ABN: 63 095 117 981 | ASX: CAP

We find it. We prove it. We make it possible.

31 July 2015

ABOUT CARPENTARIA: Carpentaria is an emerging producer of iron ore in eastern Australia. The company currently has a majority share in the Hawsons Iron project, in addition to other magnetite interests in the developing Braemar Iron Province.

CARPENTARIA'S AIM:

Build a long lasting, low cost premium iron business

CAPITAL STRUCTURE:

Ordinary Shares 123,987,777

MAJOR SHAREHOLDERS:

Silvergate Capital 18.19%

Conglin In't Invest'

Group 11.42%

NEFCO 3.2% Management, Including

Unlisted Options 6.1%

FINANCIAL

Cash on hand as at 30/6/2015

A$2,226,711

Level 6, 345 Ann Street

Brisbane Queensland 4000

PO Box 10919

Adelaide Street, Brisbane

Queensland 4000

e-mail: [email protected]

For further information contact: Quentin Hill

Managing Director

Phone: 07 3220 2022

ASX ANNOUNCEMENT

Quarterly Report

For the Quarter ended 30 June 2015

Highlights

 Superb results of >70%Fe from upgrade test work of pilot plant iron ore concentrate (reported ASX April 20, 2015)

 First stage marketing activities provide very positive market feedback on product quality of >70%Fe, that is, potentially the highest grade of seaborne traded iron ore in the world

 Hawsons products likely will have a significant market appeal, allowing access to high value markets in a number of regions.

 Company prepares for second stage marketing programme by commencing bulk concentrate upgrade programme with results and samples to be made available for customer testing.

June Quarter Hawsons Iron Project Development Summary

Product Test Work

Superb test work results from the ALS Iron Ore Technical Centre in Perth confirmed the project potential to produce the world's highest grade of seaborne traded iron concentrates with >70%Fe repeatedly returned.
The upgrade test work achieved the high grades using both simple elutriation (water washing) and, separately with flotation. The work was done on samples of Hawsons iron ore concentrate produced from the eight tonne pilot plant test programme completed the previous quarter (ASX Announcement April 20, 2015).

Marketing

Supported by the superb test work results, first stage marketing activities received very positive reactions from steel mills and trading companies. Based on this feedback from the Middle East, China and South East Asia, the Company believes that the Hawsons products will have a significant market appeal, allowing access to high value markets in a number of regions.
The feedback has also supported the Company's view that:

• high grade premium products will be increasingly sought by steel mills seeking to maintain efficiency as average sea borne traded grades continue to fall over time and environmental constraints incentivise efficiency

• high grade product premiums will continue to be substantial

• high quality steel making raw material buyers would welcome diversification of this supply as the market is dominated by a few large producers

ASX ANNOUNCEMENT

Marketing (cont.)

Preparation of stage two of marketing activities commenced.
Bulk upgrade test work of approximately 700kg of concentrate at the ALS Technical Centre in Perth has commenced. This programme will provide excellent guidance on the final product upgrade method and product quality targets.
An additional concentrate pelletising programme is being considered to determine how Hawsons pellets will perform during steel making.
These programs will allow provision of pellet and pellet feed samples to potential customers and support stage two marketing activities.
LFJ Consulting, a well-respected and highly experienced iron ore technical marketing group, has been engaged to assist with marketing activities.
Independent market analysis that will provide a deeper understanding of high grade pellet and pellet feed market dynamics, relative cost and pricing structures has commenced and will be completed in the September quarter.

Other

Market feedback has highlighted the entrenched conventional wisdom within the industry that achieving the highest grade iron ore in the sea borne trade will come at very high cost and the extra revenue benefits will not meet the "expected" extra costs to achieve the grade.
This conventional wisdom is true of typical ores and explains why products of >70%Fe are rare and valuable. Hawsons material is not conventional, however, and conventional wisdom does not apply. The results reported
this quarter clearly demonstrate that these high grades can be achieved with a simple, low cost flow sheet that is low energy grinding, magnets and water. This competitive advantage is a focus of Carpentaria marketing activities.

Corporate Activity

Carpentaria has nominally earned an additional 2.1% share of Hawsons due to dilution following the completion of the annual programme and budget. The project share is now nominally Carpentaria 62%, Pure Metals 38%.
The Company continues to focus on cost reductions to best utilise shareholders' funds and continue to advance the project.

Other Activity

Carpentaria continues to seek divestment of its prospective Lachlan Fold Belt gold portfolio and reduce its other assets to best manage costs.
During the quarter seven tenements were cancelled prior to their anniversary. During the 12 months ending June
2015, a total of 15 tenements have been allowed to expire or cancelled.

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ASX ANNOUNCEMENT

ABOUT HAWSONS IRON PROJECT

The Hawsons Iron Project joint venture (Carpentaria 62%, Pure Metals P/L 38%) is currently undertaking aspects of a bankable feasibility study based on low cost, long term supply of a high grade, ultra-low impurity iron product to a growing premium iron market.
The project has a clear technical and permitting pathway. It is located 60km southwest of Broken Hill, an ideal position for mining operations with existing power, rail and port infrastructure available for a conceptual 10 Mtpa start-up operation. A mining lease application has been lodged.
The project's soft rock is different from traditional hard rock magnetite and allows a very different approach from typical magnetite mining and processing challenges (both technical and cost-related). The soft rock enables simple liberation of a premium magnetite product without complex and expensive processing methods. The Company is targeting the growing premium high grade pellet feed market that is separate to the bulk fines market and believes its targeted costs are very competitive and profitable at prevailing long-term price forecasts for this sector.
The project is underpinned by Inferred and Indicated Resources totalling 1.8 billion tonnes at 15% mass recovery for 263 million tonnes of concentrate grading at 69.7%Fe. The Company confirms that it is not aware of any new data that materially affects this resource statement since the first public announcement and that all material assumptions and technical parameters underpinning the resource estimates continue to apply and have not
materially changed since first reported (ASX Announcement 26 March 2014 and Table 1).

Table 1 JORC compliant resources- Hawsons Iron Project based on Davis Tube test work of drill material

For further information

Quentin Hill

Managing Director

+61 7 3220 2022

We find it. We prove it. We make it possible.

The information in this announcement that relates to Exploration Result, Exploration Targets and Resources is based on information compiled by Q.S. Hill who is a member of the Australian Institute of Geoscientists and has had sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Q.S.Hill is a full-time employee of Carpentaria and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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ASX ANNOUNCEMENT

Carpentaria Exploration Tenement Schedule at end of 2015 June Quarter

1. 100% Willyama Prospecting Pty Ltd (wholly owned subsidiary of

Carpentaria).

2. 1.5% NSR royalty to Perilya Broken Hill Pty Ltd.

3. JV farm-out; Pure Metals Pty Ltd.

4. Under renewal.

5. Subsequent renewal of EL 4395.

6. Under transfer to ActivEX Ltd.

7. Under transfer to Guildford Coal Ltd.

8. MLA made on 18 October 2013; tenement application subject to unspecified grant date and conditions.

9. Subject to the Hawsons Joint Venture with Pure Metals Pty Ltd.

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Appendix 5B

Mining exploration entity quarterly report

Appendix 5B Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001 ,01/06/2010.

Name of entity

Carpentaria Exploration Limited

ACN or ABN

63 095 117 981

Consolidated statement of cash flows

Quarter ended ("current quarter")

30-Jun-15

Cash flows related to operating activities

1.1 Receipts from product sales and related debtors

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

1.10

1.11

1.12

1.13

+See chapter 19 for defined terms

30/9/2001 Appendix 5B Page 1

1.13

Appendix 5B Mining exploration entity quarterly report

1.14

1.15

1.16

1.17

1.18

1.19

1.20

1.21

1.22

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

1.23

1.24

1.25 Explanation necessary for an understanding of the transactions

Item 1.23 relates to Directors Remuneration, Fees and

Superannuation Contributions.

2.1

Non-cash financing and investing activities

Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

+See chapter 19 for defined terms

30/9/2001 Appendix 5B Page 2

Financing facilities available

Add notes as necessary for an understanding of the position.

Appendix 5B Mining exploration entity quarterly report

3.1

3.2

Estimated cash outflows for next quarter

$A'000

4.1

4.2

4.3

Exploration and evaluation *

Development

Production

141

0

0

4.4

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

5.1

5.2

5.3

5.4

Cash on hand and at bank

Changes in interests in mining tenements

6.1

6.2

Interests in mining tenements relinquished, reduced or lapsed

Interests in mining tenements acquired or increased

+See chapter 19 for defined terms

30/9/2001 Appendix 5B Page 3

Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.

Appendix 5B Mining exploration entity quarterly report

7.1

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9

7.10

7.11 Debentures -

(totals only)

7.12

Unsecured notes (totals only) -

+See chapter 19 for defined terms

30/9/2001 Appendix 5B Page 4

Compliance statement

Appendix 5B Mining exploration entity quarterly report

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

2 This statement does give a true and fair view of the matters disclosed.

Company Secretary

Chris Powell

31-07-15

1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.

4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

+See chapter 19 for defined terms

30/9/2001 Appendix 5B Page 5