President's Report To Shareholders

Iberian Minerals has undertaken a lot of activity and achieved many milestones during 2016, many of which have been communicated to you though our numerous press releases and newsletters. I would like to take this opportunity to recap many of these highlights for our shareholders who may not have had the opportunity to review all of them. Another purpose of this update is to convey the assurance that the entire team at Iberian Minerals/Mineworx is working diligently and is focused on attaining objectives which will significantly increase shareholder value for all of you.

The acquisition of Mineworx was finalized prior to the end of 2015 and in the spring of 2016 the Company's 100% wholly owned subsidiary, Mineworx USA signed an operating agreement on the historical Vulture Peak gold property, located near Wickenburg Arizona. During the spring and summer the initial testing of our patent-pending HM X-tract alluvial prototype gold processing technology was completed along with extensive due diligence on the property. Unfortunately, the project's Prime Lender initiated foreclosure proceedings, allowing the Prime Lender to obtain ownership of the property from the original group that Mineworx signed the operating agreement with. Since September, Mineworx USA has been in negotiations with the Prime Lender to secure an Operating Agreement and/or Purchase Agreement on the property and its assets. The Prime Lender has commissioned a detailed appraisal of the property and assets and we will update as events continue to unfold.

We have determined that our future efforts will be devoted to the design and construction of the next generation of equipment that will be focused solely on hard rock deposits, due to superior project economics. This next generation prototype will include our new patent pending portable and energy efficient HM X-mill which is undergoing final commercial testing. It is transformational in grinding technology and is based on Mineworx's proprietary, high velocity, horizontal rotary milling design. It is designed for the fine grinding of ores and regrinding of concentrates and tailings to produce a consistent particle size with 100% of the ground material passing 100 mesh (150 μm) or finer.

The Company is currently completing its due diligence on several hard rock gold deposits in the United States and Canada. We will be communicating on the status as we move further along with these and other projects that fall within our guidelines for determining the economic viability of the project.

This summer the Company announced that it had filed a patent for its HM X-leach, which is a proprietary, environmentally-friendly, non-cyanide based leach formula for the extraction of precious metals from ores, concentrates, tailings and electronic waste (e-Waste). The Company engaged the services of Met-Solve Laboratories, a well-respected and independent mineral and hydrometallurgical testing laboratory, based in Langley, B.C. to oversee the development and testing of the formula. Last September, X-leach was awarded $45,000 through the Mitacs Accelerate program which saw a research collaboration take place with the University of British Columbia's NBK Institute of Mining Engineering on the patent-pending leaching formula. The X-leach formula has caught the attention of many of the major international gold producers and e-Waste processors as well as international media. X-leach has been clearly recognized in helping the industry reduce the risks and environmental impact of current processing operations by developing an alternative to cyanide leaching.

In December 2016, the Board of Directors unanimously approved the proposal to spin-out the X-Leach reagent technology to EnviroLeach Technologies Inc. This spin-out will include the transfer of all X-Leach related assets including all intellectual property rights for the eco-friendly X-Leach, non-cyanide based leach formula to EnviroLeach for the price of $3 million. The decision to move forward with this arrangement is to allow the new company - Enviroleach, led by Duane Nelson, to focus exclusively on the development, enhancement and commercialization of this new reagent technology and forge new strategic relationships in both the mining and e-Waste sectors.

Exchange and shareholder approval is required for this transaction with January 23, 2017 set as the shareholder date of record. This means that any registered Iberian shareholder as of this date will be able to vote at the soon to be announced Special Meeting on this proposed transaction. If the approvals are obtained, Iberian shareholders on or

about February 27th will receive, by way of a return of capital dividend, approximately 1 free trading share of EnviroLeach for every 10 shares held in Iberian. More detailed information on this transaction will be included in an information circular that will be sent to shareholders at the beginning of February.

Spain

While a great deal of focus has been on the R&D and operational rollout of the Mineworx technologies during 2016, management has continued to closely monitor the market conditions and potential for our Spanish assets - the Caurio concessions, the Cehegin Iron Ore Project and the Aroche Wollastonite Project.

Due to findings of the investigation work completed to date, the company chose not to advance the next option installment payment regarding the Caurio concessions and has no further continuing obligations with respect to the option agreement. The near-term benefits of these concessions do not justify continued expenditures, however, the relationship with the rights holder remains strong. If conditions change, the company could pursue re-establishing an agreement with the rights holder.

Iron ore has rallied over 80% during 2016 to over $80/ton for the benchmark 62% Fe. These price levels have not been seen in almost three years. It is important to recall that the 100% wholly owned Cehegin project was a former producing mine, which historically achieved an average grade of over 65% Fe, with very low impurities, making it very attractive to the European market. This high grade of iron ore can typically realize a ~10% premium over and above the market price of the benchmark 62% Fe. Cehegin has over 38,000 metres of historical drilling on four major deposits on its 62 mineral concessions. This, combined with Cehegin's close proximity to the major deep sea Port of Cartagena and nearby rail, makes for a very attractive project. With the significant improvement in market sentiment towards iron ore, management has determined that the timing is right to methodically advance Cehegin to capture increased interest for a potential joint venture or acquisition, a proven approach Iberian realized with the Alberta-1 tin/tantalum and lithium project when it was sold for $7 million in 2015.

Iberian, through its 100% wholly owned Spanish subsidiary, Magnetitas de Cehegin has now submitted the results of its 2015 high-resolution aeromagnetic survey to the Spanish mining authorities to expedite an exploration permit required to commence a moderate Work Program to enhance Cehegin's potential and verify the historical data in accordance to a NI 43-101 Resource Estimate. The results of the aeromagnetic survey provided excellent resolution of near-surface magnetic sources as well as other targets not previously known, representing a major improvement over previous data.

Management is confident that the modest cost of an approximate 2,200m (15-18 borehole) drill program to verify the historical data's estimated potential of up to 30 million tonnes of mineralization, which was referenced in the Company's Cehegin Magnetite Project NI 43-101 Technical Report, prepared by Micon International and dated April 2014, will substantially increase the value and interest in the concessions

The Aroche Wollastonite project has also attracted the attention of major international companies in this sector. It's strategic location and excellent infrastructure combined with the high quality of wollastonite are factors resulting in this interest. The current status of ongoing discussions along with further due diligence of the property will determine the business strategy to be undertaken to best monetize the project.

In summary, our objectives are to optimize all undertakings we are currently working on. In this end, I would like to recognize our dedicated employees who have contributed to the success of the previous year as well as to their anticipated future efforts in realizing our ongoing vision of pursuing new avenues towards maximizing shareholder value. Finally, I want to acknowledge our shareholders for their ongoing support and confidence in our undertakings as we strive to make our presence felt in the mining industry, because without you, none of this could happen.

Sincerely,

Greg Pendura, President & CEO

Iberian Minerals Ltd. published this content on 10 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 10 January 2017 23:28:04 UTC.

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