SHANOON RESOURCES MINING G EXPLORATION

May 18,2018

Re - Shanoon Resources licence Application LA001628

Dear Sir / Madame.

Shanoon Resources is a company that was established to redevelop an underground Zinc and Lead Mine within the same geological resource that was previously mined by Galmoy Mine in County Kilkenny. The Mine to be developed by Shanoon is being referred to as the Garrylaun Mine.

The Directors of Shanoon Resources are John Elmes and Alan Buckley both of whom have extensive experience within the mining sector in Ireland and Internationally and were key members of the management team at Lisheen mine where they helped to deliver a highly successful project that created significant value for the local community though employment and CSR activities. The Garrylaun Mine intends to bring similar benefits to the local Galmoy community and also to provide employment to local miners who are currently living in the area but are working significant distances from home in Ireland and abroad.

While not thought of a ‘mining country’, Ireland is a significant part of the international zinc market. At one time Ireland accounted for the production of over 40% of the European zinc market and 3% of the global zinc market. Zinc is an essential mineral of “exceptional biologic and public health importance” and is considered a “Life Saving Commodity” by the United Nations. Due to its unique properties, zinc is used in a wide range of consumer, infrastructure, agricultural, and industrial products. More importantly, zinc is essential to life, playing an important role in biological processes of all living organisms (humans, animals, and plants). Zinc is crucial for cell division, protein synthesis, the immune system and growth. From a sustainability perspective zinc is a crucial metal as it has a primary use in extending the life of steel products.

NEW WORK JUNCTION, DUBLIN ROAD, KILKENNY, R95 VP83 I WWW.SHANOONRES0URCES.IE I COMPANY NO. 593108 I DIRECTORS‘ J.ELMES. A.BUCKLEY

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Both Kilkenny County Council in their local development plan and the Department of Communications, Climate Action and Environment (DCCAE) are also encouraging the development of mining activity in the area and the State will benefit from taxes, rates and royalties from this development.

Developing sustainable indigenous sources of commodities, including zinc, is a priority for Europe. The European Commission recognises that Europe has become too dependent on the importation of raw materials required for manufacturing.

Securing reliable and unhindered access to raw materials is vitally important. In the EU, there are at least 30 million jobs depending on the availability of raw materials. The European Commission has taken action to ensure a sustainable supply of these materials. In 2008 the Commission adopted the Raw Materials Initiative which set out a strategy for tackling the issue of access to raw materials in the EU and this included the sustainable supply of raw materials from within the EU. The zinc and lead produced at Garrylaun can contribute to Europe's need to supply raw materials from within the member States.

Garrylaun has a proven resource of 2.3 million tonnes of zinc equivalent metal and as such is, a t this time, a relatively small project. However, the ground around Galmoy is some of the most prospective land in the country and Shanoon are confident that they will be able to grow the resource once underground mining commences and an underground exploration programme commences. Unlike Lisheen Mine, Galmoy Mine did very little underground exploration during its operation life and as such outside of the proven resource there is confidence that additional mineral will be located by Shanoon.

As is the case for all commodities, the zinc market is cyclical. The chart below shows the 15 year zinc trend. From the chart it can be seen that there are currently very favourable market conditions for zinc (c. $3,00O/Te).

NEW WORK JUNCTION, DUBLIN ROAD, KILKENNY, R95 VP83 I WWW.SHANOONRES0URCES.IE 1 CnLaDANY NO' 593108 I DIRECTORS: J.ELMES. A.BUCKLEY

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4 SHANOON ' RESOURCES MINING & EXPLORATION

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15 year zinc price in dollars per tonne

Jan 1 2003

Jan 1 2008

Jan 2 Jan 2 201 3 201 8

The business plan for Garrylaun is to lock into the current prices by hedging (or forward selling) a portion of the Mines production and this will essentially provide the certainly that is needed to finance the operation. It is critical that Shanoon secures i ts various Statutory permits a quickly as possibly as once all permitting has been secured (Environmental, Planning and Mining Licence) Shanoon will be in a position to hedge the production and this will essentially provide the certainly that is needed to finance the operation. If there is a significant delay there is a chance metal prices could drop and this would essentially prevent the project from getting off the ground.

As Shanoon's management have experience of working with the various Statutory Authorities, including the EPA, we are fully aware of the time pressures that the EPA is under. As required the EPA will need to do a comprehensive assessment of the application and it is understood that this will take time and at a minimum the time that is set out in the legislation governing the application process. It is expected that there will be queries from the EPA in relation to aspects of the application and Shanoon will provide comprehensive responses to all queries raised.

However, a t the outset it is important for all concerned to be aware of the fact that while this is a new project and a new company, it is in essence a recommencement of an activity

NEW WORK JUNCTION, DUBLIN ROAD, KILKENNY, R95 VP83 I WWW.SHANOONRES0URCES.IE I COMPANY NO: 593108 I DIRECTORS: J.ELMES, A.BUCKLEY

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MINING G EXPLORATION

previously permitted by the EPA (Galmoy Mine PO5177-01). The environmental aspects of the Galmoy mine are well understood and while, as is the case with all operations, there were challenges - the record shows that Galmoy had a good relationship with the

community, a relatively low number of complaints were received and the operation has left no impact on the environment. The environmental controls that were put in place by Galmoy were capable of managing all environmental aspects and Shanoon will ensure that similar controls are put in place.

The intensity of mining at Garrylaun will be less than Galmoy (c. 250k/yr vs. c. 650k/yr) and there will be no processing of ore and no on site storage of the waste that is generated from processing the ore (tailings). Therefore Garrylaun will have much less potential for impact than Galmoy (which itself had negligible impact).

Closing the Mine after the operation is complete is a well understood and straight forward process as Shanoon can use and learn from the experiences of Galmoy who implemented a very successful mine closure plan (CRAMP) and successfully received a Mine Closure Completion Certificate from the Regulatory Authorities shortly after operations ceased and the CRAMP was implemented. The budget for Mine closure will likewise be well understood and Shanoon will be in a position to ensure that there is adequate financial assurance to cover the closing of the Mine.

We look forward to hearing from you and will ensure that prompt responses are issued to any queries that are raised. We would again just remind the EPA of the criticality of the timeline for receiving a licence to operate from the EPA and would very much appreciate a prompt assessment of this application.

Regards,

/ JohnElmes

Director

Alan Buckley

Director

NEW WORK JUNCTION, DUBLIN ROAD, KILKENNY, R95 VP83 I WWW.SHANOONRES0URCES.IE I COMPANY NO: 593108 I DIRECTORS: J.ELMES, &BUCKLEY

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EPA Export 07-06-2018:04:33:23