Ms. Jessica Helm reports

LEADFX REPORTS FOURTH QUARTER AND YEAR-END 2016 RESULTS

LeadFX Inc. has released its fourth quarter 2016 and year ended Dec. 31, 2016, financial results. In the fourth quarter, the company incurred a net loss of $2.4-million or six cents per share compared with a net loss of $1.7-million or seven cents per share for the fourth quarter of 2015. This release should be read in conjunction with the company's audited financial statements for the quarter ended Dec. 31, 2016, and management's discussion and analysis found on the company's website or on SEDAR. (All dollar amounts are in U.S. dollars unless otherwise indicated.)

The net loss for the three months ended Dec. 31, 2016, was $600,000 (37 per cent) higher compared with the same period in 2015 primarily as a result of foreign exchange, principally on borrowings and accounts payable balances denominated in Canadian and Australian dollars. As the Paroo Station mine was in care and maintenance in both periods, costs were broadly comparable in both periods except for foreign exchange fluctuations, which resulted in a $200,000 gain in the fourth quarter of 2016 as compared with a $700,000 gain in the same period of 2015.

Fourth quarter and year-end 2016 financial and operating highlights

                          SUMMARY FINANCIAL AND OPERATING HIGHLIGHTS
                    (in thousands of U.S. dollars, except per-share amounts)                  

                                           Three months ended Dec. 31,           Year ended Dec. 31,
                                                  2016           2015           2016           2015
Financial highlights
Revenue (1)                                         $-             $-             $-        $27,163
Gross (loss)                                    (1,261)        (1,281)        (4,593)        (7,523)
Net (loss) and comprehensive (loss)             (2,361)        (1,726)       (11,848)       (12,924)
Basic and diluted (loss) per share               (0.06)         (0.07)         (0.31)         (0.90)
Cash flow used in operating activities          (1,011)        (1,957)        (4,523)        (4,381)

(1) During the first quarter of 2015, the Paroo Station mine transitioned to care and 
maintenance due to depressed London Metal Exchange (LME) lead prices and increased
treatment charges. Mining operations ceased in January, and milling operations ceased 
in early February. Final shipments of lead concentrate left the Fremantle port in
March, 2015.

Operational:

• The Paroo Station mine has been on care and maintenance since January, 2015. A minimum complement of experienced care and maintenance staff is at the mine site full-time to maintain the site in a restart-ready state.
• In November, 2016, pursuant to an amendment made to the mine's operating conditions, the company has received a seven-year extension for access to the Port of Fremantle to export lead concentrate using the company's best-practice concentrate transportation process. Securing port access is a critical step in the preparations for a potential restart of the Paroo Station mine in Western Australia. The company is now permitted to ship through the Port of Fremantle until July 27, 2024. In addition, the operating conditions were also amended to reduce the quantum of the financial assurance bond that the company must have in place during transport operations, from $5-million (Australian) to $2-million (Australian). The company considered the receipt of these amendments to its operating conditions as important preconditions to any decision to restart the mine. With these amendments approved, the company can now move forward with its mine restart financing discussions.
• Advanced planning has commenced in relation to the requirements for a potential restart of operations at the Paroo Station mine. Ultimately, a decision to restart the Paroo Station mine will be dependent on several factors, including, among other things, positive LME lead prices and securing the necessary restart financing.
• The LME lead prices improved significantly in the fourth quarter, and management remains in advanced negotiations with interested parties to provide restart financing subject to various conditions being met.
• In December, 2016, the company entered into a non-binding memorandum of understanding relating to a farm-in and joint venture to explore for cobalt, copper and gold on the company's mining leases and exploration licences at the Paroo Station mine and reciprocal rights to explore for lead, zinc and silver minerals on neighbouring mining tenements.

Financial:

• Gross loss of $1.3-million and $4.6-million for the fourth quarter and year, respectively;
• Net loss of $2.4-million and $11.9-million for the fourth quarter and year, respectively;
• Cash used in operations of $1.0-million and $4.5-million for the fourth quarter and year, respectively;
• During the quarter, LeadFX negotiated and drew down an additional $1.0-million unsecured promissory grid note dated Nov. 21, 2016, issued by LeadFX to Sentient Executive GP IV Ltd. (for Sentient Global Resources Fund IV LP); no interest is payable on the principal amount of the note, which must be repaid on June 30, 2017; in total, LeadFX has raised $4.5-million in interest-free borrowings during 2016, with an aditional $2.0-million in interest-free borrowings raised on Feb. 21, 2017, through the issuance of unsecured promissory notes to Sentient IV;
• The Paroo Station mine is on full care and maintenance, and as a result, additional financing will be required to meet the company's strategic growth plans, continuing costs and loan commitments.

Outlook

Planning continued in relation to the requirements for a potential restart of operations at the Paroo Station mine. The company has received improved quotes for services and reagents should the Paroo Station mine restart operation. A small restart team has been retained to allow a rapid restart of operations if the decision to proceed is taken. Restart planning has identified up to 200 new employee positions that will need to be hired in Western Australia by the company or its contractors within six months of a positive restart decision. This recruitment phase is the critical path to a restart of production.

The final decision to restart the Paroo Station mine will also be dependent on a sustained improvement in LME lead prices supported by positive market fundamentals, favourable foreign exchange rates and treatment charges, as well as securing the necessary financing to restart operations. Given the company's current debt obligations and an estimated mine life of approximately four years based on current mineral reserves, management continues to focus not only on financing requirements, but on an overall strategic review of the Paroo Station mine and its operations in light of the foregoing factors.

Liquidity and financial condition

Operating activities

Cash used in operating activities in the current period was $900,000 (48 per cent) less than in the fourth quarter of 2015. The net cash outflows are a result of costs incurred while the Paroo Station mine is on care and maintenance and are lower due to an increased focus on cash management.

Cash used in operating activities for the year ended Dec. 31, 2016, was $4.5-million while maintaining the Paroo Station mine in care and maintenance throughout the period compared with $4.4-million in the year ended Dec. 31, 2015, as a result of milling high-grade inventory on hand and collecting outstanding receivables before being transitioned into care and maintenance in 2015. Mining operations ceased in January, 2015, and milling operations in February, 2015.

Investing activities

There have been no investing activities during the year ended Dec. 31, 2016, apart from interest income and contributions to restricted cash balances committed to asset retirement obligations. Investing activities in the same period in 2015 primarily relate to additions to property, plant and equipment and the return of a transportation bond when the mine was placed into care and maintenance.

Financing activities

Financing activities for the year ended Dec. 31, 2016, relate to the receipt of $2.5-million, $1.0-million and $1.0-million from the notes in the second, third and fourth quarter, respectively, offset by finance lease payments. In the same period in 2015, the company met its scheduled principal repayment of $800,000 (Canadian) on Jan. 31, 2015, under the secured loan facility with Sprott Resource Lending Partnership. On Feb. 12, 2015, the company reached an agreement with Sprott on a five-month forbearance on principal repayments ended on June 30, 2015. On June 17, 2015, Sprott agreed to a further extension of the forbearance period until Nov. 15, 2015. In consideration, the company repaid $3.8-million of the balance owing to Sprott resulting in loan repayments of $4.5-million in total for the year ended Dec. 31, 2015.

On Dec. 18, 2015, Enirgi Group Corp., Sprott and the company entered into an agreement pursuant to which Enirgi Group paid Sprott the outstanding balance owed by the company to Sprott under the Sprott facility and Enirgi Group assumed all of Sprott's rights. Effective July 19, 2016, pursuant to an agreement, Enirgi Group assigned the bridging facility to Sentient IV. The bridging facility bears interest at the rate of 10 per cent per annum and has a maturity date of June 30, 2017.

Capital resources, liquidity and working capital requirements

As at Dec. 31, 2016, the company has a working capital deficit of $19.4-million, which includes $12.5-million owing to Sentient IV under the bridging facility and notes, all with a maturity date of June 30, 2017. Neither the Paroo Station mine, the Chief properties nor the North 67 properties are operational or generating revenue.

The company's ability to continue as a going concern is dependent on a number of factors, including, but not limited to, the company's ability to either: (i) refinance the bridging facility and notes, (ii) raise additional funds to meet its debts and obligations as they fall due, or (iii) undertake further transactions which may realize the value of the company and its assets. The company will need to raise funds to pay for its continuing costs of operations and undertake at least one of these aforementioned actions to service its working capital deficiency, meet its commitments to lenders, meet the costs of care and maintenance, meet the costs of any potential future restart of the Paroo Station mine, and meet the costs of bringing the company's mineral projects into production. The amount of any financing requirement will be dependent on several factors, including, but not limited to, the nature of any refinancing of the bridging facility, the nature of any additional transactions undertaken by the company, the outcome of further negotiations with the company's lenders, the costs and duration of care and maintenance, the timing and cost of any potential future restart of operations at the Paroo Station mine, and the cost of bringing the company's mineral projects into production.

There is no guarantee or assurance that the company will be able to: (i) refinance the bridging facility and notes, (ii) be able to secure sufficient financing to finance its commitments to its lenders, the costs of continuing care and maintenance, the costs of any potential future restart of operations, or the costs of bringing its mineral projects into production, or (iii) complete any further transactions. If the company is unable to obtain sufficient funds or repay debts from either one or more of these actions, it would affect its ability to continue as a going concern. A decision to restart the Paroo Station mine will be contingent on several factors, including, but not limited to, a sustained recovery in the LME lead price, a reduction in treatment charges and a favourable U.S.-dollar-to-Australian-dollar foreign exchange rate. A decision to commence development of the company's mineral projects will be contingent on several factors, including, but not limited to, commodity prices, the projected cost to develop these projects and obtaining financing for these costs.

These material uncertainties create significant doubt as to the company's ability to continue as a going concern. As at Dec. 31, 2016, the annual 2016 financial statements do not reflect any adjustments to carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary should the going concern assumption be inappropriate. Such adjustments could be material.

Shares issued and outstanding

As of the date hereof, there were approximately 38.3 million common shares of LeadFX issued and outstanding. In addition, options exercisable for a maximum aggregate of approximately 100,000 common shares were outstanding.

Management's discussion and analysis and consolidated financial statements

LeadFX's audited financial statements and MD&A for the fourth quarter 2016 and year ended Dec. 31, 2016, will be filed today and will be available on SEDAR and on the company's website.

About LeadFX Inc.

LeadFX is a Canadian-based mining company focused on the development of lead-silver projects located in stable jurisdictions. Its current portfolio includes a restart-ready lead operation in Western Australia and exploration and development projects in Alaska and Utah, United States of America. The company continues to seek opportunities at its new properties in North America to underpin future cash flow and growth.

We seek Safe Harbor.