GBM RESOURCES LIMITED. — Capital/Financing Update 2016

Jul 7, 2016

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ABN 91 124 752 745

8 July 2016

ASX Announcement

135% Increase in Gold Resource at Koala Gold Mine, Mt Coolon Gold Project, Qld

• Gold resource increased by 135% to 1.4Mt averaging 2.6 g/t Au containing an estimated 118,700 ounces.

• The Koala Gold Deposit now has an identified gold endowment (past production and current resources) containing an estimated 378,000 ounces with significant exploration upside.

• Interpreted en-echelon[1 ] structural setting opens significant opportunity for discovery of high-grade gold mineralisation north and south of the Koala Lode.

• Historical gold production has produced 243,000 ounces at an average grade of 12.7 g/t Au. Production was extracted from workings extending over a strike length of 900 metres and from a depth of only 130 metres from surface.

• The global gold resource at Mount Coolon Gold Project has increased to contain an estimated 320,000 ounces of gold.

ASX Code: GBZ

COMPANY DIRECTORS

Peter Thompson Managing Director/ Executive Chairman

Neil Norris Exploration Director – Executive Hun Seng Tan Non- Executive Director

CONTACT DETAILS

Principal & Registered Office Suite 8, 7 The Esplanade, Mt Pleasant, WA 6153

Exploration Office 10 Parker Street, Castlemaine, Victoria 3450

Website www.gbmr.com.au

Email

info@gbmr.com.au Phone +61 (8) 9316 9100 Fax +61 (8) 9315 5475

Phone (Exploration Office) +61 (3) 5470 5033

Australian resources company GBM Resources Limited (ASX: GBZ ) (“ GBM ” or “ the Company ”) is pleased to announce the remodelled resource estimate at Koala Gold Mine has resulted in a significant 135% increase to 1.4Mt averaging 2.6 g/t Au containing an estimated 118,700 ounces of gold .

The Koala Gold Mine, is part of the Mount Coolon Gold Project, located within the Drummond Basin, a mineral province which hosts numerous epithermal gold deposits with historical gold production of more than 4.5 Mozs and a total known gold endowment of over 7.5 Mozs of gold.

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• I. “En_Echelon” – defined as closely spaced, parallel or sub-parallel mineral filled lenses within a body of a rock.

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Mining of the existing open cut at Koala ceased in 1996 when the gold price was less than A$500 per ounce. Improvements in mining efficiency during the last twenty years combined with increase in gold price make the deepening of the existing open pit a potentially viable consideration.

A detailed review of the geology of the Koala Deposit confirmed that lower grade stockwork mineralisation extends for several metres on either side of the central high-grade chalcedony zone both below the old open pit, and around the old underground workings.

Resource Category	Resource Category	Ore Type	Cutoff Grade (g/t Au)	Tonnes (t)	Grade Contained Gold Au(g/t) (ozs.)	Grade Contained Gold Au(g/t) (ozs.)
Indicated	open pit	Fresh 0.4 Oxide 0.4 Transition 0.4 Fresh 2.0 sub total Indicated		250,000 2.9 22,800 30,000 1.1 1,100 90,000 3.3 9,600 50,000 3.0 5,100 420,000 2.8 38,500
	underground
Inferred	open pit	Fresh	0.4	600,000	2.3	44,900
		Oxide	0.4	40,000	0.8	1,200
		Transition	0.4	110,000	1.6	5,600
	underground	Fresh	2.0	230,000	3.9	28,500
		sub total Inferred		980,000	2.6	80,200
total	open pit	Fresh 0.4 Oxide 0.4 Transition 0.4 Fresh 2.0 TOTAL		850,000 2.5 67,700 70,000 0.9 2,200 190,000 2.4 15,100 280,000 3.7 33,700 1,400,000 2.6 118,700
	underground

Table 1: Koala summary reported by resource category and oxidation state. Please note rounding; tonnes (1,000t), grade (0.1 g/t) and contained gold (100 ounces).

The Koala leases occur within the Drummond Basin (see figure below). Mineralisation in the Drummond Basin is typified by high sulphidation epithermal style precious metal Deposits. Examples include Pajingo (3.0 Moz), Wirralie (1.1 Moz), Yandan (0.6 Moz) and Koala. Mineralisation is typified by fine grained electrum in quartz veins and or breccias. These Deposits are variously interpreted to have formed in locally extensional jogs or bends of transform fault systems.

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Figure 1: Mt Coolon Gold Project tenement group location plan.

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Mt Coolon Gold Project Forward Programme

The Company will continue the evaluation of the known mineralising systems and aims to advance a number of near-term production options and activities during the September Quarter.

Current activities include:

• Finalising the Scoping Study - evaluating the viability of heap leaching gold extraction from the known oxide resources at the Eugenia Deposit.

• Investigating Toll Milling options for the Koala and Glen Eva gold resources.

• Drilling of the untested high – priority IP drill target adjacent to the Koala Lode system.

• Complete infill drilling and a resource estimate on the Bimurra Prospect. Previously GBM have estimated an exploration target ( Refer ASX announcement dated 21 September 2015).

• Continue the evaluation of the Conway Prospect which contains multiple prospects and is considered to hold potential for both bonanza epithermal vein style deposits and bulk tonnage low grade disseminated deposits. The highest grade intersects occur within the Wobegong prospect and include 14 m @ 16.08 g/t Au from surface in CFS005 (including 1 m @ 208 g/t Au from 1 m), 2 m @ 26.6 g/t Au from 40 m in CON006 and 8 m @ 4.91 g/t Au from 26 m in C013. (Refer ASX announcement dated 17 February 2016).

For Further information please contact:

Peter Thompson Karen Oswald Managing Director Marko Communications GBM Resources Limited Tel: 0423 602 353 Tel: 08 9316 9100 Email: Karen.oswald@markocommunications.com.au

About GBM Resources

GBM Resources Ltd (ASX: GBZ) is an Australian resource company that listed on the ASX in 2007, headquartered in Perth WA, with exploration operations in Victoria and Queensland.

The Company’s primary focus is in key commodities of gold and copper-gold, assets in Australia. GBM tenements cover an area greater than 4,300 square kilometres in eight major projects areas in Queensland and Victoria.

GBM is prioritising the exploration and development of the Mount Coolon Gold Project and Mount Morgan Gold Copper Project.

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2016 Resource Estimate

The current Koala resource estimate is based on over 30,000 metres of drilling including 20,780 metres of diamond drilling completed by various companies. In addition, stope outlines and details of previous underground mining and open pit mining and grade control data have been used to guide interpretation and estimation.

Gold mineralisation at Koala occurs as high grade colloform quartz (+/– sulphide) veins surrounded by a halo of low grade gold mineralisation comprising quartz stringer vein stockworks in variably altered (propyllitic silica – pyrite) andesite. The high grade veins have been offset and compartmentalised by cross faults.

The gold mineralisation domain was interpreted from raw assays on 25 m spaced sections from gold grades and logged veining percentages. The interpretation was carried out at a nominal 0.2 g/t Au as the raw assay data showed no natural lower grade cut-off 0.2 g/t was selected as the nominal interpretation grade based on being sufficiently below likely open pit mining cut-off grades.

For inclusion in a gold domain, a minimum true width of 2 m above the nominal domain grade was necessary. In addition only mineralisation zones intercepted in at least two sections with at least two holes on both sections were included.

The gold domain was interpreted to honour grade control data from the Ross Mining pit (GC data was not used for grade interpolation) and also used the small scale mineralisation geometries apparent in the GC data as templates for interpretation of the exploration data.

Three gold sub-domains were interpreted. The main sub-domain comprises mineralisation hosted by the main Koala quartz vein and associated low grade halo. The splays sub-domain comprises mineralisation interpreted as being hosted by splayed from, or sub-parallel to, the main zone. The flat sub-domain comprises near flat lying, low grade mineralisation to the east of the main shaft. The flat domain is close to co-incident with the base of transition, however inspection of core from this zone shows that it is in situ quartz stringer stockwork mineralisation and not re-mobilised secondary mineralisation.

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Figure 2: . Gold domains showing main (green), splays (pink) and flat (yellow) sub-domains, Sullivans Fault (dark blue wireframe) and Ross Mining pit (brown wireframe) for reference.Top Left; plan view, Bottom Left; longitudinal view, Right; oblique view along strike to the North.

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Three oxidation domains were created, the near surface oxide domain, the transition domain and the fresh domain.

The oxidation domains were created from surfaces based on logged oxidation1 (majority oxidation). Logged oxidation1 is a ‘synthetic’ logging field created by GBM geologists from the many and varied forms of oxidation logging in the historical drill logs.

Two oxidation surfaces were interpreted – the base of complete oxidation (BOX) at the highest occurrence of logged POX (partially oxidised) or FR (fresh) and the base of transition (Btrans) at the lowest occurrence of logged POX or FR. The oxide domain solid was created between from pre-mining surface (created from the current topographic surface with the Ross Mining Pit area assumed flat) and the BOX surface. The transition domain solid was created between Btrans surface and the lowest of the pre-mining and BOX surfaces. Similarly, the fresh domain was created between the base of the block model and the lowest of the pre-mining, BOX and Btrans surfaces.

Therefore the oxide domain comprises completely oxidised rocks, the transition domain partially oxidised or mixed oxide and fresh material. The fresh domain is un-weathered rocks in which the main sulphide mineral is pyrite. The depth of oxidation changes abruptly across the Sullivan Fault. To the north Btrans is at about 70m – 90m below surface, but south of the Sullivan Fault it is only about 10m depth below surface.

The statistical analysis and variography were completed using the Minesight Data Analyst (MSDA) module of the Minesight software package. A composite length of 1.0 m was selected as this requires the splitting of very few raw samples (25 or 1.6% of the raw samples; see Figure 6 1). An argument could have been made for compositing to 2.0 m as this is the likely mining selectivity, however it was considered that the loss of information on short range variability outweighed this. There are too few composites in the splay and flat sub-domains to allow meaningful analysis, therefore the sub-domains were grouped into a single domain for analysis. There are significant differences in the gold grade statistics between the oxidation domains. Visual inspection of gold composite grades near the oxidation domain boundaries revealed no dramatic grade gradient across the oxidation boundaries, therefore the oxidation boundaries were not used for variography or grade interpolation.

Gold was interpolated using ordinary kriging (OK) from the composited data into the block model item AUPPM at parent block scale. No pre-processing changes (such as top cutting) were applied to the data. AUPPM was only interpolated within the gold domain. The search neighbourhood was determined from the drill spacing and variogram range, allowing a block to ‘see’ across drill sections in the major axis direction. Extreme high grades were managed by restricting the influence of composites greater than 50 g/t were to 20m.

The minimum, maximum samples and block discretisation were determined by minimising the kriging variance in sparsely and closely drilled areas of test models.

• Search ellipsoid (100m x 25m x 50m)

• Minimum 4 composites

• Maximum 30 composites (limits negative kriging weights)

• Gold domain as hard boundaries

• Block discretisation of 2x4x2 (XYZ)

No additional de-clustering methods such as quadrant restriction or limiting the number of composites per hole was employed because the data is not obviously clustered.

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Project	Location				Res	ource Category	ource Category	ource Category	ource Category	ource Category	000' t Aug/t Au ozs Total	000' t Aug/t Au ozs Total	000' t Aug/t Au ozs Total	Cut-off
		000' t Aug/t Au ozs Measured			000' t	Aug/t Au ozs Indicated		000' t Aug/t Au ozs Inferred
Koala	Open Pit				370	2.8	33,500	750	2.1	51,700	1,110	2.4	85,000	0.4
	Underground Extension				50	3.0	5,100	230	3.9	28,500	280	3.7	33,700	2.0
	Total				420	2.8 38,500 980 2.60 80,200 1,400 2.6 118,700
Eugenia	Oxide				1,445	0.9	43,300	252	1.2	9,700	1,698	1.0	53,000	0.4
	Sulphide				2,306	0.9	66,100	1,007	1.4	45,200	3,313	1.0	111,300	0.4
	Total				3,751	0.9 109,400 1,260 1.4 54,900 5,011 1.0 164,300 0.4
Glen Eva	Belowpit.				132	7.8	33,200	21	5.9	4,000	154	7.5	37,200	3.0
Total					4,303	1.3 181,100 2,261 1.9 139,100 6,565 1.5 320,200

Table 2: Revised global resource table for Mt Coolan Gold Project. Please note rounding; tonnes (1,000t), grade (0.1g/t) and contained gold (100 ounces).

Notes

The information in this report that relates to Mineral Resources is based on information compiled by Kerrin Allwood, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian Institute of Geoscientists. Mr Allwood is a full time employee of Geomodeling Limited . Mr Allwood has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Allwood consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Neil Norris, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian Institute of Geoscientists. Mr Norris is a full-time employee of the company, and is a holder of shares and options in the company. Mr Norris has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Norris consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The Company confirms that the form and context in which the Competent Persons findings are presented have not been materially modified from the original market announcements.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the respective announcements and all material assumptions and technical parameters underpinning the resource estimate with those announcements continue to apply and have not materially changed.

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JORC Code, 2012 Edition – Table 1 report template

Section 1 Sampling Techniques and Data

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

Important Note:

Drilling and exploration has been carried out at Koala over a 30 year period by a variety of companies using varied drilling, sampling and assaying methods. The comments below refer to a compilation of all data in which like drilling, sampling and assaying methods have been aggregated for reporting purposes unless noted otherwise. For more detail refer to the full technical report on this resource estimate.

Criteria	JORC Code explanation	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or	•Percussion (Aircore and Reverse Circulation (RC)) samples were
techniques	specific specialised industry standard measurement tools appropriate	collected as individual 1m samples through a cyclone.
	to the minerals under investigation, such as down hole gamma	•Diamond core was only sampled over zones recognised as being
	sondes, or handheld XRF instruments, etc). These examples should	potentially mineralised.
	not be taken as limiting the broad meaning of sampling.
	• Include reference to measures taken to ensure sample representivity
	and the appropriate calibration of any measurement tools or systems
	used.
	• Aspects of the determination of mineralisation that are Material to the
	Public Report.
	• In cases where ‘industry standard’ work has been done this would be
	relatively simple (eg ‘reverse circulation drilling was used to obtain 1
	m samples from which 3 kg was pulverised to produce a 30 g charge
	for fire assay’). In other cases more explanation may be required,
	such as where there is coarse gold that has inherent sampling
	problems. Unusual commodities or mineralisation types (eg
	submarine nodules) may warrant disclosure of detailed information.
Drilling	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air	•Drilling comprised diamond drilling (62.0% of metres), RC drilling
techniques	blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple	(32.0% of metres) and Airtrack drilling (6.0% of metres)
	or standard tube, depth of diamond tails, face-sampling bit or other	•Diamond core was recovered in a standard wireline core barrel with
	type, whether core is oriented and if so, by what method, etc).	inner split or ‘triple’ tube. Samples were pushed out from the core
		barrel, with the top half split was split and the core placed in a core
		tray of suitable dimension. Samples were from HQ and NQ size
		barrels except for Renison Underground(UD)holes which were

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Criteria	JORC Code explanation	Commentary	Commentary
			drilled with BQ core size and the entire core sample sent for assay
		•	Diamond core was oriented but this data is not currently available
		•	RC drilling was mostly used a cross over hammer (31.4% of metres)
			with 0.6% of metres drilled usinga face sample hammer
Drill sample	• Method of recording and assessing core and chip sample recoveries	•	RC drilling recovery was not systematically recorded, however
recovery	and results assessed.		extremely poor recovery is noted in the drill logs
	• Measures taken to maximise sample recovery and ensure	•	Larger diameter HQ and NQ size core was used to provide
	representative nature of the samples.		improved recovery for the majority of drilling and triple tube drilling
	• Whether a relationship exists between sample recovery and grade		was often employed to preserve core in a more coherent state for
	and whether sample bias may have occurred due to preferential		logging and also to improve recovery in very broken or clayey
	loss/gain of fine/coarse material.		lithologies.
		•	Diamond drill recovery was recorded run by run for the Drummond
			drilling only. This data averages 92.3% recovery. Visual inspection of
			core stored on site showed that core recovery was generally very
			high but reduced in fault zones.
		•	The relationship between grade and drilling recovery was not
			investigated due to the insufficient drillingrecoverydata.
Logging	• Whether core and chip samples have been geologically and	•	Percussion chips were logged for lithology, weathering, colour and
	geotechnically logged to a level of detail to support appropriate		veining
	Mineral Resource estimation, mining studies and metallurgical	•	Diamond core was logged in detail for lithology, weathering, veining,
	studies.		alteration, structure, colour and basic geotechnical parameters (RQD)
	• Whether logging is qualitative or quantitative in nature. Core (or	•	The logging has been carried out to an appropriate level for resource
	costean, channel, etc) photography.		estimation. The logging was checked against stored core for 23
	• The total length and percentage of the relevant intersections logged.		holes.
		•	No systematic core photography has been found
		•	Alldrillingwaslogged geologically
Sub-	• If core, whether cut or sawn and whether quarter, half or all core	•	All diamond core samples (41.9% of samples) was cut with a
sampling	taken.		diamond saw to 1.0 m or geological intervals and half sampled with
techniques	• If non-core, whether riffled, tube sampled, rotary split, etc and		the exception of 6 holes drilled form underground which were BQ and
and sample	whether sampled wet or dry.		sampled as whole core.
preparation	• For all sample types, the nature, quality and appropriateness of the	•	Percussion drilling was sub-sampled using a Jones riffle splitter
	sample preparation technique.		(47.7% of samples) or by a spear (10.4% of samples). The quality
	• Quality control procedures adopted for all sub-sampling stages to		(moisture content and recovery) of percussion samples was not
	maximise representivity of samples.		recorded.
	• Measures taken to ensure that the sampling is representative of the in	•	Laboratorysamplepreparation for all samples followed the respective

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Criteria	JORC Code explanation	Commentary
	situ material collected, including for instance results for field	laboratories standard methodologies for gold fire assays techniques.
	duplicate/second-half sampling.	•Blanks samples were inserted by Drummond at a rate of one per 20
	• Whether sample sizes are appropriate to the grain size of the material	samples. The results of the Drummond blanks are acceptable. No
	being sampled.	blanks have been found for other drilling although there is reference
		to them in Renison and Ross Mining reports.
		•Standard samples were inserted by Drummond at a rate of one per
		20 samples. The standards used by Drummond were appropriate to
		the style of mineralization at Koala. The results of the Drummond
		standards are acceptable. No results for standards have been found
		for other company drilling although there is reference to them in
		Renison and Ross Mining reports.
		•Only five field duplicate pairs have been found. This is too few data
		to assess the quality of field sampling.
		•18 pulp duplicates performed well but this is a very limited dataset
		and so indicates but does not confirm acceptable quality laboratory
		performance.
		•No measures were taken to ensure the representivity of the samples.
		•A nomogram was used to determine that the sample sizes are
		appropriate to the veryfinegrainedgold mineralization style.
Quality of	• The nature, quality and appropriateness of the assaying and	• Renison samples from RC precollars of MDDH001 to MDDH005
assay data	laboratory procedures used and whether the technique is considered	were submitted to Tetchem Laboratories, Cairns, for analysis of Au
and	partial or total.	by 30gm fire assay plus AAS analysis of Ag, As, Cu, Pb, and Zn.
laboratory	• For geophysical tools, spectrometers, handheld XRF instruments, etc,	Silver and base metals proved to be non-anomalous, and assays for
tests	the parameters used in determining the analysis including instrument	these were discontinued. Precollars of MDDH006 to MDDH044 were
	make and model, reading times, calibrations factors applied and their	assayed for gold only, also by Tetchem Laboratories and selected
	derivation, etc.	samples from the precollars of MDDH073 to MDDH089 were
	• Nature of quality control procedures adopted (eg standards, blanks,	submitted to Classic Comlabs Townsville for 30gm FA gold assay.
	duplicates, external laboratory checks) and whether acceptable levels	Diamond core samples from holes MDDH001 to MDDH072 were
	of accuracy (ie lack of bias) and precision have been established.	analysed by Tetchem Laboratories; MDDH001 to MDDH005 for Au,
		Ag, As, Cu, Pb and Zn; MDDH006 to MDDH022 for Au only; and
		MDDH023 to MDDH072 for Au only in country rock samples, for Au
		and Ag in lode samples. Both lode and country rock samples were
		prepared by jaw—crushing, lode samples were pulverised in
		"Supercrunch" mill to -120 mesh, splitting off 500 g, and fine
		pulverising in "Labtechnics" mill for 5 minutes. Country rock were
		pulverised in hammer mill to 40-60 mesh splittingoff 500g,and fine

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Criteria	JORC Code explanation	Commentary
		pulverising in "Labtechnics" mill for 5 minutes. Samples from holes
		MDDH072 onwards were analysed by Classic Comlabs, for Au only
		in country rock and for Au and Ag in lodes Sample preparation was
		the same for each, using hammer mill then "Labtechnics" mixer mill
		(whole sample down to 150 mesh).
		•Ross initially sent samples to Analabs, Townsville for testing
		using the 50 gram fire assay method (GG313, Detection limit
		•ppm Au), later in the program aqua regia AAS method (GG335
		Detection Limit 0.01 ppm Au) was used as the standard method.
		Pulp check samples were sent to Yandan mine. All tailings sample
		preparation and assaying was performed by Analabs, Townsville.
		Subsamples were pulverized and assayed with a standard 50 g fire
		assay with an AAS finish (GG313, Detection limit 0.001 ppm Au).
		•All Drummond samples were sent to ALS, Townsville for assaying
		with 30g fire assay with AAS finish (Au-AA25) and 34 elements by
		ME-ICP (ME-ICP41s). The entire Drummond sample was crushed
		(>70 % to <6 mm) then pulverised before being riffle split.
		•All methods are considered acceptable industry standard for gold
		assays and follow a similar assay method. In the fire assay method, a
		prepared sample is fused and then cupelled to yield a precious metal
		bead. The bead is digested in 0.5 mL dilute nitric acid and 0.5 mL
		concentrated hydrochloric acid. The digested solution is cooled,
		diluted to a total volume of 10 mL with de-mineralized water, and
		analysed by atomic absorption spectroscopy against matrix-matched
		standards. The technique is total.
		•Other than for the Drummond data, very few QAQC data have been
		found. The Drummond QAQC data indicates that the Drummond data
		is of acceptable quality for use in resource estimation with no evidence
		for bias or unacceptable precision. Whilst there are many references
		in reports to acceptable QAQC results for drilling from companies
		other than Drummond, this cannot be demonstrated with data. This
		drilling comprises the vast majority of the data used in this resource
		estimate. The pre-Drummond data formed the basis of the resource
		estimate used for the Ross Mining open pit. This resource reconciled
		well to bothgrade control data and reconciledplant data forgrade.

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Criteria	JORC Code explanation	Commentary
		The available QAQC data is insufficient to demonstrate the quality of
		the data used in this resource estimate but neither does it provide any
		evidence for bias or imprecision in the data.
		•No handheld tools were used with all assays performed at external
		laboratories
Verification	• The verification of significant intersections by either independent or	•23 selected mineralized intercepts were inspected at the site core
of sampling	alternative company personnel.	storage facility by GML and GBM staff
and	• The use of twinned holes.	•No verification samples (including twinned holes) have been taken
assaying	• Documentation of primary data, data entry procedures, data	•Digital data was checked against original drill logs and assay
	verification, data storage (physical and electronic) protocols.	certificates for 94% of the data and no significant errors were found.
	• Discuss any adjustment to assay data.	•The raw assay data has been used with no adjustments. The first
		assayresult was used for intervals with more than one assays result.
Location of	• Accuracy and quality of surveys used to locate drill holes (collar and	•Hole collar locations were determined total station survey instruments
data points	down-hole surveys), trenches, mine workings and other locations	for Renison and Ross drilling and by DGPS for Drummond Gold
	used in Mineral Resource estimation.	drilling.
	• Specification of the grid system used.	•Downhole drill surveys were carried out for both RC and diamond
	• Quality and adequacy of topographic control.	drilling. The average interval between surveys was 39 m. 5.6% of
		surveys were digital with the remainder analogue, mostly Eastman
		camera shots
		•All work was carried out in the Koala local mine grid. Original survey
		data is in one of Koala Mine grid, MGA94 and AMG84. The data in
		MGA94 and AMG84 was converted to Koala Mine Grid using a grid
		conversion in MapInfo developed from 4 known points.
		•The topographic surface was triangulated from mine survey data
		collected at the time of mine closure in 1997. The resultant surface is
		of sufficient quality for resource estimation
		•Underground voids resulting from historical mining were wireframed
		from digitized level plans, a digitized long section of stopes, a 3D
		wireframe of the Renison decline and surface survey traverse of
		stopes open to the surface. The volume of the resultant wireframes
		was checked against the recorded tonnes treated. As the historical
		stopes were not surveyed this wireframe likely has some minor
		errors. These errors cannot be resolved and have been taken into
		consideration in resource classification.
Data spacing	• Data spacing for reporting of Exploration Results.	•Drillinghas beencarried out on 25mspaced sectionswith holes

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Criteria	JORC Code explanation	Commentary
and	• Whether the data spacing and distribution is sufficient to establish the	intercepting mineralization about 25 m down dip. Holes were drilled
distribution	degree of geological and grade continuity appropriate for the Mineral	across strike of the main north striking mineralized zone towards both
	Resource and Ore Reserve estimation procedure(s) and	the east and west. The drill holes generally intersected mineralization
	classifications applied.	at 60º or greater.
	• Whether sample compositing has been applied.	•The spacing and orientation of the sampling is appropriate to
		establish the grade and geological continuity as established by
		variography.
		•The samples were not composited prior to submission to the
		laboratory
Orientation	• Whether the orientation of sampling achieves unbiased sampling of	•The spacing and orientation of the sampling is generally appropriate
of data in	possible structures and the extent to which this is known, considering	to the main mineralized zone, however there are known (from grade
relation to	the deposit type.	control data) mineralized cross faults which have a similar orientation
geological	• If the relationship between the drilling orientation and the orientation	to the drill sections. The current drilling configuration does not
structure	of key mineralised structures is considered to have introduced a	adequately define these cross structures and so the resource
	sampling bias, this should be assessed and reported if material.	estimate is likely to under-estimate the number, volume (tonnage)
		and grade of these mineralized cross structures.
		•It is possible that the sampling is biased by not intersecting possible
		high grade cross structures. This has not been tested because too
		few cross structures have been definitivelyidentified.
Sample	• The measures taken to ensure sample security.	•The measures taken to ensure sample security (if any) were not
security		recorded.
		•Core, coarse chip rejects and pulps from previous exploration are
		stored on site in a lock container.
Audits or	• The results of any audits or reviews of sampling techniques and data.	•No audits of either the data or the methods used in this resource
reviews		estimate have been undertaken.

Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	Commentary
Mineral	• Type, reference name/number, location and ownership including	•The Koala resource is located within ML1029 which along with
tenement	agreements or material issues with third parties such as joint	ML1085 and ML1086 form a contiguous group of leases that form the
and land	ventures, partnerships, overriding royalties, native title interests,	Koala project and are 100% owned by GBM Resources Ltd. ML1029
tenure status	historical sites, wilderness or national park and environmental	expires on 31/1/24

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Criteria	JORC Code explanation	Commentary	Commentary
	settings.	•	GML is not aware of any material issues with third parties which may
	• The security of the tenure held at the time of reporting along with any		impede current or future operations at Koala. GBM would need to
	known impediments to obtaining a licence to operate in the area.		obtain certain permits before a mining operation could proceed at
			Koala
Exploration	• Acknowledgment and appraisal of exploration by other parties.	•	In 1913 gold was discovered at MT Coolon (Koala gold mine) by a
done by other parties			boundary rider, from 1913 until 1931 gold was mined from small shallow leases and shallow shafts, from 1931 -139 Gold Mines of
			Australia (GMA) consolidated and mined the whole field. Historic
			underground mining from discovery in 1914 to 1938 produced
			approximately 180,000 ounces of gold at an average grade of
			18.4g/t Au.
		•	No activity was taken from 1939 to 1974 Saracen Minerals (~1974)
		•	Saracen Minerals explored for porphyry-style base metals in an
			area from Koala Mine to east of Bungobine Homestead during
			1974. Work involved collection of 115 rock chip samples and
			geological traverses. The two main prospects were at Bungobine
			Yards and around Mt Coolon/Koala Mine. Due to poor results, the
			tenement was relinquished.
		•	Renison Goldfields LTD/Gold Feilds Exploration (1986 – 1989)
			Carried out mapping, colour aerial photography, airborne magnetic
			and radiometric survey, ground magnetics, produced a feasibility
			study, a review of old GMA data and plans from 1939, rock chip
			sampling of the reef at surface, and drilling; 78 percussion Drill
			holes, 99 Reverse circulation collars with Diamond Drill holes tails
			to test and delineate remnant resources, the western reef and
			Hectorina deposit. Renison commenced a decline but terminated
			mining due to intersecting a major fault.
		•	ACM Gold Limited/Wirralie Gold Mines (1989 - 1992) carried out
			exploration on the Tower prospect and at Mt Koala. Producing a
			resource estimate and feasibility study for open pit mining. Work
			included evaluating Renison’s previous work, photo and
			lineament analysis, rock chip sampling, and drilling; 45 RAB
			scout holes testing surface mineralisation, 291 soil auger holes
			and 1 RC hole.
		•	Ross Mining (1992 - 2000)carried out regional and detailed

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Criteria	JORC Code explanation	Commentary	Commentary
			mapping, produced a new resource estimate, soil sampling,
			metallurgy testing, a gradient array Resistivity survey, IP surveys,
			CSMAT survey, Petrology, drilling; RC collars with Diamond tails
			(6 holes), 39 RC, 103 diamond holes and 157 RAB holes. Ross
			carried out mining of the northern end of the ML an area that
			Renison had planned to mine from underground and is known as
			the Koala Pit. Ross Mining produced 53,000 ounces gold at an
			average grade of 5.6g/t Au.
		•	Normandy Mining (2000 - 2002) carried out work re-modelling
			the whole deposit, a heli-borne EM survey and drilling distal to
			the main Koala resource.
		•	MCGM/Drummond Gold (2006 -2014) carried out a revaluation and
			synthesis of all previous work which included a verification and
			validation of previous work and data, mapping, HyVista imagery,
			reinterpretation of previous geophysics data sets, and drilled; 17
			RC holes, 9 RC pre collar with diamond tail holes and 4 Diamond
			holes
		•	GBM acquired the project from Drummond Gold in 2015.
		•	All drilling, sampling, surveying and assaying that forms the basis of
			this resource estimate was carried out bythese otherparties.
Geology	• Deposit type, geological setting and style of mineralisation.	•	Auriferous epithermal veining at Koala is hosted in a thick package
			of shallow dipping volcanic flow sheets, which are part of the
			regional Cycle 1 Volcanic sequence (Silver Hills Volcanics). The
			lode lies approximately 500m west of a major granodiorite intrusion
			outcrop and is preferentially hosted by porphyritic andesite. The
			gold mineralisation occurs as a narrow, steeply dipping high grade
			colloform quartz vein a wider lower grade, veinlet stockwork and is
			locally disrupted by faulting. The main vein has been defined by
			drilling over a strike length of about 1200 m and down dip about
			200 m. The main vein is offset by steeply dipping, west-northwest
			striking cross faults with high grade zones formed at the
			intersection of the cross faults and the main vein. The main vein
			changes dip direction along strike. In the south it dips steeply to the
			west, whereas in the north it dips steeply to the east. The main vein
			splits into a series of splay veins at the southern end. The up-dip
			extent of the main vein appears to be limited bya rhyolitic unit

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Criteria	JORC Code explanation	Commentary
		which results in a gentle north plunge. The main vein thins and
		weakens with depth. A number of alteration styles are evident
		including silica-sericite- pyrite+K-Feldspar associated with gold
		mineralisation.
Drill hole	• A summary of all information material to the understanding of the	•Not applicable –individual drill intercepts would not have a material
Information	exploration results including a tabulation of the following information	effect on the resource estimate reported on here.
	for all Material drill holes:
	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 averaging techniques,	•Not applicable – exploration results are not reported
aggregation	maximum and/or minimum grade truncations (eg cutting of high
methods	grades) and cut-off grades are usually Material and should be stated.
	• Where aggregate intercepts incorporate short lengths of high grade
	results and 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 important in the reporting of	•Not applicable – exploration results are not reported
between	Exploration Results.
mineralisatio	• If the geometry of the mineralisation with respect to the drill hole
n widths and	angle is known, its nature should be reported.
intercept lengths	• 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 scales) and tabulations of	•Not applicable – exploration results are not reported
	intercepts should be included for any significant discovery being
	reported These should include, but not be limited to aplan view of

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Criteria	JORC Code explanation	Commentary
	drill hole collar locations and appropriate sectional views.
Balanced	• Where comprehensive reporting of all Exploration Results is not	•Not applicable – exploration results are not reported
reporting	practicable, representative reporting of both low and high grades
	and/or widths should be practiced to avoid misleading reporting of
	Exploration Results.
Other	• Other exploration data, if meaningful and material, should be reported	•Not applicable – exploration results are not reported
substantive	including (but not limited to): geological observations; geophysical
exploration	survey results; geochemical survey results; bulk samples – size and
data	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 work (eg tests for lateral	•Further drilling is planned to test for additional high grade cross
	extensions or depth extensions or large-scale step-out drilling).	structures and to better define shape of historically mined stopes and
	• Diagrams clearly highlighting the areas of possible extensions,	associated low grade stockwork remnants.
	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	Commentary	Commentary
Database	• Measures taken to ensure that data has not been corrupted by, for	•	Downhole data was collated by Drummond Gold and validated by
integrity	example, transcription or keying errors, between its initial collection		GBM from a mixture of hardcopy and digital logging. Responsibility
	and its use for Mineral Resource estimation purposes.		for the data resides with GBM
	• Data validation procedures used.	•	GML performed further checks of drill collar locations against the
			topographic surface, extreme assay values and geologically
		•	On import into mine planning software automated checks were
			performed for sample overlaps, gaps, out of range values
		•	All flagged suspect data was investigated and either corrected, or
			else omitted if it could not be satisfactorilyresolved
Site visits	• Comment on any site visits undertaken by the Competent Person and	•	Kerrin Allwood completed a site visit from 19 to 22 May, 2016. During
	the outcome of those visits.		this time checks were made of collar locations, outcrop geology and
	• If no site visits have been undertaken indicate why this is the case.		core logging as well as the general site layout and possible site
			specific impediments to development. No issues were identified.

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Criteria	JORC Code explanation	Commentary
Geological	• Confidence in (or conversely, the uncertainty of ) the geological	•The confidence in the interpretation of the geology is in part reflected
interpretatio	interpretation of the mineral deposit.	in the resource classification. The mineralized veins and associated
n	• Nature of the data used and of any assumptions made.	stockworks are readily identified visually and so logging should be
	• The effect, if any, of alternative interpretations on Mineral Resource	very reliable.
	estimation.	•The geological interpretation of the gold domain is largely based on
	• The use of geology in guiding and controlling Mineral Resource	gold assay data and logged veining.
	estimation.	•There are locally possible alternative interpretations of the main vein,
	• The factors affecting continuity both of grade and geology.	especially relating to whether the main vein ‘bends’ or is offset by a
		cross fault
		•The geological model which forms the basis for the resource estimate
		is informed by closely spaced (5m by 5m) grade control drilling in the
		Ross Mining pit. The geological features defined by the grade control
		data were used as a ‘template’ for interpreting the mineralization as
		defined byresource drillingin the un-minedparts of the deposit.
Dimensions	• The extent and variability of the Mineral Resource expressed as	•The mineral resource extends approximately 1200 m along strike,
	length (along strike or otherwise), plan width, and depth below	200 m down dip and varies in width from 2 m to 10 m. mineralization
	surface to the upper and lower limits of the Mineral Resource.	is continuous but does vary in width and location with common left
		steppinglateraljogs or offsets.
Estimation	• The nature and appropriateness of the estimation technique(s)	•The grade estimation involved the interpolation of gold grades
and	applied and key assumptions, including treatment of extreme grade	composited to 1.0 m length by ordinary kriging into a block model A
modelling	values, domaining, interpolation parameters and maximum distance	gold domain interpreted at a nominal 0.2 g/t Au was used as a ‘hard’
techniques	of extrapolation from data points. If a computer assisted estimation	boundary for data selection. A minimum of 4 and a maximum of 30
	method was chosen include a description of computer software and	composites were used from within oriented search ellipses of 100 m
	parameters used.	by 25 m by 50 m for interpolation. No other method of de-clustering
	• The availability of check estimates, previous estimates and/or mine	the data was used.
	production records and whether the Mineral Resource estimate takes	•Gold composites greater than 50 g/t Au were restricted to 20 m. This
	appropriate account of such data.	allowed the natural grade distribution to be honoured but also limited
	• The assumptions made regarding recovery of by-products.	the influence of extreme values which did not show continuity.
	• Estimation of deleterious elements or other non-grade variables of	•The block model has parent blocks 2 m (X) by 20m (Y) by 5m (Z)
	economic significance (eg sulphur for acid mine drainage	compared to the data spacing of typically 25 m by 25m by 1 m. The
	characterisation).	search neighbourhood extends st least three drill sections along
	• In the case of block model interpolation, the block size in relation to	strike. The block model was sub-blocked to a minimum 0.5 m (X) by
	the average sample spacing and the search employed.	5m (Y) by 2.5m (Z) honouring oxidation and gold domains and also
	• Any assumptions behind modelling of selective mining units.	honoring topography and historical mining voids wireframes.
	• Any assumptions about correlation between variables.	•The gold grade domain was interpreted at a nominal 0.2 g/t with a
		minimum width of 2.0 m and a maximum internal dilution of 2.0 m.

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Criteria	JORC Code explanation	Commentary
	• Description of how the geological interpretation was used to control	•The grade interpolation was checked against nearest neighbor and
	the resource estimates.	inverse distance squared interpolators.
	• Discussion of basis for using or not using grade cutting or capping.	•No by-product was assumed. Although silver it may be possible to
	• The process of validation, the checking process used, the comparison	economically produce silver, there is insufficient silver data for
	of model data to drill hole data, and use of reconciliation data if	meaningful grade estimation
	available.	•There are no known deleterious elements for the envisaged
		processing methods.
		•Pyrite is common in fresh waste rock and will likely cause acid rock
		drainage should mining proceed. There is insufficient sulphur data for
		meaningful grade estimation and hence calculation of possible acid
		generation.
		•The block model was constructed assuming mining would be a
		combination of open pit and underground mining to a minimum 2.0m
		mining width.
		•The resultant block model was validated visually against drill assays,
		statistically against de-clustered composite grades and as histograms
		and bythe use of swathplots
Moisture	• Whether the tonnages are estimated on a dry basis or with natural	•All tonnages are on a dry basis, consistent with the assay method.
	moisture, and the method of determination of the moisture content.
Cut-off	• The basis of the adopted cut-off grade(s) or quality parameters	•The reporting cutoffs reflect preliminary assessments of possible
parameters	applied.	processing, transport and open pit mining cosst above 880RL and
		underground mining below 880RL. Processing options assessed
		included open pit heap leach, open pit and underground CIL and
		transport of openpit and underground ore to a thirdpartyCILplant
Mining	• Assumptions made regarding possible mining methods, minimum	•The block model was constructed assuming mining would be a
factors or	mining dimensions and internal (or, if applicable, external) mining	combination of open pit and underground mining to a minimum 2.0m
assumptions	dilution. It is always necessary as part of the process of determining	mining width.
	reasonable prospects for eventual economic extraction to consider
	potential mining methods, but the assumptions made regarding
	mining methods and parameters when estimating Mineral Resources
	may not always be rigorous. Where this is the case, this should be
	reported with an explanation of the basis of the mining assumptions
	made.
Metallurgical	• The basis for assumptions or predictions regarding metallurgical	•It is assumed that an economic process to recover gold will be
factors or	amenability. It is always necessary aspart of theprocess of	possible

18

Criteria	JORC Code explanation	Commentary
assumptions	determining reasonable prospects for eventual economic extraction to	•Historical mining in 1996/97 yielded high (~90%) metallurgical
	consider potential metallurgical methods, but the assumptions	recoveries through a conventional CIL plant from oxide and fresh ore,
	regarding metallurgical treatment processes and parameters made	indicating that CIL is a (technically) viable processing option.
	when reporting Mineral Resources may not always be rigorous.	•Limited testwork suggests that heap leaching may be possible for
	Where this is the case, this should be reported with an explanation of	oxide and transition mineralization with recoveries above 80%. This
	the basis of the metallurgical assumptions made.	work is only preliminary and further testwork is necessary to
		determine leach kinetics, recovery from fresh mineralization and
		variability.
Environmen-	• Assumptions made regarding possible waste and process residue	•It has been assumed that, while there may be some environmental
tal factors or	disposal options. It is always necessary as part of the process of	impacts it will be possible to technically and economically mitigate
assumptions	determining reasonable prospects for eventual economic extraction to	these effects. Such impacts may include (but not limited to) acid mine
	consider the potential environmental impacts of the mining and	drainage from waste dumps, dust, noise, surface hydrology, sub-
	processing operation. While at this stage the determination of	surface hydrology, sediment runoff, flora and fauna impacts
	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 assumed, the basis for the	•Bulk density was assigned from assumed proportions of minerals and
	assumptions. If determined, the method used, whether wet or dry, the	porosity by mineralization / waste and by oxidation domain. There are
	frequency of the measurements, the nature, size and	too few bulk density data to allow interpolation or even averaging of
	representativeness of the samples.	data for assignment.
	• The bulk density for bulk material must have been measured by	•The lack of bulk density data was taken into account during resource
	methods that adequately account for void spaces (vugs, porosity,	classification
	etc), moisture and differences between rock and alteration zones
	within the deposit.
	• Discuss assumptions for bulk density estimates used in the
	evaluationprocess of the different materials.
Classificatio	• The basis for the classification of the Mineral Resources into varying	•None of the resource has been classified as measured due to limited
n	confidence categories.	density data, incomplete description of drilling and sampling methods
	• Whether appropriate account has been taken of all relevant factors (ie	for all drilling and very limited assay QAQC data.
	relative confidence in tonnage/grade estimations, reliability of input	•The resource was classified as either indicated or inferred. Indicated
	data, confidence in continuity of geology and metal values, quality,	material was classified from a wireframe enclosing continuous zones
	quantity and distribution of the data).	of unambiguous geological interpretation, more than 5 m away from
	• Whether the result appropriately reflects the Competent Person’s	historically mined stopes and where distance to the nearest
	view of the deposit.	composite is less than 20 m.

19

Criteria	JORC Code explanation	Commentary
Audits or	• The results of any audits or reviews of Mineral Resource estimates.	•This mineral resource estimate has not been audited or reviewed
reviews		because this project is at an early stage. It is anticipated that an audit
		will be completed before a decision is made to proceed to
		construction.
Discussion	• Where appropriate a statement of the relative accuracy and	•The resource classification signifies the confidence in this resource
of relative	confidence level in the Mineral Resource estimate using an approach	estimate.
accuracy/	or procedure deemed appropriate by the Competent Person. For	•The global resource estimate is likely to be within +/- 20% at cutoff
confidence	example, the application of statistical or geostatistical procedures to	grades below 1.0 g/t Au. As the cutoff grade increases so will the
	quantify the relative accuracy of the resource within stated confidence	uncertainty in the global grade estimate.
	limits, or, if such an approach is not deemed appropriate, a qualitative	•Local (parent block) grade estimates will be significantly less accurate
	discussion of the factors that could affect the relative accuracy and	than the global estimate.
	confidence of the estimate.
	• The statement should specify whether it relates to global or local
	estimates, and, if local, state the relevant tonnages, which should be
	relevant to technical and economic evaluation. Documentation should
	include assumptions made and the procedures used.
	• These statements of relative accuracy and confidence of the estimate
	should be compared withproduction data, where available.

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