Axiom Mining Limited

ARBN 119 698 770

Level 6, 15 Astor Terrace Spring Hill QLD 4000

Australia

T + 61 7 3319 4100

[email protected] www.axiom-mining.com

12 August 2016

ASX Announcement

Company Update - Pre-Feasibility Study highlights world class potential of the Isabel Nickel Project (San Jorge and Kolosori deposits)

Highlights

• Economics:

  8%

  • After-Tax Net Present Value (NPV1

    ) of US $188M and an IRR of 95%, based on most recent Nickel market

    forecast.

  • Net Profit Margin2 of 35% over Life of Mine.

• Low CAPEX: US $18.2M.

• Low Operational FOB cost: US $11.49/WMT3 currently one of the most competitive in the region.

• Production: an average of 2.2 WMT per annum.

• Life of Mine:

  • 18 years.

  • First five years of mining schedule developed using mostly Measured and Indicated Resources.

• Deposit:

  • The Isabel Nickel Project will be able to produce a consistent, saprolite product for which customers will pay a premium, unlike other supply sources such as the Philippines.

  • Significant opportunity to upgrade resource in both grade and tonnage through further drilling.

    Axiom CEO Mr Ryan Mount states "The pre-feasibility study has confirmed the economic viability and the world class potential of the Isabel Nickel Project. It also highlights the competitiveness of our operation and validates our previously published scoping details. We will continue to work with the Solomon Islands government to bring this project into production as quickly as possible."

    1 NPV: Net Present Value

    2 Net Profit Margin: Profit margin after income tax and royalties

    3 WMT: Wet Metric Tonnes

    Summary

    Axiom Mining Limited ('Axiom' or 'the Company' ) is pleased to announce the positive results from the Pre-Feasibility Study (PFS) conducted by IMC Mining Pty Ltd (IMC) on the world class nickel bearing deposits of the Isabel Nickel Project in the Solomon Islands. This study builds on the JORC Mineral Resource upgrade which was completed and announced on 29 December 2015 and establishes a detailed mine plan that defines the 18 years of mine life.

    This report presents the mine operations plan for nickel laterite mining on the Kolosori and San Jorge deposits, collectively known as the Isabel Nickel Project ('The Project'). The Kolosori deposit is currently not owned by Axiom, however the company has re-applied for the Prospecting Licence. The Company currently owns 80% of the San Jorge deposit, and it is anticipated it will own 80% of the Kolosori tenement, if successful with the application.

    The deposits are located 135 km north-west of the capital Honiara; San Jorge is adjacent to Santa Isabel, as shown in Figure 1.1.

    Figure 1.1 Geography of the Isabel Nickel Project

    Based on a Life of Mine (LOM) of up to 18 years, this PFS is focussed on the development and production of a mine production target of 1.5 Mtpa (wet) product in year one to full operating capacity of 2.2 Mtpa (wet) product by year three.

    The scheduling of mining operations has been carried out on the basis of developing the best balance between the optimisation of the resource and maximising the NPV of the project. This has been achieved by dividing the scheduled mine development into mining phases which include year's one to five (Phase 1) targeting saprolite material that would result in an average of 1.6% Ni (insitu).

    For years six to eighteen (Phases 2-4) the PFS incorporates the historical drilling by Inco, which in many cases did not define the full profile of the laterite.

    Financial Evaluation

    The PFS confirms the financial viability of The Project with an NPV of US $188M and a Net Profit Margin of 35% over the life of the project. IMC have estimated an operational FOB cost of US $11.49/WMT which is low in comparison to other worldwide nickel laterite DSO4 projects.

    Axiom is able to differentiate itself from other laterite nickel projects due to the following factors:

    • A large proportion of saprolite can be readily accessed;

    • Very low stripping ratio (almost no waste overlays);

    • Access to a readily available labour force;

    • Easy access to port and world shipping networks; and

    • Low initial pre-production capital outlay.

The combination of the above factors indicates that the Project's operations will be a low cost saprolite nickel producer able to provide a steady and reliable premium product to its customers.

Figure 1.2 Aerial view of the Isabel Nickel Project

4 DSO: Direct Shipping Ore

Basis for the Financial Evaluation

Table 1.1 provides the assumptions and calculations on which the financial evaluation is based upon.

Table 1.1 Financial Assumptions

*based on Wood Mackenzie forecast

All dollars reported in this document are US $ unless otherwise stated.