Manhattan : Quarterly Report 30 June 2017

• Manhattan's 100% owned ISR Ponton uranium project in WA has reported Inferred Resources of 24Mlb uranium oxide in four deposits
• Double 8 Inferred Resource of 17.2Mlb is located within QVSNR with Inferred Resources totalling 7Mlb uranium oxide reported for the Stallion, Highway and Shelf uranium deposits to the north, and outside, the QVSNR‌‌‌
• In addition Exploration Results reported, for the palaeochannels within QVSNR at Ponton, have identified four wide spaced drilled uranium oxide Exploration Targets
• WA Labor government's policies not to approve uranium mines or allow mineral exploration in A Class reserves suggests there is little likelihood of progressing the Ponton uranium project over the four year term of the present government
• Manhattan will maintain its key tenements at Ponton as a potential future low cost uranium mine development opportunity when the Labor policies or the WA government change
• The rush to renewables and emerging power storage technologies around the globe cloud nuclear developments and direct politicians and investment away from the sector
• Over optimistic renewable energy targets (up to 100% renewables by 2050) being set are unlikely to be met but also galvanise effort away from nuclear‌‌‌‌
• Tier one uranium development projects in Western Australia and Tanzania now on hold
• Paladin Energy calls in KPMG administrators under a mountain of debt and failed asset sales. Paladin's problems were compounded when uranium prices plunged in 2011 and failed to recover after the Fukushima nuclear incident and tsunami in Japan
• Nuclear energy remains well established in the global energy mix, and with a record new build underway, ordered and planned, over the longer term uranium demand will exceed supply and this will result in higher uranium prices
• With the current ban on progressing uranium projects in WA we are now developing a revised business plan to take the company forward‌‌
• SPOT MARKET URANIUM OXIDE REMAINS DEPRESSED AT US$20.25 POUND

  REVIEW OF OPERATIONS

  INTRODUCTION

  Manhattan Corporation Limited's ("Manhattan") flagship Ponton uranium project is located approximately 200km northeast of Kalgoorlie on the edge of the Great Victoria Desert in WA. The Company has 100% control of around 690km2 of exploration tenements underlain by Tertiary palaeochannels within the Gunbarrel Basin. These palaeochannels are known to host a number of uranium deposits and drilled uranium prospects (Figures 1 & 2).

  The Company is drill testing and developing palaeochannel sand hosted uranium mineralisation amenable to in-situ metal recovery ("ISR").

  FIGURE 1: MANHATTAN'S PONTON URANIUM PROJECT

  On 23 January 2017 Manhattan reported an upgraded JORC Code 2012 Inferred Resource for the Double 8 uranium deposit at Ponton in WA of 17.2 million pounds ("Mlb") of uranium oxide ("U3O8") at a 200ppm cutoff. As well, maiden JORC Code 2012 combined Inferred Resources estimates for three uranium deposits at Ponton of 21.5 million tonnes ("Mt"), grading from 137 to 151ppm U3O8 totalling 6.97Mlb U3O8 at a 100ppm cutoff were reported.

  The four Inferred Resource estimates reported for Ponton project are:

• Double uranium deposit of 17.2Mlb U3O8 at 200ppm cut off;

• Stallion uranium deposit of 3.3Mlb U3O8 at 100ppm cutoff;

• Highway uranium deposit of 1.9Mlb U3O8 at 100ppm cutoff; and

• Shelf uranium deposit of 1.8Mlb U3O8 at 100ppm cutoff

  Exploration Results at Ponton, reported on 7 February 2014, have also identified four wide spaced drilled Exploration Targets with tonnage ranges of 4 to 45Mt, grade ranges of 250 to 450ppm U3O8 totalling 33 to 67Mlb U3O8 at the 200ppm U3O8 cutoff. In accordance with clause 17 of the JORC Code 2012, the potential quantity and grade reported as Exploration Targets in this report must be considered conceptual in nature as there has been insufficient exploration and drilling to define a Mineral Resource and it is uncertain if further exploration and drilling will result in the determination of a Mineral Resource.

  The four Exploration Targets reported for the Ponton project are:

• Double 8 of between 2.5 and 5.5Mlb U3 O8;

• Stallion South of between 8 and 16Mlb U3O8 ;

• Highway South of between 8 and 16Mlb U3O8; and

• Ponton of between 15 and 30Mlb U3O8

The four Inferred Resource estimates and four Exploration Targets at Ponton reported here were prepared by the Company's independent resource consultants H&S Consultants ("H&SC").

The Double 8 uranium deposit and the four Exploration Targets at Double 8, Stallion South, Highway South and Ponton are all located on granted exploration licence, E28/1898, located mostly within the Queen Victoria Spring Nature Reserve ("QVSNR") (Figures 2 & 3).

The four Mineral Resource Estimates reported in January 2017, and the four Exploration Targets previously reported in 2014, are based on actual exploration results including Manhattan's aircore and sonic drilling of over 767 holes and 52,700 metres of drilling along the palaeochannels immediately to the north of QVSNR in 2009 and 2010, 21 holes and 1,170 metres of drilling by Manhattan in 2016 and over 70km of conductive palaeochannels defined by the Company's airborne EM and magnetic surveys within QVSNR (Figure 3) and uranium mineralised sands discovered in previous drilling of 114 holes and 6,900 metres of drilling and down hole gamma logging by PNC Exploration ("PNC") and Uranerz Limited ("Uranerz") in the area in the 1980's.

Whilst a proposal has been developed to excise granted E28/1898 (that equates to 6% or 160km2 of the 2,700km2 QVSNR) from the reserve by a Reserves Amendment Bill in the WA parliament this proposal is now on hold. The WA state Labor government's policy of not to approve any new uranium mines, or permit mineral exploration in A Class reserves, suggests there is little likelihood of progressing the exploration and development of the Ponton uranium project over the next four year term of the present WA government.

REVIEW OF PROJECTS

1. PONTON PROJECT (WA) Interest: Manhattan 100%‌

Operator: Manhattan Corporation Limited

The Ponton project area is underlain by Tertiary palaeochannels within the Gunbarrel Basin. Carbonaceous sand hosted uranium mineralisation, below 40 to 70 metres of cover, has now been defined by drilling along 55 kilometres of the palaeochannels at Stallion, Stallion South, Double 8, Ponton, Highway and Highway South prospects (Figure 3). At a depth of 40 to 70 metres the uranium mineralisation is in shallow reduced sand hosted tabular uranium deposits in a confined palaeochannel that is potentially amenable to ISR metal recovery, the lowest cost method of producing yellowcake with the least environmental impact.

Within E28/1898 approximately 6,900 metres of drilling, in 114 drill holes, was drilled and down hole gamma logged by PNC and Uranerz in 1983 to 1986. This drilling discovered the palaeochannel sand hosted uranium mineralisation at Double 8, Stallion South, Highway South and Ponton (Figure 3). Manhattan has obtained and compiled all the PNC and Uranerz exploration results including the geological drill logs, assay results, down hole gamma logs, logging tool calibrations and estimated disequilibrium factors. These drill logs and gamma logs have been digitised and verified by Manhattan's independent consultants.

In 2009 Uranio drilled 1,683 metres of aircore in 20 holes and from December 2009 to September 2016 Manhattan drilled over 52,400 metres of aircore and sonic drilling in 735 holes along the palaeochannels at Ponton to the north of the QVSNR. Manhattan and Uranio's exploration and drilling results and the historic PNC and Uranerz data have been reviewed and the Inferred Resource estimated for Double 8, Stallion, Highway and Shelf deposits and Exploration Targets reported for Double 8, Stallion South, Highway South and Ponton prospects.