ASX RELEASE

Thursday 28th January, 2016

QUARTERLY REPORT AND APPENDIX 5B FOR THE QUARTER ENDED 31ST DECEMBER 2015

A-Cap Resources Limited ("A-Cap" or "the Company") (ASX: ACB) is pleased to provide its Quarterly Activities Report for the quarter ended 31st December 2015.

HIGHLIGHTS

A new resource estimate was completed utilising Localised Uniform Conditioning; Potential pit areas show higher grade;

Large increase in lbs of uranium at 300ppm cut-off;

$1 million drawdown of financial accommodation facility to fund short term working capital requirements; Fully underwritten, non-renounceable rights issue to raise AUD $5 million;

Meetings held with Department of Mines;

Expiry of unlisted options, issue of new shares.

QUARTERLY ACTIVITIES

Following the submission of A-Cap's Mining Licence Application for the Letlhakane Uranium Project (the Project) and the completion of the Project's technical study which yielded positive outcomes during the September quarter, the Company has made good progress during the December quarter and prioritised our efforts towards securing the Project from a technical, financial and licencing perspective.

On the 2nd October 2015, A-Cap announced a new global resource estimate utilising Localised Uniform Conditioning which takes into account mining and grade control selectivity. Furthermore, the positive results from the 2014 drilling programme were incorporated into the resource estimate, with the outcome being an increase in both tonnes (particularly at a 300ppm cut-off) and grade. This is discussed in greater detail later in this report. A-Cap has been assessing the implications of the new resource estimate on resource optimisations. Initial optimisations look encouraging, and further work will be prioritised in 2016.

The 2015 Annual Report released at the end of September 2015 confirmed that A-Cap would be entering into a financial accommodation facility of up to $2 million. The facility is on an arm's length basis at an interest rate of 10% per annum. On the 13th November 2015 A-Cap drew down $1 million from the facility to fund the Company's short term working capital requirements.

In December A-Cap was pleased to announce a non-renounceable entitlement offer to shareholders to issue approximately 250 million new shares on the basis of 1 new share for every 1.9 shares held at an issue price of 2 cents per new share, to raise up to $5 million. Importantly an Underwriting Agreement was entered into with Jiangsu Chixiang Precision Gear Co., Ltd, who hold a 1% interest in A-Cap as at the Record Date of the entitlement. This capital raising is an important milestone for the Company, which will enable us to recommence work to finalise the bankable feasibility study for the Project, including mine plan and optimisations, process design work and infill drilling to refine reserves. In addition, trial mining and a pilot plant study are also planned.

A-Cap continues to build on its excellent working relationship with the Botswana Government and the Department of Mines. Following the submission of the Project's Mining Licence Application, the Company have held positive meetings and discussions with the Botswana Department of Mines (DoM) and the Department of Environmental Affairs during the quarter. While A-Cap awaits environmental approval, the DoM is concurrently assessing the Mining Licence Application.

Under advice from the DoM, an application was submitted and subsequently granted for an extension of PL45's prospecting licence up to the 31st December 2016. This is a compliance requirement under the Botswana Mines and Minerals Act that a valid prospecting licence must be in place for all Mining Licence Applications. A-Cap is working with all government departments to ensure all approvals are in place and information is readily available to facilitate the approvals process.

A-Cap's Annual General Meeting was held on the 30th November 2015 in Brisbane. Unlisted options expired in October and December 2015 (4 million and 1 million respectively). On the 10th December 2015, shares in the Company were issued pursuant to resolutions passed at the AGM and pursuant to ASX Listing Rule 7.1.

LETLHAKANE URANIUM PROJECT

The Letlhakane Uranium Project is one of the world's largest undeveloped Uranium Deposits. The Project lies adjacent to Botswana's main North-South infrastructure corridor that includes a sealed all-weather highway, railway line and the national power grid, all of which make significant contributions to keeping the capital cost of future developments low.

The project has the distinct advantage of having all the major infrastructure in place and is one of the few major undeveloped uranium projects in the world capable of being in production in 3 years at a low capital cost and competitive operating costs in a safe and stable jurisdiction. The strategy is to prepare the project for early development to enable the company to fully capitalise on an expected recovery in the uranium price.

Mining Licence Application, Technical Study

In August 2015 A-Cap submitted the Mining Licence application for PL 45/2004 (Letlhakane) to the Botswana Department of Mines. The application was based on the results of a technical study and financial modelling. The technical study was based on shallow open pit mining and heap leach processing to produce up to 3.75 million pounds of uranium per annum over a mine life of 18 years, incorporating the most up to date metallurgical results and process route, optimised mineral resources, mining, capital and operating costs developed by our feasibility specialists in Australia and internationally. The Botswana Department of Mines is examining the application in parallel while awaiting the ESIA approval of the Department of Environmental Affairs. Whist this is occurring the tenure of PL45 was officially extended to ensure tenure continuity till 31st December 2016.

The technical study confirms that the Project has the right mix of a good resource, low capital and operating costs and is well positioned to be taken into early production, reaping the benefits of projected shortfalls in supply in the uranium market and forecast rising uranium prices.

The outcomes of the technical study were released to the market (refer ASX release 11th September 2015) which highlighted the following:

Positive economics based on forecast uranium average contract price Initial construction CAPEX of US$351 million

Initial working capital of US$40 million

Pre-tax NPV of US$383 million at a discount rate of 8% and IRR of 29%

Operating costs of US$35/lb U3O8 over first 5 years, approximately $40/lb U3O8 over 18-year process life.

Figure 1: Location of A-Caps major projects.

The technical study and financial modelling was completed with the assistance and in collaboration with a world-class team of consultants including Optiro, Cube Consulting, SLR Consulting (South Africa), Kappes Cassiday & Associates, OMC Hydromet and Lycopodium Minerals Pty Ltd. The key parameters for the project are summarised in Table 1 below.

Table 1: Summary of outcomes of the technical study

The Technical Study results and production targets reflected in this announcement are preliminary in nature as conclusions are drawn partly from indicated mineral resources and partly from inferred mineral resources. The Technical Study is based on lower level technical and economic assessments and is insufficient to support estimation of ore reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Technical Study will be realised. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.

Resources

A-Cap announced on the 2nd October 2015 a new JORC Mineral Resource Upgrade at Letlhakane completed by Optiro Pty Ltd, an independent expert. The updated resource uses a recoverable resource methodology which takes into account the proposed Standard Mining Unit (SMU). The SMU is defined by the proposed mining method utilising surface miners and the proposed grade control system using in-pit surface gamma radiation measurements.

The Localised Uniform Conditioning (LUC) estimate best reflects the mining methodology envisaged, taking into account the surface miners selective mining capability combined with the proposed grade control methodology. The accurate mining characteristics of surface miners and the ability to measure the gamma radiation on the surface during mining will ensure the optimum grade delivery to the process heap. The SMU of 20m x 4m x 0.25m forms the basis for the LUC estimation. Historic resource estimations were more reflective of conventional open pit mining and therefore had averaged resource data into blocks of bigger mining panels which smoothed or averaged the grade data.