CANYON RESOURCES LIMITED — Capital/Financing Update 2013

Jul 17, 2013

Canyon Resources Limited ACN 140 087 261 353 Rokeby Road Subiaco WA 6008 www.canyonresources.com.au

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ASX RELEASE

18 July 2013

Three New Gold Targets at Canyon’s Pinarello Project

• Canyon has identified 3 new gold exploration targets within its Pinarello Project, in southwest Burkina Faso (the Soukoura, Togoba and Gagnhy Prospects)

• At the Soukoura prospect, auger geochemistry has successfully extended the Tankoro mineralised corridor 7 kilometres into Canyon’s Pinarello Project, and the mineralised corridor is still open on Canyon’s permit area

• Soil sampling along strike from the Gagnhy and Togoba artisanal workings confirms strike extensions to these active artisanal workings

• Next stage is to complete an aeromagnetic survey to assist with targeting follow-up drilling

• Canyon remains fully funded for the next phase of exploration work, with cash at bank of approximately $2 million at 30 June

Canyon Resources Ltd (“Canyon” or “the Company”) is pleased to announce the geochemistry results from three separate programs conducted within the western section of its Pinarello Project in southwest Burkina Faso.

Canyon’s recently completed programs were designed to test whether the gold mineralisation discovered on the Tankoro corridor (immediately north of Canyon’s permits) continues into Canyon’s Pinarello Project. Pleasingly, all programs have returned gold anomalism that warrant further follow-up exploration, which is detailed within this announcement.

The Pinarello Project is situated in the Houndé Gold Belt in southwest Burkina Faso and comprises five permits covering approximately 1,000km². The project is contiguous to the south of TSX-V listed Sarama Resources Limited’s (“Sarama”) Tankoro Permit, which hosts their MM, Phantom and MM East Prospects, and ASX listed Orbis Gold Limited’s (“Orbis”) Dynikongolo Permit, hosting their Bantou and Tankoro Prospects. Soil geochemistry results from these companies exploring along the Tankoro mineralised corridor have demonstrated good continuity, and that the mineralisation at Sarama’s MM prospect is disseminated in feldspar porphyry dykes, which may also continue onto Canyon’s permit.

Earlier this month Sarama reported that it had encountered shallow, high-grade mineralisation over significant downhole intervals at the MM East Prospect from its RC and diamond drilling (refer to Sarama’s announcement dated 5 July 2013).

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Figure 1: Pinarello Project western permit package and prospects

Canyon’s Managing Director, Phil Gallagher commented;

“ We are highly encouraged by our recent auger drilling at the Soukoura prospect which has demonstrated the continuation of the gold mineralisation discovered by our neighbours to the north along the Tankoro Corridor, and pleasingly, the mineralised corridor remains open to the south within Canyon’s permit . It provides strong support for a follow up RAB drilling program, which we plan to commence in Q4 2013 following the wet season that has commenced in Burkina Faso”.

“The positive results received from the soil sampling programs at the Gagnhy and Togoba artisanal workings sites indicate the potential for further mineralised zones across the project area and highlights the prospectivity of the Houndé gold belt.”

Tankoro Corridor Auger Drilling

Over recent months Canyon has completed a 5,563 metre auger geochemistry program at the Soukoura prospect in the northern part of Canyon’s Pinarello Project, with holes spaced 50 metres apart on east west lines spaced 400 metres along the Soukoura prospect. Holes ranged in depth between 1 to 13 metres, with an average of 4.5 metres. A total of 1,322 samples were collected from the interface between the transported lateritic overburden and the weathered saprolite.

Nominal 1 kilogram samples were pulverised at ALS Ouagadougou (85% passing 75 microns), the pulps shipped to ALS Vancouver where they were analysed by aqua regia for low level gold (detection limit 1ppb) with an ICP-MS finish.

The results of the auger drilling have highlighted the south west striking continuation of the Tankoro mineralised trend over the 7 kilometres tested by the auger program. Sampling the interface in this environment tends to give a subdued response relative to soil sampling anomalism in areas with no transported cover. However, the analysis returned results up to 274ppb with a low order anomaly of between 5 and 10ppb over 7 kilometres and a number of higher order anomalies over 20ppb (see Figure 2).

The Tankoro corridor remains open on Canyon’s Pinarello Project to the southwest beyond the extent of the auger geochemistry.

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Figure 2: Results from auger drilling on the Soukoura prospect

Gagnhy Soil Geochemistry

Canyon’s technical team conducted a soil sampling program along strike from the Gagnhy artisanal workings. Samples were collected on a 100 metre by 40 metre grid, stepping out to a 200 metre by 80 metre grid further along strike.

Nominal 50g minus 80 mesh samples were shipped to ALS Vancouver where they were analysed by aqua regia for low level gold (detection limit 1ppb) with an ICP-MS finish.

The artisanal mining at Gagnhy follows the strike of two quartz vein sets. The main quartz vein has a strike of 350 degrees, is up to 2 metres wide and strikes over 250 metres. This is cross cut by a number of smaller quartz veins striking 100 degrees with a strike length of up to 100 metres. Gold is associated with ferruginous quartz veining in felsic volcanic and intrusive rocks, with zones of strong silicification and sericite alteration noted around the workings.

From a total of 385 samples (excluding quality control duplicates etc) collected, 23 samples were above 100ppb, and 7 above 400ppb, with a maximum of 673ppb (0.673g/t) Au. Although the results will require detailed field checking, the anomalism associated with the main vein appears to have been extended to approximately 1.2km long, up to 200 metres wide outlined by a +100ppb Au soil anomaly with a peak assay of 673ppb Au; within a 2.7km long, 400 metres wide, +15ppb Au anomaly, open along strike at both ends.

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Figure 3: Results from soil sampling on the Gagnhy prospect

Togoba Soil Geochemistry

A total of 278 minus 80 mesh (excluding routine duplicates etc) were collected on a 100 metre by 40 metre grid proximal to the Togoba artisanal workings stepped out to a 200 metre by 40 metre grid distally. The Togoba artisanal workings are relatively small in comparison to those workings at Gagnhy. A number of pits have been sunk on small veinlets located in sedimentary rock striking 45 degrees.

Nominal 50g minus 80 mesh samples were shipped to ALS Vancouver where they were analysed by aqua regia for low level gold (detection limit 1ppb) with an ICP-MS finish.

Gold results from the soil sampling program were high with a maximum of 967ppb (0.967g/t) followed by 883ppb Au.

From the 278 samples collected, 21 samples were above 100ppb and although results at this stage don’t provide a coherent orientation they indicate significant +200ppb soil anomalism in and around the artisanal workings and extending over large portions of the sampled area (see Figure 4).

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Figure 4: Results from soil sampling on the Togoba prospect

Next Exploration Stage

Canyon had previously signed a contract with an airborne survey company to conduct a fixed wing magnetic and radiometric survey over the Pinarello, Konkolikan and Tao projects. However, due to delays by the contractor this contract was cancelled, with arrangements now being made to commence the program as soon as possible following the wet season. Given the results of the three geochemical programs and the proximity to the success by our peers to the north, an airborne survey is still warranted at the Pinarello and Konkolikan projects. The survey will also cover the Tao Project in north western Burkina Faso.

At an estimated cost of approximately $150,000, Canyon view the aeromagnetic survey as a low-cost and effective exploration strategy used by our neighbours in the region, to assist in targeting future drilling.

In addition, after field checking and detailed regolith and geological mapping, Canyon is intending to undertake RAB drilling and extensional geochemistry over the Pinarello Project as part of the 2013/2014 exploration season.

About the Burkina Faso projects

Canyon’s existing mineral exploration projects in Burkina Faso cover an area of approximately 3,500km² over 18 permits in the Birimian greenstone belts of the West African craton. These permits comprise five project areas known as the Taparko North project, the Tao project, the Pinarello project, the Konkolikan project and the Derosa project (joint ventured).

The Tao project lies in the Gorouol greenstone belt which hosts the country’s largest deposit, the major Essakane gold mine. Previous RC drilling by Canyon at Tao has intersected high-grade gold mineralisation over a 13km strike length.

The Taparko North project is situated in the Yalogo belt. This greenstone belt hosts the Taparko gold mine and the large Inata gold mine.

Significantly, both projects are situated along north east striking structures. The major gold endowed northeast–southwest trending Markoye fault is recognised as hosting both the Taparko and Essakane gold deposits and the Bomboré gold deposit, situated along strike to the southwest. Numerous artisanal gold occurrences have also been located along the trend of the Markoye fault within the Taparko North project.

The Pinarello project comprises five exploration permits with a combined area of 1,004km². The project area is located on the Hounde greenstone belt in the highly prospective southwest region of Burkina Faso. The project is contiguous to the MM prospect and Tankoro prospect.

The Konkolikan project is situated in the central Houndé Gold Belt and is situated along a mineralised structure that hosts numerous high grade gold resources.

The Derosa project is a package of six exploration permits which offer an early stage exploration opportunity in an area that has active artisanal mining and significant exploration potential. Rumble Resources Limited is earning up to a 75% interest in the Derosa project from Canyon, which will require Rumble to spend $3 million on exploration of the project over a 5-year period and meet project acquisition costs.

Canyon’s projects represent a combination of outstanding geological and structural settings in highly gold endowed Birimian greenstone belts, with recognised major gold hosting structures traversing the project areas. As such, the project areas have potential to host significant mineral resources.

Enquiries:

Phil Gallagher Managing Director T: +61 8 6143 4256 E: pgallagher@canyonresources.com.au

The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Rhoderick Grivas, an employee of the Company and a Competent Person who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Mr Grivas has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Grivas consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.