Spectrum Rare Earths : Quarterly Activities and Cashflow Statement - March 2017

ASX:SPX

26 APRIL 2017

QUARTERLY REPORT

For the period ending 31 March 2017

SUMMARY OF ACTIVITIES

During the March 2017 quarter, activities were focussed on capital preservation and the seeking of shareholder approvals to ratify or approve the issue of shares to raise $600,000, which was achieved at a general meeting held on 21 April 2017. The raising has been completed and the cash balance at the date of this report is $736,198, including funds of $130,000 received post quarter for the second tranche of the placement.

The only activity during the quarter on the proposed Mt Remarkable joint venture was seeking to progress obtaining the necessary native title and heritage agreements, which is a necessary condition for the granting of the tenement and completion of formal documentation with King River Copper. Flooding in the Kununurra region resulted in dispersal of the traditional owners and re-establishment of contact awaited their return to the area. Spectrum has completed its obligation to raise $0.5 million.

Spectrum continues to review other mineral exploration opportunities that may be offered to the company.

CORPORATE

Finance

The 31 March 2017 cash balance of the Company was $631k compared with a 31 December 2016 cash balance of $154k.

Mr Alex Hewlett was appointed Non-executive chairman on 8 March 2017 and Mr A Barton retired as a director.

Capital Structure

Share Price (SPX): $0.008; Issued Shares**: 472.9M; Market Cap: $3.78M (as at 24 April 2017).

**After allotment of all shares approved at EGM of 21 April

TENEMENT STATUS

Mining Tenements held at the end of the quarter

Nil.

For further information please contact: MR ALEX HEWLETT

NON-EXECUTIVE CHAIRMAN (08) 9271 0149

Registered Office

15 Lovegrove Close Mount Claremont WA 6010

Tel: 08 9384 3284 | Fax: 08 9284 3801

info@spectrumrareearths.com.au ABN: 94 115 770 226

www.spectrumrareearths.com.au

Company Management

Alex Hewlett: Non-Executive Chairman Alexander Moyle: Non-Executive Director Leon Charuckyj: Non-Executive Director Graeme Boden: Company Secretary

+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

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 (9 months) $A'000
   2.2	Proceeds from the disposal of:	-	18
   (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	-	18
   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

470

-

-

-

-

-

-

-

-

470

-

-

-

-

-

-

-

-

470

470

**** On 24 February 2017, the Company has mandated K2 Advisory Partners Pty Ltd to undertake a placement to raise $600,000 in two tranches. 76,850,000 shares were allotted on 3 March 2017 for Tranche 1 to raise $307,400. $162,600 has been received to date for Tranche 2 which is subject to shareholder approval at the General Meeting on 21 April 2017. A further $120,000 is yet to be received for Tranche 2.

1. Net increase / (decrease) in cash and cash equivalents for the period

2. Cash and cash equivalents at beginning of

   period

3. Net cash from / (used in) operating activities (item 1.9 above)

4. Net cash from / (used in) investing activities (item 2.6 above)

5. Net cash from / (used in) financing activities (item 3.10 above)

6. 154 219

   7 (76)

   - 18

   470 470

   Consolidated statement of cash flows		Current quarter $A'000	Year to date (9 months) $A'000
   4.5	Effect of movement in exchange rates on cash held	-	-
   4.6	Cash and cash equivalents at end of period	631	631

   5.	Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A'000	Previous quarter $A'000
   5.1	Bank balances	631	154
   5.2	Call deposits	-	-
   5.3	Bank overdrafts	-	-
   5.4	Other (provide details)	-	-
   5.5	Cash and cash equivalents at end of quarter (should equal item 4.6 above)	631	154

   Current quarter $A'000

   -

   -
7. Payments to directors of the entity and their associates

8. Aggregate amount of payments to these parties included in item 1.2

9. Aggregate amount of cash flow from loans to these parties included in item 2.3

10. Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

    Current quarter $A'000

    -

    -

11. Payments to related entities of the entity and their associates

12. Aggregate amount of payments to these parties included in item 1.2

13. Aggregate amount of cash flow from loans to these parties included in item 2.3

14. Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2