Quarterly Activities Report 31 January 2017

Battery Minerals creates foundation for rapid operational and corporate progress

QUARTER HIGHLIGHTS:

Highly-regarded mining executive and industry leader Mr David Flanagan appointed as non-executive Chairman

$9 million placement successfully completed to advance battery graphite operations

Company name change from Metals of Africa Limited to Battery Minerals Limited to reflect focus on graphite anode ready material for development and sales

Groundbreaking Spherical Graphite Test Facility begins operations in USA

Flagship Montepuez project Definitive Feasibility Study (DFS) enhanced to include Spherical Graphite Prefeasibility Study (PFS), due to be released in February 2017

Additional high-grade graphite deposit, Elephant, confirmed in Mozambique

Option agreement signed with ASX-listed Trek Metals to advance Kroussou Lead-Zinc Project, Gabon

Graphite-development company Battery Minerals Limited (ASX: BAT) (“the Company”, or “Battery Minerals”) has achieved significant progress operationally and corporately in the December quarter of 2016, providing a significant foundation on which the Company plans to make rapid progress in Q1 2017 and beyond.

Commenting on the achievements of the December quarter, Battery Minerals Limited Managing Director Cherie Leeden said, “The December quarter was key to Battery Minerals, as it culminated in a range of operational corporate activities that we had been working on for more than 12 months.”

“We have strengthened our Board with the appointment of David Flanagan as Chairman, secured necessary funding in a well-supported capital raising, and rapidly advanced the Montepuez project DFS to near completion – in the process creating a solid foundation for rapid progress in the early stages of 2017.”

MONTEPUEZ PROJECT DFS EXPANDED TO INCLUDE SPHERICAL GRAPHITE PFS

During the December quarter the Company has been focused on completing the Definitive Feasibility Study (DFS) at the proposed Montepuez flake graphite operation in Mozambique.

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The Montepuez Project contains two high grade graphite resources that are being included in the DFS, known as the Buffalo and Elephant Resources. The DFS was expanded to also include a Spherical Graphite Pre-Feasibility Study (PFS), which is currently underway.

The inclusion of a spherical graphite PFS is in line with the Company’s strategy of becoming a significant player in the spherical graphite (anode material in the lithium-ion battery) sector.

It is expected the DFS will be finalised and released in February 2017.

INSTALLATION AND COMMISIONING OF PILOT PLANT AND TEST MILL

Running parallel with the rapid advancement of the Company’s Montepuez and Balama Central Graphite Projects, the Company installed and commissioned with its industry partners its micronizing and spheronizing test mill (“Mill”) in the USA.

The Mill is being used to produce and optimize the yield of spherical graphite (“SPG”) from various mine concentrates and to maximize the SPG’s performance in battery anode test-work.

SPG is the anode material used in lithium ion batteries (“LiBs”). Ultimately, the goal of all the parties is to develop next generation and high-yield spheronization technology to meet the demanding cost targets of automotive LiB applications and to achieve full qualification of materials for use by LiB manufacturing companies. The Company will retain any spheronizing technology and IP that is developed.

The Company believes that the graphite anode material is an area within battery research that has significant scope for advancement and refinement, and will contribute to delivering the ongoing improved efficiencies required by a planet moving toward advanced energy storage capabilities.

DFS DRILLING CONFIRMS HIGH-GRADE ELEPHANT GRAPHITE DEPOSITS AT MONTEPUEZ

Phase 1 drilling as part of the DFS at the Elephant deposit within the Montepuez Graphite Project was completed during the quarter.

Extensive high-grade graphite mineralisation was identified and is now to be included in the DFS. The Phase 1 program comprised a total of 34 holes for 3,749 metres, focused primarily on the Elephant and Buffalo deposits within Montepuez.

Drilling was completed in November 2016. The program was designed to contribute to an upgrade of the Resource category from Inferred to Indicated at the Elephant deposit and also to assist with geotechnical and hydrogeological assessment at the Buffalo and Elephant deposits.

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The Phase 1 drilling was very successful and returned excellent high-grade intersections from the Elephant deposit including;

98.40m @ 10.02% TGC and 0.27% V2O5% from 21.6m down hole from hole ELGT04 Including 10.20m @ 16.71% TGC and 0.35% V2O5 from 23.80m Including 24.20m @ 14.87% TGC and 0.49% V2O5 from 94m

150.35m @ 8.13% TGC and 0.22% V2O5 from 8.2m to end of hole in hole EL016D

118m @ 9.15% TGC and 0.25% V2O5 from surface in hole EL017D Including 65.60m @ 9.98% TGC and 0.28% V2O5 from 22.20m

141.30m @ 8.06% TGC and 0.20% V2O5 from 4m in hole EL018D Including 45.10m @ 9.75% TGC and 0.25% V2O5 from 4m Including 30.60m @ 9.67% TGC and 0.28% V2O5 from 70.1m

133.70m @ 8.18% TGC and 0.26% V2O5 from 5m down hole in hole EL021D

The Company is highly encouraged with the exceptional drill intersection widths and high grade (%) of Total Graphitic Carbon (TGC).

Figure 1. Montepuez Graphite Project, Elephant Deposit cross section EL011D, 10D and 20D. Analytical results from the July-November 2016 drilling with bulk intercepts highlighted down hole in green and significant intercepts in red. Graphite mineralisation is hosted by folded variations of graphitic schist with amphibolite on the hanging wall contact and psammite on the footwall contact.

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Following the success of Phase 1, Phase 2 exploration and resource drilling commenced during the quarter at Buffalo, along with further holes targeting a VTEM conductor west of Elephant.

A total of 1,300 metres was planned to be drilled. Phase 2 drill holes were designed to increase the total resource tonnages at the Montepuez Graphite Project.

The Company’s geoscience team will maintain its focus to discover additional near surface, along strike resources rather than deeper down dip extensions - as the near surface tonnages present a more attractive economic mine scenario than down dip resource extensions, which are also more expensive to drill.

Please refer to announcement to the ASX on 21 November 2016 for further details on the drilling results.

CORPORATE

CHANGE OF COMPANY NAME TO BATTERY MINERALS LIMITED

At the shareholder meeting to approve the second tranche of the placement, shareholders of the Company also approved the Company’s name change to Battery Minerals Limited (previously Metals of Africa).

Commenting at the time Managing Director Cherie Leeden said;

“Our name change represents a significant inflection point for the shareholders of our Company. The name Battery Minerals was chosen to signal to the capital markets and our potential offtake parties, our specific focus and commitment on graphite, used in the Lithium Ion Battery sector.”

The Board and management are both confident and enthusiastic about where the Company has positioned itself amongst its peers and the potential now emerging for our stakeholders.”

CAPITAL RAISING TO FUND ONGOING GRAPHITE STUDIES AND PRE-DEVELOPMENT WORK

During the quarter the Company completed an oversubscribed placement to sophisticated and institutional investors to raise $9m (before costs) via the issue of 100 million fully paid ordinary Shares in the Company at a price of A$0.09 per share, in two tranches as follows;

• Tranche 1: 78,512,778 Shares to raise $7.05 million (before costs) utilising the company’s existing placement capacity under Listing Rules 7.1 and 7.1A.

• Tranche 2: 21,688,889 Shares to raise $1.95 million (before costs), was subject to shareholder approval at a shareholder meeting held on 21 December 2016.

The issue price for the Placement represented an 8.2% discount to the last closing BAT share price prior to the placement and a 1.8% discount to the 15 day volume weighted average share price.

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During the quarter the Company also received shareholder approval for the issue of incentive options to board members and further allotted incentive options to key management personnel under the Company Employee Option Plan, which predominantly vest on key performance milestones, including the delivery of a commercial graphite operation in Mozambique.

All resolutions at the shareholder meeting held on 21 December 2016 were passed with an average of 96.3% votes in favour.

At the end of the quarter the Company held $9.7M in cash reserves.

OPTION AND FARM-IN AGREEMENT SIGNED WITH TREK METALS LIMITED

In line with the Company’s focus on the emerging battery minerals space it entered into an option agreement that will see Trek Metals Ltd (ASX: TKM) (“Trek”, previously Zambezi Resources Limited) farm into the highly prospective Kroussou Zinc-Lead Project in Gabon. Refer announcement 2 November 2016 for further details. This agreement allows Battery Minerals to completely focus on its graphite projects in Mozambique.

-Ends- On behalf of Board of Directors Battery Minerals Ltd

For further information, please contact Battery Minerals Limited Media & Investor Relations Cherie Leeden David Tasker Managing Director Professional Public Relations T: +61 8 9322 7600 T: +61 9388 0944/ +61 433 112 936 E: info@batteryminerals.com.au E: david.tasker@ppr.com.au

Competent Persons Statement

The information in this report that relates to Exploration Results is based on information compiled by Ms. Cherie Leeden, who is Managing Director and who holds shares and options in the Company. Ms. Leeden is a Member of the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ms. Leeden consents to the inclusion in this report of the matters based on information in the form and context in which it appears.

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The information in this report that relates to Exploration Targets and Mineral Resources is based on information compiled by Mr Robert Dennis who is a Member of Australian Institute of Geoscientists and a full time employee of RPM Limited. Mr Dennis 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 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Dennis consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Tenement Summary – 31 December 2016

1. MINING TENEMENTS HELD

Tenement Reference

Location Nature of interest Interest at beginning of quarter

Interest at end of quarter

5572 Mozambique Granted, subject to earn in agreement

100% 100%1

6216 Mozambique Granted 100% 100%

Kroussou Gabon Granted 90% 100%3

4118 Mozambique Acquisition completed subject to transfer of licence.

100%2 100%2

1. Subject to JV with Mozambican Ruby LDA, announced to ASX 20 October 2015. Should relevant expenditure commitments be met by Mozambican Ruby LDA then they will acquire 75% of license 5572.

2. License 4118 acquired as per ASX Announcement 22 August 2014. Final consideration being US$200,000 in shares has not been made and is subject to transfer of License 4118 into the Company’s name.

3. Trek Minerals has option to fund an initial near term drilling program at Kroussou up to US$250,000. Should TKM elect to exercise this option (prior to 31 July 2017), TKM will pay BAT US$240,000 in cash and/or shares and secure the right to earn 30% of the Kroussou Project through the expenditure of US$1M within 12 months of the exercise date. Option agreement contemplates Trek earning up to 70% via additional expenditure. In addition, the Company’s previous JV partner has relinquished its previous 10% holding in the project in return for a 0.75% Net Smelter Royalty.

2. MINING TENEMENTS ACQUIRED/DISPOSED

Tenement Reference

Location Nature of interest Interest at beginning of quarter

Interest at end of quarter

ACQUIRED Kroussou Gabon Granted 90% 100%

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DISPOSED Nil

3. BENEFICIAL PERCENTAGE INTERESTS HELD IN FARM-IN OR FARM-OUT AGREEMENTS

Tenement Reference Location Nature of interest

Interest at beginning of quarter

Interest at end of quarter

5572 Mozambique Granted, subject to earn in agreement

100% 100%1

1. Subject to earn-in agreement with Mozambican Ruby LDA, announced to ASX 20 October 2015. Should relevant expenditure commitments be met by Mozambican Ruby LDA then they will acquire 75% of license 5572.

4. BENEFICIAL PERCENTAGE INTERESTS HELD IN FARM-IN OR FARM-OUT AGREEMENTS ACQUIRED OR DISPOSED

Tenement Reference Location Nature of interest

Interest at beginning of quarter

Interest at end of quarter

ACQUIRED

Nil

DISPOSED

Nil

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+ See chapter 19 for defined terms 1 September 2016 Page 1

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

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

Name of entity

Battery Minerals Limited

ABN Quarter ended (“current quarter”)

75 152 071 095 31 December 2016

Consolidated statement of cash flows Current quarter $A’000

Year to date

(12 months) $A’000

1. Cash flows from operating activities

- - 1.1 Receipts from customers

1.2 Payments for

(2,123) (4,086) (a) exploration & evaluation

(b) development - -

(c) production - -

(d) staff costs (177) (622)

(e) administration and corporate costs (375) (964)

1.3 Dividends received (see note 3) - -

1.4 Interest received 11 28

1.5 Interest and other costs of finance paid - -

1.6 Income taxes paid - -

1.7 Research and development refunds - -

1.8 Other (provide details if material) - (20)

1.9 Net cash from / (used in) operating activities

(2,664) (5,664)

2. Cash flows from investing activities

- -

2.1 Payments to acquire:

(a) property, plant and equipment

(b) tenements (see item 10) - -

(c) investments - -

(d) other non-current assets - -

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+ See chapter 19 for defined terms 1 September 2016 Page 2

Consolidated statement of cash flows Current quarter $A’000

Year to date

(12 months) $A’000

2.2 Proceeds from the disposal of:

- - (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 activities

- -

3. Cash flows from financing activities

9,027 14,645 3.1 Proceeds from issues of shares

3.2 Proceeds from issue of convertible notes - -

3.3 Proceeds from exercise of share options - -

3.4 Transaction costs related to issues of shares, convertible notes or options

(521) (745)

3.5 Proceeds from borrowings - -

3.6 Repayment of borrowings - -

3.7 Transaction costs related to loans and borrowings

- -

3.8 Dividends paid - -

3.9 Other (provide details if material) - -

3.10 Net cash from / (used in) financing activities

8,506 13,900

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

3,899 1,505 4.1 Cash and cash equivalents at beginning of

period

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

(2,664) (5,664)

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

- -

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

8,506 13,900

4.5 Effect of movement in exchange rates on cash held

- -

4.6 Cash and cash equivalents at end of period

9,741 9,741

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+ See chapter 19 for defined terms 1 September 2016 Page 3

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 9,741 3,899

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)

9,741 3,899

6. Payments to directors of the entity and their associates Current quarter $A'000

6.1 Aggregate amount of payments to these parties included in item 1.2 102

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

-

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

Director fees and consulting.

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

Current quarter $A'000

7.1 Aggregate amount of payments to these parties included in item 1.2 -

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

-

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

n/a

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+ See chapter 19 for defined terms 1 September 2016 Page 4

8. Financing facilities available Add notes as necessary for an understanding of the position

Total facility amount at quarter end

$A’000

Amount drawn at quarter end

$A’000

8.1 Loan facilities - -

8.2 Credit standby arrangements - -

8.3 Other (please specify) - -

8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

n/a

9. Estimated cash outflows for next quarter $A’000

9.1 Exploration and evaluation (1,750)

9.2 Development -

9.3 Production -

9.4 Staff costs (200)

9.5 Administration and corporate costs (250)

9.6 Other (provide details if material) -

9.7 Total estimated cash outflows (2,200)

10. Changes in tenements (items 2.1(b) and 2.2(b) above)

Tenement reference and location

Nature of interest Interest at beginning of quarter

Interest at end of quarter

10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced

- - - -

10.2 Interests in mining tenements and petroleum tenements acquired or increased

Kroussou, Gabon

Tenement granted. 90% 100%

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+ See chapter 19 for defined terms 1 September 2016 Page 5

Compliance statement

1 This statement has been prepared in accordance with accounting standards and policies which

comply with Listing Rule 19.11A.

2 This statement gives a true and fair view of the matters disclosed.

31 January 2017

Sign here: ............................................................ Date: ............................................. (Director/Company secretary)

Steven Wood

Print name: .........................................................

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

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