ZAMIA METALS LIMITED

ABN: 73 120 348 683

Annual Report 2015

Table of Contents

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 for the year ended 30 June 2015.

The 2015 year has been one of falling bulk commodity prices, however, the gold price has continued to rise with the falling Australian dollar to well over A$1,600 per ounce. The reduction in minerals activity has helped ease the cost pressures for miners and explorers and has addressed some of the comparative competiveness issues in Australia.

Whilst the risk appetite for investment in Australian explorers generally has been restrained, Zamia is extremely fortunate in having two large shareholders who are also on our board of directors, Mr Chen Qiang and Dr Deng Jiniu. I am grateful for their financial support, which has enabled the Company to continue fieldwork during the year.

Our exploration targets remain much as for last year: porphyry-related copper-gold-molybdenum deposits and epithermal gold deposits in central Queensland. A particular focus has been the former Belyando gold mine. Our geological team has carried out substantial work on compiling and interpreting the old geological data and merging it with newly-acquired data. This has assisted the Company in forming a better understanding of the nature of the Belyando deposit and siting further exploration drill holes. The very promising results of this work have been reported during the year.

Exploration is a high-risk activity where success comes with patient and careful collection and analysis of data. Zamia Metals has been well served by an excellent geological team that has continued to identify and assess targets in the Zamia Metals exploration portfolio.

This has been a difficult year for the Company and I wish to thank my predecessor Mr Richard (Dick) Keevers for his great and tireless work for the Company and, in particular, his grasp of the geological importance of our target areas and his guidance of our geological team.

As a result of the downturn in the mining industry, we have 'trimmed the sails' to reduce costs so that the company can survive and continue its exploration for the benefit of all shareholders.

I also wish to thank my fellow directors for their support during the year and also for the staff of Zamia for their great contribution.

Andrew Skinner Executive Chairman 25 September 2015

Review of Operations

Introduction

Zamia Resources Pty Ltd ('Zamia'), a wholly owned subsidiary of Zamia Metals Limited, holds 13 Exploration Permits for Minerals ('EPM's), 12 of which are located in the Clermont district of central Queensland, an established gold province (Figure 1). The 2008 discovery of Zamia's Anthony molybdenum resource, the first significant porphyry deposit in the region, demonstrates the regional potential for bulk tonnage copper-gold-molybdenum (Cu-Au-Mo) deposits. The remaining EPM 18715 - Warroo is located in the Stanthorpe - Texas area of Southern Queensland. This tenement covers historic copper and gold mines, and previous exploration has highlighted untested potential for porphyry style copper-gold mineralisation.

Figure 1: Zamia Resources' tenement portfolio in the Clermont region (as of June 2015)

The new EPM 25479 - Epping Forrest, granted to Zamia Resources in October 2014, is located over buried intrusive rocks prospective for porphyry style copper, gold and molybdenum deposits in the Drummond Basin north-west of Clermont (Figure 1).

Exploration during the financial year 2014/15 focussed on the historic Belyando gold deposit, which had fallen into Zamia's EPM 15145 after the pre-existing Mining Lease, covering the dormant open-cut mine, was cancelled in late 2013. In February 2014, Zamia decided to surrender three exploration tenements, EPMs 14792, 17529 and 17641, as work completed on these tenements was not able to identify exploration targets significant enough to justify further investment.

Regional Exploration

NORTHERN TENEMENTS - EPITHERMAL GOLD TARGETS

Zamia Resources' northern tenements, i.e. EPMs 17641, 17703, and 18583, are prospective for epithermal-style gold-silver deposits. The dormant Twin Hills '309' and 'Lone Sister' mines, containing

0.4 million ounces ('Moz') of gold at an average grade of 2.8 grammes / tonne ('g/t') Au (ASX: NQM 4 February 2010), are examples of this style of mineralisation. In FY 2015, Zamia focussed exploration on geochemical targets contained within EPM 17703, in particular the previously established 'Big Red' gold prospect.

EPM 17703 Disney

EPM 17703 - Disney, located a few kilometres west of the two Twin Hills deposits (see Figure 1), covers the 'Bendee', 'Apache' and 'Big Red' prospects, where elevated gold concentrations were detected in previous drilling. In 2013 Zamia acquired 1141 conventional B-horizon soil samples, covering approximately 16 square kilometres ('km2') in the southern segment of the tenement. To limit cost, the survey samples were initially assayed for selected base metals and trace elements, excluding gold. In late 2014, selected sample traverses across each of the trace element anomalies identified in the initial survey were submitted for gold assays. Results highlight the previously established gold targets, Apache and Big Red. The most significant results of up to 0.2 ppm gold-in-soil were returned from Big Red, which shows a geochemical footprint well in excess of the originally described strike length of 300m (Figure 2).

Figure 2: Classified gold fire assay results over southern EPM 17703 - Disney (as of July 2015).

Initially discovered in 2004 during regional traversing and rock chip sampling, the Big Red prospect was explored by BMA Gold Limited using geological mapping, trenching and drilling of 3 reverse circulation ('RC') percussion holes in 2005 ('EMP', 2008). Mineralisation occurs in quartz-sulphide splay veins within silica-sericite altered granite, and is associated with a silicified host structure trending NNE. Best intersections reported from the BMA Gold drilling are 8m at 0.42 ppm Au from 72m down-hole and 1m at 1.78 ppm Au from 126m down-hole. The prospect area was relinquished in 2008 with no further work reported.

Zamia extended gold assaying in and around the prospect in the first half of 2015, including a programme of infill soil and rock chip geochemistry conducted in April (ASX: ZGM 31 July 2015). Results indicate an elevated geochemical response of above 6 ppb gold-in-soil with a distinct NE trend and a strike length in excess of 1.4 km. This area contains a central anomaly above 35 ppm gold-in-soil with a strike length of 400m, located approximately 500m SW of the original Big Red prospect area (Figure 3). The central gold anomaly yielded three float rock samples assaying between 0.49 and 1.06 ppm Au and weakly elevated arsenic ('As') of up to 76 ppm. The elevated soil response is coincident with a linear low anomaly in regional aero-magnetic data, which is interpreted as a tectonic structure de-magnetised by hydrothermal alteration (ASX: ZGM 25 March 2015). This interpretation is consistent with the location and general strike of the host structure observed by BMA Gold during trenching in 2005.

Figure 3: Classified gold-in-soil results over the Big Red prospect (enlarged from Figure 2) showing BMA Gold Ltd 2005 drill holes and Zamia 2015 float rock sample locations.

Zamia is encouraged by the positive surface geochemistry results and intends to undertake follow-up exploration, targeting near-surface stockwork epithermal or quartz-sulphide style gold deposit.

EPM 18538 Elgin Downs

Results of the 2013 south Disney soil survey on EPM 17703 identified a new 1800m x 800m polymetallic anomaly termed 'Pelican Creek' (see Figure 2). The anomaly, characterised by elevated concentrations of silver, copper, lead, thallium and tin, is located within clay-rich soils of the Mistake Creek floodplain. Based on the topography and soil profile, it is unclear whether the geochemical signature is derived from underlying bedrock, or transported alluvial material. In an attempt to test the possibility of an alluvial source, Zamia acquired 53 sediment samples from creeks draining into the Pelican Creek area in October 2014, with approximately 50% of the samples taken on EPM 18538 (ASX: ZGM 13 February 2015). Assay results indicate a possible provenance from sources to the south and SW of Pelican Creek, but also suggest widespread anomalism of precious and base metal concentrations within the Mistake Creek floodplain. Further sampling will be necessary to unequivocally resolve the nature and origin of the Pelican Creek anomaly.

Photo: Zamia geologists sampling soil on EPM 17703, April 2015.

EPMs 14792 Mount Rolfe, 16523 Bullock Creek, and 17641 Laurel Hills

The northern tenements EPM 17641 - Laurel Hills and 16523 - Bullock Creek were acquired because of their coverage of Drummond Basin volcanic and intrusive rocks, prospective for epithermal and intrusion related gold analogous to the Twin Hills deposits. Initial geological mapping in the area proved promising, confirming the presence of near-surface magmatic intrusions with a variety of geochemical compositions. Syenite intrusions outcropping on EPMs 16523 exhibit myarolitic cavities, i.e. mineral textures indicative of magmatic processes commonly associated with intrusion-related gold-copper mineralisation. However, geochemical surface sampling of various intrusive suites, carried out by Zamia and Gold Fields Australasia on EPMs 17703, 18523 and 18538 during 2012-13, was unable to establish a vector towards mineralisation. As a result EPM 17641 and 16523 were surrendered in full. Relinquishment was confirmed in February and July 2015, respectively.

EPM 14792, granted to Zamia in 2004, covered the Mount Rolfe volcanic caldera which forms part of the prospective Drummond Basin Silver Hills Volcanics. The tenement was the focus of Zamia's exploration activities in 2007-10, culminating in the drilling of a single diamond drill hole at the Nivram epithermal gold prospect (ASX: ZGM 27 January 2011). Subsequent geochemical sampling along the most prospective western caldera margin was unable to identify any new exploration targets, and the tenement was surrendered in full in February 2015.

SOUTHERN TENEMENTS - PORPHYRY COPPER-GOLD-MOLYBDENUM TARGETS

In 2014-15 Zamia placed significant exploration focus on the Belyando gold project in EPM 15145, culminating in an RC drilling programme completed in November 2014. The southern EPMs 16524, 17488 and 19369 were the subject of a field-based review by consultant geologist D. Menzies (Corbett, Menzies & Cunliffe), and reviews of previous exploration activities were completed over newly granted EPMs 18655 and 25479.

EPM 16524 Logan Creek

Following the unsuccessful 2013 RC drilling programme conducted in the Mount Douglas area under the Option and Joint Venture Agreement with Gold Field Australasia (ASX: ZGM 26 September 2014), Zamia shifted its focus onto Mount McLaren, located on the southern section of the tenement (see Figure 1). Mount McLaren exposes Drummond Basin rhyolite as well as underlying meta-siltstone basement, and was previously explored for volcanic-hosted lead-zinc mineralisation (1971-75), porphyry-style molybdenum mineralisation (1977-80) and quartz-sulphide-style gold mineralisation (1987).

The previous exploration was reviewed in detail by Zamia in 2012 and Mount Rolfe was subject to a number of reconnaissance field visits since EPM 16524 was granted. Consulting geologist D. Menzies visited Mount Rolfe in April 2015 and summarises his conclusions as follows:

'The porphyry-style quartz - Fe oxide veins developed, within strongly silica-sericite altered rhyolite at the Mount McLaren prospect, along with the reported occurrence of molybdenite stockworked quartz veins in historical drill holes, and a zoned pattern of elevated Mo-Cu-Pb-Zn in soil samples coincident with an aeromagnetic and K channel radiometric high, all suggest porphyry-related Cu-Mo mineralisation may occur at depth. It is recommended […] that historically collected induced polarisation data be assessed and recollected, if required, and that any zones of elevated chargeability with coincident Mo-Cu-Pb-Zn in soil samples should be drill tested with a fence of reverse circulation percussion holes.'

Figure 4: Aeromagnetic data (plate A) and total count radiometric data (plate B) for the Mt McLaren prospect in comparison with Alumbrera porphyry deposit data (Hoschke, 2008). Coordinates given are MGA 94, Zone 55S.

Zamia has adopted the recommendations by Mr Menzies as part of its proposed exploration programme for the second half of 2015 (ASX: ZGM 30 June 2015).

EPM 14788 Mistake Creek

EPM 14788 hosts the poly-phase Mistake Creek intrusive complex, which is seen as highly prospective for porphyry-style mineralisation. Exploration by previous companies focussed strongly on the bull's-eye aeromagnetic high in the centre of the prospect, related to underlying diorite intrusions (Figure 5). Zamia investigated the altered Drummond Basin host rocks forming an indurated rim around the main intrusive body, using a combination of geological mapping and surface geochemistry (ASX: ZGM 27 October 2011). Results from this work highlighted a small topographic high located SW of the main diorite, featuring sheeted quartz-sulphide veining and elevated arsenic and base metal geochemistry. Previous RC drilling into these altered sediments returned a best intersection of 2m at 2 ppm Au (Shywolup, 1996).

Figure 5: Ilustrated aeromagnetic image showing the Mistake Creek magnetic intrusion (central high), the surrounding altered host rocks (low) as well as buried magnetic intrusions (subdued highs). Coordinates given are MGA 94, Zone 55S.

In September 2013, Gold Fields drilled one RC percussion hole into the central diorite intrusion (ASX: ZGM 26 September 2014). The drill hole was designed to test the continuation of previous drilling intercepts to depth, but was unable to reach the target depth due to high ground water pressure.

Consulting geologist D. Menzies inspected prominent outcrops within the altered host sediments in April 2015, and concludes:

'Quartz-pyrite ± base metal bearing D veins at the Mistake Creek prospect, which are coincident with elevated Cu-Au-As-Pb-Zn in soil samples collected over a zone of magnetite enrichment, rimmed by a K channel anomaly, and have a reported endo-skarn occurrence, suggest a magmatic source typical of porphyry Cu±Au±Mo mineralisation may be present at depth. A deep penetration dipole-dipole induced polarisation survey should be completed over this prospect […] and targets drill tested with a fence of deep, reverse circulation percussion/diamond cored drill holes.'

Zamia has first proposed an induced polarisation survey in 2011, and this recommendation is included the current exploration programme (ASX: ZGM 30 June 2015).

EPM 19369 Amaroo South

The principle exploration target on EPM 19369 is 'Hill 271', a broad low hill which exposes massive ferruginous and/or gossanous quartz veins within meta-siltstones along an area of approximately 1000m x 100m, trending NW. Previous exploration, comprising geological mapping, surface geochemistry and rotary air blast ('RAB')/RC drilling to a maximum depth of 100m, encountered sporadic elevated copper and gold intercepts up to 3m at 1820 ppm Cu and 0.39 ppm Au (Jeffress, 1993).

Figure 6: Pseudosection showing observed chargeability results of the 2013 induced polarisation survey over Hill

271. Coordinates shown are local.

Zamia completed a single line dipole-dipole induced polarisation ('IP') survey of 1.4 km length over the crest of the hill in 2013 (ASX: ZGM 31 January 2014). The survey, which was oriented perpendicular to the mapped quartz feature, indicated the presence of a distinct 800m wide high chargeability feature (Figure 6) coincident with a complex resistivity high. Follow-up drilling of a single vertical RC percussion hole to 211m in 2014, however, was unsuccessful in intersecting lithology suitable to explain the IP results (ASX: ZGM 31 July 2014). In April 2015, consultant geologist D. Menzies inspected the prospect area and concluded:

'The epithermal quartz-sulphide style Au ± Cu veins, which sub-crop over Hill 271 prospect, lie in a NW oriented zone of magnetite depletion similar to that shown over the Belyando prospect and require […] additional lines of induced polarisation survey data collection to close-off a chargeability high. The region of the chargeability high, coincident with elevated Au-As-Cu in historical soil samples, should be drill tested […].'

EPM 14790 Mazeppa

EPM 14790, granted to Zamia in 2004, has been a principle focus of exploration for the company in 2006- 11, and work undertaken included the drill testing of Belyando-type gold targets at the 'Frankfield Hill', 'Matilda' and 'West Lucky Break' Prospects. Gold Fields Australasia completed a single vertical RC hole into the 'Blackwood Dam' aeromagnetic anomaly, prospective for porphyry-style copper-gold- molybdenum, in September 2013 (ASX: ZGM 26 September 2014). While no exploration work was undertaken in FY 2014-15, the tenement remains a strategic asset for the company due to its proximity to the Anthony molybdenum deposit, located on the neighbouring EPM 15145.

EPM 18598 Cairo

The principle exploration target on EPM 18598 is the 'Memphis' aeromagnetic anomaly, which is interpreted to represent magmatic intrusions emplaced in the same structural corridor as the nearby Dead Horse intrusive complex, which hosts the Anthony Mo and Belyando Au deposits. The anomaly does not outcrop, and drilling west of Anthony suggests that the prospective basement rocks may be overlain by up to 100m of volcanic cover rocks. The prospect requires a dipole-dipole induced polarisation survey to identify prospective drill targets under cover. No work was undertaken in FY 2014-15.

EPMs 15145 Mazeppa Extended, and 17555 Gregory

EPM 15145, granted to Zamia in 2006, hosts both the Anthony Molybdenum Project and the Belyando Gold Project (discussed separately, below) and has been the principal focus of the company's exploration activities since 2008. Zamia concluded exploration of the Anthony prospect in the first half of 2014, completing a drilling programme that tested the potential for economic copper mineralisation in the NE sector of the deposit (ASX: ZGM 31 July 2014).

In the first half of 2015, Zamia extended existing 2008-10 soil sampling surrounding the Anthony Mo deposit to cover the area between the Mo deposit and the Belyando Au deposit (Figure 7). A total of 247 soil samples were taken, with samples falling into EPMs 14790, 15145 and 17555 (ASX: ZGM 31 July 2014).

Figure 7: Classified gold fire assay results over EPMs 15145 and 17555 (as of July 2015).

Assay results highlight an area 2.1 km south of the Belyando pit, characterised by coincident high gold and arsenic responses. The anomaly, featuring gold results >8 ppb (maximum of 45 ppb Au) and arsenic assays >17 ppm, is centred on a subtle vegetation anomaly less than 500m in diameter, and has been named 'Ibis' target. Zamia is intends to use a gradient-array IP survey to investigate the target.

EPM 17529 Barcombe

EPM 17529 covered a structurally complex segment of the contact between Anakie Inlier and Drummond Basin, prospective for epithermal-style gold-silver deposits. No previous exploration was reported in the area before Zamia completed a soil geochemistry programme and a 3D induced polarisation survey in 2011-12 (ASX: ZGM 31 January 2012). The IP survey detected a subtle coincident chargeability and resistivity anomaly at a modelled depth of 150m. Zamia allowed the tenement to expire in February 2015.