EMERALD RESOURCES NL — Interim / Quarterly Report 2021

Jul 29, 2021

ASX Announcement

& Media Release

30 July 2021

Fast Facts

ASX Code: EMR Shares on issue: 515,397,207 Market Cap: ~A$464 million Cash: A$23 million (at 30 June 2021)

Board & Management

Simon Lee AO, Non-Executive Chairman Morgan Hart, Managing Director Mick Evans, Executive Director Ross Stanley, Non-Executive Director Mark Clements, Non-Executive Director and Company Secretary Bernie Cleary, Operations Manager Brett Dunnachie, Chief Financial Officer

Company Highlights

• First mover in an emerging gold province in Cambodia;

• Okvau Deposit: Indicated and Inferred Mineral Resource Estimate of 1.14Moz at 2.0g/t Au;

• Project built in 2021 on time on budget and now in operation;

• Forecast economics demonstrates high grade, low cost, compelling project;

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Quarterly Report for the period ended 30 June 2021

Highlights

Operational and Commissioning Activities - Okvau Gold Project

• Maiden gold pour achieved on schedule

• Gold poured to date of ~US$7.0M of doré and bullion during the commissioning phase

• First ore feed and wet commissioning successfully completed

• Okvau Gold Mine completed on time-on budget

• Subsequent to the end of the Quarter the sulphide float regrind circuit has been fully commissioned and production is rapidly ramping up to nameplate capacity

• Earthmoving activities continued in line with project schedule with first hard rock sulphide ore delivered to the process plant subsequent to the end of the Quarter

Funding

• Consolidated cash at 30 June 2021 was approximately A$23 million

• First gold delivered to the refinery and first out-take received subsequent to Quarter end

COVID-19

• Ore Reserve of 14.3Mt & 2.0g/t Au for 0.9Mozs in a single open pit with waste:ore ratio of 5.8:1;

• LOM average annual production of 106,000ozs pa;

• AISC US$754/oz over LOM (at a US$1,450 gold price assumption);

• Mineral Investment Agreement governs significant tax and duty concessions for first 5 years and includes offshore arbitration process;

• Highly credentialed gold project operational and development team;

• Significant resource growth potential;

• Focussed on a net positive impact on near-mine environmental and social values by targeting strict compliance with corporate governance, international guidelines (IFC PS’s) and local law by engaging and collaborating with all stakeholders.

• The Company continues to prioritise the health and wellbeing of staff, contractors and stakeholders by maintaining stringent protocols to limit the impact of the COVID-19 pandemic on site

• The Company achieved a significant milestone subsequent to Quarter end with the assistance of the Cambodian Ministry of Health by successfully commencing the full site-wide vaccinating of all Okvau mine site staff (in excess of 300 first doses administered). The second (full) vaccine dose for all workers is scheduled for completion in the coming weeks

• Travel between Australia and Cambodia continues to be restricted but is being managed through longer rosters and regional sourcing and the dedication of key employees on site at Okvau

Commenting on the Quarter ended 30 June 2021, Emerald’s Managing Director, Morgan Hart, said:

“The first gold pour is a major milestone for both the Company and for Cambodia as the project becomes the first modern large scale mine to operate in the country. This marks the creation of a new industry for Cambodia bringing opportunities and benefits for the people of Cambodia.”

“Construction activities have been completed on budget and the first gold pour has been completed on schedule despite the logistical challenges brought on by the global pandemic. It is a testament to the skill and experience of the team we have assembled on site throughout this process.”

Registered Office 1110 Hay Street West Perth WA 6005

“Further, the commissioning of the sulphide float regrind circuit subsequent to Quarter end marks the commencement of full production at Okvau and the generation of significant cashflow for all Okvau stakeholders.”

T: +61 8 9286 6300 F: +61 8 6243 0032

W: www.emeraldresources.com.au

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Activities during the Quarter

Okvau Gold Mine

Operational and Commissioning Activities

During the Quarter, final works were completed on the construction of the crushing circuit, processing circuit, tailings storage facility (Stage 1) and the electrical substation was energised and fully operational. This allowed for commissioning activities to commence in early June 2021 with the processing of oxide ore from crusher to the SAG mill and through the CIL tanks, stripping circuits and detox circuit.

Following the successful commissioning of the processing plant on oxide ore, the maiden gold pour was achieved on 21 June 2021. This has resulted in a total of US$7 million of gold doré being produced to the date of this report with first gold delivered to the refinery and first out-take now received.

Subsequent to Quarter end the Company has completed commissioning of the Okvau sulphide float regrind circuit. This work marks practical completion of the Okvau Gold Mine commissioning process and commencement of normal run of mine operations.

The Company maintains its guidance that the production at the Okvau Gold Mine is forecast to be 100,000oz to 110,000oz on an annualised basis at an AISC of US$754/oz in line with the Company’s Definitive Feasibility Study (DFS) releases on 1 May 2017 and subsequently updated on 26 November 2019. The Company expects to update the market with quarterly and full year 2022 guidance prior to the end of the current quarter.

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Figure 1 |First Gold Doré Bars Poured at the Okvau Gold Mine
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Figure 2 | Gold Furnace During Maiden Gold Pour
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Figure 3 | Ribbon cutting ceremony for the opening of the Okvau Gold Mine
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Figure 4 | Process Plant and Crushing Circuit - Complete and Commissioned
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Figure 5 | Commissioning of the Jaw Crusher
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Figure 6 | Crushed ore conveyed to the stockpile
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Figure 7 | First Ore to the Mill

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Figure 8 | Electrical Sub-Station – Commissioned and Operational

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Figure 9 | SAG Mill – Commissioned and Operating/Final Mill Liner Segment Installation
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Figure 10 | SAG Mill – Commissioned and Operating

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8 Megawatt Outotec SAG Mill “Big Eddie” named by Installation Engineer, P Nilsson in honour of his father

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Okvau Mining

Mining activity was focused on stripping oxide ore and waste to expose grade control floor in areas that provided access to fresh rock ore supply. Total surveyed movement for the quarter was 1,132,062 BCM of ore and waste against a scheduled 1,151,997 BCM with 486,467 BCMs blasted. Earthmoving advanced in line with project requirements.

Environment and Social

During the Quarter, the Company continued to focus on a net positive impact on near-mine environmental and social values by targeting strict compliance with corporate governance, international guidelines (IFC PS’s) and local law by engaging and collaborating with all stakeholders in the Okvau Gold Mine area. The Company has committed to Environmental, Social and Endowment funds, in accordance with its environmental obligations. These funds and other programmes implemented by the Company seek to achieve a net-gain in both biodiversity and social values.

The Environmental Management System for the Okvau Gold Mine, including an Environmental Compliance Register of all ESIA and management plan actions, is implemented and maintained. An extensive monitoring program reflective of the operations phase is now underway. The company continues to work closely with local authorities and key stakeholders to ensure the community are safeguarded from project activities, and to enhance protection of the Phnom Prich Wildlife Sanctuary & the project’s Biodiversity Offset Sites.

In line with tradition, the local monastery visited the Okvau Gold Mine in early June 2021 to conduct Krong Pali Ceremony and bless the processing plant and mining fleet.

Figure 11 | Cambodian Gold Project | Left: Installing road safety signage in nearby villages; Middle: Providing Covid-19 supplies to local police; Right: Quarterly meeting with the PPWS Authority to review and implement offset program initiatives

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Regional Exploration

Emerald’s exploration tenements, which comprise of a combination of 100% owned granted licences and joint venture agreements now cover a combined area of 1,239 km².

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Figure 12 | Cambodian Gold Project | Exploration Licence Areas
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Memot Project (100%)

Work completed during the Quarter on the 100% owned Memot project located 95km southwest of the Okvau Gold Mine included the completion and submission of an independently commissioned environmental impact assessment. The Company awaits formal approval from the Cambodian Ministry of Environment expected in the September quarter prior to the commencement of formal exploration activities.

Identified historical work includes mapping and 23 rock chip samples (verified) from around the shafts and the artisanal workings. These results include 8 values greater that 9g/t with peak values of 72.8g/t, 74.5g/t and 83.2g/t Au coincident with high values of the same associated elements observed at the Okvau Gold Project (As, Te, Sb and Bi). In addition to the peak gold values, 3 rock chips samples also returned significant Ag (>190 g/t) and Cu (>3 %) values (refer ASX announcement on 28 January 2021). Notably the highest grade (historical) rock chip samples were collected from the stockpiles created from spoils from underground mining.

As announced in April 2021, Emerald technical collected preliminary rock chip grab samples from recently mined stockpiled material and outcrops from the surrounding area. 5 of the 12 samples returned assays greater than 4g/t with the peak values of 40.4, 27.3, 23.6 and 13.65 g/t Au (including 226g/t Ag, 1.45% Pb and 1.43%Zn) (refer ASX announcement 30[th] April 2021).

Figure 13 | Memot Artisanal Workings

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Okvau Gold Project

As previously announced, Emerald has updated the Okvau Gold Project’s magnetic susceptibility Inversion Model and completed a 3DIP geophysical survey targeting the potential high-grade feeder zone for the Okvau mineralisation (ASX announcement 4 April 2019 and 2 July 2019, 28 January 2021 and 30 April 2021). Whilst the modelling is currently being processed, initial results have indicated targets with IP chargeability signatures typically associated with massive sulphides and magnetic destructive alteration associated with mineralisation outside the current 1.14 Moz resource. The results from these studies will assist with a better understanding of the significance of the interpreted high-grade feeder zone to target deeper zones of mineralisation at Okvau.

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Preak Khlong and Okthung (100%)

Both Gradient Array and Dipole-Dipole Geophysical surveys have been completed on the Preak Khlong NW and Gossan prospects (refer ASX announcement 1 April 2020 and 30 April 2021), the data is currently being modelled with results to be released when available. Both the Okapai and Big Toe prospects (refer ASX announcement 1 April 2020 and 30 April 2021) have gradient array programmes underway and are expected to be completed by the end of the current quarter. Any significant targets will be followed up with dipole-dipole surveys to assist with developing drill targets for testing later in 2021 once the dry season commences and access improves.

Figure 14 | Okhtung and Preak Khlong historical intersections and interpreted geology

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Other Exploration

The Company continues to look to expand on its prospective tenure in Cambodia by seeking to make further applications for tenure when identified and advancing discussions with third parties. The Company continues to assess additional prospective gold development opportunities both in Australia and internationally with the aim to create a multi asset gold producing company.

Corporate

Cash Position

Emerald’s consolidated cash at 30 June 2021 was approximately A$23 million.

The Okvau Project finance facility has also provided access to a US$100 million Acquisition and Development Facility to fund future development and acquisition opportunities as previously announced on 26 June 2019. Emerald continues to assess value adding assets for subsequent developments to create a multi asset gold producing company.

In accordance with ASX Listing Rule 5.3.5 the Company advises that payments made to related parties and their associates during the period included director fees, salaries and superannuation ($204k), rental payments to a director related party for the Company premises ($50k) and payments to a director related party for the provision of company secretarial services ($15k).

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COVID-19 Update and Safety

The Company has prioritised the health and wellbeing of staff, contractors and stakeholders by maintaining stringent protocols to minimise the potential transmission of COVID-19. Renaissance Safety Manager, Construction Manager, Civil Works Supervisor, Operations Manager, in addition to EMR’s COO Executive Director, were all based on site during the Quarter to maintain awareness and ensure these protocols are adhered to while completing construction activities.

Travel between Australia and Cambodia continues to be restricted but is being managed through longer rosters and regional sourcing and the dedication of key employees on site at Okvau.

The Company achieved a significant milestone subsequent to Quarter end with the assistance of the Cambodian Ministry of Health by successfully commencing the full site wide vaccinating of all Okvau Mine site staff (in excess of 300 first doses administered). The second (full) vaccine dose for all workers is scheduled for completion in the coming weeks.

There were no serious incidents or injuries during the Quarter.

This ASX release was authorised on behalf of the Emerald Board by: Morgan Hart, Managing Director.

For further information please contact Emerald Resources NL

Morgan Hart Managing Director

Cambodian Gold Project

Summary

Emerald’s main focus is the exploration and development of its Cambodian Gold Projects which comprise of a combination of 100% owned granted licences, applications and earn-in & joint venture agreements covering a combined area of 1,239km². The 100% owned Okvau Gold Project (‘Okvau Gold Project’) is the Company’s most advanced project which is located approximately 275km north-east of Cambodia’s capital city of Phnom Penh in the province of Mondulkiri (refer Figures 15 and 16). The town of Kratie is located on the Mekong River approximately 90km to the west and the capital of Mondulkiri, Saen Monourom is located approximately 60km to the south-east. In May 2017, Emerald completed a Definitive Feasibility Study (‘DFS’) on the development of the Okvau Gold Project which demonstrated a robust project producing approximately 106,000 ounces of gold per annum on average over 7+ years from a single open pit.

In July 2018, the Company was granted the Industrial Mining Licence covering 11.5 km² which allows for the development of the Okvau Gold Project. The Mining Licence has an initial 15-year period with the right to two renewals of up to 10-years for each renewal in accordance with Cambodian laws. The grant of the Mining Licence followed approval of the Okvau Gold Project by the Office of Council Ministers for both the rezoning of the project area to ‘Sustainable Use’ within the Phnom Prich Wildlife Sanctuary (‘PPWS’) and the granting of the Mining Licence. The rezoning of the Mining Licence area to ‘Sustainable Use’ lawfully permits commercial development under Cambodian law and follows the successful negotiation and approval by the Minister of Environment (‘MoE’) of the environmental contract (the ‘Environmental Contract’) and environmental licence (‘Environmental Licence’) in December 2017.

Topography of the tenure area is relatively flat with low relief of 80 metres to 200 metres above sea level. The Okvau Deposit and other gold occurrences within the tenure are directly associated with diorite and granodiorite intrusions and are best classed as Intrusive Related Gold mineralisation. Exploration to date has demonstrated the potential for large scale gold deposits with the geology and geochemistry analogous to other world class Intrusive Related Gold districts, in particular the Tintina Gold Belt in Alaska (Donlin Creek 38Moz, Pogo 6Moz, Fort Knox 10Moz, Livengood 20Moz).

In December 2019, the Mineral Investment Agreement (‘MIA’) was signed which provides certainty and stability of the fiscal regime for the development and operations of the Okvau Gold Project. Following confirmation of the key fiscal incentives of the MIA, the key assumptions, and inputs of the DFS were reviewed resulting in a significant improvement in the NPV and IRR of the Project.

In July 2021 the Company achieved practical completion of the Okvau Gold Mine with first gold delivered to the refinery and first out-take received.

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Figure 15 | Cambodian Gold Project | Location Figure 16 | Cambodian Gold Project | Exploration Licence Areas
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Table 1 | Okvau Mineral Resource Estimate

			Okvau Mineral Resource Estimate	Okvau Mineral Resource Estimate	Okvau Mineral Resource Estimate
	Indicated Resource			Inferred Resource			Total Resource
Cut-off	Tonnage	Grade	Contained	Tonnage	Grade Contained	Tonnage	Grade	Contained
(Au g/t)	(Mt)	(g/t Au)	Au (Koz)	(Mt)	(g/t Au) Au (Koz)	(Mt)	(g/t Au)	Au (Koz)
0.70	15.11	2.08	1,008	2.57	1.61 133	17.68	2.01	1,141

The Project has a JORC Ore Reserve (Probable) estimate of 14.26Mt @ 1.98g/t Au for 907,000 ounces gold (refer Table 2).

Table 2 | Okvau Ore Reserve Estimate

	Okvau	Ore Reserve Estimate
	Tonnage	Grade	Contained
	(Mt)	(g/t Au)	Au (Koz)
Probable Ore Reserve	14.26Mt	1.98g/t Au	907koz

Forward Looking Statement

This document contains certain forward looking statements. These forward-looking statements are not historical facts but rather are based on the Company’s current expectations, estimates and projections about the industry in which Emerald Resources operates, and beliefs and assumptions regarding the Company’s future performance. Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”’ “estimates”, “potential” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known or unknown risks, uncertainties and other factors, some of which are beyond the control of the Company, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward looking statements, which reflect the view of Emerald Resources only as of the date of this announcement. The forward looking statements made in this release relate only to events as of the date on which the statements are made. Emerald Resources will not undertake any obligation to release publicly any revisions or updates to these forwardlooking statements to reflect events, circumstances or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.

This document has been prepared in compliance with the current JORC Code 2012 Edition and the ASX listing Rules.

The Company believes that is has a reasonable basis for making the forward-looking statements in this announcement, including with respect to any production targets and financial estimates, based on the information contained in this announcement. Reference is made to ASX Announcements dated 1 May 2017 and 26 November 2019. All material assumptions underpinning the production target, or the forecast financial information continue to apply and have not materially changed.

100% of the production target referred to in this announcement is based on Probable Ore Reserves.

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Emerald has a highly experienced management team, undoubtedly one of the best credentialed gold development teams in Australia with a proven history of developing projects successfully, quickly and cost effectively. They are a team of highly competent mining engineers and geologists who have overseen the successful development of gold projects in developing countries such as the Bonikro Gold Project in Cote d’Ivoire for Equigold NL and more recently, Regis Resources Ltd.

The Company believes it has a reasonable basis to expect to be able to fund and develop the Okvau Gold Project for the reason set out above and in this document. However, there is no certainty that the Company can raise funding when required.

Competent Persons Statements

The information in this report that relates to Exploration and Drill Results is based on information compiled by Mr Keith King, who is an employee to the Company and who is a Member of The Australasian Institute of Mining & Metallurgy. Mr Keith King has sufficient experience which is relevant to the style of mineralisation and type of deposits 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 Keith King has reviewed the contents of this release and consents to the inclusion in this announcement of all technical statements based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resources for the Okvau Gold Deposit was prepared by EGRM Consulting Pty Ltd, Mr Brett Gossage, who is a consultant to the Company, who is a Member of the Australasian Institute of Mining & Metallurgy (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 Gossage has reviewed the contents of this news release and consents to the inclusion in this announcement of all technical statements based on his information in the form and context in which it appears.

Information in this announcement that relates to Ore Reserves for the Okvau Gold Deposit is based on, and fairly represents, information and supporting documentation prepared by Mr Glenn Williamson, an independent specialist mining consultant. Mr Williamson is a Fellow of the Australasian Institute of Mining & Metallurgy. Mr Williamson 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 (or ‘CP’) as defined in the 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Williamson has reviewed the contents of this news release and consents to the inclusion in this announcement of all technical statements based on his information in the form and context in which it appears.

No New Information

To the extent that announcement contains references to prior exploration results and Mineral Resource estimates, which have been cross referenced to previous market announcements made by the Company, unless explicitly stated, no new information is contained. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcements and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

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Appendix One | Tenements

Mining and exploration tenements held at the end of June 2021 Quarter

Project	Location	Tenement	Interest at
			30 June 2021
Okvau	Cambodia	Okvau Industrial Mining Licence	100%
Okvau	Cambodia	Okvau Exploration Licence	100%
O’Chhung	Cambodia	O’Chhung Exploration Licence	100%
Preak Khlong	Cambodia	Preak Khlong Exploration Licence	100%
O’Khtung	Cambodia	O’Khtung Exploration Licence	100%
Memot	Cambodia	Memot Exploration Licence	100%

Mining and exploration tenements and licenses acquired and disposed during the June 2021 Quarter

Project	Location Tenement Interest at	Interest at end
	beginning of	of Quarter
	Quarter
Tenements	Disposed
Nil
Tenements	Acquired
Nil

Quarter Beneficial percentage interests in joint venture and earn-in agreements at the end of the June 2021 Quarter

Project	Location	Tenement	Interest at end of Quarter
Phnom Khtong	Cambodia	Phnom Khtong Exploration Licence	0%A
Snoul	Cambodia	Snoul Exploration Licence	0%A
A Emerald Resources NL is earningupto a 70% interest from MekongMinerals.

Beneficial percentage interests in joint venture and earn-in agreements acquired or disposed of during the June 2021 Quarter

Project	Location	Tenement	Interest at beginning of	Interest at beginning of	Interest at end of
			Quarter		Quarter
Joint Venture	Interests
Disposed
Nil
Joint Venture	Interests
Acquired
Nil

Interests in royalties

The Company has a 5% overriding royalty interest in all gas production from various oil and gas interests located in Magoffin County, Kentucky. During the Quarter, there was no product recovered and sold from the Leases and the royalty received for the period was Nil.

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