QUARTERLY REPORT

Quarter ended 30 June 2016

Australian Securities Exchange Code: FEL

Ordinary Shares: 255,669,629

Unlisted Options: 3,850,000

Board of Directors: Tony Sage

Non-Executive Chairman

Mark Gwynne

Executive Director

Paul Kelly

Non-Executive Director

Eloise von Puttkammer

Company Secretary

Key Projects & Interests: Mt Ida Iron Ore Project

Mt Elvire Iron Ore Project

Fe Limited Contact: Mark Gwynne Executive Director

Tel: +61 (8) 6181 9793

Corporate Office: 32 Harrogate Street West Leederville,

Western Australia 6007 Australia Telephone +61 8 6181 9793

Facsimile +61 8 9380 9666

Australian Enquiries: Professional Public Relations David Tasker

Tel: +61 8 9388 0944

Mob: +61 433 112 936

Email: [email protected]

Fe Limited is an Australian domiciled mineral resources exploration and development company.

28 July 2016

QUARTERLY REPORT - 30 June 2016

Please find attached the Quarterly Activities Report and Appendix 5B for the period ended 30 June 2016.

Yours faithfully Fe Limited

Mark Gwynne

Executive Director

32 Harrogate Street, West Leederville WA 6007 PO Box 1385, West Leederville WA 6901

T +61 (8) 6181 9793

F +61 (8) 9380 9666 ASX Code: FEL

ABN: 31 112 731 638 felimited.com.au

CORPORATE

Fe Limited (ASX: FEL) ("FEL" or "Company") is an Australian company with interests in a large portfolio of mineral resource projects at exploration stage located in Australia that are prospective for iron ore, gold and base metals.

Cardinal House Group Pty Ltd

As previously advised the Company is in the process of acquiring 100% of Cardinal House Group Pty Ltd ("Cardinal House") ("Transaction"). Cardinal House is an Australian registered proposed business-to-business (B2B) and business-to-consumer (B2C) provider of online social gaming products and real money gambling platforms. On 12 November 2015 the Company signed the binding conditional Share Sale Agreement ("Agreement") with Cardinal House. Cardinal house have three worldwide gaming licences from the Norfolk Island Gaming Authority (NIGA), access to an exclusive gaming software platform via an agreement with Bet Fun International Ltd ("Bet Fun"), and a managed gaming service agreement with Canadian registered Gameworkz Inc ("Gameworkz"). On the 28 June 2016 Cardinal House was granted operational approval in relation to its Lotteries Licence No. 20151609 from NIGA.

On the 11 April 2016 the Company held a general meeting (General Meeting) where all resolutions associated with the Transaction were passed by shareholders. Subsequently, the receipt of a decision by Australian Securities and Investment Commission (ASIC) (see Prospectus below) will require the Company to seek further shareholder approval should the Transaction proceed.

To be reinstated to the official list of ASX, FEL will need to re-comply with the back-door listing requirements set out in Chapters 1 and 2 of the ASX Listing Rules, subject to ASX's discretion.

In order for the Transaction to proceed, the Company will need to raise capital to fund commitments and to re- comply with Chapters 1 and 2 of the Listing Rules (which includes the issue of a full form prospectus, see Prospectus below).

For further details of the Transaction refer to ASX announcements released by the Company.

Existing Business

Should the Transaction proceed, FEL proposes to seek to divest of its existing mining exploration business.

FEL has not yet identified any potential buyers for its existing assets and will keep the market updated of any material developments.

The Company has interests in several highly prospective projects in the Bryah Basin region of Western Australia with joint venture partners RNI NL, Alchemy Resources Ltd, Independence Group NL, Metals X Ltd and Northern Star Resources Ltd, where it has no contributing responsibilities.

Converting Loan Agreements

During the quarter the Company completed the conversion of $431,460 of converting loans to 35,954,999 fully paid ordinary shares in the Company. Shareholder approval to issue these shares was obtained at the General Meeting.

Prospectus

As previously advised the Company issued a prospectus on 23 March 2016, as supplemented by a supplementary prospectus dated 22 June 2016 (Prospectus), copies of which can be found on the Company's website.

On 29 April 2016 the ASIC issued an interim stop order and subsequently on the 30 June 2016, a final stop order in respect of its Prospectus.

The effect of the final stop order is that no offers, issues, sales or transfers of securities in FEL can be made under the Prospectus.

The company is assessing its options including an application for review of the decision to the Administrative Appeals Tribunal.

PROJECTS

Projects Review

The Company holds, or has rights or interests in several tenements prospective for iron, nickel, copper and gold located in Western Australia. This includes interests and rights in the 3 iron-focused projects at Mt Ida, Mt Elvire and Robinson Range.

Bryah Basin Joint Venture Projects ("Bryah Basin") (20% rights, free carried to decision to mine)

FEL, via its wholly owned subsidiary, Jackson Minerals Pty Ltd, has a 20% free carried interest to Decision to Mine in 14 tenements covering an area of 838km² in the highly prospective Bryah Basin, including tenements proximal to Sandfire Resources NL (ASX: SFR) Doolgunna Project and DeGrussa copper gold mine and several gold and copper prospects.

The Bryah Basin Project tenements are subject to joint ventures and farm ins with Metals X Ltd (ASX: MLX), Independence Group Ltd (ASX: AGO), Northern Star Resources Ltd (ASX: NST), Alchemy Resources Ltd (ASX: ALY) and RNI NL (ASX: RNI).

The Bryah Basin is emerging as a highly prospective and largely under-explored mineral field with potential for further discovery of gold and base metals resources. This is demonstrated by the recent success by Sandfire and JV partner, Talisman Mining Ltd at the Monty prospect, which returned high grade copper/gold mineralization from recent and ongoing drilling. The drilling targeted geophysical anomalies identified under cover and highlights the exploration potential for the region (see ASX: SFR announcements).

Grosvenor Project - RNI NL 80%, FEL 20% free carried to Decision to Mine

FEL, via its subsidiary, Jackson Minerals Pty Ltd, holds a 20% free carried interest to Decision to Mine in six exploration licences and three prospecting licences (E51/1033, E52/1613, E52/1659, E52/1671, E52/1672 and P52/1494-1496) covering a total of 607km² (refer Map 1).

The tenements hold favorable geological setting to those hosting the DeGrussa Cu/Au mine as well as significant gold potential.

On 31 July 2015, RNI announced the sale of its gold assets to Metals X Ltd (ASX: MLX) with regard to E52/1659 and E52/1671 (for further details, please refer to RNI announcement). FEL retains full mineral rights until decision to mine (for further details of the Fortnum Project, please refer to MLX announcement).

Forrest, Wodger, Big Billy Prospects

The Forrest, Wodger and Big Billy Prospects are located along a 12km mineralized Cu+-Au trend which hosts multiple targets for VHMS style mineralization.

Previous exploration at the Forest Prospect has identified high grade copper +/- gold results from drilling.

Morck's Well Prospect

The Morck's Well Prospect is located in the eastern part of the Bryah Basin and contains approximately 40kms strike length of the highly prospective Narracoota Volcanic Formation. The northern boundary of Morck's Well is adjacent to Sandfire Resources NL's DeGrussa-Doolgunna exploration tenements.

Bryah Basin Project (ALY 80%, FEL 20% free carried to Decision to Mine)

FEL, via its wholly owned subsidiary Jackson Minerals Pty Ltd holds a 20% free carried interest to Decision to Mine in four exploration licenses (E52/1668, E52/1678, E52/1722, E52/1730) and two prospecting licenses (P52/1195, P52/1196) and, in relation to the portion of P52/1167 and P52/1168 amalgamated into E52/1852, ALY hold a further 20% interest in trust for JAK, for a total area of 228km² (refer Map 1). Additionally, Jackson Minerals Pty Ltd has 20% beneficial interest in all minerals in part of E52/1852 previously held under P52/1167+1168 held in trust for JAK by ALY/NSRL - JAK/FEL has no registered interest.

The project covers approximately 45km strike of the prospective Narracoota Volcanic Formation sequence in the Bryah Basin and is proximal to Sandfire's Doolgunna Project and the recently discovered Monty Prospect.

Alchemy has entered into farm-ins and joint ventures with Independence Group NL (base metals, see ALY announcement 5 November 2014) and Northern Star Resources Ltd (gold, see ALY announcement 24 February 2015).

Base Metals Rights

Diversified mining company, Independence Group NL (ASX: IGO) is earning up to 70% interest in base metals rights, excluding iron ore rights.

FEL has not received any updates from ALY regarding this project.

FEL holds 20% free carried interest in 4 exploration licenses (E52/1668, E52/1678, E52/1722 and E52/1730), totaling 216.5km² included in the IGO Farm In agreement where IGO may earn 70% interest in base metals rights by sole funding exploration over 6 years.

Please refer to ALY Quarterly Report and various announcements for further relevant information and diagrams.

Gold Rights

Leading Australian gold producer Northern Star Resources Ltd (ASX: NST) has entered into a Farm-In and Joint Venture agreement with ALY (refer ALY announcement 24 February, 2015), in regard to E52/1668, E52/1678 and E52/1730 and P52/1195-1196. FEL retains its 20% free carried interests.

Please refer to ALY Quarterly Report and various announcements for further relevant information and diagrams.

Mt Ida Gold - FEL, Mt Ida Iron Ore Project

Mt Ida is approximately 80km northwest of the operational railway at Menzies, which offers access to existing port facilities at Esperance.

The Project comprises the rights to explore and mine for iron ore on a group of 23 licenses, held by Mt Ida Gold Pty Ltd, covering approximately 370km2 in the emerging Yilgarn Iron Province. This land holding is currently being reviewed to reduce the total area to better reflect iron ore potential.

The Project area covers part of the Mt Ida - Mt Bevan BIF, which is currently being explored and evaluated by Jupiter Mines Limited ("Jupiter") and Legacy Iron Ore ("Legacy").

No field work was undertaken during this quarter at the Mt Ida Project by FEL.

Mt Ida Project - FEL 100%

On 5 July 2016 E77/1269 (held 100% by FEL) expired.

No field work was undertaken during this quarter at the Mt Ida Project by FEL.

Mt Elvire Project - FEL 100%

On 26 July 2016, FEL surrendered exploration licences 29/806, 29/807 and 29/847 outright. No field work was undertaken during this quarter at the Mt Elvire Project by FEL.

Evanston Iron Ore Royalty (Cliffs Asia Pacific Iron Ore Pty Ltd, a subsidiary of Cliffs Natural Resources Inc ("Cliffs"))

FEL holds a 1.5% Dry Metric Tonne, FOB Royalty over the Evanston Project. Cliffs is the operator of the Koolyanobbing Iron Ore mining operation which includes the Windarling and Mt Jackson mines.