HAWTHORN RESOURCES LIMITED — Capital/Financing Update 2017

Jun 19, 2017

ABN 44 009 157 439

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Company Announcement

20 June 2017

Level 2, 90 William St Melbourne Victoria 3000 Australia

Telephone: +61 3 9605 5950 Facsimile: +61 3 9605 5999 Email: info@hawthornresources.com

Maiden Ore Reserve for Anglo Saxon Gold Project

Hawthorn Resources Limited (ASX:HAW) is pleased to announce a maiden Ore Reserve for the Anglo Saxon Gold Project (“ASGP”) at the Trouser Legs JV ( HAW 70%, Gel Resources 30% ) of:

 Probable Ore Reserve:

o 730,000 t at 2.66 g/t Au - 62,000 Ounces of Gold

This initial Ore Reserve is derived from the significantly increased Indicated Resource base contained in the updated Mineral Resource of:

 Indicated & Inferred Resource:

o 4,132,000 t at 2.17 g/t Au - 288,500 Ounces of Gold

The announcement of this initial Ore Reserve highlights the robust economics and significant potential of the project.

Study highlights include:

 Low C1 Cash Cost of $1,010 per ounce

• Low capital expenditure requirement via Toll Treatment model

• 18 month initial mine-life

• Significant potential to increase Ore Reserves within the current resource base

• Significant potential to upgrade and increase the current Mineral Resource which is open at depth

Updated Mineral Resource

Hawthorn Resources, as manager of the Trouser Legs Joint Venture in the Eastern Goldfields of Western Australia, has finalised the technical and economic assessment of the ASGP, de-risking the project and allowing finalisation of the project budget and schedule.

A revised Resource Model has been constructed by independent consultant’s BM Geological Services that better reflects the proposed mining methods and fleet likely to be used when mining commences.

This Mineral Resource estimate supersedes the previous estimation “ Anglo Saxon Indicated Mineral Resource Upgrade” announced in October of 2013 and completed by AMC Consultants .

The results of the updated resource estimate are tabulated in Table 1.

Table 1. ASGP Mineral Resource Estimate – 20 June 2017

Classification	COG Au (g/t)	Tonnage (t)	Au (g/t)	Au (ounces)
Total Indicated Resource	0.5	2,107,000	2.15	145,600
Total Inferred Resource	0.5	2,025,000	2.27	147,800
Total Resources	0.5	4,132,000	2.21	293,400
Classification	COG Au (g/t)	Tonnage (t)	Au (g/t)	Au (ounces)
Total Indicated	1.0	1,443,000	2.79	129,600
Total Inferred	1.0	1,430,000	2.90	133,300
Total Resources	1.0	2,873,000	2.85	262,900
Classification	COG Au (g/t)	Tonnage (t)	Au (g/t)	Au (ounces)
Total Indicated	2.0	723,200	4.17	96,900
Total Inferred	2.0	736,000	4.26	100,800
Total Resources	2.0	1,459,000	4.21	197,700

Notes:

1 The Mineral Resource is reported in accordance with the 2012 Edition of the JORC Code

2 Contained metal is rounded to the nearest 100 oz

3 All resources have been rounded to the nearest 1,000 tonnes

4 COG is defined as cut-off grade

5 Top-cut of grade = 25g/t Au (oxide), 35g/t Au (transition) and 43 g/t Au (fresh)

6 The base of the Indicated Mineral Resource is 260m RL, approximately 125 m below surface

This new Mineral Resource estimate varies from the previous version in that:

• Indicated Resource increased by 128% - inclusion of suitable Fresh ore blocks to a 125 m vertical depth.

• Tonnage increased by 81% - internal dilution of ore blocks re-assessed to account for mining methodology proposed.

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Figure 1: Plan View ASGP Resource Drilling and Reserve pit design.

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Figure 2: Typical cross section of the ASGP resource, showing the Ore Reserve pit design.

Open Pit Ore Reserve

An Ore Reserve estimate for the ASGP was undertaken utilising the updated Resource Model. Mining study inputs were updated to a pre-feasibly level, with independent mining consultant’s BM Mining delivering the Ore Reserve outlined in Table 2 below:

Table 2. ASGP Ore Reserve – 20 June 2017

Classification	Tonnage (t)	Au (g/t)	Ounces
Proven Ore Reserve	0	0	0
Probable Ore Reserve	730,000	2.66	62,000
Total Ore Reserve	730,000	2.66	62,000

The associated cashflow model delivers robust returns and early cashflow from near surface ore following mine and haul road construction. Contracts for haul road construction are to be awarded in the upcoming quarter with mining contracts to follow.

An additional 23,000 ounces of Indicated Mineral Resource contained within the pit optimisation have been excluded from the initial Open Pit Ore Reserve as preliminary underground mining studies suggest that improved economics may be achieved by utilising underground mining methods.

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Pit Optimisation
Ore Reserve Pit Design
NORTH
Preliminary Stope Optimisation
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Figure 3: Southern extent of the ASGP pit design showing the $1,600 per ounce optimised shell and conceptual underground stope designs at a 5g/t cutoff. Resources at greater than 8g/t shown in magenta.

A preliminary stope optimisation utilising a conservative cutoff grade of 5g/t indicates that approximately 40,000 ounces of Indicated and Inferred Mineral Resource may be recoverable by a combination of long hole open stoping and overhand cut and fill mining. Work on a maiden Underground Ore Reserve will begin once open pit mining has commenced.

For further information please contact Mourice Garbutt Company Secretary 03 9605 5917 Ian Moody Exploration Manager 03 9605 5951

The information in this report that relates to Exploration Results is based on information compiled by Mr Ian Moody, who is a member of the Australasian Institute of Mining and Metallurgy and a full time consultant geologist with First Principle Mineral Exploration Company Pty Ltd. Mr Moody has sufficient experience as a geologist which is relevant to the style of mineralization and the 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 of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Moody consents to the inclusion in this report of the matters based on his information in the form and context in which it appears

The information in this report that relates to the Mineral Resource estimate is based on information compiled by Mr Andrew Bewsher, a Competent Person who is a Member of The Australasian Institute of Geoscientists. Mr Bewsher is employed by BM Geological Services. Mr Bewsher has been engaged as an external independent consultant by Hawthorn Resource Limited. Mr Bewsher has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Bewsher consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Ore Reserve estimate is based on information compiled by Mr William Lloyd, a Competent Person who is a Member of Australasian Institute of Mining and Metallurgy. Mr Lloyd is employed by BM Mining. Mr Lloyd has been engaged as an external independent consultant by Hawthorn Resource Limited. Mr Lloyd has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Lloyd consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Appendix 1 JORC Code, 2012 Edition – Anglo Saxon Resource Estimation Data

Section 1 Sampling Techniques and Data

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

Criteria	JORC Code explanation	Commentary	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or	•	There have been different generations of drilling by three different project
techniques	specific specialised industry standard measurement tools		managers. Drill methods for each generation include reverse circulation (RC),
	appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These		diamond core (DH), and percussion with 86% of the holes by length being RC.
	examples should not be taken as limiting the broad meaning of	•	Channel sampling has occurred on various benches of a small pit mined over the
	sampling.		top of the deposit during the 1980’s.
	• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement	•	All holes were sampled in 1m intervals.
	tools or systems used.	•	Sampling technique discussed over page in sub sampling technique section.
	• 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.
Drilling	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air	•	Diamond core drilling since 2011 uses triple tube and core is oriented for
techniques	blast, auger, Bangka, sonic, etc) and details (eg core diameter,		structural logging. Post 2011 RC is 5.5 inch hammer drilling and DH is HQ size in
	triple or standard tube, depth of diamond tails, face-sampling bit or		diameter.
	other type, whether core is oriented and if so, by what method, etc).
Drill sample	• Method of recording and assessing core and chip sample	•	For drilling from 2011 onwards assessment of RC recovery is by visual means
recovery	recoveries and results assessed.		and recorded.
	• Measures taken to maximise sample recovery and ensure representative nature of the samples.	•	DH drilling recovery is logged.
	• Whether a relationship exists between sample recovery andgrade	•	Recovery is in general good in both forms of drilling.

Criteria	JORC Code explanation	Commentary	Commentary
	and whether sample bias may have occurred due to preferential	•	There is no relationship between recovery and mineralisation grade in both RC
	loss/gain of fine/coarse material.		and DH.
		•	The grade distribution of the DH and the RC is the same for both drilling methods
			post 2011.
		•	For holes pre 2011 limited recovery data has been located.
Logging	• Whether core and chip samples have been geologically and	•	Chip samples have been geologically logged for all relevant geological and some
	geotechnically logged to a level of detail to support appropriate		structural data. Logging for this program has been digitally captured, and are
	Mineral Resource estimation, mining studies and metallurgical studies.		capable of being included in a Mineral Resource Estimation. Chips are retained in chip trays
	• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.	•	Every metre is individually logged
	• The total length and percentage of the relevant intersections	•	All DDH core is logged and photographed
	logged.
Sub-	• If core, whether cut or sawn and whether quarter, half or all core	•	Reverse circulation samples were split on site. Pre 2011 holes were split using a
sampling techniques and sample preparation	taken. • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.		riffle splitter, post 2011 holes were split using a rotary splitter. All samples are dry. Samples weigh approximately 25 kg and are split down to 3 kg and dispatched to the laboratory.
	• For all sample types, the nature, quality and appropriateness of the	•	Field duplicates from the rotary split have been submitted for holes post 2011,
	sample preparation technique.		correlation is reasonable for a field duplicate in a moderately nugget style of
	• Quality control procedures adopted for all sub-sampling stages to		deposit.
	maximise representivity of samples.	•	Half core was submitted for analysis for DH holes pre 2011.
	• Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.	•	DH holes post 2011 were assayed (half core) except for intervals selected for metallurgical test work where the entire core was submitted for testwork. The
	• Whether sample sizes are appropriate to the grain size of the		combined grade of these intervals has been recorded.
	material being sampled.	•	Most samples are dry (>97.9%). If Wet samples are sent through the rotary
			splitter the splitter is cleaned between wet sample metres
		•	Bulk Samples are collected in appropriate sized plastic bags
		•	Sample splits are collected in appropriately sized calico bags with drawstring ties

Criteria	JORC Code explanation	Commentary	Commentary
		•	CRM standards, blanks and duplicates submitted with assays
Quality of	• The nature, quality and appropriateness of the assaying and	•	Samples collected post 2011 are assayed by Fire Assay, 30 g charge at Bureau
assay data and	laboratory procedures used and whether the technique is considered partial or total.		Veritas, Kalgoorlie
laboratory tests	• For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors	•	A range of five different gold grade standards have been submitted. Some sample batches had individual standards in excess of 2 standard deviations but overall the performance of the standard assays was adequate.
	applied and their derivation, etc.	•	Extremely low grade standards < 0.1g/t gold did not perform well for both pre and
	• Nature of quality control procedures adopted (eg standards, blanks,		post 2011 drilling.
	duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been	•	All other standards perform reasonably.
	established.	•	Blanks have been submitted these have performed reasonably with results less
			than 0.01 g/t gold, approx. 4% of samples returning grades up to 0.1g/t gold.
			These blanks are not located immediately after high grade samples.
		•	Samples collected pre – 2011 were assayed at a variety of laboratories – original
			hardcopy Assay Notifications are in Hawthorn’s possession
Verification	• The verification of significant intersections by either independent or	•	No specific twinned holes have been drilled however four diamond holes have
of sampling and assaying	alternative company personnel. • The use of twinned holes. • Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.		been drilled within 3m of post 2011 reverse circulation holes. The diamond holes have exhibited gold visible under a hand lens in the expected locations such that it correlates with the grade in the reverse circulation holes. These DH were assayed with a good correlation to the RC results.
	• Discuss any adjustment to assay data.	•	Laboratory data was supplied electronically to site and to the company head office.
		•	Geological logging is entered by both technical and non-technical staff and
			reviewed by geologists for correctness.
		•	Project data was stored at the head office of the company and in onsite laptops,
			with a weekly offsite backup of all data.
		•	Samples for assay were collected from drillsites upon completion of drillholes and
			transported to a camp until a batch is despatched for assaybyHawthorn staff to

Criteria	JORC Code explanation	Commentary	Commentary
			the laboratory.
Location of	• Accuracy and quality of surveys used to locate drill holes (collar	•	The grid used is GDA 94 Zone 51.
data points	and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.	•	Post 2011 collars have been picked up by registered surveyors.
	• Specification of the grid system used.	•	Old holes were located in a mix of local grid and AMG.
	• Quality and adequacy of topographic control.	•	All old holes have been converted to GDA 94 Zone 51.
		•	A selection of old holes have been located on ground and have been picked up
			by registered surveyors during 2012 and 2013. The pickup supports the location
			of the transformed data, showing that the transformed holes are where they were
			expected to be within +/- 0.5 m.
		•	Due to the age of the data it is understood that some holes may not be in the
			location expected. New drilling, post 2011, has validated the geological
			interpretation and grade continuity.
		•	Surface land form is gently sloping and surveyed drillholes have been
			incorporated into the topographic surface.
		•	A surface survey was undertaken as was a laser survey of the interior of the
			existing open-cut pit
Data	• Data spacing for reporting of Exploration Results.	•	Data is sufficiently closely spaced to ensure geological and grade continuity. With
spacing and distribution	• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the		drilling spaced 15 m to 100 m along strike, 15 m to 50 m across strike and 1 m intervals sampled downhole.
	Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.	•	A significant portion of the Indicated Resource is in area where drilling is at < less 20 metres along strike
	• Whether sample compositing has been applied.	•	Samples were not composited for the purpose of assaying..
Orientation	• Whether the orientation of sampling achieves unbiased sampling of	•	The majority for drilling is at 60 to 70 degrees which is perpendicular to the
of data in	possible structures and the extent to which this is known,		dominant dipof thegeology. Potentiallysteeper structures have been intersected

Criteria	JORC Code explanation	Commentary	Commentary
relation to	considering the deposit type.		by these holes and by select vertical and sub-vertical drilling.
geological structure	• If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have	•	It is understood that there is no bias introduced by the drilling direction.
	introduced a sampling bias, this should be assessed and reported if
	material.
Sample	• The measures taken to ensure sample security.	•	All RC samples submitted to the laboratory are collected directly from the splitter
security			with the sample bag tied. During sample collection for all holes a staff member is
			always present. Samples are delivered to the laboratory by company staff.
		•	1M Sample bags are kept on drill site until initial assay and QAQC results are
			completed.
		•	Assay pulps are recovered from laboratory and stored in locked storage sheds
Audits or	• The results of any audits or reviews of sampling techniques and	•	To the competent person for the mineral resource estimations knowledge there
reviews	data.		have been no audits or reviews of sampling techniques and data.

Section 2 Reporting of Exploration Results

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

	Criteria	JORC Code explanation	Commentary	Commentary
	Mineral	• Type, reference name/number, location and ownership including	•	The mineral tenements M31/79 and M31/284 that host the Resource are under a
	tenement and	agreements or material issues with third parties such as joint		joint venture agreement with private company Gel Resources Ltd, with Hawthorn
	land tenure	ventures, partnerships, overriding royalties, native title interests,		Resource Limited having a 70% ownership. There are no known issues and the
	status	historical sites, wilderness or national park and environmental		tenements are in good standing.
		settings.	•	A Mining Proposal (Reg Id 55291) has been approved by the Western Australian
		• The security of the tenure held at the time of reporting along		Department of Mines and Petroleum
		with any known impediments to obtaining a licence to operate in the area.	•	A Project Management Plan for the Anglo Saxon Gold Deposit has been approved by the Western Australian Department of Mines and Petroleum
	Exploration	• Acknowledgment and appraisal of exploration by other parties.	•	Significant exploration has been undertaken by other parties. The data has been
	done by other			reviewed for both location and grade distribution. To date the post 2011 and the
	parties			pre 2011 data grade distribution is almost identical. A selection of pre 2011
				drillholes have been surveyed in the current coordinate system and are located

Criteria	JORC Code explanation	Commentary	Commentary
			correctly.
		•	Aurifex/Newmont/Amoco/Picon/Little River drilled 14,150 m RC, 438 m DD, 4,572
			m percussion and 398.3 m of channel samples pre-1999
		•	Gutnick Resources NL drilled 23,566 m RC and 912.7 m DD between 1999 and
			2008
Geology	• Deposit type, geological setting and style of mineralisation.	•	Mineralization occurs in a broad shear bound alteration zone within a felsic schist
			unit that dips west from 55 to 70 degrees and ranges from 20 to 100 m in width.
			The mineralization is interpreted to dip from 38 to 75 degrees and occurs in a
			number of fairly discrete packages, stacked above each other, broadly similar to a
			ladder vein system. Gold mineralization appears to be related to thin quartz veins
			which vary in thickness from 2 mm to 80 cm but occur in sub parallel groups. A
			small pit mined during the mid to late 1980’s provides good exposure for mapping
			mineralized veins. Many veins can be followed 30 to 50 m along strike with more
			prominent veins being followed for up to 80m.
Drill hole	• A summary of all information material to the understanding of	•	All post 2012 drillholes carried out by Hawthorn have previously been reported to
Information	the exploration results including a tabulation of the following		the ASX at the time of drilling.
	information for all Material drill holes:
	o easting and northing of the drill hole collar
	o elevation or RL (Reduced Level – elevation above sea level
	in metres) of the drill hole collar
	o dip and azimuth of the hole
	o down hole length and interception depth
	o hole length.
	• If the exclusion of this information is justified on the basis that
	the information is not Material and this exclusion does not
	detract from the understanding of the report, the Competent
	Person should clearly explain why this is the case.
Data	• In reporting Exploration Results, weighting averaging	•	Intervals reported duringthe exploration phase weregenerally greater than 2.00

Criteria	JORC Code explanation	Commentary	Commentary
aggregation	techniques, maximum and/or minimum grade truncations (eg		gram x metres – unless geologically significant
methods	cutting of high grades) and cut-off grades are usually Material and should be stated.	•	Exploration results were also reported with a maximum of 2.0 metres of <0.5 g/t
	• Where aggregate intercepts incorporate short lengths of high		Au waste per reported interval
	grade results and longer lengths of low grade results, the	•	No top cutting was undertaken
	procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.	•	Compositing and top cutting was carried out in the Mineral Resource Estimation (see Section 3 below)
	• The assumptions used for any reporting of metal equivalent
	values should be clearly stated.
Relationship	• These relationships are particularly important in the reporting of	•	The majority of holes were drilled perpendicular to dip, and are believed to be
between mineralisation	Exploration Results.		representative of the true thickness of mineralization
widths and	• If the geometry of the mineralisation with respect to the drill hole
intercept	angle is known, its nature should be reported.
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 known’).
Diagrams	• Appropriate maps and sections (with scales) and tabulations of	•	Refer to Figures 1 and 2 of the ASX Announcement“30/10/2013_AngloSaxon
	intercepts should be included for any significant discovery being		Mineral Resource Upgrade”
	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 Exploration Results is not	•	Not applicable
reporting	practicable, 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	•	A total of 237 bulk density samples where submitted for analysis from the 2013
substantive	reported including (but not limited to): geological observations;		DH drilling programme at Bureau Veritas Kalgoorlie. The samples were waxed
exploration	geophysical survey results; geochemical survey results; bulk		coated where required and the Archimedes method was used. The bulk density
data	samples – size and method of treatment; metallurgical test		calculation and results provided by the laboratory were reviewed.
	results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	•	Metallurgical testwork on drillcore (including BWi, Gravity and Cyanide Leach Recovery, Reagent consumption and optimal Grind Sizing at ALS Laboratories, Perth
		•	Hydrogeologyand hydrologystudies were carried out in the Resource area by

Criteria	JORC Code explanation	Commentary	Commentary
			Rockwater Pty Ltd, Perth
		•	Geotechnical studies of the Resource (drillcore and existing open cut) by AMC
			Limited and Green Geotechnical.
		•	Drill core was submitted to Western Australian School of Mines Geomechanics
			Laboratory for comprehensive Rock Properties Testwork
		•	Waste Rock Characterisation and ARD studies were carried out by Soilwater
			Group, Perth
Further work	• The nature and scale of planned further work (eg tests for lateral	•	Further exploration is proposed to test along strike and at depth in primary
	extensions or depth extensions or large-scale step-out drilling).		material.
	• Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.	•	This work will be carried out while grade control is undertaken in the upcoming mining phase to test the potential for known Inferred Resources at depth to be upgraded and either mined in a deeper open cut or via underground access.
		•	Results from this program will be announced when undertaken

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	Commentary	Commentary
Database	• Measures taken to ensure that data has not been corrupted by, for	•	All data is in	digital spreadsheets. Data used in the 2013 Resource estimation was
integrity	example, transcription or keying errors, between its initial		reviewed by	BM Geological Services in 2017 and imported into an Access
	collection and its use for Mineral Resource estimation purposes.		database and queries or corrupted data was amended or deleted as required.
	• Data validation procedures used.	_• _	The Datamine block models, wireframes, a converted Datamine composite string
			file, and the	2014 written report by AMC (“Anglo Saxon Block Model Estimation”)
			was supplied to BM Geological Services
		_• _	Data was validated and mapped before use in Surpac
			o	All collar co-ordinates were within the tenement area.
			o	Overlapping FROM and TO values in the geology, assay, density
				and geotechnical tables.
			o	Downhole survey dip and bearing angles appear reasonable.
			o	Duplicate records or duplicate drillholes.

Criteria	JORC Code explanation	Commentary	Commentary
			o If there were any anomalous assay values.
Site visits	• Comment on any site visits undertaken by the Competent Person	•	Mr Moody was on site during the data collection periods in 2012-2014 and in
	and the outcome of those visits.		2016 and directs work in his role as Exploration Manager.
	• If no site visits have been undertaken indicate why this is the	•	Mr William Lloyd, who carried out the accompanying Reserve calculation, and
	case.		two other geologists from BM Geological Services have also visited and carried
			out works on site
Geological	• Confidence in (or conversely, the uncertainty of) the geological	•	Gold mineralisation is predominantly confined to quartz and quartz-carbonate
interpretation	interpretation of the mineral deposit.		veins with the presence of saprolitic mineralization near the surface. The veins
	• Nature of the data used and of any assumptions made.		are variable in dip from 38 to 75 degrees. The average vein width is less than 1 m and down to 1 cm. The veins are stacked. Where veins are in close proximity the
	• The effect, if any, of alternative interpretations on Mineral Resource estimation.		geological interpretation includes intervening low grade / waste material. The variable dip may mean alternative interpretations are possible on a local scale
			and this partially contributes to the changes in the overall tonnage and grade of
	• The use of geology in guiding and controlling Mineral Resource		the deposit. The contained metal content of the deposit has not changed
	estimation.		significantly.
	• The factors affecting continuity both of grade and geology.	•	All available geological data including RD, DH, PC drilling, channel samples and
			existing pit mapping were used in the interpretation original 2013-14
			interpretation and block model constructed by AMC.
		•	This current 2017 Resource Estimation by BM Geological Services has used the
			same raw data as used by in the 2013-14 Resource Estimation.
Dimensions	• The extent and variability of the Mineral Resource expressed as	•	The zone of exploration and mineralization assessed in this 2017 Resource
	length (along strike or otherwise), plan width, and depth below		Estimation extends 1400 m in a N-S orientation, 560 m in an E-W orientation and
	surface to the upper and lower limits of the Mineral Resource.		275 m vertically below surface.
Estimation	• The nature and appropriateness of the estimation technique(s)	•	There are no by-products.
and modelling	applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum	•	There are no deleterious elements known.
techniques	distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer	•	There is no correlation between gold grades and any other element.
	software and parameters used.	•	There is no relationship between grade and structure, depth or lithological
	• The availability of check estimates, previous estimates and/or mineproduction records and whether the Mineral Resource		features. Higher grades do not appear to be preferential to the footwall or hangingwall of the veins.

Criteria	JORC Code explanation	Commentary	Commentary
	estimate takes appropriate account of such data.	•	Surpac software was used for the estimation.
	• The assumptions made regarding recovery of by-products.	•	Block model cell sizes of 5 mE x 20 mN x 2 mZ were used
	• Estimation of deleterious elements or other non-grade variables of	•	Gold top caps of 25 g/t for oxide, 35 g/t for transition and 43 g/t for fresh were
	economic significance (eg sulphur for acid mine drainage		used. These values were taken from the probability curve at the 95thpercentile.
	characterisation).	•	Due to the proposed open pit method of mining and the relatively flatly dipping
	• In the case of block model interpolation, the block size in relation		nature of lodes the current estimation (using inverse distance squared estimation
	to the average sample spacing and the search employed.		method “ID2”) utilized all composites flagged as ore inside ore lode wireframes.
	• Any assumptions behind modelling of selective mining units.	•	Model validation included visual validation against raw drillhole intersections and
	• Any assumptions about correlation between variables.		a statistical analysis between block grades and composite grade on a global and local scale.
	• Description of how the geological interpretation was used to control the resource estimates.	•	All lodes were successfully validated with blocks representing composite grades.
	• Discussion of basis for using or not using grade cutting or	•	Visual validation confirmed the estimation search parameters to be acceptable.
	capping.	•	The model was depleted for previous mining.
	• 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	•	Tonnage has been calculation on a dry bulk density. No allowance for moisture
	moisture, and the method of determination of the moisture		has been made.
	content.
Cut-off	• The basis of the adopted cut-off grade(s) or quality parameters	•	A geological cut-off of 0.5 g/t gold has been used as the mineralization is close to
parameters	applied.		surface and highly weathered to a depth of between 90 to 120m below surface
		•	A range of cut-off grade models have been produced – with 0.5, 1.0 & 1.5 g/t Au
			reported in this announcement.
Mining	• Assumptions made regarding possible mining methods, minimum	•	Small scale open pit mining is proposed. Mining is anticipated to be free dig in
factors or	mining dimensions and internal (or, if applicable, external) mining		both the oxide and transition zones without a requirement for blasting, hence
assumptions	dilution. It is always necessary as part of the process of		lower mining and treatment costs.
	determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters	•	Some blasting may be required in fresh rock zones although this is yet to be confirmed
	when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an	•	It is anticipated there will not be a requirement for major capital expenditure hence lower start-up costs.

Criteria	JORC Code explanation	Commentary	Commentary
	explanation of the basis of the mining assumptions made.
Metallurgical	• The basis for assumptions or predictions regarding metallurgical	•	Studies carried out in 2014 at ALS Perth have indicated that the gold
factors or	amenability. It is always necessary as part of the process of		mineralization can be recovered in a conventional CIP plant with recoveries in
assumptions	determining reasonable prospects for eventual economic		excess of 95% in oxide and transition material
	extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be	•	Limited testwork on high gold grade fresh rock samples has indicated that combined gravity circuit recovery followed by cyanide leaching can return gold recoveries > 98%
	reported with an explanation of the basis of the metallurgical	•	No deleterious properties have been reported from this testwork.
	assumptions made.
Environmen-	• Assumptions made regarding possible waste and process residue	•	Studies carried out in 2014 at Soilwater Perth indicated that material in a waste
tal factors or	disposal options. It is always necessary as part of the process of		rock dump was
assumptions	determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a		o Unlikely to generate acidic or metalliferous drainage. Majority of samples had a negative Net Acid Production Potential (i.e acid consuming)
	greenfields project, may not always be well advanced, the status		o Low salinity levels
	of early consideration of these potential environmental impacts should be reported. Where these aspects have not been		o Total Metal concentrations as expected on average
	considered this should be reported with an explanation of the		o Unlikely to inhibit plant growth post mining
	environmental assumptions made.	•	As no onsite processing is planned no tailings will be generated and store on-site.
Bulk density	• Whether assumed or determined. If assumed, the basis for the	•	A total of 237 bulk density samples were submitted for analysis. The samples
	assumptions. If determined, the method used, whether wet or dry,		were waxed where required and the Archimedes method was used. The bulk
	the frequency of the measurements, the nature, size and		density calculation provided by the laboratory was reviewed by the competent
	representativeness of the samples.		person for the exploration data.
	• The bulk density for bulk material must have been measured by	•	No vugs or voids – other than minor historic underground workings are known
	methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.	•	Bulk density measurements were flagged with oxidation state and then averaged within each oxidation zone.
	• Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.	•	This value was applied to both mineralization and waste, with there being no difference in bulk density identified between ore and waste.
		•

Criteria	JORC Code explanation	Commentary	Commentary
Classification	• The basis for the classification of the Mineral Resources into	•	This 2017 Resource Estimation was classified in line with JORC2012 guideline
	varying confidence categories.	•	An elevation boundary 125 m below surface (250 mRL) was used as a lower
	• Whether appropriate account has been taken of all relevant		vertical constraint for Indicated material, based upon pit optimisation studies that
	factors (ie relative confidence in tonnage/grade estimations,		imply that material at greater than 125 m was uneconomic to extract using open
	reliability of input data, confidence in continuity of geology and		cut methods.
	metal values, quality, quantity and distribution of the data).	•	This re-classification differs from the earlier 2013 Resource estimation in that
	• Whether the result appropriately reflects the Competent Person’s		Fresh rock lodes that meet criteria are also included.
	view of the deposit.	•	Classification (Indicated / Inferred) of individual lodes was carried out on the
			basis of
			o Sample density
			o Geological understanding
			o Grade continuity
			o Estimation pass
		•	All in-situ interpreted mineralisation was either classified as either Indicated or
			Inferred resources.
Audits or	• The results of any audits or reviews of Mineral Resource	•	The current 2017 Update of the Anglo Saxon Resource is an update and
reviews	estimates.		replaces the Resource estimation announced to the ASX
			“30/10/2013_AngloSaxon Mineral Resource Upgrade”
Discussion of	• Where appropriate a statement of the relative accuracy and	•	Following further technical evaluation, including updated geotechnical,
relative accuracy/ confidence	confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within		metallurgical, economic and mining method factors this updated Mineral Resource Estimation has formed the site specific resource basis behind the Reserve Calculation announced in this report
	stated confidence limits, or, if such an approach is not deemed
	appropriate, a qualitative discussion of the factors that could affect
	the relative accuracy and confidence of the estimate.
	• The statement should specify whether it relates to global or local
	estimates, and, if local, state the relevant tonnages, which should
	be relevant to technical and economic evaluation. Documentation

Criteria JORC Code explanation Commentary should include assumptions made and the procedures used. • These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

JORC TABLE 1

Section 4 Estimation and Reporting of Ore Reserves

(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)

Criteria	JORC Code explanation	Commentary	Commentary
Mineral	• Description of the Mineral Resource estimate used as a basis for the	•	The Mineral Resource described in this release was used for Ore Reserve
Resource	conversion to an Ore Reserve.		calculations.
estimate for	• Clear statement as to whether the Mineral Resources are reported	_• _	The ASGP Ore Reserve lies entirely within the announced Mineral Resource.
conversion to	additional to, or inclusive of, the Ore Reserves.	_• _	For consistency with the Mineral Resource, a deduction of 7,063 tonnes the
Ore Reserves			local resource grade was made to the Ore Reserve, reflecting historical
			underground depletion. This historical production may or may not lie within the
			detailed pit design_._
Site visits	• Comment on any site visits undertaken by the Competent Person and the	•	A site visit was undertaken by the competent person for the reserve
	outcome of those visits.		estimation.
	• If no site visits have been undertaken indicate why this is the case.
Study status	• The type and level of study undertaken to enable Mineral Resources to be	•	The estimation of JORC (2012) Ore Reserves was prepared to a Pre-
	converted to Ore Reserves.		Feasibility Study level.
	• The Code requires that a study to at least Pre-Feasibility Study level has
	been undertaken to convert Mineral Resources to Ore Reserves. Such
	studies will have been carried out and will have determined a mine plan
	that is technically achievable and economically viable, and that material
	Modifying Factors have been considered.
Cut-off	• The basis of the cut-off grade(s) or quality parameters applied.	•	A gold price of $1550 was used for cut off grade calculations.
parameters

Criteria	JORC Code explanation	Commentary	Commentary
Mining factors	• The method and assumptions used as reported in the Pre-Feasibility or	•	A detailed pit design was utilised in the Mining Study, optimised for a $1,300
or	Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e.		AUD gold price. A trade off study will be undertaken to determine if additional
assumptions	either by application of appropriate factors by optimisation or by		tonnes will be added to the open pit Reserve or a maiden underground
	preliminary or detailed design).		Reserve at current gold prices.
	• The choice, nature and appropriateness of the selected mining method(s)	•	The open pit mining method used to convert Mineral Resource to Reserve
	and other mining parameters including associated design issues such as		was a selective truck and excavator method suitable for narrow vein mining.
	pre-strip, access, etc.		Ore extends to surface however higher grades and tonnes are mined near
	• The assumptions made regarding geotechnical parameters (eg pit slopes,		the pit base. Access to the mine and processing facility is via a fully permitted
	stope sizes, etc), grade control and pre-production drilling.		and approved haul road that is yet to be constructed.
	• The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate). • The mining dilution factors used.	• •	Independent geotechnical consultants, Green Geotechnical, have produced a geotechnical assessment of the ASGP pit wall slopes to a feasibility level of confidence. The Mineral Resource described in this release was used as the basis for the
	• The mining recovery factors used.		Ore Reserve estimate.
	• Any minimum mining widths used.	•	Mining dilution of between 20% and 30% has been allowed for, supported by
	• The manner in which Inferred Mineral Resources are utilised in mining		a mine shape optimisation.
	studies and the sensitivity of the outcome to their inclusion.	•	A mining recovery of 95% was used, supported by a statistical analysis of the
	• The infrastructure requirements of the selected mining methods.		orebody geometry.
		•	No minimum mining width has been applied as part of the Ore Reserve
			estimation process.
		•	All Inferred Mineral Resource has been treated as waste.
		•	Site preparation, haul road and camp construction are required prior to the
			commencement of mining.
Metallurgical	• The metallurgical process proposed and the appropriateness of that	•	Processing via gravity concentration and conventional CIL at a third party mill
factors or	process to the style of mineralisation.		has been proposed.
assumptions	• Whether the metallurgical process is well-tested technology or novel in	_• _	Gravity concentration and carbon leaching are well proven and their
	nature.		application to the ASGP ore body is supported by the metallurgical test work
	• The nature, amount and representativeness of metallurgical test work		undertaken to date.
	undertaken, the nature of the metallurgical domaining applied and the	_• _	Lab scale test work modelling recoveries for oxide, transitional and primary
	corresponding metallurgical recovery factors applied.		material have been undertaken on composites considered reflective of the
	• Any assumptions or allowances made for deleterious elements.		orebody in its entirety.
	• The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a	_• _	No significant concentrations of deleterious elements have been identified in the metallurgical work undertaken to date.
	whole.
	• For minerals that are defined by a specification, has the ore reserve

Criteria	JORC Code explanation	Commentary	Commentary
	estimation been based on the appropriate mineralogy to meet the
	specifications?
Environmental	• The status of studies of potential environmental impacts of the mining and	•	The Mining Proposal was approved in 2016. Minor amendments may be
	processing operation. Details of waste rock characterisation and the		required as the project progresses. Waste rock characterisation has been
	consideration of potential sites, status of design options considered and,		performed and the proposed waste dump designs were incorporated into the
	where applicable, the status of approvals for process residue storage and		approved Mining Proposal. Tailings storage will be in an approved, third party
	waste dumps should be reported.		facility.
Infrastructure	• The existence of appropriate infrastructure: availability of land for plant	•	All associated mine infrastructure was approved in the 2016 Mining Proposal.
	development, power, water, transportation (particularly for bulk		Construction costs have been allowed for in the cost model.
	commodities), labour, accommodation; or the ease with which the	_• _	The open pit mine and offices are located on a Crown Common Reserve and
	infrastructure can be provided, or accessed.		are fully permitted and approved at a state level.
		_• _	The haul road is approved and crosses various Pastoral Leases.
			Determination of compensation by the Mining Warden may be required but
			should not materially affect the Ore Reserve.
Costs	• The derivation of, or assumptions made, regarding projected capital costs	•	Camp costs have been based on quotes from suitably qualified contractors.
	in the study.		Haul road construction costs have been estimated from construction costs of
	• The methodology used to estimate operating costs.		similar haul roads in the area. Further studies are required to increase
	• Allowances made for the content of deleterious elements.		confidence to a feasibility level.
	• The source of exchange rates used in the study. • Derivation of transportation charges.	• _• _	Operating costs have been derived from the detailed project budget with preliminary quotes for major goods and services. No allowance has been made for deleterious elements.
	• The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.	_• _	All costs have been modelled in AUD.
	• The allowances made for royalties payable, both Government and private.	_• _	Transport charges have been based on quotes from third party contractors.

Criteria	JORC Code explanation	Commentary	Commentary
		•	Ore treatment charges have been based on the terms of the draft agreement.
		_• _	All relevant royalty payments have been allowed for in the derivation of the
			reserve.
Revenue	• The derivation of, or assumptions made regarding revenue factors	•	Ore treatment charges have been based on the terms of the draft agreement.
factors	including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.	_• _	C1 Cash Costs are estimated at AUD$1,010 per ounce of gold metal. Cash cost are shown after a global deduction for historical underground production,
	• The derivation of assumptions made of metal or commodity price(s), for		which may or may not be located within the current pit design.
	the principal metals, minerals and co-products.
Market	• The demand, supply and stock situation for the particular commodity,	•	Market assessment has not been conducted as the gold metal will be sold on
assessment	consumption trends and factors likely to affect supply and demand into the		the open market.
	future.
	• A customer and competitor analysis along with the identification of likely
	market windows for the product.
	• Price and volume forecasts and the basis for these forecasts.
	• For industrial minerals the customer specification, testing and acceptance
	requirements prior to a supply contract.
Economic	• The inputs to the economic analysis to produce the net present value	•	A base case discount rate of 7% has been used.
	(NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.	_• _	A sensitivity analysis was completed on all inputs, prices and costs and indicates that the Ore Reserve is resilient to a +/-15% variation of all input
	• NPV ranges and sensitivity to variations in the significant assumptions and		parameters. Maximum sensitivity was found to be to gold price.
	inputs.

Criteria	JORC Code explanation	Commentary	Commentary
Social	• The status of agreements with key stakeholders and matters leading to	•	A Mining Proposal was approved by the Department of Mines and Petroleum
	social licence to operate.		in 2016.
		_• _	The ASGP area does not coincide with any registered Native Title application
			or determination under the Native Title Act 1993.
		_• _	Stakeholder compensation may require determination by the state Wardens
			Court.
Other	• To the extent relevant, the impact of the following on the project and/or on	•	Major processing, haul road and operational contracts require finalisation and
	the estimation and classification of the Ore Reserves:		commitment.
	• Any identified material naturally occurring risks.	_• _	All tenements required for the operation of the project are granted and in good
	• The status of material legal agreements and marketing arrangements.		standing.
	• The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government	_• _	The Mining Proposal was approved in 2016. Minor amendments may be required for operational reasons.
	and statutory approvals. There must be reasonable grounds to expect that	_• _	Haul road development agreements require finalisation. Determination of
	all necessary Government approvals will be received within the timeframes		compensation by the state Warden’s Court may be required but should not
	anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss		material impact project economics.
	the materiality of any unresolved matter that is dependent on a third party
	on which extraction of the reserve is contingent.
Classification	• The basis for the classification of the Ore Reserves into varying	•	Indicated Resources have been converted to Probable Ore Reserves with the
	confidence categories.		application of the selected mining dilution and recovery assumptions.
	• Whether the result appropriately reflects the Competent Person’s view of	_• _	The classification is consistent with the Competent Person’s view of the
	the deposit.		deposit.
	• The proportion of Probable Ore Reserves that have been derived from	_• _	No Measured Mineral Resource has been included in the Reserve.
	Measured Mineral Resources (if any).	_• _	Internal reviews were conducted on the application of the data provided into
			the optimisation and design process and the Ore Reserve was found to meet
			the requirements set by JORC 2012.
Audits or	• The results of any audits or reviews of Ore Reserve estimates.	•	Internal reviews were conducted on the application of the data provided into
reviews			the optimisation and design process and the Ore Reserve was found to meet
			therequirements set by JORC2012.

Criteria	JORC Code explanation	Commentary	Commentary
Discussion of	• Where appropriate a statement of the relative accuracy and confidence	•	Inputs within the stated confidence limits have been utilised and a sensitivity
relative	level in the Ore Reserve estimate using an approach or procedure		analysis to +/-15% conducted.
accuracy/ confidence	deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the	_• _	The location of historic underground production cannot be accurately determined. Although possibly depleted during historic open pit mining, 7,064t of ore has been deducted from the global reserve, in line with the Mineral Resource estimate.
	factors which could affect the relative accuracy and confidence of the
	estimate.
	• The statement should specify whether it relates to global or local
	estimates, and, if local, state the relevant tonnages, which should be
	relevant to technical and economic evaluation. Documentation should
	include assumptions made and the procedures used.
	• Accuracy and confidence discussions should extend to specific
	discussions of any applied Modifying Factors that may have a material
	impact on Ore Reserve viability, or for which there are remaining areas of
	uncertainty at the current study stage.
	• It is recognised that this may not be possible or appropriate in all
	circumstances. These statements of relative accuracy and confidence of
	the estimate should be compared with production data, where available.