CRITICAL RESOURCES LIMITED — Capital/Financing Update 2016

Aug 31, 2016

ASX Release 1 September 2016

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Sovereign Gold Company Limited ACN 145 184 667

Suite 7, 234 Churchill Avenue , Subiaco, WA, 6008, Australia

Phone: +61 8 6500 6872

Contact Rocco Tassone, Managing Director

e: corporate@sovereigngold.com.au

Latest News www.sovereigngold.com.au

Directors / Officers Charles Thomas (Chairman) Rocco Tassone (MD) Patrick Glovac

ASX: SOC

Qualifying Statements

The information in this Report that relates to Exploration Information is based on information compiled by Michael Leu who is a member of The Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists.

Mr Leu is a qualified geologist and is the Chief Geologist of Sovereign Gold Company Limited.

Mr Leu has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Resources. Mr Leu consents to the inclusion in this announcement of the Exploration Information in the form and context in which it appears.

The information in this announcement that relates to geophysical reporting and interpretation is based on results and interpretations compiled by Dr. Alexander Prikhodko, P. Geo., PhD, Senior Geophysicist, VTEM Interpretation Supervisor, Geotech Ltd. Dr. Alexander Prikhodko is a practising Member of the Association of Professional Geoscientists of Ontario, a Recognised Overseas Professional Organisation included in a list promulgated by the ASX from time to time and consents to the inclusion in this report of the geophysical information and interpretation in the form and context in which it appears

Second Significant VTEM Anomaly for Drilling at Halls Peak Base Zinc Target

• Airborne VTEM survey defined an anomalous conductive zone within EL7679

• “Geologically the steeply dipping conductors likely reflect faults which could be channels for sulfur solutions transportation (feeding channels); and adjacent subhorizontal conductors can be interpreted as sulphide-beds.”

• Drill program planned to test conductor.

Previously flown Heliborne VTEM (Versatile Time Domain Electromagnetic) survey detected deep conductive zones that have potential to contain continuous flat lying zinc-lead-copper-silver bearing beds.

Details from the survey report by Geotech Ltd. (the developers of the VTEM system) that interpreted this conductive zone are presented below. An exploration priority is the VTEM anomaly outlined by Dr Alex Prikhodko (Report: Detail Interpretation of VTEM Conductive Zone, for Precious Metal Resources Limited, Halls Peak Block, Armidale, New South Wales, Geotech VTEM System flown and processed by Geotech Ltd. Ontario, Canada, Survey 2012, Alexander Prikhodko, P.Geo., PhD, Senior Geophysicist, Supervisor of VTEM Interpretation Geotech Ltd.)

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Figure 1: 3D view, EM Resistivity Depth Imaging (RDI). Interpretation of the VTEM conductors at Spike Island anomaly by Geotech Airborne. Flat lying conductor in blue; Vertical conductor in purple.

The interpretation concluded “In general the conductive zone is complex and consists of two types of conductors: 1) steeply dipping (or subvertical) conductors and 2) subhorizontal blocky, lens or layer similar conductors.

Figure 2 shows the deep conductor, depicted in pink/red, previously reported for testing by diamond drilling (SOC ASX Release 11 2 2016; PMR ASX Releases 10 9 2012, 15 3 2013).

ASX Release 1 September 2016 - Page 2

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Figure 2: The VTEM airborne geophysical survey data contains an additional significant anomalous conductive zone not reported by the previous holder (Precious Metal Resources, PMR) of EL7679 (Halls Peak).

Geologically the steeply dipping conductors likely reflect faults which could be channels for sulfur solutions transportation (feeding channels); and adjacent sub horizontal conductors can be interpreted as sulphide-beds.”

The next phase of exploration will include drilling to determine whether these anomalies are due to massive silver-copper-zinc-lead sulphide deposits, similar to those historically mined in the surrounding area. These VTEM anomalies are produced by electrically conductive rocks at depths ranging from surface to over 300 metres. The rocks most likely to cause these anomalies are sulphides, graphite bearing black shales and, to a lesser extent, rocks saturated with highly salty water. The only conclusive way of determining their nature is by drilling.

The drilling is aimed at intersecting the electrically conductive horizons mapped in detail by a state of the art helicopter mounted VTEM and aeromagnetic survey flown by Geotech Airborne.

Based on the Maxwell Plate Modelling results Geotech recommended the following drill hole parameters:

parameters:
Diamond Hole	Coordinates DA94 56J	Azimuth Magnetic	Dip	Drill Hole Depth (m)
SOC1DDH02	409805mE 6606310mN	180	50	400
SOC1DDH03	410000mE 6606600mN	180	50	200

ASX Release 1 September 2016 - Page 3

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Figure 3: Location of two drill holes at Spike Island

About Halls Peak

• Right geological setting, Halls Peak base metal province located in an area (4 x 5km) of historic high grade massive sulphide mines

• Several shallow, small high grade massive sulphide bodies already discovered

• Halls Peak has potential to host a large base metal deposit

• Flat lying VTEM conductor around the old Sunnyside Mine fits a typical SEDEX deposit model. Consultant Geophysicists interpret this conductor to host sulphides

• Confidence exists that the VTEM survey has potentially located sulphide deposition but economic grades and tonnage yet to be proven

• Long term Zinc outlook positive, declining production levels and the lack of genuine development opportunities

Halls Peak is the inferred volcanic centre for extensive small but high grade Volcanic Massive Sulphide (VMS) deposits rich in copper, lead, zinc and silver. Current exploration aims to locate the right depositional environment to host a large scale, high-grade base metal deposit. Several geochemical and geophysical anomalies are also present that identify further high grade, near-surface sulphides.

Additional to the VMS prospectivity, there are indications for the presence of orogenic gold from breccia floaters and small pods of Au–rich quartz.

ASX Release 1 September 2016 - Page 4

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About VTEM

Geotech Ltd. Ontario Canada, Airborne VTEM survey, Halls Peak N.S.W.

During June 20th to July 13th, 2012 Geotech Ltd. carried out a helicopter-borne geophysical survey over the Hall Peak block situated approximately 34 kilometres southeast of Armidale, New South Wales, Australia.

Principal geophysical sensors included a versatile time domain electromagnetic (VTEMplus) system, and a caesium magnetometer. Ancillary equipment included a GPS navigation system and a radar altimeter. A total of 1221 line-kilometres of geophysical data were acquired during the survey.

The interpretation results include additional products (detail resistivity depth imaging and Maxwell plate modelling), description and recommendations for VTEM anomalous zone in the NE part of the surveyed area.

Airborne VTEM surveys use a helicopter, which suspends a high-resolution caesium magnetometer from its cargo hook. The magnetometer is described as a 26-metre transmission coil or loop, which is suspended beneath the helicopter in a tent shaped array. The inner part of the array contains a smaller diameter receiving coil, which measures the period of time it takes for an induced electro-magnetic field to dissipate through the ground, using the principle that highly conductive rocks, like those containing metals, would hold an electric charge for a longer period.

A current is transmitted through the coil, which energises the ground, creating an electromagnetic field. When the induced current is stopped, sensors on the coil record the time delay for this induced electromagnetic field to disperse. The VTEM system has the ability to generate readings at a rate of 10 samples per second, which are recorded digitally with a GPS log and radar altimeter for accurate navigation.

The VTEM system produces data that are then translated onto maps which shows regions of conductivity in the earth and EM profiles. The proposed flight paths will be orientated to suit the overall geological trend, and line spacing was designed to ensure maximum coverage.

Geotech Airborne describe the VTEM system as follows: “The VTEM or Versatile Time Domain Electro Magnetic system is the most innovative and successful airborne electromagnetic system to be introduced in more than 30 years. The proprietary receiver design using the advantages of modern digital electronics and signal processing delivers exceptionally low-noise levels. Coupled with a high dipole moment transmitter, the result is unparalleled resolution and depth of investigation in precision electromagnetic measurements.

Key features include:

• Spotting drill targets directly off of the airborne results

• Superior Exploration Depth – Over 400 metres

• Excellent resistivity discrimination and detection of weak anomalies

• Low Base Frequency (25 or 30 Hz) for Penetration through conductive cover

• High Spatial Resolution – 2 to 3 metres

• Improved Interpretability due to Receiver-Transmitter symmetry

• Virtually impervious to atmospheric activity.

The system was designed to be field configurable to best suit a large variety of different geophysical requirements from deep penetration to optimizing the discrimination within a narrow range of resistivity values. The recent surveys flown with VTEM have produced superior results over the same test areas flown by competing airborne EM surveys. VTEM has flown the Reid-Mahaffy, Caber, Perseverance and Montcalm test ranges and the results have demonstrated that VTEM provides the Industry’s highest signal/noise ratio and conductor spatial resolution”.

ASX Release

1 September 2016 - Page 5

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The Halls Peak Tenements are located 80km SE of Armidale N.S.W.

For further information please contact:

Rocco Tassone, Managing Director Sovereign Gold Company Limited Telephone: +61 8 6500 6872

Table 1 for reporting in accordance with the JORC Code

Section 1 Sampling Techniques and Data

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

Criteria	Criteria	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or	A Versatile Time-Domain Electromagnetic (VTEM) survey was
techniques	specific specialised industry standard measurement tools appropriate to	conducted in EL 7679 (refer Figure1 ASX release 1 September
	the minerals under investigation, such as down hole gamma sondes, or	2016). This survey was conducted between 20 June to 13 July 2016
	handheld XRF instruments, etc). These examples should not be taken as	over the Halls Peak block.
	limiting the broad meaning of sampling.
	• Include reference to measures taken to ensure sample representivity	• The survey was flown by Geotech Ltd with the VTEMplus helicopter-
	and the appropriate calibration of any measurement tools or systems	borne system on flight lines oriented 0-180° (North-South) using
	used.	100 metre line
	• Aspects of the determination of mineralisation that are Material to the	spacings. A total of 1,221 line kilometres of VTEMplus data was
	Public Report.	acquired.
	• In cases where ‘industry standard’ work has been done this would be	The system VTEMplus system specifications are summarised below.
	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.	VTEMplus Configuration: Transmitter loop area – 540 m2dodecagon shape Base Frequency – 25 Hz Peak dipole moment – Up to 625,000 NIA but 400,000 NIA standard Peak Current – Up to 310 Amperes (200 typical)
		Transmitter Pulse Width – 7 ms
		VTEM Receiver – Z,X coils
		Magnetic Sensor (cesium vapour on suspended cable)
		Helicopter Height - 90 meters
		EM sensor Height- 30 meters
		Magnetic sensor Height – 75 meters
		• Other details of sampling techniques is not applicable
Drilling	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air	• No drilling activity undertaken
techniques	blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or
	standard tube, depth of diamond tails, face-sampling bit or other type,

Criteria	Criteria	Commentary
	whether core is oriented and if so, by what method, etc).
Drill sample	• Method of recording and assessing core and chip sample recoveries and	• No drill samples collected
recovery	results assessed.
	• Measures taken to maximise sample recovery and ensure representative
	nature of the samples.
	• 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	• Airborne (helicopter) VTEMplus survey and hence no logging
	geotechnically logged to a level of detail to support appropriate Mineral	undertaken.
	Resource estimation, mining studies and metallurgical studies.
	• Whether logging is qualitative or quantitative in nature. Core (or costean,
	channel, etc) photography.
	• The total length andpercentage of the relevant intersections logged.
Sub-sampling	• If core, whether cut or sawn and whether quarter, half or all core taken.	• A real-time GPS onboard system utilizing the Novatel OEM4-G2-
techniques	• If non-core, whether riffled, tube sampled, rotary split, etc and whether	3151W GPS receiver was used and provided in-flight navigation
and sample	sampled wet or dry.	control. This system determines accurate position of the
preparation	• For all sample types, the nature, quality and appropriateness of the	helicopter in three dimensions (within error tolerances). As many
	sample preparation technique.	as 11 GPS and two WAAS satellites may be monitored at any one
	• Quality control procedures adopted for all sub-sampling stages to	time to compute the aircraft location. The position accuracy (CEP)
	maximise representivity of samples.	is estimated to be 1.8 metres and with WAAS satellite tracking,
	• Measures taken to ensure that the sampling is representative of the in	1.2 metres.
	situ 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	• The nature, quality and appropriateness of the assaying and laboratory	• No assays carried out for this survey
assay data	procedures used and whether the technique is considered partial or
and laboratory	total.
tests	• For geophysical tools, spectrometers, handheld XRF instruments, etc, the
	parameters used in determining the analysis including instrument make
	and model, reading times, calibrations factors applied and their
	derivation, etc.
	• Nature of quality control procedures adopted (eg standards, blanks,
	duplicates, external laboratory checks) and whether acceptable levels of

Criteria	Criteria	Commentary
	accuracy (ie lack of bias) and precision have been established.
Verification of	• The verification of significant intersections by either independent or	• Not applicable for airborne geophysical surveying.
sampling and	alternative company personnel.
assaying	• The use of twinned holes.
	• Documentation of primary data, data entry procedures, data verification,
	data storage (physical and electronic) protocols.
	• Discuss any adjustment to assay data.
Location of	• Accuracy and quality of surveys used to locate drill holes (collar and	• The VTEMplus survey was undertaken at Halls Peak and was
data points	down-hole surveys), trenches, mine workings and other locations used in	conducted along 1,221 kilometres with survey lines 100 metres
	Mineral Resource estimation.	apart, oriented North-South.
	• Specification of the grid system used.
	• Quality and adequacy of topographic control.
Data spacing	• Data spacing for reporting of Exploration Results.	• The data between the flight lines is approximately 100 metres
and	• Whether the data spacing and distribution is sufficient to establish the	and along the lines, samples using a 25 Hz EM pulse and 0.1
distribution	degree of geological and grade continuity appropriate for the Mineral	magnetometer rate, represent a reading sampled to locations
	Resource and Ore Reserve estimation procedure(s) and classifications	every 2-4 metres (dependent on topography and aircraft speed
	applied.	over terrain).
	• Whether sample compositing has been applied.
Orientation of	• Whether the orientation of sampling achieves unbiased sampling of	• The flight path was oriented approximately perpendicular to the
data in	possible structures and the extent to which this is known, considering	strike direction of the primary geological trends and formations.
relation to	the deposit type.	Data acquired is sufficient to locate discrete conductive
geological	• If the relationship between the drilling orientation and the orientation of	anomalies.
structure	key mineralised structures is considered to have introduced a sampling
	bias, this should be assessed and reported if material.
Sample	• The measures taken to ensure sample security.	• Data was recorded, processed and provided by Geotech Ltd
security		ensuring the data was not manipulated or altered.
Audits or	• The results of any audits or reviews of sampling techniques and data.	• The data were independently interpreted and verified by Dr Alex
reviews		Prikhodko (Supervisor of VTEM Interpretation – Geotech Ltd).
		Results are as reported in SOC ASX Release 11 2 2016; PMR ASX
		Releases 10 9 2012,15 3 2013.

Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	Commentary
Mineral	• Type, reference name/number, location	• Halls Peak project lies within EL 7679 and is currently under exploration licence with 55% held
tenement and	and ownership including agreements or	in JV Company of Sovereign Gold Company Limited.
land tenure	material issues with third parties such as
status	joint ventures, partnerships, overriding
	royalties, native title interests, historical
	sites, wilderness or national park and
	environmental settings.
	• The security of the tenure held at the
	time of reporting along with any known
	impediments to obtaining a licence to
	operate in the area.
Exploration	• Acknowledgment and appraisal of	• The licence area was historically explored by numerous previous explorers and companies.
done by other	exploration by other parties.
parties
Geology	• Deposit type, geological setting and style	• Halls Peak (located approximately 34 kilometres southeast of Armidale NSW, is the inferred
	of mineralisation.	volcanic centre for extensive small but high grade Volcanic Massive Sulphide (VMS) deposits
		rich in copper, lead, zinc and silver. Current exploration aims to locate the right depositional
		environment to host a large scale, high-grade base metal deposit.
		• Several geochemical and geophysical anomalies are also present that identify further high
		grade, near-surface sulphides. Additional to the VMS prospectivity, there are indications for the
		presence of orogenic gold from breccia floaters and small pods of Au–rich quartz.
		• A range of known multi-element deposits exist within the tenement with all deposits to date
		being discovered originally from outcrop.
Drill hole	• A summary of all information material to	• A number of existing drillholes, focussed on the area of Gibsons and Faints Mines within the
Information	the understanding of the exploration	tenement and these have yielded intersections of high zinc, lead and moderate copper with
	results including a tabulation of the	some silver. A listing of many of these intersections is below:
	following information for all Material drill
	holes:
	o easting and northing of the drill hole

Criteria	JORC Code explanation	Commentary
	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 detract from the understanding of
	the report, the Competent Person should
	clearly explain why this is the case.
		• Additional high silver zones include:
Data	• In reporting Exploration Results,	• No data aggregation from geophysical survey.
aggregation	weighting averaging techniques,
methods	maximum and/or minimum grade
	truncations (eg cutting of high grades)
	and cut-off grades are usually Material
	and should be stated.
	• Where aggregate intercepts incorporate

Criteria	JORC Code explanation	Commentary
	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	• Interpretation of the VTEMplus data has provided a number of targets. In particular, analysis of
between	important in the reporting of Exploration	two indicated conductors has been undertaken (using software Maxwell Plate Modelling) and
mineralisation	Results.	using flight lines 10741 and 10761.
widths and	• If the geometry of the mineralisation with
intercept	respect to the drill hole angle is known,
lengths	its nature should be reported.
	• If it is not known and only the down hole
	lengths are reported, there should be a
	clear statement to this effect (eg ‘down
	hole length, true width not known’).
Diagrams	• Appropriate maps and sections (with	• Diagrams provided here are target conductors modelled as part the interpretation of the VTEM
	scales) and tabulations of intercepts	plus data undertaken by Dr Alex Prikhodko.
	should be included for any significant
	discovery being reported These should
	include, but not be limited to a plan view
	of drill hole collar locations and
	appropriate sectional views.

Criteria JORC Code explanation Commentary

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Criteria	JORC Code explanation	Commentary
Balanced	• Where comprehensive reporting of all	• No balanced reporting in relation to grades are applicable for VTEM survey.
reporting	Exploration Results is not practicable,
	representative reporting of both low and
	high grades and/or widths should be
	practiced to avoid misleading reporting of
	Exploration Results.
Other	• Other exploration data, if meaningful and	• First pass analysis of the data indicate several significant conductive trends and anomalies as
substantive	material, should be reported including	detailed in ASX release 1 September 2016.
exploration	(but not limited to): geological
data	observations; geophysical survey results;	• Two primary anomalies indicating subsurface conductors were modelled and interpreted
	geochemical survey results; bulk samples	resulting in a recommendation for three drillholes to be used to test these conductors. The
	– size and method of treatment;	modelling resulted in targets to determine location, geometry, depth and conductivity.
	metallurgical test results; bulk density,
	groundwater, geotechnical and rock
	characteristics; potential deleterious or

Criteria	JORC Code explanation	Commentary
	contaminating substances.
Further work	• The nature and scale of planned further	• Testing of the indicated conductors defined by the VTEM survey are proposed to be tested by
	work (eg tests for lateral extensions or	three drillholes.
	depth extensions or large-scale step-out
	drilling).
	• Diagrams clearly highlighting the areas of
	possible extensions, including the main
	geological interpretations and future
	drilling areas, provided this information is
	not commercially sensitive.