Hannans : 2nd Quarter Cashflow Report

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

HANNANS LTD

ABN Quarter ended ("current quarter")

52 099 862 129 31 December 2016

Rule 5.5

Consolidated statement of cash flows Currentquarter $A'000 Year to date (6 months) $A'000

1. Cash flows from operating activities

2. Receipts from customers

3. Payments for

4. exploration & evaluation

   - -

   (275) (335)

5. development - -

6. production - -

7. staff costs (31) (192)

8. administration and corporate costs (232) b (487) b

9. Dividends received (see note 3) - -

10. Interest received 7 14

11. Interest and other costs of finance paid - -

12. Income taxes paid - -

13. Research and development refunds - -

14. Other (provide details if material) - -

    1.9 Net cash from / (used in) operating activities (531) (1,000)
15. Cash flows from investing activities

16. Payments to acquire:

17. property, plant and equipment

    - (1)

18. tenements (see item 10) - -

19. investments - -

20. other non-current assets - -

    Consolidated statement of cash flows Currentquarter $A'000 Year to date (6 months) $A'000

21. Proceeds from the disposal of:

22. property, plant and equipment - -

23. tenements (see item 10) - -

24. investments - -

25. other non-current assets - -

26. Cash flows from loans to other entities (4) (95)

27. Dividends received (see note 3) - -

28. Other (provide details if material) 1,000 a 750 a

    2.6 Net cash from / (used in) investing activities 996 654
29. Cash flows from financing activities

30. Proceeds from issues of shares - -

31. Proceeds from issue of convertible notes - -

32. Proceeds from exercise of share options 125 271

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

    (20) (25)

34. Proceeds from borrowings - -

35. Repayment of borrowings - -

36. Transaction costs related to loans and - - borrowings

37. Dividends paid - -

38. Other (provide details if material) - -

3.10 Net cash from / (used in) financing activities 105 246

4.	Net increase / (decrease) in cash and cash equivalents for the period
4.1	Cash and cash equivalents at beginning of period	1,005	1,675
4.2	Net cash from / (used in) operating activities (item 1.9 above)	(531)	(1,000)
4.3	Net cash from / (used in) investing activities (item 2.6 above)	996	654
4.4	Net cash from / (used in) financing activities (item 3.10 above)	105	246
4.5	Effect of movement in exchange rates on cash held	-	-
4.6	Cash and cash equivalents at end of period	1,575	1,575

1. 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

2. Bank balances 792 87

3. Call deposits 783 918

4. Bank overdrafts - -

5. Other (provide details) - -

   5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 1,575 1,005

6. The acquisition of Reed Exploration Pty Ltd was completed on 29 September 2016. Pursuant to the agreement with Neometals Ltd, Reed Exploration Pty Ltd transferred a cash balance of $1 million less the costs of the nickel exploration drilling completed in October 2016 with no liabilities.

7. Approximately $94,000 (Jul - Dec 2016: $224,000) was associated with one-off transaction costs relating to implementation of the Neometals transactions and the in-specie distribution of Critical Metals Ltd.

8. Payments to directors of the entity and their associates Currentquarter $A'000

9. Aggregate amount of payments to these parties included in item 1.2 31

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

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

    6.1 Payments of Managing Director's salary, superannuation, taxes and Non-Executive Directors' fees for the quarter.

    During the quarter, the Company issued shares and unlisted options in lieu of the outstanding Managing Director's salary and Non-Executive Directors' fees as approved at Hannans' shareholder meeting on 15 September 2016. Refer to ASX announcement dated 15 November 2016 for further information.

12. Payments to related entities of the entity and their associates Currentquarter $A'000

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

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

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

16. 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

17. Loan facilities - -

18. Credit standby arrangements - -

19. Other (please specify) - -

20. 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.

9.	Estimated cash outflows for next quarter	$A'000
9.1	Exploration and evaluation	340
9.2	Development	-
9.3	Production	-
9.4	Staff costs	48
9.5	Administration and corporate costs	49
9.6	Other (provide details if material)	-
9.7	Total estimated cash outflows	437

10.	Changes in tenements	Tenement reference and	Nature of interest	Interest at beginning	Interest at end of
(items 2.1(b) and 2.2(b)	location	of quarter	quarter
above)
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