ALCHEMY RESOURCES LIMITED — Interim / Quarterly Report 2017

Oct 27, 2016

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ASX RELEASE

SEPTEMBER 2016 QUARTERLY REPORT

28 OCTOBER 2016

Highlights

CODE: ALY

BOARD OF DIRECTORS

Mr Oscar Aamodt Non-Executive Chairman

Ms Liza Carpene Non-Executive Director

Mr Lindsay Dudfield Non-Executive Director

LACHLAN PROJECTS (NSW) – gold & base metals

• Data compilation and 3D modelling of high-grade gold – base metal mineralisation at Overflow completed

• Initial RC-diamond drilling planned to test the up plunge extent and along plan continuity of the high-grade mineralisation at Overflow

• Land access agreements in place with drilling to commence in December Quarter upon receipt of statutory approvals

Mr Anthony Ho Non-Executive Director

KARONIE PROJECT (WA) – gold

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

• Data compilation and review of high-grade gold at Karonie complete

• Further high-grade gold targets identified at multiple prospects

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

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• Initial drill testing to commence upon grant of tenements and receipt of statutory approvals

BRYAH BASIN PROJECT (WA) – gold & base metals

• Independence Group NL ( ASX: IGO ) continued base metals exploration through the completion of regional aircore drilling program – assay results pending

• Subsequent to end of Quarter, Billabong Gold Pty Ltd acquired the rights to the on-going Farm-in/Joint Venture over the gold prospective part of the project, with planning of follow-up auger geochemical drilling of multiple gold targets

CORPORATE

• Cash at 30 September 2016 – $1.1M

Alchemy Resources Ltd (ASX: ALY ; “ Alchemy ” or “the Company ”) is an Australian gold and base metal exploration company focused on growth through the discovery and development of gold and base metal resources within Australia.

The Company recently entered a Farm-in and Joint Venture Agreement on the Lachlan Projects in New South Wales ( Figure 1 ) ( see ASX announcement dated 30 May 2016 ) where it will look to advance targets through discovery and extensional drilling to define sufficient resources to underpin a profitable near-term development scenario. This project is in a well-endowed gold and base metal district with significant upside in both gold and copper.

Alchemy also recently acquired a significant gold-prospective land package in the Karonie greenstone belt (F igure 1 ) ( see ASX announcement dated 24 May 2016 ) in the Eastern Goldfields region in Western Australia where it intends to test high-grade gold targets through extensional drilling. The Karonie Project is in one of Australia’s premier gold provinces with significant potential to discover additional gold resources.

Alchemy maintains its interest in the Bryah Basin Project in the emerging gold and base metal-rich Gascoyne region of Western Australia ( Figure 1 ) where farm-in and joint venture partners, Independence Group NL (ASX: IGO ; “ IGO ”) and Billabong Gold Pty Ltd (“ Billabong Gold ”) are continuing to advance base metal and gold exploration, respectively.

In the September 2016 Quarter, the focus was on completing compilation of historic exploration information and planning of targeted drilling programs at the Lachlan and Karonie Projects.

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Figure 1 : Alchemy Resources’ Project Location Map.

Lachlan Projects (NSW) (Alchemy earning up to 80%)

Alchemy commenced a farm-in and joint venture with Heron Resources Ltd (ASX: HRR ; “ Heron ”) to earn up to an 80% interest in gold and base metal projects in the highly prospective central Lachlan province ( Figure 2 ). The Lachlan Projects consist of the Overflow Gold-Base Metal Project, the Eurow Copper-Gold Project and the Girilambone Copper Project. Each of these projects contains identified multiple gold and / or base metal targets, including drill-ready priority targets at Overflow.

Quarterly Report 1 July 2016 – 30 September 2016

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Figure 2 : Lachlan projects – Overflow, Eurow & Girilambone – Farm-in / Joint Venture Agreement with Heron Resources Ltd.

The Lachlan Projects represent a strategic exploration project acquisition for Alchemy, with a large 674km[2] land package in the underexplored central Lachlan province. The projects are proximal to high profile mining centres in the central Lachlan, including Hera/Nymagee (Aurelia Metals Ltd), Mallee Bull (Peel Mining Ltd), Tritton (Aeris Resources Ltd) and the Parkes mining centre ( Figure 2 ).

Overflow Gold-Base Metal Project

The Overflow Gold-Base Metal Project (“ Overflow ”) consists of four exploration licences covering 390km[2] located over a 50km long zone from 15km east of Aurelia Metal’s Hera/Nymagee operation to adjacent to KBL Mining’s Mineral Hill operation ( Figure 2 ). The project is located along the northern extension of the Gilmore Suture within Ordovician-Devonian metasediments and prospective for epithermal and Cobar-style Au and base-metal mineralisation.

Overflow is centred on the historic Overflow mining centre ( Figure 2 ), a past producer of Au, Ag and Pb, and has been the focus of previous exploration in the area since mining ceased in 1942. Mineralisation at Overflow is structurally-controlled, high-grade Au-Ag with base metal credits, with known zones having relatively short strike lengths but potentially long in the down-plunge direction, typical of Cobar-style mineralisation.

Quarterly Report 1 July 2016 – 30 September 2016

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Historic drilling at Overflow has returned a number of significant high-grade intercepts, including:

BOBRCPC6 4.65m at 20.39 AuEq[] from 185.4m (8.49g/t Au, 79g/t Ag, 0.22% Cu, 13.5% Zn, 7.1% Pb) TBB001 10m at 7.03 AuEq from 163m (4.44g/t Au, 21g/t Ag, 0.07% Cu, 3.0% Zn, 1.3% Pb) TBB006 16m at 3.28 AuEq from 162m (1.13g/t Au, 88g/t Ag, 0.09% Cu, 1.15% Zn, 0.43% Pb) TBB008 7m at 4.53 AuEq from 198m (1.67g/t Au, 135g/t Ag, 0.04% Cu, 1.3% Zn, 0.5% Pb) & 7m at 7.76 AuEq from 236m (5.46g/t Au, 19g/t Ag, 0.32% Cu, 1.9% Zn, 1.4% Pb) TBB017 6m at 7.64 AuEq from 121m (4.69g/t Au, 39g/t Ag, 0.21% Cu, 2.4% Zn, 1.9% Pb) & 6m at 10.71 AuEq* from 136m (7.55g/t Au, 29g/t Ag, 0.11% Cu, 3.6% Zn, 1.5% Pb)

Gold equivalent (AuEq[*] ) values were assigned to each drilling intersection using the following formula based on current metal prices:

AuEq (g/t) = Au (g/t) + Ag0.014 (g/t) + Cu1.11 (%) + Zn0.54 (%) + Pb0.46 (%).

A leading geological consultancy, Model Earth™, undertook a review of the historic drilling and 3D modelling of mineralisation to assist planning of an initial targeted diamond drilling (with RC pre-collar) program at Overflow. Data integration and preliminary modelling illustrates that the Overflow deposit is confined within a moderate south plunging, tight to isoclinal syncline at the margins of the Kopyje Group and the eastern succession of sedimentary and volcanic rocks of the Girilambone Group.

Modelling of the geometry of the mineralisation identifies the following features:

• strikes NNW and dips steeply to the WSW with a strong south plunge component

• drilling logs of alteration show a strong chlorite-sericite envelope with more silica present within the ‘core’

• antimony (Sb) assays suggest there is possible pyrite footwall alteration zone along strike to the south, and

• gold assays indicate three apparent plunging shoots with a similar but larger, lower-grade copper metal zonation outside of the gold zones.

Metal distributions were modelled for AuEq, Au, Ag, Cu, Zn, Pb and sulphides with lithology. Total grade multiplied by thickness contours of AuEq values are illustrated as a long section through the deposit in Figure 3 . Modelled zones with >40 AuEq (g/t) contours are supportive of high-dollar per tonne mineralisation. Several highgrade zones remain open down plunge or open down dip ( Figure 3 ).

An initial, targeted drilling program is planned to test the up plunge extent and along plan continuity of the highgrade mineralisation. Two diamond holes (with RC pre-collars) for 400m have been assigned as priority holes and assuming these intersect mineralisation as anticipated at the given depths, a further two holes (for 525m) can be followed up to test the lower and deeper portions of the deposits. The planned drilling and modelled pierce points are illustrated in Figure 3 .

Outside of the historic mine area a number of regional prospects have been delineated and warrant further exploration. Along strike to the south of the Overflow mine, at the BOZ target ( Figure 4 ), a single drill hole, OFTRC005, targeted an IP chargeability anomaly was terminated at the edge of the anomaly. The drill hole ended in weak mineralisation ( 12m at 0.42g/t Au to end of the hole) with visible chalcopyrite identified, and it represents a priority target for further drill testing.

At the Parkvale target ( Figure 4 ), narrow high-grade intersections, including 0.7m at 5.7% Cu and 1.2% Pb in BO1A drilled in 1977, have not been followed up. Coherent Au-Zn in soil anomalism over an area of 600 x 400 m at Prettyview South ( Figure 4 ) has not been drilled tested. At Black Range Tank and Airport ( Figure 4 ), outcropping gossans and limited shallow drilling has returned base metal anomalism with semi-coincident EM anomalies.

• AuEq g/t values used in this report refers to the calculated Au equivalent grade based on the Au, Ag, Cu, Zn and Pb grades. 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. As the project is at the exploration stage, these equivalent grades do not take into account factors such as recoveries, mining costs, milling costs, or payability.

Quarterly Report 1 July 2016 – 30 September 2016

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Figure 3 : Overflow Gold-Base Metal Deposit – long section showing grade x thickness contours of AuEq drilling intersections, pierce point of historic drilling & planned diamond drilling program with modelled pierce points.

At Yellow Mountain ( Figure 2 ), about 25km south of Overflow, previous drilling around historic copper workings, returned a number of broad Cu-Ag-Ag intercepts, including:

YD13 32m at 0.36% Cu, 1.7g/t Au, 34g/t Ag (from 185m) including 7.4m at 0.7% Cu, 5.7g/t Au, 102g/t Ag, 5.1%Pb, 6.7% Zn (from 206m) PYM12 64m at 0.40% Cu, 0.4g/t Au, 24g/t Ag (from 64m) PYM11 56m at 0.30% Cu, 0.5g/t Au, 34g/t Ag (from 14m) YP05A 83m at 0.44% Cu (from surface) (no Au-Ag assays)

The prospect was last drill tested in 1986 with many of the drill holes not assayed for gold. The broad zones of mineralisation are coincident with a significant IP anomaly and the prospect represents a priority target for ground geophysics and further drill testing.

Eurow Copper-Gold Project

The Eurow Copper-Gold Project (“ Eurow ”), located 30 km southeast of Parkes ( Figure 2 ), covers Ordovician and Devonian-aged meta-sediments intruded by Silurian and Devonian granites and proximal to the intersection of the Narromine-Coolac Fault Zone and the Lachlan Transverse Zone. The Project area contains the historic EurowVychan Cu-Au workings where drilling by previous companies below the workings returned high-grade intercepts of 8m at 2.94% Cu and 0.85g/t Au from 47m, 3m at 4.0% Cu and 1.25g/t Au from 73m, and 4.4 metres at 1.57% Cu and 0.63g/t Au from 212m. Heron undertook shallow aircore drilling in late 2013 on targets north and south of the historic workings that returned anomalous copper results. The drilling, which was hampered by thick clay zones, did not reach target depths and warrants further drill testing.

Quarterly Report 1 July 2016 – 30 September 2016

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Figure 4 : Overflow Gold-Base Metal Project showing Overflow mining centre, historic drilling & mineral occurrences, gold & base metal prospects, over aeromagnetic image and satellite imagery.

Girilambone Copper Project

The Girilambone Copper Project (“ Girilambone ”) comprises one granted tenement (EL 8318), about 25 km northwest of Nyngan, on the eastern edge of the Girilambone Basin ( Figure 2 ). Girilambone is located adjacent to Aeris’s Tritton copper operation and along strike from the high-grade Collerina copper prospect (Helix Resources Ltd). The area is prospective for ‘Besshi-type’ volcanic massive sulfide (VMS) copper-gold mineralisation within mafic units of the Ordovician Girilambone Group. Girilambone is located along interpreted VMS trends extending from Collerina in the south to north of Murrawombie ( Figure 2 ). The Project area is adjacent to copper anomalism along structural and magnetic trends from the historic Kurrajong copper workings.

- Proposed Near Term Exploration Activities

A priority diamond (with RC pre-collar) drilling program targeting up and down-plunge positions of the mineralisation zones at the Overflow mining centre is planned to commence in December 2016, subject to statutory approval, now that landholder access agreements have been completed and significant rainfall in the project region, which contributed to the delay in commencement of the drilling program, has abated.

Quarterly Report 1 July 2016 – 30 September 2016

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Karonie Project (WA) (Alchemy 100%)

The Karonie Project, located 100km east of Kalgoorlie, comprises five exploration licence applications totalling over 285km[2 ] of highly prospective Archean greenstone belt in the Eastern Goldfields in Western Australia ( Figure 4 ). Karonie is strategically located close to existing processing plants, and given the already substantial gold endowment in the area (>470,000 oz gold), Alchemy is focusing its near-term exploration efforts to the discovery of additional high-grade gold mineralisation.

The Project licence applications surround Silver Lake Resources’ (ASX: SLR ) Harry’s Hill deposit ( Figure 5 ) with a Probable Reserve of 1.05Mt at 2.2g/t gold for 75,000 oz gold ( Silver Lake Resources ASX announcement dated 26 August 2016 ). The Karonie Project is along strike from Breaker Resources’ (ASX: BRB ) Lake Roe Project ( Figure 5 ) where a 6km-long gold anomalous zone has been delineated through shallow drilling, and where initial RC drilling over a 2.2km strike at Bombora and Bombora North has returned multiple high-grade gold assays (see Breaker Resources ASX Announcement dated 20 October 2016 ).

The Karonie Project has a high-quality geological setting, located between major, regional-scale Keith-Kilkenny and Claypan fault zones ( Figure 5 ), and in a position which hosts Breaker Resources’ Lake Roe Project as well as Saracen Mineral Holdings Ltd’s (ASX: SAR ) Karari-Carosue Dam gold deposits 75km to the north.

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Figure 5: Karonie Project – gold and base metal prospects, location of Silver Lake Resources’ Harry’s Hill / French Kiss resources and Breaker Resources’ Lake Roe Project, over simplified bedrock geology, major faults and aeromagnetic image.

Quarterly Report 1 July 2016 – 30 September 2016

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The Karonie Project has seen exploration carried out in various phases since the 1980’s, with supergene gold mined from Karonie Main Zone-Harry’s Hill (excised from the project area: Figure 5 ) by Freeport McMoran Ltd and Poseidon Gold Ltd between 1987 and 1992 producing 1.593Mt at 3.67g/t gold.

Historic reconnaissance, shallow rotary air blast and aircore drilling outlined multiple gold anomalous trends, including Little Peck–Esplanade, Admiral, Batavia and Challenger in the southern half of the Karonie Project ( Figure 6 ) ( see ReLode Mining/Integra Mining ASX announcements dated 4 May 2004, 5 August 2004, 18 January 2011 and 21 February 2012 ). The shallow drilling indicates that the Project area has a complex regolith and areas with shallow gold anomalism require deeper RC drilling to adequately test identified targets.

The Little Peck–Esplanade trend extends over 4km strike and remains open to the north and south ( Figure 6 ). Shallow drilling by previous explorers in the 1990’s and early 2000’s returned multiple high-grade gold intercepts, including 8m at 3.37g/t Au (from 38m) in LPAC035, 9m at 3.01g/t Au (from 61m) in LPAC083 and 13m at 0.54g/t Au (from 40m to EOH) in ROE1317.

Limited, wide-spaced, reconnaissance RC drilling at Little Peck–Esplanade undertaken to test some of the targets delineated by the shallow drilling, returned numerous high-grade intercepts in bedrock, including 8m at 1.30g/t Au (from 64m) and 2m at 10.94g/t Au (from 133m) in LPRC18, 5m at 2.86g/t Au (from 101m) in LPRC5, and 6m at 1.46g/t Au (from 44m) in LPRC20 (see Integra Mining ASX announcements dated 28 January 2005, 27 April 2006 ).

At the Batavia prospect ( Figure 6 ), there is broad gold dispersion / anomalism in regolith over high-grade gold intercepts in bedrock associated with quartz veining and/or pyrite±pyrrhotite. The prospect extends for over 1km strike and remains open to north and south. Shallow drilling returned significant gold in regolith intercepts, including 8m at 2.11g/t Au (from 12m) in SISC1261, 10m at 0.59g/t Au (from 24m to EOH) in SISC789 and 10m at 0.54g/t Au (from 28m to EOH) in SISC776 (see Integra Mining ASX announcement dated 21 February 2012 ).

Review of wide-spaced, first-pass RC drilling at Batavia indicates numerous high-grade gold intercepts in bedrock (see Integra Mining ASX announcements dated 18 September 2012 and 17 December 2012 ), including:

ISRC1001 1m at 8.14g/t Au (from 48m) 2m at 13.45g/t Au (from 182m) ISRC1001 3m at 14.57g/t Au (from 121m) ISRC1013 1m at 24.81g/t Au (from 70m) ISRC1063 1m at 9.08g/t Au (from 134m)

At the Taupo prospect ( Figure 5 ), about 2km north of the Karonie mine, limited, historic broad-spaced (200400m lines) shallow drilling (maximum depth 80m) returned gold in regolith anomalism, including 6m at 1.94g/t Au (from 74m to EOH) in TRRC2 and 10m at 2.55g/t Au (from 30m) and 22m at 1.06g/t Au (from 42m) in TRRC6. The prospect was last drill tested in 1992 and is open to north and south (400m to next shallow drill line to the north) and is one of multiple gold in regolith anomalies that warrants follow-up drilling.

The KZ5 prospect at the northern end of the Karonie Project ( Figure 5 ) has gold and base metal anomalism over a strike extent of 1.2km, outlined by broad-spaced historic drilling, and with untested IP and EM anomalies ( see Integra Mining ASX announcements dated 16 January 2007, 27 July 2007 and 14 October 2009 ). The mineralisation is VMS-style and has returned anomalous gold-zinc intercepts, including 20m at 1.58 g/t Au (from 190m) and 14m at 0.44% Z n (from 202m) in KZRC040D, 26m at 0.74 g/t Au, 0.36% Zn (from 140m) in KZRC039 and 12m at 1.37 g/t Au, 0.71% Zn (from 42m) in KZD001.

The Little Peck–Esplanade, Batavia and Taupo gold prospects and the base metal-gold anomalism at the KZ5 prospect have been identified for near-term exploration, with targeted RC drill follow-up of the high-grade intercepts to commence once the exploration licences are granted and statutory approvals are in place.

Quarterly Report 1 July 2016 – 30 September 2016

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Figure 6: Karonie Project – Little Peck–Esplanade, Batavia and Challenger gold prospects – max Au values from historic, firstpass RC drilling and gold-in-regolith anomalism (gram x metre) outlined by shallow drilling, over geophysics image.

- Proposed Near Term Exploration Activities

Alchemy has completed data compilation and review of historic exploration data at Karonie. A number of highgrade gold intercepts at the Little Peck-Esplanade, Batavia and Taupo prospects and base metal-gold anomalism at the KZ5 prospect have been identified for targeted RC drilling.

Alchemy is awaiting execution of negotiated heritage agreements over the Karonie exploration licence applications, required to facilitate grant of the exploration licences. Targeted RC and shallow aircore/RAB drilling programs are planned to commence once the exploration licences are granted and statutory approvals are in place.

Quarterly Report 1 July 2016 – 30 September 2016

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Bryah Basin Project (WA) (Alchemy 80-100%)

Alchemy’s Bryah Basin Project comprises a 500km[2] ground package, located 130km NE of Meekatharra, Western Australia. The Project is located along strike and west of Sandfire Resources NL’s (ASX: SFR ) high-grade DeGrussa and Monty copper-gold deposits, and adjacent to Peak Hill where about 1Moz of gold has been mined from several deposits ( Figure 7 ). Alchemy holds 100% interest in the project with the exception of several tenements held in joint-venture (Alchemy 80%) with Fe Ltd (ASX: FEL ).

Alchemy retains its interests in the base metal and gold prospective Bryah Basin Project through farm-in and joint venture agreements with Independence Group NL (ASX: IGO ) (“ IGO ”) ( see ASX announcement dated 5 November 2014 ) and Northern Star Resources Ltd (ASX: NST ) (“ Northern Star ”) ( see ASX announcement dated 24 February 2015 ). Should a high-value base metal or gold discovery be made, Alchemy retains the right to participate as a 20% partner, an equity position that should deliver significant value to shareholders.

Alchemy also has a 1% net-smelter royalty over future production from 50,000 oz to 70,000 oz gold from the Hermes gold deposit ( Figure 7 ), where a maiden Probable Ore Reserve of 101,000 oz gold (1.565Mt at 2.0g/t Au) has been released ( see Northern Star ASX announcement dated 28 July 2016 ).

Subsequent to Quarter end, Northern Star completed the sale of its Plutonic gold operations, which includes its interest in the Bryah Basin farm-in and joint venture agreement with Alchemy and the gold royalty from the Hermes gold deposit, as a going concern to Billabong Gold Pty Ltd (“ Billabong Gold ”) and its parent entity 2525908 Ontario Inc ( see Northern Star ASX announcement dated 12 October 2016 ).

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Figure 7: Bryah Basin Project – IGO JV and Billabong Gold JV areas and gold and base metal prospects.

Base Metals Exploration (IGO earning up to 80%)

Leading Australian base metal and gold producer IGO is exploring and earning an interest (“ IGO JV ”) in the whole and part tenements that cover the base metal prospective area of the Bryah Basin Project ( see ASX announcement dated 5 November 2014 ). Under the terms of the IGO JV, IGO can earn up to 80% in Alchemy’s interests (excluding iron ore rights) through Earn-In Expenditure of $6M within five years, with Alchemy freecarried on further exploration to completion of a Pre-Feasibility Study and then carried on an interest-free deferred basis for a further $5M of Definitive Feasibility Study expenditure.

Quarterly Report 1 July 2016 – 30 September 2016

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The IGO JV area contains more than 40km of strike extent of the Narracoota – Karalundi volcano-sedimentary sequence, host to Sandfire Resources’ DeGrussa copper-gold deposit and the high-grade Monty copper-gold resource ( Figure 7 ), and prospective for discovery of VMS-style copper-gold deposits.

Broad-spaced diamond and RC drilling undertaken at the Neptune prospect in late 2015 ( see ASX announcements dated 2 October 2015 and 27 January 2016 ) returned high-order, copper and / or gold anomalism associated with stringer-style to heavy disseminated/blebby, pyrite-dominant sulfide mineralisation. Mineralisation is mainly hosted at three stratigraphic horizons within a 2.5km long, strike-parallel zone within the Karalundi sedimentary-dominated sequence, close to the contact with the overlying mafic (sub-)volcanic-dominated Narracoota sequence.

Five target areas at Neptune, comprising a combination of geochemical, geophysical and structural features, require follow-up drilling. These targets include an off-hole response from a down-hole EM survey undertaken on the diamond and RC holes, and interpreted to be of high conductance (3000 Siemens) and modelled to lie between drill sections.

The majority of exploration on the tenements to date has focussed on the Karalundi-Narracoota contact zone. There is increasing evidence to suggest that other zones within the Bryah Basin Project area, particularly those stratigraphically deeper within the Karalundi sequence, are also highly prospective for VMS-style mineralisation.

During the September 2016 Quarter, IGO advised that it completed aircore drilling of selected regional targets across the Bryah Basin Project area, including targets to the east and west of the Neptune prospect as well as targets at Churchill, Moby, Magnus and east of Central Bore ( Figure 7 ). The drilling comprised 122 aircore holes for 8705 metres and focussed on zones within the Karalundi sequence, as well as along the Karalundi-Narracoota contact zone. IGO further advised that a total of 2456 samples have been submitted for assay for gold and a multi-element suite. At the date of reporting, the assay results are pending.

IGO further advised that a geological interpretation, including updated cross sections, geochemical contouring and prospectivity update will be completed in the December 2016 Quarter, following receipt of the assay data. In addition, a MLEM survey over selected targets is planned to commence in the December 2016 Quarter.

Gold Exploration (Billabong Gold earning up to 80%)

Exploration of Alchemy’s whole and part tenements that cover the gold prospective part of the Bryah Basin Project ( Figure 7 ) continued under a farm-in and joint venture arrangement initially with Northern Star Resources Ltd, and subsequently with Billabong Gold Pty Ltd (“ Billabong Gold JV ”). No on-ground exploration was conducted on the Billabong Gold JV tenements during the Quarter.

Under the terms of the Billabong Gold JV up to 80% in Alchemy’s interests can be earned through earn-in exploration expenditure of $1.2M within three years on the gold prospective tenements. Upon fulfilment of the earn-in expenditure, Alchemy’s interest is carried on an interest-free deferred basis to production, with Alchemy to repay the deferred amount at the rate of 50% of its share of free cash flow from production following commencement of mining.

The Billabong Gold JV is enabling near-term exploration of a number of advanced to grass roots gold targets identified over the gold prospective landholding in the Bryah Basin Project. The Wilgeena prospect currently has JORC 2004 Indicated Resources of 87,373 ounces of gold (1.36Mt @ 1.99g/t Au). The mineralisation is open at depth and further drilling has excellent potential to expand the area of gold mineralisation and add to the known

Quarterly Report 1 July 2016 – 30 September 2016

11

resource. The Seaborg and Central Bore gold prospects are two additional priority targets that have returned high-grade gold results and warrant further targeted drilling.

Auger geochemical sampling at Seaborg, Flamel and Henry has previously delineated multiple drill targets in areas with thin transported cover. Further auger geochemical drilling programs completed in late 2015 returned multiple areas with low-order (+6ppb Au) gold anomalism in the Faust, Flamel, Henry, Jones, Pelorus, Troy and Wilgeena areas, with a peak result of 60.2ppb Au returned from the Pelorus prospect.

Billabong Gold advises that they intend to undertake further in-fill and extension auger geochemical drilling in the coming months to test and extend previously identified geochemically anomalous trends within the project area. The planned geochemical traverses target the interpreted strike extensions of the Faust, Jones, Pelorus, Troy and Wilgeena mineralised structures. An aerial topographic survey over the Wilgeena prospect area is also planned for the forthcoming quarter.

Corporate

At 30 September 2016, the Company retained a cash balance of $1.1M.

In August 2016, Northern Star Resources Ltd executed a legally binding conditional sale and purchase agreement for the sale of its Plutonic gold operations, which includes its interest in the Farm-in and Joint Venture over the whole and part tenements in the gold prospective part of the Bryah Basin Project, as a going concern to Billabong Gold Pty Ltd and its parent entity 2525908 Ontario Inc. In September 2016, following a review of the terms of the sale and purchase agreement for the Bryah Basin assets, Alchemy waived its right of first refusal relating to the Bryah Basin tenements for the purpose of this transaction only. The sale to Billabong Gold was completed on 12 October 2016.

In September 2016, Dr Kevin Cassidy resigned as Chief Executive Officer of the Company. The Company has initiated a search for a replacement.

Please direct enquiries to: Mr Oscar Aamodt – Chairman

Telephone: +61 8 9481 4400

Email: oscar@alchemyresources.com.au

Quarterly Report 1 July 2016 – 30 September 2016

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APPENDIX 1 Schedule of Mining Tenements as at 30 September 2016

			Interest startQtr	Interest endQtr
Project/Tenement	State	Status			Co-holder	Notes
Bryah Basin Project E52/1668 E52/1678 E52/1722 E52/1723 E52/1730 E52/1731 E52/1810 E52/1852 E52/2360 E52/2362 E52/3292 E52/3405 E52/3406 E52/3407 E52/3408 E52/3409 E52/3472 E52/3475 M52/722 M52/723 M52/737 M52/795 M52/844 M52/1049 P52/1195 P52/1196 P52/1199 P52/1200 P52/1314 P52/1315 P52/1316 P52/1317 P52/1318 P52/1320 P52/1321 P52/1322 P52/1323 P52/1327 P52/1365 P52/1425 P52/1427 P52/1428 P52/1429 P52/1467 P52/1468 P52/1469 P52/1470 P52/1531 P52/1532 P52/1533 P52/1534	WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA	Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Application Application Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Expired Expired Granted Granted Granted Granted Granted Application Application Application Application	80% 80% 80% 100% 80% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 0% 100% 100% 100% 100% 100% 100% 80% 80% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 0% 0% 0%	80% 80% 80% 100% 80% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 80% 80% 100% 100% 0% 0% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 0% 100% 100% 100% 100% 100% 100% 100% 100% 100%	Jackson Minerals Pty Ltd Jackson Minerals Pty Ltd Jackson Minerals Pty Ltd Jackson Minerals Pty Ltd Jackson Minerals Pty Ltd Jackson Minerals Pty Ltd	1, 2, 3, 5 1, 2, 3, 5 1, 2 2, 4, 5, 6 1, 2, 3, 5 2, 4, 5 2 4, 5 2, 7 2, 4, 5, 7 2 2, 4, 5, 7 2, 4, 5, 7 2, 7 2, 4, 5, 7 2, 7 2, 4, 5, 7 2, 4, 5, 7 4, 5, 7 2, 4, 5, 7 2, 7 4, 5, 7 1, 3, 5 1, 3, 5 2 2 8 8 4, 5, 7 2, 7 2, 7 2, 7 4, 5, 7 4, 5, 7 2, 7 4, 5, 7 4, 5, 7 2 4, 5 2 2 2 2
P52/1535	WA	Application	0%	100%

Quarterly Report 1 July 2016 – 30 September 2016

13

			Interest startQtr	Interest endQtr
Project/Tenement	State	Status			Co-holder	Notes
Karonie Project E28/2475 E28/2476 E28/2575 E28/2576 E28/2601 E28/2619 E28/2643	WA WA WA WA WA WA WA	Granted Granted Application Application Application Application Application	100% 100% 100% 100% 100% 100% 0%	100% 100% 100% 100% 100% 100% 100%		9 9 9 9 9 9 9
Lachlan Projects EL5878 - Overflow EL7941 - Overflow EL8267 - Overflow EL8356 - Overflow EL8192 - Eurow	NSW NSW NSW NSW NSW	Granted Granted Granted Granted Granted	0% 0% 0% 0% 0%	0% 0% 0% 0% 0%	ALY earning up to 80% ALY earning up to 80% ALY earning up to 80% ALY earning up to 80% ALY earning up to 80%	10 10 10 10 10 10
EL8318 - Girilambone	NSW	Granted	0%	0%	ALY earningupto 80%

Notes:

1. Jackson Minerals Pty Ltd, a subsidiary of Fe Ltd (ASX: FEL), retains a 20% interest free-carried to a decision to mine.

2. Independence Group NL (ASX: IGO) has a right to explore and earn a 70-80% interest (excludes iron ore) in whole or part tenement by sole funding a total of $6,000,000 of exploration expenditure, with Alchemy free-carried up to completion of a pre-feasibility study.

3. Northern Star Resources Ltd (ASX: NST) has a right to explore and earn a 70% interest in whole or part tenement by sole funding a total $1,200,000 on exploration expenditure over tenements or parts of tenements marked (3) & (4).

4. Northern Star Resources Ltd (ASX: NST) has a right to explore and earn a 80% interest in whole or part tenement by sole funding a total $1,200,000 on exploration expenditure over tenements or parts of tenements marked (3) & (4).

5. Northern Star Resources Ltd (ASX: NST) has completed a sale and purchase agreement with Billabong Gold Pty Ltd and its parent entity 2525908 Ontario Inc. for the sale of its Plutonic gold operations, which includes its interest in the Farm-in and Joint Venture over tenements or parts of tenements marked (3) & (4).

6. PepinNini Robinson Range Pty Ltd retains a 1% NSR on iron ore.

7. 100% minerals rights for all minerals, excluding iron ore; Carey Mining Iron Ore JV – Alchemy Resources 50%, Carey Mining 50% iron ore.

8. Tenement acquired by Northern Star Resources Ltd (ASX: NST) as set out in the Letter Agreement dated 29 August 2016, as a variation to Sale and Purchase Agreement – Hermes Gold Project, dated 23 February 2015.

9. Goldtribe Corporation Pty Ltd, a subsidiary of Alchemy Resources Ltd, has 100% interest in the tenement.

10. Alchemy Resources (NSW) Pty Ltd, a subsidiary of Alchemy Resources Ltd, has a right to explore and earn up to an 80% interest in tenements by sole funding a total of $2,000,000 on exploration expenditure.

The information in this report that relates to Exploration Results is based on information compiled by Dr Kevin Cassidy, who is a part-time employee and security holder of Alchemy Resources Limited. Dr Cassidy is a Fellow of the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (‘JORC Code 2012’). Dr Cassidy consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resources at the Wilgeena Gold Deposit is based on information compiled by Simon Coxhell, who is an employee of CoxsRocks Pty Ltd, a consultant to Alchemy Resources Limited. Mr Coxhell is a Member of the Australian Institute of Geoscientists and the Australasian Institute of Mining and Metallurgy and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2004 Edition of the Joint Ore Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (‘JORC Code 2004’). Mr Coxhell consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Alchemy confirms that the Indicated Mineral Resource at the Wilgeena Gold Deposit were prepared and first disclosed under JORC Code 2004. These have not been updated since to comply with JORC Code 2012 on the basis that the information has not materially changed since last reported on 22 October 2012. Alchemy is not aware of any new information or data that materially affects the information included in that announcement and that all material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed.

Quarterly Report 1 July 2016 – 30 September 2016

14