Strandline Resources : Significant Increase in Fungoni High Grade Mineral Resource

ASX ANNOUNCEMENT

16 January 2017

Significant increase in Fungoni high grade Mineral Resource

Mineral sands developer, Strandline Resources (Strandline or the Company) is pleased to provide an update on its 100% owned Fungoni Mineral Sands Project, located near Dar es Salaam in Tanzania.

The zircon-rich Fungoni Project is predicated on a low capital cost and low risk operating model to produce saleable titanium and zircon mineral sand products to generate near-term cashflow for the Company.

Results from the recent aircore (AC) drilling campaign have significantly increased the contained Heavy Mineral (HM) of the Mineral Resource Estimate, improved JORC classification and confirmed the sizable extent of the high grade portion of the deposit favourably positioned at surface.

This announcement summarises the key findings, including the potential strong upside of the immediate North West extension zone (Fungoni NW).

HIGHLIGHTS:

• Significant increase to Fungoni Mineral Resource Estimate - The infill and extension drilling has been successful in growing the Fungoni resource and confirmed the high grade mineralised zone at surface:

  • 45% increase in Mineral Resource to 16Mt @ 3.1% Total Heavy Mineral (THM) - compared to previous estimate of 11Mt @ 3.1% THM.

  • Upgraded JORC 2012 classification of Mineral Resource to 60% Measured and 40% Indicated,

    up from 100% Indicated previously.

  • 42% increase in contained Heavy Mineral (HM) to 480,000t without decreasing THM grade - previous equivalent 340,000t HM.

  • Confirmed the very high grade assemblage characteristics including Zircon 22%, Ilmenite 40%, Rutile 4% and Leucoxene 1%.

• Fungoni NW Extension Potential - Initial 200m x 100m spaced AC drilling of the immediate North West extension zone was completed in December 2016 - assay results pending.

  A single surface sample taken from the centre of the Fungoni NW radiometric anomaly shows high grade of 11.24% THM containing 26% Zircon and similar valuable assemblage of the main ore body.

• Fungoni Feasibility Study Progressing as Planned - The definitive level feasibility work is progressing in earnest with the Company's Fungoni focus now firmly on defining the optimal mining and processing solutions for the Project, whilst concurrently progressing the project approvals process. The Company will provide a detailed update on the feasibility study over the coming weeks.

Strandline's Managing Director and CEO, Luke Graham commented, "The Fungoni Mineral Resource upgrade has demonstrated an enhanced ore body in terms of scale, value in the ground and level of JORC classification. The mineral resource provides a strong geological foundation for the feasibility study, with the potential further economical upside from the 2km long Fungoni NW extension anomaly running along strike, as well as other nearby exploration targets in the region.

"The Company is excited by the near term project potential of Fungoni as well as progress made through 2016 on the Company's other strategic exploration and development pursuits in Tanzania and Australia."

www.strandline.com.au Page 1

INTRODUCTION

Strandline continues to advance development of its zircon-rich Fungoni Mineral Sands Project located 25km south of Dar es Salaam port infrastructure (Figure 1).

Results from Strandline's infill and extension drill programme at Fungoni were released on 17 November 2016 and this release provides the JORC-2012 mineral resource update and classification upgrade relating to the main Fungoni ore-body area (not including Fungoni NW).

A positive Scoping Study for Fungoni was announced on 23 February 2016 which was based on a smaller, high grade portion of the previous Indicated Mineral Resource of 11 million tonnes @ 3.1% THM. This Mineral Resource update has significantly increased the contained heavy mineral of the Project from an initial 340,000t to 480,000t (increase of 42%) of heavy mineral. The infill and extension drilling has been successful in growing the Mineral Resource base (from 11Mt to 16Mt) laterally to the north, east and south discovering additional shallow heavy mineral sand mineralisation.

The results have confirmed a very high grade zircon-rich core within the Mineral Resource (continuous domains), as shown in cross section (Figure 3) and long section (Figure 4). The mineralisation shows strong geological and grade continuity along and across strike, which bodes well for mine planning and scheduling.

Figure 1 - Strandline holds a large tenement package strategically located along the Tanzanian Coastline

Figure 2 - Location Map of the Fungoni Mineral Resource and contiguous NW Radiometric Anomaly (titled Fungoni NW)

THM Grade Key

300m across strike

AC drillhole Prefix CSAC - Jacana 16FGAC - Strandline

50m

Vertical Exaggeration = 5

Figure 3 - Fungoni Cross-section (refer Figure 2 for location)

THM Grade Key

1300m along strike

AC drillhole Prefix CSAC - Jacana 16FGAC - Strandline

200m

Vertical Exaggeration = 5

Fungoni Long-Section Domain 2 (548100mN +/- 50m) Looking West

Figure 4 - Fungoni Long-section (refer Figure 2 for location)

FUNGONI PROJECT JORC-2012 MINERAL RESOURCE

The Mineral Resource estimation was conducted by Greg Jones who is a full time employee of IHC-Robbins, a specialist consultant in mineral sands resources, metallurgy and processing (refer to Competent Person statement).

Table 1 below displays the Mineral Resources estimated for the Fungoni Project main ore body area (not including Fungoni NW area). Importantly, the mineral resources are classified as Measured and Indicated and all start at surface with no, to extremely low, strip ratios.

Table 1 - Mineral Resource Statement for Fungoni at January 2017 (not including Fungoni NW)

MINERAL RESOURCE SUMMARY FOR FUNGONI PROJECT
Summary of Mineral Resources(1)					VHM assemblage(2)
Deposit	Mineral Resource Category	Tonnage	In situ THM	THM	Altered Ilmenite	Ilmenite	Rutile	Zircon	Leucoxene	Slimes	Oversize
(Mt)	(Mt)	(%)	(%)	%	(%)	(%)	(%)	(%)	(%)
FUNGONI	Measured	9	0.36	4.2	25	15	4	24	1	19	7
FUNGONI	Indicated	7	0.12	1.7	23	12	4	16	1	28	9
Total(3)	16	0.48	3.1	25	15	4	22	1	23	8
(1) Mineral Resources reported at a cut-off grade of 1.0% THM
(2) Valuable Mineral assemblage is reported as a percentage of in situ THM content
(3) Appropriate rounding applied
(4) The Total Mineral Resource contains approximately 19% combined kyanite and sillimanite within the trash component of the THM

Grade tonnage curves are presented in Figures 5 and 6. Varying cut-off grades shown immediately beneath the chart and tonnage and slimes content can be read from the left hand axis (or from the numbers at the bottom). Grade in THM% can be read from the right hand axis (or from the numbers at the bottom).

Figure 5 - Grade-tonnage curve for the Fungoni deposit (not including Fungoni NW)