Spectrum Rare Earths : New Exploration Licence Application

(ASX: SPX) ASX ANNOUNCEMENT 1st June 2017 NEW EXPLORATION LICENCE APPLICATION

HIGHLIGHTS

• New 100% SPX Exploration Licence Application covering 38.2km2 of prospective mineralised basement stratigraphy.

• Under-explored banded iron formation hosted gold intercepts.

• Gold-copper potential at depth and along strike.

Spectrum Rare Earths Limited ("SPX") is pleased to announce a new mineral exploration licence application (E08/2924) covering 38.2km2 and host to prospective mineralised Banded Iron Formation ("BIF") approximately 40km east of Onslow, Western Australia (Fig. 1). The new application is host to the undeveloped Whaleshark Gold- Copper prospect previously explored by ("WMC") Limited from 1993 to 1997 and comprises the Winning Group suite of clastic sedimentary and igneous formations.‌‌

Figure 1. New mineral Licence application E 08 / 2924 Location. About the Whaleshark Prospect

The tenure is accessible by serviced sealed and unsealed roads. Within close vicinity to Onslow, the tenure may be accessed and explored year-round.

Registered Office: 15 Lovegrove Close, Mount Claremont WA 6010 | T: 08 9384 3284 | F: 08 9284 3801

ABN: 94 115 770 226 | [e-mail] | www.spectrumrareearths.com.au

The local geology consists of approximately 30m of Tertiary cover comprising of sand, gravel, calcrete clay and laterite. A further 100m of indurated clastic Cretaceous sedimentary sequences unconformably overlie the prospective Proterozoic, deformed banded iron formation ("BIF") and tourmaline bearing granitoid intrusions.

Early exploration in the 1970's targeted roll front uranium style deposits. From 1993 WMC conducted detailed magnetic and gravity geophysical surveys to define conceptual gold and copper drill targets in the vicinity of covered magnetic anomalies.

WMC completed RC and diamond drilling along the most notable high amplitude NE-SW trending magnetic anomaly. Drill hole PMLD9 (GDA94 MGA Zone 50, 7606740 N 346760 E) was drilled (-70°/360°) to test the SW termination of the NE-SW magnetic high. PMLD9 was drilled Reverse Circulation Percussion to 136m at the basement BIF interface and further as diamond core. The BIF was noted as dipping steeply to the SE. Drill hole PMLD9 terminated at 241.8m ending in gold mineralization including the following significant intercepts sourced from open file WAMEX report A48726;

~ Split Core Sample - AB927141 173m to 173.7m - 0.7m @ 0.1g/t Au

~ Split Core Sample - AB927146 176.8m to 178m - 1.2m @ 0.4g/t Au

~ Split Core Sample - AB927147 178m to 178.4m - 0.4m @ 1.9g/t Au

~ Split Core Sample - AB927158 186.9m to 187.6m - 0.7m @ 0.4g/t Au

~ Split Core Sample - AB928914 241.45m to 241.8m - 0.35m @ 0.1g/t Au

Figure 2. Location of the Whaleshark Prospect and WMC resources RC / Diamond drilling.

Diamond drilling confirmed that the large magnetic anomaly is due to magnetite rich BIF and that the gold mineralisation may postdate basement deformation events.

Figure 3. Schematic section of WMC Ltd RC / Diamond drilling, geology and Au Intercepts.

From diamond core logging PMLD9, sulphides were observed over much of the drilling intensifying around gold occurrence. Gold occurrence is notable in carbonate, pyrite, quartz, veins with a sulphide selvage.

Linear zones of demagnetisation are observed from the historical geophysical magnetic data sets at and around the Whaleshark prospect. These zones are coincident with interpreted NS cross cutting features and are considered prospective drill targets for gold mineralisation based on magnetic susceptibility data, associated gold mineralisation in PMLD009 and the conceptual model that demagnetised zones may represent fluid mineralisation conduits.

Explorers successive to WMC focused drilling predominantly on iron ore drill targets. Further geophysical surveys and desktop modelling progressed in developing a deeper geological and geophysical understanding although no further drilling was undertaken after the exercise.

From preliminary open file data compilation work, SPX considers the gold mineralisation to be open at depth. The mineralisation strike extents at depth may be linear to cross cutting features or continuous along the strike length of the high amplitude magnetic anomaly.

SPX plans to undertake a detailed review of geophysical datasets using modern technologies and tooling in conjunction with exploration targeting to further define prospective mineralisation zones.

Follow up geophysical and drilling programs are to be designed in preparation for grant of license.

SPX Chairman Mr Hewlett is pleased to have captured a mineral licence with a readily advanced understanding of the mineral system, conceptual prospective mineral targets and drill ready targets.

Table 1. Drill hole collars, completed drilling by WMC Ltd.

(Reverse Circulation "RC", Diamond Drill Core continuation "RCD").

Hole Id	Hole Type	Datum	Projection	Easting	Northing	Depth RC (m)	Depth D (m)
PMLC10	RC	GDA94	MGA Zone 50	346918	7606995	153.7	0
PMLC11	RC	GDA94	MGA Zone 50	346798	7606895	166	0
PMLC12	RC	GDA94	MGA Zone 50	346898	7606795	162	0
PMLC13	RC	GDA94	MGA Zone 50	346738	7606655	166	0
PMLC14	RC	GDA94	MGA Zone 50	346538	7606655	190	0
PMLC15	RC	GDA94	MGA Zone 50	346338	7606655	178	0
PMLC16	RC	GDA94	MGA Zone 50	347538	7607065	130	0
PMLC18	RC	GDA94	MGA Zone 50	347338	7607065	50	0
PMLC19	RC	GDA94	MGA Zone 50	347338	7607060	130	0
PMLC20	RC	GDA94	MGA Zone 50	346938	7607065	156	0
PMLC21	RC	GDA94	MGA Zone 50	346738	7607065	160	0
PMLD7	RCD	GDA94	MGA Zone 50	347140	7607065	128	242.1
PMLD8	RCD	GDA94	MGA Zone 50	347418	7607215	124.8	244
PMLD9	RCD	GDA94	MGA Zone 50	346898	7606895	136	241.8

For further information please contact: Mr Alex Hewlett

Chairman

Telephone: [phone]

Email: [e-mail]