We find it. We prove it.

We make it possible.

ABN : 63 095117 981 ASX :CAP

27 OCT. 2015

ABOUT CARPENTARIA:

Carpentaria is an emerging producer of iron ore in eastern Australia. The company currently has a majority share in the Hawsons Iron project, in addition to other magnetite interests in the developing Braemar Iron Province.

CARPENTARIA'S AIM:

Build a long lasting, low cost premium iron business

CAPITAL STRUCTURE:

Ordinary Shares 123,987,777

MAJOR SHAREHOLDERS:

Silvergate Capital 18.2%

Conglin In't Invest'

Group 11.4%

FINANCIAL

Cash on hand as at 30/9/2015 A$2,525,000

Level 6, 345 Ann Street

Brisbane Queensland 4000

PO Box 10919

Adelaide Street, Brisbane Queensland 4000

e-mail: [email protected]

For further information contact: Quentin Hill

Managing Director

Phone: 07 3220 2022

Quarterly Report

C A R P E N T A R I A

For the Quarter ended 30 September 2015

Highlights

• Bulk test work returns world leading product grades allowing targeting of a global range of customers

• Product quality receives very good feedback from potential customers during product marketing visits

• Term sheet signed to farm-out two gold projects

• Board and Management changes streamline Company structure

E X P L O R A T I O N L I M I T E D

September Quarter Hawsons Iron Project Development Summary

Product Test Work

Once again the product test work returned superb results from the ALS Iron Ore Technical Centre in Perth.

Lab scale upgrade results reported last quarter were replicated in bulk this quarter, producing over 500kg of highest quality pellet feed. The 'Supergrade' product contains 70.3% iron, 1.99% silica and 0.3% alumina and would be the highest grade of seaborne traded ore in the world.

www.carpentariaex.net.au

The upgrade results were achieved, using simple, low cost elutriation, which means simply using upwelling water to separate lighter particles from heavier, clumping magnetite particles. This upgrade methodis another significant processing advantage of the Hawsons ore over other ores that rely on the chemical process of flotation to achieve very high grades (refer ASX Announcement 14 October 2015).

A 250kg sample has been sent to the China Iron and Steel Research Institute (CISRI) for pelletising and steel making performance tests, including product performance when blended with current Chinese ores.

Product Marketing

Phase two of the product marketing programme began with visits by the marketing team to a number of Asian market participants. The product quality received very positive feedback, andthe Company will maintain dialogue with a numberof potential customers throughout the project development.

The Company also delivered product samples requested by interested parties.

The 'Supergrade' results achieved direct reduction quality, and the marketing programme will include targeting this market next quarter in addition to the high quality blast furnace market.

The very high quality of the product separates Hawsons from other iron ore projects and allows access to a global range of markets. The Company, through its continued marketing programme, plans, over time, to secure the off-take support required for project development.

A China market survey conductedby Shanghai Metals Market (SMM) last quarterhighlighted the significant reductionin magnetite pellet feed supply and a rising demand for magnetite pellet feed. SMM concluded an extra 50mt of additional pellet feed will be required in China over the next five years , as pelletisers seek high quality and aim to improve environmental outcomes.

Corporate Activity

Gold Projects

Carpentaria signed a conditional Terms Sheet with Faraday Resources Pty Ltd concerning the Barellan (EL 7896) and Combaning (EL 6901) projects. Under the agreement, Faraday, a private exploration company, has the right to earn a 90% interest in the projects.

Board and Management

Board and management changes announcedon 8 September 2015 were implemented on 30 September. The changes provide a streamlined and cost effective structure that is best placed to preserve and promote value during this period of challenging market conditions.

About Hawsons Iron Project

The Hawsons Iron Project joint venture (Carpentaria 62%, Pure Metals P/L 38%) is currently undertaking a bankable feasibility study based on the low cost, long term supply of a high grade, ultra-low impurity iron concentrate to a growing premium blast furnace market and the direct reduction (DR) market.

The project has a clear technical and permitting pathway. It is located 60km southwest of Broken Hill, an ideal position for mining operations with existing power, rail and port infrastructure available for a conceptual 10 Mtpa start-up operation. A mining lease application has been lodged.

The project's soft rock is different from traditional hard rock magnetite and allows a very differentapproach to the typical magnetite mining and processing challenges (both technical and cost-related). The soft rock enables simple liberation of a product of rare quality without complex and expensive processing methods.

Figure 2 Location of Hawsons Iron Project and Port Pirie

The Company is targeting two markets, the DR market, which requires super high grade ores to meet the exacting requirements of electric arc furnaces, and the growing premium high grade blast furnace market. The targeted cost structure is very competitive and profitable atconsensus long-term price forecasts for these sectors, and DR pellets have attracted approximately $50/t premium over the 62% iron fines prices.

The project is underpinned by Inferred and Indicated Resources totalling 1.8 billion tonnes at 15% mass recovery for 263 million tonnes of concentrate grading at 69.7% Fe. The Company confirms that it is not aware of any new data that materially affects this resource statement since the first public announcementand thatall material assumptions

and technical parameters underpinning the resource estimates continue to apply and have not materially changed since first reported (ASX Announcement 26 March 2014 and Table 2).

Table 2 JORC compliant resources- Hawsons Iron Project

For further information please contact:

Quentin Hill Managing Director

+61 7 3220 2022

We find it. We prove it. We make it possible.

The information in this report that relates to Exploration Results, Exploration Targets and Resources is based on information evaluated by Mr Q.S. Hill who is a member of the Australian Institute of Geoscientists (MAIG) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the 'JORC Code'). Mr Hill is a Director of Carpentaria Exploration Ltd and he consents to the inclusion in the report of the Exploration Results in the form and context in which they appear.

Carpentaria Exploration Tenement Schedule at end of 2015 September Quarter