HAMMER METALS LIMITED — Capital/Financing Update 2017

Jul 27, 2017

ASX Announcement (ASX: HMX)

28 July 2017

EXPLORATION UPDATE

Hammer Metals Limited (Hammer or the Company) (ASX: HMX) wishes to provide an update on current exploration activities over its Mount Isa Project in Northwest Queensland.

• RC drilling program has commenced at the Kalman West and Revenue copper-gold prospects.

• Follow-up of VTEM anomalies identifies 12 potential drilling targets; highlighting a zone of elevated gold soil and rock chip geochemistry along a 1.2km strike length of the Pilgrim Fault in the Serendipity area.

• The Dronfield RC and diamond drilling program to test the western and eastern geophysical anomalies was completed and final assays received. Strong magnetite veining and alteration with sporadic lowgrade copper mineralisation intersected in each hole coincident with the geophysical anomalies.

Planned RC Drilling Program

RC drilling has commenced at the Kalman West Cu-Au-Pb-Zn(-graphite) Prospect and the Revenue Cu-Au Prospect southeast of Mount Isa.

Revenue is located 30km southwest of Kalman in a similar geological and structural position as Overlander 28 km to the north. Up to three holes are planned to test a zone of Cu-Au mineralisation.

Kalman West is located approximately 1km west of the Kalman Cu-Au-Mo-Re Deposit. Geochemical sampling has outlined a multi-element soil anomaly partially coincident with a zone of graphitic schist and a high priority VTEM target. Up to five holes are planned at the prospect to test a combined soil anomaly which has peak values of 210ppb Au, 900ppm Cu, 1100ppm Zn and 2000ppm Pb.

Initial assay results are expected to be received in mid to late August.

The planned RC drilling at Hammertime has been deferred whilst an assessment of the broader Mount Philp breccia project which encompasses Hammertime is conducted.

Pilgrim Fault VTEM Survey – Target Review

An airborne VTEM Max (Versatile Time Domain EM) and magnetic survey over a 23km strike length of the Pilgrim Fault corridor extending from China Wall in the north to Python in the south was completed by Geotech International in late 2016.

Field investigation of the anomalies interpreted by Southern Geoscience is now complete with several of the target areas considered sufficiently prospective to warrant either drilling or further definition and assessment.

During field inspection, observations were recorded at 994 sites and 158 rock chip samples were collected. Copper mineralisation or iron oxide gossan was observed in thirteen areas.

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The VTEM anomalies typically, but not always, occupy zones of carbonaceous siltstone, mica schist or graphitic schist. These zones have recessive topography and recent cover that complicates surface geochemical assessment. Further sampling and partial leach assay is recommended for selected covered areas.

Contacts between these recessive, conductive units and adjacent competent units such as calc-silicates or igneous rocks attract north-south shearing and alteration. Copper +/- gold mineralisation frequently occurs along these contacts, offset from the VTEM anomalies by up to 200m. Sometimes a causal relationship between the VTEM targets and the alteration and mineralisation is not readily apparent.

Twelve areas are currently considered potential drill targets. Additional targets are prospective but require further sampling and assessment due to subtle anomalism or alluvial / colluvial cover. Most of these targets could be tested with angled RC drillholes of between 100m and 250m depth.

Anomalies of particular interest include:

China Wall

At PF2 , 8km north of Kalman, discordant shears dilate the copper mineralised contact between carbonaceous metasediments and calc-silicates. A 400m long sheared outcropping alteration zone has drill potential, with scope for strike-extensions under cover. The area exhibits sporadic soil copper and gold anomalism, and reconnaissance rock chips samples returned up to 3.2% Cu, 0.47g/t Au, 3.3ppm Ag, 1320ppm Ce, 730ppm La and 9ppm Sn.

PF1, A gabbro body 400m northwest, has a coherent soil copper anomaly and contains scattered hematite and malachite alteration. Rock chip sampling returned up to 15% Cu and 0.88g/t Au. The area is under consideration as a drill target.

PF12 is situated on a folded carbonaceous metasediment / calc-silicate contact. A discordant soil Cu, Au anomaly 100m west near a granite contact coincides with rock chip assays up to 12% Cu and 0.33g/t Au and 4.4ppm Ag. The area is slated for further field assessment and extension sampling with a view to drill testing.

Pharaoh East

PF24 is situated on a bend in the Kalman Shear, 3km north of Kalman. Historic copper workings are accompanied by anomalous Cu and Au in soils and rock chips with up to 5.2% Cu and 0.51g/t Au. The area hosts strong redrock and magnetite alteration. The old workings are a drill target and 500m of strike to the south is slated for further assessment.

Pharaoh

At the Pharaoh prospect two groups of historic copper workings occur along the Kalman West shear zone, 3km north of Kalman. Alteration and copper mineralisation is focused on the intersection of the northstriking Kalman shear with north east striking cross faults. Sporadic soil Cu and Au anomalism coincides with rock chip assays of up to 14% Cu and 2.6g/t Au. Kings Minerals tested the southern group with one drillhole (K-115), returning up to 0.90% Cu and 1.0g/t Au over a one metre interval. The mineralisation is interpreted as occupying steep narrow shoots, which may not have been effectively tested. The richer northern group has not been drill-tested and is under consideration for future drilling.

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Kalman West

PF5 occupies part of a 5km long graphitic schist zone hosting the Kalman West Shear. A broad, dilated schist zone with quartz veining occupies an 800m long sinistral jog in the shear zone, sandwiched between felsic intrusive bodies. This dilation zone appears to be part of a large north east trending zone of cross faulting and dilation that extends through to the Kalman deposit. Copper anomalism along the western schist contact has been partially drill-tested. The schist package has been targeted for future RC drill-testing and metallurgical sampling for Cu, Au, Pb and graphite.

Pelican

PF20, 21 & 23 occupy a 1.7km long zone of carbonaceous metasediments and calc-silicates with significant folding and displacement adjacent to the regional Pilgrim Fault. Coherent soil and rock chip Cu and Au anomalies also include Mo, Sn and U anomalism indicative of Kalman-style mineralisation. The anomalous areas have been tested with several short historic drill campaigns with mixed results. PN205C drilled by Mount Isa Mines Ltd in 2008 returned a best intercept of 24m @ 1.0% Cu, 0.34g/t Au from 28m, including 10m @ 1.6% Cu, 0.49g/t Au from 30m. Rock chip assay results include 22% Cu and 6.7g/t Au.

Recent reconnaissance mapping indicates that previous drill planning may not have adequately accounted for the structural complexity. The area is being re-assessed with a view to future drill-testing.

Serendipity

VTEM targets PF25 & 8 are situated near copper-gold mineralised carbonaceous siltstone along the Pilgrim Fault at the Serendipity prospect. The mineralised zone has been drill-tested on one section. An intercept of 25m @ 0.5g/t Au from 137m in K-90 (including 1m @ 2.3g/t Au), the easternmost hole on the section coincides with the Pilgrim Fault quartz veining.

Additional rock chip sampling returned several anomalous results up to 2.6g/t Au along the trend. One of the anomalous areas at the northern end of the trend also returned highly anomalous copper values and the light REE’s cerium (up to 3550ppm) and lanthanum (up to 1860 ppm). The gold anomalism in the rock chips and soils extends for 1.2km along the fault.

PF26 features a copper-mineralised shear along a quartzite / carbonaceous metasediment contact 1.4km south of the Serendipity prospect. The target structure outcrops for 300m and disappears under cover in both directions. Reconnaissance rock chip samples returned assays of up to 2.7% Cu and 0.76g/t Au. The target is under consideration for drill-testing and further assessment of covered extensions is recommended.

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Pilgrim Fault survey VTEM channel 40 image overlaid on reduced to pole, total magnetic intensity image and showing major targets

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Serendipity area – VTEM targets PF25, 8 & 26. Soil and rock chip sampling has outlined a 1.2km anomalous gold trend.

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Dronfield Drilling Program

The three-hole diamond and RC drilling program at the Dronfield copper-gold project southeast of Mount Isa was completed in mid-July. A total of 1010 metres of diamond and 246 m of RC were drilled in the three holes.

The Dronfield targets are located 25km southeast of Kalman on EPM 18084, which is subject to a farm-in agreement with Kabiri Resources Pty Ltd. Hammer has earned an 80% interest in EPM 18084 from Kabiri by spending $250,000 on exploration. The tenement forms part of the Farm-in and Joint Venture Agreement with Newmont Exploration Pty Ltd. This drilling will be partially subsidised by a $100,000 Collaborative Drilling Initiative (“CDI”) Funding Grant from the Queensland Department of Natural Resources.

The first two (diamond) holes tested the western geophysical anomaly and the third RC hole tested the eastern geophysical anomaly. Both diamond holes, HDD001 (537m) and HDD002 (473m) intersected strongly magnetite-actinolite and red rock altered granodiorite of the Wimberu Granite (part of the Williams Batholith) over large parts of the hole. The alteration is consistent with other IOCG deposits in the region. Sulphide mineralisation where present is dominantly pyrite-chalcopyrite with levels generally ranging between trace to 1% with thin zones (<5m) where the total sulphide content can approach 5% in total. HDRC004, which was drilled into the eastern anomaly, intersected magnetite and red rock altered granodiorite with microgranite lenses.

Significant results from the program are tabulated below.

Hole	E	N	RL	TD	Dip	Az (true)		From	To	m	Au_ppb	Cu_ppm
HD001	402370	7651425	335.1	536.8	-50	314		297	309	12	4	1062
							incl.	297	298	1	27	9260
							&	307	309	2	7	5155
								312	313	1	4	1060
								318	319	1	3	1060
HD002	402408	7651780	327.7	473.3	-55	276.4		32	34	2	184	118
								34	35	1	12	1200
HDRC004	405296	7651174	340.8	246	-55	300		24	29	5	39	2113
							incl.	25	26	1	51	4140
								175	184	9	20	979
							incl.	175	177	2	45	1485
							&	183	184	1	41	3800
								207	215	8	47	1038
							incl.	207	208	1	131	1480
								211	215	4	49	1165
Note (1). All locations have been captured in GDA94 Zone 54 Datum
Note(2)All samples analysed forgold via fire assaywith AAS finish and a four acid digest followed bylow level ICP AES and MS analysis

Table 1: Significant intercepts from the Dronfield drilling program

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Hammer Metals Limited (ASX: HMX) Hammer Metals holds a strategic tenement position covering approximately 3,200km[2] within the Mount Isa mining district, with 100% interests in the Kalman (Cu-Au-MoRe) deposit, the Overlander North and Overlander South (Cu-Co) deposits, the Millennium (Cu-Co-Au) deposit as well as the recently acquired Elaine-Dorothy (Cu-Au) deposit. Hammer is an active mineral explorer, focused on discovering large copper-gold deposits of the Ernest Henry style and has a range of prospective targets at various stages of testing.

For further information, please contact:

Alex Hewlett | Executive Director & CEO Russell Davis | Executive Chairman info@hammermetals.com.au M: +61 (0) 419195087

Competent Person’s Statement:

Exploration Results

The information in this report as it relates to exploration results and geology was compiled by Mr. Mark Whittle, who is a Member of the AusIMM and a consultant to the Company. Mr. Whittle who is a shareholder and optionholder, has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Whittle consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

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Drill Rig on HDD001

==> picture [411 x 109] intentionally omitted <==

Semi-massive magnetite-actinote-chlorite-hematite alteration is a common component of the Dronfield western anomaly system (HDD001, 81m)

==> picture [395 x 310] intentionally omitted <==

Modelled geophysical features of the Dronfield Western Anomaly with the locations of HDD001 and HDD002. The chargeability response shown in yellow (ranges between 35mv/v to +65mv/v)

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==> picture [459 x 496] intentionally omitted <==

Mount Isa Project

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Rock Chip results from the Serendipity area

**Sample **	E	N	RL	Aug/t	Cu %	Ag ppm	Ceppm	Lappm	Coppm	K %	Moppm	Snppm	Uppm
PF0848	391793	7667315	443	0.25	0.05	0.56	3550	1860	2.1	0.17	3.12	0.5	44.6
PF0849	391822	7667309	442	-0.01	0.02	0.29	57.9	34.3	6.5	0.16	3.3	0.5	3.1
PF0850	391846	7667296	440	-0.01	0.00	0.03	14.6	7.4	2.1	0.1	1.64	0.5	3
PF0855	391853	7667394	433	-0.01	0.04	0.07	26.8	18	30.2	0.02	7.32	0.9	18.7
PF0857	391821	7667453	423	-0.01	0.01	0.04	32	19	10.6	0.14	4.05	0.5	4.8
PF0865	391335	7665539	379	0.08	2.65	2.41	54.4	23.1	29.8	5.32	29	2.4	20.9
PF0866	391323	7665550	386	0.08	2.65	2.41	54.4	23.1	29.8	5.32	29	2.4	20.9
PF0873	391332	7665596	391	0.76	0.80	0.81	37.8	17.5	12.8	1.52	9.72	1.2	9.3
PF0883	391135	7665596	390	-0.01	0.00	0.03	63	28.7	11.9	0.22	1.57	3	4.2
PF0891	391287	7665734	392	-0.01	0.17	1.64	28.8	13.2	54.2	3.47	96.8	0.9	65
PF0892	391309	7665785	397	0.53	0.03	2.73	44.6	22.9	14	6.36	7.35	2.9	8.9
PF0893	391380	7665822	401	0.01	0.04	0.19	39.4	25.1	7.8	5.33	10.55	3.1	3.6
PF0894	391418	7665766	404	-0.01	0.00	0.05	29.8	27.2	9.6	3.55	0.83	2.7	5.5
PF0895	391430	7665747	404	-0.01	0.00	0.04	24.3	8.3	27.3	1.27	0.61	2.3	2
PF0898	391381	7666078	404	0.2	0.00	0.85	51.9	24.4	6.5	2.87	21.8	1.8	4.3
PF0901	391376	7666167	411	-0.01	0.00	0.11	58.5	27.6	5.8	4.21	1.02	2	3.6
PF0902	391389	7666163	408	-0.01	0.00	0.13	30.8	19.2	9	0.02	21.4	5.8	2.3
PF0917	391886	7665667	394	-0.01	0.00	0.02	30.8	20.3	3.6	0.36	3.2	0.3	3.1
PF0928	391336	7665580	386	-0.01	0.01	0.2	34.4	17	2.4	1.62	1.19	1.1	3
PF0929	391315	7665680	396	0.01	0.03	0.2	74.9	34.6	10.9	3.37	1.07	2.4	6.9
PF0933	391316	7665753	397	0.01	0.00	0.17	4.39	1.4	0.6	0.4	0.9	0.5	14.5
PF0936	391325	7665775	400	0.03	0.00	0.93	27.8	14.7	1.3	2.41	8.29	1.4	4.2
PF0939	391347	7665723	415	0.09	0.00	0.04	20.4	10.6	1.5	1.71	1.36	0.7	1.2
PF0941	391350	7665750	410	0.03	0.00	0.09	7.89	4.5	0.8	0.55	2.85	0.5	1.1
PF1282	391729	7666866	414	0.02	0.01	0.07	5.78	3.4	1.9	0.12	4.31	0.6	6.2
PF1284	391744	7666863	418	0.05	0.05	0.12	37.4	18.2	8.1	0.17	18	0.6	25.4
PF1285	391752	7666865	417	-0.01	0.04	0.11	18.7	9.8	3.2	0.04	7.78	0.5	12.4
PF1289	391847	7666809	406	-0.01	0.00	0.01	16.5	8.6	3.6	0.3	1.78	0.7	6.6
PF1292	391788	7666593	410	0.01	0.03	0.27	34.4	18.5	179.5	0.12	34.2	0.6	8.6
PF1293	391710	7666606	429	0.05	0.00	0.28	23.5	18.6	1	0.06	2.13	0.5	1.2
PF1295	391698	7666604	429	0.01	0.00	0.15	23.2	15.6	1.2	0.11	2.16	0.4	1
PF1296	391685	7666600	428	0.01	0.02	0.21	47	27.3	1.8	0.08	3.53	0.5	2.3
PF1297	391694	7666601	429	-0.01	0.05	0.16	30.6	16.1	22.1	0.17	10.15	0.8	10.9
PF1298	391597	7666232	403	0.53	0.01	0.16	17.6	9.6	4.6	0.28	2.21	0.6	4
PF1299	391594	7666744	401	2.25	11.95	0.66	43.1	22.3	281	0.11	34.3	4.2	7.3
PF1300	391675	7666712	414	0.01	0.01	0.13	9.53	4.6	1.8	0.34	2.95	0.4	2.2
PF1301	391694	7666709	419	0.01	0.02	0.15	15.1	7.1	1	0.14	1.72	0.5	0.9
PF1302	391744	7666711	422	0.04	0.06	0.11	21.5	16	2.9	0.07	3.92	0.7	3.6
PF0860	391718	7667188	409	-0.01	0.10	0.04	11.5	2.8	23.4	0.09	2.02	0.6	27.1
PF0861	391780	7667203	428	0.07	0.05	0.23	17.9	9.6	8.7	0.25	5.86	0.5	27.3
PF0862	391814	7667395	428	2.61	0.03	0.6	21.7	12.2	16.3	0.36	3.56	0.7	7.5
PF0863	391769	7667405	415	0.02	0.16	0.36	50.9	23.7	62.2	1.17	24.2	0.6	19.2
PF0940	391585	7665654	402	-0.01	0.01	0.09	60.6	34.6	28.4	0.04	11.55	1.9	3.1
PF1303	391576	7666622	411	0.02	0.02	0.03	16.8	8.5	59.5	0.08	10.5	-0.2	8.6
PF1304	391576	7666622	411	0.02	0.01	0.12	23.9	10.8	4.6	0.1	1.74	0.5	2.2
Note(1)All samples analysed forgold via fire assaywith AAS finish and a four acid digest followed bylow level ICP AES and MS analysis
Note(1)All locations captured in GDA94 Zone 54 Datum

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JORC Code, 2012 Edition

Table 1 report – Exploration Update – Dronfield drilling and Serendipity rock chip results

• This table is to accompany an exploration update documenting results from a three-hole drill program at Dronfield (EPM18084) and rock chip results from the Serendipity Prospect (EPM13870).

Section 1 Sampling Techniques and Data

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

Criteria	JORC Code explanation	Commentary	Commentary
Sampling	• Nature and quality of sampling (eg cut	DRILLING
techniques	channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or	•	Samples were selected using geological criteria (visual inspection) and portable XRF analysis.
	handheld XRF instruments, etc).	•	For HDD001 and HDD002, the
	These examples should not be taken		entire length of each hole was
	as limiting the broad meaning of		submitted for assay either as 1 or
	sampling.		2 metre intervals.
	• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.	•	For HDRC004, the entire length of the hole was sampled either as 1 or 4 metre intervals.
	• Aspects of the determination of	•	The interval length was based on
	mineralisation that are Material to the Public Report.		the copper response (via portable XRF) and the degree of alteration
	• In cases where ‘industry standard’		and mineralisation based on
	work has been done this would be		visual observation.
	relatively simple (eg ‘reverse
	circulation drilling was used to obtain 1
	m samples from which 3 kg was	ROCK CHIP SAMPLING
	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	•	Rock chip samples were grab samples. The sampling method is to take a 3-4kg sample perpendicular to the strike of the zone of interest.
	(eg submarine nodules) may warrant disclosure of detailed information.	•	All samples submitted for assay underwent a fine crush with 1kg
			riffled off forpulverisingto 75

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Criteria	JORC Code explanation	Commentary	Commentary
			micron. Drilling samples were
			submitted for 4 acid digest
			followed by fire assay for gold
			(50-gram charge) and ICP
			analysis for a range of elements
			including copper, silver, cobalt
			and molybdenum. The samples
			were also analysed for rare earth
			elements.
Drilling	• Drill type (eg core, reverse circulation,	DRILLING
techniques	open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg 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	• •	HDD001 and HDD002 – HQ3 (Approximately 61.1mm) and NQ2 (Approximately 47.6mm) HDRC004 (nominal 5.5” diameter holes).
	method, etc).
Drill	• Method of recording and assessing	•	Diamond core recoveries were
sample	core and chip sample recoveries and		typically in excess of 95% with minor
recovery	results assessed.		exceptions occurring at the top of each
	• Measures taken to maximise sample		hole.
	recovery and ensure representative nature of the samples. • Whether a relationship exists between sample recovery and grade and whether sample bias may have	•	Recovery of RC samples was visually estimated. Average recovery of the samples was estimated to be in the range of 80-90%.
	occurred due to preferential loss/gain	•	HDRC04 was drilled dry using a
	of fine/coarse material.		booster and auxiliary compressor.
			Care was taken to avoid sample
			contamination.
		•	No sample recovery bias was
			observed through mineralised zones.
Logging	• Whether core and chip samples have	DRILLING
	been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. • Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.	•	All drill core and chips were geologically logged in detail by Hammer Metals geologists recording lithology, alteration and mineralisation, weathering, colour, structure, and any other features of the sample to a level of detail to support appropriate studies.
	• The total length and percentage of the	•	Diamond core was photographed and
	relevant intersections logged.		stored appropriately.
		•	A representative sub-sample of RC
			chips was collected and stored in a
			chip tray. Chips trays were
			photographed.
		•	Holes were logged in full.

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Criteria	JORC Code explanation	Commentary	Commentary
Sub-	• If core, whether cut or sawn and	DRILLING
sampling techniques and sample preparation	whether quarter, half or all core taken. • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. • For all sample types, the nature,	•	For HDD001 and HDD002 samples consist of half sawn core. In the case of duplicates, the sample consisted of quarter core.
	quality and appropriateness of the	•	For HDRC004 samples consist of 1m
	sample preparation technique.		rotary splits. In the case of 4m
	• Quality control procedures adopted for		composites the samples were created
	all sub-sampling stages to maximise		by repeated riffle splitting of 1m
	representivity of samples.		samples to obtain an appropriate
	• Measures taken to ensure that the		sample weight for analysis.
	sampling is representative of the insitu material collected, including for instance results for field duplicate/second-half sampling. • Whether sample sizes are appropriate	•	Sample collection and size is considered appropriate to the target- style and laboratory analytical methods employed.
	to the grain size of the material being	•	Standard reference samples and
	sampled.		blanks were each inserted into the
			laboratory submissions at 25 sample
			intervals. ALS applied industry-
			standard QAQC procedures
			throughout the sample stream.
		•	The sample sizes submitted for
			analysis were appropriate for the style
			of mineralisation sought and methods
			employed.
		ROCK CHIP SAMPLING
		•	The rock chip sampling method and
			3-4kg sample weight is appropriate
			for the recon exploration level of work
			and the analytical methods employed.
Quality of	• The nature, quality and	DRILLING
assay data and laboratory tests	appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. • For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make	•	All drilling samples were analysed by ALS for a range of elements by ME- ICP61 or ME-MS62r after a 4-acid digest. Gold was analysed by Au- AA22. Chlorine and fluorine analyses were conducted on 20% of samples via ALS method ME-IC881.
	and model, reading times, calibrations	•	Cu values greater than 1% were re-
	factors applied and their derivation,		analysed by ME- OG62. Any other
	etc.		elements which exceeded their
	• Nature of quality control procedures		maximum analytical limits were re-
	adopted (eg standards, blanks,		analysed by the relevant over-grade
	duplicates, external laboratory checks)		methods tailored for the element.
	and whether acceptable levels of accuracy (ie lack of bias) and precision	•	Standard reference samples and blanks were inserted at 25 sample

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Criteria	JORC Code explanation	Commentary
	have been established.	intervals. ALS Laboratories also
		maintained a regime of check
		samples, duplicates, standard
		reference samples, blanks and
		calibration standards.
		ROCK CHIP SAMPLING
		•All rock chip analyses were analysed
		by ALS for a range of elements by ME-
		ICP61 or ME-MS62r after a 4-acid
		digest. Gold was analysed by Au-
		AA26.
		•Where the presence of graphite was
		suspected the sample was also
		analysed by ALS method C_IR18 for
		total graphitic carbon.
Verification	• The verification of significant	DRILLING AND ROCK CHIP SAMPLING
of sampling and	intersections by either independent or alternative company personnel. • The use of twinned holes.	•All results were checked by alternative company personnel.
assaying	• Documentation of primary data, data	•These holes have not been twinned.
	entry procedures, data verification, data storage (physical and electronic) protocols. • Discuss any adjustment to assay data.	•All field logging is done into laptops on site and later checked and entered into the company database.
		•Assay files are received electronically
		from the laboratory. Repeat results are
		kept independent and are not
		averaged. Below-detection limit (BDL)
		results are saved in the database as -
		BDL values. BDL results are converted
		to half the detection limit value on
		export from the database to enable
		any downstream compositing.
Location of	• Accuracy and quality of surveys used	DRILLING
data points	to locate drill holes (collar and down- hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. • Specification of the grid system used.	•Drill hole collars were measured using a hand-held GPS unit with an estimated positional accuracy of approximately 5 metres.
	• Quality and adequacy of topographic	•Datum used is UTM MGA 94 Zone 54.
	control.	•RL’s for the drill hole collars are initially
		captured by GPS and subsequently
		adjusted using local digital elevation
		models (created using the most
		accurate RL information available).
		•Hole positions will be re-surveyed with
		DGPS. At this time,higherquality

14

Criteria	JORC Code explanation	Commentary
		elevation data will be generated.
		ROCK CHIP SAMPLING
		•Datum used is UTM MGA 94 Zone 54
		captured via hand held GPS.
Data	• Data spacing for reporting of	DRILLING AND ROCK CHIP SAMPLING
spacing and distribution	Exploration Results. • Whether the data spacing and distribution is sufficient to establish the degree of geological and grade	•Drill density and rock chip sampling is testing specific targets and is not sufficient to establish grade continuity.
	continuity appropriate for the Mineral
	Resource and Ore Reserve estimation	DRILLING
	procedure(s) and classifications applied. • Whether sample compositing has been applied.	•In the situation where visual inspection and portable XRF suggested an interval was not mineralised then a 2m (in the case of HDD001 and HDD002)
		or 4m composite (in the case of
		HDRC004) was deemed appropriate.
Orientation	• Whether the orientation of sampling	DRILLING
of data in relation to geological structure	achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. • If the relationship between the drilling	•Drill holes are oriented as close to perpendicular as possible to the interpreted orientation of the geophysical targets.
	orientation and the orientation of key
	mineralised structures is considered to have introduced a sampling bias, this	ROCK CHIP SAMPLING
	should be assessed and reported if	•Rock chips samples are oriented
	material.	perpendicular to the strike of the target
		lithology.
Sample	• The measures taken to ensure sample	•Pre-numbered bags are used and
security	security.	transported by company personnel to
		the ALS Laboratory in Mount Isa. ALS
		transports samples to its laboratories
		in Townsville, Brisbane and in the case
		of drilling F and Cl assays Vancouver.
Audits or	• The results of any audits or reviews of	•No audits or reviews have been
reviews	sampling techniques and data.	undertaken.

15

Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	Commentary
Mineral	• Type, reference name/number,	DRILLING
tenement and land tenure status	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	•The Dronfield diamond drilling is located on EPM18084 which is 80% owned by Mt Dockerell Mining Pty Ltd and 20% by Kabiri Resources Pty Ltd.
	environmental settings.	•Mt Dockerell Mining Pty Ltd is a
	• The security of the tenure held at the	100% owned subsidiary of HMX.
	time of reporting along with any known impediments to obtaining a licence to operate in the area.	•EPM18084 is also subject to a joint Venture with the Newmont Australia Group.
		ROCK CHIP SAMPLING
		•Rock chips were taken on
		EPM13870, which is wholly owned by
		Mt Dockerell Mining Pty Ltd, a 100%
		owned subsidiary of HMX.
Exploration	• Acknowledgment and appraisal of	•Drill holes depicted in the Serendipity
done by other	exploration by other parties.	figure with a K prefix were drilled by
parties		Kings Minerals NL, the previous
		owner of EPM13870.
Geology	• Deposit type, geological setting and	DRILLING
	style of mineralisation.	•Drill targets are located within the
		Wimberu Granite – a Proterozoic
		intrusive complex which is part of the
		Williams Batholith in the eastern fold
		belt of the Mount Isa Inlier.
		•The mineralisation style discussed in
		this release is Iron-Oxide Copper
		Gold (IOCG). The closest example of
		this style is the Ernest Henry Deposit
		to the north of Cloncurry.
		ROCK CHIP SAMPLING
		•Rock chip samples were sourced
		from zones of altered Corella
		Formation in close proximity to the
		Pilgrim Fault Zone. The Corella
		Formation is a Proterozoic calc-
		silicate unit.
		•The style of target beingsought is

16

Criteria	JORC Code explanation	Commentary
		large tonnage Cu-Au-Mo-Re IOCG
		variant.
		•The closest example of this style of
		mineralisation is the Kalman Cu-Au-
		Mo-Re Deposit located less than
		20km to the north in the same
		geological setting. Variants of this
		deposit type are the Merlin and Mt
		Dore Deposits located near Selwyn in
		the Cloncurry region.
Drill hole	• A summary of all information material	•See the attached tables. The reader
Information	to the understanding of the	should note that the location data is
	exploration results including a	subject to change as a result of a
	tabulation of the following information	higher accuracy survey planned to be
	for all Material drill holes:	conducted prior to any resource
	o easting and northing of the drill	estimates being conducted.
	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,	DRILLING
aggregation methods	weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are	•Intervals quoted in this release are reported primarily on their copper grades.
	usually Material and should be	•Intercepts have been quoted based
	stated.	primarily on a 0.1% Cu cut-off.
	• 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.
	• The assumptions used for any
	reporting of metal equivalent values
	should be clearly stated.
Relationship	• These relationships are particularly	DRILLING
between mineralisation widths and	important in the reporting of Exploration Results. • If the geometry of the mineralisation	•In both plan and section drill-holes are oriented close to perpendicular to the interpretedposition of the

17

Criteria	JORC Code explanation	Commentary	Commentary
intercept	with respect to the drill hole angle is		modelled geophysical features.
lengths	known, its nature should be reported.	•	The drilling is not at a sufficient
	• If it is not known and only the down		density to enable any grade
	hole lengths are reported, there		continuity to be established. The true
	should be a clear statement to this		width of any quoted intercept is not
	effect (eg ‘down hole length, true		known with any certainty.
	width not known’).
Diagrams	• Appropriate maps and sections (with	•	See attached figures
	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.
Balanced	• Where comprehensive reporting of all	DRILLING
reporting	Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should	•	Intersections have been quoted at 0.1% Cu cut-off grades
	be practiced to avoid misleading
	reporting of Exploration Results.	ROCK CHIP SAMPLING
		•	Rock chip samples have been
			highlighted where the gold grade
			exceeds 0.2g/t. However, all rock
			chip samples have been shown on
			the relevant figure and the results of
			these samples have been tabulated.
Other	• Other exploration data, if meaningful	•	Refer to the release.
substantive	and material, should be reported
exploration	including (but not limited to):
data	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.
Further work	• The nature and scale of planned	•	At Serendipity, it is envisioned that
	further work (eg tests for lateral		the area will be subject to further
	extensions or depth extensions or		exploration drilling in 2017-2018.
	large-scale step-out drilling).
	• Diagrams clearly highlighting the	•	At Dronfield further investigation of
	areas of possible extensions,		the geophysical anomalies will be
	including the main geological		undertaken in 2017-2018.
	interpretations and future drilling
	areas, provided this information is not
	commercially sensitive.

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