ASX ANNOUNCEMENT

5 September 2016

Major Tanzanian Exploration and Feasibility Campaign

Tanzanian-focused mineral sands developer, Strandline Resources (Strandline or the Company) is pleased to provide an update on its current exploration program. Following a recent equity raising, the Company is now aggressively ramping up its exploration and development program.

Highlights

Fungoni Project

• Resource Extension and Feasibility Study - The drilling campaign to infill and extend existing high grade Mineral Resources at Fungoni has been completed, adding a potential 400m of strike to the previously defined mineralisation. The Company is now preparing for a mineral resource update, bulk metallurgical testwork, optimal flowsheet design and marketing studies.

Tanga South Project

• Tajiri Mineralised Corridor - Resource extension drilling has commenced between and along strike of the high grade deposits, already defined within the 25km long mineralised corridor.

• Tongoni and Pangani Projects - Maiden drill campaigns being finalised targeting discovery of new zones of high value mineralisation at these projects.

  Aeromagnetic and Radiometric Survey

  • An extensive 20,000 line-km, high resolution survey underway over much of the Company's Tanzanian land tenure, designed to significantly assist in delineating new zones of heavy mineral sands.

Strandline Managing Director, Tom Eadie commented, "The Company is now in the middle of a very active phase of aggressive exploration and resource building.

"The current program involves drilling programs across four high priority targets in Tanzania over the next 3 months, aimed at extending known Resources as well as new discoveries.

"The Fungoni Feasibility Study is progressing well, with drilling and re-logging identifying potential resource extensions that may extend the potential mine life and therefore economic returns."

Figure 1. Location map for Strandline projects in Northern Tanzania

Fungoni Project - Resource Extension and Feasibility

Approximately 140 holes totalling 1700m of infill and extensional aircore (AC) drilling were completed at the Fungoni Project (Figures 1, 2 & 3). The holes were designed to infill existing resource drilling completed by Jacana Resources in 2012 reducing the drill pattern from 100 x 200m to 50 x 100m (Figure 3). The samples generated from this program will also provide additional material for mineral assemblage characterisation and geological domain definition prior to updating the resource model.

The updated mineral resource model will be used to select a 7 to 10 tonne composite sample for metallurgical testwork, essential to develop the optimum mining method, processing flow sheet, and product suites. Importantly, this will provide high value product samples for marketing in the short term.

In addition, re-logging of previous drill samples stored from the 2012 drill program has yielded some extensional heavy mineral targets to the north and south along strike of the Fungoni Mineral Resource. Field logging of the drill samples shows that shallow surface mineralisation extends a further 400m from the existing resource boundaries.

The samples are currently being processed in Tanzania prior to export to Australia for heavy mineral analysis.

As part of its development commitment, the Company lodged a preliminary Environmental Impact Assessment (EIA) Report for the Fungoni Project with the Tanzanian environmental regulatory authorities in late July 2016. A field visit by the Tanzanian Government's technical review panel will be carried out in early September. Feedback from this meeting will allow the report to be finalised efficiently.

Figure 2. Aircore drilling at Fungoni with heavy mineral pan sample taken from that drill hole

Figure 3. Extension and infill aircore drilling at Fungoni