GOLDARC RESOURCES LIMITED — Capital/Financing Update 2014

Dec 9, 2014

ASX RELEASE

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10[th ] December 2014

AMENDMENT TO TRANSACTION WITH CASCADE RESOURCES LIMITED

Highlights:

• Torian Resources Limited has entered into an Amendment to the Conditional Heads of Agreement with Cascade Resources Limited

• Transaction to proceed without the Taurus and Mt Keith projects as agreements were unable to be settled with the project Vendors in a reasonable timeframe

• Company to focus on the Mt Stirling and Malcolm projects

• The projects host an existing Inferred JORC Resource of 37,477 oz Au

• ASX Listing Rule 11.1.3 will not apply to the transaction meaning Torian is no longer required to re-comply with Chapters 1 & 2 of the Listing Rules

• Drill program planned to commence immediately following completion of the acquisition

• Torian shareholders to vote on various resolutions to approve the acquisition at an Extraordinary General Meeting expected to be held following completion of satisfactory due diligence and execution of all relevant transaction documentation

Torian Resources Limited ( Torian or Company ) has entered into an Amendment to the Conditional Heads of Agreement with Cascade Resources Limited ( Cascade ). Following lengthy discussions between Cascade and the Vendors of the Taurus and Mt Keith projects, suitable transaction documentation was unable to be settled in a reasonable timeframe to Torian’s satisfaction. As a result, the Company will proceed with the acquisition of the contractual rights over the Mt Stirling and Malcolm projects only.

A summary of the Mt Stirling and Malcolm projects and the amended terms of the proposed transaction are included below.

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Overview of the Projects

The projects host an existing Inferred JORC Resource of 37,477 oz Au.

		Total ProjectResources	Total ProjectResources	Total ProjectResources	Torian'sInterest
Project	JORCCategory				(assuming exercise
		Tonnes	g/tAu	Oz
					of options)
MtStirling	Inferred	259,750	2.44	20,400	51 - 90%1
Mt Stirling Well2	Inferred	41,250	8.54	11,327	100%
Malcolm	Inferred	48,000	3.72	5,750	51 -90%1
Total	Inferred	349,000	3.34	37,477

1. Cascade currently holds an option to acquire 51% and has the right to earn up to a 90% pursuant to the relevant joint venture agreement’s.

2. Mt Stirling Well is a prospect within the Mt Stirling Project.

A detailed summary of the supporting project assumptions and data (Table 1 as per JORC (2012) guidelines) is provided in the Appendix.

Mt Stirling Project

The Mt Stirling Project is located approximately 40 kilometres north west of Leonora. Under the proposed transaction, Torian will acquire a contractual right to acquire 100% of the Mt Stirling Well prospect. Torian will also acquire contractual rights to acquire 51% of the Mt Stirling prospect and 51% of the Mt Cutmore prospect with a right to earn up to 90% of each prospect under the terms of two separate joint venture agreements. The Mt Stirling Project comprises 19 prospecting licences covering an area of 23 square kilometres.

The Mt Stirling Well Prospect has a current JORC compliant Inferred resource of 41,250 tonnes @ 8.54g/t for 11,327oz Au. This resource, whilst inferred, is a high grade, oxidised system, located at surface which the Company believes may be amenable to low cost mining. This resource is open in all directions and further exploration at this prospect is a high priority.

This mineralisation is a flat lying quartz vein hosted in granite. The granite has a diameter of approximately 1 kilometre and there is potential for the current resource to grow significantly. Previous drilling at the prospect occurs over a strike length of approximately 200 metres and there is no drilling deeper than about 40 metres.

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Between 1897 and 1913, a small underground mine was active at the Mt Stirling Well prospect. Recorded production from the mine was 3,354 tonnes @ 52.02g/t Au for 5,610 oz’s Au.

Previous exploration at the Mt Stirling Project has focused on a small number of targets defined by old workings. RC drilling was conducted at these targets however they remain open along strike and down dip. The Mt Stirling Project has a number of other targets that have been defined by surface sampling that have not been drill tested to date.

Malcolm Project

The Malcolm Project is located approximately 20 kilometres east of Leonora. Under the proposed transaction Torian will acquire a contractual right to acquire 100% of the Rabbit Warren South prospect and contractual rights to acquire 51% interests in the Mt Stewart, Braemore, Malcolm and Mt George Prospects. Torian has the right to earn up to 90% of each of these Prospects under the terms of various joint venture agreements. The Malcolm Project comprises 54 tenements covering an area of approximately 75 square kilometres.

The Malcolm Project has received only superficial exploration to date, focusing on historic workings. Several reconnaissance RAB holes have intersected anomalous values away from the historic workings. Many of these have not been followed up by RC drilling. In addition JORC Inferred resources have been defined from previous shallow RC drilling. All resources remain open along strike and also at depth.

Other targets have been defined from previous soil geochemical sampling and areas of gold nuggets being found at or very near surface. Most of these areas have never been drill tested.

Resource Parameters

• Geology and geological interpretation – the drillholes were geologically logged noting various features such as rock type, alteration, veining, and oxidation. Mt Stirling Well is a flat lying quartz vein hosted by a granite. Mt Stirling is a typical steep dipping shearzone in basalts. Malcolm is hosted by sheared black shales. All zones of mineralisation outcrop at surface and have had shallow historic minor mining dating from the 1890s. Further details are described above.

• Sampling and sub-sampling techniques – sampling was via riffle split from original bulk samples collected at the drill sites during drilling. Sub-sampling was again via riffle splitting in independent laboratories with typically 50 grams used for routine fire assay.

• Drilling techniques – only reverse circulation (RC) drilling was used in the resource estimates.

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• The criteria used for classification, including drill and data spacing and distribution – at Mt Stirling Well the drill spacing is 40m by 40m; at Mt Stirling it is variable ranging from 10m by 10m to 10m by 50m; at Malcolm the drill spacing is 20m by 20m. All the resources were classified as Inferred.

• Sample analysis method – all analysis is via 50 gram fire assay, with routine standards and blanks inserted for quality control.

• Estimation methodology – Mineralised zones were interpreted on cross sections and digitized outlines created in Micromine software. These were in turn developed into 3 dimensional wire frames encapsulation the mineralisation as interpreted. Drill weighted averages (grade multiplied by width) was used to determine the grades within a wireframe, with discrete higher grade zones (typically +10g/t Au) determined separately.

• Cut-off grade, including the basis for the selected cut-off grade – a lower cutoff of 1g/t Au was used as a first pass. Top cuts reflect values below the 97[th] percentile of statistical distribution of the values above 1g/t Au.

• Mining and metallurgical methods and parameters, and other material modifying factors considered to date – all resources were shallow, and actually are exposed on the surface. This being the case open pit mining was assumed, typically with a maximum depth of the top of fresh rock (commonly approximately 40m depth). An exception was at Mt Stirling where the mineralisation is known from previous drilling to persist to at least 120m depth. No metallurgical issues were noted in previous shallow historic mining activities in these areas and so none are expected. All resources remain open at depth and commonly along strike. The maximum extrapolation in areas of no drilling was 40m.

Amended Heads of Agreement:

The key terms of the Amended Heads of Agreement are outlined below:

Transaction

The Company has entered a conditional heads of agreement with Cascade to acquire the contractual rights Cascade holds over a number of gold projects located in the Goldfields region of Western Australia (as described above) ( Acquisition Options ) ( Transaction ).

Consideration

The consideration payable by the Company under the proposed Transaction is 27,272,727 fully paid ordinary shares in the capital of the Company ( Shares ) on a post-Consolidation (as defined below) basis (being 900,000,000 Shares on a pre-Consolidation basis) to Cascade.

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Escrow Arrangements

The following parties are expected to be subject to a minimum of 12 months escrow:

• Cascade Resources Limited; and

• The Project Vendors.

Conditions Precedent

The Heads of Agreement was subject to a number of conditions precedent. On 26 September 2014, the Company announced the satisfaction of the first condition precedent, being completion of satisfactory due diligence by Cascade.

Pursuant to the Amended Heads of Agreement, the acquisition remains conditional upon:

• Torian completing due diligence on the projects to its satisfaction;

• The Project Vendors agreeing to assign the Acquisition Options on terms satisfactory to Torian;

• Both Torian and Cascade obtaining all required shareholder approvals necessary for the proposed transaction;

• The Company undertaking a consolidation of capital on a ratio of 33:1, occurring simultaneously with the issue of the consideration ( Consolidation );

• The Company completing a capital raising of up to $2,000,000 through the issue of up to 10,000,000 Shares at an issue price of $0.20 per Share, on a post-Consolidation basis (being 330,000,000 Shares on a pre-Consolidation basis), or such amount as otherwise agreed between the parties; and

• The appropriate entities entering into voluntary escrow agreements.

Issue of Shares to Vendors

The Company will issue 6,450,000 Shares on a post-Consolidation basis (being 212,850,000 Shares on a pre-Consolidation basis) and pay $295,000 cash to the vendors of the projects in consideration for the exercise of the Acquisition Options.

Re-Compliance with ASX Listing Rules Chapters 1 And 2:

ASX has confirmed that the proposed amended transaction will not result in a significant change to the nature and scale of Torian’s activities. As ASX Listing Rule 11.1.3 does not apply to the Transaction, Torian will not need to re-comply with Chapters 1 and 2 of the ASX Listing Rules. ASX Listing Rule 11.1.2 will apply to the proposed Transaction, requiring the approval of Torian shareholders.

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Shareholder Approvals:

A notice of meeting seeking shareholder approval for the resolutions required to effect the proposed transaction will be sent to Torian shareholders in due course. It is expected that Torian will convene a meeting to facilitate shareholder approval in February 2015.

Proposed Capital Structure:

The anticipated effect of the proposed Transaction on the capital structure of the Company is set out in the table below.

	Shares	Options
Securities on issue pre Consolidation and post debt conversion	500,332,463	30,200,0001
Securities on issue post Consolidation2 (33:1)	15,161,590	915,151
Consideration payable to Cascade	27,272,727	Nil
Capital Raising	10,000,000	Nil
Consideration payable to Project Vendors	6,450,000	Nil
Total	58,884,317	915,151

Notes :

1. 5,075,000 unlisted options exercisable at 20 cents each on or before 31 December 2014, 5,075,000 unlisted options exercisable at 22 cents each on or before 31 December 2014, 10,000,000 unlisted options exercisable at 4.6 cents each on or before 29 December 2015, 5,025,000 unlisted options exercisable at 24 cents each on or before 31 December 2015 and 5,025,000 unlisted options exercisable at 26 cents each on or before 31 December 2015.

2. The Consolidation will result in the price of Shares increasing from approximately $0.006 to approximately $0.20.

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Proposed Board Changes:

As part of the proposed transaction the board will be reconstituted as follows:

Non-Executive Chairman: Mr Andrew Sparke Managing Director: Mr Matthew Sullivan Executive Director: Mr Sunil Dhupelia Non-Executive Director: Mr Nathan Taylor

Proposed Indicative Timetable*:

Event	Date
ASX announcement of the Proposed Transaction	June 2014
Complete Due Diligence	December 2014
Send Notice of Meeting seeking approval for Capital Raising, Consolidation and issue of Shares as consideration for the Proposed Transaction	Dec 2014/Jan 2015
Shareholder meeting	February 2015
Complete Capital Raising	February 2015
Satisfaction (or waiver) of other Conditions	February 2015
Completion of Proposed Transaction	February 2015

• This timetable is indicative only and subject to change.

For further information please contact:

Elissa Hansen Company Secretary 02 9290 9606

Competency Statement

The information in this report relation to Exploration Results and Mineral Resources is based on information reviewed by Mr Matthew Sullivan who is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient exploration experience which is relevant to the style of mineralisation under consideration to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves’. Mr Sullivan is a director of Torian Resources and Cascade Resources and consents to the inclusion of the matters based on his information in the form and context in which it appears.

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ANNEXURE A – PRO FORMA BALANCE S HEET AS AT 30 JUNE 2014

The unaudited pro-forma Balance Sheet has been prepared to provide information on the assets and liabilities of the Company and pro-forma assets and liabilities of the Company as noted below. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.

Balance Sheet and Pro Forma Balance Sheet as at 30 June 2014

	Audited Balance Sheet Pro Forma Adjustments Note Unaudited 30-Jun-14 Pro Forma Balance Sheet 30-Jun-14
ASSETS	93,549 1,616,042 1 1,709,591 23,299 - 23,299
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS	116,849 1,616,042 - 1,732,890
	1,429 - 1,429 12,859 - 12,859 - 6,744,545 2 6,744,545
NON-CURRENT ASSETS
Financial assets
Property, plant and equipment
Exploration and evaluation assets
TOTAL NON-CURRENT ASSETS	14,288 6,744,545 6,758,833
TOTAL ASSETS	131,137 8,360,587 8,491,723
	229,297 (100,000) 3 129,297 307,174 (307,174) 4 -
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Financial liabilities
TOTAL CURRENT LIABILITIES	536,470 (407,174) - 129,297
TOTAL LIABILITIES	536,470 (407,174) 129,297
NET ASSETS	(405,334) 8,767,761 8,362,427
	55,725,782 8,553,761 5 64,279,543 1,995,700 - 1,995,700 (58,126,816) 214,000 6 (57,912,816)
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY	(405,334) 8,767,761 8,362,427

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Pro Forma Adjustment Notes:

1. Recognition of net cash with the below adjustments and inclusive of cash raised of $1.72 million ($2 million net of costs of raising share capital). Additional funds of $300,000 anticipated to be recovered by way of tenement sales and recoupment of rehabilitation bonds (see note 6). Reductions in cash relate to $295,000 vendor payments and reductions to repay loans (see Note 4);

2. Exploration assets purchased by way of issue of shares to purchase contractual rights owned by Cascade, and cash and share issues to exercise the options, which are all costs associated with acquiring the underlying tenements;

3. Net $100,000 accrued liability reduction as a result of prior scrip issues which will discharge part of accrued Directors fees and rental owed to related parties;

4. Reduction of loans payable to related and third parties on the following basis:

5. a. $20,000 interest payable to ROC Salt Limited discharged by cash;

6. b. $198,216 payable to former Director Mr Peter Ashcroft/his related entities discharged by share issue;

7. c. $88,958 loan payable inclusive of interest to be repaid in cash;

8. Issue of capital to reflect the acquisition and exercise of contractual rights in addition to all agreed conversions of debt or trade payables;

9. Reduction in carried forward losses to account for receipt of an estimated $214,000 in rehabilitation bonds on transfer/surrender of tenements ($300,000 less Acquisition Costs of $86,000). Note that in prior audited financial statements auditors recommended the write off of these bonds and they were impaired however the company has a track record of recovering these bonds and they are highly likely to be received. On receipt the impairment will be reversed and will result in a net favourable reduction in carried forward losses.

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ANNEXURE B – JORC CODE, 2012 EDIT ION TABLES

Mt Stirling Project

JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

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

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sampling		Nature and quality of sampling (eg cut channels, random chips, or specific		All data and results referred to in this report are historic, and date from the
techniques		specialised industry standard measurement tools appropriate to the minerals		late 1980s to the present day. This data has been judged to be reliable
		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.		following independent t research, including discussions with previous operators and explorers in person. Samples were collected via Rotary Air Blast (RAB) and Reverse Circulation (RC) drill chips.
		Aspects of the determination of mineralisation that are Material to the Public		All drilling yielded samples on a metre basis. RAB drilling samples were
		Report.		commonly composited into intervals of 4 or 5m, with selected individual or
		In cases where ‘industry standard’ work has been done this would be		2m resamples collected. Reverse Circulation (RC) drilling is utilised to
		relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant		obtain 1 m samples which are riffle split, from which approx. 2-3 kg is pulverised to produce a 50 g charge for fire assay. Sample preparation method is total material dried and pulverized to nominally 85% passing 75 µm particle size. Gold analysis method is
		disclosure of detailed information.		generally by 50g Fire Assay, with Atomic Absorption Spectrometry (AAS)
				finish (DL 0.01 – UL 50 ppm Au). Samples exceeding the upper limit of the
				method were automatically re-assayed utilizing a high grade gravimetric
				method.
Drilling		Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast,		RAB holes were typically 100mm in diameter, RC drilling usually 155mm in
techniques		auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard		diameter. RC drilling was via a face sampling hammer.
		tube, depth of diamond tails, face-sampling bit or other type, whether core is
		_oriented and if so, by what method, etc). _
Drill sample		Method of recording and assessing core and chip sample recoveries and		Recoveries were logged onto paper logs during drilling. Recoveries were
recovery		results assessed.		visually assessed.
		Measures taken to maximise sample recovery and ensure representative		Sample recoveries were maximised in RAB and RC drilling via collecting the
		nature of the samples.		samplesina cyclone priorto sub sampling. RABdrillholeswere stoppedif

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		Whether a relationship exists between sample recovery and grade and		significant water flows were encountered.
		whether sample bias may have occurred due to preferential loss/gain of		No relationship appears from the data between sample recovery and grade of
		fine/coarse material.		the samples.
Logging		Whether core and chip samples have been geologically and geotechnically		All drillholes were geologically logged. This logging appears to be of high
		logged to a level of detail to support appropriate Mineral Resource estimation,		quality and suitable for use in further studies.
		mining studies and metallurgical studies.		Logging is qualitative in nature.
		Whether logging is qualitative or quantitative in nature. Core (or costean,		All samples / intersections are logged. 100% of relevant length intersections
		channel, etc) photography.		are logged.
		The total length andpercentage of the relevant intersections logged.
Sub-sampling		If core, whether cut or sawn and whether quarter, half or all core taken.		Non-core RC drill chip sample material is riffle split, where sample is dry. In
techniques and		If non-core, whether riffled, tube sampled, rotary split, etc and whether		case of wet sample a representative ‘grab’ sample method is utilized.
sample		sampled wet or dry.		The sample preparation technique is total material dried and pulverized to
preparation		For all sample types, the nature, quality and appropriateness of the sample		nominally 85% passing 75 µm particle size, from which a 50g charge was
		preparation technique.		representatively riffle split off, for assay.
		Quality control procedures adopted for all sub-sampling stages to maximise		Standard check (known value) sample were not used in all cases. Where
		representivity of samples.		used the known values correspond closely with the expected values. A
		Measures taken to ensure that the sampling is representative of the in situ		duplicate (same sample duplicated) were commonly inserted for every 20 or
		material collected, including for instance results for field duplicate/second-half		30 samples taken.
		sampling.		There is a significant amount of coarse gold at Mt Stirling Well. This is
		Whether sample sizes are appropriate to the grain size of the material being		reflected in the poor repeatability of some samples and also was noted on the
		sampled.		drill logs.
Quality of		The nature, quality and appropriateness of the assaying and laboratory		Various independent laboratories have assayed samples from the project
assay data and		procedures used and whether the technique is considered partial or total.		over the years. In general they were internationally accredited for QAQC in
laboratory tests		For geophysical tools, spectrometers, handheld XRF instruments, etc, the		mineral analysis.
		parameters used in determining the analysis including instrument make and		No geophysical tools have been used to date.
		model, reading times, calibrations factors applied and their derivation, etc.		The laboratories inserted blank and check samples for each batch of samples
		Nature of quality control procedures adopted (eg standards, blanks,		analysed and reports these accordingly with all results.
		duplicates, external laboratory checks) and whether acceptable levels of
		accuracy (ie lack of bias) andprecision have been established.
Verification of		The verification of significant intersections by either independent or		Selected significant intersections were resampled from original remnant
sampling and		alternative company personnel.		sample material and analysed again.
assaying		The use of twinned holes.		No twinned holes have been used to date.
		Documentation of primary data, data entry procedures, data verification, data		Documentation of primary data is field log sheets (hand written). Primary
		storage (physical and electronic) protocols.		data is entered into application specific data base. The data base is
		Discuss any adjustment to assay data.		subjected to data verificationprogram,erroneous data is corrected. Data

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				storage is retention of physical log sheet, two electronic backup storage
				devices and primary electronic database.
Location of		Accuracy and quality of surveys used to locate drill holes (collar and down-		Survey control used is hand held GPS. No down hole surveys were
data points		hole surveys), trenches, mine workings and other locations used in Mineral		completed to date. As these areas contain drillholes to no more than 100m
		Resource estimation.		significant deviations are not expected.
		Specification of the grid system used.		Grid systems are various local grid converted to MGA coordinates.
		Quality and adequacy of topographic control.		Topographic control is accurate to +/- 0.5 m.
Data spacing		Data spacing for reporting of Exploration Results.		The drill spacing is variable but generally no greater than 200m by 40m, with
and distribution		Whether the data spacing and distribution is sufficient to establish the degree		some areas infilled to 80m by 40m.
		of geological and grade continuity appropriate for the Mineral Resource and		The areas have drilling density sufficient for JORC Inferred category. Further
		Ore Reserve estimation procedure(s) and classifications applied.		infill will be required for other categories.
		Whether sample compositing has been applied.		Apart from the reconnaissance RAB drilling, no sample compositing has been
				used.
Orientation of		Whether the orientation of sampling achieves unbiased sampling of possible		Apart from some vertical reconnaissance RAB drilling, the orientation of the
data in relation		structures and the extent to which this is known, considering the deposit type.		drilling is approximately at right angles to the known mineralisation and so
to geological		If the relationship between the drilling orientation and the orientation of key		gives a fair representation of the mineralisation intersected.
structure		mineralised structures is considered to have introduced a sampling bias, this		No sampling bias is believed to occur due to the orientation of the drilling.
		should be assessed and reported if material.
Sample		The measures taken to ensure sample security.		Samples were delivered to the laboratory in batches at regular intervals.
security				These are temporarily stored in a secure facility after drilling and before
				delivery
Audits or		The results of any audits or reviews of sampling techniques and data.		The company engages independent consultants who regularly audit the data
reviews				for inconsistencies and other issues. None have been reported to date.

Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Mineral		Type, reference name/number, location and ownership including agreements		The details relating to the tenements are located in the Tenement Status
tenement and		or material issues with third parties such as joint ventures, partnerships,		section of this report.
land tenure		overriding royalties, native title interests, historical sites, wilderness or
status		national park and environmental settings.		The tenement status is described elsewhere in this report.
		The security of the tenure held at the time of reporting along with any known

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		impediments to obtaining a licence to operate in the area.
Exploration		Acknowledgment and appraisal of exploration by other parties.		All work relating to previous exploration contained within this report was
done by other				completed by other parties. Details are included in the references.
parties
Geology		Deposit type, geological setting and style of mineralisation.		Details of the geology are found elsewhere in this report.
Drill hole		A summary of all information material to the understanding of the exploration		Details of the drilling, etc are found within the various tables and diagrams
Information		results including a tabulation of the following information for all Material drill		elsewhere in this report.
		holes:		No material information, results or data have been excluded.
		o easting and northing of the drill hole collar
		o elevation or RL (Reduced Level – elevation above sea level in metres) of
		the drill hole collar
		o dip and azimuth of the hole
		o down hole length and interception depth
		o hole length.
		If the exclusion of this information is justified on the basis that the information
		is not Material and this exclusion does not detract from the understanding of
		the report, the Competent Person should clearly explain why this is the case.
Data		In reporting Exploration Results, weighting averaging techniques, maximum		Weighted averages were calculated by a simple weighting of from and to
aggregation		and/or minimum grade truncations (eg cutting of high grades) and cut-off		distances down each hole. Most samples are 1 metre samples. No top cuts
methods		grades are usually Material and should be stated.		were applied. Lower cut-offs used were – Mt Stirling 1g/t Au.
		Where aggregate intercepts incorporate short lengths of high grade results		The high grade nature of the resource at Mt Stirling Well means that little low
		and longer lengths of low grade results, the procedure used for such		grade material has been included in the intersection table. At Mt Stirling a
		aggregation should be stated and some typical examples of such		small amount of higher grade is consistently present in each intersection as
		aggregations should be shown in detail.		shown in the drill results tables above.
		The assumptions used for any reporting of metal equivalent values should be
		clearly stated.
				 No metal equivalent values are used
Relationship		These relationships are particularly important in the reporting of Exploration		Details of geology, and selected cross sections are given elsewhere in this
between		Results.		report
mineralisation		If the geometry of the mineralisation with respect to the drill hole angle is		 At Mt Stirling Well the gently dipping nature of the mineralisation means
widths and		known, its nature should be reported.		that steeply inclined holes give approximately true widths. At Mt Stirling
intercept lengths		If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not		the steep dip of the mineralisation means that drill widths are exaggerated. These are shown in the tables above.
		known’).
				The tables above show drill widths not true widths. In the case of Mt

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				Stirling Well the drill widths are approximately the same as true widths.
Diagrams		Appropriate maps and sections (with scales) and tabulations of intercepts		Details of geology, and selected cross sections are given elsewhere in this
		should be included for any significant discovery being reported These should		report.
		include, but not be limited to a plan view of drill hole collar locations and
		appropriate sectional views.
Balanced		Where comprehensive reporting of all Exploration Results is not practicable,		Details of the results, drilling, etc are reported elsewhere in this report.
reporting		representative reporting of both low and high grades and/or widths should be
		practiced to avoid misleading reporting of Exploration Results.
Other		Other exploration data, if meaningful and material, should be reported		Details of geology, and selected cross sections are given elsewhere in this
substantive		including (but not limited to): geological observations; geophysical survey		report.
exploration		results; geochemical survey results; bulk samples – size and method of
data		treatment; metallurgical test results; bulk density, groundwater, geotechnical
		and rock characteristics; potential deleterious or contaminating substances.
Further work		The nature and scale of planned further work (eg tests for lateral extensions		Proposed work included drilling of selected twin holes followed by infill and
		or depth extensions or large-scale step-out drilling).		step out RC drilling across all resources. The aim of such work is to increase
		Diagrams clearly highlighting the areas of possible extensions, including the		confidence in the data and also to test for extensions to the known resources.
		main geological interpretations and future drilling areas, provided this		Budgets are being prepared for this work at present.
		information is not commercially sensitive.		In addition a significant number of additional prospects are known to exist
				within the projects as defined by previous RAB and RC drilling intersections.
				These will form the second phase of exploration.
				Various maps and diagrams are presented elsewhere in this report to
				highlight possible extensions and new targets.

Section 3 Estimation and Reporting of Mineral Resources

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

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Database		Measures taken to ensure that data has not been corrupted by, for example,		The database was checked against the hard copy originals for validity.
integrity		transcription or keying errors, between its initial collection and its use for		Data validation checked consistency of features such as hole depth,
		Mineral Resource estimation purposes.		consistent down hole surveys, duplicate assays, etc.
		Data validationprocedures used.
Site visits		Comment on any site visits undertaken by the Competent Person and the		The competent person made site visits to all projects during the course of the
		outcome of those visits.		last year.
		If no site visits have been undertaken indicate why this is the case.
Geological		Confidence in(or conversely, the uncertainty of) thegeological interpretation		Thegeologyof the various resources is reasonablywell documented and

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
interpretation		of the mineral deposit.		understood. Most are in areas of outcrop and so direct observation of dips,
		Nature of the data used and of any assumptions made.		strikes, widths, etc have been made.
		The effect, if any, of alternative interpretations on Mineral Resource		3D models of the geology were commonly used as a guide for the
		estimation.		interpretation of the mineralization.
		The use of geology in guiding and controlling Mineral Resource estimation.		Continuity is assumed to be from hole to hole. As the maximum spacing of
		The factors affecting continuity both of grade and geology.		holes is 80m in the resources this appears to be a reasonable assumption.
				At all times the geology guided the continuity. No faults or other dislocations
				that may influence the geological continuity are known within the resources.
Dimensions		The extent and variability of the Mineral Resource expressed as length (along		The widths of the mineralisation within the resources are fairly uniform. The
		strike or otherwise), plan width, and depth below surface to the upper and		strike and dip extents of the mineralisation in the various resources is
		lower limits of the Mineral Resource.		determined solely by drilling.
Estimation and		The nature and appropriateness of the estimation technique(s) applied and		The resources were estimated using Micromine software. The mineralization
modelling		key assumptions, including treatment of extreme grade values, domaining,		was wireframed at the cut off grades stated above. Where high grade
techniques		interpolation parameters and maximum distance of extrapolation from data		domains were noted these were subset from the overall wireframes.
		points. If a computer assisted estimation method was chosen include a		Where historic workings are also mapped these were also wireframed and
		description of computer software and parameters used.		deducted from the resource. These estimates were validated against historic
		The availability of check estimates, previous estimates and/or mine		production records where known.
		production records and whether the Mineral Resource estimate takes		Geological models were used to constrain the mineralization models. The
		appropriate account of such data.		method used is considered to be suitable for the estimation of Inferred
		The assumptions made regarding recovery of by-products.		Resources. More complex methods may be appropriate for resources of
		Estimation of deleterious elements or other non-grade variables of economic		higher category.
		significance (eg sulphur for acid mine drainage characterisation).		There is modest previous mining activity across most of the resources.
		In the case of block model interpolation, the block size in relation to the		These provide evidence of width, dip, strikes, etc.
		average sample spacing and the search employed.		Top cuts were not applied, however their influence on the wireframes was
		Any assumptions behind modelling of selective mining units.		reduced by domaining high grade zones separately.
		Any assumptions about correlation between variables.		No data was available for reconciliation. The model was compared to the drill
		Description of how the geological interpretation was used to control the		data directly on section using the geological features as a guide. Minor
		resource estimates.		adjustments were made following this.
		Discussion of basis for using or not using grade cutting or capping.
		The process of validation, the checking process used, the comparison of
		model data to drill hole data, and use of reconciliation data if available.
Moisture		Whether the tonnages are estimated on a dry basis or with natural moisture,		The estimates are made on a dry basis as little information exists reliably
		and the method of determination of the moisture content.		outlining the moisture contents.
Cut-off		The basis of the adopted cut-off grade(s) or quality parameters applied.		The lower cut off were arbitrarily assigned after a visual assessment of the
				mineralization on cross sections. No upper cuts were applied,but their

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
parameters				potential influence was reduced by separately domaining any high grade
				areas.
Mining factors		Assumptions made regarding possible mining methods, minimum mining		All resources are assumed to be open pittable. This is due to the oxide
or assumptions		dimensions and internal (or, if applicable, external) mining dilution. It is		nature of the upper parts of the resources and the relatively shallow nature of
		always necessary as part of the process of determining reasonable prospects		the drilling to date. No mining studies have been made to date for any
		for eventual economic extraction to consider potential mining methods, but		resource.
		the assumptions made regarding mining methods and parameters when
		estimating Mineral Resources may not always be rigorous. Where this is the
		case, this should be reported with an explanation of the basis of the mining
		assumptions made.
Metallurgical		The basis for assumptions or predictions regarding metallurgical amenability.		All mineralisation is assumed to be free milling on the basis of historic data.
factors or		It is always necessary as part of the process of determining reasonable		The Mt Stirling Well mineralization contains a significant amount of coarse
assumptions		prospects for eventual economic extraction to consider potential metallurgical		gold as noted in previous assay reports. Some visible gold was panned drill
		methods, but the assumptions regarding metallurgical treatment processes		cuttings at Mt Stirling Well and also directly observed in historic workings. A
		and parameters made when reporting Mineral Resources may not always be		significant proportion of gravity recoverable gold would be expected in any
		rigorous. Where this is the case, this should be reported with an explanation		future processing.
		of the basis of the metallurgical assumptions made.
Environmen-tal		Assumptions made regarding possible waste and process residue disposal		The assumed operations will have typical waste dumps as seen in many sites
factors or		options. It is always necessary as part of the process of determining		across Western Australia. These include dewatering and tailings disposal
assumptions		reasonable prospects for eventual economic extraction to consider the		facilities.
		potential environmental impacts of the mining and processing operation.		No assumed operation in the future will have an unusual impact on the
		While at this stage the determination of potential environmental impacts,		environment.
		particularly for a greenfields project, may not always be well advanced, the
		status of early consideration of these potential environmental impacts should
		be reported. Where these aspects have not been considered this should be
		reported with an explanation of the environmental assumptions made.
Bulk density		Whether assumed or determined. If assumed, the basis for the assumptions.		No data relating to bulk densities were available and so these values have
		If determined, the method used, whether wet or dry, the frequency of the		been assumed. An SG of 2.2t/m2 was assumed for all material. This reflects
		measurements, the nature, size and representativeness of the samples.		the semi oxidised nature of most of the material.
		The bulk density for bulk material must have been measured by methods that
		adequately account for void spaces (vugs, porosity, etc), moisture and
		differences between rock and alteration zones within the deposit.
		Discuss assumptions for bulk density estimates used in the evaluation
		process of the different materials.
Classification		The basis for the classification of the Mineral Resources into varying		The classification of all resources as Inferred reflects various unknowns of the
		confidence categories.		data. Despite this there is sufficient continuityof the mineralisation across all

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		Whether appropriate account has been taken of all relevant factors (ie		resources.
		relative confidence in tonnage/grade estimations, reliability of input data,		As currently understood these estimates give a fair reflection of the
		confidence in continuity of geology and metal values, quality, quantity and		resources.
		distribution of the data).
		Whether the result appropriately reflects the Competent Person’s view of the		As currently understood these estimates give a fair reflection of the
		deposit.		resources.
Audits or		The results of any audits or reviews of Mineral Resource estimates.		The resources have received a number of peer reviews. No key issues were
reviews				raised.
Discussion of		Where appropriate a statement of the relative accuracy and confidence level		The classification of the resources as Inferred reflects the presently
relative		in the Mineral Resource estimate using an approach or procedure deemed		understood confidence in the continuity of dimensions and grade of the
accuracy/		appropriate by the Competent Person. For example, the application of		resources.
confidence		statistical or geostatistical procedures to quantify the relative accuracy of the		Various features require additional drilling. For example the coarse gold at
		resource within stated confidence limits, or, if such an approach is not		Mt Stirling Well needs additional sampling. In all cases the resources remain
		deemed appropriate, a qualitative discussion of the factors that could affect		open, particularly down dip.
		the relative accuracy and confidence of the estimate.		A more rigorous statistical understanding of the mineralisation in the
		The statement should specify whether it relates to global or local estimates,		resources will be made following more detailed drilling.
		and, if local, state the relevant tonnages, which should be relevant to		The resources stated in this report relate to local estimates. Further drilling is
		technical and economic evaluation. Documentation should include		warranted before any economic evaluation is made.
		assumptions made and the procedures used.		Details of assumptions used are stated in the report.
		These statements of relative accuracy and confidence of the estimate should
		be compared withproduction data, where available.

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Malcolm Project

JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

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

	Commentary	Commentary
		All data and results referred to in this report are historic, and date from the
		late 1980s to the present day. This data has been judged to be reliable
		following independent t research, including discussions with previous operators and explorers in person. Samples were collected via Rotary Air Blast (RAB) and Reverse Circulation (RC) drill chips. A minor number of diamond drillholes (DD) were drilled at
		Malcolm.
		All drilling yielded samples on a metre basis. RAB drilling samples were
		commonly composited into intervals of 4 or 5m, with selected individual or
		2m resamples collected. Reverse Circulation (RC) drilling is utilised to obtain 1 m samples which are riffle split, from which approx. 2-3 kg is pulverised to produce a 50 g charge for fire assay. Diamond core is sawn in half before crushing, pulverising and assaying.
		Sample preparation method is total material dried and pulverized to
		nominally 85% passing 75 µm particle size. Gold analysis method is
		generally by 50g Fire Assay, with Atomic Absorption Spectrometry (AAS)
		finish (DL 0.01 – UL 50 ppm Au). Samples exceeding the upper limit of the
		method were automatically re-assayed utilizing a high grade gravimetric
		method.

• Criteria JORC Code explanation Sampling  Nature and quality of sampling (eg cut channels, random chips, or specific techniques 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.

• Aspects of the determination of mineralisation that are Material to the Public Report.

• In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

		samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant		. obtain 1 m samples which are riffle split, from which approx. 2-3 kg is pulverised to produce a 50 g charge for fire assay. Diamond core is sawn in half before crushing, pulverising and assaying.
		disclosure of detailed information.		Sample preparation method is total material dried and pulverized to
				nominally 85% passing 75 µm particle size. Gold analysis method is
				generally by 50g Fire Assay, with Atomic Absorption Spectrometry (AAS)
				finish (DL 0.01 – UL 50 ppm Au). Samples exceeding the upper limit of the
				method were automatically re-assayed utilizing a high grade gravimetric
				method.
Drilling		Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast,		RAB holes were typically 100mm in diameter, RC drilling usually 155mm in
techniques		auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard		diameter; diamond drilling was either NQ (50mm) or HQ (63mm). Triple tube
		tube, depth of diamond tails, face-sampling bit or other type, whether core is		coring was used in oxide zones. Core was orientated where possible via
		oriented and if so, by what method, etc).		spear to mark the bottom of the hole. RC drilling was via a face sampling
				hammer.
Drill sample		Method of recording and assessing core and chip sample recoveries and		Recoveries were logged onto paper logs during drilling. Recoveries were
recovery		results assessed.		visually assessed.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		Measures taken to maximise sample recovery and ensure representative		Sample recoveries were maximised in RAB and RC drilling via collecting the
		nature of the samples.		samples in a cyclone prior to sub sampling. Diamond drilling used drilling
		Whether a relationship exists between sample recovery and grade and		muds to reduce loss of core in oxide zones and careful monitoring of the
		whether sample bias may have occurred due to preferential loss/gain of		pumping of drilling fluids. RAB drillholes were stopped if significant water
		fine/coarse material.		flows were encountered.
				No relationship appears from the data between sample recovery and grade of
				the samples.
Logging		Whether core and chip samples have been geologically and geotechnically		All drillholes were geologically logged, whilst the diamond holes at Malcolm
		logged to a level of detail to support appropriate Mineral Resource estimation,		also have geotechnical logs. This logging appears to be of high quality and
		mining studies and metallurgical studies.		suitable for use in further studies.
		Whether logging is qualitative or quantitative in nature. Core (or costean,		Logging is qualitative in nature.
		channel, etc) photography.		All samples / intersections are logged. 100% of relevant length intersections
		The total length and percentage of the relevant intersections logged.		are logged.
Sub-sampling		If core, whether cut or sawn and whether quarter, half or all core taken.		Non-core RC drill chip sample material is riffle split, where sample is dry. In
techniques and		If non-core, whether riffled, tube sampled, rotary split, etc and whether		case of wet sample a representative ‘grab’ sample method is utilized.
sample		sampled wet or dry.		The sample preparation technique is total material dried and pulverized to
preparation		For all sample types, the nature, quality and appropriateness of the sample		nominally 85% passing 75 µm particle size, from which a 50g charge was
		preparation technique.		representatively riffle split off, for assay.
		Quality control procedures adopted for all sub-sampling stages to maximise		Standard check (known value) sample were not used in all cases. Where
		representivity of samples.		used the known values correspond closely with the expected values. A
		Measures taken to ensure that the sampling is representative of the in situ		duplicate (same sample duplicated) were commonly inserted for every 20 or
		material collected, including for instance results for field duplicate/second-half		30 samples taken.
		sampling.		 Routine standards and duplicates were used to check for accuracy and
		Whether sample sizes are appropriate to the grain size of the material being		precision of the results.
		sampled.
				The grain size is generally fine and so the sample size is appropriate.
Quality of		The nature, quality and appropriateness of the assaying and laboratory		Various independent laboratories have assayed samples from the project
assay data and		procedures used and whether the technique is considered partial or total.		over the years. In general they were internationally accredited for QAQC in
laboratory tests		For geophysical tools, spectrometers, handheld XRF instruments, etc, the		mineral analysis.
		parameters used in determining the analysis including instrument make and		No geophysical tools have been used to date.
		model, reading times, calibrations factors applied and their derivation, etc.		The laboratories inserted blank and check samples for each batch of samples
		Nature of quality control procedures adopted (eg standards, blanks,		analysed and reports these accordingly with all results.
		duplicates, external laboratory checks) and whether acceptable levels of
		accuracy (ie lack of bias) andprecision have been established.
Verification of		The verification of significant intersections by either independent or		Selected significant intersections were resampled from original remnant

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
sampling and		alternative company personnel.		sample material and analysed again.
assaying		The use of twinned holes.		No twinned holes have been used to date.
		Documentation of primary data, data entry procedures, data verification, data		Documentation of primary data is field log sheets (hand written). Primary
		storage (physical and electronic) protocols.		data is entered into application specific data base. The data base is
		Discuss any adjustment to assay data.		subjected to data verification program, erroneous data is corrected. Data
				storage is retention of physical log sheet, two electronic backup storage
				devices and primary electronic database.
Location of		Accuracy and quality of surveys used to locate drill holes (collar and down-		Survey control used is hand held GPS. Down hole surveys were completed
data points		hole surveys), trenches, mine workings and other locations used in Mineral		on most diamond drillholes at Malcolm. These surveys were via a single shot
		Resource estimation.		down hole tool. As the other drillholes were drilled to no more than 100m
		Specification of the grid system used.		significant deviations are not expected.
		Quality and adequacy of topographic control.		Grid systems are various local grid converted to MGA coordinates.
				Topographic control is accurate to +/- 0.5 m.
Data spacing		Data spacing for reporting of Exploration Results.		The drill spacing is variable but generally no greater than 200m by 40m, with
and distribution		Whether the data spacing and distribution is sufficient to establish the degree		some areas infilled to 40m by 40m and 20m by 20m.
		of geological and grade continuity appropriate for the Mineral Resource and		The infilled areas have drilling density sufficient for JORC Inferred category.
		Ore Reserve estimation procedure(s) and classifications applied.		Further infill will be required for other categories.
		Whether sample compositing has been applied.		Apart from the reconnaissance RAB drilling, no sample compositing has been
				used.
Orientation of		Whether the orientation of sampling achieves unbiased sampling of possible		Apart from some vertical reconnaissance RAB drilling, the orientation of the
data in relation		structures and the extent to which this is known, considering the deposit type.		drilling is approximately at right angles to the known mineralisation and so
to geological		If the relationship between the drilling orientation and the orientation of key		gives a fair representation of the mineralisation intersected.
structure		mineralised structures is considered to have introduced a sampling bias, this		No sampling bias is believed to occur due to the orientation of the drilling.
		should be assessed and reported if material.
Sample		The measures taken to ensure sample security.		Samples were delivered to the laboratory in batches at regular intervals.
security				These are temporarily stored in a secure facility after drilling and before
				delivery
Audits or		The results of any audits or reviews of sampling techniques and data.		The company engages independent consultants who regularly audit the data
reviews				for inconsistencies and other issues. None have been reported to date.

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Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Mineral		Type, reference name/number, location and ownership including agreements		The details relating to the tenements are located in the Tenement Status
tenement and		or material issues with third parties such as joint ventures, partnerships,		section of this report.
land tenure		overriding royalties, native title interests, historical sites, wilderness or
status		national park and environmental settings.		Tenement details are described elsewhere in this report.
		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.
Exploration		Acknowledgment and appraisal of exploration by other parties.		All work relating to previous exploration contained within this report was
done by other				completed by other parties. Details are included in the references.
parties
Geology		Deposit type, geological setting and style of mineralisation.		Details of the geology are found elsewhere in this report.
Drill hole		A summary of all information material to the understanding of the exploration		Details of the drilling, etc are found within the various tables and diagrams
Information		results including a tabulation of the following information for all Material drill		elsewhere in this report.
		holes:		No material information, results or data have been excluded.
		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.		No materlai information has been excluded.
		If the exclusion of this information is justified on the basis that the information
		is not Material and this exclusion does not detract from the understanding of
		the report, the Competent Person should clearly explain why this is the case.
Data		In reporting Exploration Results, weighting averaging techniques, maximum		Weighted averages were calculated by a simple weighting of from and to
aggregation		and/or minimum grade truncations (eg cutting of high grades) and cut-off		distances down each hole. Most samples are 1 metre samples. No top cuts
methods		grades are usually Material and should be stated.		were applied. Lower cot-offs used were – Malcolm 1g/t Au.
		Where aggregate intercepts incorporate short lengths of high grade results		The drilling results are shown tabulated elsewhere in this report.
		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.		No metal equivalents have been used
		The assumptions used for any reporting of metal equivalent values should be
		clearly stated.
Relationship		These relationships are particularly important in the reporting of Exploration		Details of geology, and selected cross sections are given elsewhere in this
between		Results.		report

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
mineralisation		If the geometry of the mineralisation with respect to the drill hole angle is		The steep dipping nature of the mineralisation means that steeply inclined
widths and		known, its nature should be reported.		drillholes will show exaggerated widths. These are shown in the diagrams
intercept		If it is not known and only the down hole lengths are reported, there should		and tables elsewhere in this report.
lengths		be a clear statement to this effect (eg ‘down hole length, true width not
		known’).		The drilling results shown elsewhere in this report are drill widths not
				true widths.
Diagrams		Appropriate maps and sections (with scales) and tabulations of intercepts		Details of geology, and selected cross sections are given elsewhere in this
		should be included for any significant discovery being reported These should		report.
		include, but not be limited to a plan view of drill hole collar locations and
		appropriate sectional views.
Balanced		Where comprehensive reporting of all Exploration Results is not practicable,		Details of the results, drilling, etc are reported elsewhere in this report.
reporting		representative reporting of both low and high grades and/or widths should be
		practiced to avoid misleading reporting of Exploration Results.
Other		Other exploration data, if meaningful and material, should be reported		Details of geology, and selected cross sections are given elsewhere in this
substantive		including (but not limited to): geological observations; geophysical survey		report.
exploration		results; geochemical survey results; bulk samples – size and method of
data		treatment; metallurgical test results; bulk density, groundwater, geotechnical
		and rock characteristics; potential deleterious or contaminating substances.
Further work		The nature and scale of planned further work (eg tests for lateral extensions		Proposed work included drilling of selected twin holes followed by infill and
		or depth extensions or large-scale step-out drilling).		step out RC drilling across all resources. The aim of such work is to increase
		Diagrams clearly highlighting the areas of possible extensions, including the		confidence in the data and also to test for extensions to the known resources.
		main geological interpretations and future drilling areas, provided this		Budgets are being prepared for this work at present.
		information is not commercially sensitive.		In addition a significant number of additional prospects are known to exist
				within the projects as defined by previous RAB and RC drilling intersections.
				These will form the second phase of exploration.
				Various maps and diagrams are presented elsewhere in this report to
				highlight possible extensions and new targets.

Section 3 Estimation and Reporting of Mineral Resources

Section 3 Estimation and Reporting of Mineral Resources	Section 3 Estimation and Reporting of Mineral Resources
(Criterialistedinsection 1, andwhererelevantinsection 2, also apply to this section.)
Criteria	JORC Code explanation	Commentary
Database	 Measures taken to ensure that data has not been corrupted by, for example,		The database was checked against the hard copy originals for validity.
integrity	transcription or keying errors, between its initial collection and its use for		Data validation checked consistency of features such as hole depth,
	Mineral Resource estimation purposes.		consistent down hole surveys, duplicate assays, etc.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		Data validationprocedures used.
Site visits		Comment on any site visits undertaken by the Competent Person and the		The competent person made site visits to all projects during the course of the
		outcome of those visits.		last year.
		If no site visits have been undertaken indicate why this is the case.
Geological		Confidence in (or conversely, the uncertainty of ) the geological interpretation		The geology of the various resources is reasonably well documented and
interpretation		of the mineral deposit.		understood. Most are in areas of outcrop and so direct observation of dips,
		Nature of the data used and of any assumptions made.		strikes, widths, etc have been made.
		The effect, if any, of alternative interpretations on Mineral Resource		3D models of the geology were commonly used as a guide for the
		estimation.		interpretation of the mineralization.
		The use of geology in guiding and controlling Mineral Resource estimation.		Continuity is assumed to be from hole to hole. As the maximum spacing of
		The factors affecting continuity both of grade and geology.		holes is 40m in the resources this appears to be a reasonable assumption.
				At all times the geology guided the continuity. No faults or other dislocations
				that may influence the geological continuity are known within the resources.
Dimensions		The extent and variability of the Mineral Resource expressed as length (along		The widths of the mineralisation within the resources are fairly uniform. The
		strike or otherwise), plan width, and depth below surface to the upper and		strike and dip extents of the mineralisation in the various resources is
		lower limits of the Mineral Resource.		determined solely by drilling.
Estimation and		The nature and appropriateness of the estimation technique(s) applied and		The resources were estimated using Micromine software. The mineralization
modelling		key assumptions, including treatment of extreme grade values, domaining,		was wireframed at the cut off grades stated above. Where high grade
techniques		interpolation parameters and maximum distance of extrapolation from data		domains were noted these were subset from the overall wireframes.
		points. If a computer assisted estimation method was chosen include a		Where historic workings are also mapped these were also wireframed and
		description of computer software and parameters used.		deducted from the resource. These estimates were validated against historic
		The availability of check estimates, previous estimates and/or mine		production records where known.
		production records and whether the Mineral Resource estimate takes		Geological models were used to constrain the mineralization models. The
		appropriate account of such data.		method used is considered to be suitable for the estimation of Inferred
		The assumptions made regarding recovery of by-products.		Resources. More complex methods may be appropriate for resources of
		Estimation of deleterious elements or other non-grade variables of economic		higher category.
		significance (eg sulphur for acid mine drainage characterisation).		There is modest previous mining activity across most of the resources.
		In the case of block model interpolation, the block size in relation to the		These provide evidence of width, dip, strikes, etc.
		average sample spacing and the search employed.		Top cuts were not applied, however their influence on the wireframes was
		Any assumptions behind modelling of selective mining units.		reduced by domaining high grade zones separately.
		Any assumptions about correlation between variables.		No data was available for reconciliation. The model was compared to the drill
		Description of how the geological interpretation was used to control the		data directly on section using the geological features as a guide. Minor
		resource estimates.		adjustments were made following this.
		Discussion of basis for using or not using grade cutting or capping.
		Theprocess of validation, the checking process used, the comparison of		 Lower grade cut offs were used to define the edges of the wireframes,

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		model data to drill hole data, and use of reconciliation data if available.		whilst the higher grades were not cut due to a lack of statistics. The
				higher grade areas were wireframed separately so as not to affect the
				surrounding lower grade haloes.
				the wireframes were checked manually agains the cross sectional
				interpretations for consistency. Minor changes were made following this
				process.
Moisture		Whether the tonnages are estimated on a dry basis or with natural moisture,		The estimates are made on a dry basis as little information exists reliably
		and the method of determination of the moisture content.		outlining the moisture contents.
Cut-off		The basis of the adopted cut-off grade(s) or quality parameters applied.		The lower cut off were arbitrarily assigned after a visual assessment of the
parameters				mineralization on cross sections. No upper cuts were applied, but their
				potential influence was reduced by separately domaining any high grade
				areas.
Mining factors		Assumptions made regarding possible mining methods, minimum mining		All resources are assumed to be open pitable. This is due to the oxide nature
or assumptions		dimensions and internal (or, if applicable, external) mining dilution. It is		of the upper parts of the resources and the relatively shallow nature of the
		always necessary as part of the process of determining reasonable prospects		drilling to date. No mining studies have been made to date for any resource.
		for eventual economic extraction to consider potential mining methods, but
		the assumptions made regarding mining methods and parameters when
		estimating Mineral Resources may not always be rigorous. Where this is the
		case, this should be reported with an explanation of the basis of the mining
		assumptions made.
Metallurgical		The basis for assumptions or predictions regarding metallurgical amenability.		All mineralisation is assumed to be free milling on the basis of historic data.
factors or		It is always necessary as part of the process of determining reasonable		Most other resource contain some visible gold either in panned drill cuttings
assumptions		prospects for eventual economic extraction to consider potential metallurgical		or directly observed in historic workings. A significant proportion of gravity
		methods, but the assumptions regarding metallurgical treatment processes		recoverable gold would be expected in any future processing.
		and parameters made when reporting Mineral Resources may not always be
		rigorous. Where this is the case, this should be reported with an explanation
		of the basis of the metallurgical assumptions made.
Environmen-tal		Assumptions made regarding possible waste and process residue disposal		The assumed operations will have typical waste dumps as seen in many sites
factors or		options. It is always necessary as part of the process of determining		across Western Australia. These include dewatering and tailings disposal
assumptions		reasonable prospects for eventual economic extraction to consider the		facilities.
		potential environmental impacts of the mining and processing operation.		No assumed operation in the future will have an unusual impact on the
		While at this stage the determination of potential environmental impacts,		environment.
		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

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		reported with an explanation of the environmental assumptions made.
Bulk density		Whether assumed or determined. If assumed, the basis for the assumptions.		No bulk density data were available. Bulk densities were assumed based on
		If determined, the method used, whether wet or dry, the frequency of the		industry experience elsewhere in Western Australia. An SG of 2.2t/m2 was
		measurements, the nature, size and representativeness of the samples.		assumed for all material. This reflects the semi oxidised nature of most of the
		The bulk density for bulk material must have been measured by methods that		material.
		adequately account for void spaces (vugs, porosity, etc), moisture and
		differences between rock and alteration zones within the deposit.		An assumed SG of 2.2 has been assumed for all material based on
		Discuss assumptions for bulk density estimates used in the evaluation		experience elsewhere in this region.
		process of the different materials.
Classification		The basis for the classification of the Mineral Resources into varying		The classification of all resources as Inferred reflects various unknowns of the
		confidence categories.		data. Despite this there is sufficient continuity of the mineralisation across all
		Whether appropriate account has been taken of all relevant factors (ie		resources.
		relative confidence in tonnage/grade estimations, reliability of input data,		As currently understood these estimates give a fair reflection of the
		confidence in continuity of geology and metal values, quality, quantity and		resources.
		distribution of the data).
		Whether the result appropriately reflects the Competent Person’s view of the		The result is appropriate in the competent person’s view.
		deposit.
Audits or		The results of any audits or reviews of Mineral Resource estimates.		The resources have received a number of peer reviews. No key issues were
reviews				raised.
Discussion of		Where appropriate a statement of the relative accuracy and confidence level		The classification of the resources as Inferred reflects the presently
relative		in the Mineral Resource estimate using an approach or procedure deemed		understood confidence in the continuity of dimensions and grade of the
accuracy/		appropriate by the Competent Person. For example, the application of		resources.
confidence		statistical or geostatistical procedures to quantify the relative accuracy of the		Various features require additional drilling. In all cases the resources remain
		resource within stated confidence limits, or, if such an approach is not		open, particularly down dip.
		deemed appropriate, a qualitative discussion of the factors that could affect		A more rigorous statistical understanding of the mineralisation in the
		the relative accuracy and confidence of the estimate.		resources will be made following more detailed drilling.
		The statement should specify whether it relates to global or local estimates,		The resources stated in this report relate to local estimates. Further drilling is
		and, if local, state the relevant tonnages, which should be relevant to		warranted before any economic evaluation is made.
		technical and economic evaluation. Documentation should include assumptions made and the procedures used.		Details of assumptions used are stated in the report.
		These statements of relative accuracy and confidence of the estimate should
		be compared withproduction data, where available.