Bougainville

Resource & other economic opportunities

Outline document. Not for public dissemination

Unlocking the World Class Copper Gold Projects of Bougainville

Kalia Limited

Bougainville-Part of the “Pacific Ring of Fire”

Major Resource Projects along the Pacific Ring of Fire

Frieda River 1,347 Mt @ 0.37% Cu - 0.55g/t Au

OK Tedi 632 Mt @ 0.92% Cu 0.86g/t Au

Wafi 72 Mt @ 2.7g/t Au

Ramu 143 Mt @ 1.0% Ni 0.1% Co

Kainantui 3.1 Mt @ 20.3g/t Au

Tolukuma 2 Mt @ 20.3g/t Au

Kodu 203 Mt @ 0.28% Cu 0.32g/t Au

Porgera 198 Mt @ 4.8g/t Au

Mt Kare 25.5 Mt @ 2.2g/t Au

Hidden Valley 32.3 Mt @ 3.28g/t Au 54.2g/t Ag

Edie Creek Au mining

Fergusson Is Au

Siniurt Au mining

New Hanover Au

Metaworei Au

Woodlark Is 18.1 Mt @ 1.7g/t Au

Misima 134 Mt @ 1.3g/t Au

Simberi 45 Mt @ 1.1g/t Au

Lihir 552 Mt @ 2.6g/t Au

Panguna 1,838 Mt @ 0.30% Cu, 0.34g/t Au Prev Prod: 3Mt Cu, 306t Au, 784t Ag

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Geopolitical Overview • Bougainville is located at the northern end of the Solomon Islands

Chain:

• Area: 9300 km2 .

• Population: circa 250,000 (2011 census).

• 120km long and average between 65 - 95km wide.

• Under German Administration in 1898 and mandated to Australia in 1920.

• Under Japanese occupation: 1942-1944 and returned to Australian administration post World War II.

• Papua New Guinea granted independence in 1975 with Bougainville designated a Province.

• Landowner dissatisfaction with local share of mining revenues led to a rebellion in 1988.

• Peace treaty signed in 2001 with new constitution established in 2004 creating autonomous rule.

• Government headquartered in Buka.

• Now governed by the Autonomous Bougainville Government (ABG).

• Referendum on Independence from PNG to be held in 2018.

• Considerable aid activity by Australia. Japanese-led scoping studies underway for a new international airport and a university.

• Huge mining potential and for the development of a range of sustainable activities such as farming, fishing and tourism.

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Highlights – Why Bougainville?

• Bougainville is one of the last high quality mineralised ‘elephant’ countries undeveloped

• 2015 Mining Code recognises indigenous landowners also own all minerals beneath the surface

• Without landowner approval exploration or mining lights will not be granted

• Memorandum of Understanding for lease of Mt Tore signed with indigenous landholders in April 2016. Deed

with Landholders signed in September 2016

• Multiple high grade targets identified. Potential for Tore Region to deliver another “Panguna”.

• Mineralised areas hosted in highly prospective epithermal, porphyry and massive volcanic sulphide

• Alluvial gold production for Bougainville estimated at 70M Kina per annum

• Strong government and landholder support for exploration and mining to commence immediately

• To develop a sustainable economy Government also promoting other industries with high potential

• Farming and agriculture ; fishing and processing

• Tourism

• Considerable AID activity by Australia and scoping studies underway for a new International Airport and university by Japan

• Under sea Optic Fibre Cable near to Bougainville Island

• In response Kalia intends to approach investment on an holistic economic development basis that benefits the

community as a whole and not just those directly involved with resource development

Outline document. Not for public dissemination 4

Project Summary

• Bougainville represents a unique resource opportunity

• A pristine geological environment unexplored outside only one, albeit the world’s largest, porphyry copper deposit (Panguna)

• 9,300 square kilometres of target rich geology within the Pacific Rim of Fire, a zone already host to some of the world’s largest mines

• All indications (geological, geochemical, geophysical and structural) are that there will be major additional discoveries made once systematic, modern exploration is undertaken

• Work completed by Rogerson in 1989 identified potential for porphyry and epithermal styles of mineralisation at Rarie/Puspa in the north on Kalia area of interest. The geophysics rates this as the number one target outside Panguna

• Proven track record of development and exploitation of resources

• Opportunity to develop higher grade resources for lower capital cost start up, early production and cash flow

• All within a friendly and stable sovereign state

Outline document. Not for public dissemination 5

SUMMARY & RANKING OF RESOURCE ASSESSMENTS FOR IDENTIFIED PROSPECT AREAS ON THE ISLAND OF BOUGAINVILLE

(Information Sourced primarily from Rogerson et al 1989, PNG Prospect Assessment Report)

Unrisked Estimates

Prospect Status Min Occurrence Supporting Data Ore Body (Mt) Au (g/t) Cu (%) Ag (g/t) Au (oz) Cu (Mlbs) GPS(1) EPS(2)

Panguna Proven Reserve Base* Porphyry 495.6 0.55 0.42 3 8,763,672 4,587.7 1.00 1.00

Kupei Exploration Target Porphyry Occurrence Au-Cu-Te Anomaly 3.4km in diameter 562.5 0.50 0.40 3 9,042,420 4,959.0 0.50 0.50

Pumkuna Exploration Target Epithermal Vein 4.1 5.00 655,877 0.0 0.60 0.50

Atamo 1 Exploration Target Porphyry Occurrence Potassic alteration, Au anomaly 360.0 0.50 0.40 3 5,787,149 3,173.8 0.60 0.50

Atamo 2 Exploration Target Skarn Occurrence Au anomaly 4km in diameter 89.6 0.50 1.00 3 1,440,357 1,974.8 0.60 0.50

Atamo 3 Exploration Target VMS 2.4 0.50 1.00 3 38,581 52.9 0.40 0.50

Mainoki Exploration Target Porphyry Occurrence Au-Cu anomaly 4.2km in diameter 360.0 0.50 0.40 3 5,787,149 3,173.8 0.40 0.50

Mainoki South Exploration Target Porphyry Au-Cu anomaly 4.2km in diameter 157.5 0.50 0.40 3 2,531,878 1,388.5 0.50 0.50

Karatu 1 Exploration Target Porphyry Occurrence Au-Cu anomaly 8.0km in diameter 562.5 0.50 0.40 3 9,042,420 4,959.0 0.60 0.50

Karatu 2 Exploration Target Epithermal 5.8 2.00 4 372,950 0.0 0.40 0.50

Kopani 1 Exploration Target Porphyry Occurrence Au-Zn-Te anomaly 4.7km in diameter 157.5 0.50 0.40 3 2,531,878 1388.5 0.40 0.50

Kopani 2 Exploration Target Epithermal 2.9 2.00 4 186,475 0.0 0.40 0.25

Kopani West Exploration Target Epithermal? Ag anomaly 7.4km in diameter 2.9 2.00 4 186,475 0.0 0.30 0.25

Kopani East Exploration Target Epithermal? Te anomaly 2.6km in diameter 2.9 2.00 4 186,475 0.0 0.30 0.25

Sisivi Exploration Target Epithermal/Skarn Ag-As anomaly 4.9km in diameter 2.9 2.00 4 186,475 0.0 0.50 0.50

Isinai Exploration Target Epithermal Ag-Te anomaly 5.8km in diameter 5.8 3.00 3 559,424 0.0 0.50 0.50

Deuro Range - Turital Exploration Target Epithermal/ Occurrence Ag-As anomaly 3 x 5km in size 157.5 0.50 0.40 3 2,531,878 1388.5 0.40 0.50

Porphyry 5.8 2.00 3 372,950 0.0 0.60 0.25

Deuro Range - East Exploration Target Porphyry Cu anomaly 2.5 x 3.0km in size 157.5 0.50 0.40 3 2,531,878 1388.5 0.40 0.50

Deuro Range – Mt Senfet Exploration Target Epithermal Occurrence Ag-As anomaly 3.4 x 7.7km in size 5.8 2.00 3 372,950 0.0 0.50 0.25

Mt Lolonu Exploration Target Epithermal? Ag-Cu-Zn anomaly 3.2km in diameter 5.8 2.00 3 372,950 0.0 0.20 0.50

Puspa 1 Exploration Target Porphyry Occurrence Au-Zn anomaly 4.5 x 11.0km in size 157.5 0.50 0.40 3 2,531,878 1388.5 0.40 0.50

Puspa 2 Exploration Target Epithermal, VMS 5.8 2.00 3 372,950 0.0 0.40 0.25

Puspa Regional Exploration Target Porphyry/Epither Occurrence Hg-As-Cu anomaly 25.6km in diameter 157.5 0.50 0.40 3 2,531,878 1388.5 0.30

58,918,961 31,212

(1) Geological Probability of Success (2) Economic Probability of Success * As existed in 1989 (Table sourced from Morumbi Resources Inc. (TSX-V: MOC) presentation 2013)

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Bougainville Potential, Rogerson’s estimates (1989)

Mining on Bougainville

• Bougainville is one of the last undeveloped mineralised regions in the world that hosts world-class deposits.

• Mineralised areas hosted in highly prospective epithermal, porphyry and massive volcanic sulphides.

• 9,300 km2 of target rich geology within the Pacific Rim of Fire, a zone already host to some of the world’s largest

mines

• History of mining with Gold & Copper mined during German colonial administration.

• Alluvial gold mined continuously for more than 100 years. Current annual value of production >70M Kina

(c.US$22mn).

• Historically one large scale mine – Panguna

• New Bougainville Mining Act passed in 2015 recognises indigenous landowners and adopts the core principle:

‘landowners own their traditional land and the minerals beneath them’.

• Landowners support mining with ‘appropriate partner’,

• Without landowner agreement exploration or mining licences cannot be applied for or granted.

• Strong government and landholder support for exploration and mining to re-commence immediately. Clear

public statements by Bougainville vice president, Patrick Nisira, ABC News 3 May 2016 to that effect.

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Kalia Management and Advisory

• David Johnston, Chairman:

• Nik Zuks, Chief Executive Officer: 35 years experience in the mining industry in Australia, Africa, Central Asia and SE Asia. Pioneered the mid-tier iron ore miners in Western Australia before moving on to diamonds and gold in Africa and culminating with iron ore operations in Guinea, West Africa (Bellzone).

• Terry Larkan, Chief Financial Officer: 30 years mining finance and general management experience in Australia, Africa and SE Asia. Currently director of CIC Capital Limited and previously director of Bellzone Mining, partner with Ernst & Young (Australia) and Vice President at Barrick Gold.

• Peter Batten, Chief Technical Officer: Geologist with over 30 years in the mining industry. Previously, director of Berkeley Resources (ASX), Bannerman Resources (ASX; TSX; NSX), White Canyon Uranium (ASX; TSX-V), Walkabout Resources (ASX) and De Grey Mining (ASX).

• Rob Edwards, Non-Executive Director & Special Advisor: Mining engineer with 25 years production, new business, investment banking and board level experience. Currently Chairman of Sierra Rutile Ltd, Independent Director of MMC Norilsk Nickel and GB Minerals Ltd. Formerly Chairman of Global Mining for Renaissance Capital and Senior Advisor to Royal Bank of Canada Capital Markets.

• Steinepries Paginin: Legal – the leading resource advisory company in Western Australia with global capabilities and operations

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Our Access and Tenure

• Under the new Mining Code approved by Parliament in 2015, the Traditional Landholders own their lands and the minerals on and below the surface

• Kalia Holdings Pty Ltd signed a binding MOU, April 2016, with the Traditional Landowners to explore and develop mining operations for life of mines.

• Memorandum of Understanding for lease applications of the Tore region signed with landowners in April 2016.

• The Landowners have registered Toremana Resources Limited, an entity through which the landowner interests will be managed

• Draft Joint Venture Agreement prepared for approval mid December 2016

• Kalia upgraded the MOU with Landholders to a Deed that was signed in September 2016 and is binding and exclusive

• ABG Parliament passed legislation to remove the Moratorium on exploration and mining in June 2016

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Securing Title – Mt Tore

Memorandum of Understanding signed between Nik Zuks of Kalia Holdings Pty

Ltd and Indigenous Landowners of Tore North in the Tinputz region in April

2016. The MoU was upgraded to a Deed that was signed in September 2016.

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Toremana awareness-cleansing-reconciliation

• Kalia has conducted awareness, cleansing and reconciliation in the Northern region with very positive outcomes allowing for the first time access to areas of interest to Kalia and the project.

Bougainville Geology

• Bougainville and the Solomon chain rise from a submarine ridge bounded on both sides by deep sea trenches.

• Emerged from three successive cycles of volcanic activity, creating the Solomons Island Ridge. Repeated accumulations of volcanic rocks from over 45 million years ago and until the present day

• The rocks are a mixture of lavas, volcanic breccias and volcanic sediments and range in age from 45 – 4 million years

• Coarser grained intrusive granodiorites and diorites within the volcanic sequences represent the magma cores. These host the copper and gold mineralization on Bougainville. (Davies, 1992)

• The mineralization at Panguna was identified in 1961 by Clark as porphyry copper in style. Additional porphyry coppers and epithermal mineralization identified by Dr Rogerson (1989) throughout the island of Bougainville.

• Panguna, at the time it was in operation, was the largest porphyry copper mine in the world. The remaining resources are still amongst the world’s largest.

• The copper and gold reserves at Ok Tedi, Frieda River and Wafi are of similar style. After Blake and Miezitis, Bulletin 93, 1967

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Boundaries of the Agreement

• Approximately 1,300 km2 under agreement

• The geology of the Tinputz region is dominated by andesites, diorites and granodiorites, similar to the Crown Prince Range and Panguna.

• Four intrusive granodiorites have been identified in the MoU area of the Emperor Range.

• Upper Ramazon is a 20+ km long zone of anomalous Au, Cu and Hg, as defined from stream sediment sampling.

• The Rarie/Puspa prospect on the Uruai River is anomalous for Au and Cu and has an exploration target of 158Mt of 0.5% Cu and 0.40g/t Au from the work completed in 1989 (Rogerson), In addition, Rogerson set a further target of 80t Au and 0.6Mt Cu for porphyry mineralization in the Rarie/Puspa region and another 400k oz Au from epithermal veining from field observations and sampling. A total in excess of 5Moz Au and 1.2Mt Cu

+ 155 00’ 00”E 5 00’

00”S

10 kms _______________________

Boundaries defined under the MoU

Upper Ramazon

Puspa River

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Background on Mining

• Gold & Copper mined during German colonial administration

• Rio Tinto developed Panguna (the world’s largest copper mine) in the 1960s until shut down in 1989

• ASX listed Bougainville Copper Ltd. Rio Tinto (54%) , PNG Government(19%) & others

• Non payment by PNG Government of royalties to local landowners key issue which led to insurrection

• During 17 years of operation Panguna produced: 3m tonnes of copper and 9m troy ounces of gold from 675m tonnes of ore

• Gold mined continuously for more than 100 years. Current annual value of production >70M Kina

• New Bougainville Mining Act passed in 2015:

• Core principle: ‘landowners own land and the minerals beneath them’

• Landowners now support mining with ‘appropriate and sensitive partner

• ABG passed legislation to lift Moratorium on exploration mining in June 2016

Panguna Mine

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Panguna

• The geology exposed in the open pit at Panguna consists of volcanic Andesites (Panguna and Nautango) and numerous diorite and granodiorite intrusives.

• Breccia pipes have intruded into this sequence which has been cut by pebble dykes.

• Mineralization is most closely related to Potassic alteration and this is defined by the presence of biotite and/or potassium feldspar.

• Sulphide mineralization is seen in all rock types distributed concentrically around a low grade core.

• Five copper and gold mineralizing events, often overlapping, have been recognized. All are associated with diorite and quartz diorite units and characterized by the presence of sulphides, predominantly pyrite but also chalcopyrite and bornite. (Clark, 1990)

• The Panguna mine operated for 17 years from 1972 to 1989. To the end of 1988, 686.9 Mt of ore at 0.53% Cu and 0.63g/t Au were milled to produce 3.0Mt of copper, 299t of gold and 763t of silver.

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Tore Prospects

Bougainville 1986 Airborne Magnetic Survey – RTP combined residuals RGB Projection: AGD66 AMG56

• The targets devised by Rogerson in his 1989 report highlight the prospectivity of the Tore region.

• With incomplete access and limited geophysics the Rogerson team was able to identify two major styles of mineralization in the Tore region (porphyry copper and epithermal gold).

• The Rarie/Puspa target was estimated to have the potential to host both porphyry copper and epithermal vein styles of mineralization.

• Melelup is a combined geophysical/geochemical anomaly larger than Panguna in diameter.

• Outside of this one occurrence the Tore region exhibits numerous targets from topography and geophysical surveys completed in 1986.

• The geophysical surveys only covered a portion of the Tore project area and the expectation is that additional anomalies will be produced from a more comprehensive survey.

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Tore Prospects - Geochemically

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Prospectivity Map (after Rogerson et al, 1989)

• Rogerson’s expedition in 1988/89 took only 860 stream sediment samples for the entire 9,000 km2 Bougainville land mass.

• The sampling was prioritised to cover targets derived from the 1986 geophysical survey results. Except for the strandline magnetite sands on the west coast below the Sarime River. For the Tore region this represents less than 50% coverage.

• The targets sampled for Tore are those highlighted in the previous slide.

• Rogerson’s results suggest there is potential in the Tore for multiple deposits and up to seven different styles of mineralization, although these seven styles can be broadly grouped into three styles.

• Porphyry Cu, Au

• Epithermal quartz veining (including polymetallic veins), and

• Volcanogenic Massive Sulphides (VMS)

• The standouts from Rogerson’s work are the Rarie/Puspa prospect and the Ramazon (Melelup) anomalous zone.

• The Rarie/Puspa results were anomalous for Au, Cu, Zn and Te. The rock types described and the chemical assemblage suggest multiple sources including porphyries and epithermal veining. The zinc suggests VMS or polymetallic veining.

• The Ramazon anomaly is a 20km+ long Au Cu anomaly. The sheer size of the anomaly suggests a large source possibly a porphyry.

TARGETS IDENTIFIED FROM GEOPHYSICS Target zone defined using layers

presented [and checked against original RTP etc]

Targeting

NORTH

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Rogerson, 5m oz ,1.2Mt Cu, 3 of the 6 high quality target areas on Bougainville are in the Kalia/Toremana area of interest

Development Plan for next 12 Months

• Complete initial capital raising ( November-December 2016)

• Establish operating infrastructure in Tinputz ( December 2016),

• Data recovery and target identification underway (June – December 2016)

• Digitise information and update geology (December 2016-January 2017)

• Complete processing raw 1986 geophysical data (September 2016) - Completed

• Target sampling, infill stream sediment sampling, soil mapping, wide spaced soil sampling, rock chip sampling. (December 2016– March 2017)

• Mapping, infill sampling, soil and rock chip (January – May 2017)

• Commence environmental and socio-economic reports (January 2017, ongoing)

• Target definition drilling (April – July 2017)

• Assay work (November 2016 – August 2017)

• Landholder awareness and dispute resolution (June 2016 – August 2017)

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18 month Establishment and Operating Costs

USD (millions)

• Complete capital raising, establish local activities 500,000

• Establish operating infrastructure in Tinputz 200,000

• Geological data recovery and target identification 100,000

• Digitise information and update geology 100,000

• Landholder engagement and capacity building processes 500,000

• Geology investigation with local knowledge 150,000

• Award and commence drilling on selected priority targets. 1,500,000

• Commence environmental and socio-economic reports 200,000

• Corporate activity – financing, legal, statutory, corporate structuring, permitting 1,300,000

TOTAL 4,550,000

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Opportunity Summary

• Unique position for multiple high quality targets, suggested potential of 58 million ozs gold, 14 million tonnes copper.

• All indications (geological, geochemical, geophysical and structural) are that there will be major additional discoveries made once systematic, modern exploration is undertaken.

• Bougainville represents a unique target rich resource opportunity.

• First mover advantage securing Landowner agreements, with their participation, securing exploration and development rights over large highly prospective areas.

• Team with proven track record of exploitation and development of resources.

• Opportunity to develop higher grade resources for lower capital cost start up, early production and cash flow.

• Potential to develop large scale world class mining operations.

• Supportive Landowner and government environment.

Outline document. Not for public dissemination 22

Airborne Survey Findings

23

Supporting figures

24

SRTM 30M TOPOGRAPHY ORIGINAL

Linear stretch, shading from NW

NORTH

srtm30__mga56_AOI_dummies_lin_NW.tif

25

SRTM 30M TOPOGRAPHY

EDGES [scale 480] Greyscale shaded 045

srtm30__mga56_AOI_dummies_SD_Edges_480_shad_grey_045.tif

NORTH

27

1986 survey data Data provided by PNG were as follows: • PEM38A.DAT • PEM38B.DAT • PEM38C.DAT • PMS038.DAT • 38_Bougainville_Index_map.pdf • 38_Papua(Bougainville)_Format_description.TXT The survey was flown in 1986 aid-funded campaign by the National Government and the Federal Republic of Germany that included airborne geophysical surveys in 1986 As part of the same program, 10,000 line kilometres of airborne geophysical surveys were flown by the German Government Bundesanstalt fur Geowissenschaften und Rohstoffe (Federal Institute for Geology and Raw Materials) (BGR) in 1986, using a large helicopter equipped to measure the magnetic field, electromagnetics and radiometrics. http://eview.anu.edu.au/bougainville/pdf/ch02.pdf Data provided is in AGD66 AMG56 Final deliverables from Fathom are all in GDA94 MGA56 (as requested by P Batten) All data were re-processed from the line data (profile form) by Fathom. The flight path was trimmed heavily to remove ‘turns’ and deviations from an acceptable altitude range. Each profile was manually inspected and edited. EM data were tie line levelled (900 Hz and 3600 Hz Apparent resistivity). These data were then de-corrugated and heavily filtered (directional cosine 045 and butterworth) in an attempt to produce useable grids. The EM data are particularly poor, even after heavy editing and filtering. Magnetic data are reasonable and could be filtered and enhanced well. Radiometric data needed to be levelled in blocks. The resultant data proved useful.

Examples of the final flight path used

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MD 400m HI MD 800m HI > 2k MD 800m HI > 3k

K Hysteresis thresholding [3 2] K Hysteresis thresholding [2 1] K Hysteresis thresholding [1 0.5]

MI 800 LO MD 800 LO

MAGNETIC HIGHS POTASSIUM HIGHS TOPOGRAPHIC LOWS

TARGETING IDEAS Magnetic Anomalies

[discrete highs] Potassium Anomalies

Topographic lows

NORTH

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1986 AIRBORNE RTP

STRUCTURE Scale 400

Rogerson et al., 1989: Figure 2.19 overlain

LOW HIGH

NORTH

30

1km

Bougainville target 3 RTP Magnetic Image Amplitude > 1000 nT

The geophysical response of some known Po-Cu-Au deposits

Source for all figures reproduced: T. Hoschke (2011), Geophysical Signatures of copper-gold porphyry and epithermal gold deposits, and implications for exploration. ARC Centre of Excellence in Ore deposits, University of Tasmania.

31

large circular or donut features in magnetic data

Some of these features are obvious (most northern one) and some are subtle. Complete magnetic coverage would allow this sort of analysis to be carried out with a much higher degree of confidence.

32

The geophysical response of some known Po-Cu-Au deposits

33

34

Tore Prospects - Geophysically • Despite only partial cover the results of

the 1986 geophysical survey confirms the prospectivity of the Tore region.

• Using the potassium band in the radiometrics (1) two anomalous highs stand out in the Tore data.

• Overlaying the K anomalies on the Ternary radiometrics, KThU, (2) suggests a diorite/granodiorite association.

• Looking at the magnetics (3) highlights the large circular feature, coincident with the structural and radiometric anomalies and high magnetic anomaly on the circular feature’s west rim. A desirable location similar to the Panguna magnetic features.

• Overlaying deep, mid and shallow magnetics (4) shows the magnetic anomaly is continuous to depth, again suggesting an intrusive association.

1 2 3

4

SRTM - topography

Projection: AGD66 AMG56

Panguna

Targets

Kalia Permit Area

Bougainville

37

High definition topographic data is searched for circular features. These features may represent many situations but in volcanic terrains are indicative of intruded porphyries and collapsed volcanic vents