14 SEPTEMBER 2016 N E W D E V E L O P M E N T S T R A T E G Y A T C L E V E L A N D

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1 14 SEPTEMBER 2016 N E W D E V E L O P M E N T S T R A T E G Y A T C L E V E L A N D Elementos Limited (ASX: ELT) ( Elementos or the Company ) is pleased to announce the implementation of an enhanced development strategy for the Cleveland tin project. The strategy draws on the findings of the Cleveland pre-feasibility and open-cut scoping studies, and discussions with the Company s new alliance partner, Thaisarco, and potential financiers. The new strategy aims to expand the size of the open-pit mineral resource through a diamond drilling program targeting infill, strike and depth extensions to the current 800,000 tonnes at 0.81% Tin and 0.27% Copper open-pit Indicated Mineral Resource estimate (ASX announcement 03 March 2015). A ground magnetics geophysical program to assist with the generation of drill targets will be completed prior to drilling. The geophysics will be used to enhance old geophysical data which demonstrates potential extensions of the mineralisation between the existing open-cut mineral resources and new targets to the south-west of the existing mineralisation. On completion of the drilling, an updated mineral resource estimate and feasibility study will be completed on processing open-cut and underground mineral resources, and supplementing the flotation stage of the processing plant with a tailings ore stream. The new exploration program has the potential to significantly de-risk a future project development, and significantly enhance the economics of the project, including: Drawing on a larger, open-cut tin-copper resource; Creating a longer mine life project with higher-grade ore from the open-cut; Early cash flows will be generated through simple, open-cut mining techniques; Lowering forecast dilution and ore losses through the design of one open-cut; and Creating a lower risk profile to finance the project. Elementos has made considerable progress in advancing Cleveland towards development with the completion of pre-feasibility study, scoping studies, environmental and mining licence applications. Whilst positive economics have been demonstrated through the staged development strategy, the Company believes the new strategy addresses the perceived risks of developing an initial standalone low-grade tailings project and the high capital expenditure of an initial underground mine. The geophysics is being planned for October 2016 and tenders for a small initial drilling campaign have commenced. The Company has approached a number of prospective financiers about funding of the program and is encouraged by the potential level of support. The Company is pursuing strategies to fund the program with lowest possible dilution to shareholders. Recent merger and acquisition activity, and strong LME tin prices of US$19,200/t (AUD$25,000/t) has put focus back on the tin industry, which has a lack of high-quality new growth projects in first world countries.

2 New C l e v e l a n d D e v e l o p m e n t S t r a t e g y The Company is pleased to announce the implementation of an enhanced development strategy for the Cleveland project. The Company has made considerable progress in advancing Cleveland towards development with the completion of a pre-feasibility study, scoping studies, environmental and mining licence applications. Whilst positive economics have been demonstrated through the staged development strategy, the review process has highlighted the market s concern about aspects of the previous strategy, including: The perceived risks of developing an initial standalone low-grade tailings project; The low metallurgical recoveries associated with the tailings reprocessing; Short mine-life from the existing open-cut JORC mineral resources; and The high capital expenditure required to establish underground operations. The new strategy involves expanding the size of the hard rock open-pit mineral resource through a diamond drilling program. Drill targets include untested near surface geophysical and geochemical anomalies, and shallow infill and along strike target extensions to the current 800,000 tonne at 0.81% Tin and 0.27% Copper open-pit Indicated Mineral Resource. A ground magnetics geophysics program to assist with the generation of drill targets will be completed prior to drilling. On completion of the drilling, an updated Mineral Resource estimate and feasibility study will be completed on processing open-cut and underground mineral resources. In 2015, the Company released a scoping study on developing the open-cut mineral resources at Cleveland. The study demonstrated the positive aspects of developing opencut resources at Cleveland, including: Attractive cash cost forecast of US$8,303 per tonne (compares to current spot LME tin prices of over US$19,200/tonne); Low capital costs for the implementation of a conventional flow sheet for tin processing crush, grind and flotation; and Low strip ratio s and high average utilisation of the mineral resource. The study was based on three years of open-cut operations. The Company believes by expanding the open-cut resources it can significantly enhance and de-risk the Cleveland project development by: Creating a longer mine life project by drawing on a larger, higher-grade, open-cut tin-copper resource; Generating early cash flow through simple, lower-cost, open-cut mining techniques; Lowering forecast dilution and ore losses through the design of one open-cut; and Creating a lower risk profile to finance the project. G e o p h y s i c s P r o g r a m A ground magnetic survey that was carried out in 1954 by the Australian Bureau of Mineral Resources over the central portion of the old Cleveland underground tin mine demonstrated the survey technique was successful in locating the style of mineralisation being targeted at Cleveland. The 1954 ground magnetic survey clearly defined anomalous zones outside the current open pit boundaries (see Figure 1). The proposed new ground magnetic survey will be extended beyond the 1954 survey area to cover the prospective geology in the immediate vicinity of historical workings, including: Between the existing pit shells along strike at Hall s and Henry s; To the north and south, of Henry s and Hall s, and Khaki; and Page 2

3 A new potential zone of mineralisation at Battery, Lucks and Smithy lodes in the southwest zone of the mineralisation structures. The magnetics program (including line cutting, subject to Mineral Resources Tasmania approval) is expected to start in October 2016 and take 6 weeks to complete Figure 1. Proposed Ground Magnetic Survey Location Plan Page 3

4 D r i l l i n g P r o g r a m The Company is planning a diamond drilling program commencing, once the geophysics, drill permitting and track clearing programs are completed. The drilling program has been designed to improve the overall quality and expand on the size of its existing JORC 2012 compliant Mineral Resource estimate (Table 1). Table 1 - Open Pit Tin-Copper Mineral Resource (at 0.35% Sn cut-off) Indicated 0.80 Mt 0.81% 6,500t ,300t Inferred 0.01 Mt 0.99% 140t t Note: Open Pit Mineral Resource Estimate (Table subject to rounding errors; Sn=tin, Cu=copper) The Company has defined Open Cut and Underground Exploration Targets (Table 2) at Cleveland, and whilst the potential quantity and grade is conceptual in nature, there has been insufficient exploration drilling to estimate a Mineral Resource. It is uncertain if further drilling will result in the estimation of a Mineral Resource, however it is the basis for the new geophysics and drilling program. Table 2 - Cleveland Exploration Target Tonnage Sn Grade Contained Sn Cu Grade Contained Cu Target 3-16Mt % 20,000t to 110,000t 0.27% 8,000t to 43,000t Note: Cleveland Exploration Target (ASX release dated 02 April 2014) (Table subject to rounding errors: Sn=tin, Cu=copper) Within the overall Exploration Target, a number of zones relate to shallow areas that would form part of the potential open-cut resources. This gives the Company confidence it may be able to expand the overall size of the open-cut resource at attractive tin-copper grades. Other work programs The Company has commenced working on some metallurgical programs aimed at significantly improving the tin metallurgical recovery. In addition, the Company is close to finalising a scoping study on a new tailings storage facility. Updates will provided to the market shortly on these programs. Elementos Chairman, Andy Greig, commented: The new executive team has completed a thorough review of the historical data relating to the Cleveland project. In conjunction with the Company s new alliance partner and prospective financiers, a new strategy aimed at getting Cleveland on track to first production and cash flow has been designed. The new strategy targets expanding the open-cut resources and reducing the perceived risk of the Company to lower-grade tailings reprocessing. The new strategy is being implemented at a time when we are evidencing a return of M&A activity in the tin sector and LME tin prices returning to over AUD$25,000/tonne. Page 4

5 For more information, please contact: Duncan Cornish Company Secretary Phone: admin@elementos.com Please visit us at: M I N E R A L R E S O U R C E S A N D O R E R E S E R V E S Tailings Ore Reserve (at 0% Sn cut-off) Probable 3.7 Mt 0.29% 11,000t 0.13% 5,000t Table subject to rounding errors; Sn = tin, Cu = copper Total Tin-Copper Mineral Resource (at 0.35% Sn cut-off) Indicated 5.00 Mt 0.69% 34,500t 0.28% 14,000t Inferred 2.44 Mt 0.56% 13,700t 0.19% 4,600t Table subject to rounding errors; Sn = tin, Cu = copper Open Pit Tin-Copper Mineral Resource (at 0.35% Sn cut-off) NOTE: this Open Pit Tin-Copper Mineral Resource is a sub-set of the Total Tin-Copper Mineral Resource noted above Indicated 0.80 Mt 0.81% 6,500t ,300t Inferred 0.01 Mt 0.99% 140t t Table subject to rounding errors; Sn=tin, Cu=copper Underground Tungsten Mineral Resource (at 0.20% WO3 cut-off) 1 Category Tonnage WO3 Grade Inferred 4 Mt 0.30% Table subject to rounding errors; WO3 = tungsten oxide 1 This information was prepared and first disclosed under the JORC Code 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. Page 5

6 C A U T I O N A R Y S T A T E M E N T S F o r w a r d - l o o k i n g s t a t e m e n t s This document may contain certain forward-looking statements. Such statements are only predictions, based on certain assumptions and involve known and unknown risks, uncertainties and other factors, many of which are beyond the company s control. Actual events or results may differ materially from the events or results expected or implied in any forward-looking statement. The inclusion of such statements should not be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions or that any forward-looking statements will be or are likely to be fulfilled. Elementos undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this document (subject to securities exchange disclosure requirements). The information in this document does not take into account the objectives, financial situation or particular needs of any person or organisation. Nothing contained in this document constitutes investment, legal, tax or other advice. M i n e r a l R e s o u r c e s a n d O r e R e s e r v e s Elementos confirms that Mineral Resource and Ore Reserve estimates used in this document were estimated, reported and reviewed in accordance with the guidelines of the Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code) 2012 edition. Elementos confirms that it is not aware of any new information or data that materially affects the Mineral Resource or Ore Reserve information included in the following announcements: Cleveland Tailings Ore Reserve released on the 3 August 2015; Cleveland JORC Resource Significantly Expanded announced to the ASX on 5 March 2014; and Cleveland Open Pit - High-Grade Mineral Resource Defined announced on 3 March The Company also confirms that all material assumptions and technical parameters underpinning the estimates in the Cleveland Mineral Resources and Reserves continue to apply and have not materially changed. Elementos also confirms the form and context in which the Competent Person s findings are presented have not been materially modified from the date of announcement. Page 6