ALCHEMY RESOURCES LIMITED — Capital/Financing Update 2017

Feb 8, 2017

==> picture [596 x 119] intentionally omitted <==

ASX ANNOUNCEMENT

Alchemy commences drilling at Overflow Historic Gold and Base Metal Mine, NSW

9 FEBRUARY 2017

==> picture [377 x 6] intentionally omitted <==

HIGHLIGHTS

CODE: ALY

BOARD OF DIRECTORS

Mr Oscar Aamodt Non-Executive Chairman

Mr Leigh Ryan Managing Director

Ms Liza Carpene Non-Executive Director

Mr Lindsay Dudfield Non-Executive Director

Mr Anthony Ho Non-Executive Director

ISSUED CAPITAL

SHARES 230,788,035 OPTIONS 10,500,000 (Unlisted)

PROJECTS

BRYAH BASIN (80-100%)

KARONIE (100%)

LACHLAN (earning up to 80%)

Suite 8, 8 Clive Street WEST PERTH WA 6005

Phone: +61 8 9481 4400 Facsimile: +61 8 9481 4404 www.alchemyresources.com.au

==> picture [129 x 58] intentionally omitted <==

==> picture [130 x 35] intentionally omitted <==

• Diamond drilling underway at Overflow to confirm continuity of high grade Cobar style gold-silver-lead-zinc mineralisation

• An initial 350m diamond drill hole will provide structural, physical and geophysical information to aid drill targeting of a strong electromagnetic (EM) conductivity anomaly down plunge of known mineralisation

Alchemy Resources Limited (ASX: ALY) (“Alchemy”) is pleased to announce the commencement of diamond drilling within the Overflow gold and base metal project in the Cobar Basin, NSW (Fig. 1). The Project forms part of the farm-in and joint venture agreement with Heron Resources Ltd (ASX: HRR) (ref. ASX announcement dated 30 May 2016) .

==> picture [292 x 340] intentionally omitted <==

Figure 1 : Cobar Basin / Lachlan Projects, major deposits, Au and Cu occurrences, and major structures over aeromagnetics

Page | 1

An initial targeted 350m deep diamond hole has been planned to confirm the continuity of high grade goldsilver-lead-zinc mineralisation (within >50gm AuEq* grade shell - Fig. 2), and provide structural, physical, and geophysical information via a planned downhole EM survey. Subject to further geophysical modelling of both airborne and downhole EM data a 600m deep diamond hole is planned to test a strong EM conductivity anomaly identified at ~350m below surface, and ~250m down plunge of known high grade mineralisation at Overflow (Fig. 3).

The Overflow mineralisation is located at the northern end of a 6km long, sparsely tested ironstone gossan. The mineralisation is structurally-controlled, shows distal chlorite-sericite and proximal silica alteration, and displays metal zonation typical of Cobar-style mineralisation. The current drill hole is testing beneath two significant drill intercepts encountered in historic drilling by Triako Resources Limited (Fig. 2):

TBB006 16m at 3.28g/t AuEq * from 162m (1.13g/t Au, 88g/t Ag, 1.15% Zn, 0.43% Pb, 0.09% Cu) TBB008 7m at 4.53g/t AuEq * from 198m (1.67g/t Au, 135g/t Ag, 1.3% Zn, 0.5% Pb, 0.04% Cu) & 7m at 7.76g/t AuEq * from 236m (5.46g/t Au, 19g/t Ag, 1.9% Zn, 1.4% Pb, 0.32% Cu)

* Gold equivalent (AuEq g/t) values used in this report refer to the calculated Au equivalent grade based on the Au, Ag, Cu, Zn and Pb grades assigned to each drilling intersection using the following formula (based on metal prices at the time): AuEq (g/t) = Au (g/t) + Ag0.014 (g/t) + Cu1.11 (%) + Zn0.54 (%) + Pb0.46 (%). The AuEq calculation takes into account the following metal prices: Au US$1325/oz, Ag US$19/oz, Cu US$2.15/lb, Zn US$1.05/lb and Pb US$0.90/lb.

==> picture [495 x 356] intentionally omitted <==

----- Start of picture text ----- N TBB006: S16m at 3.28g/t AuEq from 162mOpen Down PlungeAu g/t Cu ppmTBB008:7m at 4.53g/t AuEq from 198m &7m at 7.76g/t AuEq from 236m----- End of picture text -----

Figure 2 : Overflow Prospect long section looking east showing historic workings, drill intercept AuEq grade x metre shells (red = >50gxm AuEq, yellow = >30gxm AuEq, green = >20gxm AuEq), historic drilling (traces coloured by Aug/t (left) and Cu ppm (right)) and current diamond drilling (magenta line) with drill target pierce point (magenta circle).

Page | 2

==> picture [492 x 354] intentionally omitted <==

----- Start of picture text ----- Open Down PlungeStrong EM anomalydown plunge of highgrade intercepts----- End of picture text -----

Figure 3 : Overflow Mine 3D view looking down to the NW showing grade x thickness shells of AuEq intersections (red = >50gxm AuEq, orange dots = >30gxm AuEq), historic drilling (traces coloured by Au and Cu grades), current and planned diamond drilling (magenta lines) over VTEM conductivity slices (150m, 350m and 550m below surface).

Alchemy’s Managing Director, Leigh Ryan said:

“Alchemy is pleased to have commenced drilling at Overflow, and subject to the results of this initial hole and the downhole EM surveys, looks forward to drill testing the strong EM target down plunge of the Overflow mineralisation as soon as possible.”

For further information please contact:

Mr Leigh Ryan Managing Director Telephone: +61 8 9481 4400 Email: leigh@alchemyresources.com.au

Page | 3