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1 ASX ANNOUNCEMENT 16 August 2017 MARKET UPDATE BOLIVIA Highlights Victory Mines to commence feasibility study Sole focus in the foreseeable future will be on tin tailings sites Four additional tailings sites identified Victory Mines to work exclusively with COMIBOL in Bolivia Right time, right people, right relationships now in place Victory Mines Limited (VIC.ASX) (the Company) is pleased to announce that it has been granted permission by the Bolivian state mining company, Corporacion Minera de Bolivia (COMIBOL) to commence a feasibility study on a number of its existing tailing sites plus four new additional sites identified by the Victory Mines board and Victory s Bolivian Country Manager, Mr Alberto Galvez. Initially, the Company plans to complete a drilling program across all eight tailing sites with the view to finalising a feasibility study in the next six months. Once the feasibility study has been finalised, it is expected that the Company will then finalise its environmental study and social study and, as such, be able to complete the requirements to enter into a production contract with COMIBOL. The environmental and social studies are expected to take six to nine months. It is expected that the production contract with the Company will be passed by the Bolivian Government within eighteen months from completion of drilling. Details on the eight tailing sites that have been granted to the Company are set out below. Figures 1, 2, 3 and 4 show the locations of the various tin tailings sites. Existing sites comprise: - El Kenko Tailings - Catavi Arena Tailings - Sink & Float Descartes Tailings - Rio Andavillque Tailings New concessions comprise: - Colas Arenas Ingenio "Santa Elena Huanuni - Colas Arenas Ingenio "Machacamarca" Huanuni - River "Huanuni" sediments (till Lake "Poopo") - Colas "Japo The current market prices of Sn are, according to Empresa Metallurgica de Vinto on 27 July 2017, - Pure Tin, $20, US$/t; and - Tin grade $6, US$/t. There has been historical exploration work completed on all of the tailings sites. These exploration results are not sufficient to define a JORC resource, however, they have enabled the Company to define Exploration Target Potential across each of the sites. Victory Mines Limited ABN Registered Office: Level 11, 216 St George s Terrace, Perth WA 6000 Telephone Fax

2 The eight tailing projects have their Exploration Target Potential summarised in the table below which shows a Total Exploration Target Potential of to million tonnes (Mt) at grades between 0.39 and 0.41% tin. The potential quantity and grade of these Exploration Targets is conceptual in nature and there has been TAILINGS EXPLORATION TARGETS PROJECT El Kenko Tailings Colas Catavi Tailings Sink and Float Descartes Tailings Rio Andavillque Tailings Colas Arenas Santa Elena River Huanuni Sediments Colas Machacamarca Colas Japo TOTAL/WEIGHTED AVERAGE EXPLORATION TARGET MINERALISATION POTENTIAL 8.4 to % Sn % Sn % Sn to 0.84 % Sn to 0.65% Sn % Sn % Sn % Sn to 0.41% Sn El Kenko El Kenko has an Exploration Target Potential of between 8.4 and 8.8 million tonnes (Mt) at grades of between 0.36 and 0.40% tin (Sn). i The international tender document from COMIBOL dated January 1991, entitled Convocatoria Publica Nacional e International CENTRO MINERO CATAVI Colas Arenas, Colas Lamas y Descartes SINK AND Float forms the basis of the Exploration Target Potential of between 8.4 Mt and 8.8Mt at grades of 0.36 to 0.40% Sn as well as information contained from at least 5 separate drilling programmes conducted between 1962 and A 1964 report by COMIBOL suggested that some 8.123Mt of tailings had been pumped into the El Kenko site and more material was added after that time. 2 P a g e

3 Colas Catavi Colas Catavi has an Exploration Target Potential of between 9.5Mt and 10Mt at grades of between 0.29 and 0.31% Sn. The international tender document from COMIBOL dated January 1991 entitled Convocatoria Publica Nacional e International CENTRO MINERO CATAVI Colas Arenas, Colas Lamas y Descartes SINK AND Float forms the basis of the Exploration Target Potential of between 9.5Mt and 10Mt at grades of 0.29 to 0.31% Sn. Also, a report on a 20 hole churn drilling programme done by COMIBOL in 1975 has assisted in arriving at the Exploration Target Potential figures for this area. Colas Sink and Float Descartes Colas Sink and Float Descartes has an Exploration Target Potential of between 24 Mt to 26Mt with grades ranging from 0.25 to 0.27% Sn. The international tender document from COMIBOL dated January 1991, entitled Convocatoria Publica Nacional e International CENTRO MINERO CATAVI Colas Arenas, Colas Lamas y Descartes SINK AND Float forms the basis of the Exploration Target Potential of between 24Mt and 26Mt at grades of 0.25 to 0.27% Sn. Rio Andavillque Tailings Rio Andavillque Tailings have an Exploration Target Potential of between 8 and 10 Mt at grades ranging from 0.74 to 0.84% Sn. A 1998 report by Bolivian Geologist, Gregorio Yucra forms the basis for the Exploration Target Potential of between 8 Mt and 10 Mt at grades ranging from 0.74 to 0.84% Sn. The report details that previous explorers sampled a series of 10 channels in the tailings along the two edges of the river, with samples returning tin values which averaged 0.78% Sn. The tailings are captured by the Chaquiri Dam, a 40m high concrete arch structure and extend for about 3km. 3 P a g e

4 Colas Arenas Huanuni Colas Arenas Huanuni (Santa Elena) has an Exploration Target Potential of 1.1 Mt to 1.3 Mt at grades between 0.55 and 0.65% Sn result in the estimation of a Mineral Resource A report Colas Arenas Huanuni : Tito F., 2016 Annual Report Ingenio Santa Elena, E.M.H., January 2017, Huanuni, Bolivia.forms the basis for the Exploration Target Potential of 1.1Mr to 1.3Mt at grades between 0.55 and 0.65% Sn. This is an internal report from the Huanuni Plant (the largest tin concentrator in Bolivia). River Huanuni Basin River Huanuni Basin tailings has a Exploration Target Potential of 2.1Mt to 2.3 Mt with grades between 0.45 and 0.55% Sn A report titled Oruro Technical University, Sediments Re-treatment of Huanuni River as an alternative for Remediation Final Design Project, Agreement between Oruro Technical University & Prefecture of Oruro, Oruro (Bo), September 2008, 108 p. forms the basis for the Exploration Target Potential of 2.1 to 2.3 Mt with grades between 0.45 and 0.55% Sn. The Exploration Target Potential figures have been derived from three traverses across the site with samples collected at 60cm depths at regular intervals. Volume calculations gave rise to an estimate of tonnages. Colas Machacamarcahas Colas Machacamarcahas has an Exploration Target Potential of between 0.65 Mt and 0.75 Mt at grades between 0.48 and 0.52% Sn. A report Tails Machacamarca: Prado Nitzi, Project profile presented to DIMA COMIBOL of E.M.H. Machacamarca Plant, March 2017, Oruro, Bolivia forms the basis for the Exploration Target Potential of 0.48Mt to 0.52Mt with grades between 0.48 and 0.52% Sn. This is an internal report from the Huanuni Plant (the largest tin concentrator in Bolivia). Colas Japo Colas Japo (which includes Santa Fe and Morococala) has an Exploration Target Potential of between 1.3 Mt and 1.5Mt at grades between 0.45 and 0.55% Sn. 4 P a g e

5 A report COMIBOL, Monthly Report of Geological Operations, Tin Mines, 1974 forms the basis of the Exploration Target Potential of between 1.3 Mt and 1.5 Mt at grades between 0.45 and 0.55% Sn. It was estimated considering the plant capacity and years of operation and the grade came from assay results provided in the reference (COMIBOL report). A recent survey of the tailings arrived at an estimated tonnage of 1.4Mt. With reference to all of the eight tailings sites, the approximate ranges of both tonnage and grades have been determined from the examination of reports held by COMIBOL, and other available reports from Geologists, University studies as well as an Independent Geological Report by Al Maynard & Associates on South American Tin Limited s Bolivian Mineral Assets dated August Much of the information gained from these reports do not meet JORC standards and, as such, the data is deemed not suitable for Resource Estimations. However, the available data does allow for Exploration Target Potential estimates based on all available information. The Company plans to investigate the Exploration Target Potential by completing drilling programmes across all eight tailing sites with the view of finalising the feasibility study in the next six months. Figure 1: General Location of Tailings Projects Centred on Llallagua and Huanuni 5 P a g e

6 Figure 2: Location of Descartes Sink and Float, El Kenko, Catavi and Rio Andavillque Sites Figure 3: Location of Colas Arenas, River Huanuni and Colas Machacamarca Sites 6 P a g e

7 Figure 4: Location of Colas Japo Tailings Site The feasibility study is intended to define the technical and economic description of the tin processing plant and will take approximately six months to finalise. The cost of building the process plant (CAPEX) and the cost for operating the plant (OPEX) will be estimated in the feasibility study. The projected cash flow for the period of plant operation and other financial indicators will be calculated to prove the profitability of the project. The Company plans to extract the tin (and other metals - silver and potentially tantalum) by gravity, magnetic separation and the flotation process. The degree of liberation and grain size of these minerals will dictate the most suitable process and equipment to be considered. A drilling program for the eight deposits will be executed shortly and followed by chemical and mineralogical analysis of the representative samples. These assay results will be carried out at Bolivian laboratories, which are equipped with Inductively couple plasma ICP, X-ray fluorescence XRF, X-ray diffraction XRD, Quantitative evaluation of minerals by scanning electron microscopy QEMSCAN, Mineral liberation analyser MLA. The Bolivian laboratory holds both QA and QC global certification. Alberto Galvez said A detailed metallurgical test program will follow with the laboratory test work undertaken in Bolivia. There is very real experience in the processing of tin in the area of South- America and we are pleased and excited to be able to advance these projects. Focus on Tailings Dr James Ellingford, the Company s Non Executive Chairman stated, We are now going to focus solely on extracting value from these tailing sites, both old and new, and will aggressively work towards establishing a minerals processing facility to extract, primarily the tin, as well as potentially, silver and tantalum. This has been a long journey but I am confident, as is the rest of the board, that Victory Mines have the right relationships in place and more importantly the right people on the 7 P a g e

8 ground to ensure success. Ellingford went onto say, We are only going to deal directly with COMIBOL moving forward and focus solely on our tailings sites which has to potential to prove significant for our shareholders. It is simply now a matter of working through the process we have committed to. The Company have already submitted to COMIBOL the geographical location and areas with their respective government numbers of concessions sought, as per issued by AJAM ( Autoridad Jurisdiccional Administrativa Minera ) and are pleased to report that Victory has received formal approval to commence the feasibility study and commence the associated drilling program from COMIBOL. The Company plans to create a new wholly owned subsidiary in Bolivia to handle all the legal requirements of the Bolivian Government. The new subsidiary will be the holder of the new concession approvals and in time, will employ the necessary staff to help manage the project. The Company intends to continue to work exclusively with COMIBOL on all of the tailings projects and will cease any further work and investigation in relation to the other hard rock sites in Bolivia in favour of executing and finalising a Production Contract with COMIBOL with a view to generating significant revenues for its shareholders. The Company plans to secure all of the tailing projects within the feasibility study in the final Production Contract. The Company is also pleased to report that the current situation for business in Bolivia is robust and favourable and while there have been numerous changes recently to the mining law we feel confident that we are in an excellent position to be able to finalise all contractual requirements and progress our strategy in the very near future. In mid-2014, the Bolivian Government passed a new Mining Code. The new legislation replaces a general law passed in 1997 and brings public and private companies operating in Bolivia in line with the 2009 mining constitution. Further changes in late 2016 resulted in COMIBOL taking a more active approach in the Mining sector. These changes represent significant risk to the cooperative relationships established via Gondwanaland and, as such, it is our intention to deal directly and exclusively with COMIBOL, create a new legal entity in Bolivia and close South American Tin immediately. The Company s Bolivian Country Manager, Alberto Galvez stated The changes in the Mining and Metallurgical Law in Bolivia (law No. 535) has been beneficial to our work with COMIBOL and proves that our strategy to work with the government is not only the right strategy but has also come at the right time. Ellingford noted, The new laws are in place to encourage private enterprises to be able to do business in Bolivia. We have found that working with COMIBOL has been extremely positive with their professionalism and timely response to our requests. COMIBOL is truly an organisation that is seeking private enterprise to invest in their country and willing to work hard to achieve this outcome. 8 P a g e

9 Summary The following steps will now be taken as we move towards our overall goal in Bolivia. Development of drilling program for eight tailing deposit sites Creation of a new company in Bolivia, controlled by Victory Definition and execution of the metallurgical test work program Definition of the most cost-effective way to process the tailings Preparation of the feasibility study Submission of the feasibility study to COMIBOL The Company believes strongly in the economics of the tailing sites and is committed to the Bolivian Government, its people and working with COMIBOL to ensure that a successful outcome is achieved. Enquiries Elizabeth Hunt Company Secretary The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Peter Peebles who is a Member of The Australasian Institute of Mining and Metallurgy and a Member of the AIG. Mr Peebles is employed by Darlington Geological Services Pty Ltd and is also a Director of Victory Mines Limited. Mr Peebles has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Peebles consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 9 P a g e