Ann: Arcadia Lithium Project Update, page-9

 Additional drilling results to expand Arcadia Lithium Project  Arcadia Lithium Pre-Feasibility Study (PFS) Update  Prospect Resources expands Technical and Marketing team with key recruits

 Prospect Resources Ltd (ASX: PSC) (the “Company”) is pleased to report significant assay intersections of up to 1.85% Li2O from Phase 3 Diamond (DD) and Reverse Circulation (RC) drill holes located to the immediate West of the conceptual pit design derived from the Scoping Study* completed in December 2016. These positive results confirm the continuity of the Main Pegmatite (MP) and Lower Main Pegmatite (LMP) to the west.

 Additional drill results to be incorporated into the ongoing PFS that will see an updated pit design and Mineral Resource estimate, along with the declaration of Ore Reserves.

 The PFS is well progressed and is on track for completion in the 1Q 2017, and includes all requisite scale metallurgical testwork, engineering, geotechnical, mining, offtake, marketing and social studies.

 In order to fully complement and support the PFS and mine development programs at Arcadia, the Company has hired technical staff with reputable experience of the Lithium/pegmatite geometallurgy, marketing and products development sectors. The Company is now confident it has a team that can achieve the timelines and project development objectives of taking Arcadia into production.