EMPIRE RESOURCES LIMITED — Capital/Financing Update 2016

Feb 14, 2016

ACN 092 471 513

ASX Release

15 February 2016

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HIGH GRADE RESERVE ANNOUNCED FOR EMPIRE’S PENDING NEW W.A. GOLD MINE

 146,000 tonnes @ 4.62g/t Au for 21,700 contained ounces at Penny’s Find near Kalgoorlie

• Open-pit mining planned to commence from mid-year

• Scoping study underway on underground extension

A probable ore reserve of 21,700 ounces of gold at robust grades has today been announced by Empire Resources Ltd (‘Empire’, ASX code: ERL, the “Company”) for its 60% owned Penny’s Find gold project, 50 kilometres northeast of Kalgoorlie in Western Australia.

Empire is currently progressing the Penny’s Find gold project through a Feasibility Study, with a view to commencement of open-pit mining from mid-year and first gold production in the second half of 2016.

Empire’s Managing Director, Mr David Sargeant:

“This maiden high grade open-pit ore reserve, based on a gold price of AUD$1,500/oz, is an important milestone in the progression of Penny’s Find towards development and comes just seven months after Empire resumed management of the project.

“With an average open-pit grade of 4.62g/t Au to a depth of 80m this project represents an excellent near term production opportunity for Empire given the current high gold price.

“We also believe there is substantial upside at Penny’s Find once an ongoing study into development of the underground resource has been completed. This along with exploration potential at depth bodes well for the long term future of the project”.

The Feasibility Study for Penny’s Find is on schedule for completion this month and discussions with financiers regarding project funding are progressing.

DAVID SARGEANT MANAGING DIRECTOR

For further information on the Company, visit www.resourcesempire.com.au

David Sargeant – Managing Director Phone: +61 8 9361 3100 Adrian Jessup – Executive Director Phone: +61 8 9361 3100

Penny’s Find Gold Project

Empire Resources Ltd holds a 60% direct interest in the Penny’s Find gold project situated on granted Mining Lease 27/156. The remaining 40% interest is held by unlisted Brimstone Resources Ltd (‘Brimstone’).

A 2012 JORC compliant reportable mineral resource of 470,000 tonnes @ 4.42g/t Au (Table 1) containing 66,800 ounces of gold was reported to the ASX on the 1 September 2015.

Table 1 – Penny’s Find Resources

Table 1– Penny’s Find Resources	Table 1– Penny’s Find Resources	Table 1– Penny’s Find Resources	Table 1– Penny’s Find Resources	Table 1– Penny’s Find Resources	Table 1– Penny’s Find Resources	Table 1– Penny’s Find Resources
Reportable In Situ Mineral Resource by location and cut-off
	Open Cut (0.5g/t)		Underground (1.5g/t)		Combined
Class	Tonnes	Au g/t	Tonnes	Au g/t	Tonnes	Au g/t
Measured	-	-	-	-	-	-
Indicated	218,000	4.64	84,000	4.90	302,000	4.71
Inferred	82,000	1.79	86,000	5.89	168,000	3.89
TOTAL	300,000	3.86	170,000	5.40	470,000	4.42

Penny Find’s total in-situ mineral resource extends to 250m below surface and remains open at depth. High grade gold mineralization is hosted by quartz veins at the contact between sediments and basalt.

Both oxide and fresh mineralization are free milling with 98% and 99% recoveries achieved in recent testwork respectively. There is also a high gravity recoverable gold component, 53% for oxide and 85% for fresh.

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Figure 1 – Location Penny’s Find deposit

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Figure 2 – Penny’s Find Resource Model showing blocks above 0.5g/t Au

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Figure 3 – Penny’s Find Preliminary Underground Mine Design

Underground Scoping Study

A scoping study has commenced on gold mineralization located below the planned open pit. Table 1 reports an indicated and inferred resource in this area of 170,000t @ 5.40g/t Au.

A preliminary underground mine design has been undertaken to ensure the final open pit design is able to mesh smoothly with any possible future underground development. Figure 3 shows a long section under the proposed open pit. Work to confirm the assumed underground mining parameters is continuing.

Ore Reserve Calculation Summary

From the JORC 2012 code an ‘Ore Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.

The Penny’s Find ore reserve is contained within a single open pit mined to a depth of 80m with ore trucked off site for treatment through a toll milling facility using conventional gravity recovery and a CIL circuit.

The ore reserve have been calculated at a gold price of AUD$1,500 per ounce and a lower cut-off grade of 1.41g/t Au.

Open cut mining is based on extraction by conventional truck and excavator techniques with 15% ore dilution and 5% ore loss. The open pit will comprise a mixture of free dig and drill and blast reflecting the deeply weathered footwall sediments and fresh competent hanging wall basalts. The footwall angle will average 36 degrees, the hanging wall 42 degrees.

Gold processing and extraction is based on all metallurgical studies completed to date and includes a conservative overall gold recovery of 93%. All additional administration, road diversion, construction and overhead costs, including royalties, have been included in the ore reserve calculation.

The Ore Reserve statement in Table 2 is based on the Mineral Resources (Table 1) and after taking into account all Modifying Factors as detailed below, in the Appendix or in the Feasibility Study report. The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce the Ore Reserves.

As required by the JORC Code, no Inferred Resources have been included in this ore reserve calculation.

Table 2 - Ore Reserves

Table 2 - Ore Reserves	Table 2 - Ore Reserves	Table 2 - Ore Reserves	Table 2 - Ore Reserves
PENNY'S FIND OPEN PIT ORE RESERVE - FEBRUARY 2016
DESCRIPTION	TONNES	GRADE	GOLD TO
		g/t Au	MILL (ozs)
PROVED	-	-	-
PROBABLE	146,000	4.62	21,700
TOTAL	146,000	4.62	21,700

The key inputs or ‘Modifying Factors’ include:

• Ore mining recovery of 95%;

• Mining dilution of 15%;

• A nominal plant throughput of 0.2Mtpa (it is assumed that all the ore from this open pit will be processed in less than 12 months);

• An overall gold process recovery of 93% based on test work completed at the Perth laboratory of AMMTEC Ltd which indicated that 98% recovery is achievable. This work was performed under the supervision of independent process consultant Mr Bruno Sceresini of Australian Mining Advisors;

• Geotechnical parameters based on independent consultant reports by MineGeotech;

• Processing costs of $40/t based on ongoing discussions with three potential toll mill operators;

• Mining costs averaging $3.44/t ore and waste mined based on hourly hire and contract rates from a number of similar projects;

• Fixed monthly costs (general and administration) of $0.55/t mined have been added. This includes owner’s salaries plus on costs, light vehicles, office, power generation, communications equipment, other overheads and contractor’s fixed costs.

• Ore haulage costs of $10.35/t based on indicative quotes from potential contractors;

• The pit design was based on the optimal undiscounted cash-flow pit shell using a gold revenue price of $1,500/oz and a revenue factor of 1.00. Royalty payable to the West Australian Government of 2.5% has been allowed for; and

• Capital/Upfront expenditure of $1.47M based on a number of quotes for major items and an in-house analysis by Empire. The biggest capital item is the Pinjin Kurnalpi road re-alignment. Two quotes have been received for this item.

Competent Persons Statements

Ore Reserves

The scientific and technical information in this report that relates to Ore Reserves estimates for the Penny’s Find Project is based on information compiled by Mr Roselt Croeser, an independent consultant to Empire Resources Limited. Mr Croeser is a Member of the Australasian Institute of Mining and Metallurgy. Mr Croeser has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Croeser consents to the inclusion in the report of the matters related to the Ore Reserve estimate in the form and context in which it appears.

Mineral Resources

The information is this release concerning the Mineral Resources for the Penny’s Find Deposit have been estimated by Mr Peter Ball B.Sc who is a director of DataGeo Geological Consultants and is a member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Ball has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and qualifies 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 Ball consents to the inclusion in this public release of the matters based on his information in the form and context in which it appears.

APPENDIX

Penny’s Find Gold Project - JORC Code, 2012 Edition – Table 1

Section 1 : Sampling Techniques and Data
Criteria	Explanation	Comments
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 deposit has been drilled and sampled by diamond coring, reverse circulation and rotary air blast methods with holes on variable spacings over a 500m strike length, the closest being a 20mE x 10m N grid. The total metres of the 109 RC and diamond holes used in mineral resource estimation is 11,754m. The holes are drilled mostly to the west to intersect the relatively steeply east dipping north-south orientated mineralisation.
	• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.	Initial RAB and shallow RC drilling targeted the areas of old workings and identified near surface mineralisation. This was supplemented by deeper drilling to highlight the mineralisation within the Shear zone. The RC samples are collected from the cyclone of the rig with some split to smaller samples using a rotary or cone splitter attached to the cyclone or spear sampled from the large sample. Sample representivity was governed by sample recovery which can be erratic in wet conditions. Diamond core was collected into core trays with acceptable recovery.
	• 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.	The diamond core was HQ sized near surface and NQ sized in the mineralised zones. Core was halved and 1/2 sent for sample preparation by crushing, pulverising and splitting to produce either a 30gm or 40gm charged size dependent on the Laboratory. RC drilling collected samples at 1m intervals down hole. These 1m samples were either composited to 4m intervals by spear sampling or submitted as 1m samples each of approximately 2.5 to 4Kg. These samples were dried, crushed and pulverised and either a 30gm, 40gm ort 50gm sub-sample (dependent on laboratory) selected for FA assay.

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).	Diamond drilling (4 surface collared holes and 2 tails to RC holes) is mostly NQ sized through the mineralised zone, the surface holes totalled 1,259m and the two tails 198m. The core was not orientated. The RC holes were all 135mm diameter and drilled with a face sampling bit, the total number of holes is 105 and total metres is 10,296.
Drill sample recovery	• Method of recording and assessing core and chip sample recoveries and results assessed.	The core recovery recorded is length recovered per run, the recovery is in excess of 95%. The RC sample recovery is recorded descriptively as good, medium or poor and that work by weighing samples indicated that good recovery was in excess of 75% and poor recovery was usually less than 25%, this occurred mostly in wetground.
	• Measures taken to maximise sample recovery and ensure representative nature of the samples.	For RC drilling the collar was sealed and air pressure was used to maximise return. The cyclone was cleaned between samples.
	• Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	No assessment has been made of grade v RC sample recovery but based on the descriptive assessment the majority of mineralisation was returned dry and thus usually with good recovery. The competency of the core demonstrates that there should be minimal potential for sampling bias.
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.	Core and chips have been geologically logged recording lithology, mineralisation, veining, alteration, weathering and some geotechnical features (core only) like RQD. The geological logging is appropriate to the style of the Deposit.
	• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography	Geological logging is both in summary (comments) and detailed by interval for the information listed above.
	• The total length and percentage of the relevant intersections logged.	The entire length of all diamond and RC holes, apart from surface casing, has been logged.
Sub-sampling techniques and sample preparation	• If core, whether cut or sawn and whether quarter, half or all core taken.	All core to be sampled was 1/2ed using a mechanical saw. It is not known if the core was consistently taken from one side of the stick.

	• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.	RC samples are collected from the cyclone into a plastic bucket and then transferred to a sample bag. In addition a smaller sample is split using a rotary or cone splitter attached to the cyclone. The cyclone was cleaned with air and any loose material scrapped off between samples. Sub-samples of the larger samples are taken with a spear.
	• For all sample types, the nature, quality and appropriateness of the sample preparation technique.	All samples (approx. 2.5 to 4Kg for the RC samples and 1/2 NQ core up to 1m long) are provided to a commercial accredited laboratory facility for the preparation of samples using industry standard practises of drying, crushing and pulverising to allow sub-sampling by riffle or rotarysplitter to a 30 to 50gm charge size.
	• Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.	Empire did not include Standards or Blanks for the 2007 drill program with their routine samples submitted to the Laboratory but used an Umpire Laboratory and SFA v FA comparisons to provide control on quality. Brimstone included Standards and Blanks at rates of approximately 1 QAQC sample to 12 Routine samples or better. Whilst there was some evidence of bias of the lower grade Standard (1.3g/t) the majority of results can be considered acceptable. Empire included Standards and Blanks in their 2015 drilling campaign at a similar rate to Brimstone.
	• 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.	Duplicate RC sampling was conducted in 2012 and the results were supportive of the original results. No 1/2nd half core duplicate assay results have been observed.
	• Whether sample sizes are appropriate to the grain size of the material being sampled.	Whilst there is coarse gold in the system the outlier grades returned are not excessive as such the sampling appears to be representative and thus the global grade is being fairly represented.
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.	The assay techniques applied for the measurement of gold content is appropriate for the determination of the level of gold in the sample. Comparison between SFA and FA methods are reasonable this indicating that the analytical methods adopted report total gold content.

	• 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.	None applied
	• 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.	Standards and Blanks were included at approximately 1 in 12 and 1 in 10 of the number of samples submitted for the recent (2012 and 2015) holes. The results were mixed with the lower grade Standards showing a potential high grade bias (2012 program). Umpire laboratory checking provided support for the original results.
Verification of sampling and assaying	• The verification of significant intersections by either independent or alternative company personnel.	Mineralisation intercepts have been determined by previous and current company personnel and appear correct
	• The use of twinned holes.	No specific twinning program has been conducted.
	• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols	Primary data was recorded directly onto electronic spread sheets and validated against expected codes. Assay information in electronic form from the laboratories was merged with sample interval data on sample number
	• Discuss any adjustment to assay data.	None applied
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.	The collar positions were surveyed by contractors after the completion of the 2012 drilling using an RTKGPS on the GDA 94 Zone 51 Datum and the AHD. This survey included some of the 2007 drill collars which confirmed the location of these holes in the 2007 data set. The orientation and dip at the start of the hole was recorded for all holes. Down hole information was recorded by single shot camera that measured dip only for most RC holes with the exception of later part of the 2007 RC program where azimuth was also measured. The diamond tails were measured for dip and azimuth using a gyroscopic inclinometer. The 2015 drill hole collars were not surveyed post drilling and no down orientation was undertaken due to the holes relatively short length!
	• Specification of the grid system used.	The regional grid is GDA94 Zone 51 and the Deposit is laid out on a local grid for a central control point with a 40orotation.

	• Quality and adequacy of topographic control.	Topographic control is taken from contouring the drill hole collar information and applying observations of the site to assist in control.
Data spacing and distribution	• Data spacing for reporting of Exploration Results.	Drill spacing varies with position in the deposit from 10mN x 20mE to in excess of 50m.
	• 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.	Successive drilling programs have in filled and extended (at depth) the previous drilling and on the majority of occasions drilling has returned mineralisation in the expected locations. This provides a high degree of confidence in the geological continuity. Close spaced drilling provides good support for positioning of the mineralisation by zone.
	• Whether sample compositing has been applied.	The sampling reflects the geological conditions. For mineral resource estimation a 1m composite length was chosen given that this is the dominant sample length.
Orientation of data in relation to geological structure	• Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.	The drilling is oriented as best as possible to perpendicular to the structure/geology containing or controlling the mineralisation.
	• If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	No sampling bias is considered to have been introduced.
Sample security	• The measures taken to ensure sample security.	The chain of custody adopted by operators of the project appears appropriate and is based on responsibility and documentation.
Audits or reviews	• The results of any audits or reviews of sampling techniques and data.	A brief audit of assay records revealed no data errors.

Section 3: Estimation and Reporting of Mineral Resources

Section 3: Estimation and Reporting of Mineral Resources	Section 3: Estimation and Reporting of Mineral Resources	Section 3: Estimation and Reporting of Mineral Resources
Criteria	Explanation	Comments
Database integrity	• Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.	There is no data storage system in place. Data from logging, sample submission and the assay laboratory is combined in many spreadsheets. Previously (2014) key holes utilised in the mineral resource assessment had their sample submission and assay laboratory data re- entered and compared to the data within the supplied spreadsheet and no errors were found. Similarly the data from the 2015 was reviewed and found to reflect the field and laboratory data. There has been no exhaustive review just sufficient to give confidence that the data to be utilised is accurate with respect to the supportinginformation.
	• Data validation procedures used.	Data is validated when combined from the various sources described above. The "audits" described above provided sufficient confidence in the data contents to state that it most likely accurately represents the drill information.
Site visits	• Comment on any site visits undertaken by the Competent Person and the outcome of those visits.	DataGeo visited the site on March 26th 2014 and was able to establish that the drill holes were correctly positioned, the old workings and position of the shear was appropriate; the topography was generally flat with fall to the east and a rise existed at the southern central end of the area. Also RC chips, chip trays and diamond core was reviewed to establish the support for the mineralisation. No site visit to inspect the recent drilling program was felt necessary
	• If no site visits have been undertaken indicate why this is the case.	Not applicable
Geological interpretation	• Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.	The confidence in the geological interpretation is considered good as it is supported by surface mapping and corroboration of the surface positions with the close spaced drilling. The Penny's Find Shear is a major outcropping feature and the quartz associated gold mineralisation within it (as modelled) appears consistent with the feature.
	• Nature of the data used and of any assumptions made.	Only physical data obtained in the field was utilised.
	• The effect, if any, of alternative interpretations on Mineral Resource estimation.	The application of hard boundaries to reflect the position of the zones which host the mineralisation is supported by the field and drilling observations. This interpretation is thought to be appropriate to the style of mineralisation be it the entire shear (2014) or just the higher-grade zones within the shear (2015).

	• The use of geology in guiding and controlling Mineral Resource estimation.	The position of the shear provides the overall geological control with some allowance for interpreted fault, this combined with presence of gold is used to constrain the interpretation.
	• The factors affecting continuity both of grade and geology.	The higher-grade gold zones occur mostly within the overall Shear appearing to be sub- parallel to Shear. To the east of the Shear and within the weathered profile there is interpreted to be flat lying supergene style mineralisation. The position and style of mineralisation impacts thegrade continuity.
Dimensions	• The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.	The main mineralisation within the Deposit occurs over a 450m strike length and extends some 250m down dip and varies between 2 and 10m in width. The deposit remains open at depth although thinning.
Estimation and modelling techniques	• The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.	The largest high-grade zone contained in excess of 440 composites and provided a reasonable continuity model which supported the use of ordinary kriging. The composites were top-cut and search restricted. Zones with fewer composites (insufficient data to perform a continuity assessment) had grade estimated using inverse distance to the power of 3 to reflect the relatively high nugget within the Deposit. If there were < 10 composites the grade was assigned as the average of the composites. In all cases if appropriate composites were top-cut. Grade estimation was carried out in VulcanTMapplication. Density was assigned based on, for fresh rock, representative measurements made from what core was available. For oxidised and partially oxidised material specific gravity was assigned based on results from similar deposits within the general area. 1m composites were created within each zone and input to the grade estimation (or assigning) was restricted to those composites which were within the zone being assessed. Estimated blocks were informed in a three step strategy with orientation set to the orientation of the zone being estimated. The initial (primary) search was 30m x 20m x 5m in strike, dip and across dip-strike plane. This search range was expanded by double the length for blocks were not informed in the primary search and again in the final search strategy. This strategy informed on average 94% of the blocks within the zones to be estimated in the primary and secondarysearch.

	• The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.	There is no mining history. The previous model was significantly larger in tonnes with lower grade above cut-off due to the modelling of the entire shear zone. Check estimates for the largest zone using inverse distance provided a similar result.
Estimation and modelling techniques (continued)	• The assumptions made regarding recovery of by-products.	No assumptions made.
	• Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).	No assessment of deleterious elements has been made.
	• In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.	The block model was constructed using blocks which were 5mE x 20mN x 5mRL with sub- celling to 2.5mE x 10mN x 1mRL the block size in each direction adopted to ensure accurate volume representation of the various surface and zones. Grade estimation was to the parent block size.
	• Any assumptions behind modelling of selective mining units.	None undertaken
	• Any assumptions about correlation between variables.	No assessment undertaken
	• Description of how the geological interpretation was used to control the resource estimates.	Hard boundaries were applied to the Zones. Grade was estimated within these boundaries.
	• Discussion of basis for using or not using grade cutting or capping.	Statistical analysis indicated that some zones in particular the largest ones had elevated coefficients of variation and thus to minimise the influence of outlier grades top-cuts were applied, high-grade influence was restricted in some circumstances
	• The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.	Volume validation was carried out by comparison of the solids representing the mineralisation to the block model. Grade validation was carried by both global comparison of the average estimated grade to the average input grade and spatially by comparison of the estimated grades to the input grades by position for the largest zone. Also visual comparison was used.
Moisture	• Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.	The tonnages were estimated using specific gravity determined by weight in air measurements for fresh rock. This data was then assigned to the appropriate positions in the block model by rock type. Indicative values were assigned to the weathered profile.

Cut-off parameters	• The basis of the adopted cut-off grade(s) or quality parameters applied.	The margin of the zones of mineralisation is a combination of lithology and grade. Given the model targeted higher grade anomalous gold is considered to be the 0.5g/t and above. For mineral resource reporting cut-off of 0.5g/t for open cut (to depth of 100m) and 1.5g/t for underground (beneath 100m) returns that part of the resource which, based on grade alone, has thepotential to be mined.
Mining factors or assumptions	• Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.	Mining scoping studies based on previous models indicated that economic extraction by open cut could occur to 80m below the surface. The details of this assessment are not known to DataGeo but it is assumed that the then mineral resource was optimised using indicative cost structures (2007 to 2009 and 2015) and gold prices. Such studies did not review the potential for underground mining. Post these studies underground mining scenarios have been considered.
Metallurgical factors or assumptions	• The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.	Some metallurgical test work to determine gold recovery (both by gravity and cyanide leaching) has occurred which indicates that the recovery would be in excess of 95%. This was based on two very high-grade samples (one of oxide, the other of fresh) which are not representative of the likely open cut mining grade that this deposit could support.

Environmental factors or assumptions	• Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.	The Deposit is located on a granted mining license. DataGeo is unaware of any studies relating to environmental impacts of a potential mining and processing operation in the location. These are numerous mining and processing operations within 50Km of the site thus it is considered likely that environmental impacts would be manageable.
Bulk density	• Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.	Density has been assumed based on a limited number of core sample measurements using weight in the air and weight in water technique. The results were applied to the appropriate locations in the model. Assumptions were made as the density of the material in the weatheredprofile.
	• The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.	The rocks do not display significant porosity thus the technique adopted is appropriate.
	• Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.	The material is generally fairly uniform as evidenced by the consistency in what specific gravity information is available.
Classification	• The basis for the classification of the Mineral Resources into varying confidence categories.	The classification is based on the quality and amount of input data; the spatial arrangement of the drill data and its supported position; the grade continuity for the largest zone and confidence in the geological interpretation which is supported by field observation and drilling. Whilst QAQC information is lacking for the 2007 drilling comprehensive programs for the 2012 and 2015 drilling was mostly supportive. Higher confidence areas have more supporting data, areas of lower geological support reflect a lower classification.

	• Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).	The input data particularly the more recent is consistent and closely spaced enough to support the projection of the geological interpretation at depth which in terms of style of mineralisation is consistent with other deposits within the same or similar geological setting. Later drilling programs have successfully in filled earlier programs in mineralised locations predicted by the initial programs - this is particularly the case with the 2015 drilling. The estimated grade correlates reasonably well with the input data given the nature of the mineralisation.
	• Whether the result appropriately reflects the Competent Person’s view of the deposit.	The Mineral Resource estimate reflects the Competent Persons understanding of the Deposit.
Audits or reviews.	• The results of any audits or reviews of Mineral Resource estimates.	None undertaken
Discussion of relative accuracy/ confidence	• Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.	The mineral resource is volume constrained by the geological interpretation thus in a global sense there is no sensitivity. As would be expected there is sensitivity to the estimated resource grade related to be the top-cut applied with indication that grade could be influenced by 10 to 15% in the main mineralised zone. Whilst DataGeo is comfortable with the top-cut applied (based on what appears to be a distinct change in population statistics) the influence of the higher-grade needs additional review. The confidence in the mineral resource is defined by the classification adopted as per the guidelines of the 2012 JORC code.
	• The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.	The statement relates to global estimates of tonnes and grade.
	• These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.	No production information from the old working is available.

Section 4 - Estimation and Reporting of Ore Reserves

(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section)

Section 4-Estimation and Reporting of Ore Reserves (Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section)	Section 4-Estimation and Reporting of Ore Reserves (Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section)	Section 4-Estimation and Reporting of Ore Reserves (Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section)
Criteria	Explanation	Commentary
Mineral Resource estimate for conversion to Ore Reserves	 Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.  Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.	The Measured and Indicated Resources from Section 3 have been used as the basis for conversion to the Ore Reserve. The Mineral Resources are inclusive of the Ore Reserve.
Site visits	 Comment on any site visits undertaken by the Competent Person and the outcome of those visits.  If no site visits have been undertaken indicate why this is the case.	No site visit was undertaken by the Competent Person. There are no current facilities at the project site.
Study status	 The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves.  The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.	A Feasibility Study has been prepared and is ready for issue.
Cut-off parameters	 The basis of the cut-off grade(s) or quality parameters applied.	The cut-off grade has been calculated based on the pit optimisation inputs. The basis for calculation of cut-off is: 𝐶𝑢𝑡 𝑜𝑓𝑓 𝑔𝑟𝑎𝑑𝑒 = (𝑝𝑟𝑜𝑐𝑒𝑠𝑠+ 𝑜𝑣𝑒𝑟ℎ𝑒𝑎𝑑 𝑐𝑜𝑠𝑡) × (1 + 𝑀𝑖𝑛𝑖𝑛𝑔 𝐷𝑖𝑙𝑢𝑡𝑖𝑜𝑛(%)) 𝑃𝑎𝑦𝑎𝑏𝑙𝑒 𝐺𝑜𝑙𝑑 𝑃𝑟𝑖𝑐𝑒 × 𝑃𝑟𝑜𝑐𝑒𝑠𝑠 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 (%)
Mining factors or assumptions	 The method and assumptions used as reported in the Pre- Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design).  The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.  The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade _control andpre-production drilling. _	The Mineral Resources have been optimised using Whittle software followed by detailed final pit design. The Ore Reserve is the Measured and Indicated Resources within the pit design, after allowing for ore loss and mining dilution. The mining method selected is open pit, selective mining of ore and waste on nominal 2.5 m benches using a backhoe excavator. Pit ramps are designed at a 10% gradient and 22 m wide, except for lower pit levels where the ramp is 10 m wide with a 1 in 7 gradient. A Feasibility Study level geotechnical study has been completed by MineGeotech. The resultant pit design parameters have been used for the pit design and the overall pit slope angle was estimated for thepreceding

	 The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate).  The mining dilution factors used.  The mining recovery factors used.  Any minimum mining widths used.  The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion.  The infrastructure requirements of the selected mining methods.	pit optimisations. Grade control will be based on additional RC drilling and pit mapping and a 10 m along strike and 10 m across strike pattern has been allowed for. Mining dilution was estimated to be 15%, at zero grade. This was based on consideration of the width, continuity and orientation of the orebody and the planned mining method. Ore recovery of 95% has been estimated to allow for losses from blasting and grade control. A minimum mining width was set at 10 m. Inferred Resources within the pit design contains <7% of total gold and have not been considered for Ore Reserve estimates. Infrastructure required for the open pit mining operation will be limited to mining contractor workshop, mining office, water storage dam, ROM pad, fuel and explosives storage. A road deviation for the Pinjin Kurnalpi Road is required to bypass the open pit.
Metallurgical factors or assumptions	 The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.  Whether the metallurgical process is well-tested technology or novel in nature.  The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied.  Any assumptions or allowances made for deleterious elements.  The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole.  For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?	The metallurgical process proposed is conventional gold extraction by CIL. For all ores data indicates recovery of gold would be feasible. Metallurgical processes proposed are all well-tested technology and appropriate for the styles of mineralisation. Extensive metallurgical testwork has been undertaken under the direction of Australian Mining Advisors and included: Gravity concentration. Gravity tails cyanidation. Carbon preg robbing from Black Shales. Oxygen uptake. Metallurgical domaining is into oxides and primary mineralization as defined in the Mineral Resource models. Metallurgical recoveries determined from testwork indicate recoveries of 98% for oxides and 99% for primary material. A value of 93% overall was used for the Ore Reserves. Preg robbing by carbon due to Black Shales appear not to have a deleterious effect on gold extraction. No bulk sample of pilot scale test work was justified or completed. Not applicable.

Environmental	 The status of studies of potential environmental impacts of the mining and processing operation.  Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.	Environmental studies have been completed by Botanica, Greg Harewood, MWES Consulting, Maria Jose Romero Segura, SGS and Chemcentre. This included studies into: Flora. Fauna. Surface Hydrology. Sub-surface Hydrology. Soil, Waste Rock and Groundwater analysis. All potential environmental and social impacts associated with the Project have been considered and no issue has been identified that cannot be mitigated or managed to an acceptable degree. Waste geochemistry investigations have been undertaken by SGS and testing of waste rock samples indicates that none of the waste rock samples tested were potentially acid generating. Management of surface runoff and seepage from the waste dumps and pit walls during operation will need to be managed and final waste dumps capped with suitable materials to minimise water infiltration.
Infrastructure	 The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.	The Pinjin Kurnalpi Road passes through the mine lease area and will need to be diverted to allow mining to start. This road gives access to the substantial mining centre of Kalgoorlie which is approximately 50 km away. Power will be generated on site using mobile, diesel powered generators. Water will be sourced from onsite dewatering bores. Potable water will be transported from Kalgoorlie. Miscellaneous licences and general purpose licences have been applied for to fit in the waste dump, the abandonment bund, the road diversion, watercourse control bunding and a water line to Lake Penny in case excess dewatering water needs to be disposed of. A communications tower and related equipment will be installed on site for phone and data communications. The project will rely on the mining centre of Kalgoorlie for labour and accommodation.
Costs	 The derivation of, or assumptions made, regarding projected capital costs in the study.  The methodology used to estimate operating costs.	Capital costs were estimated from written quotes obtained for a number of substantial items and additional estimates based on experience with similar projects. The current estimate is $1.468M which includes $400,000 for the Pinjin Kurnalpi Road realignment. So far two preliminary quotes have been received for this substantial item. Mining operating costs have been based on hourly hire and contractor rates for similar projects. The average mining costs are $3.44/t mined. Fixed monthly costs including

	 Allowances made for the content of deleterious elements.  The source of exchange rates used in the study.  Derivation of transportation charges.  The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.  The allowances made for royalties payable, both Government and private.	owner’s costs and contractor’s fixed costs make up and additional $0.55/t mined. This includes the general and administration cost. An additional allowance of $10.35/t ore has been included to transport ore to a toll milling processing plant. Processing costs have been estimated based on experience with similar projects and ongoing discussions with toll mill operators. The toll milling cost has been estimated to be $40.00/t milled. Most of the operating costs need to be confirmed with written quotes. The current US$/AUD exchange rate of 0.70 US$/AUD has been used for the estimation of revenue. This has been fairly consistent for some time. All the costs will be in AUD. The only substantial transport charge is related to ore haulage to the nominated toll mill. This has been estimated based on a rate of $0.164/t km and a distance of 63 km. An agreement needs to be negotiated. Toll milling costs have been based on typical rates prevailing in the West Australian goldfields and ongoing discussions with toll mill operators. Actual toll milling costs will depend on the final agreement that is reached. The royalty paid to the West Australian government will be 2.5% of revenue. There are no other royalties payable.
Revenue factors	 The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.  The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.	Revenue for pit optimisation assumes a gold sale price of $1500/oz and excludes transport and refining charges and government royalties. In selecting the optimised pit shell used for pit designs, and hence Ore Reserve estimation, the maximum undiscounted cashflow pit shell with a revenue factor of 1.00 was selected. This pit shell gave more space for an access ramp to be accommodated.
Market assessment	 The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.  A customer and competitor analysis along with the identification of likely market windows for the product.  Price and volume forecasts and the basis for these forecasts.  For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.	The market for gold is well established and the price has varied over the past two years from a low of around $1330/oz in November 2014 to a current high of $1730 (Australian Dollars). No formal market assessment or forecast for the gold price has been undertaken by Empire.
Economic	 The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.	The February 2016 Feasibility Study is ready to be issued by Empire and includes the inputs and economic analysis details used. The undiscounted cashflow was estimated to be $5.4M. The short mine life does not justify discounting or allowance for inflation. No sensitivityanalysis has been completed.

	 NPV ranges and sensitivity to variations in the significant assumptions and inputs.	The primary sensitivities will be the gold price, metallurgical recovery, the mining cost and the processing cost. Every $100/oz variation in the gold price changes the cashflow of the project by approximately $2M.
Social	 The status of agreements with key stakeholders and matters leading to social licence to operate.	There are no agreements in place.
Other	To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:  Any identified material naturally occurring risks.  The status of material legal agreements and marketing arrangements.  The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.	No material naturally occurring risks have been identified. No material legal or marketing agreements have been entered into. The Mining Lease over the tenement that contains the Ore Reserves has been granted. A number of general purpose and miscellaneous licenses have been applied for and are pending. These licenses are for water management bunds, waste dump and the Pinjin Kurnalpi road diversion. The Mining Proposal and Project Management Plan have been submitted for approval and are expected to take approximately 3 months to be approved.
Classification	 The basis for the classification of the Ore Reserves into varying confidence categories.  Whether the result appropriately reflects the Competent Person’s view of the deposit.  The proportion of Probable Ore Reserves that have been derived from Measured Mineral _Resources(if any). _	Indicated Resources have been converted to Probable Reserves. The estimated Ore Reserves are, in the opinion of the Competent Person, appropriate for these deposits. No Measured Resources have been classified as Probable Reserves.
Audits or reviews	 The results of any audits or reviews of Ore Reserve estimates.	No audits have been undertaken.
Discussion of relative accuracy/ confidence	 Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative	All areas of the Ore Reserve estimate have been completed to Feasibility Study level.

discussion of the factors which could affect the relative accuracy and confidence of the estimate.  The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.  Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage.  It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.