AUSQUEST LIMITED — Interim / Quarterly Report 2016

Oct 27, 2016

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Quarterly Report – 30[th] September 2016

HIGHLIGHTS

Peru – Copper-Gold

• Inaugural reconnaissance drilling (20 holes for 12,015m) completed over copper-gold targets at the Cardonal, Ventana, Puite and Colorada prospects east of Ilo in southern Peru.

• Presence of nearby porphyry copper mineralisation supported by analysis of geochemical results, which identified sodic (increased sodium) and phyllic (increased potassium) alteration in several drill-holes at the Puite prospect.

• Weak phyllic alteration identified in drill-holes at Colorada suggests the main area of interest has not been tested by the current drill program.

• Full assay results from the Cardonal and Ventana prospects are awaited.

• AusQuest regained 100% title to these prospects following the withdrawal of Compania Minera Zahena SAC (“Zahena”) from the joint ventures.

Australia – Nickel, Copper, Zinc

• High-powered electromagnetic (HPEM) surveys targeting massive nickel-copper sulphides at the Jimberlana Prospect due to commence in November 2016.

• Access clearance for HPEM surveys requested for up to 12 targets within the Balladonia Nickel Project, located ~60km south of the Nova-Bollinger deposit.

• HPEM surveys planned over nickel targets within the Gibson Soak Project, with work expected to commence in Q1 2017.

• Analysis of historical drill-core near the Blue Billy Zinc Project suggests the potential for sediment-hosted zinc, similar to mineralisation found in Northern Australia.

West Africa – Gold

• AusQuest’s joint venture partner, Ressources Burkinor SARL, a wholly-owned subsidiary of TSX-listed SEMAFO Inc., reported that joint venture title renewals are progressing.

Corporate

• Funding of $750,000 secured from the Company’s major shareholder, Christopher Ellis, through the execution of a Loan and Convertible Note Agreement taking available cash at the end of the Quarter to ~$1.0 million.

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Figure 1: Project Locations – Australia and Peru

OVERVIEW

The inaugural drilling programs under the Cardonal and Puite-Colorada Joint Ventures in Southern Peru were concluded during the Quarter with 20 diamond drill-holes completed for a total of 12,015m.

Drill results from Puite and Colorada identified variable alteration, suggesting good potential for nearby porphyry style mineralisation. Full assay results for drillholes at Ventana and Cardonal are still pending.

Much of the drilling was focused on Puite (6 holes/3,824m) and Ventana (7 holes/4,215m), where initial signs of copper mineralisation were considered by Zahena to be the strongest. Drilling at Cardonal and Colorada was limited to 3 holes/1,610m and 4 holes/2,366m respectively, providing limited testing of these two prospects.

Drilling metres were limited by expenditure levels under both joint ventures (US$1.0 million for the Cardonal JV and US$1.5 million for Puite-Colorada JV) and consequently a number of planned drill-holes were not completed.

Discussions with interested parties over the Company’s copper-gold prospects continued during the Quarter, including a site visit to the Cerro de Fierro IOCG prospect. The Company continues to be encouraged by the ongoing interest shown in its prospects and remains optimistic that a suitable joint venture will be forthcoming over one or more of its prospects as the copper market improves.

In Australia, the Company has re-assessed its nickel-copper and zinc projects in WA, and is in the process of ramping up its exploration efforts to advance them to the drilling stage. Clearances have been received to enable a HPEM survey at Jimberlana to commence in November, to be followed by further HPEM surveys over other projects when clearances have been obtained.

In West Africa, the Company’s joint venture partner, Burkinor SARL, reported that the renewal of joint venture titles for a further three-year period is progressing. It must spend a further US$0.75 million (i.e. a total of US$7.5 million) to complete the stage 2 earn-in to 80% equity in the project before April 2017.

PERU COPPER-GOLD JV PROJECTS (100% AQD)

Over the past five years, AusQuest has assembled a large portfolio of copper-gold prospects along the southern coastal belt of Peru in South America with targets identified for drilling as possible porphyry copper

targets and/or iron-oxide copper-gold (IOCG) targets with the size potential being of significance to AusQuest (Figure 2). Peru is one of the world’s most prominent destinations for international copper exploration and is considered to be a prime location for world-class exploration opportunities (Figure 2).

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Figure 2: Project Locations in southern Peru

During the Quarter, drilling at the Puite, Colorada, Cardonal and Ventana porphyry copper-gold prospects in southern Peru was completed under the Puite-Colorada and Cardonal Joint Venture Agreements with Compania Minera Zahena SAC (“Zahena”).

A total of 20 drill-holes for 12,015m of diamond drilling was completed with expenditures exceeding the commitments of US$1.5 million for the Puite-Colorada Joint Venture and US$1.0 million for Cardonal. Zahena subsequently advised of their withdrawal from the joint ventures to concentrate on their own projects ( Figure 3 ).

The Puite prospect is located approximately 30km due east of the port of Ilo and approximately 10km from the coast. This prospect has extensive cover and the initial drilling program was designed to test a range of targets as a first step to evaluating its potential for porphyry copper mineralisation.

Geochemical data from drill-core at Puite (6 holes/3,824m) indicates that a large hydrothermal alteration system has overprinted the original intrusive dioritic rocks, suggesting the potential for nearby porphyry copper mineralisation.

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Figure 3: Pampa de las Pulgas Project showing prospects and drilling completed.

Both sodic (increased sodium) and phyllic (increased potassium) alteration is evident in the drill data, with the strongest signatures occurring in drill-holes PUT02, 03, and 08, and weaker but still recognisable alteration in drill-holes PUT01 and 05 ( Figure 4) .

Anomalous copper values (>350ppmCu) are associated with either strong phyllic alteration in drill-holes PUT05 and 08 or calcium/ sodium alteration in drill-holes PUT02 and 03. The copper values reported for both alteration types are consistent with copper levels expected within the halo to a nearby porphyry system.

The Colorada Prospect, which is located ~10km NNE of Puite, was tested by four drill-holes (2,366m). Two of these holes (COL011 and COL017) intersected weak phyllic alteration with associated elevated copper values (>350ppm Cu), suggesting that

they could be close to the edge of a porphyry system.

A review of surface rock-chip assay data from the Colorada Prospect suggests that stronger alteration and a greater concentration of anomalous copper values occur between the two drill holes, which are located ~2km apart ( Figure 5 ). The use of pathfinder elements from drill core assays to help vector towards mineralisation is being hampered by the high detection limits used by Zahena for assaying the core. Re-assaying of selected core samples is being considered.

Full assay results from the Ventana and Cardonal prospects are still awaited. At Ventana, visual indications of porphyry copper mineralisation were exposed in road cuttings where oxide copper and porphyrystyle structures could be seen to extend over several kilometres.

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Figure 4: Puite Prospect showing drill-holes and alteration

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Figure 5: Colorada prospect showing drilling and rock sample alteration

Drilling at Ventana (7 holes/4,215m) was primarily designed to test beneath surface occurrences of copper at the western end of the prospect. Results to date suggest higher background copper values (~150ppm to 500ppm Cu) within the dioritic host, but geochemical evidence of porphyry-style alteration within these drill-holes is weak, suggesting that much of the copper is likely to be transported.

Elevated copper (up to 0.12% Cu) associated with weak phyllic alteration in the upper parts of drill-hole VEN018 may be of interest and assist in vectoring towards a buried porphyry. A full assessment of the Ventana drill results will be made when all assay data are available.

At the Cardonal prospect, only three of the proposed six holes were completed with assay results for one drill-hole still pending. An assessment of this prospect and comparisons with surface rock data will be made once all assay results have been received.

During the Quarter, geological mapping and rock sampling was completed at the El Jaguay prospect, where magnetic targets had been identified from the Company’s proprietary aeromagnetic survey.

Mapping showed increased alteration trending to the north-west of the prospect, suggesting a possible buried porphyry located beneath the sediment cover. The identification of a granite intruding the Toquepala Volcanics suggests the potential for younger intrusions in the area and the possibility of a Palaeocene porphyry system (<100ma) similar to those that host the giant copper deposits at Cerro Verde and Toquepala. Age dating of selected samples was initiated to confirm the age of the intrusion.

Discussions with interested parties over the Company’s copper-gold prospects continued during the Quarter, including a site visit to the Cerro de Fierro IOCG prospect, located ~30km from the town of Chala and 130km south-east of the Mina Justa copper deposit.

The Company continues to be encouraged by the ongoing interest shown in its prospects and remains optimistic that a suitable joint venture will be forthcoming over one or more of its prospects.

Induced Polarisation (IP) Surveys are being planned to upgrade targets identified at the Chololo and Cerro de Fierro prospects and optimise the location and number of drill sites required to test each prospect. Quotes from local contractors have been requested. The Chololo and Cerro de Fierro prospects are both considered high priority targets for copper-gold mineralisation.

AUSTRALIA – BASE METAL PROJECTS (Nickel, Copper, Zinc)

- Jimberlana Ni Cu Project (100% AQD)

The Jimberlana Project, which is located ~120km west of Norseman between the Lake Johnston and Forrestania Greenstone Belts, consists of two Exploration Licences (273km²) covering the western extension (~50km strike) of the Jimberlana Dyke. Recent research has recognised a strong association between intrusive related nickel sulphide deposits and lateral/horizontal magma flow within dykes that can create effective trap-sites for the accumulation of massive nickel sulphides at or near the base of these chonolithic type structures. Within Australia, the Jimberlana Dyke is a prime target for this style of deposit. Jimberlana is a very large, fertile, fractionated intrusion known to contain nickel sulphides in a number of locations along its strike length, but has had no previous exploration (drilling) targeted at its basal section.

During the Quarter, clearances were obtained for a high-powered electromagnetic survey (HPEM) to be undertaken along the western 10km strike length of the Jimberlana Dyke, targeting accumulations of massive nickel– copper sulphides along the floor of the dyke complex, where depths to the basal section are relatively shallow (~200m to ~500m) and well within the depth of exploration for the HPEM system ( Figure 6 ).

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Figure 6: Jimberlana Project showing HPEM survey area.

The HPEM survey is scheduled to commence in November 2016 and will take approximately two weeks to complete.

The Company believes the Jimberlana Project provides a unique opportunity to explore the basal section of a highly fertile intrusion where the potential for large accumulations of nickel-copper sulphides is considered to be very high.

Balladonia Ni-Cu Project (100% AQD)

of the Nova deposit. Most of the tenements lie within the Dundas Nature Reserve.

During the Quarter, reconnaissance HPEM surveys were planned to test for massive nickel sulphides associated with up to 12 mafic intrusions interpreted from the available aeromagnetic data. The targets outlined are relatively strike extensive (ranging from 2 to 6km) and are associated with inferred NE and NW structures that cross-cut the area.

The Balladonia Project is located ~50km south of the Nova–Bollinger nickel-copper deposit. It consists of four Exploration Licences covering an area of ~940km², within a structurally complex region of the Fraser Range Terrain centred above the southern margin of a deep regional gravity anomaly (~30 milligals) which is thought to reflect buried mafic/ultramafic rocks similar to those that may be related to the formation

Given the size and scope of the Balladonia Project, the Company has decided to undertake further EM surveying over a selection of interpreted mafic intrusions in order to identify and prioritise drill targets before embarking on a substantial drilling campaign in 2017.

HPEM surveys are expected to commence in late 2016 or early 2017 once clearance for access has been obtained.

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Figure 7: Balladonia Project showing planned HPEM survey locations

Gibson Soak Ni-Cu Project (100% AQD)

Blue Billy Zinc Project ( 100%AQD )

The Gibson Soak Project is located ~30km north of the port of Esperance, within the broader Fraser Range terrain. The tenement covers an area of ~350km², centred on a regional north-east trending gravity high with similarities to the Fraser Range Complex and covers major north-east trending structures thought to host maficultramafic intrusions prospective for nickel sulphides.

HPEM surveys have been planned to test up to eight mafic intrusions identified by magnetics and in some cases confirmed by an earlier aircore drilling program.

Half of the targets identified occur within Vacant Crown Land (VCL) and can be accessed under normal clearance processes. The remaining four occur within farmland and require access approval from the landowner.

It is expected that EM surveys in this area will commence in early 2017.

The Bluebilly Zinc Project is located ~100km south west of Paraburdoo within the Edmund Basin in Western Australia. The tenement covers the down-dip extent of anomalous zinc values (up to 0.5% Zn) found within a pyritic black mudstone similar to host rocks known to contain sedimentary zinc deposits in the Mt Isa-McArthur River District of north-west Queensland. A study of historical exploration data suggests potential for SEDEX-style zinc mineralisation close to a regional scale (growth?) fault system down-dip from the anomalous surface occurrences.

During the Quarter, results from re-sampling drill core (14 samples) from an historical drill-hole (Alcoa) located several kilometres outside the target area suggested it had intersected an alteration halo analogous to those surrounding sediment-hosted zinc deposits in Northern Australia.

Strong Fe and Mn alteration of carbonate minerals within the black mudrock sequence,

as well as anomalous levels of zinc (up to 0.5% Zn) found in the more carbonaceous sections, suggest the potential for nearby zinc mineralisation within the sediments.

Compilation of regional data has identified structural complexities in the area of interest and the possibility of localised sub-basins reflecting priority targets for sediment hosted zinc similar to that found in the Mt IsaMcArthur River area.

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Figure 8: Blue Billy Project showing SEDEX target areas

Seismic data collected by Geoscience Australia in conjunction with the Geological Survey of WA show significant disruptions in the area of the Talga Fault, which is located down-dip from the Alcoa drill-hole. Reprocessing of this data is being considered to help upgrade the Company’s understanding of the prospect before more detailed ground surveys (including drilling) are recommended.

under the extensive cover that could be prospective for nickel-copper sulphide deposits.

Computer modelling of the magnetic data is in progress to determine the characteristics of the underlying rocks. HPEM surveys are being considered to more rapidly advance these prospects to the drilling stage.

GOLD – WEST AFRICA

- Glenayle Ni Cu Project ( 100%AQD )

The Glenayle Ni-Cu Project is located ~350km northeast of Wiluna along the northern margin of the Yilgarn Craton in Western Australia. Tenements cover the basal section of large mafic sill complex where available magnetic and geochemical data suggest there may be ultramafic rocks

Comoe Project (AQD 35%, Ressources Burkinor SARL 65% earning to 80%)

The Comoe Project is located near the town of Banfora in south-west Burkina Faso, West Africa, within an extensive greenstone belt. AusQuest controls approximately 1,150km² of title within the Belt, which is now under a

Farm-In and Joint Venture Agreement with Ressources Burkinor SARL, a wholly-owned subsidiary of TSX-listed SEMAFO Inc. Burkinor has now earned a 65% interest in the titles and has elected to earn a further 15% by spending a further US$3.5 million before April 21[st] 2017. Burkinor is the operator of the JV.

Burkinor has advised that tenement renewals for a further 3-year period are progressing. As part of this process, Government officials have visited the area. Field programmes under the joint venture have been suspended until the conclusion of the wet season and the approval of title renewals.

Burkinor must spend a further US$0.75 million (i.e. a total of US$7.5 million) to complete their stage 2 earn-in and secure an 80% equity in the project.

BUSINESS DEVELOPMENT

AusQuest continues to assess opportunities both within Australia and offshore to determine if they would add value to the Company, especially in areas of immediate interest.

CORPORATE

Loan is interest-free for a period of six months from the date of issue. The key terms for the Loan and Convertible Note Agreement were provided to the ASX on 5[th] October 2016.

KEY ACTIVITIES – DECEMBER 2016 QUARTER

The following activities are planned for the December 2016 Quarter:

• Jimberlana (Ni-Cu) – HPEM survey to identify drill targets;

• Balladonia (Ni-Cu) – HPEM Survey to identify drill targets;

• Gibson Soak (Ni-Cu) – Access for ground EM surveys to commence early 2017;

• Blue Billy (Zn) – reprocessing of seismic data to upgrade prospectivity;

• Peru (Cu-Au) – IP survey over the Chololo prospect to optimise drill targets;

• Peru (Cu-Au) – Assessment of JV drilling results;

• Peru (Cu-Au) – Ongoing JV discussions over Peru projects; and

• Comoe (Au) – Monitor results from Burkinor JV program.

During the Quarter, AusQuest secured funding of $750,000 from its major shareholder, Christopher Ellis, by executing a Loan and Convertible Note Agreement.

Under the terms of the Agreement, the conversion price for AusQuest shares has been set at the lower of 2 cents or the 5-day VWAP immediately prior to conversion. The

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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.

JORC Code, 2012 Edition – Table 1 report, Diamond Drilling at Puite, Colorada, Ventana, and Cardonal.in southern Peru

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 specialised	• The entire cored hole is sampled. Composite samples are
techniques	industry standard measurement tools appropriate to the minerals under investigation,	collected over 3 metre intervals.
	such as down hole gamma sondes, or handheld XRF instruments, etc). These examples	• Core is cut in half with half sent for analysis and half
	should not be taken as limiting the broad meaning of sampling.	retained for geological and quality control purposes
	• Include reference to measures taken to ensure sample representivity and the appropriate	• Sample intervals are measured by tape from depth
	calibration of any measurement tools or systems used.	intervals shown on core blocks labeled by the drillers, as
	• Aspects of the determination of mineralisation that are Material to the Public Report.	per standard industry practice.
	• 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 techniques	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger,	• Diamond Drilling to produce continuous core.
	Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of	• HQ and NQ drill rods used to produce 63.5mm and
	diamond tails, face-sampling bit or other type, whether core is oriented and if so, by	47.6mm diameter core respectively. The hole starts with
	what method, etc).	HQ core and changes to NQ at the appropriate depth
		depending on drilling conditions.
		• Down-hole surveys are read at ~ 50m intervals.
Drill sample	• Method of recording and assessing core and chip sample recoveries and results	• Core recovery is determined by comparing core lengths
recovery	assessed.	measured against drilled intervals shown on core blocks
	• Measures taken to maximise sample recovery and ensure representative nature of the	and recorded on the logs.
	samples.	• Experienced diamond drillers are engaged to ensure
	• Whether a relationship exists between sample recovery and grade and whether sample	maximum core recovery.
	bias may have occurred due to preferential loss/gain of fine/coarse material.	• Sample recovery is high negating any sample bias due to
		recovery.
Logging	• Whether core and chip samples have been geologically and geotechnically logged to a	• Drill core and sample chips are logged by experienced
	level of detail to support appropriate Mineral Resource estimation, mining studies and	geologists to identifykeyrock types,alteration and

1

Criteria	JORC Code explanation	Commentary
	metallurgical studies.	mineralisation styles.
	• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc)	• Core logging is qualitative with visual estimates of
	photography.	mineralisation made for later comparison with assay
	• The total length and percentage of the relevant intersections logged.	results.
		• All core is logged and photographed.
Sub-sampling	• If core, whether cut or sawn and whether quarter, half or all core taken.	• Samples are collected by splitting the core in half along
techniques and	• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or	its length and sampling over 3 metre intervals. In sections
sample preparation	dry.	where core cannot be cut, representative core chips are
	• For all sample types, the nature, quality and appropriateness of the sample preparation technique.	collected for assay. • Duplicate samples are collected from the core every 40th
	• Quality control procedures adopted for all sub-sampling stages to maximise	sample for quality control. The duplicated sample is split
	representivity of samples.	from the same length as the original sample with 30% of
	• Measures taken to ensure that the sampling is representative of the in situ material	the core used as the original and 30% used as the
	collected, including for instance results for field duplicate/second-half sampling.	“duplicate”. 40% is retained in the core box.
	• Whether sample sizes are appropriate to the grain size of the material being sampled.	• The sample sizes are appropriate for the geological
		materials being sampled.
Quality of assay	• The nature, quality and appropriateness of the assaying and laboratory procedures used	• Assaying of the drill samples is by standard industry
data and	and whether the technique is considered partial or total.	practice.
laboratory tests	• For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters	• The samples are sorted, dried, crushed then split to obtain
	used in determining the analysis including instrument make and model, reading times,	a representative sub-sample which is then pulverized.
	calibrations factors applied and their derivation, etc.	• A portion of the pulverized sample is digested using a
	• Nature of quality control procedures adopted (eg standards, blanks, duplicates, external	four acid digest (Hydrofluoric, Nitric, Hydrochloric and
	laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and	Perchloric) which approximates a total digest for most
	precision have been established.	elements. Some refractory minerals are not completely
		dissolved.
		• Inductively Coupled Plasma Atomic Emission
		Spectroscopy (ICP-AES) was used to measure Ag, Al, As,
		Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, K, La, Li, Mg, Mn,
		Mo, Na, Ni, P, Pb, S, Sb, Sc, Sn, Sr, Ti V, W, Y, Zn, Zr.
		• Assays are provided by SGS del Peru in Lima which is a
		certified laboratory for mineral analyses. Analytical data
		is transferred to the company via email.
		• Data from the laboratory’s internal quality procedures
		(standards, repeats and blanks) are provided to check data
		quality.
		• The Companyinserts duplicate samples on a 1 in 40 basis,

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Criteria	JORC Code explanation	Commentary
		and blind standards within each batch on a 1 in 20 basis.
		• Blanks are inserted as per standard industry practice
Verification of	• The verification of significant intersections by either independent or alternative company	• N/A for this report.
sampling and	personnel.	• No twinned holes were completed.
assaying	• The use of twinned holes.	• All data are entered into Excel spreadsheets and stored in
	• Documentation of primary data, data entry procedures, data verification, data storage	the company’s database.
	(physical and electronic) protocols.	• No adjustments have been made to the assay data.
	• Discuss any adjustment to assay data.
Location of data	• Accuracy and quality of surveys used to locate drill holes (collar and down-hole	• Drill hole collars including elevation are located by hand
points	surveys), trenches, mine workings and other locations used in Mineral Resource	held GPS to an accuracy of approximately 5m.
	estimation.	• Down hole surveys on angled holes are carried out every
	• Specification of the grid system used.	50m down hole, and at the end of the hole.
	• Quality and adequacy of topographic control.	• All surface location data are in WGS 84 datum, UTM
		zone 19S.
Data spacing and	• Data spacing for reporting of Exploration Results.	• Diamond drill-holes were positioned to test targets
distribution	• Whether the data spacing and distribution is sufficient to establish the degree of	identified by various ground surveys. No systematic
	geological and grade continuity appropriate for the Mineral Resource and Ore Reserve	drilling of targets has been undertaken.
	estimation procedure(s) and classifications applied.
	• Whether sample compositing has been applied.
Orientation of data	• Whether the orientation of sampling achieves unbiased sampling of possible structures	• Any bias due to the orientation of the drilling is unknown
in relation to	and the extent to which this is known, considering the deposit type.	at this early stage of exploration.
geological	• If the relationship between the drilling orientation and the orientation of key mineralised
structure	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 security is managed by the operator of the JV.
		Procedures match with Industry best practice.
		• Samples are 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.

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Criteria	JORC Code explanation	Commentary
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.

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 Puite, Colorada, Ventan and Cardonal Prospects are
and land tenure	issues with third parties such as joint ventures, partnerships, overriding royalties, native	all located approx. 20km east of Ilo, Peru, centered at
status	title interests, historical sites, wilderness or national park and environmental settings.	8048000N and 277000E (PSAD56 Zone 19S).
	• The security of the tenure held at the time of reporting along with any known	• At the time of drilling, the prospects were subject to joint
	impediments to obtaining a licence to operate in the area.	venture agreements with Compania Minera Zahena SAC
		which included Mineral concessions Pampa de Las Pulgas
		J, K ,O, P, R, S, T, U, W, V, AB, AC, AD, AF.
		• All tenements are held 100% by Questdor SAC a 100%
		owned subsidiary of AusQuest Limited.
		• A drill permit (AIA) was provided by INGEMMET for
		the drilling programme following environmental, and
		community approvals.
Exploration done	• Acknowledgment and appraisal of exploration by other parties.	• No historic exploration data is available.
by other parties
Geology	• Deposit type, geological setting and style of mineralisation.	• All prospects are targeting porphyry copper-gold
		resources associated with diorite intrusions along the
		coastal belt of southern Peru.
Drill hole	• A summary of all information material to the understanding of the exploration results	• All relevant drill hole data and information are provided
Information	including a tabulation of the following information for all Material drill holes:	below.
	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
	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 detractfrom the understanding of the report, the

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Criteria	JORC Code explanation	Commentary
	Competent Person should clearly explain why this is the case.
Data aggregation	• In reporting Exploration Results, weighting averaging techniques, maximum and/or	• N/A for this report.
methods	minimum grade truncations (eg cutting of high grades) and cut-off grades are usually
	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.	• All intervals reported are down-hole lengths. True widths
between	• If the geometry of the mineralisation with respect to the drill hole angle is known, its	are unknown at this stage.
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	• All drill holes are shown on appropriate plans and
	included for any significant discovery being reported These should include, but not be	included in the ASX release.
	limited to aplan view of drill hole collar locations and appropriate sectional views.
Balanced reporting	• Where comprehensive reporting of all Exploration Results is not practicable,	• N/A for this report.
	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	• The relationship between current drilling and previously
exploration data	not limited to): geological observations; geophysical survey results; geochemical survey	reported exploration data is shown in the report.
	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	• Future work will depend on assessment of the current drill
	extensions or large-scale step-out drilling).	results.results
	• Diagrams clearly highlighting the areas of possible extensions, including the main
	geological interpretations and future drilling areas, provided this information is not
	commercially sensitive.

Datum	Zone	East	North	Azimuth	Dip	Depth(m)
WGS84	19S	269476	8044834	330	-70	500
WGS84	19S	270213	8044910	15	-70	500
WGS85	19S	269476	8044834	180	-55	610

5

VEN-07-16	WGS84	19S	274150	8049500	180	-60	616
VEN-13-16	WGS84	19S	274400	8049000	0	-60	645
VEN-08-16	WGS84	19S	274400	8049500	0	-60	600
VEN-18-16	WGS84	19S	274920	8049268	240	-70	600
VEN-10-16	WGS84	19S	275599	8049622	60	-60	650
VEN-07a-16	WGS84	19S	274150	8049500	315	-60	500
VEN-17-16	WGS84	19S	275162	8049643	45	-60	604
PUT-01-16	WGS84	19S	280747	8042827	0	-90	500
PUT-02-16	WGS84	19S	280571	8043193	70	-60	670.9
PUT-03-16	WGS84	19S	280347	8043157	70	-60	719.6
PUT-05-16	WGS84	19S	279397	8042837	0	-60	640.7
PUT-06-16	WGS84	19S	279397	8043237	0	-60	610.5
PUT-08-16	WGS84	19S	278597	8042737	270	-60	682.4
COL-011-16	WGS84	19S	282706	8050235	180	-60	600
COL-015-16	WGS84	19S	282706	8051335	0	-60	597
COL-019-16	WGS84	19S	283300	8050760	0	-90	469.8
COL-017-16	WGS84	19S	282400	8048120	45	-60	700

6

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity: AUSQUEST LIMITED

ABN: 35 091 542 451

Quarter ended (“current quarter”) 30 SEPTEMBER 2016

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	(362) - - (27) (124) - 1 - - - -	(362) - - (27) (124) - 1 - - - -
	(512)	(512)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets	- - - -	- - - -

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - -	- - - - - - -
	-	-
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - - - - - -	- - - - - - - - -
	-	-
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	811 (512) - - 3	811 (512) - - 3
	302	302

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	302 - - -	302 - - -
	302	302

6.	Payments to directors of the entity and their associates	Current quarter
		$A'000
6.1	Aggregate amount of payments to these parties included in item 1.2		38
6.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
6.3	Include below any explanation necessary to understand the transactions included in
	items 6.1 and 6.2

Payment of director fees

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		17
7.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

Payment of consulting fees and office rent.

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

	8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities - - 8.2 Credit standby arrangements - - 8.3 Other (please specify) - - 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-

9. Estimated cash outflows for next quarter	$A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other (provide details if material) 9.7 Total estimated cash outflows	(360) - - (25) (88) -
	(473)

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	-	-	-	-
10.2 Interests in mining tenements and petroleum tenements acquired or increased	-	-	-	-

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

==> picture [76 x 104] intentionally omitted <==

Sign here: ............................................................ Date: ...27 October 2016

Print name: HENKO VOS (Company Secretary)

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

Page 5