EMPIRE RESOURCES LIMITED — Capital/Financing Update 2019

Mar 3, 2019

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NEW MINERAL VENTURE PROJECT

ACQUISITION OF HIGH-GRADE PENNY’S FIND GOLD MINE

Highlights

• Orminex acquires 100% of Penny’s Find Gold Mine

ASX ANNOUNCEMENT ASX Code: ONX

• Mineral Resource of 248,000 tonnes at 7.04g/t Au for 56,000 oz and mineralisation remains open at depth

• Completed open pit and significant on-site infrastructure

4 March 2019

• Underground mine plan supports potential short lead time to gold production

DIRECTORS & MANAGEMENT

Daryl Henthorn Executive Chairman Emmanuel Correia Non-Executive Director John Correia Non-Executive Director Kelly Moore Company Secretary

Overview

Orminex Ltd (ASX: ONX) (‘ Orminex ’ or ‘ the Company ’) is pleased to advise that it has entered into an agreement to acquire 100% of the Penny’s Find Gold Mine (‘ Penny’s Find ’) located 50km northeast of Kalgoorlie in Western Australia. The Company has signed a binding term sheet with Empire Resources Ltd (ASX Code: ERL) (‘ Empire ’) to acquire Penny’s Find for staged cash payments totalling A$600,000 and a net smelter royalty, subject to detailed documents being executed over the coming weeks and all necessary approvals being obtained.

Commenting on the acquisition, Executive Chairman Daryl Henthorn, said:

Current Share Price $0.185

Share Capital - 538,554,223 Unlisted Options – 10,000,000

A: 1A Agnew Way, Subiaco WA 6008

P: PO Box 924, SUBIACO WA 6904

PH: +61 8 6149 1550 FAX: +61 8 9380 8300

e: admin@orminex.com.au www.orminex.com.au

ACN: 008 740 672 ABN: 45 008 740 672

“This acquisition fits the Mineral Ventures Model perfectly as Penny’s Find has previous mining history, a mineral resource and potential for a long underground mine life, and the existing infrastructure provides quick lead time that allows us to get on with what we are good at, mining. It further demonstrates that our Mineral Ventures Model is scalable and repeatable.

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Figure 1. Penny’s Find gold mine recently completed open pit providing access to proposed underground mine.

Mineral Resource

Penny’s Find has o56,000 ounces of gold at high grades contained within the previously announced underground mineral resource reported by gold miner Empire Resources (refer ASX announcement entitled “Penny’s Find Gold Mine New Underground Resource Estimate” dated 13 December 2017) (‘ ERL Announcement ’). ONX is not aware of any new information or data that materially affects the information in the ERL Announcement and considers that all material assumptions and technical parameters underpinning the mineral resource disclosed in the ERL Announcement continue to apply and have not materially changed.

The underground 2012 JORC compliant mineral resource of 248,000 tonnes at 7.04g/t Au (refer Table 1 below) extends from the base of the completed open pit (approximately 85m depth) to at least 250m below surface and remains open at depth (Figure 2).

This underground resource only reports fresh mineralisation and is defined by a 1.5g/t Au lower cut-off wireframe model. It also reflects only those parts of the mine’s total resource which have the potential to be economically viable for extraction by underground mining methods.

The high-grade gold mineralisation at Penny’s Find is hosted by quartz veins at the contact between sediments and basalt. Metallurgical test work has shown fresh mineralisation to be free milling with a high gravity recoverable gold component and a total gold recovery which has historically exceeded 90%.

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Table 1: Penny’s Find Gold Mine
Reportable in situ Mineral Resource below completed open pit
Fresh mineralisation only
Class Tonnes Au g/t Ounces
Indicated 147,000 8.06 38,000
Inferred 101,000 5.57 18,000
TOTAL 248,000 7.04 56,000
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The resource estimation was calculated by DataGeo Geological Consultants (‘ DataGeo ’) and incorporated results from all appropriate drilling with the most recent being diamond drilling reported to the ASX by Empire on 6 November 2017. The data, interpretation and techniques utilised in the estimate of the mineral resource are as summarised in the ERL Announcement.

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Figure 2. Long Section (looking west) shows all blocks by classification and drill holes. Light Blue - Indicated Blue - Inferred

Mine Plan

As part of the purchase of Penny’s Find, Orminex will acquire all the data and information relating to the proposed underground mine including geological information, drill data and results, the underground mining model and all reports prepared by independent consultants. The due diligence process undertaken by GBF Mining Pty Ltd (‘ GBF ’) and Orminex reviewed the proposed mine plan and associated information, concluding that, with further refinement and review, the Penny’s Find underground mine has the potential to be a viable operational gold mine. Figure 3 below provides a potential conceptual 3D model of the proposed underground development showing the position of the decline in relation to the ore body. The current model indicates that ore containing gold may be accessible within a short period as the decline development is relatively short.

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Figure 3. Conceptual 3D model of the proposed underground.

Mine Site

The previous open cut mining required the construction of support infrastructure for the operations and most of that infrastructure still exists within the project tenements. This includes internal roads, open pit with ramp access to potential portal for the underground mining, site offices, storage dams and magazine for the storage of explosives.

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Figure 4. Penny’s Find Gold mine site layout, location of infrastructure and tenements.

Location

Penny’s Find Gold Mine is located 50 kilometres northeast of Kalgoorlie in Western Australia. It is strategically located within 30 minutes’ drive of Kalgoorlie and approximately 1 hour’s drive from Orminex’s operational mine Comet Vale.

The location will provide operational efficiencies for GBF during start-up and mining. Operational staff can be based in Kalgoorlie and it’s a short commute for services contractors located in Kalgoorlie. There are a number of gold processing options in the area. Penny’s Find is located within economic trucking distance of the Burbanks gold processing mill. Orminex has previously announced that GBF has entered a 12-month lease with an attached option to buy the Burbanks mill subject to satisfactory due diligence. The Lakewood mill which provides toll milling services and processed most of the ore from the recently completed Penny’s Find open pit mine is close to Kalgoorlie and approximately 45 km south west of Penny’s Find.

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Figure 5. Location of Penny’s Find, the Comet Vale mine and Burbanks mill.

Acquisition Key Terms

The purchase includes a 100% interest in Mining Tenements M27/156 (which hosts the Penny’s Find open pit mine and mineral resource) and G27/01, L27/90 L27/91, L27/92 and L27/93 (which provide access to the mine and access roads within the mining area). The purchase includes existing site infrastructure and some equipment.

The key terms of the purchase of the Penny’s Find Gold Mine include cash consideration and a net smelter royalty.

The cash consideration is $600,000 and payable in 3 tranches:

• First payment of $200,000 on signing of the detailed documentation;

• Second payment of $200,000 on commencement of mining from M27/156;

• Third payment of $200,000 on first gold pour from M27/156.

Net Smelter Royalty:

A 5% net smelter royalty payable on the first 50,000 ounces produced from M27/156 and thereafter a 2.5 % net smelter royalty for life of mine.

Payment for Non-Commencement and Cessation of Mining:

• If mining has not commenced within 9 months of signing of the detailed documentation, Orminex has to make further payments of $100,000 to Empire every 6 months, capped at $400,000.

Underground Mine Development Timing

Orminex, with its strategic mining partner GBF, propose on completion of the purchase of Penny’s Find, that GBF will apply for an underground mining licence and all other statutory approvals required to commence mining. Simultaneously, GBF will commence dewatering of the open pit, refine mine design and mine model and the installation of ground support. The current plan is to commence mining within 12 months from final legal documentation being signed.

New Mineral Venture Projects

As previously advised, Orminex continues to review a number of potentially suitable new Mineral Venture projects and the Company will update the market of any material development.

Investor enquiries: Daryl Henthorn Executive Chairman dhenthorn@orminex.com.au

For more information, visit www.orminex.com.au

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Follow @Orminex on Twitter

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Follow Orminex Limited on Linked

About Orminex

Orminex has a strategic alliance with underground mining contractor GBF Mining Pty Ltd (“GBF”) who oversees operational management of the Company’s projects. This strategic alliance facilitates a Mineral Ventures Model that provides capital and mining service solutions to suitable near-term production gold projects

Competent Person – Mineral Resource Estimate

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 1 - Summary of Penny’s Find Resource Reporting Criteria

The data and interpretation utilised and the resultant mineral resource estimate for the Penny’s Find Deposit is summarised as follows:

• Geology and Mineralisation Interpretation

• The deposit consists of a moderate to steeply north-easterly dipping north-west to south-east striking (relative to a GDA grid) sheared quartz/carbonate zone which is anomalous in gold. Within the shear in the fresh rock are zones of similarly orientated higher-grade with the largest zone occurring over a strike length of 180m, and extending for 220m down dip with a true width averaging 2.2m. These were interpreted on 20m spaced sections along strike. The Deposit remains open at depth although appears to be thinning.

• The mineralised zones are defined using a nominal 1.5g/t Au boundary without a minimum length. These zones are wireframed as solids.

• The weathering profile is positioned by the drill log information and represented by wireframed surfaces, including base of soil cover.

• The main lithological units are interpreted on section and wireframed as solids

• Drill Information and Sampling

• The deposit has been drilled from surface using RAB, reverse circulation (RC) and diamond coring. Only RC and diamond drilling from 2007 onwards has been used in this estimate. A total of 54 RC and diamond holes containing 7,642m intersect the mineralisation.

• The diamond core recovery is generally very good, averaging more than 95%. The RC sample recovery for the 2007 and 2012 drilling is erratic being described as good (thought to be >75% recovery) in dry conditions which is most of the time and within the mineralised zone to poor (thought to be < 25%) in wet conditions. For the 2015 drilling it averaged 84%. The recovery for the mineralised zone within the hole drilled in 2016 was in excess of 95%.

• All hole collars were surveyed by DGPS and the orientation and inclination at collar is set out using compass and clinometer. Down hole survey for the 2007 series holes was by down hole camera measuring dip only except for the last holes of the program where dip and azimuth were measured. The 2012 program was down hole surveyed by camera with dip only recorded. Diamond tails were surveyed by gyroscopic methods. For the 2015 drilling collars were positioned by tape and compass (from existing holes) or by handheld GPS. The inclined hole was orientated using compass, sighter pegs and clinometer. For the 2016 and 2017 holes the collars were pickup up by the site surveyor using a DGPS and the down hole orientation was measured with a Reflex Ezi-shot tool.

• The drilling and sample collection techniques for RC was that chips were collected at 1m intervals via the cyclone into sample bags with on most occasions a rotary or cone splitter used to collect a smaller sample at the same time. Samples for dispatch were either composites (individual samples speared and 4 consecutive samples were combined) or individual (the 1m rotary or cone split samples were sent initially if the material returned was obviously mineralised). If the 4m composites returned an assay above a threshold then the large samples were respeared or the rotary splitter sample was taken and submitted individually. The RC chips are logged for mineral content and geology. For the diamond holes the core is stored in core boxes labelled with the hole number and length contained. The core is transported to the core storage area where it is logged geologically and intervals for analysis are marked up by the site geologist. The intervals selected for analysis had the core ½ed at site or at a laboratory facility in Kalgoorlie (2017 program) and then sent for preparation and analysis. In the 2012, 2015 and 2017 drilling programs Standards and Blanks were included with the samples dispatched for analysis.

• Sample Preparation and Analysis

• Drill samples have been prepared and analysed at commercial accredited laboratories in Western Australia

• the preparation is dependent on sample type by drying, crushing, riffling and pulverising.

• gold content is determined FA techniques with atomic absorption or ICP finish. Some SFA analysis has been carried out.

• When utilised QAQC protocols included a standard or a blank with between 10 to 14 routine samples (approximately) submitted to the laboratory, this number was dependant on the program being considered. An umpire laboratory was occasionally used as were field duplicates to assist in analytical validation

• Duplicate sampling for some RC holes was undertaken.

• Estimation Methodology

• The drill hole information is composited within the mineralisation interpretation to the most common sample length within the dataset – 1m down hole

• Grade is estimated by ordinary kriging for the largest zone with demonstrated continuity and sufficient composite information from composite data top-cut to the 98%ile. Other zones are estimated by inverse distance to the power of 3 techniques. The estimation is constrained by a hard boundaries representing the extent of the mineralisation. The grade is estimated into a block model with a parent cell size of 2.5mE x 20mN x 2.5mRL.

• Specific gravity is assigned to the block model by weathering profile position and, in the fresh zone, by reference to the position of the shear zone. A background value is assigned by rock type.

• Validation and Classification

• The block grade estimates are validated against the composites both globally (for all zones) and spatially for the largest zone

• The block estimates are classified according to geological confidence, length of search, number of composites, number of holes and quality of the input data.

• Reporting

• No reporting cut-off has been applied to this resource which by its design targets underground extraction and used a mineralisation boundary of 1.5g/t to define the mineralisation. Material to be reported will be below the planned depth of the open cut mine.

• Mining and metallurgy

• Metallurgical test work has been conducted on a representative fresh “ore” sample (taken from RC drilling) with the results indicating very high gravity recovery and an overall gold recovery of 99% using typical gravity separation and cyanide leaching techniques.

• Scoping studies on the 2015 mineral resource estimates indicated that underground mining beneath the currently operating open cut may be economic. The indicated that an undiluted grade of 5.2g/t Au (diluted 4.9g/t) could be achieved. The pit is designed (at this time) to an RL of 245m a depth of 85m below the surface.

APPENDIX 2 JORC Code 2012 - Table 1

Section 1: Sampling Techniques and Data

Section 1: Sampling Techniques and Data	Section 1: Sampling Techniques and Data	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.	Overall 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 mineralisation being assessed for underground mining potential occurs in 3 zones the largest striking over 180m and extending down dip for approximately 220m in fresh rock. These zones are defined for grade estimation purposes by 44 RC and 10 diamond holes totalling 7,642m. 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.	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 between a 30gm to 50gm charge 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 or 50gm sub-sample (dependent on laboratory) selected for FA assay.

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Drilling techniques • Drill type (eg core, reverse Diamond drilling is mostly NQ sized through the
circulation, open-hole hammer, mineralised zone with the holes totalling 2,145m
rotary air blast, auger, Bangka, including any pre-collar. The core from the recent
sonic, etc) and details (eg core holes were orientated. The RC holes were all 135mm
diameter, triple or standard tube, diameter and drilled with a face sampling bit, the
depth of diamond tails, face- total number of holes is 54 and total metres is
sampling bit or other type, whether 5,497.
core is oriented and if so, by what
method, etc).
Drill sample • Method of recording and The core recovery recorded is length recovered per
recovery assessing core and chip sample run, the recovery is in excess of 95%. The RC sample
recoveries and results assessed. recovery is either recorded descriptively as good,
medium or poor (testing by weighing samples
determined that good recovery was in excess of 75%
and poor recovery was usually less than 25% which
occurred mostly in wet ground) and in later
programs recorded by visual estimates of %recovery
which was usually in excess of 90% .
• Measures taken to maximise For RC drilling the collar was sealed and air pressure
sample recovery and ensure was used to maximise return. The cyclone was
representative nature of the cleaned between rod changes.
samples.
• Whether a relationship exists No assessment has been made of grade v RC sample
between sample recovery and recovery but based on the descriptive assessment
grade and whether sample bias the majority of mineralisation was returned dry and
may have occurred due to thus usually with good recovery. The competency of
preferential loss/gain of the core demonstrates that there should be minimal
fine/coarse material. potential for sampling bias.
Logging • Whether core and chip samples Core and chips have been geologically logged
have been geologically and recording lithology, mineralisation, veining,
geotechnically logged to a level of alteration, weathering and some geotechnical
detail to support appropriate features (core only) like RQD. The geological logging
Mineral Resource estimation, is appropriate to the style of the Deposit.
mining studies and metallurgical
studies.
• Whether logging is qualitative Geological logging is both in summary (comments)
or quantitative in nature. Core (or and detailed by interval for the information listed
costean, channel, etc) photography above.
• The total length and percentage The entire length of all diamond and RC holes, apart
of the relevant intersections from surface casing, has been logged.
logged.
Sub-sampling • If core, whether cut or sawn and All core to be sampled was 1/2ed using a mechanical
techniques and whether quarter, half or all core saw. It is not known if the core was consistently
sample taken. taken from one side of the stick.
preparation
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• If non-core, whether riffled, tube RC samples are collected from the cyclone into a
sampled, rotary split, etc and plastic sample bag. In addition a smaller sample is
whether sampled wet or dry. split using a rotary or cone splitter attached to the
cyclone. The cyclone was cleaned with air and any
loose material scrapped off between rod changes.
Sub-samples of the larger samples are taken with a
spear.
• For all sample types, the nature, All samples (approx. 2.5 to 4Kg for the RC samples
quality and appropriateness of the and 1/2 NQ core up to 1m long) are provided to a
sample preparation technique. 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 rotary splitter to a 30 to
50gm charge size.
• Quality control procedures Empire did not include Standards or Blanks for the
adopted for all sub-sampling 2007 drill program with their routine samples
stages to maximise representivity submitted to the Laboratory but used an Umpire
of samples. 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 these results can be
considered acceptable. Empire included Standards
and Blanks in their 2015 and 2017 drilling campaign
at a similar rate to Brimstone with results generally
acceptable from small numbers. Empire used
duplicate sampling as QAQC for the RC hole drilled
in 2016 again with acceptable results.
• Measures taken to ensure that Duplicate RC sampling was conducted in 2007 and
the sampling is representative of 2016 and the results were supportive of the original
the in situ material collected, results. No 1/2nd half core duplicate assay results
including for instance results for have been observed.
field duplicate/second-half
sampling.
• Whether sample sizes are Whilst there is coarse gold in the system the outlier
appropriate to the grain size of the grades returned are not excessive and as such the
material being sampled. sampling appears to be representative and thus the
global grade is being fairly represented.
Quality of assay • The nature, quality and The assay techniques applied for the measurement
data and appropriateness of the assaying of gold content is appropriate for the determination
laboratory tests and laboratory procedures used of the level of gold in the sample. Comparison
and whether the technique is between SFA and FA methods are reasonable this
considered partial or total. indicating that the analytical methods adopted
report total gold content.
• For geophysical tools, None applied
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.
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• Nature of quality control Standards and Blanks were included at
procedures adopted (eg standards, approximately 1 in 12, 1 in 10 and 1 in 14 of the
blanks, duplicates, external number of samples submitted for the 2012, 2015
laboratory checks) and whether and 2017 holes. The results whilst showing that the
acceptable levels of accuracy (ie lower grade Standards had a potential high grade
lack of bias) and precision have bias (2012 program only - Lab not used in latter
been established. programs) were generally acceptable. Umpire
laboratory checking provided support for the
original results.
Verification of • The verification of significant Mineralisation intercepts have been determined by
sampling and intersections by either independent previous and current company personnel and
assaying or alternative company personnel. appear correct
• The use of twinned holes. No specific twinning program has been conducted.
• Documentation of primary data, Primary data was recorded directly onto electronic
data entry procedures, data spread sheets and validated against expected codes.
verification, data storage (physical Assay information in electronic form from the
and electronic) protocols laboratories was merged with sample interval data
on sample number
• Discuss any adjustment to assay None applied
data.
Location of data • Accuracy and quality of surveys The collar positions were surveyed by contractors
points used to locate drill holes (collar and after the completion of the 2012 drilling using an
down-hole surveys), trenches, mine RTKGPS on the GDA 94 Zone 51 Datum and the AHD.
workings and other locations used This survey included some of the 2007 drill collars
in Mineral Resource estimation. which confirmed the location of these holes. A
surface survey in 2015 according to the GDA Grid
picked up the 2015 collars and confirmed the
location of previous holes. The 2016 and 2017
collars were surveyed by the site surveyor. 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 DGPS surveyed post
drilling but no down orientation was undertaken
due to the holes relatively short length and/or
vertical orientation. The down hole orientations of
the 2016/2017 holes were measured with a Reflex
Ezi-shot tool. The 2017 core was orientated.
• Specification of the grid system The regional grid is GDA94 Zone 51 and the Deposit
used. is drilled and modelled on this grid
• Quality and adequacy of Topographic control is taken from the 2015 site
topographic control. survey.
Data spacing and • Data spacing for reporting of Drill spacing varies with position in the deposit from
distribution Exploration Results. 10mN x 20mE to in excess of 50m.
• Whether the data spacing and Successive drilling programs have in filled and
distribution is sufficient to establish extended (at depth) the previous drilling and on the
the degree of geological and grade majority of occasions drilling has returned
continuity appropriate for the mineralisation in the expected locations. This
Mineral Resource and Ore Reserve provides a high degree of confidence in the
estimation procedure(s) and geological continuity.
classifications applied.
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• Whether sample compositing The sampling reflects the geological conditions. For
has been applied. mineral resource estimation a 1m composite length
was chosen given that this is the dominant sample
length.
Orientation of data • Whether the orientation of The drilling is oriented as best as possible
in relation to sampling achieves unbiased perpendicular to the structure/geology containing or
geological sampling of possible structures and controlling the mineralisation.
structure the extent to which this is known,
considering the deposit type.
• If the relationship between the No sampling bias is considered to have been
drilling orientation and the introduced.
orientation of key mineralised
structures is considered to have
introduced a sampling bias, this
should be assessed and reported if
material.
Sample security • The measures taken to ensure The chain of custody adopted by operators of the
sample security. project appears appropriate and is based on
responsibility and documentation.
Audits or reviews • The results of any audits or A brief audit of assay records revealed no data
reviews of sampling techniques errors.
and data.
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Section 2 : Reporting of Exploration Results

Section 2 : Reporting of Exploration Results	Section 2 : Reporting of Exploration Results	Section 2 : Reporting of Exploration Results
Criteria	Explanation	Comments
Mineral tenement and land tenure status	• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.	Empire Resources Ltd holds a 60% interest in the Penny’s Find gold project with the remaining 40% interest held by unlisted Brimstone Resources Ltd. Empire acts as manager for the project.
	• The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	Mining lease and necessary approvals to operate an open cut mine are in place; the mining lease is held in the names of Brimstone Resources and Empire Resources
Exploration done by other parties	• Acknowledgment and appraisal of exploration by other parties.	Whilst numerous companies have explored and drilled the Deposit only the information collected by Empire and Brimstone since 2007 has been used in this estimate.
Geology	• Deposit type, geological setting and style of mineralisation.	The Penny’s Find Deposit overall consists of gold in a sheared quartz host which is moderately to steeply north-east dipping. In the fresh rock the shear is expressed as quartz veins which are adjacent to the mafics on most occasions, the largest zone of these veins varies between 0.3m and 8m in true width over a strike of 180m along strike and is drill defined over 220m down dip.

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Drill hole • A summary of all information The drill hole details are in Appendix 1 and 2 of the
material to the understanding of report
the exploration results including a
tabulation of the following
information for all Material drill
holes : easting and northing of the
drill hole collar
Information • easting and northing of the drill
hole collar
• elevation or RL (Reduced Level –
elevation above sea level in
metres) of the drill hole collar
• dip and azimuth of the hole
• down hole length and
interception depth
• hole length.
• If the exclusion of this
information is justified on the
basis that the information is not
Material and this exclusion does
not detract from the
understanding of the report, the
Competent Person should clearly
explain why this is the case.
Data aggregation • In reporting Exploration Mineralised intercepts are reported down hole by
methods Results, weighting averaging length weighting of the individual sample intervals
techniques, maximum and/or if appropriate. No top-cuts are applied
minimum grade truncations (eg
cutting of high grades) and cut-off
grades are usually Material and
should be stated.
• Where aggregate intercepts All intercepts aggregation is to the full down hole
incorporate short lengths of high length of the hole within the mineralisation
grade results and longer lengths of envelopes which has a nominal Au boundary grade
low grade results, the procedure of 1.5g/t.
used for such aggregation should
be stated and some typical
examples of such aggregations
should be shown in detail.
• The assumptions used for any Equivalents not utilised
reporting of metal equivalent
values should be clearly stated.
Relationship • These relationships are
between particularly important in the
mineralisation reporting of Exploration Results.
widths and
intercept lengths
• If the geometry of the The true width is approximately 2/3rd of the down
mineralisation with respect to the lengths reported
drill hole angle is known, its nature
should be reported.
• If it is not known and only the
down hole lengths are reported,
there should be a clear statement
to this effect (eg ‘down hole
length, true width not known’).
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Diagrams • Appropriate maps and sections Sections at 20m spacing have been generated for
(with scales) and tabulations of the mineralisation interpretation. The report
intercepts should be included for contains plans and long sections of the drill data.
any significant discovery being
reported These should include, but
not be limited to a plan view of
drill hole collar locations and
appropriate sectional views.
Balanced • Where comprehensive reporting All intercepts within the mineralisation are
reporting of all Exploration Results is not included within the report
practicable, representative
reporting of both low and high
grades and/or widths should be
practiced to avoid misleading
reporting of Exploration Results.
Other substantive • Other exploration data, if Metallurgical test work has shown that the
exploration data meaningful and material, should samples tested had excellent overall gold recovery
be reported including (but not (99%) with both high gravity recoverable gold and
limited to): geological rapid leach times. Open pit mining has been and is
observations; geophysical survey being conducted successfully to date on the first
results; geochemical survey results; 60m from surface of the deposit but no
bulk samples – size and method reconciliation with model or mill has been
of treatment; metallurgical test provided to ascertain performance. Minor
results; bulk density, groundwater, groundwater seepage only is seen in the pit.
geotechnical and rock
characteristics; potential
deleterious or contaminating
substances.
Further work • The nature and scale of planned At this time the mineral resource generated from
further work (eg tests for lateral this data will be reviewed for mining potential.
extensions or depth extensions or Once this is done future work (if any) can be
large-scale step-out drilling). determined.
• Diagrams clearly highlighting These mineralised zones are open down dip
the areas of possible extensions,
including the main geological
interpretations and future drilling
areas, provided this information is
not commercially sensitive.
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Criteria Explanation Comments
Database integrity • Measures taken to ensure that data An Access database file has been
has not been corrupted by, for example, created by site to store drill
transcription or keying errors, between its information, it contains the
initial collection and its use for Mineral information which was in the previous
Resource estimation purposes. excel spreadsheets. Data from logging,
sample submission and the assay
laboratory is combined in many
spreadsheets. Previously (2015) 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. Assay data from
the 2016/17 programs was reviewed
and found to reflect the 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
supporting information.
• 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 DataGeo visited the site on March 26th
by the Competent Person and the 2014 and was able to establish that the
outcome of those visits. 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 programs
was felt necessary
• If no site visits have been undertaken Not applicable
indicate why this is the case.
Geological • Confidence in (or conversely, the The confidence in the geological
interpretation uncertainty of) the geological interpretation is considered good as it
interpretation of the mineral deposit. 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
the deeper fresh material adjacent to
the mafics contact (as modelled)
appears consistent based on the
drilling.
• Nature of the data used and of any Only physical data obtained in the field
assumptions made. was utilised.
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	• 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 being modelled (i.e. high-grade adjacent to the mafics).
	• The use of geology in guiding and controlling Mineral Resource estimation.	The overall position of the shear provides the geological control, this combined with presence of gold in quartz adjacent to the mafics is used to constrain the interpretation.
	• The factors affecting continuity both of grade and geology.	The higher-grade gold zones modelled occur sub-parallel to Shear and adjacent the mafics. The position and style of mineralisation impacts the grade 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 largest zone modelled in this exercise within the fresh rock strikes over 180m, is drill defined down dip for 220m and averages 2.2m in true width. The deposit remains open at depth although thinning.
Estimation	• 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 200 composites and provided a reasonable continuity model which supported the use of ordinary kriging. The composites were top-cut to the 98%ile to guard against outlier influence. 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. Grade estimation was carried out in VulcanTMapplication. Density was assigned based on, for fresh rock, representative measurements made from what core was available. 1m composites were created within each zone and input to the grade estimation 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 2m in strike, dip and across dip-strike plane with a NW plunge. This search range was expanded by double the length for blocks which were not informed in the primary search and again in the final search strategy. This strategy informed on average 64% of the blocks within the zones to be estimated in the primary and secondarysearch.

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and modelling • The availability of check estimates, There is no mining history. The
techniques previous estimates and/or mine previous model was significantly larger
production records and whether the in tonnes with lower grade above cut-
Mineral Resource estimate takes off due to the modelling of the entire
appropriate account of such data. higher grade part of the shear zone.
Check estimates for the largest zone
using the same parameters in a strike
orientated model provided a similar
result.
• The assumptions made regarding No assumptions made.
recovery of by-products.
• Estimation of deleterious elements or No assessment of deleterious elements
other non-grade variables of economic has been made.
significance (eg sulphur for acid mine
drainage characterisation).
• In the case of block model The block model was constructed using
interpolation, the block size in relation to blocks which were 2.5mE x 20mN x
the average sample spacing and the 2.5mRL with sub-celling to 0.5mE x
search employed. 5mN x 0.5mRL the block size in each
direction adopted to ensure accurate
volume representation of the various
surface and zones. The model was
constructed orthogonal to the grid, i.e.
not with strike set to the strike of the
deposit. Grade estimation was to the
parent block size.
• Any assumptions behind modelling of None undertaken
selective mining units.
Estimation • Any assumptions about correlation No assessment undertaken
between variables.
and modelling • Description of how the geological Hard boundaries were applied to the
techniques (continued) interpretation was used to control the Zones. Grade was estimated within
resource estimates. these boundaries.
• Discussion of basis for using or not Statistical analysis indicated that
using grade cutting or capping. because the interpretation was dealing
with mostly only the high-grade
component of the deposit an almost
normal grade distribution occurred.
Minor number of more extreme
outliers were cut to the 98%ile.
• The process of validation, the checking Volume validation was carried out by
process used, the comparison of model comparison of the solids representing
data to drill hole data, and use of the mineralisation to the block model.
reconciliation data if available. 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.
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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 1.5g/t and above. For mineral resource reporting no cut-off is applied as the in situ has the potential to support underground mining based on studies to date.
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.	In 2016 underground mining studies determined that an undiluted head grade of 5.2g/t Au could provide positive economics using a decline from the open pit.
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.	Metallurgical test work to determine gold recovery (by gravity and cyanide leaching) indicates that the recovery would be in excess of 95%, possibly as high as 99% as the gold is free milling with a high gravity component.

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. Whilst DataGeo is unaware of the details of environmental and land use studies they must be positive given open cut mining is in progress.
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 weathered profile.
	• 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, 2015 and 2017 drilling combined with duplicate sampling from the 2016 hole was mostly supportive. Higher confidence areas have more supporting data, areas of lower geological support reflect a lower classification.

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• Whether appropriate account has been The input data particularly the more
taken of all relevant factors (ie relative recent is consistent and closely spaced
confidence in tonnage/grade estimations, enough to support the projection of
reliability of input data, confidence in the geological interpretation at depth
continuity of geology and metal values, which in terms of style of
quality, quantity and distribution of the mineralisation is consistent with other
data). 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 all drilling post 2014. The
estimated grade correlates reasonably
well with the input data given the
nature of the mineralisation.
• Whether the result appropriately The Mineral Resource estimate reflects
reflects the Competent Person’s view of the Competent Persons understanding
the deposit. of the Deposit.
Audits or reviews. • The results of any audits or reviews of None undertaken
Mineral Resource estimates.
Discussion of relative • Where appropriate a statement of the The mineral resource is volume
accuracy/ confidence relative accuracy and confidence level in constrained by the geological
the Mineral Resource estimate using an interpretation thus in a global sense
approach or procedure deemed there is no sensitivity. Given only the
appropriate by the Competent Person. For high-grade with quartz is being
example, the application of statistical or assessed in a zone adjacent to the
geostatistical procedures to quantify the mafics and that the grade statistics are
relative accuracy of the resource within near normal it is anticipated that in a
stated confidence limits, or, if such an global sense the result is
approach is not deemed appropriate, a representative for an exploration
qualitative discussion of the factors that model. The confidence in the mineral
could affect the relative accuracy and resource is defined by the classification
confidence of the estimate. adopted as per the guidelines of the
2012 JORC code.
• The statement should specify whether The statement relates to global
it relates to global or local estimates, and, estimates of tonnes and grade.
if local, state the relevant tonnages, which
should be relevant to technical and
economic evaluation. Documentation
should include assumptions made and the
procedures used.
• These statements of relative accuracy No production information either from
and confidence of the estimate should be the old workings or the current open
compared with production data, where cut is available.
available.
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