GENESIS RESOURCES LIMITED — Capital/Financing Update 2017

Nov 26, 2017

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GENESIS RESOURCES LIMITED

(ASX: GES)

ASX and Media Release

27 November 2017

Mineral Resource Update for 926K Ounces of Gold within oxide and transitional material at the Plavica Project, Macedonia

Genesis Resources Limited (ASX: GES ) ( Genesis or the Company ) refers to the updated Mineral Resource estimate for the Plavica Project in Macedonia, which was announced by the Company on 17 November 2017.

Further to Genesis’ announcement on 17 November 2017, the Company sets out below additional information to assist shareholders in understanding the reported estimates of the mineral resources.

The information in this announcement is supplemental to Genesis’ 17 November 2017 announcement. For further information, shareholders should refer to the full resource report, a copy of which is available under the investor information (resource reports) section of the Company’s website (www.genesisresourcesltd.com.au).

Key highlights

The total Measured, Indicated and Inferred Mineral Resources as at November 2017 are estimated at 37.4 million tonnes (MT) at 0.77 grams per tonne of gold (ppm Au) containing 926,000 ounces of gold and 7.7 M ounces of silver (Table 1).

This material is all within oxide and partial oxide (transitional) material which metallurgical test work shows is recoverable by heap leaching methods.

This resource represents an upgrade of 18 % on the total ounces of the same material reported last year (Dec 2016). The primary mineralisation (non oxidised) component was not targeted in 2017.

The resource estimate follows a series of reverse circulation and diamond drilling campaigns completed to define mineralisation along both the main Plavica ridge and Maricanski Rid.

Mineralisation is continuous for over 1km at Plavica and 700m at Maricanski Rid and has been drilled to depths of over 300m.

Genesis Resources Limited | Plavica Project Resource Update | November 2017

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Summary:

Class	Material Type	Tonnes (Mt)	Au (ppm)	Ag (ppm)	As (ppm)	Cu (ppm)	S (%)
Measured	OX	1.6	1.01	4.7	740	130	2.6
	POX	0.002	0.59	2.3	390	840	4.3
	Sub-total	1.6	1.01	4.7	740	130	2.6
Indicated	OX	15.8	0.76	5.8	690	190	1.8
	POX	3.5	0.78	6.7	570	660	3.4
	Sub-total	19.3	0.76	6.0	670	270	2.1
Inferred	OX	9	0.7	6.6	710	200	2.0
	POX	7.5	0.8	7.8	660	520	3.0
	Sub-total	16.5	0.7	7.2	690	350	2.5
TOTAL	OX	26.4	0.75	6.0	700	190	1.9
	POX	11.0	0.81	7.5	630	570	3.1
	Sub-total	37.4	0.77	6.5	680	300	2.3

Table 1: November 2017 Mineral Resource Estimate

Notes: - All figures have been rounded to reflect the relative accuracy of the estimates. Differences may occur due to rounding errors.

• Cut-off grade used was 0.4 ppm Au for Mineral Resource reporting

• Metallurgical test work shows oxide heap leach recoveries of 83.9 % for Plavica oxide and 89.2 % for Maricanski Rid oxide ore. Transitional (Pox) recoveries are 73.8 % for Plavica ore and 64.6 % for Maricanski Rid. Silver recoveries for both deposits and both ore types averages approximately 33%.

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PLAVICA PROJECT – MINERAL RESOURCE

Geology and geological interpretation

The Plavica deposit is hosted in a sequence of andesitic volcanics and volcanoclastic material of mixed ‐ ‐ sub aerial and sub aqueous nature which dip approximately 30° to south-southwest. The volcanic stratigraphy is cut by steeply dipping vuggy silica bodies which are up to ca. 500 m long and between ca, 10 and 100 m wide. There are numerous silicified bodies with the largest of these at Plavica (trending east to south-east) and at Maricanski Rid (trending east to north-east)(Figure 1). The main geological units of the Plavica area are shown in cross-section (Figure 2) and the most important lithologies are listed below:

• Basal andesitic lithic lapilli tuff (LPT);

• Andesitic layered ash tuff (LAT). Much of the gold is hosted within this unit at Plavica, exemplified in Figure 1;

• Upper andesitic crystal to crystal – lithic tuff (ACL);

• The northern andesitic crystal tuff that is interpreted to be thrust up against the Layered Ash Tuff prior to mineralisation; and

The eastern end of the deposit an andesitic lithic-lapilli tuff (LIP) overlies the Crystal Lithic Tuff.

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Figure 1: Geological map of Plavica deposit area highlighting Plavica and Maricanski Rid areas

Genesis Resources Limited | Plavica Project Resource Update | November 2017

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Figure 2: Geology schematic interpretation of section 7597450E through the Plavica deposit

The mineralisation at the Maricanski Rid area is mostly hosted in sub-vertical vuggy silica bodies that intersect shallowly dipping interbedded lapilli tuffs and crystal lithic tuffs (Figure 3). The upper lapilli tuff is coarser grained than the lower unit and exhibits numerous lapilli over 2 cm in size. The geology at Maricanski Rid is fairly continuous between sections. A number of steeply dipping east trending faults dissect the geology. Mineralisation is often controlled by these faults. A number of hydrothermal, diatreme and fault breccias are also commonly intersected in the drilling.

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Figure 3: Geology schematic interpretation of section 7597490E in the central part of Maricanski Rid

Sampling and sub-sampling techniques

All diamond holes completed by Genesis were sampled by cutting the core longitudinally in half using diamond saws. Sampling of diamond core was also undertaken on 1m intervals.

Reverse Circulation (RC) Samples were riffle split every 1m at the rig and the sub-samples of approximately 3kg sent to SGS Ankara or SGS Bor. The majority of the RC samples were riffle split. Some RC samples were collected using a cone splitter mounted beneath the cyclone. Sub-samples of ~3kg were sent to the laboratory for assaying.

Analysis has been performed by commercial laboratories with samples sent to SGS Ankara or SGS Bor. The samples sent to SGS follow standard SGS crushing and pulverization procedures and a conventional fire assay procedure with either atomic absorption or gravimetric finish on a 30 gram subsample. Fire Assay is considered a total recovery method for gold.

QC samples have been inserted into the routine sample stream to monitor sample quality as per industry best practice. These include standards, blanks and duplicates at regular (25m) intervals. Quarter core duplicates are submitted every 50m. RC duplicates are submitted at 25m intervals. Sample sizes are reasonable for fine gold analysis. No coarse gold has been observed through photo-micrographic studies.

Genesis Resources Limited | Plavica Project Resource Update | November 2017

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Drilling techniques

Both DD and RC drilling has been employed. The DD drill rigs used 3m drill rods. DD drilling has employed a 63.5mm diameter HQ ‘standard tube’ and 85mm diameter PQ core drilling methods. RC drilling has been completed with 6m rods using a 121 mm face sampling hammer bit. Orientations are completed every run (maximum 3m) using the spear technique. DD core is typically orientated where possible though often the core is highly fractured and cannot be reliably orientated using standard techniques.

Mineral Resources methodology, factors and assumptions

Mineral Resources were classified in accordance with guidelines provided in the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (JORC Code, 2012 Edition).

The Mineral Resource estimate was based on a number of factors and assumptions:

• An option study carried out by AMEC Foster Wheeler demonstrated that a Heap Leach (HL) process is financially more beneficial to the project than a Carbon-in-Leach (CIL) process, based on the samples collected for test work. Under this scenario, only oxide (OX) and partially oxide (POX) material qualify as having reasonable prospects for future economic extraction using the selected heap-leach process option. Therefore only oxide and partial oxide mineralisation are included in this Mineral Resource estimate;

• All of the available borehole data, from Reverse Circulation (RC) and Diamond Drilling (DD), was used in the Mineral Resource estimation except holes drilled by the Yugoslav Government in the 1980’s, which are considered unreliable; The number of DD holes used in this resource estimate totals 198 holes for 49,827m. The total number of RC holes used in this resource estimate is 221 holes for 34,422m.

• All of Genesis’ samples (96% of the total) were sent to either SGS Ankara or SGS Bor and assayed for gold by 50 gram fire assay and for a multi-element suite, including Ag, Cu, Pb, Zn and As by ICP.

• The mineralisation domain is based on a cut-off grade of 0.2 ppm Au, and was modelled in three dimensions by Golder using an Indicator Kriging approach. The domain was used to flag the sample data and the block model and forms the basis of the statistical analysis and constraining of the grade estimation;

• A topography surface, resulting from a drone survey flown in 2017, was provided by Genesis. Drill collars from old drill campaigns were registered to the new topographic surface;

• Golder reviewed the QAQC data delivered by Genesis and considered it satisfactory for the purposes of resource estimation;

• Statistical and geostatistical analyses were carried out on drilling data composited to 1 m downhole. This included variography to model spatial continuity relationships in the mineralisation domains;

• The Ordinary Kriging interpolation method was used for the estimation of gold, silver, copper, arsenic, sulphur and in situ bulk density using variogram parameters defined from the geostatistical analyses;

• The Mineral Resource was reported at a cut-off grade of 0.4 ppm Au bounded by an economic shell.

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Resource classification

The Mineral Resources were classified as Measured, Indicated and Inferred based on data density, estimation performance and confidence in geological continuity. The initial classification criteria, applied in a block by block basis, is described below:

• Measured Resources: OX and POX mineralisation zones where:

• a) Blocks are estimated in the first pass;

• b) Drill holes average distances is less than 30 m; and

• c) The slope of regression is greater than 0.5.

• Indicated Resources: OX and POX mineralisation zones where:

• a) Blocks are estimated in the first pass;

• b) Drill holes average distances is less than 60 m; and

• c) The number of drill holes is greater or equal to 3.

• Inferred Resources: Remaining OX and POX mineralisation zones estimated on first or second passes, generally representing zones with discontinuous or low sampling coverage, however with grade extrapolation limited to half of the drill holes distances.

Subsequent refinement of the initial classification was undertaken using generalised classification polygons, to yield more spatially continuous classification categories. The Measured areas are defined by the wireframe “CLASS_Measured.00t”, the Indicated by the wireframe “CLASS_indicated.00t“ and the Inferred zone represented by the remaining blocks with extrapolation limited to half of the nominal drill hole spacing. A plan view of the resource classification together with the drill holes is shown below in Figure 4.

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Figure 4: Plan view of the Mineral Resource Classification for Plavica and Maricanski Rid

Genesis Resources Limited | Plavica Project Resource Update | November 2017

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Consideration of mining, metallurgical and other modifying factors

For the purposes of the Mineral Resource estimate, open pit mining using excavator and truck was assumed for near surface (0-120m). A low strip ratio and potential for heap leaching of the oxide resource should provide low mining and processing costs.

Metallurgical test work has confirmed good gold recovery for oxidised material (84 - 89%). Recoveries for transitional material (Pox) were lower.

Scoping study work has identified potential overburden and Heap leach locations on site and has defined the terms of reference for an Environmental and Social Impact Assessment (ESIA).

Cut-off grade and reasonable prospects for eventual economic extraction

The cut-off grade (COG) of 0.4g/t is based upon an assumed total ore cost at the process plant of $11.62 including ore mining cost and 87% metallurgical recovery against a net gold price of $37.80/gramme, giving a marginal COG of ~ 0.4g/t. No account of the credit from silver is assumed in the COG determination.

In order to demonstrate reasonable prospects for eventual economic extraction of the Mineral Resource, the resource model was optimised using the industry standard Whittle 4X to produce an economic resource open pit shell using an optimistic gold sale price of US$1,875 per troy ounce. The economic pit shell was used to constrain the reporting of the Mineral Resource estimate. The use of the economic pit shell utilising an elevated gold price is an industry recognised method of demonstrating ‘reasonable prospects’ when ascertaining the eventual economic extraction criteria for determination of the Mineral Resource Estimate. Current project (non-inflated) mining and processing costs are applied to the Whittle optimisation using the aforementioned optimistic gold price. The resulting pit shell demonstrated that a cut-off grade of 0.4 Au ppm produces a positive cashflow scenario. Therefore, the Mineral Resource reporting is constrained to within this pit shell to satisfy economic considerations. Figures 5 and 6 illustrate the pit shell contour in two separate sections of the deposit. Approximately 13 MT of material is located outside of this pit shell that is not included in the Mineral Resource.

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Figure 5: Vertical section 7597245E at Maricaski Rid highlighting the economic pit shell limiting the Mineral Resource declaration. Material sitting beneath the pit shell has not been included in the resource.

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Figure 6: Vertical section 7597400E at Plavica highlighting the economic pit shell limiting the Mineral Resource declaration. Material sitting beneath the pit shell has not been included in the resource.

Mineral Resources

The in situ Mineral Resources were classified as Measured, Indicated or Inferred Resources. The classification of Mineral Resources was considered appropriate based on geological confidence criteria and the location and quality of drilling and sampling information. The Mineral Resource Estimate was based on the database available as of 27th June 2017. Mineral Resources are reported from the Ordinary Kriged block model in Maptek Vulcan format. Non-mineralised blocks have been estimated but were not classified or reported. The Mineral Resource consists of gold horizons hosted within a volcanic sequence which dips at a shallow angle to the south and is associated with high sulfidation epithermal alteration, controlled by steeply dipping structures. The deposit was mined in ancient times by the Romans, however in a scale considered insignificant. Exploration history includes sampling and mining during the 1930s. After a gap, the deposit was targeted by drilling during late 1997 and the beginning of 2000s.

The Mineral Resource using a gold cut-off grade of 0.4 ppm Au is 37.4 Mt, at an average gold grade of 0.77 ppm Au, for a contained gold content of 926,000 oz. Au and 7,760,000 oz. Ag. The graph in Figure 7 represents the tonnages and grades of the deposit for a range of Au cut-off grades.

Genesis Resources Limited | Plavica Project Resource Update | November 2017

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Figure 7: Grades and Tonnage curve of Plavica deposit at different Au cut-off grades

Additional JORC 2012 information is set out in Table 1 in the Appendix.

Information in this report that relates to exploration activity, geological information, drilling and other results was compiled under the guidance of James Patterson who is a Member of the Australasian Institute of Geoscientists (AIG) and is an employee of Genesis. Mr Patterson has sufficient experience relevant to the styles of mineralisation and to the activities which are being reported to qualify as a Competent Person as defined by the JORC Code. The Resources delineated in this report were completed under the guidance of independent consultant Richard Gaze of Golder Associates Pty Ltd. Mr Gaze has sufficient experience relevant to the styles of mineralisation and to the activities which are being reported to qualify as a Competent Person as defined by the JORC Code. Mr Gaze is a Member of the Australasian Institute of Mining and Metallurgy (AUSIMM). Mr Patterson and Mr Gaze both consent to the release of the information compiled in this report in the form and context in which it appears.

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APPENDIX: JORC TABLE 1.

Section 1 Sampling Techniques and Data

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

Part	Criteria	Comment
1-1	Sampling Techniques	Samples used in the resource estimation were obtained from RC and DD drill holes. A total of 198 DD (for 49,287m) and 221 RC drill holes (for 34,422m) were used in the Plavica and Maricanski Rid resource estimates. Holes were generally drilled towards grid north with dips of approximately 60° to optimally intersect the steeply dipping east-west striking mineralised zones of high sulphidation style epithermal mineralisation. Some holes at Maricanski Rid were drilled to the south as well as some vertically due to lack of access for drill pads and the sub-horizontal nature of the mineralisation there.
		Diamond core was drilled to obtain high quality samples that were logged for lithological, structural, geotechnical, density and other attributes. Sampling of diamond core was also on one meter intervals with the core being cut in half using a diamond core saw.
		Samples are assumed to be representative of the mineralised zone.
	Drilling Techniques	The core drill rigs used 3m drill rods. Diamond drilling has employed a 63.5mm diameter HQ ‘standard tube’ and 85mm diameter PQ core drilling methods. RC drilling has been completed with 6m rods using a 4.5” or 121 mm face sampling hammer bit. Orientations are completed every run (maximum 3m) using the spear technique. Diamond drill core is typically orientated where possible though often the core is highly fractured and cannot be reliably orientated using standard techniques.
1-2	Drill Sample Recovery	Diamond drill core is assessed by measuring the recovered drill length against the actual drilled. Diamond drill recovery is generally above 95%. Recoveries drop to less than this in minor (1-2m) zones of vuggy silica and clay. RC sample weights have been taken on all primary samples. Theoretical sample weights are then compared to the actual sample to identify any intervals that have had poor recovery. Average recoveries for RC holes are >95% but can vary significantly between holes.
		Some larger diameter PQ core drilling in shallow oxide zone undertaken to improve core recovery.
		Sixteen twin holes have been completed at the Plavica and Maricanski Rid areas. Ten are DD versus RC, four are DD versus DD and two RC versus RC. The broader assay intervals are considered to be a better comparison of the holes, rather than comparing grades metre by metre as the samples are located up to 7 metres apart due to deviation, etc. Overall, gram metre data results correlate reasonably well.
1-3	Logging	All drill holes have been logged in full and record standard criteria such as lithology, alteration, mineralisation, structures, weathering and oxidation. Geotechnical data such as drill recovery, RQD, hardness, fracture type and frequency are also recorded for input into future scoping level mining studies.

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Part	Criteria	Comment
		All logging is entered into Excel spreadsheet templates or onto hard copy forms which are transferred to Excel spreadsheets. These spreadsheets are then routinely imported into Micromine software.
		All diamond core is photographed in a wet and dry state.
		Holes are geologically logged for their entire length.
1-4	Sub-Sampling Techniques and Sample Preparation	All DD holes completed by Genesis were sampled by cutting the core longitudinally in half using diamond saws. Sampling of diamond core was also undertaken on 1m intervals. RC Samples were riffle split every 1m at the rig and the sub-samples of approximately 3kg sent to SGS Ankara or SGS Bor.
		The majority of the RC samples were riffle split. Some RC samples were collected using a cone splitter mounted beneath the cyclone.
		Sub-samples of ~3kg were sent to the laboratory for assaying. Analysis has been performed by commercial laboratories with samples sent to SGS Ankara or SGS Bor. The samples sent to SGS follow standard SGS crushing and pulverization procedures and a conventional fire assay procedure with either atomic absorption or gravimetric finish on a 30 gram sub-sample. Fire Assay is considered a total recovery method for gold.
		QC samples have been inserted into the routine sample stream to monitor sample quality as per industry best practice. These include standards, blanks and duplicates at regular (25m) intervals.
		Quarter core duplicates are submitted every 50m. RC duplicates are submitted at 25m intervals.
		Sample sizes are reasonable for fine gold analysis. No coarse gold has been observed through photo-micrographic studies.
1-5	Quality of Assay Data and Laboratory Tests	Analysis has been performed by commercial laboratories with samples sent to SGS Ankara or SGS Bor. The samples sent to SGS follow standard SGS crushing and pulverization procedures and a conventional fire assay procedure with either atomic absorption or gravimetric finish on a 30 gram sub-sample. Fire Assay is considered a total recovery method for gold. Gold and a suite of other elements were analysed.
		No geophysical analysis methods were used.
		Industry standard QC sample insertion procedures have been adopted. QC insertion rates are: - every 50m is a field duplicate - every 25m is a Standard - every 50m is a coarse blank The QA/QC results indicate acceptable levels of precision and accuracy.
1-6	Verification of Sampling and Assaying	Samples are currently submitted to an umpire laboratory and are comparable with the originals.
		Sixteen twinned drill holes demonstrate that there is good agreement between RC and DD holes sampling results.
		Data is imported into Micromine.
		There is no adjustment of assay data.

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Part	Criteria	Comment
1-7	Location of Data Points	The drill hole locations are picked up by local survey contractors using a DGPS (Differential Global Positioning System). A local survey control station near the project is utilised by the local surveying contractor. Down hole surveys have been undertaken using a Reflex EZ-Trac tool. Down hole surveys were conducted at intervals of 25m.
		All surveys are taken using the Gauss–Krüger (GK) coordinate system which has been the system used for survey by Genesis at Plavica since 2012.
		Topography is based on surveyed drill collars, tracks, ridges and valleys where available. In areas with new survey gridded elevations are used.
1-8	Data Spacing and Distribution	The nominal drill hole spacing is 50m (easting) x 50m (northing). Samples are collected at one meter lengths and are not composited in the field / core-shed.
		Drill spacing has allowed reasonable geological interpretation to be completed. Variogram ranges are generally greater than the drill spacing allowing reasonable estimation of the mineralisation grade continuity for mining study purposes.
		Samples are collected at one metre lengths and are not composited in the field / core-shed. Two metre compositing was undertaken during the grade estimation process.
1-9	Orientation of Data in Relation to Geological Structure	Holes were generally drilled towards grid north with dips of approximately 45 to 60° to optimally intersect the steeply dipping east-west striking mineralised zones.
		No orientation based sampling bias has been identified in the recent data. Early vertical drill holes were excluded from the resource estimation process due to data quality concerns and their orientation subparallel to mineralised structures.
1-10	Sample Security	Chain of Custody has been managed by Genesis Staff. All drilling assay samples were collected from the field by Genesis personnel. Core samples were stored at a secure sample processing and storage facility where they were subsequently processed and prepared for pickup. This facility has CCTV. Assay samples were collected by appropriately qualified staff at the laboratories.
1-11	Audits or Reviews	An audit of drilling and sampling procedures was undertaken by Golder Associates in 2012 at the commencement of that years drilling program. A number of priority based recommendations were provided to Genesis. All priority 1 recommendations were implemented and many of the lower priority actions have also been completed. The implementation of these recommendations has provided increased confidence in the quality of the data used in the resource estimate. An independent consultancy, Golder Associates, has reviewed all exploration data and interpretations utilised in the resource modelling work.

Genesis Resources Limited | Plavica Project Resource Update | November 2017

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Section 2 Reporting of Exploration Results

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

Part	Criteria	Comment
2-1	Mineral Tenement and Land Tenure Status	A 30 year Exploitation Licence and Concession Agreement were granted to Silgen Resources International Ltd, an incorporated joint venture entity owned by Genesis and its Macedonian-based joint venture partner RIK Sileks AD Kratovo. Silgen is 62% owned by Genesis. The JV Company has been formally granted the Licence for a term of 30 years from the 12thof May 2015 by the Ministry of the Economy. The area covered by the Licence totals 16.85 km2.
		Genesis has pledged its 62% share of Silgen to completing a Feasibility Study to mine Plavica and has agreed to spend USD $7.5M for this work.
2-2	Exploration Done by Other Parties	At Plavica historic small scale mining was undertaken during Roman times and by Ottoman Turks. Two adits were completed by British Mines Selection in the 1930’s targeting enargite veins. Previous exploration has been conducted by the Yugoslav Government, Cyprus Amax, Rio Tinto and European Minerals.
2-3	Geology	Both Plavica and Maricanski Rid host oxide gold mineralization in vuggy silica and clay zones within silica caps of a high sulphidation epithermal style setting. Alunite alteration is common. Beneath this oxide zone is a series of steeply dipping east striking structures comprising enargite-pyrite veins and vuggy silica zones. These zones are rich in Au, Cu, Ag and occasionally Pb and Zn. The prospects lie within the Western Tethyan Arc and are Tertiary in age.
2-4	Drill Hole Information	All drill hole collars with location, elevation, depth, dip and azimuth are tabulated in previous Quarterly Reports.
2-5	Data Aggregation Methods	Exploration results have been previously reported for the Plavica and Maricanski Rid deposits. These are superseded by resource statements for these deposits.
2-6	Relationship Between Mineralisation Widths and Intercept Lengths	Core orientation and sectional interpretation suggest the mineralised zones are sub-vertical.
		Holes are drilled on 45 to 65° angles to intersect the zones at the highest angle possible but also taking into account the steep topography of the area and the difficulty of locating drill pads. As a result the mineralised zones are intersected at an oblique angle and therefore down hole lengths are not true widths.
2-7	Diagrams	A plan and sections are included.
2-8	Balanced Reporting	Exploration results are not reported for Plavica and Maricanski Rid deposits.

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Part	Criteria	Comment
2-9	Other Substantive Exploration Data	Bulk density measurements were conducted on selected intervals of core. Dry core is wax coated prior to bulk density measurement by water immersion methods.
2-10	Further Work	Infill drilling to improve the resource confidence of the remaining Inferred material.
		Future drill planning requirements are currently being prepared.

Genesis Resources Limited | Plavica Project Resource Update | November 2017

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Section 3 Estimation and Reporting of Mineral Resources

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

Part	Criteria	Comment
3-1	Database Integrity	Drill data is stored and managed using Micromine software. This system does not manage data security or record editing history. Security is managed by access limited to senior geological staff only. Genesis staff checked digital data against hard copy following data entry.
		Data validated during importing into Vulcan software. Checks include: missing intervals, overlapping intervals, duplicate sample locations and data intervals beyond end of hole.
3-2	Site Visits	The Competent Person for the Mineral Resource estimate, Richard Gaze of Golder Associates, did not visit Plavica and Maricanski Rid, however the Project Manager for the PFS, Barry Balding also of Golder Associates, visited the sites on a number of occasions in 2016 and 2017. RC and DD drilling, logging, sampling and bulk density measurements were observed. All work was being conducted according to written procedures and standards.
3-3	Geological Interpretation	Lithology and alteration zone interpretation appear to show reasonable consistency between drill holes and between section lines, leading to good confidence in the lithology model. The level of weathering is highly variable and the weathering model is of lower local confidence.
		Geological information used included drill hole logging and surface outcrop mapping. It has been assumed that the logging is consistent between the various phases of drilling. Mineralisation domains are based on sample assays.
		Alternative geological interpretations were not assessed.
		Alteration intensity (silica) was used to constrain the higher grade zones of gold mineralisation. Orientation of the structures and lithology orientation was used to guide the mineralised domain boundaries. These boundaries were used to constrain the grade estimation within selected zones.
		Gold mineralisation appears to be strongly associated with the zones of silica alteration. Weathering has resulted in a depletion of Cu and to a lesser extent Ag near the surface and in areas of deeper oxidation. High grade gold mineralisation was constrained by a restricted search during estimation as drill spacing was not sufficient to model the continuity at higher grade thresholds.
3-4	Dimensions	The mineralisation has been intersected at a maximum depth of 800m. The area extent of mineralisation is: Plavica 3,500mE x 1,000mN x 600mRL Maricanski Rid 800mE x 300mN x 300mRL
3-5	Estimation and Modelling Techniques	Vulcan software was used to estimate grade into 25x25x5m sized blocks using ordinary kriging. The spatial influence of high grade outliers in the composite dataset were limited by the use of a search of 25x25x10m.
		Comparison was made to previous resource estimates but there was substantially more drilling conducted since the previous estimate which makes comparison inconclusive. No production data was available. Mine workings from Roman times and from 1930s adits are unlikely to have removed significant volumes.

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Part	Criteria	Comment
		Metallurgical test work has confirmed good gold recovery for oxidised material (84 - 89%).
		Grade of deleterious elements was also conducted.
		Estimation block size of 25x25x5m is approximately half the nominal drill spacing of 50x50m over the majority of the deposits.
		Block grades were visually compared to drill hole grades. Global average grades for each estimation domain were reasonably consistent between de- clustered composite grade and the block estimate. Swath plot validations also indicated acceptable conformance between the block model and the composite data.
3-6	Moisture	Tonnage is reported on a dry basis.
3-7	Cut-off Parameters	In order to demonstrate reasonable prospects for eventual economic extraction of the Mineral Resource, the resource model was optimised using the industry standard Whittle 4X to produce an economic resource open pit shell using an optimistic gold sale price of US$1,875/troy ounce. The economic pit shell was used to constrain the reporting of the Mineral Resource estimate. The use of the economic pit shell utilising an elevated gold price is an industry recognised method of demonstrating ‘reasonable prospects’ when ascertaining the eventual economic extraction criteria for determination of the Mineral Resource Estimate. Current project (non- inflated) mining and processing costs are applied to the Whittle optimisation using the aforementioned optimistic gold price. The resulting pit shell demonstrated that a cut-off grade of 0.4 Au ppm produces a positive cashflow. Therefore, the Mineral Resource reporting is constrained to this pit shell to satisfy economic considerations.
3-8	Mining Factors or Assumptions	Open pit mining using excavator and truck was assumed for near surface (0-120m). A low strip ratio and potential for heap leaching of the oxide resource should provide low mining and processing costs.
3-9	Metallurgical Factors or Assumptions	Metallurgical test work has confirmed good gold recovery for oxidised material (84 - 89%). Recoveries for transitional material (Pox) were lower.
3-10	Environmental Factors or Assumptions	Scoping study work has identified potential overburden and Heap leach locations on site and has defined the terms of reference for an ESIA.
3-11	Bulk Density	Excellent bulk density data has been acquired throughout both deposits. Rather than assuming a bulk density, it has been possible to interpolate a value into the resource model blocks from the drill data. Bulk density dry in-situ bulk density (DISBD) was estimated from 9,427 measurements. Measurements were made on 10-20cm lengths of core.
		Wax coating of core samples prior to water displacement method density measurements was used to account for small scale porosity and voids.
		Bulk density estimates assumed the primary control was the intensity of weathering. Oxidised, partially oxidised and fresh material DISBD were estimated separately.
3-12	Classification	The Mineral Resource classification has taken into account, data density and quality criteria as well as confidence in geological interpretation and continuity which has been guided by estimation parameters. The Mineral Resources were initially classified based on data density, estimation performance and confidence in geological continuity. Subsequent refinement of the initial classification was undertaken using generalised classification polygons, to yield more spatially continuous

Genesis Resources Limited | Plavica Project Resource Update | November 2017

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Part	Criteria	Comment
		classification categories. The Measured areas are defined by the wireframe “CLASS_Measured.00t”, the Indicated by the wireframe “CLASS_indicated.00t“ and the Inferred zone represented by the remaining blocks with extrapolation limited to half of the nominal drill hole spacing
		Only recent data with best practice QAQC information was used in the resource estimate. Older data which lacked quality control information was excluded from consideration.
		The Mineral Resource estimate appropriately reflects the view of the Competent Person.
3-13	Audits or Reviews.	Golder associates conducted an audit of data collection practices in 2012. Golder have reviewed all exploration data and interpretations utilised in the resource modelling work. Golder conducted internal peer review on the resource report.
3-14	Discussion of Relative Accuracy / Confidence	Grade variability of samples is reasonable (low CV) for the use of ordinary kriging grade estimation. Low nugget values and drill spacing which exceeds the observed variogram ranges suggesting the grade estimation should provide and reasonable estimate for the deposit.
		The statement relates to the global estimates of tonnes and grade. Local estimate at the reporting cut-off is reasonable but will be poor at higher cut off grade.
		No production data is available.

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