GEOPACIFIC RESOURCES LTD — Capital/Financing Update 2017

Mar 15, 2017

ASX Code: KGD 16 March 2017

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ASX Announcement & Media Release

High grade intersection of 23m at 4.82 g/t gold

adjacent to open-pit at

Woodlark Island Gold Project

Highlights:

• Long intersections of high grade mineralisation recorded outside the current DFS pit design on the Kulumadau deposit at Woodlark Island Gold Project confirms potential to increase project resources

• Results from RC drill hole KU17RD004 include:

• 3m at 2.02 g/t Au from 44m

• 23m at 4.82 g/t Au from 102m (including 9m at 9.05 g/t Au)

• 6m at 4.53 g/t Au from 138m

• Visible gold recorded

• Two diamond drill rigs and an RC rig continue to drill at the Woodlark Island Gold Project

Kula Gold Limited (ASX: KGD) (“ Kula ” or “ the Company ”) is pleased to announce that attractive gold intersections continue to be received from the ongoing drilling program at the Company’s flagship Woodlark Island Project in Papua New Guinea.

The Company’s Joint Venture partner, Geopacific Resources Limited (ASX: GPR), is undertaking the current drill program as part of its earn-in agreement, with an RC and two diamond drill rigs currently in operation at the Kulumadau and Busai deposits respectively. Under the agreement, Geopacific Resources is funding the next A$8 million of expenditure at the Woodlark Island Project to earn an interest of up to 51%.

The recently completed holes were designed to test for extensions to known mineralisation to the south of the current Kulumadau West pit design, with the positive results demonstrating potential to be tested in follow-up drilling. The location of the drill holes is clear on the drill hole location plan in Figure 1 , showing gold intersections in areas outside of current pit designs. A number of the Geopacific drill holes that have been completed, and are in the process of being assayed, are in light red on the plan.

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Figure 1: Drillhole location plan showing the drillholes for current results (bold red) and in relation to current pit designs at the Kulumadau deposit. Drill holes with assays pending are shown in light red.

Drilling Summary

Drill hole KU17RD004 was designed to target a cross-cutting shear to the south of the main Kulumadau mineralisation that is potentially a gold feeder zone. The hole is situated in an area that has not been previously tested by drilling, and encountered milled breccias within several shear zones at the target depth. The zone is strongly mineralised and similar in style to gold mineralised zones within the current Kulumadau pit outline.

Gold was also encountered higher in the hole at the interface between overlying younger coronus limestone and underlying volcanoclastic units. This occurs in several areas and is interpreted to be an old surface elluvial gold zone that was covered by the more recent coronus layer. The mineralisation identified is over 100m outside the current pit design as demonstrated in the longitudinal section below.

The steeply plunging core and surrounding mineralisation at Kulumadau West are open at depth and are shown on the longitudinal section (Figure 2). Several interpreted faults are interpreted as offsetting the mineralisation. Understanding these may reveal a repetition of the main zone mineralisation.

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Figure 2: Longitudinal section showing new, broad intercepts and the plunging trend of the mineralisation.

Drill hole KU17RD004 is oblique to the main zone which is why it is represented on a longitudinal section. The broken nature of the shear zone makes it difficult to determine the true width and orientation of the zone based on these results; further drilling will be required to confirm interpretations.

All reported grade intersections are downhole widths, as at this stage true widths are unknown. Visible gold was also recorded.

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Background on the Woodlark Island Gold Project, PNG

Kula Gold Limited has advanced its Woodlark Island Gold Project to the point where it is permitted and ready to progress to the next stage. The Project is located 600 kilometres east of Port Moresby in the Milne Bay Province, Papua New Guinea.

Kula’s Joint Venture Partner Geopacific Resources Limited is funding the next $8 million expenditure to advance the gold reserves to a target of 1.2 million ounces of gold to earn additional equity in the Project.

The Project has excellent upside potential through the conversion of Inferred Resources and numerous nearby exploration targets within a short distance of the proposed process plant location.

The Resource Estimates for the Kulumadau and Busai Deposits were re reported and released on 31 January 2017 in accordance with JORC 2012. The estimates for Munasi and Woodlark King have not been re reported in accordance with JORC 2012, as there has been no additional work within these deposits since the previous estimate.

Kula Gold’s Feasibility Study, based on a JORC 2004 Ore Reserve of 766,000 ounces and a gold price of US$1200/ounce, defined a Project with a mine life of nine years, three open pit mining areas and a 1.8Mtpa gravity and carbon in leach plant (KGD ASX release 27 September 2012).

The Company’s 95% owned subsidiary, Woodlark Mining Limited, has been granted the Environment Permit and the Mining Lease for the Project.

Directors and Management

David Frecker Chairman Louis Rozman Non-executive director Mark Stowell Non-executive director Garry Perotti Chief Financial Officer

Registered office 20 Howard Street Perth, WA 6000, Australia T: + 61 8 6144 0588 F: + 61 8 6144 0589 E: info@kulagold.com.au W: www.kulagold.com.au Tw: twitter.com/kulagold

Auditor

Ernst & Young 11 Mounts Bay Road, Perth, WA 6000, Australia Office: +61 8 9249 2222

Share registry Link Market Services Limited Level 12, 680 George Street Sydney, NSW 2000, Australia T: 1300 554 474 or +61 2 8280 7111

Investor relations Six Degrees 18 Howard Street Perth, WA 6000, Australia T: +61 (0) 400 164 067

For further information, contact:

Garry Perotti Chief Financial Officer Kula Gold Limited

T: + 61 8 6144 0588 F: + 61 8 6144 0589

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The information in this report that relates to geology and exploration is based on information compiled by Mr Paul Dunbar, a Competent Person who is a member of the Australian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Mr. Dunbar is employed by Dunbar Resource Management, a Geology and Exploration Management consultancy, who has been engaged by Kula Gold. Mr. Dunbar has sufficient experience, which is relevant to the style of mineralisation, geology and type of deposit under consideration and to the activity being undertaken to qualify as a competent person under the 2012 edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (the 2012 JORC Code). Mr. Dunbar 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 relating to the 2012 JORC Resource estimates was initially released in the 31 January 2017 ASX release and is available on the company’s website. The company confirms that it is not aware of any new information or data that materially affects the information included in that announcement and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. The company confirms that the form and context of the resource estimates have not been materially modified from the original ASX release.

Appendix A: Table 1. Significant Intersections

HOLE	From (m)	To (m)	Interval (m)	AU (ppm)
KU16RC001		No significant intersections
KU17RC001	144	146	2	1.19
	149	150	1	1.31
KU17RD002	62	67	5	3.20
	112.7	115	2.3	1.04
	142.4	144.1	1.7	1.13
KU17RD004	44	47	3	2.02
	102	125	23	4.82
Including	102	111	9	9.05
	138	144	6	4.53
	234	237	3	0.66
KU17RC005	48	54	6	1.80

Notes:

• All material diamond drill core or RC chips

• Samples collected as half core, cut by diamond saw

• Sample preparation undertaken by ITS Laboratories on Woodlark Island (refer Appendix B for details)

• Gold analysis by Fire Assay 50gm charge by Intertek Genalysis Laboratories, Townsville, Australia

• Mineralised intercepts calculated as a weighted average, using a 0.5g/t Au lower cut, maximum of two metres of internal waste.

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Appendix A: Table 2. Drillhole Collar Table

Hole ID	Easting	Northing	RI	Azimuth	Depth
KU16RC001	469201	8995491	53	270	150
KU17RC001	469300	8995489	53	270	150
KU17RD002	469265	8995479	54	270	150
KU17RD004	469183	8995602	59	0	297
KU17RC005	469235	8995633	62	0	150

Notes:

• Collar coordinates in PNG94 Geodetic System

• Azimuths true bearing

Appendix A: Table 3. Woodlark Island 2012 Resource Table

Reported as per JORC 2012 As of July 2012 at 0.5g/t Au lower cutoff

Deposit	Category	Resource	Grade – cut	Gold – cut (Oz)
		(Mt)	(g/t gold)
Kulumadau	Measured	5	1.78	285,000
	Indicated	4.4	1.75	250,000
	Inferred	8.6	1.4	380,000
	Totals	18	1.6	910,000
Busai	Measured	3.9	1.54	190,000
	Indicated	10.4	1.4	470,000
	Inferred	4.9	1.6	250,000
	Totals	19	1.5	910,000
All	Measured	8.9	1.66	475,000
	Indicated	14.8	1.5	720,000
	Inferred	13.5	1.5	630,000
Totals	All	37.2	1.5	1,820,000

Notes

• 1: Totals may appear incorrect due to rounding.

• 2: The Busai Indicated Resource includes 0.4Mt @ 1.4/t Au for 20,000oz from overlying alluvial mineralisation.

• 3: The Busai Inferred Resources includes 0.4Mt @ 1.2/Au for 14,000oz from overlying alluvial mineralisation.

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Appendix A: Table 4. Woodlark Island 2004 Resource Table

	Reported as per JORC 2004 As of July 2012 at 0.5g/t Au lower cutoff	Reported as per JORC 2004 As of July 2012 at 0.5g/t Au lower cutoff	Reported as per JORC 2004 As of July 2012 at 0.5g/t Au lower cutoff
Deposit	Category	Resource	Grade – cut	Gold – cut (Oz)
		(Mt)	(g/t gold)
Munasi	Inferred	3.9	0.9	110,000
	Total	3.9	0.9	110,000
Woodlark King	Indicated	3	1.2	115,000
	Inferred2	1	1.8	60,000
	Total	4	1.4	175,000
Total	All	7.9	1.1	285,000

1: Totals may appear incorrect due to rounding.

2: The Woodlark King Inferred Resource includes 0.3Mt @ 3.0g/t for 30,000oz Au from Watou (1.5km south of Woodlark King)

3: These Resources are reported under JORC 2004 and have not been updated.

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Appendix B: JORC Code, 2012 Edition – Table 1 – Recent Drilling

Section 1 Sampling Techniques and Data

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

CRITERIA	JORC CODE EXPLANATION	COMMENTARY
Sampling techniques	Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling. Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.	Sampling was conducted using diamond drilling (DD) and Reverse Circulation (RC) drilling techniques. Sampling of the diamond drilling comprised half core samples taken based on lithological, alteration, and mineralisation breaks observed in geological logging. Samples were sent for fire assay gold and four-acid multi-element analysis by ICPMS method. Blank, duplicate, and standard samples were inserted in at various intervals based on Geopacific’s QAQC procedure (nominal 1 in 20) to ensure sample representivity and repeatability of the sampling results.
	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 (e.g. ‘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 (e.g. submarine nodules) may warrant disclosure of detailed information.	Core was cut in half using a core saw. Where core competency was low, whole core was wrapped in plastic clingfilm to help maintain integrity of the sampled interval while being cut. Samples were prepared on the on-site sample prep laboratory operated by ITS Pty Ltd PNG (Intertek Services Ltd). Standard preparation of samples is to crush ~2kg through a jaw crushed, with a blank bottle wash between each sample. Crushed sample is then transferred to a LM-2 pulveriser for reduction to pulp. A 150gm pulp sample is split from the master sample and submitted for analysis. Coarse reject material and pulps are bagged and stored on site for future reference. Samples were sent for fire assay gold analysis using a 50g charge, as well as multi- element analysis using multi-acid digest with ICP finish at Intertek’s Townsville laboratory.

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CRITERIA	JORC CODE EXPLANATION	COMMENTARY
Drilling Techniques	Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.).	Diamond drilling was undertaken using triple tube methodology in a variety of core sizes including PQ and HQ and NQ depending on the ground conditions and depth of investigation.
Drill Sample Recovery	Method of recording and assessing core and chip sample recoveries and results assessed.	Core recovery is recorded by measuring the core recovered from the drill hole against the actual drilled metres.
	Measures taken to maximise sample recovery and ensure representative nature of the samples.	The use of triple tube drilling as well as shorter runs in zones of broken ground were used to maximise the sample recovery.
	Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	Sample recovery was good (consistently over 90%) throughout the drill holes and as such there is no sample bias introduced because of sample recovery.
Logging	Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.	All drill core was geologically logged by Geopacific geologists using Geopacific’s logging procedure. Geotechnical logging of Rock Quality Designation (RQD), hardness, degree of fracturing and weathering is undertaken by Geopacific staff using Geopacific’s logging procedure.
	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.	Drill core was logged both qualitatively (e.g. lithology, alteration, structure, etc.) and quantitatively (e.g. veining and mineralisation percentage, structural orientation angles, etc.). Drill core is photographed both dry and wet and is stored in plastic core trays in our exploration core yard.
	The total length and percentage of the relevant intersections logged.	All holes are logged their entire length.
Sub-sampling techniques and sample preparation	If core, whether cut or sawn and whether quarter, half or all core taken.	Core is halved, with one half sent for sample preparation and analysis. The remaining core is stored in the core trays on site.

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CRITERIA	JORC CODE EXPLANATION	COMMENTARY
	If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.	Only samples from diamond drilling (core) is discussed in this release.
	For all sample types, the nature, quality and appropriateness of the sample preparation technique.	Samples are crushed to a nominal 2mm by a jaw crusher, with the whole sample pulverised and then split; one 150gm sample for submission with residue stored on site.
	Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.	Field blank, duplicate, and standard samples are introduced to maximise the representivity of the samples.
	Measures taken to ensure that the sampling is representative of the in-situ material collected, including for instance results for field duplicate/second-half sampling.	Field duplicates are inserted in accordance with Geopacific’s QAQC procedures which are in line with industry standards.
	Whether sample sizes are appropriate to the grain size of the material being sampled.	Sample sizes are appropriate to the grain size of the material being sampled.
Quality of assay data and laboratory tests	The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.	Fire assay Au and four-acid digest ICP analysis are thought to be appropriate for determination of gold and base metals in fresh rock, and are considered to represent a total analysis.
	For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.	No results from geophysical tools, spectrometers, or handheld XRF instruments are reported in this release.
	Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.	Field and lab blank, duplicate, and standard samples were used in the drilling. Results from these QAQC samples were within the acceptable ranges.

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CRITERIA	JORC CODE EXPLANATION	COMMENTARY
Verification of sampling and assaying	The verification of significant intersections by either independent or alternative company personnel.	Significant intersections were validated by senior geological staff.
	The use of twinned holes.	No holes reported in this announcement are twins of previous drilling.
	Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.	Primary assay data is sent electronically from the lab to the GPR database administrator and then entered into Geopacific’s database and validated by the database administrator and senior staff.
	Discuss any adjustment to assay data.	No adjustments were made or required to be made to the assay data.
Location of data points	Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.	Drillhole collars were located using a total station surveying instrument. Downhole surveys are conducted on all diamond drillholes with readings recorded every 5 metres downhole using a Reflex MEMS gyro.
	Specification of the grid system used.	Coordinates are recorded in PNG94 geodetic system
	Quality and adequacy of topographic control.	LiDAR survey data obtained over the licence area, tied in to total station collar readings provide sub-metre accuracy.
Data spacing and distribution	Data spacing for reporting of Exploration Results.	Drilling reported in this release relates to infill drilling within the Kulumadau deposit. Existing drilling within the defined deposit area is nominally spaced 25m x 25m, closer in some areas.
	Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.	Drilling results released in this announcement confirm mineralisation delineated in previous drilling and confirm both grade and geological continuity. As these holes compliment drilling informing a previously reported JORC Resource (see Appendix A, Table 3), spacing is considered sufficient.

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CRITERIA	JORC CODE EXPLANATION	COMMENTARY
	Whether sample compositing has been applied.	Results released in this announcement refer to diamond drilling where no compositing was undertaken.
Orientation of data in relation to geological structure	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.	Current interpretations of the mineralised zones in all areas indicate that the orientation of the drillholes has achieved unbiased sampling of the structures.
	If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	An interpretation of the mineralisation has indicated that no sampling bias has been introduced to the diamond drillholes reported herein.
Sample security	The measures taken to ensure sample security.	All samples are collected by GPR staff and put into numbered plastic bags, along with a corresponding sample ticket, which are immediately sealed and placed in order on a pallet with other samples in an area directly adjacent to the onsite sample preparation laboratory. and the pallet containing the sealed samples is then delivered directly into the onsite sample prep lab, where chain of custody hands over to ITS Ltd.
Audits or reviews	The results of any audits or reviews of sampling techniques and data.	No audits have been completed, but QAQC data is monitored on a batch-by-batch basis.

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Appendix B: JORC Code, 2012 Edition – Table 1

Section 2 Reporting of Exploration Results

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

CRITERIA	JORC CODE EXPLANATION	COMMENTARY
Mineral tenement and land tenure status	Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	Geopacific executed a Joint Venture agreement with Kula Gold Ltd (ASX:KGD) to acquire a 75% interest by spending AUD$18.65m over three tranches. Tranche 1 was $0.65m to conduct due diligence and earned GPR 5%, under Tranche 2, GPR must spend AUD$8m within the first two years to earn an additional 35% interest in operating company WML. Should GPR delineate a Reserve of >1.2M Oz Au within the two-year period it will be deemed to hold a 51% interest in WML. Geopacific can increase its ownership to 60% of WML by completing the earn-in expenditure (Tranche 3) without delineating the Reserve target of 1.2M Oz Au. Should that target be met as part of Tranche 3 expenditure, Geopacific will be deemed to have earned a 75% interest in WML.
Exploration done by other parties	Acknowledgment and appraisal of exploration by other parties.	This announcement is based on work done by Kula Gold Ltd and Geopacific Resources Limited.

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CRITERIA	JORC CODE EXPLANATION	COMMENTARY
Geology	Deposit type, geological setting and style of mineralisation.	Most of Woodlark Island is covered by a veneer of Plio-Pleistocene limestones (coronus) of variable thickness with associated marine clays and basal conglomerates. A central elevated portion of the island (horst structure) contains Miocene volcanic rocks intruded by late stage, high K porphyritic intrusives and contains the known historical mines. Gold mineralisation within the Woodlark Island Gold Project is principally hosted by andesites and their sub-volcanic equivalents within the Miocene age stratigraphic unit known as the Okiduse Volcanics. The mineralisation is variously associated with lodes, quartz veins, stockwork zones and breccias developed within proximal phyllic and marginal propylitic alteration envelopes regionally associated with intrusive breccia complexes. Gold mineralisation is consistent with low sulphidation, base metal carbonate, epithermal systems typical of the south-west Pacific.
Drill hole Information	A summary of all information material to the understanding of the exploration results including a tabulation of the following information 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.	See Appendix A, Tables 1 and 2

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CRITERIA	JORC CODE EXPLANATION	COMMENTARY
Data aggregation methods	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.	No top-cuts were used in the reporting of these significant intercept. The interval selected using a cut off value 0.5ppm Au and were calculated using weighted averaging.
	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.	Shorter intercepts of higher grade within larger reported intercepts are subsequently highlighted within the summary drilling table.
	The assumptions used for any reporting of metal equivalent values should be clearly stated.	N/A
Relationship between mineralisation widths and intercept lengths	These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).	Information from other drilling in the area as well as geological mapping indicate that the downhole intervals may be close to the true width, but more structural information is needed to determine the exact orientation of the mineralised zones.
Diagrams	Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.	Diagrams relevant to the report content are included in the body of the report.

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CRITERIA	JORC CODE EXPLANATION	COMMENTARY
Balanced reporting	Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	Refer to Appendix A, tables 1 and 2
Other substantive exploration data	Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	Refer to text.
Further work	The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.	Refer to text.

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