EVOLUTION MINING LIMITED — Regulatory Filings 2016

Aug 23, 2016

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ASX Announcement

24 August 2016

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ABN: 74 084 669 036 P 02 9696 2900 F 02 9696 2901

Level 30 175 Liverpool Street, Sydney, NSW 2000 www.evolutionmining.com.au

ACQUISITION OF AN ECONOMIC INTEREST IN THE ERNEST HENRY COPPER-GOLD OPERATION AND PRO RATA ENTITLEMENT OFFER TO RAISE A$400 MILLION

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Evolution Mining Limited (ASX:EVN) (" Evolution " or the " Company ") is pleased to announce that it has, through a wholly owned subsidiary, entered into a transaction with Glencore plc (" Glencore ") to acquire an economic interest in Glencore's Ernest Henry operation (" Ernest Henry ") for A$880 million[1] . In addition, Evolution has entered into a strategic alliance with Glencore in respect of potential future regional acquisitions and the parties have made a commitment to cooperate on exploration activities in the region surrounding Ernest Henry (collectively, the " Transaction ").

Transaction Highlights

• Proven, large scale, long life copper-gold mine located in Australia

• Pro-forma FY16 gold production for Evolution’s interest of 88,342 ounces at an AISC of A$(59)/oz[2]

• Reduces Evolution Group FY17 AISC guidance from A$1,000/oz to A$930/oz[3]

• Major capital investment recently completed supporting the 11 year mine life, based on current reserves

• Upside at Ernest Henry through potential mine life extension at depth and regional opportunities

• Provides Evolution with a platform for growth in one of the world’s premier copper-gold mining regions

• Acquisition expected to be earnings, cash flow and value accretive

• Further extends Evolution’s average reserve life to more than eight years

• Revised FY17 Group production guidance of 800,000 – 860,000oz at an AISC of A$900 – A$960/oz

Evolution’s Executive Chairman, Jake Klein, commented:

“Evolution has today gained exposure to a world-class mining asset in Ernest Henry. Since inception we have consistently communicated a very clear strategy of upgrading the quality of our asset portfolio to create a globally relevant, mid-tier Australian gold producer. This acquisition, together with the recent divestment of Pajingo, is a substantial step forward in delivering on this strategy.

“In the last 12 months we have demonstrated that the acquisitions of Cowal and Mungari have provided significant value accretion to our shareholders. The addition of low cost gold production from Ernest Henry to our portfolio gives us exposure to another high quality, long life asset that further underpins the future success of our business. Evolution is building a portfolio of high quality, long life assets that will prosper through the gold cycle.”

Note: All information in this announcement in relation to Ernest Henry has been sourced from Glencore plc and its subsidiaries. Evolution has not independently verified such information and no representation or warranty, expressed or implied, is made as to its fairness, accuracy, correctness, completeness or adequacy.

1 Evolution is not acquiring a direct interest in the underlying assets or production of the Ernest Henry mine. Under the transaction documents, Evolution is acquiring an amount of copper, gold and silver that is referable to a proportion of the actual future production of the Ernest Henry mine. To the extent that the actual future production of the Ernest Henry mine is less than expected, Evolution has no entitlement to receive a prescribed quantity of payable metals.

2 Based on production and costs for the 12 months to 30 June 2016 and inclusive of attributable copper and silver credits. 3 Midpoint of Evolution Group FY17 AISC guidance.

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The Transaction is expected to deliver Evolution gold production at extremely low AISC[4] (after copper and silver credits), generate significant free cash flow (similar to the cash flow generation from Cowal at current spot metal prices) and provide Evolution with exposure to mine life extension potential from a high quality Australian copper-gold mine. The Transaction arrangements are summarised below.

Evolution has agreed to acquire 100% of future gold produced from the agreed life of mine area (the " LoM Area ")[5] and 30% of future copper and silver produced from the LoM Area. In addition to the upfront A$880 million payment, Evolution must contribute 30% of future production costs in respect of the LoM Area. In the 12 months to 30 June 2016, Ernest Henry produced 67,000t of copper and 88,000oz of gold in concentrate. On a pro-forma basis, Evolution’s interest in Ernest Henry would have delivered an FY16 AISC of negative A$(59) per ounce[2] (after copper and silver credits) and generated a net mine cash flow of A$142 million.[6]

Evolution intends to raise approximately A$401 million through an underwritten pro-rata accelerated renounceable entitlement offer to partly fund the Transaction. Evolution’s largest shareholder, La Mancha Group International B.V., has confirmed that it will take up A$60 million, representing approximately 50% of its entitlement, under the entitlement offer. The balance of the A$880 million payment will be funded by a new A$500 million Term Loan (“ Facility D ”), with a five year tenor, which will be additional to Evolution’s existing syndicated debt facility.

Overview of the Ernest Henry copper-gold mine

Ernest Henry is located ~35km north east of Cloncurry in Queensland, Australia. The mine has a long operating history, having been initially commissioned as an open-cut mine in 1997 which transitioned to a wholly underground operation in late 2011. Ernest Henry currently has an Ore Reserve base that supports a mine life of at least 11 years. Ernest Henry is a high quality Australian copper-gold asset which has a track record of stable, large scale, low cost production. The underground mining operation utilises the sub-level caving ore extraction method. The ore is crushed underground and brought to surface via a sophisticated ore hoisting system supported by a 1.0km deep shaft and a 1.2km network of conveyors.

Ernest Henry is expected to immediately contribute annualised gold production of approximately 85,000oz[7] at a very low AISC, including copper and silver by-product credits at current spot prices. The Ernest Henry Mineral Resource is estimated at 96.1 million tonnes grading 1.17% copper and 0.59g/t gold for 1.1 million tonnes copper metal and 1.8 million ounces gold and is reported inclusive of Ore Reserves[8] . The processing plant currently has capacity of around 8.5Mtpa and is scalable up to approximately 11.0Mtpa.

Ernest Henry has strong potential growth prospects beyond its current reserve life via its large resource base and extension potential at depth.

Evolution has also entered into agreements with Glencore in respect to the potential for future regional acquisitions and exploration activities on tenements proximal to Ernest Henry. There are several existing identified exploration targets and regional opportunities that Glencore and Evolution are already focused on further analysing. The long mine life and strong free cash flow expected to be generated from Ernest Henry should allow Evolution to explore and develop upside opportunities.

4 AISC (All-in Sustaining Cost) includes C1 cash costs, plus royalty expense, sustaining capital expense and general corporate and administration expense. Calculated on a per ounce payable production basis. Pro-forma FY16 AISC of A$(59)/oz based on production and costs for the 12 months to 30 June 2016 and inclusive of attributable copper and silver credits.

5 The LoM Area is defined by reference to a geological block diagram of the Ernest Henry mine taken from the current Life of Mine plan.

6 Net mine cash flow is calculated as EBITDA less Sustaining Capex.

7 Based on FY17 forecast production for the full financial year for the asset.

8 Full details of the Ernest Henry Mineral Resource and Ore Reserve are provided Appendix B of this announcement.

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Summary of Transaction Arrangements

Under the proposed arrangements:

• Evolution has agreed to acquire 100% of future gold and 30% of future copper and silver produced from the LoM Area;[9]

• Evolution is required to pay A$880 million and to contribute 30% of future production costs in respect of the LoM Area;

• Evolution has agreed to pay 49% of development and production costs in return for the equivalent of 49% of future copper, gold and silver production from the area outside of the LoM Area and within the mining tenements comprising Ernest Henry (“ New Reserves Area ” ) as well as from any area not currently owned by either Evolution or Glencore that is within an agreed radius of Ernest Henry and which is later acquired by the parties (" Regional Acquisitions ");[10]

• Evolution and Glencore have entered into a non-binding agreement under which the parties commit to cooperate in relation to exploration opportunities in the region surrounding Ernest Henry with the aim of establishing an exploration joint venture. Development of any opportunities discovered will be on terms to be agreed.

Under the Transaction arrangements, Evolution will have certain governance rights and protections in relation to the operations at Ernest Henry in respect of the LoM Area, the New Reserves Area and any Regional Acquisitions. These include minority voting rights on the management committee that directs operations at Ernest Henry, as well as veto rights on fundamental operational matters. Evolution will also have certain step-in and pre-emption rights.

For a more detailed summary of the Transaction arrangements, please see Appendix A to this announcement.

Glencore is a party to, and co-obligor, under the relevant Transaction agreements. The debt of Glencore is currently rated BBB- with S&P.

The Transaction remains subject to Foreign Investment Review Board approval. Transaction completion is currently expected to occur in October / November 2016.

Entitlement Offer Details

The Transaction will be partly funded via a 2-for-15 underwritten accelerated renounceable entitlement offer to raise approximately A$401 million at an offer price of A$2.05 per new share (“ Entitlement Offer ”).The record date under the Entitlement Offer is 7.00pm (AEST) on 29 August 2016 (" Record Date ").

The offer price represents a 13.4% discount to the theoretical ex rights price (“ TERP ”) based on the adjusted last closing price of Evolution on 23 August 2016[11] and a 18.4% discount to TERP based on the adjusted 10 day VWAP of Evolution as at 23 August 2016.[11]

The Entitlement Offer comprises an accelerated institutional entitlement offer and a retail entitlement offer.

Under the Entitlement Offer, eligible shareholders are invited to subscribe for 2 new fully paid ordinary shares in Evolution (" New Shares ") for every 15 existing fully paid ordinary shares in Evolution (" Entitlement ") held as at 7.00pm (AEST) on the Record Date.

9 Evolution will receive the equivalent of 30% of the copper concentrate (containing copper, gold and silver) produced from the Ernest Henry mine, and sell that to Glencore under the offtake agreement in return for cash and, in the case of gold, gold metal credits. Evolution will receive the equivalent of 70% of the payable gold produced from the Ernest Henry mine as gold credits to its metals account.

10 Evolution will receive the equivalent of 49% of the copper concentrate (containing copper, gold and silver) produced from the Ernest Henry mine, and sell that to Glencore under an offtake agreement in return for cash and, in the case of gold, gold metal credits.

11 Share price adjusted for A$0.02 per share FY16 Final Dividend declared on 17 August 2016.

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At the time of allotment, New Shares issued under the Entitlement Offer will rank pari passu with existing shares. New Shares issued under the Entitlement Offer will not be entitled to the final FY16 dividend declared on 17 August 2016.

Institutional Entitlement Offer

The institutional entitlement offer will take place from Wednesday, 24 August 2016 to Thursday, 25 August 2016 (" Institutional Entitlement Offer "). Eligible institutional shareholders will be invited to participate in the Institutional Entitlement Offer and can choose to take up all, part or none of their Entitlement.

Entitlements cannot be traded on the ASX. Entitlements that eligible institutional shareholders do not take up by the close of the Institutional Entitlement Offer, and Entitlements that would otherwise have been offered to ineligible institutional shareholders, will be sold through an institutional shortfall bookbuild (" Institutional Bookbuild "). Any proceeds from the sale of Entitlements under the Institutional Bookbuild in excess of the offer price will be remitted proportionally to those institutional shareholders, less any applicable withholding tax. There is no guarantee that there will be any proceeds remitted to those institutional shareholders.

Evolution shares have been placed in trading halt and will recommence trading once the Institutional Entitlement Offer and Institutional Bookbuild are completed.

Retail Entitlement Offer

Eligible retail shareholders will be invited to participate in a retail entitlement offer at the same offer price and offer ratio as the Institutional Entitlement Offer (" Retail Entitlement Offer "). The Retail Entitlement Offer will open on Thursday, 1 September 2016 and close at 5.00pm (AEST) on Wednesday, 14 September 2016.

Eligible retail shareholders can choose to take up all, part of none of their Entitlement. Entitlements cannot be traded on the ASX. Entitlements which are not taken up by eligible retail shareholders by the close of the Retail Entitlement Offer and Entitlements that would otherwise have been offered to ineligible retail shareholders will be sold through the retail bookbuild on Monday, 19 September 2016 (" Retail Bookbuild "). Any proceeds from the sale of Entitlements under the Retail Bookbuild in excess of the offer price will be remitted proportionally to those retail shareholders, less any applicable withholding tax. There is no guarantee that there will be any proceeds remitted to those retail shareholders.

Eligible retail shareholders wishing to participate in the Retail Entitlement Offer should carefully read the retail offer booklet and accompanying personalised entitlement and acceptance form which are expected to be despatched on Thursday, 1 September 2016. Copies of the retail offer booklet will be available on the ASX website (www.asx.com.au) on or around Tuesday, 30 August 2016.

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Entitlement Offer Timetable

Entitlement Offer Timetable
Announcement of Transaction and Entitlement Offer
	Wednesday, 24 August 2016
Record date under the Entitlement Offer
	7.00pm Monday, 29 August 2016
Retail Entitlement Offer opens
	Thursday, 1 September 2016
Despatch of retail offer booklet and entitlement and acceptance form
	Thursday, 1 September 2016
New Shares allotted under the Institutional Entitlement Offer and Institutional Bookbuild and commencement of trading on the ASX
	Monday, 5 September 2016
Retail Entitlement Offer closes
	5.00pm Wednesday, 14
	-September 2016
New Shares allotted under the Retail Entitlement Offer and Retail Bookbuild
	Monday, 26 September 2016
New Shares allotted under the Retail Entitlement Offer and Retail Bookbuild commence trading on the ASX
	Tuesday, 27 September 2016
Despatch of Holding Statements and despatch of payments (if any) in respect of Entitlements not accepted under the Retail Entitlement Offer
	Tuesday, 27 September 2016

The above timetable is indicative only and subject to change. All dates and times are AEST. Evolution reserves the right to vary these dates or to withdraw the Entitlement Offer at any time.

Subject to the requirements of the Corporations Act, the ASX Listing Rules and any other applicable laws, Evolution, in consultation with the underwriters, reserves the right to amend this timetable at any time, including extending the closing date of the Retail Entitlement Offer period or accepting late applications, either generally or in particular cases, without notice. Any extension of the closing date will have a consequential effect on the issue date of the New Shares. The commencement of quotation of New Shares is subject to confirmation from ASX.

The information in this announcement does not constitute financial product advice and does not take into account the financial objectives, personal situation or circumstances of any shareholder. If you are in any doubt as to how to proceed, please contact your financial, tax or other professional adviser.

Evolution’s Advisers

Evolution’s financial adviser to the Transaction was RBC Capital Markets and the legal adviser was Allens.

Evolution's syndicate of banks are Australia and New Zealand Banking Group, Citibank, Commonwealth Bank of Australia, Macquarie Bank, National Australia Bank, Société Générale, Sumitomo Mitsui Banking Corporation and Westpac Banking Corporation.

For further information please contact:

Investor Enquiries

Bryan O’Hara Investor Relations Manager

Media Enquiries Michael Vaughan Media Relations

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Evolution Mining Limited Tel: +61 2 9696 2900

Fivemark Partners Tel: +61 422 602 720

About Evolution Mining

Evolution Mining is a leading, growth-focussed Australian gold miner. Post the sale of Pajingo, which is expected to complete in September 2016, Evolution operates six wholly-owned mines – Cowal in New South Wales, Mt Carlton, Mt Rawdon, and Cracow in Queensland, and Mungari and Edna May in Western Australia. Evolution is also acquiring an economic interest in the Ernest Henry copper-gold operations in Queensland.

In FY16 Evolution produced 803,476 ounces of gold at an AISC of A$1,014 per ounce generating a net mine cash flow of A$428.2 million.

Assuming completion of both the Pajingo sale and the acquisition of an economic interest in Ernest Henry, Evolution has revised FY17 Group gold production guidance to 800,000 – 860,000 ounces at an AISC of A$900 – A$960 per ounce.

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JORC Code 2012 and ASX Listing Rules Requirements

The Ernest Henry Mineral Resource and Ore Reserve statement included with this announcement has been prepared in accordance with the Australasian Joint Ore Reserves Committee Code for Reporting of Mineral Resources and Ore Reserves, 2012 edition (the "JORC Code"). The Ernest Henry Mineral Resource and Ore Reserve summaries are tabulated on the following pages. A Material Information Summary pursuant to ASX Listing Rules 5.8 and 5.9 and the Assessment and Reporting Criteria in accordance with JORC Code requirements is also provided.

Competent Person statements

The information in this statement that relates to the Ernest Henry Mineral Resource is based on information compiled by Colin Stelzer. The information in this statement that relates to Ernest Henry Ore Reserve is based on information compiled by Alexander Campbell. Mr Stelzer and Mr Campbell are Competent Persons who are members of The Australasian Institute of Mining and Metallurgy and are employed by Glencore and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the JORC Code. Mr Stelzer and Mr Campbell consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.

Ernest Henry Mineral Resources and Ore Reserves

The Ernest Henry Mineral Resource at 31 December 2015 was estimated at 96.1 million tonnes at 1.17% Cu and 0.59g/t Au for 1,124kt copper and 1,839koz gold and was reported inclusive of Ore Reserves. The Ernest Henry Ore Reserve at 31 December 2015 was estimated at 57.9 million tonnes at 1.06% Cu and 0.54g/t Au for 612kt copper and 1,011koz gold. This Mineral Resource and Ore Reserve estimate has not been previously reported to the ASX.

	Mineral Resource Statement (at 31 December 2015)	Mineral Resource Statement (at 31 December 2015)	Mineral Resource Statement (at 31 December 2015)	Mineral Resource Statement (at 31 December 2015)
		at a CuEq cut-off of 0.9%
Classification	Tonnes (Mt)	Copper Grade(%)	Copper Metal(kt)	Gold Grade(g/t)	Gold Metal(koz)
Measured	16.1	1.29	208	0.67	347
Indicated	71.0	1.15	817	0.59	1,347
Inferred	9.0	1.10	99	0.5	145
Total	96.1	1.17	1,124	0.59	1,839

	Ore Reserve Statement (at 31 December 2015)	Ore Reserve Statement (at 31 December 2015)	Ore Reserve Statement (at 31 December 2015)	Ore Reserve Statement (at 31 December 2015)
		at a CuEq cut-off of 0.9%
Classification	Tonnes (Mt)	Copper Grade (%)	Copper Metal (kt)	Gold Grade (g/t)	Gold Metal (koz)
Proved	10.9	1.17	128	0.6	210
Probable	47.0	1.03	484	0.53	801
Total	57.9	1.06	612	0.54	1,011

Data is reported to significant figures to reflect appropriate precision and may not sum precisely due to rounding The Mineral Resource Competent Person is Colin Stelzer, an employee of Glencore, and the Ore Reserve Competent Person is Alexander Campbell, an employee of Glencore CuEq=Cu(%)+RF×Au(g/t) RF=(Gold Price×Payable Gold Metal%×Gold Recovery%)/((Copper Price×Payable Copper Metal%×Copper Recovery%)/100) Payable Gold Metal % = 95, Payable Copper Metal % =92, Gold Recovery %=79, Copper Recovery % = 94

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Material Information Summary

Ernest Henry Mineral Resources

Geology and Geological Interpretation

The Ernest Henry Deposit is an Iron Oxide Copper Gold (IOCG) hosted within a sequence of moderately south south-east-dipping, intensely altered Paleoproterozoic intermediate metavolcanic and metasedimentary rocks, of the Mt Isa group. Copper occurs as chalcopyrite within the magnetite-biotite-calcite-pyrite matrix of a 250 x 300 m pipe like breccia body. The breccia pipe dips approximately 40 degrees to the south and is bounded on both the footwall and hanging wall by shear zones. The ore-body is open at depth.

The distribution of Copper and gold metal at Ernest Henry is directly proportional to the degree of brecciation occurring with chalcopyrite, magnetite and associated gold occupying the matrix within the breccia. The domains used to constrain mineralization for estimation are largely grade driven, constructed using Leapfrog’s implicit modelling software. Statistically there are two grade populations existing within the deposit; a high grade core domain above 0.9% Cu gives way quite sharply to the lower 0.1% Cu domain constraining the low grade halo. A contact analysis has been conducted on the transition between the two populations that supports the use of a semi soft boundary in the estimation. Distribution of metal within the high grade core is relatively consistent and as such emphasis on defining its shape is considered more important than gathering internal grade information.

Sampling and Sub-sampling

The Ernest Henry deposit has been defined by a combination of diamond drill and channel sampling performed throughout the deposit. Channel samples are chipped from the walls and treated as pseudo drill holes over the length of excavation sampled. Holes drilled from the surface and underground are oriented perpendicular to mineralisation. Underground channel samples are oriented along the strike of mineralisation and are conducted on a lateral 25m spacing, in line with sub-level mine excavations.

Diamond core is sampled at 2m intervals and core is cut in half to produce a 5kg sample, with one half submitted for assay, and the other half retained on site. Channel samples are also collected routinely every 2m to produce approximately 5kg samples.

Sample Analysis Methods

Diamond core and channel samples are sent to the laboratory for crushing to 6mm, split via a riffle splitter if >3.2kg and pulverised using an LM2 mill to a nominal 85% passing 75 microns, of this material a 0.4g sample is prepared for further analysis via aqua regia digestion and 50g for analysis via fire assay.

Field duplicates are collected for all diamond core at a rate of one in every 25 samples and for channel sample at a rate of one in every 10 samples. Prior to 2014 diamond core field duplicates sent quarter core for duplicate analysis and compared the results against the original half core results, which resulted in poor repeatability. All field duplicates since 2014, send half core for duplicate analysis to compare against the original half core results and indicates good repeatability.

Comparison of field duplicates is performed routinely to ensure the sample size is appropriate to grain size of sampled material. Since potential sample support issues have been rectified, results show good repeatability.

Drilling Techniques

Drill types utilised in UG Resource estimation are diamond core including HQ, NQ2 & NQ sizes yielding core diameters of 63.5mm, 50.6mm & 47.6mm respectively. Drill core is collected with a 3m barrel and standard tubing. Only selected drill holes have been oriented using an ezi mark orientation system for structural and geotechnical requirements.

Estimation Methodology

Grade estimations for copper, gold and density were completed using an ordinary kriging algorithm in Vulcan 8.2. Block dimensions (X, Y, Z = 20m x10m x 25m) used are reflective of the mining method, with 25m between sublevels and 20m between ore-drives. Sub-cells of 5 m x 5 m x 6.25 m were used to increase the resolution of domain margins. Samples were composited to 2m in length in four domains that reflect grade and the degree of

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brecciation. Top cuts were applied based on a disintegration analysis with 7.0% for copper and 3.5ppm for gold. An anisotropic search ellipse was used for Cu, Au, Fe, S and Dbd (dry bulk density) with parameters selected to reflect the variogram ranges, and optimized using a QKNA study.

Deleterious elements occurring in the deposit include arsenic and uranium. Both are in low abundance and do not present an issue at the mill or in the concentrate. Sulphur is estimated into the model and can be used to characterise waste rock. All production from underground is considered to be acid forming and is treated as such.

Validation tools employed to scrutinise the model include:

• Statistical summary of block values to check outlying values and confirm all blocks were estimated

• Visual comparison in section between blocks and raw composite values indicate the estimation occurred in line with expectation

• Alternate models using nearest neighbour and inverse distance to evaluate conditional bias

• Comparison with previous models

• Investigate several blocks around domain boundaries using the Vulcan D-bug ellipse function to ensure sample selection and weighting is applied correctly by the kriging algorithm

• Mine to mill reconciliation data gathered over the past 2 years indicates the estimate to be accurate +/5%

Resource Classification

• Mineral resources are classified using the following general criteria:

• Inferred: Any part of the estimation was considered inferred or better if it fell within the 0.1% Cu domain shell as derived in Leapfrog using the implicit modelling function with applied trends and a range inferring continuity to 100m beyond the deepest drilling or between drill holes

• Indicated: Drill spacing between 40m – 60m, estimated with a full complement of composites selected in the kriging process (40)

• Measured: Drill spacing or Channel sample data not exceeding 30 – 40m and including full drill coverage on adjacent sections to the north and south. Estimated with a full complement of composites selected in the kriging process (40)

• Other general conditions taken into consideration in the classification were as follows:

• Slope of regression from kriging output

• Kriging variance from kriging output

• Confidence in the geological interpretation of structures or grade continuity

• Consistency of grades between drill holes

• Proximity of blocks to the edge of the domain boundaries

Only blocks falling within the 0.9% copper equivalent cut-off grade shell are ultimately considered to be resource, blocks outside this wireframe are considered “External” for the purposes of the flow model.

Cut-off Grade

The 2015 Mineral Resource estimate used a cut-off grade of 0.9% Cu equivalent. This cut-off is believed to reflect the potential of the resource given the current infrastructure available for extraction and a greater appreciation of established mining costs.

The copper equivalent calculation is:

CuEq=Cu(%)+RF×Au(g/t)

RF=(Gold Price×Payable Gold Metal%×Gold Recovery%)/((Copper Price×Payable Copper Metal%×Copper Recovery%)/100)

Payable Gold Metal % = 95, Payable Copper Metal % =92, Gold Recovery %=79, Copper Recovery % = 94

Mining and Metallurgical methods, parameters and other modifying factors considered to date

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See the Mining Method and Processing Method sections provided below.

Ernest Henry Ore Reserves

Material Assumptions for Ore Reserves

The Ore Reserves are contained within the general layout of the sub-level cave. Recovered ore, including dilution, is forecast using Power Geotechnical Cellular Automata (PGCA) software to simulate cave flow and ore recovery based on the current block model, mine design and life of mine schedule. The modifying factors for the conversion from resource to reserve are incorporated in the flow modelling process using the PGCA model.

Ore Reserve Classification

The Ore Reserves are based on the application of a cave-flow simulation (flow model). Measured Resources recovered in the cave flow model are converted to Proved Reserves. Indicated Resources recovered in the cave flow model are converted to Probable Reserves. Inferred Resources and External Material recovered as dilution in the cave flow model are converted to Probable Reserves. The flow model has been calibrated against three years of historical production data.

Mining Method

Ore is mined from underground through sub level caving. The sub level cave is configured as in transverse SLC layout. The mine is an unconventional layout for a SLC due to the shallow dip (45 ⁰ ) of the orebody. Level footprint dimensions are approximately 220m x 220m and remains relatively uniform throughout the mine but a reduction to 150m width is apparent in the bottom levels. Ore is extracted from draw points with a fleet load haul dump units (LHD’s) and tipped into the ore pass system from where it is hauled and tipped into an underground gyratory crusher using LHD’s (load, haul, dump) into skips and hoisted to surface via a hoisting shaft. On surface, ore is transferred to the concentrator via a surface conveyor system.

Processing method

Copper and gold is recovered using single stage crushing conducted underground, milling using a SAG and Ball mill and flotation recovery process. Recovered gold is contained within the copper concentrate. The concentrator’s historical capacity is 11.0Mtpa (1,500tph), however the current reconfigured circuit capacity is 8.5Mtpa (1,100tph) to suit the underground ore characteristics and production profile. The metallurgical process is well tested technology and has been conducted onsite for approximately 20 years.

Cut-off Grade

Cut-off grades for the mine design were derived using an iterative process of mine design, cave flow simulation and economic analysis. The marginal cut-off grade for the underground sublevel cave operation is 0.9% copper equivalent grade. The methodology for the calculation of the cut-off grade is consistent with the formula referenced in the Mineral Resource section.

The economic evaluation supporting development of the cut-off grade at Ernest Henry includes the use of a financial evaluation model which includes reserve revenue, operating and sustaining capital costs, assumed commodity prices and exchange rates, metallurgical recovery estimates, transport costs, smelting and refining costs as well as royalty payments.

The optimum shut-off grade that maximizes the NPV of the mine was calculated to be 0.85% copper equivalent grade. This value was determined through a hill-of-value economic analysis in which multiple shut-off grades were simulated within the calibrated cave flow model to identify the production draw strategy that maximized the NPV of the mine. Due to the 45 degree dip of the orebody, a portion of the orebody on each sublevel exists where there is no opportunity to extract unrecovered ore on the sublevel below. In these areas, the cave is drawn to a marginal break-even grade of 0.73% copper equivalent.

Estimation Methodology

See the Estimation Methodology section provided above.

Material Modifying Factors

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The modifying factors for the conversion from resource to reserve are incorporated in the flow modelling process using the PGCA model. Mine to mill reconciliation data gathered over the past 2 years indicates the estimate to be accurate +/- 5%.

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Limitation on information in relation to Ernest Henry

All information in this announcement in relation to Ernest Henry - including in relation to production, resources and reserves, costs, financial information and life of mine plans - has been sourced from Glencore and its subsidiaries. Evolution has not independently verified such information and no representation or warranty, expressed or implied, is made as to its fairness, accuracy, correctness, completeness or adequacy.

Future performance

This announcement contains forward looking statements about Evolution and Ernest Henry. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, and “guidance”, or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates, expected costs or production outputs, the outcome and effects of the proposed Transaction and future operation of Evolution. To the extent that these materials contain forward looking information, the forward looking information is subject to a number of risk factors, including those generally associated with the gold industry. Any such forward looking statement also inherently involves known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements to be materially greater or less than estimated .These factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which Evolution and Ernest Henry operate or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. Any such forward looking statements are also based on current assumptions which may ultimately prove to be materially incorrect. Investors should consider the forward looking statements contained in this announcement in light of those disclosures. The forward looking statements are based on information available to Evolution as at the date of this announcement. Except as required by law or regulation (including the ASX Listing Rules), Evolution undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise. Indications of, and guidance on, future earnings or financial position or performance are also forward looking statements.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

This announcement does not constitute an offer, invitation or recommendation to subscribe for or purchase any securities and neither this announcement nor anything contained in it shall form the basis of any contract or commitment. In particular, this announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any person acting for the account or benefit of a person in the United States, or in any other jurisdiction in which such an offer would be unlawful. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, within the United States or to any person acting for the account or benefit of a person in the United States, unless the securities have been registered under the Securities Act or an exemption from the registration requirements of the Securities Act and applicable U.S. state securities laws is available.

All dollar values are in Australian dollars (“$” or “A$”) unless stated otherwise. The pro forma financial information included in this announcement does not purport to be in compliance with Article 11 of Regulation S- X of the rules and regulations of the U.S. Securities and Exchange Commission. Investors should be aware that financial data in this announcement include "non-IFRS financial information" under ASIC Regulatory Guide 230 Disclosing non-IFRS financial information published by the Australian Securities and Investments Commission and also “non-GAAP financial measures” within the meaning of Regulation G under the U.S. Securities Exchange Act of 1934. Non-IFRS/non-GAAP measures in this announcement include “All-in Sustaining Costs”. Evolution believes this non-IFRS/non-GAAP financial information provides useful information to users in measuring the financial performance and conditions of Evolution. The non-IFRS financial information do not have a standardised meaning prescribed by Australian Accounting Standards and, therefore, may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an

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alternative to other financial measures determined in accordance with Australian Accounting Standards. Investors are cautioned, therefore, not to place undue reliance on any non-IFRS/non-GAAP financial information and ratios included in this announcement. Financial data for Ernest Henry contained in this announcement has been derived from financial statements and other financial information made available by Glencore in connection with the proposed Transaction. Such financial information is unaudited and does not purport to be in compliance with Article 3-05 of Regulation S-X.

Investors should note that it is a requirement of the ASX Listing Rules that the reporting of ore reserves and mineral resources in Australia comply with the JORC Code, whereas mining companies in other countries may be required to report their mineral reserves and/or resources in accordance with other guidelines (for example, SEC Industry Guide 7 in the United States). Investors should note that while Evolution’s mineral resource estimates comply with the JORC Code, they may not comply with the relevant guidelines in other countries, and do not comply with SEC Industry Guide 7. In particular, Industry Guide 7 does not recognise classifications other than proven and probable reserves and, as a result, the SEC generally does not permit mining companies to disclose their mineral resources in SEC filings. Accordingly, if Evolution were reporting in accordance with SEC Industry Guide 7, it would not be permitted to report any mineral resources, and the amount of reserves it has estimated may be lower. You should not assume that quantities reported as “resources” will be converted to reserves under the JORC Code or any other reporting regime or that Evolution will be able to legally and economically extract them. In addition, investors should note that under SEC Industry Guide 7, mine life may only be reported based on ore reserves. Mine life estimates in this announcement assume that a portion of nonreserve resources will be converted to ore reserves, which would not be permitted under SEC Industry Guide 7.

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Appendix A – Transaction Summary

Production from LoM Area[12]

Under the transaction agreements, Evolution has agreed to acquire 100% of future gold produced from the LoM Area and 30% of future copper and silver produced from the LoM Area, and Evolution is required to pay A$880 million and to contribute 30% of future production costs in respect of the LoM Area.

The LoM Area is defined by reference to a geological block diagram of the Ernest Henry mine, taken from the current Life of Mine Plan.

The transaction agreements set out certain governance rights and protections for Evolution in relation to the operation of the Ernest Henry mine, including establishment of a management committee to make operational and budgetary decisions. Evolution will have 30% voting rights on the management committee, and veto rights in respect of fundamental operational matters, including any amendment to the current Life of Mine Plan or programme and budget, to the extent that such amendment deviates by more than 15% from the current Life of Mine Plan.

Glencore may suspend operations, and therefore the supply of materials under the supply agreement, provided that, after a three month period, Evolution has step-in rights. During any step in period, Evolution may step-in and, if it does so, it is responsible for 100% of production costs and takes the equivalent of 100% of the payable metals.

Evolution has pre-emptive rights on a sale by Glencore of the Ernest Henry mine to a third party. On a change of control or an insolvency event of a Glencore entity, Evolution has the option to exercise a right to purchase the mine at fair market value (discounted to reflect the fair market value of Evolution's upfront payment).

If the Ernest Henry mine is sold to a third party, a Glencore entity experiences an insolvency event or there is a change of control of the owner of the Ernest Henry mine, then, in addition to its other rights, Evolution continues to be entitled to receive a prescribed quantity of metals (" Stream ") based on the Life Of Mine Plan at the time of the sale, insolvency event or change of control. In such circumstances, Glencore and Evolution have agreed to negotiate in good faith for Glencore to acquire the Stream.

Production at the Ernest Henry mine, and therefore supply under the supply agreement, may also be suspended in circumstances where a force majeure event occurs.

Production from New Reserves Area and Regional Acquisitions[13]

Under the transaction agreements, Evolution agrees to an ongoing obligation to pay an amount equal to 49% of development and production costs in return for the equivalent of 49% of future copper, gold and silver production from the New Reserves Area.

The relevant agreements set out certain governance rights and protections for Evolution in relation to the operation within these areas, including establishment of a management committee to make operational and budgetary decisions. Evolution will have 49% voting rights on management committee, and veto rights in respect of the same matters as Evolution’s veto rights in respect of the LoM Area.

Evolution has the same step-in rights and other protections in respect of these areas as it does for the LoM Area. Evolution and Glencore will also have rights to participate in any mutual Regional Acquisitions and will be entitled to associated production entitlements on the same basis.

Exploration agreement

Evolution and Glencore have entered into a non-binding agreement under which the parties commit to cooperate in relation to exploration opportunities in the region surrounding Ernest Henry with the aim of establishing an exploration joint venture. Development of any opportunities discovered will be on terms to be agreed.

12 Evolution will receive the equivalent of 30% of the copper concentrate (containing copper, gold and silver) produced from the Ernest Henry mine, and sell that to Glencore under the offtake agreement in return for cash and, in the case of gold, gold metal credits. Evolution will receive the equivalent of 70% of the payable gold produced from the Ernest Henry mine as gold credits to its metals account.

13 Evolution will receive the equivalent of 49% of the copper concentrate (containing copper, gold and silver) produced from the Ernest Henry mine, and sell that to Glencore under the offtake agreement in return for cash and, in the case of gold, gold metal credits.

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Appendix B – Reserves Statement

JORC Code, 2012 Edition – Table 1 report template

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sampling		Nature and quality of sampling (eg cut		The EHM deposit has been defined by a combination of
techniques		channels, random chips, or specific		diamond drill and channel sampling performed
		specialised industry standard measurement		throughout the deposit. Channel samples are chipped
		tools appropriate to the minerals under		from the walls & treated as pseudo drill holes over the
		investigation, such as down hole gamma		length of excavation sampled. The proportion of the total
		sondes, or handheld XRF instruments, etc).		drill hole samples is 75% (818) for diamond drilling and
		These examples should not be taken as		25% (275) for channel pseudo drill holes.
		limiting the broad meaning of sampling.		Holes drilled from the surface and underground are
		Include reference to measures taken to		oriented perpendicular to mineralisation. UG channel
		ensure sample representivity and the		samples are oriented along the strike of mineralisation
		appropriate calibration of any measurement		and are conducted on a lateral 25m spacing, in line with
		tools or systems used.		sub-level mine excavations.
		Aspects of the determination of		The diamond core is routinely sampled at 2m intervals
		mineralisation that are Material to the Public		from ½ core over the entire length of the drill hole,
		Report.		producing approximately 5kg samples. Channel samples
		In cases where ‘industry standard’ work has		are also collected routinely every 2m to produce
		been done this would be relatively simple (eg		approximately 5kg samples.
		‘reverse circulation drilling was used to obtain		Samples undergo further laboratory preparation and
		1 m samples from which 3 kg was pulverised		analysis provided externally, involving crushing to 6mm,
		to produce a 30 g charge for fire assay’). In		riffle splitting and pulverising to 85% passing 75 microns,
		other cases more explanation may be		of this material a 0.4g sample is prepared for analysis
		required, such as where there is coarse gold		via aqua regia digestion and 50g for analysis via fire
		that has inherent sampling problems.		assay.
		Unusual commodities or mineralisation types
		(eg submarine nodules) may warrant
		disclosure of detailed information.
Drilling		Drill type (eg core, reverse circulation, open-		Drill types utilised in UG Resource estimation are
techniques		hole hammer, rotary air blast, auger, Bangka,		diamond core including HQ, NQ2 & NQ sizes yielding
		sonic, etc) and details (eg core diameter,		core diameters of 63.5mm, 50.6mm & 47.6mm
		triple or standard tube, depth of diamond		respectively. Drill core is collected with a 3m barrel and
		tails, face-sampling bit or other type, whether		standard tubing.
		core is oriented and if so, by what method,		Only selected drill holes have been oriented using an ezi
		etc).		mark orientation system for structural and geotechnical
				requirements.
Drill sample		Method of recording and assessing core and		Current practice ensures all diamond core intervals are
recovery		chip sample recoveries and results assessed.		measured and recorded for RQD and core loss.
		Measures taken to maximise sample		Core recovery through the mineralised portion of the
		recovery and ensure representative nature of		deposit is high (>99.5%)
		the samples.		No bias is observed due to core loss
		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.
Logging		Whether core and chip samples have been		All diamond core has been logged, geologically and
		geologically and geotechnically logged to a		geotechnically to support its inclusion into the
		level of detail to support appropriate Mineral		underground Resource estimation. The geologic and
		Resource estimation, mining studies and		geotechnical records are considered qualitative and
		metallurgical studies.		quantitative with the following items being captured
		Whether logging is qualitative or quantitative		o Lithology
		in nature. Core (or costean, channel, etc)		o Texture
		photography.		o Alteration
		The total length and percentage of the relevant intersections logged.		o Mineralisation o Structures – including veining & faults
				o Weathering
				o RQD

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				Photography of diamond core has occurred for 57% of
				this data set.
Sub-sampling		If core, whether cut or sawn and whether		Drill core is cut in half to produce a 5kg sample using an
techniques and		quarter, half or all core taken.		automatic core saw, with one half submitted for assay,
sample		If non-core, whether riffled, tube sampled,		and the other half retained on site. Where core is
preparation		rotary split, etc and whether sampled wet or		oriented, it is cut on the core orientation line.
		dry.		Diamond core and channel samples are sampled at 2m
		For all sample types, the nature, quality and		intervals and sent to the laboratory for crushing to 6mm,
		appropriateness of the sample preparation		split via a riffle splitter if >3.2kg and pulverised using an
		technique.		LM2 mill to a nominal 85% passing 75 microns, of this
		Quality control procedures adopted for all		material a 0.4g sample is prepared for further analysis
		sub-sampling stages to maximise		via aqua regia digestion and 50g for analysis via fire
		representivity of samples.		assay.
		Measures taken to ensure that the sampling		Field duplicates are collected for all diamond core at a
		is representative of the in situ material		rate of one in every 25 samples and for channel sample
		collected, including for instance results for		at a rate of one in every 10 samples. Prior to 2014
		field duplicate/second-half sampling.		diamond core field duplicates sent quarter core for
		Whether sample sizes are appropriate to the grain size of the material being sampled.		duplicate analysis and compared the results against the original half core results, which resulted in poor repeatability. All field duplicates since 2014, send half
				core for duplicate analysis to compare against the
				original half core results and indicates good repeatability.
				Comparison of field duplicates is performed routinely to
				ensure the sample size is appropriate to grain size of
				sampled material. Since potential sample support issues
				have been rectified,results showgood repeatability.
Quality of assay		The nature, quality and appropriateness of		Samples are assayed at ALS Geochemistry Townsville
data and		the assaying and laboratory procedures used		for a multi element suite using ME-ICP41, Cu-OG46 &
laboratory tests		and whether the technique is considered		MEOG46 methods, which analyses a 0.4g sample in
		partial or total.		aqua regia digestion with and AES finish as well as gold
		For geophysical tools, spectrometers,		Au-AA26, which utilises fire assay on a 50g sample with
		handheld XRF instruments, etc, the		and AA instrument finish. Analytical methods are
		parameters used in determining the analysis		deemed to be appropriate for this style of mineralisation.
		including instrument make and model,		Historic quality control procedures include the use of six
		reading times, calibrations factors applied		certified standards as well as field duplicates inserted at
		and their derivation, etc.		1:25 ratio for all sample batches sent to the ALS
		Nature of quality control procedures adopted		laboratory.
		(eg standards, blanks, duplicates, external		There have been no blanks inserted with the diamond
		laboratory checks) and whether acceptable		core historic data set. The ALS laboratory provides their
		levels of accuracy (ie lack of bias) and		own quality control data, which includes laboratory
		precision have been established.		standards and duplicates.
				Analysis of historical quality control sample assays
				indicate the accuracy and precision is within acceptable
				limits and suitable for inclusion in the underground
				resource estimate.
Verification of		The verification of significant intersections by		All diamond drill holes are logged remotely on a laptop
sampling and		either independent or alternative company		utilising Acquire software and stored digitally in an
assaying		personnel.		Acquire database on a network server.
		The use of twinned holes.		Procedures have been developed to ensure a
		Documentation of primary data, data entry		repeatable process is in place for transferring,
		procedures, data verification, data storage		maintaining & storing all drilling, logging and sampling
		(physical and electronic) protocols.		data on the network server, which has a live upload to a
		Discuss any adjustment to assay data.		local device and daily back up to an offsite device.
				A review of the historical dataset of the underground
				resource indicates confirms the veracity of the data. All
				files are reported digitally from ALS laboratories in CSV
				format, which is then imported directly into the Acquire
				database. Checks of the assay results in Acquire and
				results returned from the lab are performed at the
				completion of each drilling& samplingcampaign.
Location of data		Accuracy and quality of surveys used to		Collar coordinates are picked up by EHM site surveyors
points		locate drill holes (collar and down-hole		using a Leica total station survey instrument. All
		surveys), trenches, mine workings and other		underground excavations are monitored using the same
		locations used in Mineral Resource		instrument.
		estimation.		A variety of downhole survey methods have been
		Specification of the grid system used.		utilised in the underground resource, however 93% of
		Quality and adequacy of topographic control.		the diamond drill holes have been surveyed using a
				gyroscopic instrument recording down hole survey data

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				in 3m intervals.
				All datapoints are reported in UTM AMG84 zone 54.
Data spacing		Data spacing for reporting of Exploration		There are no exploration results reported.
and distribution		Results.		Drill holes are spaced with the following resource
		Whether the data spacing and distribution is		classification:
		sufficient to establish the degree of		o 40m x 40m for Measured
		geological and grade continuity appropriate		o 60m x 60m for Indicated
		for the Mineral Resource and Ore Reserve		o 100m x 100m Inferred
		estimation procedure(s) and classifications		This drill hole spacing is considered sufficient as it
		applied.		exhibits grade and geological continuity appropriate to
		Whether sample compositing has been		the Mineral Resource classifications outlined in the
		applied.		2012 JORC code. The drill spacing is also supported by
				historic reconciliation data from the mill.
				Prior to 2015, 12m sample compositing was applied to
				underground Resource estimation. This was
				subsequently changed to a 2m composite length after
				review.
Orientation of		Whether the orientation of sampling achieves		Holes drilled from the surface and underground are
data in relation		unbiased sampling of possible structures and		oriented perpendicular to mineralisation and bounding
to geological		the extent to which this is known, considering		shear zones wherever possible. UG channel samples
structure		the deposit type.		are oriented along the strike of mineralisation and are
		If the relationship between the drilling		conducted on a lateral 25m spacing, in line with sub-
		orientation and the orientation of key		level mine excavations.
		mineralised structures is considered to have		There has been no orientation bias recognised within the
		introduced a sampling bias, this should be		data used for the underground Mineral Resource
		assessed and reported if material.		estimate.
Sample security		The measures taken to ensure sample		Diamond core samples are securely stored onsite prior
		_security. _		to beingdispatched to the ALS laboratoryin Townsville.
Audits or		The results of any audits or reviews of		In 2014 an external audit was conducted on the data
reviews		sampling techniques and data.		management & QAQC procedures including drilling &
				sampling. These were found to be in line with industry
				standards.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Mineral		Type, reference name/number, location		The EHM operations cover 9 mining leases.
tenement and		and ownership including agreements or		The details of the leases are summarised in the following table:
land tenure		material issues with third parties such as		Lease Ownership		Expiry
status		joint ventures, partnerships, overriding		ML2671 Ernest HenryMiningPtyLtd 100%		30/11/2025
		royalties, native title interests, historical		ML90041 Ernest HenryMiningPtyLtd 100%		30/11/2037
		sites, wilderness or national park and environmental settings. The security of the tenure held at the time		ML90072 Ernest HenryMiningPtyLtd 100% ML90085 Ernest HenryMiningPtyLtd 100% ML90100 Ernest HenryMiningPtyLtd 100% ML90107 Ernest HenryMiningPtyLtd 100%		30/11/2025 31/03/2026 31/05/2026 31/08/2026
		of reporting along with any known		ML90116 Ernest HenryMiningPtyLtd 100%		30/09/2026
		impediments to obtaining a licence to		ML90075 Ernest Henry Mining Pty Ltd 100%		30/11/2025
		operate in the area.
Exploration		Acknowledgment and appraisal of		The EHM orebody was discovered in 1991		by Western
done by other		exploration by other parties.		Mining Corporation Ltd. The size and potential of the
parties				discovery led to further drill definition.	A successful

The EHM orebody was discovered in 1991 by Western Mining Corporation Ltd. The size and potential of the discovery led to further drill definition. A successful feasibility study led to the establishment of an open pit

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				operation in 1997 which was completed in 2011. In 2006 a
				deep drilling campaign was initiated to explore the down
				dip extension of the deposit ultimately leading to the
				development of the current underground mining project,
				which commenced operation in 2013.
				Data used in the current estimate is a compilation of
				several phases of exploration done since the early
				1990’s.This data has been assessed for quality as outlined
				in section 1 and deemed to be suitable for use as the basis
				of the mineral resource estimate.
Geology		Deposit type, geological setting and style of		The Ernest Henry Deposit is an Iron Oxide Copper Gold
		mineralisation.		(IOCG) hosted within a sequence of moderately south
				south-east-dipping, intensely altered Paleoproterozoic
				intermediate metavolcanic and metasedimentary rocks, of
				the Mt Isa group. Copper occurs as chalcopyrite within the
				magnetite-biotite-calcite-pyrite matrix of a 250 x 300 m
				pipe like breccia body. The breccia pipe dips
				approximately 40 degrees to the South and is bounded on
				both the footwall and hanging wall by shear zones. The
				ore-bodyis open at depth.
Drill hole		A summary of all information material to the		No exploration has been reported in this release, therefore
Information		understanding of the exploration results		no drill hole information to report. This section is not
		including a tabulation of the following		relevant to this report on Mineral Resources and Ore
		information for all Material drill holes:		Reserves.
		o easting and northing of the drill hole
		collar
		o elevation or RL (Reduced Level –
		elevation above sea level in metres) of
		the drill hole collar
		o dip and azimuth of the hole
		o down hole length and interception
		depth
		o 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		In reporting Exploration Results, weighting		No exploration has been reported in this release, therefore
aggregation		averaging techniques, maximum and/or		there are no drill hole intercepts to report. This section is
methods		minimum grade truncations (eg cutting of		not relevant to this report on Mineral Resources and Ore
		high grades) and cut-off grades are usually		Reserves. Comments relating to data aggregation
		Material and should be stated.		methods relevant to the Mineral Resource estimate can
		Where aggregate intercepts incorporate		be found in Section 1 – “Sampling techniques” and “Drill
		short lengths of high grade results and		sample recovery.”
		longer lengths of low grade results, the
		procedure used for such aggregation
		should be stated and some typical
		examples of such aggregations should be
		shown in detail.
		The assumptions used for any reporting of
		metal equivalent values should be clearly
		stated.
Relationship		These relationships are particularly		No exploration has been reported in this release, therefore
between		important in the reporting of Exploration		there are no relationships between mineralisation widths
mineralisation		Results.		and intercept lengths to report. This is not relevant to this
widths and		If the geometry of the mineralisation with		report on Mineral Resources and Ore Reserves.
intercept		respect to the drill hole angle is known, its
lengths		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’). _
Diagrams		Appropriate maps and sections (with		No exploration has been reported in this release, therefore
		scales) and tabulations of intercepts should		no exploration diagrams have been produced. This section
		be included for any significant discovery		is not relevant to this report on Mineral Resources and Ore
		being reported These should include, but		Reserves.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		not be limited to a plan view of drill hole
		collar locations and appropriate sectional
		views.
Balanced		Where comprehensive reporting of all		No exploration has been reported in this release, therefore
reporting		Exploration Results is not practicable,		there are no results to report. This section is not relevant
		representative reporting of both low and		to this report on Mineral Resources and Ore Reserves.
		high grades and/or widths should be
		practiced to avoid misleading reporting of
		Exploration Results.
Other		Other exploration data, if meaningful and		No exploration has been reported in this release, therefore
substantive		material, should be reported including (but		no exploration diagrams have been produced. This section
exploration data		not limited to): geological observations;		is not relevant to this report on Mineral Resources and Ore
		geophysical survey results; geochemical		Reserves.
		survey results; bulk samples – size and
		method of treatment; metallurgical test
		results; bulk density, groundwater,
		geotechnical and rock characteristics;
		potential deleterious or contaminating
		substances.
Further work		The nature and scale of planned further		No exploration has been reported in this release, therefore
		work (eg tests for lateral extensions or		no exploration diagrams have been produced. This section
		depth extensions or large-scale step-out		is not relevant to this report on Mineral Resources and Ore
		drilling).		Reserves.
		Diagrams clearly highlighting the areas of
		possible extensions, including the main
		geological interpretations and future drilling
		areas, provided this information is not
		commercially sensitive.

Section 3 Estimation and Reporting of Mineral Resources

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

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Database		Measures taken to ensure that data has not		All drill hole data is securely stored and backed up daily
integrity		been corrupted by, for example,		in an Acquire database on a single server located in Mt
		transcription or keying errors, between its		Isa. Assay data is quality controlled upon receipt and
		initial collection and its use for Mineral		imported directly into the database via import templates.
		Resource estimation purposes.		User access to the database is controlled by a hierarchy
		Data validationprocedures used.		ofpermissions as defined bythe database administrator.
Site visits		Comment on any site visits undertaken by		The Competent Person is a full time employee of Ernest
		the Competent Person and the outcome of		Henry Mining working at the Ernest Henry Mine.
		those visits.
		If no site visits have been undertaken
		indicate why this is the case.
Geological		Confidence in (or conversely, the		The distribution of Copper and gold metal at Ernest
interpretation		uncertainty of ) the geological interpretation		Henry is directly proportional to the degree of brecciation
		of the mineral deposit.		occurring with chalcopyrite, magnetite and associated
		Nature of the data used and of any		gold occupying the matrix within the breccia. The
		assumptions made.		domains used to constrain mineralization for estimation
		The effect, if any, of alternative		are largely grade driven, constructed using Leapfrog’s
		interpretations on Mineral Resource		implicit modelling software. Statistically there are two
		estimation.		grade populations existing within the deposit; a high
	 	The use of geology in guiding and controlling Mineral Resource estimation. The factors affecting continuity both of grade and geology.		grade core domain above 0.9% Cu gives way quite sharply to the lower 0.1% Cu domain constraining the low grade halo. A contact analysis has been conducted on the transition between the two populations that supports the use of a semi soft boundary in the
				estimation. Distribution of metal within the high grade
				core is relatively consistent and as such emphasis on
				defining its shape is considered more important than
				gatheringinternalgrade information.
Dimensions		The extent and variability of the Mineral		The Ernest Henry deposit is approximately 250m x 300m
		Resource expressed as length (along strike		in plan with an irregular shape. The longer axis is
		or otherwise), plan width, and depth below		parallel with the bounding shear zones. The deposit dips

19

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		surface to the upper and lower limits of the		at 43 degrees to the South, extending from 60m under a
		Mineral Resource.		sedimentary blanket to beyond1600m in depth.
				Below1525 mRL a secondary lens is partitioned to the
				South East appearing to be strongly influenced by the
				shearing. The current EHM resource estimate reports
				blocks below 1705 mRL that form a contiguous mineable
				entity above the 0.9% Copper equivalent cut-off. The
				current resource extends down to 960 mRL.
Estimation and		The nature and appropriateness of the		Grade estimations for Copper, Gold and density were
modelling		estimation technique(s) applied and key		completed using an ordinary kriging algorithm in Vulcan
techniques		assumptions, including treatment of		8.2. Block dimensions (X, Y, Z = 20 m x10 m x 25 m)
		extreme grade values, domaining,		used are reflective of the mining method, with 25m
		interpolation parameters and maximum		between sublevels and 20m between ore-drives. Sub-
		distance of extrapolation from data points.		cells of 5 m x 5 m x 6.25 m were used to increase the
		If a computer assisted estimation method		resolution of domain margins. Samples were composited
		was chosen include a description of		to 2m in length in four domains that reflect grade and the
		computer software and parameters used.		degree of brecciation. Top cuts were applied based on a
		The availability of check estimates,		disintegration analysis with 7.0% for copper and 3.5ppm
		previous estimates and/or mine production		for gold. An anisotropic search ellipse was used for Cu,
		records and whether the Mineral Resource		Au, Fe, S and Dbd (dry bulk density) with parameters
		estimate takes appropriate account of such		selected to reflect the variogram ranges, and optimized
		data.		using a QKNA study.
		The assumptions made regarding recovery		Deleterious elements occurring in the deposit include
		of by-products.		Arsenic and Uranium. Both are in low abundance and do
		Estimation of deleterious elements or other		not present an issue at the mill or in the concentrate.
		non-grade variables of economic		Sulfur is estimated into the model and can be used to
		significance (eg sulphur for acid mine		characterize waste rock. All production from
		drainage characterisation).		underground is considered to be acid forming and is
		In the case of block model interpolation, the		treated as such.
		block size in relation to the average sample		Validation tools employed to scrutinize the model
		spacing and the search employed.		include:
		Any assumptions behind modelling of		 Statistical summary of block values to check
		selective mining units.		outlying values and confirm all blocks were
		Any assumptions about correlation		estimated.
		between variables.		 Visual comparison in section between blocks and
	 	Description of how the geological interpretation was used to control the resource estimates. Discussion of basis for using or not using grade cutting or capping.		raw composite values indicate the estimation occurred in line with expectation.  Alternate models using nearest neighbor and inverse distance to evaluate conditional bias.
		The process of validation, the checking		 Comparison with previous models.
		process used, the comparison of model		 Investigate several blocks around domain
		data to drill hole data, and use of		boundaries using the Vulcan D-bug ellipse
		reconciliation data if available.		function to ensure sample selection and weighting
				is applied correctly by the kriging algorithm.
				 Mine to mill reconciliation data gathered over the
				past 2 years indicates the estimate to be accurate
				+/- 5%.
Moisture		Whether the tonnages are estimated on a		Tonnage estimates for the purpose of estimating in-situ
		dry basis or with natural moisture, and the		ore resources are determined based on dry bulk density.
		method of determination of the moisture
		content.
Cut-off		The basis of the adopted cut-off grade(s) or		The 2015 resource estimate used a cut-off grade of
parameters		quality parameters applied.		0.9% Cu equivalent. This cut-off is believed to reflect the
				potential of the resource given the current infrastructure
				available for extraction and a greater appreciation of
				established mining costs.
				o 𝐶𝑢𝐸𝑞= 𝐶𝑢(%) + 𝑅𝐹× 𝐴𝑢(𝑔/𝑡)
				(Equation 1)
				o 𝑅𝐹=
				𝐺𝑜𝑙𝑑 𝑃𝑟𝑖𝑐𝑒×𝑃𝑎𝑦𝑎𝑏𝑙𝑒𝐺𝑜𝑙𝑑 𝑀𝑒𝑡𝑎𝑙%×𝐺𝑜𝑙𝑑 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦%
				(𝐶𝑜𝑝𝑝𝑒𝑟 𝑃𝑟𝑖𝑐𝑒×𝑃𝑎𝑦𝑎𝑏𝑙𝑒 𝐶𝑜𝑝𝑝𝑒𝑟 𝑀𝑒𝑡𝑎𝑙%×𝐶𝑜𝑝𝑝𝑒𝑟 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦%)
				(Equation 2)
				 Payable Gold Metal % = 95
				 Payable Copper Metal % = 92
				 Gold Recovery %= 79
				 Copper Recovery% = 94

20

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				The final step in the derivation of resource figures is to
				generate a wireframe capturing all the blocks forming a
				contiguous mineable entity. In some cases the
				requirement to maintain a reasonable shape and size for
				the solid means some areas are inclusive of grades
				below cut-off and the exclusion of outlying blocks above
				0.9% Cu equivalent will be excluded.
				Another practical consideration in the derivation of the
				cut-off is the proximity to the outer grade limit of the high
				grade core, whereby the grade rises dramatically
				between 0.6% Cu and 1.2% Cu over a short distance.
Mining factors		Assumptions made regarding possible		The Ernest Henry deposit lends itself to a low cost high
or assumptions		mining methods, minimum mining		production mass mining technique such as sub-level
		dimensions and internal (or, if applicable,		caving. It is anticipated the successful extraction of the
		external) mining dilution. It is always		deposit as demonstrated through the underground mine
		necessary as part of the process of		since 2012 using the sub-level caving technique will
		determining reasonable prospects for		continue into the future.
		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.
Metallurgical		The basis for assumptions or predictions		The ore at Ernest Henry has been successfully milled
factors or		regarding metallurgical amenability. It is		since the open cut started in 1996. Historical mill
assumptions		always necessary as part of the process of		recoveries for copper and gold in the primary sulfide ore
		determining reasonable prospects for		are in the order of 95% and 80% respectively. There is
		eventual economic extraction to consider		no indication that the metallurgical character of the
		potential metallurgical methods, but the		mineralisation down dip in the deposit will change to
		assumptions regarding metallurgical		adversely affect these recoveries.
		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.
Environmental		Assumptions made regarding possible		All the relevant environmental licenses are in place for
factors or		waste and process residue disposal		the current mining operation, including TSF capacity for
assumptions		options. It is always necessary as part of		all Reserves.
		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.
Bulk density		Whether assumed or determined. If		An extensive database of dry bulk density
		assumed, the basis for the assumptions. If		measurements have been collected since deposit’s
		determined, the method used, whether wet		discovery using the Archimedes water displacement
		or dry, the frequency of the measurements,		principal on core samples approximately every 20m
		the nature, size and representativeness of		down diamond drill core. These measurements are used
		the samples.		in conjunction with an elemental assay analysis to
		The bulk density for bulk material must		generate a stoichiometric regression formula that is
		have been measured by methods that		applied to every sample. The estimate for dry bulk
		adequately account for void spaces (vugs,		density is then estimated into the block model using
		porosity, etc), moisture and differences		ordinary kriging.
		between rock and alteration zones within		Samples are dried in an oven prior to density
		the deposit.		measurements.

21

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• Criteria JORC Code explanation Commentary  Discuss assumptions for bulk density  There are very few open voids in the EHM orebody and estimates used in the evaluation process of the crystal structure of the rock exhibits minimal porosity. the different materials. These factors are not thought to have any significant influence on the estimated global density.

• Classification  The basis for the classification of the  Mineral Resources are classified using the following Mineral Resources into varying confidence general criteria: categories. o Inferred : Any part of the estimation was

• Whether appropriate account has been considered inferred or better if it fell within the taken of all relevant factors (ie relative 0.1% Cu domain shell as derived in Leapfrog confidence in tonnage/grade estimations, using the implicit modelling function with applied reliability of input data, confidence in trends and a range inferring continuity to 100m continuity of geology and metal values, beyond the deepest drilling or between drill holes. quality, quantity and distribution of the o Indicated: Drill spacing between 40 m – 60 m, data). estimated with a full complement of composites

  • Inferred : Any part of the estimation was considered inferred or better if it fell within the 0.1% Cu domain shell as derived in Leapfrog using the implicit modelling function with applied trends and a range inferring continuity to 100m beyond the deepest drilling or between drill holes.

  • Indicated: Drill spacing between 40 m – 60 m, estimated with a full complement of composites selected in the kriging process (40).

• Whether the result appropriately reflects the Competent Person’s view of the deposit.

• Measured: Drill spacing or Channel sample data not exceeding 30-40m and including full drill coverage on adjacent sections to the north and south. Estimated with a full complement of composites selected in the kriging process (40).

• Other general conditions taken into consideration in the classification were as follows; o Slope of regression from kriging output o Kriging variance from kriging output.

• Confidence in the geological interpretation of structures or grade continuity;

• o Consistency of grades between drill holes;

• Proximity of blocks to the edge of the domain boundaries

Only blocks falling within the 0.9% copper equivalent cut-off grade shell are ultimately considered to be resource, blocks outside this wireframe are considered “External” for the purposes of the flow model.

The Copper Equivalent cut-off grade is calculated using Equation 1 (See Cut-off parameters Section 3 Estimation and Reporting of Mineral Resources).

				The Copper Equivalent cut-off grade is calculated using Equation 1 (See Cut-off parameters Section 3 Estimation and Reporting of Mineral Resources).
Audits or		The results of any audits or reviews of		The Mineral Resource estimate has been reviewed by
reviews		Mineral Resource estimates.		external geostatistical consultants each year since the
				2011 underground feasibility study. Each review has
				endorsed the estimate while also recommending minor
				potential improvements for the next estimate. Mine to
				Mill Reconciliation data gathered since 2012 reconciles
				within +/- 5%.
Discussion of		Where appropriate a statement of the		Mine to Mill Reconciliation data from the underground
relative		relative accuracy and confidence level in		operation has confirmed the global accuracy of the
accuracy/		the Mineral Resource estimate using an		resource estimate with total received metal reconciling
confidence		approach or procedure deemed appropriate		within +/- 5%.
		by the Competent Person. For example,		The nature of a caving operation means there is a lag
		the application of statistical or geostatistical		between reserves and ore delivered to the mill over short
		procedures to quantify the relative accuracy		time frames reflecting the challenges of accurately
		of the resource within stated confidence		predicting the flow within a cave.
		limits, or, if such an approach is not		As a final validation the current model was compared
		deemed appropriate, a qualitative		with reconciled tonnes and grade as accounted by the
		discussion of the factors that could affect		mill to the end of 2015. This comparison indicates the
		the relative accuracy and confidence of the		copper estimate is within 1% of the actual output.
		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.
		These statements of relative accuracy and
		confidence of the estimate should be
		compared with production data, where

22

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Criteria JORC Code explanation available.

Commentary

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• The results of the reconciliation suggest only minor dilution with no grade has entered the cave indicating either a well-established ore blanket is in place or there is a systematic under-draw of the cave.

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		JORC Code explanation			Commentary
Mineral		Description of the Mineral	Resource		A detailed description of the Mineral Resource estimate
Resource		estimate used as a basis for the conversion			is provided in the previous sections of this Table.
estimate for		to an Ore Reserve.			Mineral Resources at Ernest Henry Mining are reported
conversion to					above a copper equivalent grade of 0.9% (see Equation
Ore Reserves					1 in Cut-off parameters, Section 3). This has been
					calculated as the cut-off grade for the underground
					sublevel cave operation.
					Recovered ore, including dilution, is forecast using
					Power Geotechnical Cellular Automata (PGCA) software
					to simulate cave flow and ore recovery based on the
					current block model, mine design and life of mine
					schedule. The model is validated using mine to mill
					reconciliation data and calibrated to site conditions using
					both reconciliation data and recovery of markers
					installed in the cave.
					The block model is discretized into 1.25m3particles
					within the model. Each block retains the respective
					attributes of the parent block in the block model including
					density, grade and resource category. These blocks flow
					within the cave model based on stochastic rules
					developed from large scale recovery studies conducted
					in similar SLC operations. The model calculates ore
					recovery based on the simulated mine schedule and
					planned production draw strategy. The recovered tonnes
					and grade for a mining period and the reserve
					classification is estimated based on the proportion (of
					tonnes and grade) of each resource category. This
					method enables Ore Reserves to be estimated using the
					Mineral Resource classification for the depleted ore,
		Clear statement as to whether the Mineral			unrecovered cave stocks, forecast ore recovery and the
		Resources are reported additional to, or inclusive of, the Ore Reserves.			recovery of external and diluting material. Reported Mineral Resources are inclusive of the Ore Reserve.
Site visits		Comment on any site visits undertaken by			The Competent Person is a full time employee of Ernest
		the Competent Person and the outcome of			Henry Mining and conducts regular site visits to the
		those visits.			Ernest Henry Mine.
		If no site visits have been undertaken
		indicate why this is the case.
Study status		The type and level of study undertaken to			The SLC mine has been in operation for five years. A
		enable Mineral Resources to be	converted		detailed mine design and schedule exists for the planned
		to Ore Reserves.			life of the mine and is included in the cave flow model
					used to estimate the Ore Reserve.
		The Code requires that a study	to at least		The modifyingfactors for the conversion from resource

23

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Criteria		JORC Code explanation			Commentary
		Pre-Feasibility Study level has been			to reserve is incorporated in the flow modelling process
		undertaken to convert Mineral Resources			using the PGCA model. Mine to mill reconciliation data
		to Ore Reserves. Such studies	will have		gathered over the past 2 years indicates the estimate to
		been carried out and will have determined			be accurate +/- 5%.
		a mine plan that is technically achievable
		and economically viable, and that material
		Modifying Factors have been considered.
Cut-off		The basis of the cut-off grade(s)	or quality		Economic evaluation at Ernest Henry uses a financial
parameters		parameters applied.			evaluation model which includes reserve revenue,
					operating and sustaining capital costs, assumed
					commodity and prices and exchange rates, metallurgical
					recovery, transport costs, smelting and refining costs
					and royalty payments.
					Cut-off grades for the mine design were calculated using
					an iterative process of mine design, cave flow simulation
					and economic analysis. The marginal cut-off grade for
					the underground sublevel cave operation is 0.9% copper
					equivalent.
					The optimum shut-off grade that maximizes the NPV of
					the mine was calculated to be 0.85% copper equivalent
					grade. This value was determined through a hill-of-value
					economic analysis in which multiple shut-off grades were
					simulated within the calibrated cave flow model to
					identify the production draw strategy that maximized the
					NPV of the mine.
					Due to the 45 degree dip of the orebody, a portion of the
					orebody on each sublevel exists where there is no
					opportunity to extract unrecovered ore on the sublevel
					below. In these areas, the cave is drawn to a marginal
					break-evengrade of 0.73% copper equivalent.
Mining factors		The method and assumptions	used as		Not applicable as the mine is currently operational.
or assumptions		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).
					Pre-feasibility and feasibility studies conducted in 2006
		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.			and 2008 (respectively) and ongoing mine planning reviews have determined the sub-level caving mining method is the most appropriate mining method for the deposit based on the orebody geometry, grade, geotechnical conditions and economic evaluation.
					Geotechnical parameters and engineering assessments
		The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre- production drilling.			have determined that the rock mass is amenable to sublevel caving. Empirical assessment and numerical modelling forecasts are reflected in current cave propagation to date. The mine design uses 25m sublevel spacing, 15m drive
					spacing (center to center), 6m wide cross cuts and a
					standard SLC drill and blast design. These design
					parameters are in line with benchmarked mines and
		The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate).			assessed to be geotechnically stable. All rock types, including blasted ore and the caved material are assumed to flow at the same velocity within the cave flow model.
					No mining dilution factors are applied as dilution is
		The mining dilution factors used.			included in the cave flow model simulation. This is included in the reported Ore Reserves due to the non-
					selective nature of the mining method.
					No mining recovery factors are applied as internal and
					external material recovery is included in the cave flow
					model simulation. This is included in the reported Ore
		The mining recovery factors used.			Reserves due to the non-selective nature of the mining
					method.
		Any minimum mining widths used.			A minimum mining width for cave propagation is in the order of 140 m based on empirical cavability
					assessments. A draw width of 11 m is applied in the

24

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Criteria		JORC Code explanation		Commentary
				cave flow model. This value has been selected based on
				recovery of markers installed inside the cave and
				benchmarked values from other SLC mines in similar
		The manner in which Inferred Mineral		conditions.
		Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion.		Sublevel caving is a non-selective bulk mining method in which dilution recovery is necessary to recover economic ore. Inferred Mineral Resources and
				unclassified external material that are recovered in the
				cave flow model are included in the Ore Reserves. The
				inclusion of this material is necessary as a recovery
				factor or dilution factor is not applied in the cave flow
				model.
				Dilution and unclassified material in the Mineral
				Resource that is recovered as part of the mining method
				is included in the financial assessment conducted to
				estimate the Ore Reserve.
		The infrastructure requirements of the selected mining methods.		All major infrastructure for the mine has been constructed including underground crusher, conveyor system, hoisting shaft, pumping and ventilation systems.
				Access to the underground mine is via an in-pit portal
				and decline.
Metallurgical		The metallurgical process proposed and		Copper and gold is recovered using single stage
factors or		the appropriateness of that process to the		crushing conducted underground, milling using a SAG
assumptions		style of mineralisation.		and Ball mill and floatation recovery process. Recovered
				gold is contained within the copper concentrate.
	 	Whether the metallurgical process is well- tested technology or novel in nature. The nature, amount and		The metallurgical process is well tested technology and has been conducted onsite for approximately 20 years.
	 	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	 	The current Ore Reserve is based on historic metallurgical recovery factors. No significant variation in recovery is expected. Recovery factors used in the Ore Reserve estimate are 94% for copper and 79% for gold. No deleterious elements have been experienced in material concentration or expected based on drilling and sampling conducted to date.
		scale test work and the degree to which such samples are considered representative of the orebody as a whole.		Bulk sampling is conducted on a routine basis to confirm plant performance.
		For minerals that are defined by a specification, has the ore reserve		Minerals are not defined by a specification.
		estimation been based on the appropriate
		mineralogy to meet the specifications?
Environmental		The status of studies of potential		Environmental studies including flora and fauna,
		environmental impacts of the mining and		hydrogeological studies, waste rock characterization and
		processing operation. Details of waste rock		cultural heritage have been carried out for the mine.
		characterisation and the consideration of		An environmental authority (licence) has been granted
		potential sites, status of design options		by the regulator.
		considered and, where applicable, the		The plan of operations has been approved by the
		status of approvals for process residue		regulator.
		storage and waste dumps should be reported.		The mine has an Environmental Management Plan and all required mining approvals have been granted for
				mine production, waste dump and tailings storage
				facilities and site clearing.
				Acid forming materials are contained in approved
				storage facilities and controlled using a waste rock
				managementplan.
Infrastructure		The existence of appropriate infrastructure:		All required infrastructure and access to utilities to mine
		availability of land for plant development,		the Ore Reserve is in place.
		power, water, transportation (particularly for
		bulk commodities), labour, accommodation;
		or the ease with which the infrastructure
		can beprovided, or accessed.
Costs		The derivation of, or assumptions made,		All major infrastructure has been constructed. Sustaining
		regarding projected capital costs in the		capital is forecast based on the needs of the operation
		_study. _		and updated aspart of the annual and fiveyear budget

25

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Criteria		JORC Code explanation		Commentary
				cycle.
		The methodology used to estimate operating costs.		Operating costs are calculated using a first principles approach and reconciled with actual costs on a monthly
				basis and as part of annual financial reviews.
		Allowances made for the content of		No deleterious elements material to this estimate have
		deleterious elements.		been encountered and is not expected based on drilling
				and ongoing sampling results.
				Economic inputs such as foreign exchange generated
		The source of exchange rates used in the		internally by Ernest Henry Mining. The detail of this
		study.		process is commercial sensitive and is not disclosed.
		Derivation of transportation charges.		Transport costs are based on reconciled historic data.
		The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.		Treatment charges are included in the cost model and are based on smelting in Mt Isa.
				Royalty payments of 3.77% and 5% for copper and gold
		The allowances made for royalties payable,		(respectively) to the Queensland government are
		both Government andprivate.		included in financial models
Revenue factors		The derivation of, or assumptions made		Head grades are derived from the cave flow model using
		regarding revenue factors including head		PGCA flow model.
		grade, metal or commodity price(s)		Transport and treatment charges are based on
		exchange rates, transportation and		reconciled data and included in the cost model and net
		treatment charges, penalties, net smelter		smelter return calculation.
		returns, etc.		Ernest Henry mining applies a common process to the
		The derivation of assumptions made of		generation of commodity prices. This involves
		metal or commodity price(s), for the		generation of long-term price curves based on current
		principal metals, minerals and co-products.		sales contracts, industry capacity analysis, global
				commodity consumption and economic growth trends.
				In this process, a price curve rather than a single price
				point is used to develop estimates of mine returns over
				the life of the operation. The detail of this process and of
				the price point curves is commercially sensitive and is
				not disclosed.
Market		The demand, supply and stock situation for		Supply and demand of copper and gold is not a
assessment		the particular commodity, consumption		constraint used in the estimate of the Ore Reserve at
		trends and factors likely to affect supply		Ernest Henry Mining.
		and demand into the future.
		A customer and competitor analysis along		Ernest Henry does not produce industrial minerals.
		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
		requirementsprior to a supply contract.
Economic		The inputs to the economic analysis to		Economic inputs such as foreign exchange rates and
		produce the net present value (NPV) in the		inflation rates are generated internally by Ernest Henry
		study, the source and confidence of these		Mining. The detail of this process is commercial
		economic inputs including estimated		sensitive and is not disclosed.
		inflation, discount rate, etc.		Sensitivity testing of the Ernest Henry Mining ore
		NPV ranges and sensitivity to variations in		reserves using Ernest Henry Mining long term prices
		the significant assumptions and inputs.		demonstrates a positive net present value that meets
				Ernest HenryMining’s investment criteria.
Social		The status of agreements with key		Deed and access agreements are in place with
		stakeholders and matters leading to social		neighboring landholders.
		licence to operate.		All other permits for planned mining operations have
				beengranted.
Other		To the extent relevant, the impact of the		Events such as cyclones and high rainfall events present
		following on the project and/or on the		a risk to short term production targets and are managed
		estimation and classification of the Ore		through site risk mitigation processes. These events
		Reserves:		have not been included the estimation of the Ore
		Any identified material naturally occurring		Reserves.
		risks.
		The status of material legal agreements

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Criteria		JORC Code explanation		Commentary
		and marketing arrangements.
		The status of governmental agreements		Mining operations at the site have been conducted for 20
		and approvals critical to the viability of the		years. There are no outstanding approvals required for
		project, such as mineral tenement status,		planned mining.
		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.
Classification		The basis for the classification of the Ore		Measured Resources recovered in the cave flow model
		Reserves into varying confidence		are converted to Proved Reserves.
		categories.		Indicated Resources recovered in the cave flow model
		Whether the result appropriately reflects		are converted to Probable Reserves.
		the Competent Person’s view of the		Inferred Resources and External Material recovered as
		deposit.		dilution in the cave flow model are converted to Probable
		The proportion of Probable Ore Reserves		Reserves.
		that have been derived from Measured		The results of the cave flow model have been reconciled
		Mineral Resources (if any).		based on three years of historical mine data.
				The process used to modify the Mineral Resource to the
				Ore Reserve is deemed appropriate by the Competent
				Person.
Audits or		The results of any audits or reviews of Ore		Internal review of the methodology used to generate the
reviews		Reserve estimates.		Ore Reserve estimate has been conducted.
Discussion of		Where appropriate a statement of the		Comparison of cave flow model forecasts and ore grade
relative		relative accuracy and confidence level in		presented to the concentrator indicate that the
accuracy/		the Ore Reserve estimate using an		assumptions used in the model used to estimate the Ore
confidence		approach or procedure deemed appropriate		Reserve are valid.
		by the Competent Person. For example,		Calibration of the flow model has been conducted using
		the application of statistical or geostatistical		three years of historical data. Mine to mill reconciliation
		procedures to quantify the relative accuracy		data gathered over the past 2 years indicates the
		of the reserve within stated confidence		estimate to be accurate +/- 5%.
		limits, or, if such an approach is not
		deemed appropriate, a qualitative		The accuracy of the estimates in this Ore Reserve is
		discussion of the factors which could affect		largely dependent of the accuracy of the block model
		the relative accuracy and confidence of the		used to determine the Mineral Resource as well as the
		estimate.		accuracy of the cave flow model and economic
		The statement should specify whether it		assumptions used.
		relates to global or local estimates, and, if		The cave flow model is calibrated on a 6 monthly basis
		local, state the relevant tonnages, which		to ensure assumptions and model parameters are
		should be relevant to technical and		accurate.
		economic evaluation. Documentation should include assumptions made and the		All assumptions used in financial models are subject to internal review.
		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.

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