EMERALD RESOURCES NL — Interim / Quarterly Report 2016

Apr 25, 2016

26 April 2016

ASX Announcement

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QUARTERLY ACTIVITIES AND CASHFLOW REPORT 31 March 2016

The Board of Emerald Resources NL ( EMR or Company ) is pleased to announce the Quarterly Activities Report and Appendix 5B Quarterly Cashflow Report for the period ended 31 March 2016.

Yours sincerely,

MORGAN HART Managing Director

Emerald Resources NL ACN 009 795 046 1110 Hay Street, WEST PERTH, WA, AUSTRALIA, 6005 PO Box 1408 West Perth WA 6872 T: 1300 729 543 F: 1300 729 528 E:info@emeraldresources.com.au

Quarterly Activities Report – March 2016

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Joint Venture with Renaissance Minerals Limited (ASX:RNS) – Cambodian Gold Project

As announced on 29 January 2016, EMR’s Board and team of highly experienced mining consultants have been engaged in evaluating suitable projects in the energy and broader resources sector to assess their commercial value in the current investment climate.

Following a due diligence program, including geological and technical analysis, site visits and legal review, on 3 February 2016, the Company advised that it had entered into a legally binding Memorandum of Agreement (MoA) with Renaissance Minerals Limited (Renaissance)(ASX:RNS) whereby Emerald may earn up to a 51% interest in Renaissance’s Cambodian Gold Project by sole funding a Definitive Feasibility Study (DFS) for the development of Okvau Gold Deposit inclusive of an Environmental and Social Impact Assessment (ESIA) and a 2 year exploration program of US$3 million.

Cambodian Gold Project

The Okvau Gold Project and adjoining O’Chhung licences which also form part of the MoA cover approximately 400km[2] of project area and are located within the core of a prospective Intrusive Related Gold province in the eastern plains of Cambodia (Cambodian Gold Project). The Project is located in the Mondulkiri Province of Cambodia approximately 265 kilometres north-east of the capital Phnom Penh (Figure 1).

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Figure 1: Location of Okvau and O’Chhung licences

Emerald Resources NL ACN 009 795 046

Quarterly Activities Report – March 2016

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An independent JORC Indicated and Inferred Resource estimate of 15.8Mt at 2.2g/t for 1.131Moz of gold was completed for the Okvau Deposit in July 2015 (as announced by Renaissance on 27 July 2015)(Appendix 1). Importantly, approximately 85% the resource estimate is in the Indicated category. The resource estimate comprises 13.2Mt at 2.3g/t gold for 0.96Moz of gold in the Indicated resource category plus 2.7Mt at 2.0g/t gold for 0.17Moz of gold in the Inferred resource category (Appendix 1).

Renaissance completed a Pre-Feasibility Study (Study) in July 2015 for the development of a 1.5Mtpa operation based only on the Okvau Deposit via an open pit mining operation. The Study was completed to +/-20% level of accuracy and there has been no material change.

The Study demonstrates the potential for a robust, low cost development with an initial Life of Mine of 8 years, producing on average 91,500 ounces of gold per annum via conventional open pit mining methods from a single pit to be mined in three stages. A summary of these results based on the ASX market release dated 27 July 2015 by Renaissance is set out in Appendix 2.

Farm-in and Joint Venture Agreement

On 30 March 2016, the Company announced that it had executed a Farm-in and Joint Venture Agreement (Agreement) with Renaissance as contemplated by the MoA.

The material terms of the Joint Venture are as follows;

• Emerald’s interest in the Joint Venture will be progressive, based on a combination of exploration expenditure and Definitive Feasibility Study (DFS) completion as shown below:

	Cumulative Exploration Spend (non DFS costs) DFS Status Time Emerald Interest US$0.5 million N/A 9 months 5% US$2.5 million N/A 24 months 30% US$3.0 million Completed 24 months 51%

• Completion of a DFS is to include the completion of an ESIA;

• Emerald will be the manager of the DFS. Renaissance and Emerald will be joint managers of the exploration program until such time that Emerald has earned its 51% interest. All Joint Venture decisions regarding development commitments and development expenditure will be subject to a 75% voting approval;

• Emerald may only withdraw from the Joint Venture after 6 months and spending a minimum of US$0.5 million. If Emerald elects to withdraw prior to completing a DFS and has earned a 30% interest, Renaissance can opt to dilute Emerald to a 10% interest by spending US$2 million. If either party dilutes to a 10% interest the other party may elect to convert that party’s interest to a 2% royalty;

• Provision for further opportunities secured by either party in Cambodia will form part of the Joint Venture;

• Customary mutual pre-emptive rights, expenditure and dilution formulas will apply.

Emerald Resources NL ACN 009 795 046

Quarterly Activities Report – March 2016

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Emerald and Renaissance have agreed the standard of DFS that Emerald is required to complete. This is based on a comprehensive criteria and to a level of accuracy that will be acceptable to bona-fide project financiers.

As at the date of this report, the Agreement remains subject to the following conditions precedent:

• ASX granting Emerald conditional approval for the securities in Emerald to be re-instated to trading on the ASX following re-compliance with Chapters 1 and 2 of the ASX Listing Rules; and

• Renaissance and Emerald obtaining necessary approvals and consents from the Cambodian Government.

Placement

The Company also subscribed for 57.4 million shares in Renaissance as part of an equity placement of 114.8 million shares at 3 cents per share to raise $3.4 million. The remaining 57.4 million shares have been placed to institutional and sophisticated investors. Emerald now holds a 10% interest in Renaissance and has nominated Ross Williams as a Non-Executive Director to the Renaissance Board.

New Projects

EMR continues to identify complementary projects in the energy and broader resources sector and evaluate their commercial value in the current investment climate. As part of this process, EMR has engaged highly experienced mining consultants who have achieved a significant level of commercial success in developing global resource projects and maximising shareholder returns.

Appalachian Gas - Magoffin County, Kentucky

(Emerald 5% Overriding Royalty Interest)

The Company has a 5% overriding royalty interest in all gas production from various oil and gas interests located in Magoffin County, Kentucky (Leases). The royalty interest continues over any new oil and gas lease where that new oil and gas lease is in respect of any part of an area that was the subject of the Leases that may be relinquished, surrendered or not renewed.

During the quarter, there was no product recovered and sold from the Leases and the royalty received for the period was nil.

Emerald Resources NL ACN 009 795 046

Quarterly Activities Report – March 2016

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Corporate

Directors

Mr Simon Lee AO - Chairman Mr Morgan Hart - Managing Director Mr Ross Stanley - Non Executive Director Mr Ross Williams - Non Executive Director

Change of Activities

The proposed transaction with Renaissance constitutes a change in the nature and scale of activities from oil and gas in the United States to gold exploration and development in Cambodia.

As such, Emerald was required pursuant to Listing Rule 11.1.2 to obtain approvals from shareholders to progress with the transaction and this was provided at the general meeting of shareholders held on 31 March 2016. Emerald was also required, pursuant to Listing Rule 11.1.3 to re-comply with Chapters 1 and 2 of the ASX Listing Rules.

As part of the recompliance process, Emerald issued a prospectus for a nominal capital raising and only to satisfy the requirements of Chapters 1 and 2 as the Company does not presently require any additional capital. On this basis, there was no material change to Emerald’s current capital structure and the prospectus was closed on 1 April 2016.

As at the date of this report, Emerald’s shares are suspended from trade pending ASX’s approval of the Company’s recompliance with Chapters 1 and 2 of the ASX Listing Rules and completion of the transaction with Renaissance.

Cash and Cash Equivalents

At 31 March 2016 the Group had $14.76m cash on hand (31 December 2015: $16.85m) and investments in ASX listed companies, including Renaissance, of $2.82m (31 December 2015: $0.9m).

Issued Capital

Issued capital as at 31 March 2016 was 1,306,594,114 fully paid ordinary shares.

Emerald Resources NL ACN 009 795 046

Quarterly Activities Report – March 2016

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Public Announcements

The Company made the following announcements since 1 January 2016 to the date of this report:

Date	Headline
1/04/2016	Prospectus Offer Closed Fully Subscribed
31/03/2016	Results of Meeting
31/03/2016	Suspension Request
31/03/2016	Suspension from Official Quotation
30/03/2016	Prospectus
30/03/2016	RNS: Execution of Joint Venture Agreement
30/03/2016	Joint Venture Agreement Signed With Renaissance
7/03/2016	Half Yearly Report and Accounts
29/02/2016	Notice of General Meeting/Proxy Form
22/02/2016	Change of Director's Interest Notice
15/02/2016	Revised Notice of Change of Substantial Holding
12/02/2016	Change in substantial holding
12/02/2016	Becoming a substantial holder
12/02/2016	Change of Director's Interest Notices
11/02/2016	Change in substantial holding
10/02/2016	Change of Director's Interest Notice
9/02/2016	Becoming a substantial holder for RNS
3/02/2016	Emerald To Earn Into Okvau Gold Deposit
3/02/2016	RNS: Renaissance Secures Funding and Development Partner
1/02/2016	Trading Halt Request
1/02/2016	Trading Halt
29/01/2016	Quarterly Activities and Cashflow Report December 2015

For more information please contact:

MORGAN HART Managing Director

Emerald Resources NL ACN 009 795 046

Quarterly Activities Report – March 2016

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Appendix 1 -Okvau Mineral Resource Estimate - July 2015

	July	2015	JORC Resource	(0.6g/t gold cut-off)
			Tonnage	Grade	Gold
			(Mt)	(g/t Au)	(Koz)
Indicated			13.2	2.3	962
Inferred			2.7	2.0	169
Total			15.8Mt	2.2g/t	1,131

Appendix 2 – Okvau Pre-Feasibility Study Results – refer to ASX release dated 27 July 2015[1]

Inferred 2.7 2.0 169 Total 15.8Mt 2.2g/t 1,131 Appendix 2 – Okvau Pre-Feasibility Study Results – refer to ASX release dated 27 July 20151	Inferred 2.7 2.0 169 Total 15.8Mt 2.2g/t 1,131 Appendix 2 – Okvau Pre-Feasibility Study Results – refer to ASX release dated 27 July 20151	Inferred 2.7 2.0 169 Total 15.8Mt 2.2g/t 1,131 Appendix 2 – Okvau Pre-Feasibility Study Results – refer to ASX release dated 27 July 20151
In Pit Mineral Resource 11.6Mt @ 2.2g/t gold for 829,000 ounces contained LOM Strip Ratio (waste:ore) 7.7:1 Throughput 1.5Mtpa Life of Mine 8 years Processing Recovery 85% Average Annual Production Target 91,500 ounces Pre-production Capital Costs2 US$120M Gold Price US$1,100/oz US$1,250/oz US$1,400/oz LOM Net Revenue (net of royalties3 & refining) US$756M US$860M US$964M Operating Cash Flow Before Capital Expenditure US$272M US$376M US$479M Project Cash Flow After Capital Expenditure US$142M US$245M US$349M NPV4 (5%) US$90M US$174M US$257M Payback 3.2 years 2.6 years 1.9 years IRR pre-tax 21% pa 35% pa 47% pa IRR post-tax (excluding any incentives) 19% pa 29% pa 38% pa LOM C1 Cash Costs5 US684/oz US$684/oz US$684/oz LOM All-In Sustaining Costs(‘AISC’)6 US$731/oz US$735/oz US$738/oz
	In Pit Mineral Resource LOM Strip Ratio (waste:ore) Throughput Life of Mine Processing Recovery Average Annual Production Target Pre-production Capital Costs2 Gold Price LOM Net Revenue (net of royalties3 & refining) Operating Cash Flow Before Capital Expenditure Project Cash Flow After Capital Expenditure NPV4 (5%) Payback IRR pre-tax IRR post-tax (excluding any incentives) LOM C1 Cash Costs5 LOM All-In Sustaining Costs(‘AISC’)6	11.6Mt @ 2.2g/t gold for 829,000 ounces contained 7.7:1 1.5Mtpa 8 years 85% 91,500 ounces US$120M US$1,100/oz US$1,250/oz US$1,400/oz
		US$756M US$860M US$964M US$272M US$376M US$479M US$142M US$245M US$349M US$90M US$174M US$257M 3.2 years 2.6 years 1.9 years 21% pa 35% pa 47% pa 19% pa 29% pa 38% pa US684/oz US$684/oz US$684/oz US$731/oz US$735/oz US$738/oz

1Renaissance has 100% ownership with no third party or Government equity interests and therefore economics are 100% attributable to Renaissance Under the proposed terms of the Joint Venture with Emerald, the ownership interest of Renaissance is subject to change.

2 Capital Costs include working capital and 10% contingency

3 Government royalty fixed at 2.5% of gross revenue

4 After royalties but before corporate tax

5 C1 Cash Costs include all mining, processing and general & administration costs

6 AISC include C1 Cash Costs plus royalties, refining costs, sustaining capital and closure costs

Competent Persons Statement

The information in this report that relates to the Mineral Resources for the Okvau Gold Deposit was prepared by International Resource Solutions Pty Ltd (Brian Wolfe), who is a consultant to Renaissance Minerals Limited, who is a Member of the Australian Institute of Geoscientists (AIG), and has sufficient experience 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 by the 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Wolfe consents to the inclusion of the matters based on his information in the form and context in which it appears.

Emerald Resources NL ACN 009 795 046

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

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

Name of entity

	Name of entity
	Emerald Resources NL
	ABN 009 795 046 Consolidated statement of cash flows
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) NetOperating Cash Flows		Current quarter $A’000		Year to date (9 months) $A’000
		- - - - (141) - 137 - - -		- (149) - - (418) - 431 - - -
		(4)		(136)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- (1,890) - - - 104 - - -		- (2,834) - - - 104 - - -
		(1,786)		(2,730)
		(1,790)		(2,866)

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	(1,790)	(1,790)	(2,866)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (costs of prospectus) Net financing cash flows			1 - - - - (298)		1 - - - - (298)
			(297)		(297)
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter			(2,087) 16,853 -		(3,163) 17,929 -
			14,766		14,766
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
1.23 1.24		Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10		Current quarter $A'000
				32
				-
1.25 Explanation necessaryfor an understandingof the transactions The amount above includes payments to directors and to companies associated with the directors for this quarter. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/A 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest N/A		Explanation necessaryfor an understandingof the transactions
		The amount above includes payments to directors and to companies associated with the directors for this quarter.
	N/A
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	N/A

• See chapter 19 for defined terms.

Appendix 5B Page 2

17/12/2010

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

	Financing facilities available Add notes as necessary for an understanding of the position.
	3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
		Nil	Nil
		Nil	Nil

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	657
	-
	-
	180
Total	837

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	1,946	133
	12,820	16,720
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	14,766	16,853

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	N/A
	N/A

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions	N/A
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital,buy-backs	1,306,594,114	1,306,594,114
	-	-	-	-
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured,converted	N/A
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	20,000,000	-	Exercise Price $0.025	Expiry Date 21 January 2020
	-
	-
	-
7.11 Debentures (totals only)	N/A
7.12 Unsecured notes (totals only)	N/A

• See chapter 19 for defined terms.

Appendix 5B Page 4

17/12/2010

Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

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

MARK CLEMENTS Company Secretary

26 April 2016

Notes

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

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of inte2ests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 5