DATELINE RESOURCES LIMITED — Capital/Financing Update 2019

Feb 10, 2019

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22 January 2019

Company Announcements Office Australian Securities Exchange Limited Exchange Centre 20 Bridge Street Sydney NSW 2000

Letter to Shareholders – Important information

Dear Shareholders,

I am writing to you in my new capacity as the Chief Executive of Dateline Resources. First, I would like to introduce myself and tell you why I took on this role. I am a qualified mining engineer with a Master’s Degree in Mineral Economics. I have worked in the mining and resource industry for over 30 years. Much of my time has been working with medium scale gold mining companies. In my last role as Chief Executive of Millennium Minerals Limited, I lead the change which resulted in Millennium transitioning from a high cost, high debt company with a market cap of only $5.8M to a profitable, debt free company with a market cap of $217M in just over two years.

Since leaving Millennium Minerals I have been reviewing data to identify a new opportunity which I consider has enormous potential. Like many in the industry I was not aware of the significance of Dateline’s Colorado assets and it wasn’t until I undertook an in-depth review of the data and assets that I saw an extraordinary opportunity. When the opportunity came along to join the Board and become the Chief Executive I did not hesitate to do so.

The Data

There is a large body of data and records concerning the project area, and Dateline has commenced review of this body of data by a Competent Person. The data is compelling and includes the history of mining and exploration activities dating back 130 years within the Gold Links Project area.

This area of more than 2,000 acres includes 4 historic mines and extends over 4 kilometres along Gold Creek in Gunnison county.

The key points are:

• Over 150koz of high-grade gold was mined from four gold zones; (ASX: DTR 8 Feb 2019).

• Veins mined in the gold zones had the same orientation, were steeply dipping and ranged from 0.5m to 4m in thickness. (ASX: DTR 8 Feb 2019).

• High grade ore extracted from the Lyons winze in 1915, with 9 reported grades indicating a range between 89g/t to 287g/t; and similar ore extracted from the Morris winze in 1922, with 5 reported grades , indicating a range between 81g/t to 240g/t (ASX: DTR 8 Feb 2019).

• Dateline’s recently completed sampling of 2150 vein ranging from 0.7m @ 0.07 g/t to 1.2m @ 250 g/t, including assays of 1.2m @ 38g/t, and a grab sample of 151 g/t (ASX: DTR 8 Feb 2019).

• Adits were driven from the valley floor to access known gold zones.

• Numerous veins were intersected in the adits but were never fully explored nor developed.

• Although limited, exploration and development below the adit levels confirm that mineralisation exists below the previous workings. (ASX: DTR 8 Feb 2019).

• With modern geology and geochemistry the ore zones are now well understood, continuous and easy to identify.

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All the data tells me that this could be a very high-grade gold system and that there is a high potential for extensions along strike at the depth of the existing four known gold zones, coupled with numerous unexplored stacked ore zones.

I believe the Gold Links Project has the potential to be a large, high-grade gold system and Dateline will commence realising this potential.

The Site Visit

I visited the site in October 2018 with Mark Johnson (Dateline Chairman) and Stephen Baghdadi (Dateline Executive Director). I could see first-hand the work that had been done by Dateline to significantly de-risk the project. This included:

• Acquiring the freehold land that hosts the mineralisation. In the USA, owning the freehold means owning the mineralisation below it;

• Digitising historic maps, exploration and production reports;

• Linking vendor payments to production;

• Drilling and sampling the project area and intercepting high values of gold (ASX:DTR 21 Feb, 10 Oct and 27 Nov 2018).

• Validating some of the exceptional historical exploration data by re-assaying drill core (ASX: DTR 10 Oct 2018);

• Consolidating the 250+ separate mining claims into a single entity;

• Securing a 100% owned and fully operational processing plant, modernised in 2013 by the former owners at a cost of US$6m with all approvals in place.

• Ensuring all permits and approvals to commence exploration, development, mining and processing activities are in place; and,

• Recruiting a highly competent operational team capable of executing the company’s plans in Colorado.

In 2018 a small block of ore was mined near surface within the Gold Links Project area and processed. Flotation concentrate grades of up to 767 g/t Au (ASX: DTR 30 Jul 2018).

Metallurgy and ore processing are usually one the biggest impediments for companies to move into the production phase. Dateline has the advantage of knowing that there are no metallurgical impediments, nasty bi-products or costly metallurgical test-work required to successfully process the ore.

All the hard work, time and effort that has already been completed for Dateline to allow for a smooth, quick and low-cost transition from exploration to production. For many exploration companies this process can take between 3 to 5 years to complete after exploration drilling has been finalised. For Dateline it will be under twelve months. This is a significant advantage and rare for a start-up project to be in such an advanced position.

The Strategy

The Board is confident that there is potential for extensions along strike and at depth of the existing four known gold zones, based on historical information and site evaluation by the company. There is similar potential in several unexplored stacked ore zones which, if realised, will mean that Dateline Resources will become a longterm, mid-tier gold producer.

To achieve this Dateline Resources has decided on a simple but effective strategy, to look for more gold directly below and in between where gold has previously been found.

On completion of the first drilling target Dateline will review the results and evaluate potential mining methods, processing and production rates and future exploration with the objective of becoming a mid-tier gold producer with a long mine life. The timeline for our exploration programme indicates extension of the existing Reynolds

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decline commencing in March, followed by diamond drilling and then resources modelling, to be completed by the fourth quarter of 2019.

The Initial Target

The initial target is directly below a mined section of the 2150 vein which is intersected by the Reynolds Adit. See Figure 1 below.

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Figure 1 - Long section of the Gold links Project Area and First Target

Figure 2. shows a close-up of the first target. It was chosen due the quantum of data indicating a strong likelihood that the ore zone will extend down dip.

• 50,000 ounces was previously produced from this zone (ASX: DTR 8 Feb 2019)

• High grade ore extracted from the Lyons winze in 1915, with 9 reported grades indicating a range between 89g/t to 287g/t; and similar ore extracted from the Morris winze in 1922, with 5 reported grades , indicating a range between 81g/t to 240g/t (ASX:DTR 8 Feb 2019)

• Recent sampling returned values up to 250g/t (ASX: DTR 27 Nov 2018)

• Dateline validated the 1977 C8 drill hole grading 91g/t over 1.2 m true width confirms continuity of grade 80m below main workings. (ASX: DTR 10 Oct 2018)

• Exploration Target tonnage ranges are based on average width of historical intersections which range between 0.15m to 7m (average of 1.2m), length 610m and depth of 350m. Dip angle of 65 degrees and sg of 2.7 gm/cc Wireframes were created and reduced and expanded by 12.5% to create range.

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Figure 2 – 2150 Vein / Reynolds Adit

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• Grade ranges were derived from historical data and recent announcements. Grade averages from the data ranged from 38g/t up to 177g/t. Due to the large variability of the average grades, Dateline will take a highly conservative approach and assign a grade range of 13g/t to 17g/t.

The metrics of the exploration target are tabled below

Tonnes	Grade	Ounces Au
520,000 - 650,000 t	**13 – 17g/t **	250,000 - 300,000 oz Au

An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade, relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource. The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

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Figure 3 – Drill Program

Work Program

Mar – Jul 19

Develop existing Reynolds decline to the south approximately 150m then turn to north intersecting the Reynolds Adit on the 9,600 level. Continue decline north 460m. See figure 3 below.

Mar – Aug 19 Diamond drill fans at 60m centres from decline, for a total of 9,150m. Apr – Oct 19 Assay return and analysis. Sep – Oct 19 Resource modelling and project evaluation. Apr – Nov 19 Desktop Study of production options.

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Expected Costs and Duration

The costs and duration of the program are listed below (AUD):

Cost item Duration Salaries and Wages 9 months Fixed on-costs 9 months Variable on-costs 9 months Exploration Decline 5 months Diamond Drilling and assay 6 months Geophysical survey 3 months TOTAL	Total cost $710k $340k $610k $3.1M $2.25M $330k
	$7.34M

The total estimated cost to undertake this exploration program, which aims to produce a geological Inferred Resource model, is $7.34M over a nine-month period. The Board will aim to evaluate this model and devise a forward looking strategy prior to the conclusion of the 2019 calendar year.

Expected outcomes

There are two outcomes Dateline wants to achieve from this drilling program.

First, is to produce a mineral resource that can produce an economic model which can be used to evaluate mining, processing and production options. Although further drilling will be required to produce a reserve model that can be used for a Bankable Feasibility Study (BFS), the model will provide the Company with an understanding of the likely production costs and potential production levels that could be achieved in future mining operations. After a review of this evaluation the Board will decide whether to continue down the path of a BFS.

Second, is to prove the mineralised zone extends down dip and along strike as expected. Again, by producing an Inferred Resource model we will understand the quantum with respect to both grade and tonnes that we can expect from future exploration drilling. It will also provide the company confidence to commence targeting other highly prospective targets that are drill ready.

For me, the exciting part of this program is that by December 2019 Dateline should have a greater understanding of how big this project could ultimately become and a clear path forward on realising its full potential. The Board and I believe this could turn into a high-grade large gold system that has the potential to be mined in multiple locations simultaneously. This program is the first step to proving this.

Price of Capital Raising

Why is the Renounceable Rights Issue priced at $0.002 per share?

Shareholders are aware that the rights issue in March 2018 failed. If the company did not continue to have access to funds at that time all of the assets would have been lost. The two biggest shareholders, Southern Cross Exploration and Mark Johnson provided loan funds to get the company to its present position. However, allowing further debt to accumulate would have ultimately led to tension between the debt providers and the shareholders.

No underwriters were prepared to support the full amount of the rights issue, so the Board decided the price of the issue had to be sufficiently low to virtually guarantee success. Both Southern Cross Exploration and Mark Johnson have agreed to convert their debt to shares at the same price.

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Why Dateline Resources?

For me, I have spent most of my working life within the gold mining industry. I have been involved in many highly successful mining projects but to come across the Gold Links project, that is, high-grade, undeveloped and with great potential is rare. It is unlikely a project such as this would be sitting idle in Australia if one even existed.

Of course, nothing is guaranteed, there is always risk in resource projects but the efforts of Stephen Baghdadi, the Board and the support from a few major shareholders over the last two years in consolidating this project has significantly reduced that risk. In the end, proof will be in the drilling and exploration of the project area and until we do this, we will not know how extraordinary this project could become.

I hope the shareholders who have supported the company over the years can see what I see and stay the course and continue to invest in the Company. However, everyone needs to make their own decision.

As most of you will be aware the closing date for the Renounceable Rights Issue is 31[st] January 2019. This will be the last chance for shareholders to take up all or part of their entitlements or apply for additional new shares.

If you have any questions, please contact me or Stephen Baghdadi on the contact numbers below, and please look at the presentation to the AGM on November 30, 2018 on our website: www.datelineresources.com.au

Regards,

Glenn Dovaston

CEO – Dateline Resources

Glenn Dovaston - 0458 269 876 Stephen Baghdadi - 0408 909 090

An application form for the Renounceable Rights Issue is enclosed. Closing date is 31[st] January 2019.

For ineligible shareholders that have or intend to purchase Entitlements on Market or via a third-party (ASX:DTRR). Please contact your broker or John Smith on (02) 8072 0665 for instructions on how to apply for entitlements and any additional shares.

Disclaimer – Important Information

Dateline, its directors, officers, employees, advisers and agents disclaim liability for any loss or damage suffered by reliance on information contained in this letter when making investment decisions. In addition, no express or implied representation or warranty is given in relation to the completeness and sufficiency of the information, opinions or beliefs contained in this document or any other written or oral information made or to be made available to any interested party or its advisers.

This letter may refer to the intention of Dateline Resources Limited, but it does in no way intend to provide a forecast in relation to future matters for the purposes of the Corporations Act or any other law. Future events are subject to risks and uncertainties, and as such, results, performance and achievements may in fact differ materially from those referred to in this letter.

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While reasonable care has been taken in relation to the preparation of this letter, no liability is accepted for any loss, cost or damage suffered or incurred by the reliance on the sufficiency or completeness of the information, opinions or beliefs contained in this letter

Statements in this letter are made only as of the date of this letter (unless stated otherwise) and the information in this letter remains subject to change without notice.

Research, evaluation and analysis of the Company’s business, data and projects are encouraged before making financial investments. Any estimates, projections or opinions contained herein may involve subjective judgment, analysis and interpretation, and satisfaction of one’s own decisions should be undertaken.

We caution you not to place undue reliance on any forward-looking (or indeed any other) statements contained in this letter.

This letter is provided for general information purposes only. The information contained in this letter is not intended to be relied upon as advice to investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Investors should assess their own financial circumstances and consider talking to a financial adviser or other professional before making any investment decision. We undertake no obligation to update this information.

Any information in this letter relating to exploration targets should not be misunderstood or misconstrued as an estimate of mineral resources or ore reserves. Hence the terms resource(s) or reserve(s) have not been used in this context (or at all). Furthermore, any reference to potential target size, quantity and/or grade is conceptual in nature, since there has been insufficient work completed to define them beyond exploration targets and in any event, it is uncertain if further exploration will result in the determination of a mineral resource.

– Competent Persons Statements Exploration Results

The information in this report that relates to Exploration Results is based on information compiled by Mr Greg Hall who is a Director to Dateline Resources Limited and is a Chartered Professional and Fellow of the Australasian Institute of Mining and Metallurgy (“AusIMM”) and has sufficient experience that is relevant to this style of mineralisation and type of deposit under consideration and to the activity that is being reported on to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results and Mineral Resources”. Mr Hall consents to the inclusion in the report of the matters in the form and context in which it appears.

– Competent Persons Statements Exploration Target

The information in this report that relates to an Exploration Target is based on information compiled by Mr Greg Hall who is a Director to Dateline Resources Limited and is a Chartered Professional and Fellow of the Australasian Institute of Mining and Metallurgy (“AusIMM”). Mr Hall has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken to qualify as a competent person as defined in the JORC Code 2012. Mr Hall consents to the inclusion in the report of the matters based on the information in the form and context in which it appears

Forward Looking Statements:

Any forward‐looking information contained in this news release is made as of the date of this news release. Except as required under applicable securities legislation, Dateline does not intend, and does not assume any obligation, to update this forward‐looking information. Any forward‐looking information contained in this news release is based on numerous assumptions and is subject to all of the risks and uncertainties inherent in the Company’s business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward‐looking information. Readers are cautioned not to place undue reliance on forward‐ looking information due to the inherent uncertainty thereof

Prior Exploration Results

The Company has referred to exploration results first released by the Company on 21 February 2018, 30 July 2018 10 October 2018 and 27 November 2018. The Company confirms that it is not aware of any new information which materially affects the information contained in these announcements.

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About Dateline Resources Limited

Dateline Resources Limited (ASX: DTR) is an Australian publicly listed company focused on gold mining and exploration in Colorado, United States of America. The Company owns 100% of its USA projects which comprise of almost 2,000 acres of brownfields high grade gold properties and a fully operational modern processing plant in Gunnison County Colorado. Several high-grade gold veins have been identified over a 4km strike length within the project area. Smelter and production records from previous mining indicate average grades to be between 15-20g/t gold.

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