ANNUAL REPORT

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spitf i re

MATERIALS LIMITED

CORPORATE DIRECTORY AND CONTENTS

DIRECTORS & OFFICERS

Russell Hardwick Director

Ian Huitson Non-Executive Director Dominic Traynor Non-Executive Director

COMPANY SECRETARY

Russell Hardwick

REGISTERED OFFICE

Suite 1, 346 Barker Road

SUBIACO WA 6008

P: + 61 8 6380 9660

F: + 61 8 6380 9650

LEGAL ADVISORS

Steinepreis Paganin Level 4, Next Building 16 Milligan Street

PERTH WA 6000

P: + 61 8 9321 4000

F: + 61 8 9321 4333

AUSTRALIAN SECURITIES EXCHANGE

The Company has shares listed on the Australian Securities Exchange.

ASX Code: SPI

EXPLORATION CONSULTANT

Stuart Peterson BSc MAusIMM

AUDITORS

Bentleys

London House Level 3 216 St Georges Terrace PERTH WA 6000

P: + 61 8 9226 4500

F: + 61 8 9226 4300

SHARE REGISTRY

Computershare

Level 11, 172 St Georges Terrace

PERTH WA 6000

P: + 61 8 9323 2018

CONTENTS

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22

23

62

63

65

Corporate Directory 1

Directors' Report 2

Auditor's Independence Declaration 21

Financial Statements 22

Directors' Declaration 61

Independent Audit Report 62

ASX Additional Information 64

MATERIALS LIMITED

DIRECTORS' REPORT

REVIEW OF OPERATIONS

During the year the Company maintained its interest in the South Woodie Woodie manganese project and acquired the White Lion Limestone project in Zambia ("White Lion"). Following approval by shareholders for the acquisition of White Lion, the Company then commenced detailed work on seeking a dual-listing on London's Alternative Investment Market (AIM). Due to difficult market conditions and a lack of investor support for the White Lion project, the decision was made to suspend the proposed AIM listing in May 2016. The Company subsequently concluded the agreements with its full-time executives and UK based consultants that were put in place to support the proposed AIM dual listing and construction materials focus. This restructure resulted in costs of $86,000 in this financial year and approximately

$170,000 in the 2016/17 financial year.

In June 2016, the Company completed a A$1.2 million placement to sophisticated and professional investors to subscribe for 60,000,000 fully paid ordinary shares ("Shares") at an issue price of $0.02 per share. The funds from the placement will primarily be used for potential investments, acquisitions in the minerals sector, maintaining the company's existing exploration projects (White Lion Limestone/South Woodie Woodie Manganese) and for general working capital. The Company was pleased with the strong support from strategic investors for the capital raising and the company is now focused on identifying new opportunities within the minerals sector.

SOUTH WOODIE WOODIE MANGANESE PROJECT

The South Woodie Woodie Manganese Project comprises three granted Exploration Licences in Western Australia's East Pilbara Manganese Province. The tenements lie along strike and to the south of the Woodie Woodie Manganese Mining Centre (operated by Consolidated Minerals Limited). Spitfire has decided to suspend further active fieldwork at South Woodie Woodie due to the current lack of investment community interest in greenfields mineral exploration. This position has been reinforced by the continued weakness in the price of manganese.

During the year the Company reduced its ground position and also converted into a retention license to reduce project holding costs and secure the existing JORC Resources.

RESOURCE STATEMENT

The following sets out a summary of the resources at the South Woodie Woodie manganese project in the East Pilbara region of Western Australia.

Manganese Contact and Contact North deposits situated on the E46/787

Contact & Contact North combined deposit summary @ 10.1% Mn Cut off

DIRECTORS' REPORT

Tally-Ho deposit situated on the E46/616

The Project hosts combined JORC (2004) Inferred Mineral Resources of **14.2Mt @ 13.3% Mn from within three defined deposits.

**Weighted average summary of combined mineral resource estimates for deposits at South Woodie Woodie

The Inferred resources for the Tally-Ho and the Contact/Contact North deposits have not changed since their initial release in 2009 and 2011 respectively. They were reported under the 2004 JORC code and with no additional work being performed since their release have not been updated to the 2012 JORC requirements. If further work is performed on these deposits which changes the current resource standing, they will then be updated to the 2012 JORC reporting standards. Beneficiation test work undertaken to date indicates that manganese from the two main deposits, Contact and Contact North, is able to be upgraded to a saleable manganese product of ~40% Mn.

WHITE LION LIMESTONE PROJECT ACQUISITION

The White Lion limestone project is located approximately 100km North West from the Zambian capital Lusaka. It sits on a granted Large Scale Mining Licence (14948-HQ-LML) and covers a total area of 245 square kilometres.

Initial mapping and airborne surveys of the White Lion project indicate that the large, flat lying limestone deposition covers an area of approximately 60 square kilometres. Following completion of the large surface sampling program in October 2015, Spitfire conducted preliminary planning work for a potential drill program. With the suspension of the proposed AIM listing, lack of investor support and associated funding to support the project, the Company is reviewing its slated work plans for the White Lion Project and investigating other ways to best extract value.