Platypus Minerals : Quarterly Activity and Cashflow Reports

QUARTERLY ACTIVITIES REPORT

for the period ending 30 September 2016

(All figures are unaudited and in A$ except unless stated otherwise)

Key Points

Activities

• Commencement of Pre-Feasibility Study ("PFS") on Phase 1 L-Max® Plant

• Drilling commences at the Lemare Lithium Project in Quebec, Canada

• Exploration Licence (EL 8468) granted for the Euriowie Project near Broken Hill, NSW

• Joint venture established with St-Georges for the Royal Project in Quebec

• Lodgement of Provisional Patent Application for the recovery of caesium/rubidium formate from an intermediate product generated by the L-Max® technology

• Lemare Phase 1 diamond drilling campaign of 16 holes for 1,788m completed early October - assays pending

• Known strike extended to 360m, and open; evidence of a possible pegmatite system

  Corporate

• All aspects of the business combination with Lepidico Ltd were concluded in July

• Mr Julian "Joe" Walsh appointed to the Board as Managing Director

• Mr Tom Dukovcic transitions to Director Exploration

• Mr Mark Rodda appointed to the Board as Non-Executive Director

• Proposed name change to Lepidico Limited

• Cash position as at 30 September 2016 - $2.98 million and no debt

  OVERVIEW

  Commitment to the PFS for a commercial L-Max® plant of minimum scale to provide an attractive economic return, represents an important milestone for the Company. The study will leverage the substantial body of test-work undertaken over the past two years to develop the metallurgical process, which has produced battery grade lithium carbonate along with a suite of by-products. The PFS will include plant design criteria, optimal plant location, investigation of by-product markets, assessment of feedstock options, logistics, cost estimates, financial analysis and a defined scope for feasibility study evaluation. Ex-mine capital and operating costs estimates are expected in December 2016, while the PFS is scheduled to be completed in the March quarter 2017.

  Platypus is evaluating a number of lepidolite and other lithium-mica deposits as potential feedstock for its planned Phase 1 Plant. The PFS work will also be leveraged commercially via the Platypus subsidiary, Lepidico, which has various L-Max® licence and royalty agreements with third parties.

  OPERATIONS

  Pre-Feasibility Study - Phase 1 L-Max® Plant

  During the quarter, Platypus's wholly owned subsidiary Lepidico Limited ("Lepidico") commenced a PFS to evaluate an L-Max® plant of minimum commercial scale to demonstrate the economic and technical viability of L-Max®. This has been named the Phase 1 L-Max® Plant ("Phase 1 Plant").

  The PFS is a key step on the pathway to commercialising the L-Max® technology, which has largely transitioned from research to development status. The scope of the PFS includes plant design criteria, optimal plant location, investigation of by-product markets, assessment of feedstock options, logistics, cost estimates, financial analysis and a defined scope for a feasibility study evaluation.

  Ex-mine capital and operating costs estimates are expected to be completed around calendar 2016 year end, with the PFS completed in the March 2017 quarter. Assuming a successful outcome, Lepidico will immediately transition to a feasibility study, which it is estimated will be completed in the December 2017 quarter.

  Phase 1 L-Max® Plant

  The objective of the PFS is to design a Phase 1 L-Max® Plant at sufficient scale to be economically viable at a lithium carbonate price of US$8,000/t and to prove that L-Max® is technically robust under commercial operating conditions. Work undertaken to develop the scope for the PFS has set the following indicative parameters for the Phase 1 L-Max® plant:

  Parameter	Detail
  Throughput Rate	2-4tph (17k to 35k tpa) mica concentrate
  Mica Concentrate Feed Grade	1.2% to 1.5% Li (2.6% to 3.5% Li2O)
  Lithium Carbonate Operating Parameters	2,000-3,000tpa
  Potential By-products	Potassium sulphate fertiliser Sodium silicate Caesium/Rubidium formate

  Disclaimer: For the avoidance of doubt the Parameters being investigated as part of the PFS do not constitute a production target or forecast in relation to mineral resources associated with any project owned by the Company. These Parameters have simply been provided so investors can understand the scope of the PFS. The Company cautions investors against using any statements made which may indicate or amount to the reporting of a production target or forecast financial information, as a basis for making any investment decision about shares in the Company.

  By-Products

  Previously, Lepidico has successfully produced lithium carbonate of more than 99.5% purity from a continuous L-Max® mini plant trial (Figure 1). Subsequent to this, Lepidico has also produced a number of by-products from the remnant leach liquor as outlined below.

  The ability to produce and sell any of these by-products will even further improve the economics and industry cost competitiveness of L-Max®. The PFS will investigate:

• Existing markets including pricing, demand/supply, competitors and customers; and

• Required product specifications and ability for an L-Max® Phase 1 Plant to meet these specifications.

Subsequent to the end of the quarter, Lepidico lodged a provisional patent application 2016904071 for the recovery of caesium/rubidium formate from an intermediate product generated by the L-Max® technology.

Lemare, Quebec, Canada

During the quarter, Lepidico commenced the first phase of a 4,000m diamond drilling program at the Lemare Lithium Project (Figure 2). Subsequent to the end of the quarter, the Phase 1 drilling program was completed, comprising 16 holes for a total of 1,788m. A total of 295 samples have been sent for assay. Results are pending as at the date of this report.

This initial drilling program targeted the known 200m strike of the Lemare spodumene pegmatite and its immediate extensions. Additional mapping and prospecting has also been undertaken to assess the potential for strike continuity as well as the potential for other pegmatite bodies in the immediate vicinity.

The drilling has almost doubled the known strike extent of the spodumene pegmatite with mineralised pegmatite intercepted over a 360m strike, and remaining open in both directions. Additionally, multiple pegmatites were intersected on several sections, suggesting the presence of a pegmatite system at Lemare, as opposed to just a single mineralised pegmatite.

Surface reconnaissance during the quarter identified the extension of the pegmatite approximately 250m further west, again with indications of more pegmatite occurrences in that area.

Full results from this initial drilling program will be reported once assays have been received and all geological data has been collated and evaluated.

Euriowie, Broken Hill, NSW

On 26 September 2016, Exploration Licence 8468 for the Euriowie project was granted. The licence consists of 17 units encompassing an area of approximately 49km2 some 60km north of Broken Hill, NSW (Figure 3). Included within the area are three historical mine workings in amblygonite-rich pegmatites (Figure 4). Amblygonite is a lithium-phosphate mineral which has high lithium content up to 10% Li2O.

Euriowie was originally worked for tin in the 1900s by numerous small-scale mines, developed on a series of pegmatite bodies. Historical data notes the occurrence of lithium and tantalum bearing minerals including amblygonite, spodumene and tantalite. Three pegmatites at Euriowie have been identified as prospective for amblygonite - Trident, Sceptre and Lady Don.