Quarterly Report

For the quarter ending 30 June 2015

HIGHLIGHTS

Option and Sale Agreement signed with Todd Corporation

Independent Expert's Report commenced during the quarter

PIOP Bankable Feasibility Study suspended until outcome of shareholder vote on

Todd Transaction is known

Port Hedland

WA

Pilbara Iron Ore Project

Tom Price

Mt Magnet

Perth

Canegrass Gold Project

500km

CORPORATE

Todd Transaction

On 11 May 2015, the Company announced it

had signed an Option and Sale Agreement with a subsidiary of Todd Corporation for the sale of PIOP (refer to ASX announcement dated 11/05/2015). This transaction is subject to shareholder approval at a general meeting, expected to be held in the September 2015 quarter.

At the time of this report, the Independent Expert's Report has been lodged with ASX and ASIC for review and will be dispatched to shareholders once cleared.

Several initiatives to reduce costs in the current commodity cycle were commenced including suspending activities on the Pilbara Iron Ore Project Bankable Feasibility Study and a reduction in staffing numbers.

PROJECTS

Pilbara Iron Ore Project (PIOP) - WA During the quarter, the Company scaled down its activities at PIOP due to the transaction signed with Todd Corporation. At this time the Company had completed all required drilling, resource modelling and

metallurgical test work. Environmental approvals for

PIOP continue to be progressed, with the EPA giving conditional support to the expanded project during the quarter.

FMG Agreement

During the quarter the Company assigned four tenements in the Pilbara to Fortescue Metals Group for consideration of $150,000. Fortescue already held the iron ore rights to these tenements, with Flinders retaining a royalty on iron ore produced.

Flinders Mines Limited ABN 46 091 118 044 | Quarterly Report for the period ending 30 June 2015 1

EXPLORATION AND EVALUATION ACTIVITIES

WESTERN AUSTRALIA

Pilbara Iron Ore Project

? Target

? Zone

HAC022

6,868,000 mN

There were no exploration and evaluation activities

carried out on the Company's PIOP tenements during the June 2015 quarter.

Canegrass Gold Project

Assays for a small Air-Core (AC) drilling program undertaken at the Honeypot and Boulder prospects (Figure 1) were received during the quarter. Significant intersections are shown in Table 1, with the highlight being an intersection of 8m @ 2.03 g/t Au from 12m

in hole HAC022 at the Honeypot Prospect. Hole HAC022 is located at the northern end of a trend of anomalous holes that intersected a deformed and foliated mafic schist as well as late stage undeformed granitic dykes and quartz veining. Mineralisation remains open to the north (Figure 2).

At the Boulder Prospect, only low grade mineralisation

E58/236

E58/282

0 200 m

8m @ 2.01 g/t Au

Anomalous

Zones

6,867,000 mN

was intersected (Table 1) with the best result being

4m @ 0.20 g/t Au from 24m in hole BAC030.

Figure 2 : Honeypot prospect AC drillholes over ground TMI (magnetic) image.

-28°

Mt Magnet

Project Area Prospect Homestead

0 10 km

Challa HS

Boulder

Honeypot

E58/236

E58/282

E58/232

SOUTH AUSTRALIA

There were no exploration and evaluation activities carried out on the Company's South Australian tenements during the June 2015 quarter.

Ian Gordon

Managing Director

Figure 1 : Canegrass Gold Project is located approximately 60km

SE from Mt Magnet, Western Australia.

31 July 2015

Table 1 : Significant intersections summary for 2015 AC


drillholes.

Hole ID Prospect From (m) To (m) Interval (m) Au g/t

HAC022

Honeypot

12

20

8

2.03

BAC007

Boulder

16

20

4

0.13

BAC025

Boulder

12

16

4

0.13

BAC030

Boulder

24

28

4

0.20

All other holes returned intersections less than 0.10 g/t Au.

2 Flinders Mines Limited Quarterly Report for the period ending 30 June 2015

Contact us

Ian Gordon

Managing Director

Ph: (08) 8132 7950

Email: info@flindersmines.com

Investor Relations

Duncan Gordon

Executive Director - Adelaide Equity Partners

Ph: (08) 8232 8800 or 0404 006 444

Email: dgordon@adelaideequity.com.au

Head Office

Level 1, 135 Fullarton Road

Rose Park

South Australia 5067

PO Box 4031

Norwood South

South Australia 5067

Ph: (08) 8132 7950

Fax: (08) 8132 7999

Email: info@flindersmines.com
www.flindersmines.com

Qualifying Statements

Forward-looking statements

This release may include forward-looking statements. These forward- looking statements are based on management's expectations and beliefs concerning future events as of the time of the release of this document. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, some of which are outside the control of Flinders Mines Limited, that could cause actual results to differ materially from such statements. Flinders Mines Limited makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this release.

Competent Persons

The information in this report that relates to Exploration Targets, Exploration Results, or Mineral Resources is based on information compiled by Dr Graeme McDonald who is a member of the Australian Institute of Mining and Metallurgy and a full-time employee of Flinders Mines Limited. Graeme McDonald has sufficient experience that is relevant to the styles of mineralisation and types of deposits 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. Graeme McDonald consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Flinders Mines Limited Quarterly Report for the period ending 30 June 2015 3

Flinders Mines Limited

Tenement Schedule

For the quarter ending 30 June 2015

Tenement

Status

Name

Registered Holder

/Applicant

Flinders Mines

Interest

WESTERN AUSTRALIA

Pilbara Iron Ore Project

E47/1560

L47/728

L47/730

L47/731

L47/734

M47/1451

P47/1291

Granted Granted Granted Pending Granted Granted

Granted

Anvil

PIOP Airstrip PIOP Village Northern Road Southern Road Blacksmith ML

Gap Area

Flinders Mines Ltd Flinders Mines Ltd Flinders Mines Ltd Flinders Mines Ltd Flinders Mines Ltd Flinders Mines Ltd

Flinders Mines Ltd

100%

100%

100%

100%

100%

100%

100%

Canegrass Project

E58/232

E58/236

E58/282

Granted

Granted

Granted

Boulder Well

Challa

Honey Pot

Flinders Canegrass Pty Ltd

Flinders Canegrass Pty Ltd

Flinders Canegrass Pty Ltd

100%

100%

100%

SOUTH AUSTRALIA

Jamestown Project

ELA 182/14

Pending

Caltowie

Flinders Mines Ltd

100%

Tenements E47/1011, E47/1016, E47/1306 and M47/1407 were assigned to Fortescue Metals Group during the quarter. Tenement E58/271 expired during the quarter.

4 Flinders Mines Limited Quarterly Report for the period ending 30 June 2015

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