GBM RESOURCES LIMITED. — Capital/Financing Update 2020

Oct 18, 2020

Suite 8, 7 The Esplanade, Mt Pleasant, WA 6153

==> picture [124 x 59] intentionally omitted <==

ASX Announcement 19 October 2020

E info@gbmr.com.au P +61 (8) 9316 9100 F +61 (8) 9315 5475

gbmr.com.au

ABN 91 124 752 745

Significant increase in resources with strategic acquisition of Yandan Gold Project and completion of conditional placement to raise A$5.4M

• GBM Resources Limited (ASX:GBZ) (GBM or the Company) advises it has signed a Binding Heads of Agreement (HoA) to acquire 100% of the Yandan Gold Project, through the purchase of all issued share capital in Straits Gold Pty Limited from Aeris Resources Limited (ASX:AIS) (Aeris).

• The Yandan Project produced approximately 350,000 oz gold[1,3] and currently contains a JORC 2004 Mineral Resource estimate of 8.56 Mt at 1.5 g/t Au for 401,000 ounces of gold[2,3] and includes established mine infrastructure such as power, water dams and access to the Suttor River, tailings and previous plant footprint strategically located ~40 km west of GBM’s flagship Mount Coolon Gold Project in the Drummond Basin.

• Terms of Placement and Yandan Acquisition:

• As consideration for the Yandan Project acquisition, GBM will issue AIS fully paid ordinary shares to the value of A$3.0 million (22.22 million shares at 13.5 cents).

• AIS will also subscribe for fully paid ordinary shares in GBM to the value of A$1.0m , with any shares issued to be escrowed for 12 months. The Yandan Project acquisition and share issue and placement will be subject to Shareholder approval at the Company’s Annual General Meeting (AGM) scheduled for 30 November 2020.

• GBM is currently updating the Yandan Mineral Resource estimate to meet JORC 2012 standards.

• GBM has also closed a Conditional Placement to raise approximately A$5.4 million subject to Shareholder approval at an Extraordinary General Meeting (EGM) to be held on 22 October 2020 via the issue of 40 million shares at 13.5 cents (refer notice of meeting lodged with ASX 18 September 2020).

Aeris Resources will own approximately 7.4% of the issued and outstanding ordinary shares of GBM following the completion of the proposed placement and acquisition.

Cautionary Statement – JORC 2004 Mineral Resources

• the estimates of Mineral Resources are not reported in accordance with the JORC Code 2012;

• a Competent Person has not done sufficient work to classify the estimates of Mineral Resources in accordance with the JORC Code 2012;

• it is possible that following evaluation and/or further exploration work the currently reported estimates may materially change and hence will need to be reported afresh under and in accordance with the JORC Code 2012;

• that nothing has come to the attention of GBM that causes it to question the accuracy or reliability of the former owner’s estimates; but

• GBM has not independently validated the former owner’s estimates and therefore is not to be regarded as reporting, adopting or endorsing those estimates

1 Yandan Gold Deposit, Drummond Basin, QLD, R.N. Carver and L.M Chenoweth, CRC LEME 2003

2 Refer cautionary statement on 2004 JORC resources

3 Drummond Gold (ASX:DGO) Quarterly Report 31 Decemeber 2010

https://web.archive.org/web/20110302012833/http://www.drummondgold.com.au/pdf_news/february_2011/20110127_Quarterly_Report_for_31_ December2010.pdf

==> picture [62 x 30] intentionally omitted <==

– Cautionary Statement Ownership

The Yandan assets, including the Yandan Mineral Resource, are not owned by GBM and are subject to the binding HoA which was signed with AIS in 19 October 2020 to acquire a 100% interest in the Yandan Gold Project. Certain conditions precedent have to be satisfied by GBM and AIS by 14 December 2020

Peter Rohner, Managing Director and CEO, commented:

“This acquisition represents an important milestone in the Company’s Drummond Basin “processing halo” strategy and delivers a step change in the company’s resource base, with GBM now controlling JORC (2004, 2012) compliant Mineral Resources in excess of 700,000 ounces of gold at the Mt Coolon and Yandan Projects, predominantly on registered mining leases with established mine infrastructure. We also welcome the support and investment by Aeris into GBM to advance this prospective asset, along with the strong support for our Placement to advance our Mount Coolon Gold Project.”

GBM Yandan project acquisition

Key terms of the HoA are summarised as follows:

1. Consideration

Consideration payable by GBM to Aeris to purchase 100% of Straits Gold Pty Ltd (ACN 072 498 081) consists of:

• I. The issue and allotment of 22,222,223 million fully paid ordinary shares (Consideration Shares), subject to shareholder approval, in the capital of GBM, representing $3 million at an issue price of $0.135 (Initial Share Price) and

• II. GBM will grant to Aeris a 1.5% Net Smelter Royalty (NSR) on the first 300,000 oz of gold equivalent produced from ML1095, ML1096 and EPM8257. This NSR will be registered as security over the Project’s Mining and Exploration Licences.

2. Aeris subscription

Aeris will also subscribe to a Placement of A$1.0 million of fully paid ordinary shares in the capital of GBM, at the same share price (Initial Share Price) or lower if the GBM share price is less than 80% of the Initial Share Price at the time of completion. GBM is seeking shareholder approval for the issue of the Aeris Subscription shares at the Company’s upcoming AGM.

3. Environmental bond

The Environmental Bond will remain in place with Department of Environment and Science (DES). Straits Gold Pty Ltd will continue with a cash backed bank guarantee to meet its rehabilitation liability under the Environmental EPML00771913.

Any future increase of the bond due to increased site activities or by changes to environmental calculations by DES on the Environmental EPML00771913 will be the sole liability of GBM.

4. Conditions precedent

• Aeris obtaining all necessary approvals for the transactions contemplated by this Binding HoA from its financiers

• Aeris and GBM (acting reasonably) entering into a Definitive Agreement consistent with the terms set out in the Binding HoA, including respective board approvals.

2

==> picture [62 x 30] intentionally omitted <==

• GBM obtaining shareholder approvals for the transactions contemplated by this Binding HoA, including the approval for the issue of the Consideration Shares pursuant to Listing Rule 7.1

• Aeris and GBM obtaining all authorisations, including from ASIC or ASX in accordance with the Listing Rules, that may be required to facilitate the sale and purchase of the Straits Gold Shares by GBM

• Any approvals required by the Minister for Natural Resources, Mines and Energy (QLD) approving the change in effective control of Straits Gold from Aeris to GBM in accordance with the Mining Act and on conditions reasonably acceptable to Aeris and GBM

5. Settlement process

The Consideration and Placement fully paid ordinary shares once issued by GBM will remain in voluntary escrow for a period of 12 months from the date of executing the Definitive Agreements.

If by 14 December 2020 (or such other date as mutually agreed in writing between the Aeris and GBM (End Date), the Conditions are not satisfied or waived, the agreement constituted by the Binding HoA will be at an end and the Parties will be released from their obligations under this HoA.

Capital raising to support activity

Consistent with the recent notice of meeting (lodged 18 September 2020) which sought approval for the issue of 40,000,000 fully paid ordinary shares in GBM, the Company will issue 40,000,000 shares at an issue price A$0.135 per share, to raise A$5.4 million before costs in new equity funds (Placement). The issue of these shares is subject to Shareholder approval at an Extraordinary General Meeting (EGM) being held on 22 October 2020.

GBM was supported in the by Henslow Pty Ltd (Henslow) and Bell Potter Securities Limited (Bell Potter) which acted as Joint Lead Managers to the placement.

GBM is pleased to announce the placement was strongly supported by a range of institutional and retail investors.

Appendix 3B with respect to the proposed issues of consideration and placement shares will be lodged with ASX immediately following this announcement.

Use of funds:

 Accelerated exploration programs at Mt Coolon Gold Project  Assessment of potential project acquisitions and project generation activities  Working capital  Costs of the issue  Total	A$4.28 m A$0.65 m A$0.11 m A$0.35 m A$5.40 m

The joint lead managers will receive a total fee of 6% of total funds raised pursuant to the share placement. No fees are payable to advisers in respect of the issue of consideration and placement shares to Aeris pursuant to the HoA.

This ASX announcement was approved and authorised for release by:

Peter Rohner, Managing Director

For further information please contact:

Investor enquiries Media enquiries Peter Rohner Michael Vaughan Managing Director Fivemark Partners +61 8 9316 9100 +61 422 602 720 peter.rohner@gbmex.com.au michael.vaughan@fivemark.com.au

3

==> picture [62 x 30] intentionally omitted <==

About GBM Resources

GBM Resources Limited is a mineral exploration and development company focused on the discovery of worldclass gold and copper deposits in Eastern Australia. The company has a high calibre project portfolio, hosting district scale mineral systems, located in a number of premier metallogenic terrains including the Drummond Basin, Mt Morgan district and the Mt Isa Inlier in Queensland, and the Malmsbury Project in the prolific Victorian Goldfields. Along with the recently formed JV on the White Dam Gold Project in South Australia in which it holds a 50% interest (in cashflow only).

COMPETENT PERSON STATEMENT

The information in the market announcement provided is an accurate representation of the available data and studies for the material mining project. The information was compiled by Peter Mullens, who is a Fellow of The Australasian Institute of Mining and Metallurgy (Membership No. 107138). Mr Mullens is a holder of shares and options in the company and is a full-time employee of the company. Mr Mullen 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 Mullens consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Where the Company refers to Mineral Resource Estimates in this report (referencing previous releases it has made to the ASX), it confirms that it is not aware of any new information or data that materially affects the information included in that announcement and all material assumptions and technical parameters underpinning the Mineral Resource estimate with that announcement continue to apply and have not materially changed.

The information in this announcement regarding Straits Exploration Results and Mineral Resources has been extracted from various Straits and Drummond Gold, ASX announcements which are available on the ASX website. GBM confirms that it is not aware of any new information or data that materially affects the information in the original reports. Nothing has come to the attention of GBM that causes it to question the accuracy or reliability of the data .

Exploration results for Yandan Project (previously reported under JORC 2004):

• The Exploration Results for Yandan have been reported by former owners.

• The source and date of the Exploration Results reported by the former owners have been referenced in the body of this announcement where Exploration Results have been reported.

• The Exploration Results for Yandan have been reported under previous editions of the JORC Code and the reporting of these Exploration Results may not conform to the requirements of the JORC Core 2012.

• Nothing has come to the attention of GBM that causes it to question the accuracy or reliability of the former owner’s Exploration Results.

• A summary of the work programs on which the Exploration Results quoted in this announcement are included in Appendix 1.

• There are no more recent Exploration Results or data relevant to the understanding of the Exploration Results.

• An assessment of the additional exploration or evaluation work that is required to report the Exploration Results in accordance with JORC Code 2012 will be taken following acquisition. The further exploration or evaluation work will be funded from the Company’s existing funding resources.

Cautionary Statement – exploration results

The exploration results reported above have not been reported in accordance with JORC Code 2012 and a Competent Person has not done sufficient work to disclose the Exploration Results in accordance with the JORC Code 2012. It is possible that following further exploration work that the confidence in the prior reported Exploration Resources may be reduced when reported under the JORC Code 2012, however nothing has come to the attention of GBM that causes it to question the accuracy or reliability of the former owner’s Exploration Results.

4

==> picture [62 x 30] intentionally omitted <==

Yandan Project gold assets

The Yandan Project is located approximately 40 km to the west of the township of Mount Coolon and 155 km southeast of Charters Towers, north Queensland. Tenure covers an area of approximately 75 km[2] and comprises one exploration permit (EPM 8257) and two granted mining leases (ML1095, ML1096). See Figure 1.

Yandan Project Resources – East Hill and South Pit

Within the Yandan project is a JORC 2004 Mineral Resource of 8.56 Mt at 1.5 g/t Au for 401,000 ounces of gold[2,3] has been estimated at East Hill and South Pit. The Mineral Resources can be divided into open pit and underground components.

==> picture [526 x 90] intentionally omitted <==

Note: as reported on 27 January 2011 by Drummond Gold Limited in Quarterly Report to 31 December 2010

Work will be undertaken to convert the JORC 2004 Mineral Resource to JORC 2012 Resource as quickly as possible. The potential for additional discovery and further Resource growth is considered high, particularly in the higher grade, potential underground zone.

The East Hill resources remain open at depth down plunge from the currently defined system.

Cautionary Statement - Resources

Please note that these estimates of Mineral Resources or Ore Reserves are not reported in accordance with the JORC Code 2012. A Competent Person has not done sufficient work to classify the estimates of Mineral Resources or Ore Reserves in accordance with the JORC Code 2012. It is possible that following evaluation and/or further exploration work the currently reported estimates may materially change and hence will need to be reported afresh under and in accordance with the JORC Code 2012. Nothing has come to the attention of the acquirer that causes it to question the accuracy or reliability of the former owner’s estimates but the acquirer has not independently validated the former owner’s estimates and therefore is not to be regarded as reporting, adopting or endorsing those estimates.

In respect of the acquisition of JORC 2004 Mineral Resource Estimate pursuant to the proposed transaction the Company provides the following information:

• The Mineral Resource Estimates have been reported by Drummond Gold Limited;

• The source and date of the reporting of the Mineral Resource Estimates has been included in the body of this announcement where resources have been reported;

• The Mineral Resource Estimates have been reported under JORC Code 2004 and the reporting of these Mineral Resource Estimates may not conform to the requirements of JORC Code 2012;

• The Company is not reporting an Ore Reserve Estimate in respect of the proposed acquisition;

• Nothing has come to the attention of GBM that causes it to question the accuracy or reliability of the former owner’s Resource Estimates or the modifying factors, including the economic modifying factors, used by the former owner. However, completion of the acquisition is subject to a due diligence review. A summary of GBM’s assessment of the significant modifying factors used by the former owner are included in Appendix 3);

• At this stage GBM is not able to provide a summary of the work programs on which the estimates were based other than as included in this announcement (refer Appendix 3);

4 ASX release – SRQ, Straits Press Release 9 Aug 2005. Yandan east Hill Discovery

5 ASX release – SRQ, Straits Quarterly Report period ending March 31 2006

5

==> picture [62 x 30] intentionally omitted <==

• There are no more recent estimates or data relevant to the reported mineralisation available to the entity;

• The Company will undertake sufficient exploration and evaluation work to report the mineral resources in accordance with JORC 2012 following completion of acquisition of the assets and completion of due diligence at which point it will have an understanding of the work required, which is expected to involve a thorough review of the input data, geological modelling and estimation processes. This is expected to be completed within the first 3 months post acquisition as the Company has already engaged a consultant to upgrade the Mineral Resource to meet requirements of JORC Code 2012.

• The required exploration and evaluation work will be funded from existing financial resources of the Company.

To the level that the announcement states (Drummond Gold – 31 December 2010 Quarterly Report issued on 27 January 2011 along with Hellman and Schofield supporting Resource Estimate report), it is the view of GBM that the mineral resource estimate is reliable, with acceptable drilling, sampling and estimation techniques described.

Geology

East Hill – sits to the east of the old Main Pit that was mined by Ross Mining. A small open pit was mined on the East Hill resource.

At East Hill three phases of gold mineralisation have been observed associated with silica forming vein arrays. In places the mineralised silica halo is extensive with zones in excess of 100 m not uncommon. Mineralisation can be classified as occurring in either:

• i. Massive silica generally low grade gold mineralised, rarely high grade.

• ii. Massive silica-pyrite low grade gold mineralised.

• iii. Crustiform banded silica-adularia-calcite low to more commonly high grade gold mineralised. Strong buddingtonite alteration common.

The structural and mineralisation history of the East Hill area is interpreted to be as follows:

• a) Basin inversion at end of Drummond Basin cycle 1 deposition results in dextral and reverse faulting on northeast listric faults with the formation of northeast anticlinal fault warps and steep east tension structures. At East Hill the proximity of the basement basin margin accentuates the deformation.

• b) Hydrothermal fluids generated by an unknown heat source up flow predominantly in east structures, concentrated at the intersection with northeast faults. Alteration of the host rock occurs above the boiling zone in a zonation from silica-adularia outward to clays.

• c) At East Hill massive silica veining, low grade Au mineralised, is deposited from upwelling fluids in tension fracturing in approximately 070⁰ and 110⁰ orientations and the alteration zonation is overprinted variably by silica-illite.

• d) Silica-pyrite veining, As and Sb rich low grade Au mineralisation, is deposited by hydrothermal brecciation at East Hill and porosity dissolution infill at Main Pit and South Pit.

• e) Late in the deformation at East Hill, crustiform banded veining with high grade Au, is deposited in approximately 110⁰ striking tension fractures by upwelling fluid boiling and interspersed episodes of mixing with recharge cool carbonate fluid.

• f) Hydrothermal system waning results in kaolinite-siderite alteration overprint by downdrawn carbonate fluids.

• g) Post-mineralisation deformation results in normal faulting on northeast listric structures and sinistral faulting on steep east structures truncating mineralisation.

6

==> picture [62 x 30] intentionally omitted <==

A selection of the historic drilling includes: (for related results see Appendix 1)

Drill Hole From (m) To (m) Length (m) Au g/t YAN 0054 211.0 387.6 176.6 2.4 Includes 300.5 328.0 27.5 8.1 Includes 361.5 370.0 8.5 10.2 YAN 0115 294.5 378.0 83.5 3.8 Includes 310.7 332.0 21.3 9.8 YAN 013 5 214.3 311.0 96.7 0.8 YAN 0145 275.0 396.0 121.0 0.6 YAN 0165 222.1 406.5 185.0 1.0 Includes 307.4 332.0 24.7 2.8 Includes 344.6 356.0 11.4 5.0 YAN 0175 276.6 368.0 91.4 1.0 Includes 291.2 299.7 8.5 5.2 YAN 0185 355.0 375.0 20.0 1.5 YAN 0225 283.0 371.0 88.0 7.9 YAN 0235 286.4 321.9 35.5 1.1

Previous mining and development

The Drummond basin has been explored for gold by a number of companies since the beginning of the 1980’s. Companies previously holding the Yandan tenements include the following:

• WMC ~1985-1992 (tenement consolidated as EPM 8257 in 1991).

• Ross Mining NL (RSM) (1993-2000).

• Ashburton Minerals and Delta Gold (2000).

• Normandy Mining/Newmont Australia. Normandy Mining (which became Newmont Australia) (20002002).

The discovery of Yandan resulted from a regional exploration program undertaken by WMC between 1985 and 1992, which resulted in the discovery of all the main prospects within the tenement. This was followed by regional reconnaissance and additional work on prospects conducted by RSM. No significant additional discoveries were made from RSMs exploration efforts.

RSM recovered 365,000oz Au from the Yandan Gold Mine through a combination of CIP and dump leach operations from 1992 to 1998. The last gold bar was poured from the CIP operations in April 1999 and the plant was subsequently relocated in June of that year. Delta Gold completed a take-over of RSM in 2000.

On 26 February 2004, Straits Exploration (Australia) Pty Ltd, a wholly owned subsidiary of Straits Resources Ltd, entered into an Option and Joint Venture Agreement with Wirralie Mines Pty Ltd, a wholly owned subsidiary of Ashburton Minerals Ltd with respect to EPM8257 and ML1095.

7

==> picture [62 x 30] intentionally omitted <==

Ashburton Minerals Ltd subsequently decided to sell Wirralie Mines Pty Ltd in October 2005, and Straits exercised its pre-emptive right as part of the Joint Venture to purchase the Yandan tenements (EPM8257, ML1095 and ML1096). The transfer of the exploration licence to Straits Exploration (Australia) Pty Ltd was effective from 3 May 2006.

As part of a corporate reconstruction within the Straits group, it was decided to transfer the tenement from Straits Exploration (Australia) Pty Ltd to Straits Gold Pty Ltd. The transfer of the exploration licence to Straits Gold Pty Ltd was effective from 2 August 2006 for ML1095 and ML1096, and 26 September for EPM8257.

In May 2009, Drummond Gold entered a Farm In Agreement with Straits Resources for the Yandan Project tenements. The agreement specified $1M expenditure within the initial 12 months after which Drummond could withdraw from the agreement.

Drummond undertook exploration activities at Yandan during 2010, focused on drilling at East Hill to test for extensions. Hellman & Schofield completed a mineral resource upgrade as a result, defining a JORC compliant (2004) resource of 8.56Mt at 1.5 g/t Au. In July 2011, Drummond formally withdrew from the Heads of Agreement for the farm in and joint venture with Straits for the Yandan project in July 2011.

Site infrastructure

Significant infrastructure exists at the site such as power, water dams and access to the Suttor River, tailings and previous plant footprint and GBM considers this site to be key for its centralised processing hub strategy (as Ross Mining also did from 1994 to 1999). See Figure 2.

8

==> picture [62 x 30] intentionally omitted <==

9

==> picture [62 x 30] intentionally omitted <==

10

==> picture [62 x 30] intentionally omitted <==

APPENDIX 1 – HISTORICAL DRILLING RESULTS

Straits Resources and Drummond Gold exploration programs

Exploration has continued on the Yandan East area since the late 1980’s when Western Mining held the project. In total, 4 different companies have drilled 100 reverse circulation and diamond drill holes into the Yandan East project for a total of 21,281.1 metres. Holes have ranged in depth from 50 metres to 500 metres. The main companies drilling at Yandan East were Western Mining in the late 1980’s, Ross Mining in the mid 1990’s when they mined the adjacent Yandan Main pit. Straits Resources completed three small drill programs from 2004 through to 2006 when the high grade zone of mineralisation was discovered at depth below the Yandan East Pit. Finally, Drummond Gold held the project under option from 2008 through to 2010. Drummond completed 11 holes for 3,925.1 metres.

Company	Years - Drill Programs	No. Drill Holes	Metres
Drummond Gold	2009/ 2010	11	3925.1
Straits Resources	2004/2005/2006	31	11292.0
Ross Mining	Mid 1990's	48	4048.0
Western Mining	Late 1980's	10	2016.0
TOTAL		100	21281.1

Note, all drilling from the Yandan East and Yandan South pits are included in this table above. Extensive drilling was completed by Western Mining and Ross Mining on the main pit zone at Yandan itself which are not included in this tabulation.

Drill Hole	Company	Year	Northing	Easting	Dip	Azimuth	From	To	Length	Aug/t	Source
YAN 005	Straits Resources	2005	7644890	497615	-57	360	211	387.6	176.6	2.4	Straits Press Release 9 Aug2005. Yandan east Hill Discovery
Includes							300.5	328	27.5	8.1
plus							361.5	370	8.5	10.2
YAN 011	Straits Resources	2006	7645098	497621	-60	360	294.5	378	83.5	3.8	StraitsQuarterlyReportperiod endingMarch 31 2006
Includes							310.7	332	21.3	9.8
YAN 013	Straits Resources	2006	7644850	497575	-60	3	214.3	311	96.7	0.8	StraitsQuarterlyReportperiod endingMarch 31 2006
YAN 014	Straits Resources	2006	7644850	497535	-60	351	275	396	121.0	0.6	StraitsQuarterlyReportperiod endingMarch 31 2006
YAN 016	Straits Resources	2006	7644920	497655	-59	360	222.1	406.5	185.0	1.0	StraitsQuarterlyReportperiod endingMarch 31 2006
Includes							307.4	332	24.7	2.8
							344.6	356	11.4	5.0
YAN 017	Straits Resources	2006	7644890	497535	-60.6	347.5	276.6	368	91.4	1.0	StraitsQuarterlyReportperiod endingMarch 31 2006
Includes							291.2	299.7	8.5	5.2
YAN 018	Straits Resources	2006	7644890	497455	-62.4	346.5	355	375	20.0	1.5	StraitsQuarterlyReportperiod endingMarch 31 2006
YAN 022	Straits Resources	2006	7644880	497655	-62	360	283	371	88.0	7.9	StraitsQuarterlyReportperiod endingMarch 31 2006
YAN 023	Straits Resources	2006	764920	497695	-63.5	1	286.4	321.9	35.5	1.1	StraitsQuarterlyReportperiod endingMarch 31 2006
	Broad envelopes calculated with a 0.5g/t Au lower cut.
	Highergrades calculated with a 2g/t Au lower cut,8m max. internal waste.
	Intercepts calcualted and reported byStraits Resources.
EHRCD003	Drummond Gold	2009	7644956	497654	-65	360	222	228.5	6.5	3.3	Calculated byPeter Mullens from Drummond assaydrill data base.
							266.1	276.3	10.2	1.8	AA
							290.1	327	36.9	5.8	AA
EHRCD006	Drummond Gold	2009	7644918	497595	-60	358	307	320.2	13.2	2.1	Calculated byP J Mullens from Drummond Gold data base
							323	331	8.0	2.3	AA
							334.7	336	1.3	2.0	AA
							341	347	6.0	2.8	AA
	Highergrade intervals with 1.0g/t Au lower cut.
	Maximum intenral dilution 4 metres
	Calculated byP J Mullens who is a fellow of The Australian Institute of Miningand Metallurgyand has sufficient experience to complete resource calculations accordingto 2012 JORC compliance.
	P J Mullens Fellow AUSIMM,membershipnumber 107138.
	Note remaining9 Drummond Holes were targetd outside the highgrade zone at depth at Yandan east Project.

11

==> picture [62 x 30] intentionally omitted <==

APPENDIX 2 – GBM MINERAL RESOURCE ESTIMATE FOR MOUNT COOLON GOLD PROJECT

==> picture [529 x 290] intentionally omitted <==

GBM confirms that it is not aware of any new data or information that materially affects the information disclosed in this presentation and previously released by GBM in relation to Mineral Resource estimates on its tenure. All material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed.

12

==> picture [62 x 30] intentionally omitted <==

APPENDIX 3 – EAST HILL GOLD DEPOSIT – Estimation and Reporting of Mineral Resources

Criteria	**JORC Code explanation **	Commentary	Commentary
Database	• Measures taken to ensure that data has not been corrupted by,	•	Validation of the drill hole database was carried out by Straits
integrity	for example, transcription or keying errors, between its initial		Resources This has not been reviewed by H&SC.
	collection and its use for Mineral Resource estimation purposes. • Data validation procedures used.	•	H&S-compiled its own ‘resource’ Access database from the supplied database as a check for any issues and connected it to the Surpac
			Mining software for error checking
		•	Responsibility for the drilling data resides with GBM
		•	Checks completed by H&S include:
			o Data was imported into an Access database with indexed fields,
			including checks for duplicate entries, unusual assay values and
			missing data.
			o Additional error checking using the Surpac database audit option
			for incorrect hole depth, sample/logging overlaps and missing
			downhole surveys.
			o Manual checking of logging codes for consistency, plausibility of
			drill hole trajectories and assay grades. Modifications made to
			lithology codes for easier use in interpretation.
		•	Assessment of the data confirms that it is suitable for resource
			estimation.
Site visits	• Comment on any site visits undertaken by the Competent Person	•	No site visit was completed by H&S or H&SC personnel.
	and the outcome of those visits.
	• If no site visits have been undertaken indicate why this is the
	case.
Geological	• Confidence in (or conversely, the uncertainty of) the geological	•	The East Hill mineralisation included in the current estimates comprises
interpretation	interpretation of the mineral deposit.		two relatively broad east-west striking mineralised zones, designated by
	• Nature of the data used and of any assumptions made.		H&S as the North (East Hill) and South (South Pit) domains. Previous
	• The effect, if any, of alternative interpretations on Mineral		open pit mining exploited portions of each of these zones to around 50
	Resource estimation.		metres depth, and the remnant mineralisation is dominantly fresh. The
	• The use of geology in guiding and controlling Mineral Resource		estimates do not include mineralisation below or adjacent to the
	estimation.		previously mined main Yandan Pit in the northwest of the current study
	• The factors affecting continuity both of grade and geology.		area.
		•	Interpretation of the drillhole database allowed for the generation of 3D
			mineral constrainingsolids andgeological surfaces for a set of 25m

13

==> picture [62 x 30] intentionally omitted <==

Criteria	**JORC Code explanation **	Commentary	Commentary
			spaced N-S sections.
		•	Outlines capturing zones of continuous mineralisation with composited
			gold grades above approximately 0.2 g/t were digitised on cross sections
			aligned with the drilling traverses. In addition to the two mineralised
			domains, the current estimates include a background domain which
			contains only rare, isolated mineralised drill results.
		•	The North domain interpreted for the current study is truncated at its
			base by a surface representing a listric fault, which was supplied by DGO.
			There is considerable vertical grade variation, with zones of notably
			higher grades centred at around 120mRL and -70 mRL separated by
			approximately 80 vertical metres of material with few high grade
			composites.
		•	The supplied geological logs included oxidation logging for only recent
			Drummond diamond holes. These holes target deeper mineralisation
			and do not intersect near-surface mineralisation, so little information is
			available to interpret the oxidation profile within the mineralised zones.
			As stipulated by DGO, the current estimates assume that the base of
			oxidation lies 30 metres below the pre-mining surface.
		•	There is no evidence of gold enrichment or depletion in the oxide zone.
		•	Geological understanding appears to be reasonable and appropriate for
			resource estimation. There is a good level of confidence in the geological
			interpretation, based on the relative ease in which various geological
			domains could be interpreted.
		•	Alternative interpretations are possible for the mineral zone definition
			but are unlikely to significantly affect the estimates.
		•	The style of mineralisation and the orebody type means there is both a
			strong stratabound and structural control to the grade and geological
			continuity.
Dimensions	• The extent and variability of the Mineral Resource expressed as	•	The sulphide open pit Mineral Resource for the North domain is 400m
	length (along strike or otherwise), plan width, and depth below		in strike by 300m in plan width by 370m vertical depth. The sulphide
	surface to the upper and lower limits of the Mineral Resource.		zone begins at roughly the 170mRL, 30m below the surface, in places
			just below the historic RSM pit, with a lower limit around the -200mRl
			which is approximately 400m below the original surface.
		•	The higher grade zone associated with the underground model
			measures 300m in strike by 200m in plan width by 250m in depth

14

==> picture [62 x 30] intentionally omitted <==

• Criteria JORC Code explanation Commentary beginning at the 100mRL approximately 100m below surface and extending to the -150mRL approximately 350m below surface .

• • The sulphide open pit Mineral Resource for the South pit measures 400m in strike by 100m in plan width. It reaches the -50mRL roughly 250m below surface.

• Estimation and • The nature and appropriateness of the estimation technique(s) • Gemcom software was used for data compilation, calculating and modelling applied and key assumptions, including treatment of extreme coding of composite values, and GS3M the resource estimation techniques grade values, domaining, interpolation parameters and maximum software developed by H&S was used for resource estimation. The distance of extrapolation from data points. If a computer assisted resulting estimates were imported into Gemcom models for model

• estimation method was chosen include a description of computer validation and resource reporting.

• software and parameters used.

• • The availability of check estimates, previous estimates and/or • The gold block grade was estimated using Multiple Indicator Kriging (MIK)

• mine production records and whether the Mineral Resource estimate takes appropriate account of such data. • H&SC considers MIK to be an appropriate estimation technique for

• • The assumptions made regarding recovery of by-products. this type of gold deposit. • Estimation of deleterious elements or other non-grade variables • There is no correlation between gold and any other elements e.g. Cu, of economic significance (e.g. sulphur for acid mine drainage Ag, Pb & Zn due to a lack of assay data for those elements. Some characterisation). arsenic sample data was available but appeared to show no

• • In the case of block model interpolation, the block size in relation correlation with gold grades.

• to the average sample spacing and the search employed. • H&S created two mineral domains, based on a 0.2g/t Au cut off and

• • Any assumptions behind modelling of selective mining units. a background domain, which contains only rare, isolated mineralised

• • Any assumptions about correlation between variables. drill results.

• • Description of how the geological interpretation was used to • A base of oxidation surface was used to sub-domain the mineral

• control the resource estimates.

• • Discussion of basis for using or not using grade cutting or domains and was treated as a soft boundary. capping. • The mineral wireframes were used to extract a total of 11,060 2m

• • The process of validation, the checking process used, the composites for subsequent gold grade interpolation. The coefficients comparison of model data to drill hole data, and use of of variation (CV) for gold for each mineral domain were variable with reconciliation data if available. the North domain having a CV of 6.85 for the fresh composites and a CV of 1.15 for the oxide material. The South domain has CVs around a more modest 0.8 with the background domain having CVs of 2.06 and 2.52 for oxide and fresh composites respectively.

• • No top cutting was applied to the composite data. Composite grades from the fresh portion of the north mineralised domain include a maximum value of 271.88 g/t which is markedly higher than the next highest grade of 57.85 g/t and significantly influences the mean grade

15

==> picture [62 x 30] intentionally omitted <==

Criteria	**JORC Code explanation **	Commentary	Commentary
			of upper indicator class of this domain. The class mean grade assigned
			to this subset of 20.12 g/t was derived from the class mean excluding
			the highest grade composite. All other class grades were determined
			from class mean grades.
		•	No assumptions were made regarding the recovery of by-products.
		•	The variogram models used for the current estimates were modelled
			from a combined dataset of mineralised domain composites.
			Although grade continuity within the mineralised domains is not well
			defined by the current sample spacing, the available data does show
			strongest grade continuity plunging towards the west consistent with
			trends shown in the raw data.
		•	Drill holes are on a regular spaced grid with a nominal spacing of 25m
			by 20m (tighter in some near surface areas) expanding and becoming
			more irregular with depth. Block dimensions for the open pit model
			are 25mx15mx5m (E, N, RL respectively) and are in line with the MIK
			estimation methodology. A selected mining unit (SMU) of 6m by 4m
			by 2.5m was used to reflect the proposed mining strategy for the
			open pit scenario. For the underground model a block size of
			25mx15mx20m (E, N, RL respectively) was used
		•	The mineral wireframes were used to control the limit of the grade
			interpolation ie the boundaries between the mineral domains and
			the background domain are treated as hard boundaries. The
			oxidation boundary is treated as a soft boundary
		•	The search criteria adopted for the current estimates represent a
			compromise between providing reasonably robust local estimates,
			and estimating a reasonably large proportion of the potentially
			mineralised areas. Uncertainty in the current estimates related to the
			use of broad search passes relative to mineralisation continuity and
			panel dimensions is captured by classifying the current estimates as
			Inferred. Modelling used an expanding search pass strategy with the
			initial search radii based on the drill spacing increasing to take in the
			geometry of the mineralisation and the variography. Modelling
			consisted of one estimation run with 3 passes. The minimum search
			used was 75m by22.5m by7.5m(X,Y & Z)for Pass 1 expandingto

16

==> picture [62 x 30] intentionally omitted <==

Criteria	**JORC Code explanation **	Commentary	Commentary
			97.5m by 29.25m by 9.75m for Passes 2 and 3. The minimum number
			of data was 16 samples and 4 octants for Passes 1 and 2 decreasing
			to a minimum of 8 data and 2 octants for Pass 3. The search
			parameters for the underground model were 75m by 22.5m by 20m
			(X, Y & Z) for Pass 1 expanding to 97.5m by 29.25m by 26m for Passes
			2 and 3. The minimum number of data was 16 samples and 4 octants
			for Passes 1 and 2 decreasing to a minimum of 8 data and 2 octants
			for Pass 3.
		•	The maximum extrapolation of the estimates is 100m.
		•	The estimation procedure was reviewed as part of an internal H&SC
			peer review.
		•	No deleterious elements or acid mine drainage has been factored in.
		•	The final block model was reviewed visually by H&S and it was
			concluded that the block model fairly represents the grades observed
			in the drill holes. H&S also validated the block model statistically using
			a variety of histograms and summary statistics and comparison with
			a previous resource estimate and historical and recent production.
		•	H&S completed an in-house check Ordinary Kriged model which
			produced reasonable results comparable to the MIK model.
		•	Validation confirmed the modelling strategy as acceptable with no
			significant issues.
		•	The deposit has been mined in small near surface zones but no
			production data was supplied and thus no reconciliation data is
			available.
Moisture	• Whether the tonnages are estimated on a dry basis or with	•	Tonnages are estimated on a dry weight basis; moisture not determined.
	natural 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 open pit resource estimates are reported as recoverable resources
parameters	applied.		for a 0.5 g/t Au cut off and a partial percent volume adjustment for the
			mineral wireframe and the base of complete oxidation surface. The cut
			off is based on advice by GBM and H&SC’s experience with similar type
			of deposits.
		•	The underground resource estimates are reported as E-type resource
			estimates for a 1g/t cut offgrade with apartialpercent volume

17

==> picture [62 x 30] intentionally omitted <==

Criteria	**JORC Code explanation **	Commentary	Commentary
			adjustment for the mineral wireframe. The cut off is based on advice by
			GBM and H&SC’s experience.
		•	The cut-off grades at which the resources estimates are quoted reflects
			an intended bulk-mining approach.
		•	Initial tests by H&S based on a cut off of 1.0 g/t cut off suggest that,
			although the estimates do include isolated blocks with apparently little
			potential economic viability, aggregating the estimates within a
			wireframe capturing continuous mineralisation does not significantly
			influence the estimates.
Mining factors	• Assumptions made regarding possible mining methods, minimum	•	H&SC’s understanding of the bulk mining scenario is based on
or	mining dimensions and internal (or, if applicable, external) mining		information supplied by GBM.
assumptions	dilution. It is always necessary as part of the process of	•	The deposit is very close to the historic Yandan Mine which was mined as
	determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.	• •	an open pit operation from 1993 to 1996 by Ross Mining yielding 221,028 oz from a heap leach and CIL plant. The SMU (6mx4mx2.5m) is the effective minimum mining dimension for this estimate. The open pit resource estimates have been reported as recoverable resources and thus any internal dilution has been factored in with the
			modelling and as such is appropriate to the block size.
		•	The underground resource estimates have been reported as E-type
			estimates which is appropriate for underground extraction. Using a
			defined shape for continuous mineralisation had very limited impact on
			the size of the resource estimates
Metallurgical	• The basis for assumptions or predictions regarding metallurgical	•	SRL completed some testwork in 2007 with the conclusions that
factors or	amenability. It is always necessary as part of the process of		recoveries by cyanidation increased with Au grade ranging from 59% for
assumptions	determining reasonable prospects for eventual economic		the lowest Au grade to 95% for the highest Au grade. Gravity separation
	extraction to consider potential metallurgical methods, but the		followed by cyanidation did not significantly increase recovery. The As
	assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be	•	rich sample had a low cyanidation recovery of 18%. No penalty elements have been identified in the work so far.
	reported with an explanation of the basis of the metallurgical
	assumptions made.
Environmental	• Assumptions made regarding possible waste and process	•	The area lies within flat terrain with broad drainage features.
factors or assumptions	residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual	•	The area is covered with sparse vegetation typical of that part of North Central Queensland.

18

==> picture [62 x 30] intentionally omitted <==

Criteria	JORC Code explanation	Commentary	Commentary
	economic extraction to consider the potential environmental	•	The area is on a fully permitted mine lease.
	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	• •	The low sulphidation deposit is likely to have relatively limited amount of sulphide waste from mining the sulphide resource. Limestone outcrops are within 5km that can be used to treat any sulphidic waste or acid mine drainage. Environmental monitoring programmes are in progress.
	explanation of the environmental assumptions made.
Bulk density	• Whether assumed or determined. If assumed, the basis for the	•	The resource estimates utilise an average bulk density of 2.0t/m3for
	assumptions. If determined, the method used, whether wet or dry,		the oxide zone, 2.65t/m3for the sulphide portion of the resource, ,
	the frequency of the measurements, the nature, size and representativeness of the samples.		based on the median value of the pit and diamond core measurements.
	• The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vughs, porosity, etc.), moisture and differences between rock and alteration zones within the deposit.	•	Density data supplied for the current estimates comprises results for 11 samples collected from the Yandan pit during mining and 355 immersion measurements from diamond core.
	• Discuss assumptions for bulk density estimates used in the	•	No description of the measurement technique for the in-pit samples
	evaluation process of the different materials.		was provided, and the relevance of these samples to the East Hill
			mineralisation is unclear. The internal Ross Mining memorandum
			supplied with these data specified that they were collected from
			around 155 and 157 mRL, which approximates the interpreted base
			of oxidation at 30 metres below surface.
		•	Interval lengths specified for the diamond core density samples range
			from 0.3 to 2.0 metres and average 0.8 metres. All of these samples
			are from down-hole depths of greater than 155 metres and test only
			fresh mineralisation.
		•	Gold assays which are available for all but one of the diamond core
			density samples, show that they have been generally collected from
			unusually high grade mineralisation. There does not appear to be a
			strong relationship between gold grade and density, suggesting that
			these samples are reasonably representative of the density of fresh
			mineralisation.
		•	The default densities are considered reasonable for the resource
			estimation.
Classification	• The basis for the classification of the Mineral Resources into	•	Classification of Mineral Resources is based on the pass category

19

==> picture [62 x 30] intentionally omitted <==

Criteria	JORC Code explanation	Commentary	Commentary
	varying confidence categories.		generated from the grade interpolation which is a result of the data
	• Whether appropriate account has been taken of all relevant		spacing, variography and geological interpretation.
	factors (i.e. relative confidence in tonnage/grade estimations,	•	Additional factors have been taken into consideration split into positives
	reliability of input data, confidence in continuity of geology and		and negatives:
	metal values, quality, quantity and distribution of the data). • Whether the result appropriately reflects the Competent Person’s view of the deposit.		o Positive factors  A reasonably well understood geological model
			 Appropriate drilling and sampling techniques used
			 A reasonable drillhole database
			 Reasonably well drilled deposit in parts with sufficient close
			spaced drilling.
			o Negative factors
			 Lack of documentation for the sampling methods and analytical
			techniques for the drilling.
			 Lack of sample recoveries for both DD and RC drilling
			 Lack of verification of historical data
			 No surveyed surface topography was provided
			 No base of oxidation surface was provided
			 No up to date digital geological map was provided
			 No QAQC data was supplied
			 Limited density data; default values were used for the different
			oxidation zones.
		•	Based on all the above considerations the Mineral Resources have been
			classified as Inferred (Passes 1, 2 & 3).
		•	The classification appropriately reflects the Competent Person’s view of
			the deposit.
Audits or	• The results of any audits or reviews of Mineral Resource	•	No external audits or reviews of the Mineral Resource estimates have
reviews	estimates.		been completed.
		•	H&SC completed an internal review Mineral Resource estimates
Discussion of	• Where appropriate a statement of the relative accuracy and	•	The relative accuracy and confidence level in the Mineral Resource
relative	confidence level in the Mineral Resource estimate using an		estimates are considered to be in line with the generally accepted
accuracy/	approach or procedure deemed appropriate by the Competent		accuracy and confidence of the nominated Mineral Resource categories.
confidence	Person. For example, the application of statistical or geostatistical		This has been determined on aqualitative,rather thanquantitative,

20

==> picture [62 x 30] intentionally omitted <==

Criteria	JORC Code explanation	Commentary
	procedures to quantify the relative accuracy of the resource	basis, and is based on the Competent Person’s experience with similar
	within stated confidence limits, or, if such an approach is not	deposits.
	deemed appropriate, a qualitative discussion of the factors that	• The geological nature of the deposit, composite/block grade comparison
	could affect the relative accuracy and confidence of the estimate.	and the modest coefficients of variation lend themselves to a reasonable
	• The statement should specify whether it relates to global or local	level of confidence in the resource estimates.
	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 available.	• The Mineral Resource estimates are considered to be reasonably accurate globally, but there is some uncertainty in the local estimates where there is wider drillhole spacing, and with the accurate position of the base of oxidation for separating oxide resource from sulphide resource.

21