AUSQUEST LIMITED — Capital/Financing Update 2020

Nov 4, 2020

November 5[th] , 2020 ASX Release

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PATERSON GOLD-COPPER PROJECT – DRILLING UPDATE

Further to its announcement of 12[th] October, AusQuest Limited (ASX: AQD) advises that the initial reconnaissance drilling program has been completed at the Gunanya Project in the Paterson Province of Western Australia under its Strategic Alliance Agreement with South32.

A total of seven Reverse Circulation (RC) drill holes (totalling 1,916m) spaced 200m apart across each anomaly were completed to test three magnetic targets in order to determine their potential to host gold and copper mineralisation similar to that found at Winu (by Rio Tinto) and Havieron (by Newcrest), located in the northern half of the Paterson Province.

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Figure 1: Gunanya Prospect showing RC drill-holes relative to magnetic targets

Drilling at magnetic Anomaly 3 (GURC05 and 06) intersected fine grained meta-sediments and possible intrusive granodiorite at relatively shallow depth (~90m), with low levels of magnetite (the cause of the magnetic anomaly) occurring within possible altered metasedimentary rocks below approximately 190m and 90m respectively.

Sulphides (1 to 10% pyrite) were observed over narrow intervals (5m to 10m) in both drillholes GURC05 and 06, straddling the contact between a possible intrusion (granodiorite?) and fine-grained sediments (grey siltstones) of the overlying Mundadjini Formation.

AusQuest Limited 8 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892 www.ausquest.com.au

Target depths at Anomalies 1 and 2 (>250m) were greater than predicted from modelling of the magnetic data, with drilling at Anomaly 2 (holes GURC03, 04) failing to reach the magnetic target due to high water flows encountered in each drill-hole.

At Anomaly 1 all drill-holes (GURC 01, 02, 07) intersected basement at depths ranging from ~250m to 280m, but only GURC07 intersected the cause of the magnetic anomaly (magnetite in altered metasediments below ~296m depth) before the drill-hole had to be terminated (322m) due to excessive water flow.

Sulphides (pyrite) were also found in drill-hole GURC07, associated with quartz/calcite veinlets in the Mundadjini Formation and disseminated within basement lithologies immediately below the Mundadjini contact.

Drill samples were collected at two metre intervals from each drill-hole and sent to Perth for analysis. Assay results are expected within three to four weeks, at which time an assessment of the drilling results will be undertaken.

AusQuest Managing Director Graeme Drew said the Company was pleased to have successfully completed initial reconnaissance drilling of the Gunanya targets even though not all the magnetic targets had been properly tested.

“We have seen signs of alteration and sulphide mineralisation, albeit pyrite, in both the basement lithologies and the overlying sediments,” he said. “but assays are required before any proper assessment of the drilling results can be made.”

“Final assay data should be available over the next 3-4 weeks and we look forward to reporting on the final results once we have had time to analyse the data” he continued.

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Graeme Drew Managing Director

COMPETENT PERSON’S STATEMENT

The details contained in this report that pertain to exploration results are based upon information compiled by Mr Graeme Drew, a full-time employee of AusQuest Limited. Mr Drew is a Fellow of the Australasian Institute of Mining and Metallurgy (AUSIMM) and has sufficient experience in the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Drew consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

FORWARD LOOKING STATEMENT

This report contains forward looking statements concerning the projects owned by AusQuest Limited. Statements concerning mining reserves and resources may also be deemed to be forward looking statements in that they involve estimates based on specific assumptions. Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on management’s beliefs, opinions and estimates as of the dates the forward looking statements are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

AusQuest Limited 8 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892 www.ausquest.com.au

JORC Code, 2012 Edition – Table 1 report, RC Drilling at the Gunanya Project Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or specific	• Samples were collected at 2m intervals from a cone splitter
techniques	specialised industry standard measurement tools appropriate to the minerals	mounted on the cyclone.
	under investigation, such as down hole gamma sondes, or handheld XRF	• Sample depths were determined by the length of the rod-string and
	instruments, etc). These examples should not be taken as limiting the broad	confirmed by counting number of samples and rows as per standard
	meaning of sampling.	industry practice.
	• Include reference to measures taken to ensure sample representivity and the	• A ~3kg sample was collected for representivity.
	appropriate calibration of any measurement tools or systems used.
	• Aspects of the determination of mineralisation that are Material to the Public
	Report.
	• In cases where ‘industry standard’ work has been done this would be
	relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m
	samples from which 3 kg was pulverised to produce a 30 g charge for fire
	assay’). In other cases more explanation may be required, such as where
	there is coarse gold that has inherent sampling problems. Unusual
	commodities or mineralisation types (eg submarine nodules) may warrant
	disclosure of detailed information.
Drilling	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast,	• RC Drilling with a face sampling bit has been used with a hole
techniques	auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard	diameter of approximately 132mm.
	tube, depth of diamond tails, face-sampling bit or other type, whether core is	• No down-hole surveys were undertaken.
	oriented and if so, by what method, etc).
Drill sample	• Method of recording and assessing core and chip sample recoveries and	• Experienced RC drillers and an appropriate rig size were used to
recovery	results assessed.	provide maximum sample recovery.
	• Measures taken to maximise sample recovery and ensure representative	• At this early stage of exploration, it is not known if there is a
	nature of the samples.	relationship between sample recovery and assay grade.
	• Whether a relationship exists between sample recovery and grade and
	whether sample bias may have occurred due to preferential loss/gain of
	fine/coarse material.
Logging	• Whether core and chip samples have been geologically and geotechnically	• RC sample chips were logged by an experienced geologist to
	logged to a level of detail to support appropriate Mineral Resource	identify key rock types and mineralization styles.
	estimation, mining studies and metallurgical studies.	• Sample logging was qualitative with visual estimates of
	• Whether logging is qualitative or quantitative in nature. Core (or costean,	mineralization made for later comparison with assay results.
	_channel, etc) photography. _

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Criteria	JORC Code explanation	Commentary
	• The total length and percentage of the relevant intersections logged.	• All samples were logged.
Sub-sampling	• If core, whether cut or sawn and whether quarter, half or all core taken.	• RC samples were collected every 2 metres using a cone splitter and
techniques and	• If non-core, whether riffled, tube sampled, rotary split, etc and whether	presented in rows corresponding to sample depth.
sample	sampled wet or dry.	• Assay samples were collected from the cone splitter on the rig’s
preparation	• For all sample types, the nature, quality and appropriateness of the sample	cyclone to produce a representative sample for assay.
	preparation technique.	• Certified standard or blanks were inserted every twentieth sample
	• Quality control procedures adopted for all sub-sampling stages to maximise	for initial quality control purposes.
	representivity of samples.	• The sample sizes are considered appropriate for the geological
	• Measures taken to ensure that the sampling is representative of the in situ	materials sampled.
	material collected, including for instance results for field duplicate/second-
	half sampling.
	• Whether sample sizes are appropriate to the grain size of the material being
	sampled.
Quality of assay	• The nature, quality and appropriateness of the assaying and laboratory	• Assaying of the drill samples will be by standard industry practice.
data and	procedures used and whether the technique is considered partial or total.	• The samples are sorted and dried. The whole sample is crushed
laboratory tests	• For geophysical tools, spectrometers, handheld XRF instruments, etc, the	then split by riffle splitter to obtain a representative sub-sample
	parameters used in determining the analysis including instrument make and	which is then pulverized in a vibrating pulveriser.
	model, reading times, calibrations factors applied and their derivation, etc.	• A portion of the pulverized sample is then digested and refluxed
	• Nature of quality control procedures adopted (eg standards, blanks,	using a four acid digest (Hydrofluoric, Nitric, Hydrochloric and
	duplicates, external laboratory checks) and whether acceptable levels of	Perchloric) which approximates a total digest for most elements.
	accuracy (ie lack of bias) and precision have been established.	Some refractory minerals are not completely dissolved.
		• Inductively Coupled Plasma Mass Spectroscopy (ICP-MS) is used
		to measure Ag, Al, As, Ba, Be, Bi, Ca, Cd, Ce, Co, Cr, Cs, Cu, Fe,
		Ga, Ge, Hf, In, La, Li, Mg, Mn, Mo, Na, Nb, Ni, P, Pb, Rb, Re, S,
		Sb, Sc, Se, Sn, Sr, Ta, Te, Th, Ti, Tl, U, V, W, Y, Zn, and Zr.
		• A 25g fire assay is used for Au assays
		• Data from the laboratory’s internal quality procedures (standards,
		repeats and blanks) and AusQuest (standards, repeats and blanks)
		are reviewed to check data quality.
		• Assays are provided by Intertek Genalysis of 15 Davison St,
		Maddington, WA which is a certified laboratory for mineral
		analyses.
		Analytical data is transferred to the company via email and by hard
		copy.
Verification of	• The verification of significant intersections by either independent or	• N/A for this report – No assays available at this time. Drilling was
sampling and	alternative company personnel.	reconnaissance in nature.
assaying	• The use of twinned holes.

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Criteria	JORC Code explanation	Commentary
	• Documentation of primary data, data entry procedures, data verification, data
	storage (physical and electronic) protocols.
	• Discuss any adjustment to assay data.
Location of data	• Accuracy and quality of surveys used to locate drill holes (collar and down-	• Drill hole collars including elevation are located by hand held GPS
points	hole surveys), trenches, mine workings and other locations used in Mineral	to an accuracy of approximately 5m.
	Resource estimation.	• No down hole surveys were carried out.
	• Specification of the grid system used.	• All surface location data are in GDA 94 datum, zone 51S.
	• Quality and adequacy of topographic control.
Data spacing and	• Data spacing for reporting of Exploration Results.	• Drill holes were reconnaissance in nature and designed to assess
distribution	• Whether the data spacing and distribution is sufficient to establish the degree	prospectivity of three magnetic targets hidden beneath cover.
	of geological and grade continuity appropriate for the Mineral Resource and	• Drill hole spacing across each target was 200m
	Ore Reserve estimation procedure(s) and classifications applied.
	• Whether sample compositing has been applied.
Orientation of	• Whether the orientation of sampling achieves unbiased sampling of possible	• Any bias due to the orientation of the drilling is unknown at this
data in relation to	structures and the extent to which this is known, considering the deposit type.	early stage of exploration.
geological	• If the relationship between the drilling orientation and the orientation of key
structure	mineralised structures is considered to have introduced a sampling bias, this
	should be assessed and reported if material.
Sample security	• The measures taken to ensure sample security.	• Samples were collected into securely tied bags and placed into
		cable-tied plastic bags for transport to the laboratory. Each sample
		batch has a sample submission sheet that lists the sample numbers
		and the work required to be done on each sample.
		• Reputable freight companies are used to transport samples to the
		laboratory.
		• Sample pulps (after assay) are held by the laboratory and returned
		to the company after 90 days.
Audits or reviews	• The results of any audits or reviews of sampling techniques and data.	• No reviews or audits of the sampling techniques or data have been
		carried out to date.

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Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral tenement	• Type, reference name/number, location and ownership including agreements or material	• The Gunanya Project is centered at ~7448000N and
and land tenure	issues with third parties such as joint ventures, partnerships, overriding royalties, native	288000E (GDA94 Zone 51), approximately 250 km north
status	title interests, historical sites, wilderness or national park and environmental settings.	east of Newman in Western Australia.
	• The security of the tenure held at the time of reporting along with any known	• Tenement holdings include granted Exploration Licence
	impediments to obtaining a licence to operate in the area.	E45/5447 and applications E45/5752 and 5753.
		• The Gunanya Project is subject to a Strategic Alliance
		Agreement with South32 who can earn 70% by spending
		US$4.5M.
		• Aboriginal heritage surveys are routinely completed
		ahead of ground disturbing activities
Exploration done	• Acknowledgment and appraisal of exploration by other parties.	• Previous exploration for diamonds by Stockdale
by other parties		Prospecting in 1984 identified fine gold in drainage
		samples collected in the Gunanya region.
		• In 1984 CRA Exploration drilled four air core holes into
		weak magnetic anomalies in the northern portion of the
		Gunanya tenement as part of a diamond exploration
		program. Between 1991 and 1994 they also completed an
		aeromagnetic survey and further diamond exploration
		over the Gunanya project and areas to the south and west
		of the project.
Geology	• Deposit type, geological setting and style of mineralisation.	• The Gunanya Project is targeting gold and copper
		mineralization similar to recent discoveries at Winu
		(RioTinto) and Havieron (Newcrest) within the area to the
		north of the project. Both new discoveries are associated
		with discrete magnetic anomalies which provides a
		targeting mechanism for other prospects in the same
		region.
Drill hole	• A summary of all information material to the understanding of the exploration results	• All relevant drill hole data are provided below.
Information	including a tabulation of the following information for all Material drill holes:
	o easting and northing of the drill hole collar
	o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole
	collar
	o dip and azimuth of the hole

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Criteria	JORC Code explanation	Commentary
	o down hole length and interception depth
	o hole length.
	• If the exclusion of this information is justified on the basis that the information is not
	Material and this exclusion does not detract from the understanding of the report, the
	Competent Person should clearly explainwhy this is the case.
Data aggregation	• In reporting Exploration Results, weighting averaging techniques, maximum and/or	• N/A for this report – No aggregation techniques have
methods	minimum grade truncations (eg cutting of high grades) and cut-off grades are usually	been used on the data.
	Material and should be stated.
	• Where aggregate intercepts incorporate short lengths of high grade results and longer
	lengths of low grade results, the procedure used for such aggregation should be stated
	and some typical examples of such aggregations should be shown in detail.
	• The assumptions used for any reporting of metal equivalent values should be clearly
	stated.
Relationship	• These relationships are particularly important in the reporting of Exploration Results.	• N/A for this report. No assay data available.
between	• If the geometry of the mineralisation with respect to the drill hole angle is known, its
mineralisation	nature should be reported.
widths and	• If it is not known and only the down hole lengths are reported, there should be a clear
intercept lengths	statement to this effect (eg ‘down hole length, true width not known’).
Diagrams	• Appropriate maps and sections (with scales) and tabulations of intercepts should be	• N/A for this report. No assay data available
	included for any significant discovery being reported These should include, but not be
	limited to aplanview of drill hole collar locations and appropriate sectionalviews.
Balanced reporting	• Where comprehensive reporting of all Exploration Results is not practicable,	• N/A for this report. No assay data available
	representative reporting of both low and high grades and/or widths should be practiced
	to avoid misleading reporting of Exploration Results.
Other substantive	• Other exploration data, if meaningful and material, should be reported including (but	• N/A for this report. No assay data available
exploration data	not limited to): geological observations; geophysical survey results; geochemical survey
	results; bulk samples – size and method of treatment; metallurgical test results; bulk
	density, groundwater, geotechnical and rock characteristics; potential deleterious or
	contaminating substances.
Further work	• The nature and scale of planned further work (eg tests for lateral extensions or depth	• Further work has not been determined at this stage and
	extensions or large-scale step-out drilling).	will be dependent on results from the current drilling
	• Diagrams clearly highlighting the areas of possible extensions, including the main	program.
	geological interpretations and future drilling areas, provided this information is not
	commercially sensitive.

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Drilling Details:

Hole No	Easting	Northing	Datum	Zone	RL	Azimuth	Inc	Depth (m)
20GURC001	384996	7450095	GDA94	51	428	0	-90	300
20GURC002	385194	7450095	GDA94	51	431	0	-90	270
20GURC003	391499	7448602	GDA94	51	449	0	-90	292
20GURC004	391303	7448600	GDA94	51	450	0	-90	234
20GURC005	388402	7443499	GDA94	51	423	0	-90	270
20GURC006	388598	7443443	GDA94	51	424	0	-90	228
20GURC007	384793	7450101	GDA94	51	427	0	-90	322

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