Nemex Resources : Quarterly Activities and Cashflow Report

Quarterly Activities Report

30 July 2014

Fast Facts

Shares on issue 157.4M Options 86.9M Performance Rights 9.0M ASX Code NXR

Patrick Flint Chairman Peter Turner

Technical Director

Paul Jurman

Non-Exec Director & Company Secretary

WBT Investment

 Biometric technology

 Potential global market

 Strong management

Guinea (Iron)

 High-grade iron discovery

 Large resource potential

 Targeting DSO production

Côte d'Ivoire (Gold)

 Geophysical anomalies

 Exciting opportunity

 Under-explored country

Mr Patrick Flint

T: +61 8 9388 2277 www.nemexres.com.au

June 2014

Nemex Resources Limited (ASX: NXR) is pleased to report on its operational activities for the June 2014 Quarter.

Investment in Security Biometric Technology

 Completed acquisition of initial 20% interest in Wavefront

Biometric Technologies Pty Ltd (WBT).
 WBT has developed and patented a biometric technology for reliable and secure authentication of a person's identity.

 Technology has potential applications across numerous global sectors, and initial commercialisation efforts to be focussed on mobile-online banking and mobile transactions.

 Significant progress made by WBT towards implementing the technology on a hand held / mobile platform.

Guinea & Côte d'Ivoire Mineral Exploration

 Discussions continued with a number of potential funding partners.

Corporate

 Completion of $1.8 million capital raising.

INVESTMENT IN SECURITY BIOMETRIC TECHNOLOGY

During the quarter, Nemex concluded its due diligence review of Sydney-based Wavefront Biometric Technologies Pty Ltd (WBT), and completed the initial investment of $700,000 to acquire a 20% in WBT.
WBT has developed and patented a biometric technology for reliable and secure authentication of a person's identity. The technology authenticates a person's identity based on the pattern of light reflected back from the tear film on the corneal surface of the eye. WBT has developed a desktop device to deliver its identity authentication solution. WBT's objective is to implement the technology on a hand held platform and then commercialise the technology (initially) in the mobile banking sector. The technology has potential applications across global sectors including banking, healthcare, military, aviation and border control.
The principal terms of the Agreement pursuant to which NXR can acquire up to a 51% in WBT were set out in the Company's ASX announcement dated 1 April 2014 and in the notice of meeting sent to shareholders on 15 April 2014.
In April 2014 WBT commenced the process of implementing the technology on a hand held platform. The product development program comprises three stages, is expected to take 14
- 18 months in total to complete and the associated costs are proposed to be funded by
NXR's staged investments.
The development work is primarily being undertaken by an experienced team in the United States, led by Dr Ed Sarver, with review and input as required by WBT personnel in Australia, including the technology's original inventor, Mr Stephen Mason, a Sydney based clinical Optometrist and researcher. Dr Sarver is regarded globally as a world leader in developing
innovative software and hardware for measuring the corneal contour and corneal modelling.

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The first phase of the development program is to adapt the WBT technology onto a hand- held platform and, more specifically, be able to demonstrate that the hand-held platform will:

 Acquire a live image for authentication

 Automatically process the image for features used for authentication

 Enroll an individual

 Demonstrate authentication of the enrolled individual

In July 2014 the WBT product development team in the USA advised that the first phase deliverables (as noted above) had been met (via a hand held attachment to a mobile device). WBT personnel in Australia, including Mr Stephen Mason, are now in the process of completing their review of the product development, following which NXR will conduct its own investigations and decide on whether to exercise its option and invest a further
$625,000 to fund the second phase of WBT's product development, and thereby acquire an additional 10% in WBT, bringing its interest in WBT to 30%.
The second phase of the development plan, which is budgeted to take 4 to 6 months to complete, is to port the technology to a second mobile device, improve industrial design and user interface and improve software and system performance. WBT's objective is to present the enhanced product to potential users in early 2015, and commence the commercialisation process.

TÉLIMÉLÉ PROJECT, GUINEA (Iron)

Nemex has identified significant near surface, high-grade T1 mineralisation at the Télimélé DSO iron project. Nemex has previously outlined a fully-costed, two-stage pre-development plan that involves (i) drilling additional T1 mineralisation (where it is known to occur from previous scout drilling) to lift high-grade resources and (ii) to complete a Bankable Feasibility Study.

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During the quarter the Company continued discussions with potential partners interested in assisting develop the Télimélé DSO iron project into a working mine and export operation. The decline in the iron price in recent months has further negatively impacted NXR's ability to secure funding for future development at the project.
Field work at the project was restricted during the quarter due to the spread of the Ebola virus in Guinea and the onset of the wet season.

CÔTE D'IVOIRE (Gold & Base Metals)

During the quarter, NXR continued discussions with third parties with respect to negotiating a Farm-in arrangement for Nemex's Dabakala and Alepe Projects. The discussions are on- going.

CORPORATE

During the quarter, NXR issued 90 million shares (and 45 million free attaching options) to sophisticated and professional investors who are clients of Cicero Advisory Services Pty Ltd at an issue price of 2 cents per share to raise $1.8 million.
Detailed information about Nemex's projects is available at www.nemexres.com.au

For further information contact:

Patrick Flint
Chairman
P: 08 9388 2277
E: pflint@nemexres.com.au

Page 4 of 5

About Nemex Resources

Nemex Resources Ltd (ASX: NXR) boasts a diversified asset portfolio comprising interests in both the minerals and technology sectors.
Nemex has recently acquired a 20% interest in Australian-based biometric technology developer Wavefront Biometric Technologies (WBT), and has the right to increase this to a
51% interest.
WBT is in the process of developing and commercialising a unique identity authentication technology. The technology authenticates a person's identity based on the pattern of light reflected back from the tear film on the corneal surface of the eye. The technology has potential applications across numerous sectors around the world, including banking, healthcare, military, aviation and border control.
Nemex also holds interests in a number of highly prospective resources projects, including the Télimélé DSO Iron project in Guinea, early stage gold exploration prospects in Cote d'Ivoire and the Woodley Iron project in Western Australia.

Competent Person's Statement

The information reported above relating to Exploration Results and Mineral Resources was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.
The information in this report that relates to Exploration Results is based on, and fairly represents, information and supporting documentation compiled by Dr Peter Turner, who is a member of the Australian Institute of Geoscientists (AIG). Dr Turner is the Technical Director of the Company. Dr Turner has sufficient experience which is 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 2004 Edition of the
'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves'. Dr Turner consents to the form and context in which the Exploration Results and the supporting information are presented in this report.

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A ppend ix 5B

M iningex ploration entity qu arterly report

Introd u ced 1 /7 /96.O rigin:A ppend ix 8 .A mend ed 1 /7 /97 ,1 /7 /98 ,30 /9/2 0 0 1 .

Rule 5.3

N ame of entity

NEMEX RESOURCES LIMITED

A B N Q u arterend ed ("cu rrentqu arter")

44 1 46 2 43 8 43 30 June 2014

C ash flows related to operatingactivities

1 .1 Receipts from sales

1 .2 P ayments for

(a) ex ploration and evalu ation

(b) d evelopment

(c) prod u ction

(d ) ad ministration

1 .3 D ivid end s received

1 .4 Interest and other items of a similar natu re received

1 .5 Interestand othercosts of finance paid

1 .6 Income tax es paid

1 .7 O therrevenu es -refu nd of R & D tax rebate

N etO peratingC ash Flows

+ S ee chapter1 9 ford efined terms.

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C u rrentqu arter

$A '0 0 0

1 .2 3 A ggregate amou ntof payments to the parties inclu d ed in item 1 .2 7 9

-

1 .2 4 A ggregate amou ntof loans to the parties inclu d ed in item 1 .1 0

1 .2 5 E x planation necessary foran u nd erstand ingof the transactions

Relates to D irectors fees and salaries forex ecu tive and non-ex ecu tive d irectors and payments mad e forcompany secretarialservices and occu pancy ex penses.

2 .1 D etails of financing and investing transactions which have had a materialeffecton consolid ated assets and liabilities bu td id notinvolve cashflows

N/A.

2 .2 D etails of ou tlays mad e by otherentities to establish orincrease theirshare in projects in which the reportingentity has an interest

Iron W estResou rces P ty L td earningan interestin the W ood ley P roject-$1 2 ,67 7 .

Add notes as necessary for an understanding of the position.

3.1 L oan facilities

3.2 C red itstand by arrangements

+ S ee chapter1 9 ford efined terms.

30 /9/2 0 0 1 A ppend ix 5B P age 7

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M iningex ploration entity qu arterly report

4.1 E x ploration and evalu ation

4.2 D evelopment

4.3 P rod u ction

4.4 A d ministration

* Inclu d ed in A d ministration ex pend itu re is afu rther$62 5,0 0 0 investmentin W B T,assu ming the W B T / P hase 1 hu rd le is metand N X R ex ercises its option to acqu ire an ad d itional1 0 % interestin W B T.

Reconciliation of cash at the end of the qu arter (as shown in the consolid ated statementof cash flows) to the related items in the accou nts is as follows.

6.1 Interests in mining tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements acqu ired or increased

+ S ee chapter1 9 ford efined terms.

A ppend ix 5B P age 8 30 /9/2 0 0 1

A ppend ix 5B

M iningex ploration entity qu arterly report

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

7 .1 2 Unsecu red notes

(totals only)

+ S ee chapter1 9 ford efined terms.

30 /9/2 0 0 1 A ppend ix 5B P age 9

A ppend ix 5B

M iningex ploration entity qu arterly report

1 This statement has been prepared u nd er accou nting policies which comply with accou ntingstand ard s as d efined in the C orporations A ctorotherstand ard s acceptable to A S X (see note 4).

2 This statementd oes give atru e and fairview of the matters d isclosed .

S ign here:................................................................. D ate:30 Ju ly 2 0 1 4 (C ompany secretary)

P rintname: P au lJu rman

1 The qu arterly report provid es a basis for informing the market how the entity's activities have been financed for the pastqu arter and the effecton its cash position. A n entity wanting to d isclose ad d itionalinformation is encou raged to d o so,in anote ornotes attached to this report.

2 The "N atu re of interest"(items 6.1 and 6.2 )inclu d es options in respectof interests in mining tenements acqu ired ,ex ercised or lapsed d u ring the reporting period . If the entity is involved in a jointventu re agreementand there are cond itions preced ent which willchange its percentage interestin amining tenement,itshou ld d isclose the change of percentage interestand cond itions preced entin the listrequ ired for items

6.1 and 6.2 .

3 Issu ed and qu oted secu rities. The issu e price and amou ntpaid u pis notrequ ired in items 7 .1 and 7 .3 forfu lly paid secu rities.

4 The d efinitions in, and provisions of, AASB 1022: Accounting for Extractive

Industries and AASB 1026: Statement of Cash Flows apply to this report.

5 A ccou nting S tand ard s A S X will accept, for ex ample, the u se of International A ccou nting S tand ard s for foreign entities. If the stand ard s u sed d o notad d ress a topic,the A u stralian stand ard on thattopic (if any)mu stbe complied with.

+ S ee chapter1 9 ford efined terms.

A ppend ix 5B P age 1 0 30 /9/2 0 0 1

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