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Uganda

QX has a farm in agreement with African Minerals Ventures Ltd (“AMV” – a 100% owned subsidiary of North Atlantic Mining Associates Ltd (“NAMA”) whereby AMV will earn 51% of the Busumbu Phosphate Project (“project”) by spending US$3m over 3 years. QX retains a 24% free carried interest in the Project for the first US$3m spent by AMV.

The Project is located less than 30km from the Sukulu Phosphate Project, where a Chinese firm, The 23rd Metallurgical Construction Group Co Ltd started construction in 2014 of a US$620M phosphate mine and integrated fertiliser facility, rare earths project and power station.

Overview of the Busumbu Phosphate Project

The Busumbu Phosphate Project is located on the Busumbu ridge approx. 3km east of the Namekara Vermiculite Mine and on the existing Mining License. The project is hosted within the Bukusu carbonatite located in Eastern Uganda. It hosts the Namekara Vermiculite Mine, the world’s largest vermiculite resource, the Busumbu phosphate mine which operated intermittently at Busumbu from 1944 to 1963, the Ngala hills copper prospect as well as identified anomalies for rare earths metals. Research on the Busumbu Phosphate Project in 1995 described the formation of calcium-aluminium phosphates such as crandolite in the regolith to be for “soft phosphate rock” and re-precipitation of apatite to form “hard phosphate rock”.

Exploration work was completed by Gulf Industrial Limited (ASX Listed) in 2011 and 2012. The work comprised soil sampling to delineate the potential mineralised target, followed by six diamond drill holes to test for depth extent, determine tenor of phosphate mineralisation and to identify phosphate minerals present. Analyses of the soil samples identified up to 3km of strike extent of phosphate mineralisation likely between Busumbu and the Namekara Vermiculite Mine. It also indicated a “substantial phosphate mineralisation footprint for future exploration”.

Exploration work was completed by Gulf Industrial Limited (ASX Listed) in 2011 and 2012. The full results of the six-hole diamond drill program completed by Gulf Industrial in 2012 is included in an ASX release dated 26 November 2012 “Confirmation of High Grade Phosphate Discovery – Busumbu”. The results enabled Gulf to estimate “the potential dimensions of the prospect to be in excess of 3km by 400m” and the drilling “confirms high-grade mineralisation to a depth of over 60m with assay grades of up to 30.5% P₂O₅.

Uganda

QX Resources Ltd