Flinders Mines : Quarterly Activities and Cashflow Report

28 April 2017

Corporate

During the quarter the Company appointed non-executive director Mr David McAdam to the position of interim executive director to manage the day to day operations. Mr McAdam led the Board's Strategic Review Committee and successfully completed the detailed strategic review of Flinders' Pilbara Iron Ore Project (PIOP) during the quarter.

The Company is in the process of transitioning its corporate headquarters from Adelaide to Perth.

Strategic Review

At the end of the quarter Flinders announced the completion of the independent strategic review of the PIOP. The review, which consisted of a detailed analysis of the PIOP, concluded that:

• the PIOP resource potentially provides for the development of an iron ore mine, however further detailed understanding of mine planning and metallurgy is required to confirm the ability for the mine to operate at an economic production rate;

• the optimal production rate for PIOP is ~ 45 million tonnes per annum (Mtpa) at ~ 59% Fe for a mine life in excess of 14 years, subject to an economically viable infrastructure solution being secured;

• an asset maturation phase needs to be completed to confirm a number of technical assumptions and uncertainties and to form a solid basis for progression to a feasibility study.

The Board fully supports the strategic review recommendations. As announced on 31 March, an asset maturation phase will be conducted in CY2017 (subject to funding) to mature the PIOP ahead of any feasibility study.

To fund this work, the Company intends to launch an Entitlement Issue, further details in respect of which will be announced in due course.

Financial

At the quarter end, the Company had $2.088m in cash and no debt.

For further information contact:

Phone: +61 8 9389 4444

Email: info@flindersmines.com

Neil Warburton Chairman

Flinders Mines Limited ABN 46 091 118 044

www.flindersmines.com

Level 1, 135 Fullarton Road Rose Park

South Australia 5067

PO Box 4031

Norwood

South Australia 5067

telephone: 61 8 8132 7950

facsimile: 61 8 8132 7999 Email: info@flindersmines.com

Tenement Schedule

For the Quarter ending 31 March 2017

WESTERN AUSTRALIA

Canegrass Project

E58/232 Granted Boulder Well 29/07/2002 28/07/2017 16.1 Flinders Canegrass100%

Pty Ltd

E58/236 Granted Challa 22/03/2002 21/03/2017 16.1 FlindersCanegrass

Pty Ltd 100%

E58/282 Granted Honey Pot 3/05/2007 2/05/2017 27.2 FlindersCanegrass

Pty Ltd 100%

Pilbara Iron Ore Project

Jamestown Project

+Rule 5.5

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Flinders Mines Limited

ABN Quarter ended ("current quarter")

46 091 118 044

31 March 2017

1. Cash flows from investing activities

2. Payments to acquire:

3. property, plant and equipment

4. tenements (see item 10)

5. investments

6. other non-current assets

7. Consolidated statement of cash flows	Current quarter $A'000	Year to date (6 months) $A'000
   2.2 Proceeds from the disposal of:	1
   (a) property, plant and equipment
   (b) tenements (see item 10)
   (c) investments
   (d) other non-current assets
   2.3 Cash flows from loans to other entities
   2.4 Dividends received (see note 3)
   2.5 Other (provide details if material)
   2.6 Net cash from / (used in) investing	1
   activities

8. Cash flows from financing activities

9. Proceeds from issues of shares

10. Proceeds from issue of convertible notes

11. Proceeds from exercise of share options

12. Transaction costs related to issues of shares, convertible notes or options

13. Proceeds from borrowings

14. Repayment of borrowings

15. Transaction costs related to loans and borrowings

16. Dividends paid

17. Other (provide details if material)

18. 3.10 Net cash from / (used in) financing activities

-

4,148

-

4,148

Net increase / (decrease) in cash and cash equivalents for the period Cash and cash equivalents at beginning of period Net cash from / (used in) operating activities (item 1.9 above) Net cash from / (used in) investing activities (item 2.6 above) Net cash from / (used in) financing activities (item 3.10 above) Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	3,166 (1,078) - -	551 (2,612) 1 4,148
	2,088	2,088