Cygnus Metals Ltd — Capital/Financing Update 2019

Oct 14, 2019

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Cygnus Gold | Gold Road JV Update

ASX ANNOUNCEMENT:

15 October 2019

ASX: CY5

CORPORATE DIRECTORY

Non-Executive Chairman Michael Bohm

Managing Director James Merrillees

Non-Executive Directors

Simon Jackson Oliver Kreuzer

Company Secretary

Michael Naylor

Cygnus Gold ( Cygnus or the Company ) ( ASX:CY5 ) is pleased to provide an update on activities on the Company’s joint ventures with Gold Road Projects, a wholly owned subsidiary of well-credentialed ASX-listed gold producer Gold Road Resources Ltd ( Gold Road ) ( ASX:GOR ).

The Cygnus - Gold Road joint ventures (JV) cover an area of more than 5,000km[2] in the Wheatbelt region of Western Australia (Figure 1). These tenements are located along the Yandina Shear, a largely unexplored regional structure interpreted to control the location of gold deposits such as Tampia, Griffin’s Find and Lake Magenta.

Recent aircore drilling at the Hammerhead prospect returned additional widespread, anomalous gold including 3m @ 0.35g/t Au from 52m (hole LGAC0058) and 6m @ 0.28g/t Au from 56m to end of hole (hole LGAC0091). These intersections are associated with widespread anomalous gold pathfinder elements such as arsenic, copper, and molybdenum, and are in addition to the results reported in CY5 ASX announcement 10 July 2019.

Anomalous gold and pathfinder anomalism have now been returned from four of the eight broad spaced drill lines through transported cover over nearly 15km strike length of interpreted greenstone rocks at Hammerhead.

In addition to ongoing targeting at Hammerhead, exploration activity has included regional targeting on the Wadderin and Yandina JVs, which has identified a number of high priority targets for drill testing.

The Company is now planning a program to extend and infill the AC drill coverage at Hammerhead as well as deeper reverse circulation (RC) drilling under the best results to date. The AC program will include first pass traverses across the higher priority Wadderin and Yandina targets. These programs are planned to commence immediately post-harvest in late Q4.

Cygnus Gold’s Managing Director James Merrillees said, “Even though early stage, the Hammerhead prospect is now a focus area on the Lake Grace JV where drilling programs are planned to commence over the coming months. Other targets on the Wadderin and Yandina JVs fill a pipeline of joint venture funded projects to be tested over the coming 6-12 months.

–

I’d like to thank our partners Gold Road and acknowledge their support as we aim to emulate their success at Yamarna in the Southwest, an equally underexplored area within the prolific Yilgarn Craton.”

Cygnus Gold Limited

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Level 2, 45 Richardson St, West Perth, WA 6005

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T: +61 8 6118 1627 E: info@cygnusgold.com W: www.cygnusgold.com

–

Cygnus Gold Limited

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LAKE GRACE JV

The current focus on the ~800km[2] Lake Grace JV is the Hammerhead prospect, a target identified from regional aircore drilling of a zone of surface gold (Au) anomalism coincident with the prospective Yandina Shear Zone.

The original 100m-spaced ‘discovery’ AC traverse at Hammerhead was a regional traverse over unexplored, soil-covered terrain more than 16km from the nearest historical drill holes. This line of drilling intersected widespread >20ppb Au and included (refer CY5 ASX announcement 10/7/2019)[1] :

• Hole LGAC0019 with 1m @ 0.15 g/tb Au from 51m, with strong arsenic (As), copper (Cu), lead (Pb) and zinc (Zn) in mafic rocks; and

• LGAC0022, 300m east of LGAC0019, with shallow BIF reporting intersections with gold to 116ppb Au and As to 200ppm.

Follow up aircore drilling (71 holes for 3,315m) at Hammerhead has identified further anomalous gold and pathfinder mineralisation in step out drilling from the original discovery line, nominally on 1,500m spaced lines with holes at 100m centres along lines. Eight lines of drilling were completed over 9.8km of strike length of greenstones at Hammerhead on nominal 1,500m spaced lines with 100m hole spacing (Figure 2).

Significant results include:

• LGAC0058 with 3m @ 0.35g/t Au and 512ppm As from 52m, in a broader halo of weakly anomalous Au (23m @ 67ppb Au), copper (Cu), zinc (Zn) and As in greenstone basement (Figure 3)

• LGAC0091 with 6m @ 0.28g/t Au from 56m to end of hole (EOH) interpreted as basement, with strong pathfinder elements (Ag, Cu, Mo) in transported cover above this intersection (Figure 4)

• LGAC0101 with 4m @ 0.17g/t Au from 42m and 2m @ 0.11 g/t Au from 49m (just above EOH) within a wider zone of anomalous Au (14m @ 0.097g/t Au) hosted in mafic volcanics. This hole was the last hole at the end of this traverse, on the edge of a large surface geochemical anomaly open to the north east (Figure 5).

Importantly, drilling intersected several zones with more than 1,000ppm arsenic (As) associated with the gold anomalies. Arsenic is considered an important pathfinder element for gold mineralisation in this part of the Yilgarn Craton, as exemplified by the nearby Tampia and Griffins Find deposits.

These results are considered significant given the wide line spacing, broad hole spacing, and depth of transported cover, and confirm the gold potential for this part of the Yandina Shear. Further drilling is now planned to vector towards targeted higher grade and thicker zones within this 15km strike length of prospective geology with a program of:

• Infill and expanded drilling on lines of AC drilling targeting the interpreted shear and mafic rock unit along strike from the existing holes

• Drilling of deeper RC holes under the best AC anomalies intersected in holes LGAC0058,091 and 101.

WADDERIN & YANDINA JVs

The Wadderin and Yandina JVs are also targeting gold mineralisation associated with the regional Yandina Shear. Due to the sparse outcrop in these large tenement packages exploration has been driven by detailed geological interpretation of geophysical datasets to map out the geology and structures thought to control gold mineralisation.

As well as extensions of the Hammerhead prospect on to the Yandina JV, targeting work has identified in excess of 50 target areas which have now been ranked with geological reconnaissance and surface sampling already underway or complete on most of the highest priority targets.

Land access agreements have now been negotiated with farmers covering the priority targets at Yandina and Wadderin and first pass aircore drilling of these targets is currently scheduled to commence in early 2020.

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JOINT VENTURES UPDATE

As previously announced Gold Road has now reached the expenditure required to earn 51% of the Lake Grace Earn-in project, and has elected to form a joint venture to earn an additional 24% interest (75% in total) in the project by spending a further $500,000 within 18 months (refer CY5 ASX Announcement 1 July 2019)1.

On the Wadderin Earn-in project, Cygnus and Gold Road have agreed to extend the minimum expenditure time required to achieve the $900,000 until December 31 2019 and extend the earn in period to 31 December 2020 where Gold Road is required to spend $1,600,000 on exploration expenditure to earn 51% (refer GOR ASX announcement 10/10/2017). All other terms remain unchanged.

The Hyden group of tenements were granted during September and these will be added to the existing Yandina JV.

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Figure 1: Cygnus Gold 100% and Gold Road JV projects, SW Western Australia.

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Figure 2: Hammerhead prospect, Lake Grace JV. Aircore drilling traverses on background ground gravity image with significant intervals (>0.1 g/t Au) shown. Grey boxes previously reported.

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Figure 3: Hammerhead prospect, LGAC0058 with 3m @0.35 g/t Au and associated anomalous arsenic (As). Note hole spacing ~100m and the vertical exaggeration in the section is 5. Lower grade intersections are calculated at >100ppb Au. Given the transported cover drilling has tested approximately 50% of the target stratigraphic package.

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Figure 4: Hammerhead prospect, LGAC0091 with 6m @0.28 g/t Au associated with widespread Au anomalism in the cover sequence. and the vertical exaggeration in the section is ~10. Lower grade intersections are calculated at >100ppb Au. Given the transported cover, drilling has tested approximately 25% of the target stratigraphic package.

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Figure 5: Hammerhead prospect, LGAC00101 with significant intervals of 4m @0.17 g/t Au and 3m @ 0.11 g/t Au within a lower grade zone of 14m @0.097 g/t Au to EOH adjacent to gold-in-soils anomaly overlying mafic greenstone. Vertical exaggeration in the section is 5. Given the transported cover drilling has only tested ~15% of the target stratigraphic package.

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About Cygnus Gold

Cygnus is targeting the discovery of high-grade gold, nickel and base metals deposits within the Southwest Terrane, in the Wheatbelt region of Western Australia. The Southwest Terrane is a package of high metamorphic grade rocks forming part of the well mineralised Yilgarn Craton.

Cygnus Gold’s tenements include both early stage exploration areas through to advanced drill-ready targets, where high-grade gold results were achieved in drilling by previous explorers. In addition to the wholly- owned Projects, Cygnus is managing two significant earn-in agreements with ASX-listed Gold Road Resources, whereby Gold Road is earning into Cygnus’ Lake Grace and Wadderin Projects. The Company is also managing exploration on the Yandina Project, in joint venture with Gold Road.

Cygnus’ team has considerable technical expertise in targeting and evaluating gold mineralised systems world-wide, using a regional-scale, mineral systems approach to identifying areas prospective for economic mineral deposits.

Competent Persons Statement

The information in this announcement that relates to Exploration Results is based on information and supporting documentation compiled by Mr James Merrillees, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy. Mr Merrillees is Managing Director and a fulltime employee of Cygnus Gold and holds shares in the Company.

Mr Merrillees has sufficient experience relevant to the style of mineralisation 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 Reserves”. Mr Merrillees consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears.

Notes:

1: Refer ASX announcement on the said date for full details of these exploration results. Cygnus is not aware of any new information or data that materially affects the information included in the said announcement.

For further information please visit www.cygnusgold.com or contact:

Cygnus Gold

James Merrillees - Managing Director

T: +61 8 6118 1627

E: info@cygnusgold.com

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APPENDIX 1 – DRILL HOLE INFORMATION

TABLE 1: Aircore coordinate details – Lake Grace JV (E70/4787). Drill hole coordinates MGA94 Zone 50 (GDA94). Collars located with handheld GPS (±5 m accuracy), AC = Air core hole.

		Total	East	North	RL		Azimuth
Hole ID	Hole Type					Dip
		Depth(m)	MGA	MGA	MGA		MGA
LGAC0028	AC	51	652105	6334398	305	-60	270
LGAC0028	AC	51	652105	6334398	305	-60	270
LGAC0029	AC	25	652215	6334390	298	-60	270
LGAC0030	AC	28	652305	6334399	291	-60	270
LGAC0031	AC	13	652383	6334400	302	-60	270
LGAC0032	AC	16	652538	6334398	297	-60	270
LGAC0033	AC	70	651500	6334400	275	-60	270
LGAC0034	AC	58	651600	6334400	288	-60	270
LGAC0035	AC	63	651704	6334398	288	-60	270
LGAC0036	AC	42	651800	6334400	285	-60	270
LGAC0037	AC	57	651905	6334400	291	-60	270
LGAC0038	AC	56	652002	6334400	292	-60	270
LGAC0039	AC	63	651500	6333302	300	-60	270
LGAC0040	AC	77	651600	6333300	279	-60	270
LGAC0041	AC	69	651702	6333297	305	-60	270
LGAC0042	AC	43	651800	6333300	298	-60	270
LGAC0043	AC	27	651900	6333302	291	-60	270
LGAC0044	AC	24	652000	6333300	302	-60	270
LGAC0048	AC	94	652400	6333298	288	-60	270
LGAC0049	AC	87	652499	6333296	285	-60	270
LGAC0050	AC	48	652503	6336394	291	-60	270
LGAC0051	AC	25	652605	6336402	292	-60	270
LGAC0052	AC	17	652715	6336410	300	-60	270
LGAC0053	AC	19	652800	6336393	279	-60	270
LGAC0054	AC	15	652898	6336397	305	-60	270
LGAC0055	AC	16	653000	6336401	298	-60	270
LGAC0056	AC	63	654150	6338327	291	-60	315
LGAC0057	AC	42	654204	6338273	302	-60	315
LGAC0058	AC	68	654272	6338203	297	-60	315
LGAC0059	AC	70	654346	6338135	275	-60	315
LGAC0060	AC	66	654411	6338068	288	-60	315
LGAC0061	AC	69	654480	6337993	288	-60	315
LGAC0062	AC	45	654553	6337919	285	-60	315
LGAC0063	AC	33	654622	6337850	291	-60	315
LGAC0064	AC	12	654694	6337780	292	-60	315
LGAC0065	AC	17	654765	6337711	300	-60	315
LGAC0066	AC	42	654836	6337638	279	-60	315
LGAC0067	AC	54	654913	6337557	305	-60	315
LGAC0068	AC	35	655982	6338573	298	-60	315
LGAC0069	AC	65	656141	6338579	291	-60	315
LGAC0070	AC	50	656195	6338526	302	-60	315
LGAC0071	AC	85	656272	6338459	297	-60	315

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		Total	East	North	RL		Azimuth
Hole ID	Hole Type					Dip
		Depth(m)	MGA	MGA	MGA		MGA
LGAC0072	AC	45	655570	6339161	275	-60	315
LGAC0073	AC	47	655639	6339092	288	-60	315
LGAC0074	AC	40	655708	6339025	288	-60	315
LGAC0075	AC	33	655777	6338955	285	-60	315
LGAC0076	AC	51	655846	6338911	291	-60	315
LGAC0077	AC	61	656006	6338904	292	-60	315
LGAC0078	AC	112	656150	6338898	300	-60	315
LGAC0079	AC	45	656798	6340082	279	-60	315
LGAC0080	AC	64	656870	6340013	305	-60	315
LGAC0081	AC	59	656940	6339945	298	-60	315
LGAC0082	AC	52	656994	6339889	291	-60	315
LGAC0083	AC	45	657082	6339797	302	-60	315
LGAC0084	AC	48	657148	6339733	297	-60	315
LGAC0085	AC	59	657226	6339650	275	-60	315
LGAC0086	AC	51	657334	6339588	288	-60	315
LGAC0087	AC	70	657363	6339519	288	-60	315
LGAC0088	AC	56	657432	6339450	285	-60	315
LGAC0089	AC	48	657505	6339381	291	-60	315
LGAC0090	AC	23	657577	6339308	292	-60	315
LGAC0091	AC	62	657647	6339237	300	-60	315
LGAC0092	AC	53	657716	6339179	279	-60	315
LGAC0093	AC	61	657786	6339098	319	-60	315
LGAC0094	AC	25	657805	6339407	310	-60	225
LGAC0095	AC	24	657874	6339473	324	-60	225
LGAC0096	AC	19	657947	6339548	320	-60	225
LGAC0097	AC	29	658015	6339623	315	-60	225
LGAC0098	AC	20	658088	6339694	319	-60	225
LGAC0099	AC	15	658153	6339763	310	-60	225
LGAC0100	AC	27	658222	6339835	324	-60	225
LGAC0101	AC	52	658294	6339907	322	-60	225

TABLE 2: Significant drilling assay results. Intervals are calculated with a lower cut-off of 0.1 g/t Au with up to 1m of below cut-off internal dilution included. Higher grade intervals reported >1 g/t Au. No top-cut applied. All widths quoted are downhole widths, true widths are not known at this stage. * denotes end of hole (EOH) interval.

Hole ID	Hole **Type **	Total Depth(m)	Depth From(m)	Depth To(m)	Length (m)	Au (g/t)
LGAC0058	AC	68	52	55	3	0.35
LGAC0091	AC	62	56	62*	6	0.28
LGAC0101	AC	52	42	46	4	0.17
and			49	51	2	0.11

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APPENDIX 2: JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data – Lake Grace JV Aircore Drilling

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

Criteria	JORC Code explanation Commentary
Sampling techniques	Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. The results in this release relate to holes LGAC0028-LGAC0101 all drilled within the Lake Grace JV (Cygnus Gold 49%, diluting to 25%).
	Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. Sampling was undertaken under Cygnus Gold’s standard procedures including QAQC. The laboratory also applied QAQC protocols. One metre samples were collected from individual plastic bags using a spear sampler, although scoops were used where the spear method was unsuitable (e.g. when the sample was wet). A four-metre composite was then made up these individual one metre samples to obtain an approximately 2.5 - 3kg sample. An individual one metre ‘end of hole’ sample was also collected for submission.
	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. All samples are pulverised at the lab to 85% passing -75µm to produce a 50g charge for Fire Assay with an ICP-AES finish.
Drilling techniques	Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). Aircore drilling with a blade bit was completed to “refusal”, giving 1-2m of fresh bedrock sample. Where possible lengths of 3-12m of hammer drilling was undertaken with a face sampling hammer bit. Drill holes were angled perpendicular to the interpreted stratigraphy. The program was supervised by experienced Cygnus Gold geologists.
Drill sample recovery	Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. One metre samples were collected in individual plastic bags via a cyclone on the rig. Sample recovery was estimated visually and was generally around 80-90% but may be as low as 30-40% in some near surface samples.

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Criteria	JORC Code explanation Commentary
	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 logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Samples were wet sieved and logged for colour, weathering, grain size, major lithology (where possible) along with any visible alteration, sulphides or other mineralisation The entire hole is logged by experienced geologists employed by Cygnus Gold using Cygnus Gold’s logging scheme. The level of detail is considered sufficient for early stage exploration of the type being undertaken here.
	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. Geological logging is qualitative whereas magnetic susceptibility are quantitative All chip trays are photographed in the field.
	The total length and percentage of the relevant intersections logged. All holes are logged over their entire length.
Sub-sampling techniques and sample preparation	If core, whether cut or sawn and whether quarter, half or all core taken. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is representative of the in-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. Samples were composited over 4m intervals with a 1m end of hole sample also collected. Samples were generally dry and duplicate samples were taken at the frequency of 1 duplicate per 50 samples. All samples were prepared at the ALS Laboratory in Perth. All samples were dried and pulverised to 85% passing 75µm and a sub sample of approximately 200g retained. A nominal 50g charge was used for the fire assay analysis. The procedure is industry standard for this type of sample and analysis. Sample sizes are considered appropriate given the particle size and the need to keep 4m samples below a targeted 3kg weight which meet the targeted grind size using LMS the mills used in sample preparation by ALS.
Quality of assay data and laboratory tests	The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. Samples were analysed at ALS Laboratory, Perth. The analytical method used was a 50g charge for Fire Assay with an ICP-AES finish for gold only. This method gives a near total digest of the sample and is considered appropriate for the material and mineralisation.

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Criteria	JORC Code explanation Commentary
	Representative samples were also analysed using the ALS method ME-MS61 which is a four-acid digest with an ICP-MS or ICP-OES finish depending on the element being reported with Cygnus requesting analyses for 48 elements. Four acid digestion is considered a ‘near total’ digest.
	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. Magnetic susceptibilities were recorded in the field using a magROCK magnetic susceptibility metre with a sensitivity of 1x10-5SI units.
	Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established. Cygnus has submitted a mix of Certified Reference Materials (CRMs) and blanks at a rate of five per 100 samples. Umpire checks are not required for early stage exploration projects.
Verification of sampling and assaying	The verification of significant intersections by either independent or alternative company personnel. Significant results are checked by the Project Geologist and Competent Person in addition to checks by the Database Manager.
	The use of twinned holes. No twined holes have been completed at this early stage of exploration.
	Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. All field logging is carried out on a laptop using Ocris Mobile software. Logging data is submitted electronically to the Database Manager based in Perth. Assay files are received from the lab electronically and all data is stored in the Company’s SQL database managed by Expedio Ltd in Perth.
	Discuss any adjustment to assay data. No assay data is adjusted.
Location of data points	Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Aircore collars were determined by handheld GPS, which are considered accurate to ±5m in Northing and Easting.
	Specification of the grid system used. The grid system used is MGA94 Zone 50 (GDA94).
	Quality and adequacy of topographic control. RLs are allocated to the hole collar using a DTM derived from detailed topography. The accuracy is estimated to be better than 2m in elevation.
Data spacing and distribution	Data spacing for reporting of Exploration Results. Aircore lines are spaced between 400 and 2,000m apart with holes spaced ~100m along lines.
	Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. The current drill spacing is broad and designed to follow up regolith anomalism and structural targets identified from regional geophysical surveys.
	Whether sample compositing has been applied. Samples were composited over 4m intervals except for the ‘end of hole’ sample which is a single, 1m sample of the last metre of drilling.
Orientation of data in relation	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. Drilling is orthogonal to the general trend of stratigraphy.

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Criteria	JORC Code explanation	Commentary
to geological	If the relationship between the drilling orientation and the	Drill holes are angled perpendicular to the interpreted stratigraphy.
structure	orientation of 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.	Samples were placed in calico bags which were then placed in larger polyweave bags and sealed with
security		cable ties before transport to the laboratory in Perth by B&J Bracknell Haulage (approximately 300km by
		road). The sample dispatches were accompanied by supporting documentation, signed by the site project
		geologist, which outlined the submission number, number of samples and preparation/analysis instructions.
		Samples were logged prior to being sampled.
		ALS maintains the chain of custody once the samples are received at the preparation facility, with a full
		audit trail available via the ALS Webtrieve site.
Audits or	The results of any audits or reviews of sampling	Sampling and assaying techniques are considered to be industry standard. At this stage of exploration, no
reviews	techniques and data.	external audits or reviews have been undertaken.

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Section 2 Reporting of Exploration Results - Stanley Aircore Drilling and Ground Gravity Survey

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

Criteria	JORC Code explanation Commentary
Mineral tenement and land tenure status	Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The drill holes reported here were all drilled within E70/4853 (Lake Grace tenement) which is subject to an earn-in, joint venture agreement with Gold Road Projects Pty Ltd, a 100% owned subsidiary of Gold Road Resources Ltd. The landownership within E70/4853 is mostly freehold, and Cygnus has Land Access Agreements according to the Mining Act 1978 (WA) with the underlying landowners that own the ground. Cygnus has signed a standard Indigenous Land Use Agreement (ILUA) for E70/4853.
	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. The Lake Grace tenement (E70/4853) is in good standing with the Western Australian Department of Mines, Industry Regulation and Safety (DMIRS). Cygnus is unaware of any impediments for exploration on this licence.
Exploration done by other parties	Acknowledgment and appraisal of exploration by other parties. Historical exploration within E70/4853 has comprised the following: • 1994 to 1995: North Limited explored the Lake Grace area as part of their larger 400km2Southwest Yilgarn Gold Project. The Panhandle Prospect, located within the northern corner of the current E70/4853, was discovered during a program of airborne geophysics and soil sampling (412 samples total). The Panhandle gold anomaly was interpreted as being spatially coincident with subcropping mafic granulite. The anomaly was subsequently tested with a 53 hole aircore program which failed to further delineate the anomaly. • 2003 to 2008: The Lake Grace area was explored during this period by Dominion as part of their larger Newdegate gold super-project, which spanned ~2,000km2. Most of the exploration work carried out by Dominion during this time too place outside the boundary of the current EL70/4853, with the exception of 86 roadside samples which returned a peak gold value of 8.5ppb Au. • 2013 to 2014: The Lake Grace project area was explored by Auzex Exploration Ltd as part of a joint venture with Panoramic Resources Ltd. During this time, exploration work on the current EL70/4853 comprised desktop-based gold prospectivity modelling and geophysical interpretation. Refer to the Independent Technical Assessment Report within Cygnus’ Prospectus dated 22 November 2017 for details of and references to the previous work.
Geology	Deposit type, geological setting and style of mineralisation. Cygnus’s projects are located in the Southwest Terrane of the Archaean Yilgarn Craton. Project-scale geology consists of granite-greenstone lithologies that were metamorphosed to amphibolite to granulite facies grade. The Archaean lithologies are cut by Proterozoic dolerite dykes. Mineralisation observed to date is similar in style to that at the nearby Katanning, Tampia and Griffins Find gold deposits. These deposits, classified as metamorphosed orogenic lode deposits, are characterized by multiple stackedlodes up to25mthickand greaterthan 1,000m longinquartz richgneiss andfelsic to

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Criteria	JORC Code explanation Commentary
	intermediate granulite. Narrow high-grade ore shoots (>10 g/t Au) are commonly enclosed within broader low-grade envelopes (<2 g/t Au) hosting the bulk of the ore at these deposits. Gold is commonly associated with pyrrhotite, pyrite, chalcopyrite, magnetite ± molybdenite. Quartz veins are rare. The mineralization is controlled by the schistosity of the metamorphosed host rocks and plunging folds preserved in these rocks. Please refer to the Independent Technical Assessment Report within Cygnus’ Prospectus dated 22 November 2017 for more detail.
Drill hole Information	A summary of all information material to the understanding of the exploration results 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 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. All assay and collar information are tabulated in Appendix 1 of this report. All significant intercepts are reported at a 0.1 g/t Au cut-off. Summaries of previous significant drill intersections at Lake Grace (including JORC Table 1 information) are provided in the Independent Technical Assessment Report within Cygnus’ Prospectus dated 22 November 2017.
Data aggregation methods	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. Intersection lengths and grades for all holes are reported as a down-hole, length weighted average of grades above a cut-off of 0.1 g/t Au. Lower grade intervals are quoted to provide context for significant intervals.
	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. Intersection lengths and grades for all holes are reported as a down-hole, length weighted average of grades above a cut-off of 0.1 g/t Au and may include up to 1m of ‘internal waste’ below that cut-off. Details of all intersections are included in Appendix 1 in the body of the announcement.
	The assumptions used for any reporting of metal equivalent values should be clearly stated. No metal equivalent values are reported.
Relationship between mineralisation widths and	These relationships are particularly important in the reporting of Exploration Results. Drill hole intersections are reported down hole, and true width is unknown.

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Criteria	JORC Code explanation	Commentary
intercept	If the geometry of the mineralisation with respect to the
lengths	drill hole angle is known, 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 scales) and	Refer to the figures in the body of this announcement for relevant plans including a tabulation of intercepts.
	tabulations of intercepts 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.
Balanced	Where comprehensive reporting of all Exploration Results	Intersection lengths and grades are reported as down-hole, length weighted averages of grades above a
reporting	is not practicable, representative reporting of both low and	cut-off (0.1 g/t Au).
	high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	Numbers of drill holes and metres are included in the body of the announcement.
Other	Other exploration data, if meaningful and material, should	No other substantive exploration data is available for reporting.
substantive	be reported including (but not limited to): geological
exploration	observations; geophysical survey results; geochemical
data	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	Follow up AC drilling is planned to expand and infill the current survey. Selected deeper RC and/or
	lateral extensions or depth extensions or large-scale step-	diamond drilling is planned to test stratigraphy below significant intersections.
	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.

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