ASX ANNOUNCEMENT Date: 25 July 2016

Number: 477/250716

SIGNIFICANT EXPANSION OF COMMONWEALTH DRILL PROGRAMME, NSW SILICA HILL

• Three new drill targets identified from drill assays and breakthrough in understanding of the controls on high grade mineralisation.

• Two targets to be tested as part of ongoing drill programme and both close to previous drill intercept of 20 metres at 44 g/t silver.

• Target 1 lies beneath new near surface thick drill intercept of:

  39 metres at 0.3 g/t gold and 16 g/t silver (0.6 g/t gold equivalent) from 5 metres

  including 7 metres at 0.4 g/t gold and 26 g/t silver (0.7 g/t gold equivalent) from 37 metres.

• Target 2 is a structural target at the lower contact of the Silica Hill rhyolite.

• High grade silver mineralisation at Silica Hill and Main Shaft likely to be part of the same system. Structures that link the two are priority areas for further follow up.

  WALLS PROSPECT

• Follow up drill holes to be completed along trend from the maiden drill hole at the Walls Prospect on the Welcome Jack Trend 1.2 km east of Commonwealth that returned:

  20 m at 0.5 g/t gold and 27 g/t silver (1 g/t gold equivalent from 55 m

  including 1 m at 2.9 g/t gold and 144 g/t silver and 1.1% zinc (5.7 g/t gold equivalent).

  COMMONWEALTH SOUTH

  • Further drill holes to test for down hole EM conductor close to recent drill intercept of

    13.6 metres at 2.1 g/t gold, 21 g/t silver, 0.4% zinc and 0.2% lead (2.6 g/t gold equivalent)

    including 0.6 metres at 10.8 g/t gold, 44 g/t silver, 2.5% zinc and 1% lead.

    FURTHER DRILLING IN PROGRESS

• Drilling is still in progress with assay results expected from Commonwealth South and Doughnut.

• Drill programme significantly delayed by heavy rainfalls over the past six weeks.

* Gold equivalency calculations are shown at the end of this report. Investors are advised to review these in conjunction with the text.

26 Richardson Street West Perth Western Australia 6005 Tel +61 (8) 6454 6666 Facsimile +61 (8) 6454 6667

Email [email protected] www.impactminerals.com.au

Impact Minerals Limited's (ASX:IPT) ongoing reverse circulation (RC) and Diamond drill programme at the 100% owned Commonwealth Project 100 km north of Orange in NSW is to be extended by about

25% (1,000 metres) to follow up encouraging assay results from the Silica Hill, Walls and Commonwealth Prospects.

The drill programme is testing a number of targets identified by Impact at four separate locations: the Commonwealth deposit, Silica Hill, the Walls- Welcome Jack Trend, and Doughnut. The programme has been delayed significantly by heavy rainfall that has affected the area over the past six weeks.

SILICA HILL

Three new drill targets have been identified at Silica Hill following the recognition by Impact of two important controls to the higher grade mineralisation in the Silica Hill-Commonwealth deposit area together with assays from recent drill holes (Figures 1 and 2). Two of the targets will be drilled as part of the current programme with the third area likely to require a new drill permit from the NSW Department of Mines.

The two controls on higher grade gold, silver and base metal mineralisation are:

1. where black shale units intersect the main rhyolite unit at the Commonwealth deposit; and

2. where variably oriented faults cross-cut both the lower contact of the Silica Hill rhyolite and the upper and lower contacts of the Commonwealth rhyolite.

This is an important breakthrough for Impact and is helping drive a reinterpretation of the controls on the mineralisation throughout the Commonwealth area.

Target 1

At Silica Hill, Hole CMIPT026 was drilled in this programme to test coincident gold-silver soil geochemistry and Induced Polarisation geophysical anomalies and returned:

39 metres at 0.3 g/t gold and 16 g/t (half an ounce) silver (0.6 g/t gold equivalent) from 5 metres

including 7 metres at 0.6 g/t gold and 8 g/t silver from 16 metres

and also including 7 metres at 0.4 g/t gold and 26 g/t silver (0.7 g/t gold equivalent) from 37 metres.

This near surface intercept is exceptionally thick and is interpreted to represent a steeply dipping zone of gold-and-silver-mineralised structures.

Further drilling is required down dip below this zone and in particular where it intersects the lower contact of the Silica Hill rhyolite. This target will be tested in the current programme.

The target is also interpreted to be a location where black shales (identified in previous Hole CMIPT006) may intersect the lower contact of the Silica Hill rhyolite (Figure 2). It is also close to Impact's previous drill intercept of 20 m at 44 g/t silver (1.5 ounces) from 122 metres in CMIPT011 (Figures 1 and 2). In this hole the silver mineralisation occurs immediately below the Silica Hill rhyolite.

Figure 1. Drill plan at Commonwealth with the location of the recent drill holes (black bold) and significant intercepts from this (yellow callout) and previous drill programmes. New target areas at Silica Hill are also shown.

CMIPT026 also intersected a 10 cm thick sulphide vein in altered volcanic rocks at 164 metres down hole which returned very high grades of up to 400 g/t silver with the hand held pXRF instrument (Figure 3).

An assay of a 0.7 metre intercept that includes this vein returned:

0.04 g/t gold, 57.6 ppm silver, 120 ppm copper, 488 ppm zinc and 230 ppm lead.

This is encouraging for the discovery of thicker veins of this style of mineralisation close to the footwall contact of the Silica Hill rhyolite.

Figure 2. 3D view of the Main Shaft-Silica Hill area looking north east and showing the two targets to be drill tested. A possible target at depth is shown where the mineralisation at Silica Hill may link with Main Shaft.

Figure 3. High grade silver-pyrite vein from CMIPT026. The vein contains up to 400 g/t silver as measured with the hand held XRF instrument.