Dear Shareholders,

2nd Quarter Activities Report 2015/2016

Fast Facts

ASX Code: HNR

Capital Structure

Shares on issue: 721.9m Market cap: $1.4m (at 0.2c)

Management Managing Director: Damian Hicks

Exploration Manager: Amanda Scott

Finance & Compliance Manager: Mindy Ku

Non-Executive Directors

Olof Forslund Markus Bachmann Jonathan Murray

Key Projects

Sole Funded

Lapland (Nickel-Copper-PGE) Lannavaara & Rakkuri (Iron) Free-Carried Interest Pahtohavare (Copper-Gold) Lake Johnston (Nickel)

QVR (Nickel)

WA Exploration Database

During the 2nd Quarter (Oct - Dec 2015) Hannans:

Exploration & Business Development

 Lapland Nickel-Copper PGE Project - continued with targeting and the preparation of work plans for an initial exploration program.

 Pahtohavare Copper-Gold Project - continued with analysing the drilling program and metallurgical testwork to gain a better understanding of the deposit and controls on the mineralisation; petrographical and hyperspectral scanning results were received.

Corporate

 Pahtohavare Copper-Gold Project - Lovisagruvan AB made a positive decision to proceed to Stage 2 of the Joint Venture.

 New opportunities - considered a number of transaction proposals including holding advanced discussions with a well-known profitable business with significant growth potential.

 Discovery Zone Update - commenced action to set aside statutory demand received from Avalon Minerals Ltd.

 Mine Builder Pty Ltd - continued process to recover $800,000 plus interest owed to Hannans from sole director company for sale of mining lease.

 Annual General Meeting - held meeting where all resolutions were passed on a show of hands and majority of proxy votes cast were in favour.

During the 3rd Quarter (Jan - Mar 2016) Hannans aims to:

Exploration & Business Development

 New opportunities - continue to assess the prospectivity of Sweden for Technology Metals such as lithium, cobalt and tin.

 Forrestania - monitor exploration for nickel and gold being conducted by joint venture partner Neometals Ltd (ASX:NMT); Hannans holds a 16-20% free-carried interest in the project.

Corporate

 New opportunities - continue to seek out new opportunities that have the potential to add value for shareholders.

 Discovery Zone - continue action to set aside statutory demand.

 Mine Builder - continue process to recover outstanding $800,000.

Managing Director

30 January 2016

HANNANS 2ND QUARTER ACTIVITIES REPORT 2015/2016 2

EXPLORATION &

BUSINESS DEVELOPMENT

LAPLAND NICKEL-COPPER-PGE PROJECT

The Lapland Project is a major new greenfields exploration project located in north-eastern Sweden (approximately 100km north-east of Kiruna) with the potential to host nickel-copper-platinum group elements and gold mineralisation.

EXPLORATION

Work during the Quarter included desktop targeting using the information gained from the reconnaissance field trip completed during the 1st Quarter in addition to continuing the preparation of a workplan for future exploration at the Project. Two permits from the Project were surrendered during the Quarter; the balance of permits for the project is now four. No field exploration was completed at the project during the Quarter.

The exploration plan for the next twelve months includes stakeholder meetings, environmental baseline studies, reconnaissance mapping, sampling and prospecting, in-fill airborne gravity and electromagnetic surveys and top-of-bedrock drilling to improve our understanding of the social, environmental and geotechnical (geological, geochemical and geophysical) characteristics of the Lapland Project. Commencement of this exploration work will be subject to funding.

PAHTOHAVARE PROJECT

The Pahtohavare Copper-Gold Project is located approximately 8km south-west of Kiruna, northern Sweden. Joint venture partner Lovisagruvan AB is funding the costs of exploration.

EXPLORATION

Thin section or petrographical samples collected from drillcore from the drilling completed during the 1st Quarter were dispatched to VanPetro in Canada for analysis. The results of this analysis have now been received. It was hoped that the petrographical analysis would help provide some clarification as to the relative timing of clay alteration event, oxidation event and sulphide-bearing infill event. The results were however inclusive although there are at least two stages of clay alteration evident and there is evidence to indicate the sulphide-assemblage is post-dated by oxidation.

The results confirmed the host lithologies are bedded sediments which correlate well with the observations made during core logging which identified tuffaceous host lithologies. Clay is the largest constituent in the analysed samples and is also one of the most important minerals in the minerals recovery process so it is imperative that the clay mineralogy is well understood. Specific clay species identification is best done with an XRD or SEM techniques which was not completed as part of this analysis. It is anticipated that additional clay speciation analysis will follow in due course.

Continued…

Figure 1: Photomicrograph (LHS) showing fractured chalcopyrite (yellow) being partially replaced by chalcocite (light blue) from PADH15005, 47.3m. Photomicrograph (RHS) showing pseudo-radial crystals of malachite intergrown with iron oxides from PADH15005, 52.5m.

A section of drillcore from PAD15005 was also analysed using a hyperspectral (TerraCore) scanner located in Malå, Sweden to aid in copper mineral identification and distribution. More specifically it was hoped that the scanner would be able to distinguish between malachite and chrysocolla and give a relative abundance of each mineral. The results showed that in the VNIR-SWIR (very-near to short-wave infrared) spectrum the two copper minerals could be separated and distinguished.

The scanning was completed on only one core-box as a 'trial-run' and further calibration would be required ahead of any additional scanning. Hyperspectral scanning of the mineralised sections of the drillcore could provide a relatively cost-effective method of determining the relative abundances of the various copper minerals present at Central which would contribute significant information to future metallurgical and processing design for the deposit.

Figure 2: VNIR-SWIR hyperspectral scanning image of drillcore from PADH15005, Pahtohavare Copper-Gold Project, northern Sweden. Image courtesy of TerraCore.

No field exploration was completed at the project during the Quarter.

JOINT VENTURE AGREEMENT

During the Quarter Joint venture partner Lovisagruvan AB (AktieTorget:LOVI) decided to proceed to Stage 2 of the joint venture agreement. Details of Stage 2 of the joint venture agreement are as follows:

a) prepare and lodge an exploitation concession application (i.e. a mining lease application) for the Central deposit within approximately 12 months; and

a) provide Hannans' wholly owned subsidiary Kiruna Iron AB with a AUD0.475M interest free working capital facility.

As part of their Stage 1 commitment Lovisagruvan spent AUD0.7M and completed the following:

 8 new diamond holes and 1 diamond tail for a total of 760.3m. The drilling programme confirmed the wide, high-grade nature of the copper-gold-silver mineralisation at Central but also showed that the mineralisation is complex, likely due to the insitu weathering and subsequent supergene overprinting of the deposit.

 copper speciation testwork that showed the majority of the copper mineralisation is associated with cuperiferous clays. Copper speciation testwork, undertaken using an aggressive acid (H2SO4) concentration of 50g/L over 1 hour, indicated the percentage of acid soluble copper for each of the three composites ranged from 83.10-87.85%.

 a preliminary environmental review that showed the waste rock is most likely not acid producing and no major environmental problems are expected from the existing waste dumps.

Figure 2: Location Map showing the location of the Pahtohavare Copper-Gold Project, northern Sweden.