ZAMIA METALS LIMITED

ABN: 73 120 348 683

Annual Report 2016

Table of Contents

Corporate Directory 3

Chairman's Letter 4

Review of Operations 5

Personnel, OH&S, Environment and Community 16

Corporate Governance Statement 17

Directors' Report 18

Auditor's Independence Certificate 28

Independent Auditor's Report 29

Directors' Declaration 31

Consolidated Statement of Profit or Loss and Other Comprehensive Income 32

Consolidated Statement of Financial Position 33

Consolidated Statement of Changes in Equity 34

Consolidated Statement of Cash Flows 35

Notes to the Financial Statements 36

Shareholder Information 54

Corporate Directory

The shares of Zamia Metals Limited ("the Company") are quoted on the official list of the Australian Securities Exchange.

The ASX code for the Company's ordinary fully paid shares is "ZGM".

Directors

Company Secretary

John Stone

Chief Financial Officer

Barry F Neal

Registered Office and Principal Place of Business

Suite 60, Level 6 Tower Building Chatswood Village

47-53 Neridah Street

Chatswood NSW 2067 Australia

Telephone: + 61 2 8223 3744

Fax: + 61 2 8223 3799

Internet: www.zamia.com.au

Chairman's Letter

Dear Shareholders

On behalf of our board of directors, I am pleased to present the Annual Report of Zamia Metals Limited (Zamia or the Company) for the year ended 30 June 2016.

The 2016 year has been one of recovering bulk commodity prices and the on-going strength of the Australian dollar gold price of over $1,600 per ounce. New opportunities have been emerging over the last year with a number of notable mergers, acquisitions and increasing gold production by many Australian listed gold mining companies.

Exploration continues to be a high-risk activity where success comes with patient careful analysis of available data and geology. Your Company continues to be well served by an excellent geological team that has been able to continue to identify and improve the prospects of the existing targets in the Company's exploration portfolio despite our limited financial resources. To this end, I am grateful to the vital financial support from those large shareholders who are also on our board of directors, Mr Qiang Chen and Dr Jiniu Deng.

We have continued to work on plans for the assessment and possible development of Belyando gold mine including a strategy to commence operations by re-working the tailings to recover gold. Studies are planned to test such feasibility. Our exploration targets remain as in previous years. However, we have relinquished ground that was less prospective and we are targeting; porphyry related copper-gold- molybdenum deposits and epithermal gold, primarily in the southern part of the Drummond Basin and the Anakie High in central Queensland.

The Belyando mine occurs in a geological structure in the Anakie Metamorphics, where the gold mineralisation may have been emplaced by igneous intrusion and hydrothermal activity associated with the same broad geological processes which have fed the porphyry and epithermal prospects in our exploration tenements, including the mineralisation at the Anthony molybdenum project, 3 km SE of Belyando.

Recently, the Queensland Department of Natural Resources and Mines recognised the funding difficulty for explorers and reduced the expenditure commitments. We are grateful to the Queensland Government for providing such relief. We have previously announced the outcome of our work on the Belyando project and the pleasing gold results that gives the Board confidence in the progression of this work. We have also conducted further strategic reviews of the deposit based on the additional drilling and other results to help us form a better understanding of the nature of the deposit and identify targets for further drilling.

Zamia is in advanced discussions on an acquisition.

Finally, I wish to thank my fellow directors, officers and consultants to the Company for their support and contribution during the year.

Andrew Skinner Executive Chairman 27 September 2016