GR ENGINEERING SERVICES LIMITED — Capital/Financing Update 2017

Mar 5, 2017

==> picture [238 x 78] intentionally omitted <==

ASX RELEASE

6 March 2017

For immediate release to the market

LETTER OF INTENT – MT MORGANS GOLD PROJECT

GR Engineering Services Limited (ASX:GNG) ( GR Engineering or Company ) is pleased to announce that it has entered into a conditional letter of intent ( LOI ) for the award of an engineering, procurement and construction contract ( Contract ) to design, construct and commission the mineral processing plant and infrastructure associated with Dacian Gold Limited’s (DCN.ASX) ( Dacian ) Mt Morgans Gold Project ( Project ).

The LOI provides for GR Engineering to commence work on the design and construction of a new 2.5Mtpa carbon-in-leach treatment facility and supporting infrastructure for the Project, located 25km south-west of Laverton in WA.

Works will commence immediately under the LOI, with the Contract expected to be entered into by midMarch. The LOI is conditional upon finalisation of the terms of the Contract and its approval by Dacian’s Board. The Project schedule will facilitate completion and first gold production in the first quarter of calendar year 2018.

It is intended that the Contract be entered into on a guaranteed maximum price basis. Potential earnings from the Contract are not expected to alter the anticipated FY17 financial outcomes referred to in the Company’s HY17 results announcement dated 27 February 2017.

Commenting on the award of the LOI, GR Engineering’s Managing Director, Mr Geoff Jones, said:

“The LOI is a pleasing outcome that follows a long term association with the Mt Morgans Gold Project and the Dacian team. This Project award sits alongside GR Engineering’s proven capability and expertise in the process engineering, design and construction of gold processing facilities. We look forward to continuing our work with Dacian and engaging closely with its team to deliver safe and successful outcomes for the Project.”

GR Engineering will provide further confirmation to the market upon entry into the Contract.

Ends.

For further information contact:

Geoff Jones

Managing Director

 +61 8 6272 6000

 geoff.jones@gres.com.au

Joe Totaro Chief Financial Officer

 +61 6272 6000

 joe.totaro@gres.com.au

---

GR ENGINEERING SERVICES LIMITED ABN 12 121 542 738 Tel: +61 8 6272 6000 Fax: +61 8 6272 6001 Email: gres@gres.com.au Website: www.gres.com.au PO Box 258, Belmont WA 6984 179 Great Eastern Highway, Belmont WA 6104

==> picture [162 x 33] intentionally omitted <==

GR Engineering Services Limited (ASX:GNG) is an ASX listed engineering design and construction contractor specialising in fixed price engineering design and construction services to the resources and mineral processing industry.

GR Engineering has successfully completed the engineering design and construction of projects for a diverse range of clients, including global mining houses, mid-tier miners and junior developers undertaking their first project. Traditionally an EPC contractor, GR Engineering also has the ability to contract through a variety of models, including EPCM and hybrid contracting arrangements.

GR Engineering also has a long history of providing a diverse range of process engineering consulting services, including feasibility study preparation and management, process design and peer review engagements. These services have been delivered for projects globally and play a key role in delivering organic growth opportunities through design and construction project execution.

The Company also has a presence in the hydrocarbons industry via its wholly owned subsidiary, Upstream Production Solutions. Upstream Production Solutions is a leading provider of operations and maintenance and well management services to the Australian and South East Asian oil and gas industry.

As a group, GR Engineering and Upstream Production Solutions employs more than 450 professional and support staff throughout Australia and internationally, in addition to a direct construction workforce and subcontracted personnel.

Page 2