QEM : Upgrades Julia Creek Resource

ASX ANNOUNCEMENT ASX ANNOUNCEMENT

7 April 2022

QEM Upgrades Julia Creek Resource Base with

Added Critical Minerals Potential

•  Julia Creek's Indicated vanadium JORC Resource increases 64% to 360 million tonnes (Mt)

•  Total vanadium JORC Resource rises to 2,850Mt at an average V205 ore content of 0.31%

•  Maiden 2C oil shale estimate of 71 MMBBls - 3C oil shale estimate of 626 MMBBls

•  Material volume of aluminium identified

•  In upcoming Bench Scale Pilot Plant testing, QEM will investigate high-purity alumina (HPA) extraction potential

•  HPA was recently designated as a Critical Mineral in Australia.

QEM Limited (ASX: QEM) ("QEM" or "Company") is pleased to announce a significant upgrade in the confidence of the oil Resource at the Company's flagship Julia Creek Project, as well as an increase in the size and grade of the Julia Creek vanadium deposit, which was already one of the largest single vanadium deposits the world.

An independent geology and resource estimate report undertaken by Measured Group Pty Ltd detailed a current estimated Mineral Resource at the Julia Creek project of 2,850 million tonnes (Mt) vanadium bearing ore at an average V205 content of 0.31%. The previous Mineral Resource estimate, which was released to the ASX on 14 October 2019, consisted of 2,760Mt vanadium bearing ore at an average V205 content of 0.30%.

Crucially, the updated Mineral Resource encompasses an Indicated vanadium JORC Resource of 360Mt and 2,490Mt in the Inferred category. The previous Mineral Resource estimate had an Indicated vanadium JORC Resource 220Mt and 2,540Mt in the Inferred category.

Utilising a 90% recovery factor, a 3C oil shale Resource estimate of 626 million barrels (MMbbls) was reached.

Additionally, a maiden 2C oil shale estimate of 71 MMBBls was identified, which is a resource class of greater confidence compared to a 3C estimate.

Furthermore, 24,304 parts-per million of aluminium was identified in the Resource estimate, which the Company believes warrants further investigation. QEM is set to commence vanadium and oil shale testing at its bench scale pilot plant this month and will now incorporate assessment of high-purity aluminium (HPA) extraction within its planned testing schedule.

QEM Managing Director Gavin Loyden said the Resource upgrade at Julia Creek signified a major development for the Company's production ambitions.

"We've substantially bolstered the confidence level in both our vanadium and oil shale Resource bases, propelling us towards realising our ambition of developing Australia's critical minerals resources and delivering innovative energy solutions," Mr Loyden said.

"The Resource upgrade comes at an optimal time, as we are on the verge of commencing our bench scale pilot plant testing, following successful recent delivery of the pilot plant.

QEM Limited	John Foley Chairman	www.qldem.com.au
Level 11, 216 St Georges Terrace	Gavin Loyden Managing Director	[e-mail]
Perth WA 6000 Australia	John Henderson Non-Executive Director	[phone]
Daniel Harris Non-Executive Director
David Fitch Non-Executive Director

"This testing will enable us to efficiently assess the potential additional upside of HPA mineralisation at Julia Creek, with HPA recently designated as a critical mineral by the Australian Federal Government in March 2022.

"We will build on this highly encouraging Resource upgrade with QEM's 2022 exploration campaign, with the details for the program currently being finalised."

Table 1: Summary of Mineral Resources

Notes

• 1. The estimate uses a minimum cut-off of 0.2% V2O5 for the oil shale units, and a minimum cut-off of 0.15% V2O5 for the Coquina units.

• 2. The total resource tonnage reported is rounded to reflect the relative uncertainty in the estimate categories and component horizons may not sum correctly.

Table 2: Summary of Oil Shale Resources

Notes

• 1. The total resource tonnage reported is rounded to reflect the relative uncertainty in the estimate and component horizons may not sum correctly.

• 2. The 3C petroleum resource reported includes the 2C volumes, ie. They are cumulative not incremental as per the PRMS 2018 guidelines.

• 3. An economic cut-off of 40 L/tonne was applied prior to the calculation; it must be noted that the CQU and the CQLA did not meet the criteria of >40 L/tonne for inclusion in the volumetric calculation.

• 4. The 2C and 3C volumes reported here are unrisked.

QEM Limited	John Foley Chairman	www.qldem.com.au
Level 11, 216 St Georges Terrace	Gavin Loyden Managing Director	[e-mail]
Perth WA 6000 Australia	John Henderson Non-Executive Director	[phone]
Daniel Harris Non-Executive Director
David Fitch Non-Executive Director

Julia Creek Project Vanadium Resource Categories Points of Observation

Figure 1. below shows the distribution of both points of observation and supportive (interpretive) data for the Julia Creek Project.

Figure 1. Resource Categories, points of observation and interpretive data for the Julia Creek Vanadium Project; the Indicated (yellow area) is also equivalent to the area used in the volumetric calculation of 2C petroleum resource; likewise, the pink Inferred + yellow Indicated areas are equivalent to the area used in the volumetric calculation of the 3C petroleum resource.

Figure 1: Julia Creek Project Vanadium Resource Categories Points of Observation

Listing rule 5.8.1 information is set out below in respect of the vanadium Mineral Resource estimate:

•  Geological interpretation sourced from historical mapping, drill cores, geophysical logs, 26km of 2D seismic and assays results.

•  Sampling techniques were selected by lithological and geophysical boundaries which were crushed to 2mm and placed in vacuum sealed bags before sending off for analysis

•  Drilling technique used was 4C core (100mm) rotary drilled on air.

•  Criteria for classification has a minimum spacing between points of observation has been set to 4000m for the inferred category, and 1200m for the indicated category, based on ranges derived from variography.

•  Sampling analysis were prepared by Mitra PTS for Oil using Modified Fisher Analysis completed by ALS and metals using ICP assay method completed by Bureau Veritas.

•  Estimation methodology used were grid cell sizes of 20 m for the topographic model, 50 m for the structural model and 250m for the quality model. Ordinary Kriging has been used for interpolation of V2O5 wt%. Linear interpolation (Inverse Distance power 1) was used for other grade parameters including oil grade parameters.

•  A cut-off of 0.2 V2O5 wt% was used for the Vanadium resource in the Oil Shale units, and a cut-off of 0.15 V2O5 wt% was used for the Coquina Units.

QEM Limited	John Foley Chairman	www.qldem.com.au
Level 11, 216 St Georges Terrace	Gavin Loyden Managing Director	[e-mail]
Perth WA 6000 Australia	John Henderson Non-Executive Director	[phone]
Daniel Harris Non-Executive Director
David Fitch Non-Executive Director

•  Mining parameters used a sale price of V2O5 at $8.50 USD/lb

•  Metallurgical parameters incorporated processing study results showing beneficiation from floatation, wave tables, upflow classifier and Petroteq processing. This is considered a reasonable basis for eventual economic extraction.

The vanadium Mineral Resource and oil shale Petroleum Resource are hosted by, and co-located within, the Toolebuc Formation and previous work confirms there exists a strong positive correlation between vanadium and oil grade.

At this stage, however, there has been insufficient work completed by the Company to confirm that both the vanadium Mineral Resource and oil shale Petroleum Resource can be recovered from the same ore material (i.e. host rock). As previously announced, the Company is assessing several processing options and technologies to identify the optimum methodology for the recovery of vanadium and oil, in addition to any other potential base metal bi-products (Cu, Mo, Ni and Zn).

As a result, the vanadium Mineral Resource and oil shale Petroleum Resource reported above must stand on their own. Further, it should not be assumed that both resources are currently able to be recovered from the same ore material

ENDS

This announcement was authorised for release on the ASX by the Board of QEM Limited.

For further information, please contact:

Gavin Loyden	Joanne Bergamin
Managing Director	Communications Director
P: [phone]	P: [phone]
E:[e-mail]	E:[e-mail]
ABOUT QEM

QEM Limited (ASX:QEM) is a publicly listed company which is focussed on the exploration and development of its flagship Julia Creek Project, covering 250km² in the Julia Creek area of North Western Queensland.

The Julia Creek vanadium / oil shale project is a unique world class resource with the potential to deliver innovative energy solutions, through the production of energy fuels and vanadium pentoxide. QEM strives to become a leading producer of liquid fuels and in response to a global vanadium deficit, also aims to become a global supplier of high-quality vanadium pentoxide, to both the nascent energy storage sector and the Australian steel industry.

This globally significant JORC (2012) Mineral Resource of 2,850 Mt @ 0.31% V2O5 is one of the single largest ASX listed vanadium resources and represents a significant opportunity for development.

The tenements form part of the vast Toolebuc Formation, which is recognised as one of the largest deposits of vanadium and oil shale in the world and located less than 6km east of the township of Julia Creek. In close proximity to all major infrastructure and services, the project is intersected by the main infrastructure corridor of the Flinders Highway and Great Northern Railway, connecting Mt Isa to Townsville.

QEM Limited	John Foley Chairman	www.qldem.com.au
Level 11, 216 St Georges Terrace	Gavin Loyden Managing Director	[e-mail]
Perth WA 6000 Australia	John Henderson Non-Executive Director	[phone]
Daniel Harris Non-Executive Director
David Fitch Non-Executive Director

Competent Person and Qualified Evaluator Statements

The information in this report that relates to Mineral Resources for the Julia Creek Project is based on and fairly represents information complied and reviewed by Mr. Lyon Barrett, who is a Member of the Australasian Institute of Mining and Metallurgy and is a Principal Geologist employed by Measured Group Pty Ltd, independent consultants to QEM.

Lyon Barrett has more than 20 years' experience in the estimation of Mineral Resources both in Australia and overseas. This expertise has been acquired principally through exploration and evaluation assignments at operating mines and exploration areas. This experience is more than adequate to qualify him as a Competent Person for the purpose of Mineral Resource Reporting as defined in the 2012 edition of the JORC Code. Mr Barrett consents to inclusion of the resource estimate and supporting information in the form and context in which they are presented in the announcement.

The petroleum resource estimates for Exploration Permits for Minerals 25622, 25681, 26429 and 27057 Julia Creek Oil Shale Deposit provided in this report and statement were determined by Dr Bronwyn Camac, Adelaide, Australia in accordance with Petroleum Resource Management System guidelines. She has given her consent to the use of the resource figures in the form and context in which they appear in this statement. Dr Camac:

•  has a BSc (Applied Geology) and PhD in Engineering Science and is a Member of the Society of Petroleum Engineers and the Petroleum Exploration Society of Australia;

•  has more than 20 years' experience in the exploration, development, assessment and evaluation of oil and gas reserves and resources and is a qualified evaluator as defined under the ASX Listing Rule 19.12; and

•  is an exploration consultant, Adelaide, Australia and is independent of QEM Limited.

The estimate of the Petroleum Resource for the Julia Creek Project presented in this report has been carried out in accordance with the SPEGuidelines for Application of the Petroleum ResourcesManagement System2018.

QEM Limited	John Foley Chairman	www.qldem.com.au
Level 11, 216 St Georges Terrace	Gavin Loyden Managing Director	[e-mail]
Perth WA 6000 Australia	John Henderson Non-Executive Director	[phone]
Daniel Harris Non-Executive Director
David Fitch Non-Executive Director