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NQ Minerals Plc

NQ Minerals Plc 2018 a transformational and exciting year, realising the short term objective of becoming a producer

NQ Minerals Plc (NEX: NQMI) (OTCQB: NQMLF), a mineral processing, exploration and mining company is pleased to announce its final results for the period ended 31 December 2018.

Chairman’s statement

Undoubtedly 2018 has been a transformational year for the Company. Following the acquisition in 2017 of all the issued and outstanding shares of Keen Pacific Limited, along with its wholly owned subsidiaries Ivy Resources and Hellyer Gold Mines Pty Ltd (“Hellyer”), the Company embarked on an aggressive schedule to refurbish the processing plant at Hellyer. The refurbishment commenced in February 2018, and our dedicated and experienced team of professionals completed the refurbishment on time and on budget, allowing the Company to commence floatation in September 2018.

In November 2018, the Company announced it had successfully produced its first lead, gold and silver concentrate lot and delivered it to Traxys Europe SA under a standing offtake agreement signed in August 2018. Subsequent to the year end, we announced commercial production at Hellyer, and realized our objective of becoming an emerging producer in Australia.

Projects

NQ Minerals is focused on three main projects being Hellyer in Tasmania which now offers significant ongoing cash flow, and its two exploration projects, Ukalunda and Square Post in North Queensland, Australia. These two exploration projects are both located in highly prospective mining districts that form part of the well-known and prolific Charters Towers Gold Province, where more than 20 million ounces of gold have been mined.

With ongoing cash flow before financing costs from Hellyer, the Company expects utilise cashflows to service debt obligations, to meet its minimum expenditure requirements under is exploration licenses and if cash flows allow, will allocate additional resources to its exploration prospects through 2019/202 with a view to defining the potential in Tasmania as well as North Queensland.

Hellyer

Hellyer represent the flagship project for the Company. With life of mine revenues projected to exceed £560M and an expected 10 year mine life, 2018 was a transformational year as we changed status from a developer to a producer. The capital expenditure incurred in 2018 was £11,939,000, allowing us to complete the refurbishment process and realise sales in late 2018.

The Company will continue to process the tailings which are within four separate areas representing 11.24mt, and which compromise a JORC compliant resource estimated at 9.5mt hosting 2.61 grams per tonne gold, 104 grams per tonne silver, 3.03% lead and 2.5% zinc for 790,000 ounces of gold, 32 million ounces of silver, 287,800 tonnes of lead and 237,900 tonnes of zinc.

Ukalunda

The Ukalunda tenement lies midway between the Lake Dalyrymple/Burdekin Dam and the historic Wirralie gold mine, which previously produced 1.1 million ounces of gold. The Ukalunda project are contains multiple shows of mineralisation of similar characteristics to major deposits in the region. Historic, wide-ranging exploration has been carried out on the Ukalunda permit area, having discovered potential areas of rich mineralisation of gold, silver, and a number of associated base metals. In April, 2018, the Company announced further to the receipt of the required Queensland Environmental Authority, it has now been granted a Mining Lease for its wholly-owned Sunbeam Silver Mine (“Sunbeam”).

The Sunbeam mining lease allows the Company to conduct large-scale mining operations starting with the processing of approximately 48,000 tonnes of surface mineral stockpiles at Sunbeam. The Company undertook a comprehensive program of rock chip sampling, mapping of the ore stockpiles, mineralogy and metallurgy. The work has indicated the ore stockpiles contain minerals including gold, silver, copper, lead, zinc and antimony which all may have commercial value.

Square Post

The Square Post tenement lies close to the Flinder Highway, 10 kilometres east of Mingela and 50 kilometres south of Townsville. The area is considered underexplored, principally due to its rugged terrain. The permit consists of 46 sub-blocks covering an area of approximately 168km2. The Company has received prospective rock chip samples from the Square Post tenement, with further exploration work continuing through 2019 and 2020.

Environmental

The Company is determined and committed to making a positive impact in the communities we operate in. The Company continues to operate at the highest standards as it relates to Environmental, Community, Sustainability and Human Resource policies and procedures.

With the announcement in 2017 of our approval for an Environmental Management Plan at Hellyer, followed by the successful receipt of our Mining Lease for Sunbeam, the Company is now positioned to further realise commercial value for its mineral assets. The success of our permitting is a critical success factor, and Management and the Board have met expectations for world class standards.

Financing

A summary of the Group financing position includes:

· A net debt position as at 31 December 2018 of £38,997,000.

· A net debt position as at the date of this report of £ 41,692,000.

There is a requirement for the Group to refinance its current debt obligations to be able to meet its near-term financing payments and ensure compliance of covenant obligations. The Company has secured additional funding via its bond offering memorandum to fund ongoing working capital requirements and since 1 January 2019, the Company has raised £5,526,140. The Directors anticipate being able to continue to raise funds under this bond at a similar level going forward. The Directors are also in advanced discussions with an existing lender and has entered into non-binding heads of terms, to restructure its existing debt obligations and anticipates finalising those agreements in the first half of 2019. The proposed amendments would refinance the current repayment and interest rate profiles. Further details are disclosed in Note 2.

Outlook

2018 has been a transformational and exciting year for the Company, having realized our short term objective of becoming a producer. With the refurbishment of the processing plant in 2018 and subsequent commercialization of the mineral assets, Hellyer is generating operational cash flow before financing costs. The Board believes Hellyer is a world-class project which compliments our exploration assets in North Queensland. The exciting portfolio of assets and a view to acquiring additional assets in the region will allow us to achieve our long term goal of becoming a significant gold and base metal producer in Australia.

The Executive and Senior Management have performed exceptionally well during a challenging refurbishment and start up, and should be commended for bringing Hellyer to commercial production in 2019. The current environment poses ongoing challenges with respect to fundraising for Junior Mining companies, however I am optimistic about the Company’s prospects going forward, and look forward to achieving our long term goals. We wish to thank all of our fellow shareholders for their continued support.

On behalf of the Board

Mr. Brian Stockbridge

Director

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.