Aeon Metals Limited (AML) Joining the long dots Recommendation...

Aeon Metals Limited (AML) Joining the long dots Recommendation Buy (unchanged) Price $0.35 Valuation $0.54 (previously $0.50) Risk Speculative Analyst David Coates 612 8224 2887

WIDE step-outs hit the spot: assays pending In the last few weeks AML has released three updates on diamond holes drilled at its 100%-owned Walford Creek copper-cobalt project in NW Queensland. The planned 30,000m diamond core and RC drilling program will be the single biggest ever undertaken at the project and has the potential to confirm material extensions to the current Resource. The first reports have been hugely encouraging, with three very wide step-out holes, drilled 2.5km, 4.6km and 7.4km along strike, all intersecting the targeted PY3 mineralised zone and consistent with the mineralisation encountered in the current Copper Lode Resource of 15.7Mt @ 1.24% Cu and 0.15% Co. We expect the first assays to be reported in the next two weeks. The holes reported were: • Hole WFPD273 (4.6km along strike): 21m PY3 interval from 248m (April 24th) • Hole WFDD278 (7.4km along strike): 16m PY3 interval from 132m (May 3rd) • Hole WFPD292 (2.5km along strike): 20m PY3 interval from 390m (May 17th)

Early evidence of Resource extension We need to await the assay results to fully evaluate these holes but there are two key points we can take away: 1) the structural setting has been confirmed and the continuity of the key mineralised units PY1 and PY3 along strike demonstrated; and 2) this is a strong endorsement of the geological model, which has successfully targeted the deposit as far as 7.4km along strike. It’s too early to join the dots quite that far but the three-from-three strike rate provides compelling, early evidence of the continuity of the deposit and the likelihood of a material Resource increase following this program. Investment thesis – Buy, (Speculative), valuation $0.54/sh We reiterate our view that AML has entered an exciting period of cost effective discovery and growth and news flow from this program may deliver strong, positive catalysts for the share price. Our NPV-based valuation increases 8% to $0.54/sh as we de-risk our Resource upside. AML remains one of our Top Picks for 2018.