Celsius Resources Ltd (CLA) · Issued Capital - diluted ITM options 723.4m Melanie Ross (Company Secretary) Options - all 140.1m Issued Capital - fully diluted all options 731.9m

Page 1 of 22

Celsius Resources Ltd (CLA)

Div

ers

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Base M

eta

ls: E

xp

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r

CLA.asxSpeculative Buy

Share Price

Price Target (12 month) $0.19

Brief Business Description:

Hartleys Brief Investment Conclusion

Chairman & MD

Top Shareholders

Gecko Nambia (Pty) Ltd 8.6%

Directors and Management 3.3%

Company Address

Issued Capital

- fully diluted

Market Cap

- fully diluted

Cash (31 Dec 2017)

Debt (31 Dec 2017)

EV - current

EV - fully diluted

EV/Resource t Co A$0/oz

EV/Reserve t Co -

Resources (kt Co) -

Reserves (kt Co) -

Mike Millikan

Resources Analyst

Ph: +61 8 9268 2805

E: [email protected]

A$85.1m

Cobalt and base metal (copper) focused explorer.

Hartleys has assisted in capital raisings in the past 12

months for Celsius Resources Limited ("Celsius") for w hich it

has earned fees. Hartleys has a beneficial interest in 16

million options in Celsius.

591.8m

1 Feb 2018

$0.130

Brendan Borg (Managing Director)

Level 3, 216 St Georges Tce

Perth WA 6000

Controls 95% of the f lag-ship Opuw o Cobalt Projet in

Namibia. Maiden resource estimated due for release in late

Q1 CY18. Cobalt thematic continues to look good, w ith

grow ing demand for use in electric vehicles, storage

batteries and smartphones.

Bill Oliver (Non-Exec Chairman)

A$4.3m

A$0.0m

A$72.6m

A$95.2m

A$76.9m

731.9m

CELSIUS RESOURCES LTD (CLA)

Temperature rising on a hot cobalt play in Namibia Celsius Resources Ltd (CLA) is a cobalt-focused exploration company rapidly

advancing its 95%-owned Opuwo project in Namibia (Southern Africa).

The project contains large-scale cobalt-copper targets, hosted within

sediments (Dolomite Ore Formation (DOF)) of the Kaoko Belt, an extension

of the major copper belts of Central Africa. Mineralisation is sulphide-related,

containing the favourable mineral species of linnaeite (cobalt sulphide) and

chalcopyrite (copper sulphide), with low deleterious elements such as arsenic

(As), cadmium (Cd) and uranium (U).

The mineralisation is relatively fine grained disseminated and vein-hosted,

but appears to be coarsening on number of recent drill sections at depth,

which may improve recoveries and lift grade in parts. The DOF horizon is

extensive and still largely un-tested and has a strike length in excess of

100km within the project area. CLA has confirmed mineralisation over a

+15km zone, with strong potential for adjacent and parallel systems.

Maiden resource imminent with scoping level studies underway The Company has calculated an initial Exploration Target of 33-41Mt grading

0.13-0.17% Co and 0.45-0.65% Cu over an 11km zone down to depths of

150-250m. Mineralisation remains open. A maiden resource is expected to

be released in Q1 CY18, following the completion of resource drilling late

CY17 and full assays in early CY18. The resource will be an interim estimate

with significant growth along strike and at depth anticipated.

The favourable mineralogy (sulphide-related) is considered amenable to

conventional flotation techniques to generate bulk cobalt-copper

concentrates. Preliminary metallurgy has returned recoveries of up to 88% on

the cobalt and 87% on the copper, but further cleaning (removal of other iron

and zinc sulphides) of the concentrate is required to achieve the targeted

concentrate grades (+1% Co). Met-testwork is ongoing to optimise recoveries

and concentrate grades, and will feed into the Scoping Study due Q2 CY18.

The project is located ~750km from the port at Walvis Bay, but is well serviced

by sealed roads and is within 150km of rail. Hydro-grid power is also nearby

with a transmission line transecting the eastern parts of the project. Namibia

remains a stable, mining friendly jurisdiction with a clear mining code.

Strong demand for cobalt, recently reaching 9 year highs Cobalt is one of the key ingredients for use in the cathode combination of

successful Lithium-ion batteries and we like the thematic for increased

demand. The metal remains in short supply and in high demand, with the

cobalt price increasing an impressive 115% in 2017 and has already

increased another 6% early in 2018, to reach a new 9 year high of

US$37.25/lb (or US$82,120/t) in late January 2018.

Initiate coverage with a Speculative Buy and price target 19cps

We initiate coverage of CLA with a Speculative Buy recommendation and

price target of 19cps. Current estimated cash is ~A$4.3M which provides

some funding towards some planned exploration. CLA provides quality

exposure to cobalt (~74% cobalt value as a % of total value), as well as

providing other base metal (copper) upside. Cobalt is threatened by supply

disruptions, as over 60% of the world’s cobalt supply currently sourced from

the DRC. Clearly diversity of supply is sought which could bode well for CLA.

Hartleys Limited ABN 33 104 195 057 (AFSL 230052) 141 St Georges Terrace, Perth, Western Australia, 6000

Hartleys does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the

firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single

factor in making their investment decision. Further information concerning Hartleys’ regulatory disclosures can be found on Hartleys

website www.hartleys.com.au

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

.

5.

10.

15.

20.

25.

30.

35.

40.

45.

50.

Jan-18Oct-17Jun-17Feb-17

Volume - RHS

CLA Shareprice - LHS

Sector (S&P/ASX SMALL RESOURCES) - LHS

A$ M

Celsius Resource Ltd

Source: IRESS

http://www.hartleys.com.au/

Hartleys Limited Celsius Resources Ltd (CLA) 1 February 2018

Page 2 of 22

SUMMARY MODEL

Celsius Resources Limited Share Price

CLA $0.130 Speculative Buy

Directors & Management Company Details

Share Price $0.130 Bill Oliver (Non-Exec Chairman) Level 3, 216 St Georges Tce

Market Capitalisation $76.9m Brendan Borg (Managing Director) Perth WA 6000

Net Cash (debt) $4.3m Pine van Wyk (Non Exec Director) +61 8 9226 4500

Issued Capital - current 591.8m Ranko Matic (Non Exec Director)

Issued Capital - diluted ITM options 723.4m Melanie Ross (Company Secretary)

Options - all 140.1m www.celsiusresources.com.au

Issued Capital - fully diluted all options 731.9m

EV Substantial Shareholders (est) m shs %

- current $72.6m Gecko Nambia (Pty) Ltd 50.8 8.6

- diluted ITM $85.6m Directors and Management 19.4 3.3

- diluted fully $85.1m

12Mth Price Target $0.19

Investment Summary

Projects Interest Location

Opuwo 95% Namibia

Carnilya Hill JV* 30% WA

Abednegno Hill 100% WA

* JV with Mincor Resources NL Milestones and Newsflow Project

Q4 CY16 Name change and reinstatement to ASX Corporate

Q1 CY17 Option to acquire Opuwo Cobalt Project Opuwo

Resources Q1 CY17 Acquisition approved and maiden drilling Opuwo

Q1 CY17 Brendan Borg appointed MD Corporate

Opuwo Mt Co% Cu% Comment Q2 CY17 First assays confirm extensive mineralisation Opuwo

Exploration Target 33-41 0.13-0.17 0.45-0.65 Over 11km strike, 150-250m depth Q2 CY17 A$3.5M Capital Raise @ 3.7cps Corporate

Q2 CY17 Initial Exploration Target for Central Zone Opuwo

No JORC resources and reserves - maiden resource due Q1 CY18 Q3 CY17 Commences Scoping Studies Opuwo

Q4 CY17 Moves to 95% project interest Opuwo

Q4 CY17 15,000m resource drill-out commences Opuwo

Q4 CY17 A$3.9M Capital Raise @ 5.5cps Corporate

Q4 CY17 Preliminary metallurgical results Opuwo

Q4 CY17 Completes initial resource drilling Opuwo

Q1 CY18 Drill assays Opuwo

Q1 CY18 Maiden Resource and new Exploration Target Opuwo

P&L FY2017A FY2018F FY2019F CY18 Ongoing exploration drilling - resource extensions Opuwo

Q2 CY18 Metallurgical study update Opuwo

Net Revenue A$m n/a n/a n/a Q2 CY18 Scoping study Opuwo

Total Costs A$m n/a n/a n/a Q3 CY18 PFS expected to commence Opuwo

EBITDA A$m n/a n/a n/a

Deprec/Amort A$m n/a n/a n/a Unpaid Capital

EBIT A$m n/a n/a n/a Year Expires No. (m) $m Avg. Price % ord

Net Interest A$m n/a n/a n/a 30-Jun-19 Listed 77.6 0.8 0.010 13%

Pre-Tax Profit A$m n/a n/a n/a 30-Jun-20 Unlisted 20.0 1.3 0.065 3%

Tax Expense A$m n/a n/a n/a 30-Jun-21 Unlisted 42.5 3.7 0.088 7%

NPAT A$m loss loss loss 30-Jun-22 0.0 0.0 0.000 0%

Abnormal Items A$m n/a n/a n/a 30-Jun-23 0.0 0.0 0.000 0%

Reported Profit A$m loss loss loss TOTAL 140.1 5.8 0.041 24%

Analyst: Mike Millikan

Phone: +61 8 9268 2805

Sources: IRESS, Company Information, Hartleys Research

Junior exploration company focused on the delineation of significant cobalt and

base metal deposits. Potential development options being scoped.

Last Updated: 01/02/2018

Key Market Information

Commodity

Cobalt, Copper, Zinc

Comments

Nickel

Nickel

Feb 2018

Cobalt and base metal (copper) focused explorer. Controls 95% of the flag-ship

Opuwo Cobalt Projet in Namibia. Maiden resource estimated due for release in late

Q1 CY18. Cobalt thematic continues to look good, with growing demand for use in

electric vehicles, storage batteries and smartphones.


Page 3 of 22

BUSINESS OVERVIEW Celsius Resources Limited is an ASX listed (CLA.asx) junior exploration company

focused on the discovery of significant cobalt and base metals deposits. The Company

was reinstated onto the ASX in late CY16, following a name change from Celsius Coal

Limited to Celsius Resources Limited.

In early CY17, Celsius entered into an option agreement for the right to earn a

controlling interest in the Opuwo cobalt project in Namibia. An interest of 30% was

earned in the project in August 2017, following which the Company moved to a 95%

interest through the issuance of CLA shares to Gecko Namibia (now CLA’s largest

shareholder). The remaining 5% in the project is held by local Namibian Company

Amor Investments. Opuwo is CLA’s flagship project but the Company also owns two

nickel assets in Western Australia.

Exploration activities are currently focused on advancing the Opuwo project located in

Namibia, Southern Africa. Opuwo is an emerging cobalt-copper district which has

received very little modern exploration. The Company has 95% interest and has

already confirmed and upgraded historical cobalt mineralisation. Importantly the

cobalt-dominant mineralisation (with copper) remains open along strike and at depth.

The mineralisation is sulphide related and as such amenable to simple flotation

processing, with preliminary metallurgical test-work providing favourable cobalt (up to

~88%) and copper (up to ~87%) recoveries. More detailed met-test-work is ongoing.

Resource definition drilling was completed mid-December 2017, with 75% of assays

now received. Once full results have been received a maiden resource estimate is

expected to be released (due late Q1 CY18). On the current timing a Scoping Study

is planned to be released in Q2 CY18, which will incorporate a maiden resource,

processing flowsheet, and indicative costs (both capex and opex).

CLA has current estimated cash of A$4.3M, which provides some funding towards

ongoing exploration.

Fig. 1: Key Project Location - Opuwo

Source: Celsius Resources Ltd

CLA has a 95%-

interest in the Opuwo

cobalt project in

Namibia

Opuwo is an emerging

cobalt-copper distr ict

which has received

very l i t t le modern

explorat ion

A maiden resource

estimate is due late

Q1 CY18

Dri l l ing is ongoing to

extend mineralisat ion

and grow resources

over t ime

On the current t iming

a Scoping Study is

planned to be

released in Q2 CY18


Page 4 of 22

OPUWO PROJECT

Fig. 2: Opuwo Project Snap Shot

Opuwo

Commodities:

Interest:

Location:

Tenure:

Project stage:

Type of deposit:

Permitting stage:

Infrastructure:

Exploration Upside:

Cobalt, Copper

95% interest

North-west Namibia, 30km from Opuwo

~1,470km2

Early to advance stage exploration

Sediment-hosted, sulphide-related

Granted exploration licences

Sealed roads, grid power, rail and port.

Extensive DOF horizon to test


Location

The Opuwo Cobalt Project is located in north-western Namibia, ~800 km by road from

the capital, Windhoek, and ~750 km from the port of Walvis Bay. The Project has

excellent infrastructure, with the regional capital of Opuwo only 30 km to the south,

providing good services. Sealed roads connect Opuwo to Windhoek and Walvis Bay.

A hydro-power station (320 MW) is located nearby, and a transmission line (66 kV)

passes through the eastern boundary of the project. Project tenure currently spans

~1,470km2.

Fig. 3: Project Location – Opuwo Cobalt Project, Namibia


CLA has a current

95% interest with 5%

held by local Namibian

Company Amor

Investments

Large, highly

prospect ive tenure

Proven mineral isat ion,

with good-grade

cobalt, copper

conf irmed in histor ical

and recent CLA

dri l l ing


Page 5 of 22

Moved to 95% project interest in September 2017

In early CY17, Celsius entered into an option agreement for the right to earn a

controlling interest in the Opuwo cobalt project in Namibia. An interest of 30% was

earned in the project in August 2017, following which the Company moved to a 95%

interest through the issuance of 31.25M CLA shares to Gecko Namibia. Gecko also

agreed to sell to CLA a 95% interest in three surrounding licences in the Opuwo region

covering 782 km2, taking the contiguous landholding of the expanded project area to

1,470 km2, for the consideration of 12.5M CLA shares.

Gecko is now CLA’s largest shareholder (with 50.75M CLA shares or ~8.6% of issued

capital). The remaining 5% in the project is held by local Namibian Company Amor

Investments.

Fig. 4: Opuwo Project Ownership Structure


Geology (with reference to CLA releases)

The mineralisation at the Opuwo cobalt project is hosted in the Dolomite Ore

Formation (DOF) within Neoproterozoic sediments of the Kaoko Belt in northern

Namibia. The Kaoko Belt is considered by some as the western extension of the

Central African Copper belt.

Fig. 5: Key Copper Belts of Africa (LHS); DOF Horizon (RHS)

Source: MOD Resources Ltd (LHS); Celsius Resources Ltd

CLA holds 4

cont iguous explorat ion

permits over

1,470sqkm in the

Opuwo Project

The DOF is the key

host horizon for

mineralisat ion wi thin

the project area


Page 6 of 22

The DOF is an organic carbon rich, marly dolomitic horizon consisting of clastic and

carbonate lithologies. The DOF horizon has been mapped and sampled along a strike

length of +30 km, but the prospective horizon extends over 100km within the expanded

project area.

The DOF horizon is of variable dip and thickness, ranging up to ~17m thick in parts,

with extensive areas of outcrop. The DOF horizon appears to be mineralised

throughout its extent. The DOF horizon has now been drill tested over 15km with

potential for extensions along strike along with additional mineralised zones and

parallel lodes. Mineralisation outcrops at surface and is easily visible from

satellite/aerial photos. Mineralisation is also interpreted to continue undercover to the

east, which is supported by aeromagnetic data.

Fig. 6: DOF Horizon over satellite imagery (Google Maps)

Source: Celsius Resources Ltd; Google Maps

Fig. 7: DOF Horizon over satellite imagery (Insert)

Source: Celsius Resources Ltd; Google Maps

Sediment-hosted

mineralisat ion,

structurally inf luenced

Mineralisat ion

outcrops at surface

and is easily v isible

from satell i te/aeria l

photos

‘

Mineralisat ion is also

interpreted to continue

undercover to the

east, which is

supported by

aeromagnet ic data


Page 7 of 22

The mineralisation in the DOF unit is disseminated and vein hosted sulphide

mineralisation, with chalcopyrite (CuFeS2) the main copper mineral, linnaeite (Co2S4)

the main cobalt mineral, and zinc as sphalerite (ZnS). The mineralisation is relative

fine grained but is low in deleterious elements such as arsenic (As), cadmium (Cd)

and uranium (U).

Fig. 8: Common Cobalt bearing minerals (LHS); Key Cobalt Deposit Types (RHS)

Source: Cobalt Institute (LHS); British Geological Survey (RHS)

Maiden resource drilling completed, estimate pending

Celsius completed resource drilling in preparation of the maiden JORC-compliant

resource estimate in mid-December 2017. The initial resource remains on track for

release in late Q1 CY18.

The resource delineation program consisted of some 99 holes (76 RC and 23 DC) for

a total of 17,266m. Assays have now been received for over 75% of the samples

submitted, with the final batch of samples expected in early February 2018. Some of

the more significant results include:

17m @ 0.14% Co and 0.42% Cu from 11m;

10m @ 0.12% Co and 0.59% Cu from 17m and 4m @ 0.13% Co and 0.55% Cu,

from 32m;

7.7m @ 0.11% Co and 0.52% Cu from 44m;

7m @ 0.12% Co and 0.46% Cu from 59m;

5m @ 0.16% Co and 0.48% Cu from 204m

5m @ 0.12% Co and 0.52% Cu, from 162m;

5m @ 0.12% Co and 0.39% Cu, from 233m;

4.9m @ 0.12% Co and 0.40% Cu, from 28m;

4.5m @ 0.12% Co and 0.48% Cu, from 57m and 4.2m @ 0.15% Co and 0.45%

Cu, from 81m;

4.4m @ 0.17% Co and 0.46% Cu, from 136m;

4m @ 0.18% Co and 0.50% Cu, from 202m

Drilling has now recommenced within the project area, with one diamond rig testing

mineralised extensions to the west of the resource drill-out on a 200m x 100m grid.

This area is considered a priority target based on visual observations from recent

drilling. Three diamond holes have so far been completed and all report the

intersection of DOF mineralisation, highlighting potential resource extensions.

Linnaeite is a cobalt

sulphide mineral

discovered in 1845

named to honour Carl

Linnaeus

The maiden resource

remains on track for

release in late Q1

CY18

Assays cont inue to

demonstrate the

rather consistent

nature of the

mineralisat ion

Very large mineralised

system conf irmed

Latest batch of results

were some of the best

to date and included:

17m @ 0.14% Co and

0.42% Cu from 11m –

close to true widths

and near surface


Page 8 of 22

Drilling is also planned to infill some gaps between the eastern and western zones

(200m x 100m pattern). In addition, any priority conductors generated from the current

geophysical surveys will be tested.

Fig. 9: Resource Drill ing – Plan View


Mineralisation to date has been largely disseminated but some zones of semi-massive

sulphides (potential veinlets) have been intersected. A recent semi-massive drill result

(DOFD0077) returned 4m @ 0.13% Co and 0.45% Cu, from 450m, proving the

continuity of mineralisation at depth.

The prospect of finding a potential ‘feeder zone’ of mineralisation gives substantial

upside to the exploration. Further work involves the completion of down-hole

electromagnetics (DHEM) and ground-based audio magnetotellurics (AMT), which

aims to locate conductors, which may represent accumulation of sulphides (potentially

higher grade massive sulphide mineralisation) at depth. Some of the planned DHEM

has already been completed, with modelling and interpretation now underway.

Fig. 10: DOFD0077 - Semi Massive sulphides – Cross Section (LHS); Core (RHS)

Depth – 492m

Depth – 493m


CLA has calculated an

init ial Exploration

Target of 33-41Mt

grading 0.13-0.17%

Co and 0.45-0.65% Cu

over an 11km zone

down to depths of

150-250m

Mineralisat ion remains

open.

Zones of semi-

massive sulphides

have been intersected

at depth


Page 9 of 22

Favourable mineralogy and metallurgy, now being tuned

As the cobalt is hosted in sulphide minerals (linnaeite) it is envisaged that a

conventional flotation can be utilised.

Test-work to date has shown that using a flotation flowsheet, concentrate grades of

up to 1.11% cobalt can be created with 64.2% recovery. Recoveries can be lifted to

88% if the float time is extended however the grade of the concentrate falls.

Further optimisation work will aim to improve the concentrate grade along with

recoveries, whilst trying to remove any deleterious minerals. The work will include re-

grinding the concentrate and re-floating.

Other metallurgy test-work will include leaching to investigate the feasibility of

producing a cobalt sulphate chemical from the concentrates produced at the Opuwo

Cobalt project. The results of further test-work are due to be released this quarter.

Sulphide hosted cobalt deposits have many benefits over laterite deposits. These

benefits generally include lower initial capital expenditure assuming that a flotation

plant is constructed compared to a laterite cobalt hosted deposit which commonly

require a high-pressure acid leach (HPAL) facility. HPAL is a process which requires

preheating slurried ore and mixing it with concentrated sulphuric acid at high

temperatures and pressures. Generally speaking, the operating costs of sulphide ore

processing facilities are lower when compared to HPAL due to reduced need for

reagents and lower power requirements, as the process flowsheet requires crush,

grinding and flotation of the ore to create a cobalt concentrate.

An added benefit of the CLA’s mineralogy being cobalt sulphide (linnaeite) as opposed

to other cobalt sulphide minerals (such as cobaltite) is the low levels or total lack of

arsenic. This is significant as concentrates that contain arsenic can incur penalties

when sold to refineries and would therefore reduce the value of the concentrate. This

may compensate for the relatively low concentrate grade CLA plans to produce at this

stage.

Another unique aspect of CLA’s deposit is that ~74% of its in-situ value is in the cobalt

with the remainder in copper, this is compared to the majority of cobalt production

where cobalt is the by-product of copper and nickel. This gives CLA greater exposure

to cobalt than many of its developer peers.

On the current timing a Scoping Study is planned to be released in Q2 CY18, which

will incorporate a maiden resource, more detailed met-testwork, processing flowsheet,

and indicative costs (both capex and opex).

The mineralisation is

sulphide re lated and

as such amenable to

simple f lotation

processing, w ith

preliminary

metal lurg ical test -work

providing favourable

cobalt (up to ~88%)

and copper (up to

~87%) recoveries

More detai led met-

test-work is ongoing


Page 10 of 22

COMMODITY EXPOSURE Celsius is currently focused on cobalt and base metal exploration. The Company

currently has no operating mines.

Growth in Li-ion batteries, rising cobalt demand Batteries are made up of two electrodes, a cathode (positive (+)) and anode (negative

(-)), with an electrolyte acting as the medium for which electric charge flows. In the

case of lithium ion (Li-ion) batteries, lithium ions move between the cathode and the

anode as the batteries charges and discharges.

Nickel and cobalt are fast becoming key ingredients for lithium ion (Li-ion) batteries.

Both metals are used the cathode combination in successful Li-ion batteries, such as

NMC (Lithium-Nickel-Manganese-Cobalt Oxide (LiNiMnCoO2)) batteries and NCA

(Lithium-Nickel-Cobalt-Aluminium Oxide (LiNiCoAlO2)) batteries. With cobalt used in

LCO (Lithium-Cobalt Oxide (LiCoO2)) batteries.

LCO batteries dominate portable electronic devices (such as mobile phones, laptops

and cameras) due to its high specific energy. In contrast, NCM and NCA batteries are

increasingly becoming the industry standard for electric vehicles, due to their high

energy densities and power costs. The cathode combination for NMC is typically 33%

nickel, 33% manganese and 33% cobalt (1-1-1).

Another successful cathode combination for NCM is 50% nickel, 30% cobalt and 20%

manganese (5-3-2), but the battery appears to be moving to higher nickel contents, 6-

2-2 and 8-1-1, replacing some cobalt. However, demand for cobalt remains strong

despite some substitution risk. NCA batteries in contrast typically use a combination

of 80% nickel, 15% cobalt and 5% aluminium.

Both NCA and NCM batteries require high purity nickel sulphate (NiSO4.6H2O) and

cobalt sulphate (CoSO4.7H2O) to produce precursor materials.

Fig. 11: Cobalt demand outlook through EV uptake

Source: Hartleys Estimates

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Cobalt NCM111 Cobalt NCM523 Cobalt NCM811Global Demand (all industries)

Cobalt is a key

ingredients for some

l i th ium ion (Li - ion)

batter ies

LCO Li- ion batteries

dominant portable

electronic devices

(mobi le phones,

laptops and cameras)

NCM and NCA

batter ies are

increasingly becoming

the industry standard

for electr ic vehic les


Page 11 of 22

Cobalt – hits 9 year highs as demand still soars Cobalt is a minor metal, widely used in superalloys (aircraft engines), electroplating,

glass and ceramics and batteries (LCO, NCA and NCM Li ion batteries). The power

to weight ratio of LCO batteries makes them ideal for consumer electronics (portable

devices such as smart phones, laptops, and tablets), and as mentioned NCA and NCM

Li ion batteries are fast becoming the industry standard for EVs. Cobalt demand is

now largely driven by rechargeable batteries (close to 49% of demand).

Currently 95% of the world’s cobalt is produced as a by-product of copper and nickel

mines. Cobalt is threatened by supply disruptions, as over 60% of the world’s cobalt

supply is currently sourced from the DRC. The DRC has a politically unstable history

and is seen by many as an unethical source of cobalt. As high as ~20% of mined

cobalt production in the DRC is from artisanal mining, many battery manufacturers

have indicated that they are currently looking to secure supply outside of the DRC.

The cobalt price was up over 115% in CY17 and recently hit a 9 year high of

US$82,120/t (US$37.25/lb Co) to be up over 6% already in CY18. Helped by plans to

raise royalties on cobalt in the DRC and output disruptions at the Ambatovy mine in

Madagascar. Some forecasters believe that within 3-4 years, 75% of all Li-ion batteries

will contain some level of cobalt. Cobalt is critical for increasing the energy density of

lithium ion batteries which is especially important for reducing the size and weight of

lithium ion batteries. It is interesting to note, that Telsa’s Gigafactory alone, once

operating at full capacity is expected to require over 7.5kt of cobalt per annum

(potentially more).

The current cobalt market is small however, ~100kt but forecast to more than double

within the next decade, especially as major vehicle companies invest heavily in electric

vehicles.

Fig. 12: Cobalt Price – 5 years

Source: Bloomberg

Small market but

expected to grow

signif icantly

Cobalt demand is

forecast to outstr ip

supply

Mercedes Benz: A

range of 10 electr ic

vehicles by 2022,

investing €10 bil l ion

Toyota: Sol id-state l i th ium ion bat tery,

800-1000 km range, 4

min recharge,

production 2022

China: Wor ld leading ~800,000 electr i f ied

vehicle sales in 2017

(up from ~90,000 in

2014)

Al l e lectr ic vehic les

wil l use Li- ion

batter ies with cobalt

cathodes

Telsa’s Model S

electr ic vehicle

current ly requires

~8kg of cobalt

Current cobal t pr ice is

~US$36.24/ lb (or

~US$79,895/t)


Page 12 of 22

GEOGRAPHIC EXPOSURE Namibia and Australia.

Fig. 13: Location of CLA ’s Projects


RESERVES AND RESOURCES No current JORC-compliant reserves or resources. A maiden resource for Opuwo is

expected to be released in late Q1 CY18.

The Company has calculated an initial Exploration Target of 33-41Mt grading 0.13-

0.17% Co and 0.45-0.65% Cu over an 11km zone down to depths of 150-250m.

Currently focused on

the Opuwo project in

Namibia, but has

some exploration

ground (nickel assets)

in Austral ia


Page 13 of 22

PEERS AND COMPETITORS Cobalt exploration/developer’s peers can be seen in Figure 14. Important to note that

many of the larger cobalt deposits are laterite deposits. Laterite deposits historically

have higher opex and capex figures.

Fig. 14: Cobalt Peers – Market Capitalisation

Source: Hartleys Estimates – IRESS; Market close 31 Jan 2018

Fig. 15: Cobalt Peers – Enterprise Value

Source: Hartleys Estimates – IRESS

Fig. 16: Cobalt Peers – EV/Resource Cobalt Equivalent Tonnes

Source: Hartleys Estimates – IRESS

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

CLQ MLX AUZ PAN AML ARL ARV FCC JRV NZC EUC CLA GME CLL COB HAV LFR PGM BSX MEI AZS BAR CZI CZN HMX CNJ N27 CAZ BMT

Market Capitalisation

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

CLQ MLX AUZ PAN AML ARV ARL JRV NZC FCC CLA GME CLL EUC COB HAV LFR PGM MEI AZS BSX BAR CZI CZN HMX CNJ N27 CAZ MTH

Enterprise Value

934

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

MEI MLX CLQ FCC AUZ COB CLL LFR AML CZI NZC CLA PGM N27 ARL BMT GME BAR HAV CNJ CAZ

EV/Resource Co Eq t

NOTE : On our peer

comps we have used

the mid-point range of

the *Opuwo

Explorat ion Target , a

maiden resource is

expected to be

released soon (Q1

CY18)


Page 14 of 22

Fig. 17: Peer Analysis – Cobalt-equivalent grade and contained metal

Source: Hartleys Estimates – Company Reports: Bubble Size = EV


Source: Hartleys Estimates – Company Reports: Bubble Size = Co Eq t

CLQ - Sunrise

AUZ - Sconi

ARL - KNP

CLL - Collerina

GME - NiWest

PGM - Owendale

BAR - CNJ - Mt Thristy

AML - Walford Creek

CLA - Opuwo*

NZC - Kalongwe**

COB - Thackaringa***

HAV - Mutooroo

N27 - Wollogorang

BMT - Lainejaur

JRV - Nico Young

CZI - Nebo-Babel

MLX - Wingellina

PAN - Savannah

MTH - Basil

HMX - Millennium

-0.10%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

-100,000 0 100,000 200,000 300,000 400,000 500,000 600,000

Co

bal

t-e

qu

ival

en

t gr

ade

% C

o E

q

Cobalt-equivalent contained metal tonnes

Cobalt-equivalent grade and contained metal

CLQ - Sunrise AUZ - Sconi ARL - KNP CLL - Collerina GME - NiWest

PGM - Owendale BAR - CNJ - Mt Thristy AML - Walford Creek CLA - Opuwo* NZC - Kalongwe**

COB - Thackaringa*** HAV - Mutooroo N27 - Wollogorang BMT - Lainejaur JRV - Nico Young

CZI - Nebo-Babel MLX - Wingellina PAN - Savannah MTH - Basil HMX - Millennium

Bubble Size = EV

Laterite deposit

Sulphide deposit

CLQ - Sunrise

AUZ - Sconi

ARL - KNP

CLL - Collerina

GME - NiWest

PGM - Owendale


CLA - Opuwo*

NZC - Kalongwe**


HAV - Mutooroo

N27 - Wollogorang

BMT - Lainejaur

JRV - Nico Young

CZI - Nebo-Babel

MLX - Wingellina

PAN - Savannah

AML - Walford Creek

MTH - Basil

HMX - Millennium

-0.10%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

-100,000 0 100,000 200,000 300,000 400,000 500,000 600,000

Co

bal

t-eq

uiv

alen

t gr

ade

% C

o E

q

Cobalt-equivalent contained metal tonnes

Cobalt-equivalent grade and contained metal


PGM - Owendale BAR - CNJ - Mt Thristy CLA - Opuwo* NZC - Kalongwe** COB - Thackaringa***

HAV - Mutooroo N27 - Wollogorang BMT - Lainejaur JRV - Nico Young CZI - Nebo-Babel

MLX - Wingellina PAN - Savannah AML - Walford Creek MTH - Basil HMX - Millennium

Bubble Size = Co Eq t

Laterite deposit

Sulphide deposit


Page 15 of 22

Fig. 19: Peer Analysis – Cobalt grade and contained metal

Source: Hartleys Estimates – Company Reports: Bubble Size = Co t


Source: Hartleys Estimates – Company Reports: Bubble Size = Co t

CLQ - Sunrise

AUZ - Sconi

ARL - KNP

CLL - Collerina

GME - NiWestPGM - Owendale


CLA - Opuwo*

NZC - Kalongwe**


HAV - Mutooroo

N27 - Wollogorang

BMT - Lainejaur

JRV - Nico Young

CZI - Nebo-Babel

MLX - WingellinaPAN - Savannah

AML - Walford Creek

MTH - Basil

HMX - Millennium

-0.10

-0.05

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

Co

bal

t gr

ade

% C

o

Cobalt contained metal tonnes

Cobalt grade and contained Cobalt metal


PGM - Owendale BAR - CNJ - Mt Thristy CLA - Opuwo* NZC - Kalongwe** COB - Thackaringa***

HAV - Mutooroo N27 - Wollogorang BMT - Lainejaur JRV - Nico Young CZI - Nebo-Babel

MLX - Wingellina PAN - Savannah AML - Walford Creek MTH - Basil HMX - Millennium

Bubble Size = Co t

Laterite deposit

Sulphide deposit

MLX - Wingellina

CLQ - Sunrise

AUZ - Sconi

ARL - KNP

CLL - Collerina

GME - NiWest

PGM - Owendale


CLA - Opuwo*

NZC - Kalongwe**


HAV - Mutooroo

N27 - Wollogorang

BMT - Lainejaur

JRV - Nico Young

CZI - Nebo-Babel

PAN - Savannah

AML - Walford Creek

MTH - Basil

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 50 100 150 200 250 300 350 400 450 500

Co

bal

t va

lue

% o

f to

tal v

alu

e

In-situ value per tonne

In-situ value per tonne vs Cobalt Value % of total value

MLX - Wingellina CLQ - Sunrise AUZ - Sconi ARL - KNP CLL - Collerina GME - NiWest PGM - Owendale

BAR - CNJ - Mt Thristy CLA - Opuwo* NZC - Kalongwe** COB - Thackaringa*** HAV - Mutooroo N27 - Wollogorang BMT - Lainejaur

JRV - Nico Young CZI - Nebo-Babel PAN - Savannah AML - Walford Creek MTH - Basil

Bubble Size = Co t

Laterite deposit

Sulphide deposit


Page 16 of 22

MANAGEMENT, DIRECTORS AND

MAJOR SHAREHOLDERS

Fig. 21: Economic Exposure of Board and Management


Directors (as summarised from CLA’s website)

Bill Oliver, BSc (Hons), GDipAppFin (FINSA), Non-Executive Chairman

Mr. Oliver has 14 years’ experience in the international resources industry working

for both major and junior companies. He has led large scale resource definition

projects for Rio Tinto and previously worked in near mine exploration/resource

definition roles for Harmony Gold, Bellamel Mining and BC Iron.

More recently Mr. Oliver was the Managing Director of Signature Metals Ltd

responsible from taking the Konongo Gold Project into production within two years of

acquisition and growing the company from a market cap of A$6M to a transaction

where it was valued at over A$50M.

He has wide-ranging exploration experience including expertise in near-mine

exploration/resource extension and resource definition as well as significant

experience in the technical and economic evaluation of resources projects. He holds

an honours degree in Geology from the University of Western Australia as well as a

post-graduate diploma in finance and investment from FINSIA.

Mr. Oliver was appointed to the position of director on 23 December 2010.

Brendan Borg, BSc, MSc, MAusIMM, Managing Director

Mr. Borg is a highly respected consultant geologist who has specialised in the “battery

materials” sector including lithium, graphite and cobalt mineralisation, participating in

numerous successful projects, in an investment and/or operational capacity. Mr. Borg

has played a key role in the selection of the Opuwo Cobalt Project and exploration

conducted by Celsius to date.

Mr. Borg has 20 years’ experience gained working in management, operational and

project development roles in the Exploration and Mining industries, with companies

including Rio Tinto Iron Ore, Magnis Resources Limited, IronClad Mining Limited,

Lithex Resources Limited and Sibelco Australia Limited. Brendan is a Director of

geological consultancy Borg Geoscience Pty Ltd, and of a new energy minerals

marketing firm, Minemark Pty Ltd.

Bill Oliver Non-Executive Chairman 532,834 6,166,667 0 6,699,501 2

Brendan Borg Managing Director 16,000,000 9,333,333 0 25,333,333 1

Pine van Wyk Non-Executive Director 2,791,250 0 0 2,791,250 4

Ranko Matic Non-Executive Director 69,269 6,000,000 0 6,069,269 3

Melanie Ross Co. Sec. na na na na na

Total 19,393,353 21,500,000 0 40,893,353

Economic Exposure of Board and Key management

PositionOrd Shares Options

Performance

Shares

Direct

Directors Total Rank

Highly experienced

mining executives


Page 17 of 22

Pine van Wyk, Met. Eng., B.Com, MBA, Non-Executive Director

Mr van Wyk is a Metallurgical Engineer by profession, with extensive experience in

the mining industry and for the last 11 years, specifically in uranium. He holds

commercial qualification in B.Com and MBA, with a focus on project management.

He has spent eight years at Rössing Uranium, where his roll included Superintendent

Acid Plant and Metallurgical Services, Superintendent Strategic Projects and

eventually Engineering Manager. In 2005 he joined Paladin Energy Ltd at their Langer

Heinrich Uranium project as Operations Manager. This project was taken from

feasibility to full production and still is the flagship project for Paladin. At the time of

taking up his position with Gecko he held the position of Business Development

Manager for Paladin Energy. Pine brings extensive process and project management

knowledge to the Gecko Group and now holds the position of Project Director.

Ranko Matic, B.Bus, CA, Non-Executive Director and Company Secretary

Mr. Matic has over 20 years experience in the areas of financial and executive

management, accounting, audit, business and corporate advisory. Mr. Matic has

considerable experience in a range of industries with particular exposure to public

listed companies and large private enterprises.

He is a Director of a Chartered Accounting firm and a Corporate Advisory company

based in Perth, Western Australia and has specialist expertise and exposure in the

areas of audit, corporate services, due diligence, mergers and acquisitions, and

valuations.

Through these positions Mr. Matic has been involved in an advisory capacity in over

40 initial public offerings on the ASX in the last 10 years, as well as several

recapitalisations of public listed companies.

Non-Executive Director of East Energy Resources Ltd (ASX: EER), Non-Executive

Director of Argosy Minerals Ltd (ASX:AGY), Non-Executive Director of Valmec

Limited (ASX: VMX), Non-Executive Director of Antilles Oil and Gas NL (ASX:AVD)


Page 18 of 22

MAJOR SHAREHOLDERS Gecko Namibia (Pty) Ltd is CLA’s largest shareholder and currently holds ~50.75M

CLA shares for 8.6% of the issued capital (below % holdings were at 4 Jan 2018).

Fig. 22: CLA Shareholders – 4 Jan 2018


OPTIONS, CONVERTIBLES AND UNPAID CAPITAL CLA currently has 140.1M options with expiry dates in FY19, FY20 and FY21.

Fig. 23: Options – CLA

Unpaid Capital

Year Expires No. (m) $m Avg. Price % ord

30-Jun-19 Listed 77.6 0.8 0.010 13%

30-Jun-20 Unlisted 20.0 1.3 0.065 3%

30-Jun-21 Unlisted 42.5 3.7 0.088 7%

30-Jun-22 0.0 0.0 0.000 0%

30-Jun-23 0.0 0.0 0.000 0%

TOTAL 140.1 5.8 0.041 24%


Shareholder Number of Shares % Issued Capital

1 GECKO NAMIBIA (PTY) LTD 50,750,000 8.63%2 J P MORGAN NOMINEES AUSTRALIA LIMITED 25,114,735 4.27%3 MR BRENDAN JAMES BORG & MRS ERIN BELINDA BORG (BORG FAMILY SUPER A/C) 16,000,000 2.72%4 FEATHERBED AUSTRALIA PTY LTD (FEATHERBED AUST FAMILY A/C) 15,195,947 2.58%5 PHEAKES PTY LTD (SENATE A/C) 14,500,000 2.46%6 CITICORP NOMINEES PTY LIMITED 13,635,407 2.32%7 VANTAGE HOUSE LIMITED 11,000,000 1.87%8 ASIA PRINCIPAL CAPITAL - CORPORATE FINANCE PTY LTD 8,916,233 1.52%9 MR ABDUL NASER SIDDIQUI 8,850,000 1.50%

10 BRIJOHN NOMINEES PTY LTD (NELSONIO A/C) 8,784,549 1.49%11 MR NEIL GRAEME TOBIN 7,000,000 1.19%12 BNP PARIBAS NOMINEES PTY LTD 6,663,937 1.13%13 GOLDEN DAWN LIMITED 6,277,777 1.07%14 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 6,009,559 1.02%15 CELTIC CAPITAL PTY LTD (THE CELTIC CAPITAL A/C) 5,000,000 0.85%15 MR COLIN MACKAY 5,000,000 0.85%15 DR SALIM CASSIM 5,000,000 0.85%16 GREENSEA INVESTMENTS PTY LTD 4,600,000 0.78%17 MR CHING KHUNG & MRS BEE FUN KHUNG 4,100,000 0.70%18 KJLA PTY LTD 4,003,630 0.68%19 SILVER KNIGHT HOLDINGS PTY LTD (GANDOSSI FAMILY A/C) 4,000,000 0.68%19 RIGI INVESTMENTS PTY LTD (THE CAPE A/C) 4,000,000 0.68%19 MR PAUL HARTLEY WATTS 4,000,000 0.68%20 MR RYLAN SAVIO D'SILVA 3,000,000 0.51%20 MRS VERONICA BRESLAND TROTT 3,000,000 0.51%20 LENOIR CAPITAL PTY LTD 3,000,000 0.51%20 MR PETER CHRISTOPHER WALL & MRS TANYA-LEE WALL 3,000,000 0.51%20 5150 CAPITAL PTY LTD 3,000,000 0.51%20 METIS PTY LTD 3,000,000 0.51%20 MR DAVID JAMES WALL 3,000,000 0.51%

Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL) 259,401,774 44.09%Total Remianing Holders Balance 588,327,116 100.00%

Gecko Namibia is

CLA’s largest

shareholder

Gecko is a diversif ied

mining services,

mining and explorat ion

company operating in

Namibia


Page 19 of 22

PRELIMINARY PRICE TARGET

METHODOLOGY

Our CLA price target is considered highly speculative, as it is pre-scoping and pre-

resource for Opuwo.

Celsius moved to 95% project interest in September 2017, and controls over 100km

of the highly prospective cobalt-copper horizon within the project area (~1,470km2).

Opuwo is being advanced, with a scoping development study expected to be released

in CY18. CLA has confirmed mineralisation over a +15km zone, with strong potential

for adjacent and parallel systems. The Company has calculated an initial Exploration

Target of 33-41Mt grading 0.13-0.17% Co and 0.45-0.65% Cu over an 11km zone

down to depths of 150-250m. Mineralisation remains open. A maiden resource

estimate for Opuwo is due in the coming weeks.

Work completed by CLA indicates that the mineralisation is sulphide-related (with

cobalt present as linnaeite and copper present as chalcopyrite) and considered

amenable to simple, conventional flotation techniques. The sulphides are largely

disseminated and vein-hosted but coarser semi-massive sulphides have been

intersected.

Early metallurgical test-work by CLA has returned flotation recoveries of up to ~88%

on the cobalt and ~87% on the copper from a rougher concentrate, but a concentrate

grade of over 1% Co was not reported. A concentrate grade of 1.11% Co was achieved

within a short time frame with recoveries of 64.2% reported. Metallurgical test-work is

ongoing, aimed at improving the grade of the concentrate while maintain high

recoveries and cleaning the concentrate to reduce mass and increase grades. An

update on metallurgy is expected early in CY18. The Company has an internal target

of recoveries in excess ~80% Co and cobalt concentrate grade well above of 1% Co.

The concentrate is low in deleterious elements such as arsenic (As), cadmium (Cd)

and uranium (U) and as such could attract good payable terms.

Our preliminary valuation is largely derived from a 2Mtpa sulphide plant generating a

desirable bulk concentrates. We assume favourable cobalt recoveries of +75% and

copper recoveries +85%, and assume grades at the mid-point of the current

exploration target. The release of the maiden resource, more detailed metallurgy and

scoping developments will update our preliminary estimates. Our modelling at this

stage does not consider potential value add opportunities such as further downstream

processing to produce cobalt sulphate products or copper cathodes.

Our preliminary price target of 19cps is derived from both a discounted cashflow

analysis of a scaleable cobalt operation at Opuwo and perception of exploration value

in the search of more mineralisation.

Fig. 24: Hartleys CLA Price Target

Source: Hartleys Research

Price Target Methodology Weighting Spot 12 mth out

55% $0.13 $0.14

35% $0.29 $0.31

5% $0.07 $0.08

Cash Backing 5% $0.01 $0.01

Risk weighted composite $0.18

12 Months Price Target $0.19

Shareprice - Last $0.130

12 mth total return (% to 12mth target ) 44%

95% Opuwo (NPV 14%) Base + Exploration value

95% Opuwo (NPV 14%) Spot + Exploration value

Exploration value - no development

Our CLA valuation and

price target is

considered highly

speculative

Preliminary price

target of 19cps

Current estimated

cash of ~A$4.3M

provides some funding

towards ongoing

explorat ion

Our preliminary

model l ing assumes no

other potential by-

product credi ts

Our base valuat ion

uses Consensus

pric ing for cobalt and

copper , which are

considered

conservative

At current spot

commodity pr ices the

project has signif icant

value


Page 20 of 22

RECOMMENDATION & RISKS

INVESTMENT THESIS & RECOMMENDATION We initiate coverage of CLA with a Speculative Buy recommendation, and price target

of 19cps.

The Opuwo project has potential to develop into a long-life cobalt-copper operation,

which could be scalable to exploit growing demand in the cobalt market. Cobalt

remains in high demand, especially new reliable sources of supply outside of the DRC.

Significant cobalt price appreciation was seen in CY17 and has been maintained into

CY18, with the current spot price still over US$79,800/t (US$36.2/lb Co).

The project has favourable mineralogy, with the mineralisation sulphide-related, cobalt

present as linnaeite and copper present as chalcopyrite, both considered highly

amenable to conventional flotation and extraction techniques (significantly lower

capex and opex when compared to laterite operations). The Company’s largest

shareholder (Gecko) has extensive operating experience, especially within Namibia,

which is considered a politically stable, mining friendly destination with excellent

infrastructure.

The Company’s modest EV provides strong leverage to positive exploration results

and new discoveries. With advanced stage exploration underway, we anticipate good

near-term catalysts for share price appreciation including further results for resource

definition drilling, testing new mineralised trends within the greater Opuwo project

area, and release of the maiden resource estimate. On the current timing a Scoping

Study is expected to be released for Opuwo in Q2 2018.

We consider the Company to be in the high-risk, high-reward exploration phase,

reflective of recent trading.

SIMPLE S.W.O.T. TABLE

Fig. 25: Hartleys SWOT Table for CLA

Strengths - Proven mineralisation, extensive horizons to test

- Mineralisation from surface and remains open

- Favourable sulphide mineralogy

- Highly experience board and management

- Highly prospective ground and team to execute

Weaknesses - No JORC reserves - mine life unknown

- No processing infrastructure

- No cash flow generation

Opportunities - Potential cobalt (copper) development

- Exploration upside

- M&A activity

Threats - Exploration downside

- Commodity prices and market sentiment

- Potential takeover

- FX


We ini t ia te coverage

of CLA with

Speculative Buy

recommendation and

price target of 19cps

Has already made

high-grade discoveries

Exploration Upside

Threat of commodity

price weakness


Page 21 of 22

RISKS Key risks for CLA include making an economic discovery at the Opuwo project and

obtaining funding for ongoing exploration. Weather, land access, drill rig availability,

retaining key people are all risks.

Fig. 26: Key Risks

Assumption Risk of not realising

assumption

Downside risk to share price if assumption is

incorrect Comment

Funding for ongoing exploration

Med

Med-High

We estimate CLA has a current cash position of ~A$4.3M. The Company has a number of options to raise additional funds for future

exploration, including new equity issuances. The Company operates under a lean corporate structure (low cost base). The Company is

funded for some planned exploration drilling in 2018.

Discovery Success

Med-High

Med

The Company has confirmed extensive mineralisation within the project area, and has

strong potential for additional mineralised zones. A large exploration target has been reported which is in the process of being updated by latest drilling. The maiden resource once

released is considered to be interim, as the full strike and depth potential of the system is yet to

be defined.

Viable resource progresses through development studies

Med-High

High

We assume a viable resource estimate can be released for the project. On the current timing a

Scoping Study is planned to be released in CY18, which will incorporate the maiden

resource, processing flowsheet, and indicative costs (both capex and opex). Preliminary met-testwork has been favourable but needs to be

refined.

Commodity Prices Med

Med-High

The projects remain highly sensitive to commodity price movements and sentiment.

Current exploration focus is cobalt and copper.

Conclusion At this stage we consider the assumptions have a medium to high risk of not being achieved. At this stage we have only a preliminary speculative valuation for CLA. The Company’s extensive project portfolio

with high prospectivity and low current market cap, implies the Company is undervalued.


Page 22 of 22

HARTLEYS CORPORATE DIRECTORY Research Trent Barnett Head of Research +61 8 9268 3052

Mike Millikan Resources Analyst +61 8 9268 2805

John Macdonald Resources Analyst +61 8 9268 3020

Paul Howard Resources Analyst +61 8 9268 3045

Aiden Bradley Research Analyst +61 8 9268 2876

Oliver Stevens Research Analyst +61 8 9268 2879

Michael Scantlebury Junior Analyst +61 8 9268 2837

Janine Bell Research Assistant +61 8 9268 2831

Corporate Finance Dale Bryan Director & Head of

Corp Fin.

+61 8 9268 2829

Richard Simpson Director +61 8 9268 2824

Ben Crossing Director +61 8 9268 3047

Ben Wale Associate Director +61 8 9268 3055

Stephen Kite Associate Director +61 8 9268 3050

Scott Weir Associate Director +61 8 9268 2821

Scott Stephens Associate Director +61 8 9268 2819

Rhys Simpson Manager +61 8 9268 2851

Registered Office

Level 6, 141 St Georges TcePostal Address:

PerthWA 6000 GPO Box 2777

Australia Perth WA 6001

PH:+61 8 9268 2888 FX: +61 8 9268 2800

www.hartleys.com.au [email protected]

Note: personal email addresses of company employees are

structured in the following

manner:[email protected]

Hartleys Recommendation Categories

Buy Share price appreciation anticipated.

Accumulate Share price appreciation anticipated but the risk/reward is

not as attractive as a “Buy”. Alternatively, for the share

price to rise it may be contingent on the outcome of an

uncertain or distant event. Analyst will often indicate a

price level at which it may become a “Buy”.

Neutral Take no action. Upside & downside risk/reward is evenly

balanced.

Reduce /

Take profits

It is anticipated to be unlikely that there will be gains over

the investment time horizon but there is a possibility of

some price weakness over that period.

Sell Significant price depreciation anticipated.

No Rating No recommendation.

Speculative

Buy

Share price could be volatile. While it is anticipated that,

on a risk/reward basis, an investment is attractive, there

is at least one identifiable risk that has a meaningful

possibility of occurring, which, if it did occur, could lead to

significant share price reduction. Consequently, the

investment is considered high risk.

Institutional Sales Carrick Ryan +61 8 9268 2864

Justin Stewart +61 8 9268 3062

Simon van den Berg +61 8 9268 2867

Chris Chong +61 8 9268 2817

Digby Gilmour +61 8 9268 2814

Veronika Tkacova +61 8 9268 3053

Wealth Management Nicola Bond +61 8 9268 2840

Bradley Booth +61 8 9268 2873

Adrian Brant +61 8 9268 3065

Nathan Bray +61 8 9268 2874

Sven Burrell +61 8 9268 2847

Simon Casey +61 8 9268 2875

Tony Chien +61 8 9268 2850

Tim Cottee +61 8 9268 3064

David Cross +61 8 9268 2860

Nicholas Draper +61 8 9268 2883

John Featherby +61 8 9268 2811

Ben Fleay +61 8 9268 2844

James Gatti +61 8 9268 3025

John Goodlad +61 8 9268 2890

Andrew Gribble +61 8 9268 2842

David Hainsworth +61 8 9268 3040

Murray Jacob +61 8 9268 2892

Gavin Lehmann +61 8 9268 2895

Shane Lehmann +61 8 9268 2897

Steven Loxley +61 8 9268 2857

Andrew Macnaughtan +61 8 9268 2898

Scott Metcalf +61 8 9268 2807

David Michael +61 8 9268 2835

Jamie Moullin +61 8 9268 2856

Chris Munro +61 8 9268 2858

Michael Munro +61 8 9268 2820

Ian Parker +61 8 9268 2810

Matthew Parker +61 8 9268 2826

Charlie Ransom

(CEO)

+61 8 9268 2868

Mark Sandford +61 8 9268 3066

David Smyth +61 8 9268 2839

Greg Soudure +61 8 9268 2834

Sonya Soudure +61 8 9268 2865

Dirk Vanderstruyf +61 8 9268 2855

Samuel Williams +61 8 9268 3041

Jayme Walsh +61 8 9268 2828

Disclaimer/Disclosure

The author of this publication, Hartleys Limited ABN 33 104 195 057 (“Hartleys”), its Directors and their Associates from time to time may hold

shares in the security/securities mentioned in this Research document and therefore may benefit from any increase in the price of those securities.

Hartleys and its Advisers may earn brokerage, fees, commissions, other benefits or advantages as a result of a transaction arising from any advice

mentioned in publications to clients.

Hartleys has assisted in capital raisings in the past 12 months for Celsius Resources Limited ("Celsius") for which it has earned fees. Hartleys has

a beneficial interest in 16 million options in Celsius.

Any financial product advice contained in this document is unsolicited general information only. Do not act on this advice without first consulting

your investment adviser to determine whether the advice is appropriate for your investment objectives, financial situation and particular needs.

Hartleys believes that any information or advice (including any financial product advice) contained in this document is accurate when issued.

Hartleys however, does not warrant its accuracy or reliability. Hartleys, its officers, agents and employees exclude all liability whatsoever, in

negligence or otherwise, for any loss or damage relating to this document to the full extent permitted by law.

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Celsius Resources Ltd (CLA) · Issued Capital - diluted ITM options 723.4m Melanie Ross (Company Secretary) Options - all 140.1m Issued Capital - fully diluted all options 731.9m