MAGMATIC RESOURCES LIMITED - Capital/Financing Update 2017

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MAGMATIC RESOURCES LIMITED ACN 615 598 322

PROSPECTUS

For an offer of 20,000,000 Shares at an issue price of $0.20 per Share to raise $4,000,000, together with one (1) free attaching Loyalty Option for every two (2) Shares subscribed for and issued ( Offer ).

Lead Manager and Underwriter to the Offer: Patersons Securities Limited

IMPORTANT INFORMATION

This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay. The Securities offered by this Prospectus should be considered highly speculative.

CORPORATE DIRECTORY .............................................................................................................. 1	CORPORATE DIRECTORY .............................................................................................................. 1
IMPORTANT NOTICE ...................................................................................................................... 2
CHAIRMAN’S LETTER ...................................................................................................................... 6
KEY	OFFER INFORMATION ............................................................................................................ 7
1.	INVESTMENT OVERVIEW SECTION .................................................................................. 8
2.	DETAILS OF THE OFFER .................................................................................................. 20
3.	COMPANY AND PROJECTS OVERVIEW ....................................................................... 26
4.	RISK FACTORS ............................................................................................................... 45
5.	INDEPENDENT GEOLOGIST’S REPORT ........................................................................... 56
6.	INVESTIGATING ACCOUNTANT’S REPORT ON FINANCIAL INFORMATION ............. 117
7.	SOLICITOR’S REPORT ON TENEMENTS ........................................................................ 136
8.	BOARD, MANAGEMENT AND INTERESTS .................................................................... 145
9.	CORPORATE GOVERNANCE ...................................................................................... 149
10.	MATERIAL CONTRACTS ............................................................................................... 153
11.	ADDITIONAL INFORMATION ....................................................................................... 168
12.	DIRECTORS’ AUTHORISATION ..................................................................................... 186
13.	GLOSSARY ................................................................................................................... 187

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CORPORATE DIRECTORY

Directors

Registered and Business Office

David Berrie Non-Executive Chairman

Level 1, 11 Lucknow Place WEST PERTH WA 6005

David Richardson Managing Director

Malcolm Norris Non-Executive Director

Telephone: + 61 8 6102 2709

Email: [email protected] Website: www.magmaticresources.com

Company Secretary and Chief Financial Officer

Ian Hobson

Proposed ASX Code

Lead Manager and Underwriter

Patersons Securities Limited ABN 69 008 896 311 AFSL 239052 Level 23, Exchange Tower 2 The Esplanade PERTH WA 6000

MAG

Share Registry[1 ]

Investigating Accountant

Computershare Investor Services Pty Ltd Level 11 172 St Georges Terrace PERTH WA 6000

BDO Corporate Finance (WA) Pty Ltd 38 Station Street SUBACIO WA 6008

Independent Geologist

Telephone: 1300 850 505 Telephone: +61 3 9415 4000

Solicitors

Agricola Mining Consultants Pty Ltd PO Box 473 SOUTH PERTH WA 6951

Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000

Auditor

BDO Audit (WA) Pty Ltd 38 Station Street SUBACIO WA 6008

Resources Legal Pty Ltd 1A Rosemead Road HORNSBY NSW 2077

1 This entity has been included for information purposes only. It has not been involved in the preparation of this Prospectus.

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IMPORTANT NOTICE

This Prospectus is dated 24 March 2017 and was lodged with the ASIC on that date. The ASIC, ASX and their respective officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No Securities may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

It is important that you read this Prospectus in its entirety and seek professional advice where necessary. The Securities the subject of this Prospectus should be considered speculative.

Exposure Period

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. You should be aware that this examination may result in the identification of deficiencies in this Prospectus and, in those circumstances, any application that has been received may need to be dealt with in accordance with section 724 of the Corporations Act. Applications for Securities under this Prospectus will not be accepted or processed by the Company until after the expiry of the Exposure Period. No preference will be conferred on applications lodged prior to the expiry of the Exposure Period.

No offering where offering would be illegal

The distribution of this Prospectus in jurisdictions outside Australia, Hong Kong, Singapore, China and Japan may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate securities laws. Applicants who are resident in countries other than Australia, Hong Kong, Singapore, China and Japan should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer. It is important that investors read this Prospectus in its entirety and seek professional advice where necessary.

No action has been taken to register or qualify the Securities or the Offer, or to otherwise permit a public offering of the Securities in any jurisdiction outside Australia, Hong Kong, Singapore, China and Japan. This Prospectus has been prepared for publication in Australia, Hong Kong, Singapore, China and Japan and may not be released or distributed in the United States of America.

Hong Kong

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document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the Securities have not been and will not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO).

No advertisement, invitation or document relating to the Securities has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Securities that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as defined in the SFO and any rules made under that ordinance). No person allotted Securities may sell, or offer to sell, such securities in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such securities.

The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should obtain independent professional advice.

Singapore

This document and any other materials relating to the Securities have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of Securities, may not be issued, circulated or distributed, nor may the Securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA.

This document has been given to you on the basis that you are (i) an existing holder of the Company’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined in section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this document immediately. You may not forward or circulate this document to any other person in Singapore.

Any offer is not made to you with a view to the Securities being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire Securities. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly.

China

The information in this document does not constitute a public offer of the Securities, whether by way of sale or subscription, in the People's Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The Securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to "qualified domestic institutional investors".

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Japan

The Securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the "FIEL") pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the Securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires Securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of Securities is conditional upon the execution of an agreement to that effect.

Web Site – Electronic Prospectus

A copy of this Prospectus can be downloaded from the website of the Company at www.magmaticresources.com. If you are accessing the electronic version of this Prospectus for the purpose of making an investment in the Company, you must be a resident of Australia, Hong Kong, Singapore, China or Japan and must only access this Prospectus from within Australia, Hong Kong, Singapore, China or Japan.

The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. You may obtain a hard copy of this Prospectus free of charge by contacting the Company Secretary on +61 8 6102 2709 during office hours or by emailing the Company at [email protected].

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

Website

No document or information included on the Company website is incorporated by reference into this Prospectus.

Forward-looking statements

This Prospectus contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the Directors and management.

The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.

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The Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law.

These forward looking statements are subject to various risk factors that could cause the Company’s actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are set out in Section 4 of this Prospectus.

Photographs and Diagrams

Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person shown endorses the Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale.

Definitions

Terms used in this Prospectus are defined in the Glossary in Section 13.

Proximate statements

The Investment Overview in Section 1 and the Company and Projects Overview in Section 3 of this Prospectus contain references to JORC Mineral Resources derived by other parties either nearby or proximate to the Company’s Projects and includes references to topographical or geological similarities to that of the Company’s Projects. It is important to note that such discoveries or geological similarities do not in any way guarantee that the Company will have any success or similar successes in delineating a JORC compliant Mineral Resource on its Projects, if at all.

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CHAIRMAN’S LETTER

Dear Investor

On behalf of the Board of Directors, I am pleased to invite you to become a Shareholder of Magmatic Resources Limited ( Company or Magmatic ). Magmatic is an advanced Gold, Copper and Base Metals exploration company with four projects located in New South Wales ( Projects ).

The Company’s Projects are held by its wholly owned subsidiary, Modeling Resources Pty Ltd (ACN 169 211 876) ( Modeling ). Modeling acquired the Projects from Gold Fields Australasia Pty Ltd (ACN 087 624 600) ( Gold Fields ) together with an exploration office in the East Lachlan region of New South Wales. Importantly, Magmatic has engaged key technical personnel who possess an extensive understanding of the geology of the region.

The Company’s extensive 869km[2] + tenement holding in the historic East Lachlan Fold Belt contains over 40 prospective targets and a comprehensive geological database, enabling Magmatic to readily explore multiple existing open mineralised intersections.

Magmatic’s focus is on exploring its multiple Gold targets that are near surface/outcropping and have open pit potential, while advancing and developing its Copper/Gold porphyry projects with strategic joint venture partners, such as its Joint Venture Agreement with JOGMEC with respect to the Parkes Project ( Joint Venture Agreement ) (refer to Section 10.2). The Board believes this will lead to near-term exploration success, building shareholder value early in the history of the Company.

Magmatic’s Projects, being Myall, Parkes, Wellington North and Moorefield, consist of seven exploration licences (which cover approximately 869km[2] ) located in the East Lachlan Fold Belt. The Directors are confident that each of the Projects offer both early and mid-term opportunities for value creation through the systematic exploration of Gold, Copper-Gold and Base Metal prospects.

The Directors and management of Magmatic have considerable experience in mining and exploration, which together with proven technical, operational and financial skills mean the Company is well placed to advance each of its Projects. The Company’s management have been carefully selected for their experience, expertise and understanding of the Company’s Projects and, in particular for their understanding of the East Lachlan region and epithermal Gold and Copper-Gold porphyry exploration. In addition, management have developed a fast-tracked drilling and exploration program aimed to add immediate value for Shareholders.

Pursuant to this Prospectus, Magmatic invites applications for 20,000,000 Shares at an issue price of $0.20 per Share to raise $4,000,000, together with one (1) free attaching Loyalty Option for every two (2) Shares subscribed for and issued to allow (among other things) the Company to carry out its proposed exploration programs.

Before you make your investment decision, I urge you to please read this Prospectus in its entirety, and in particular, Section 4 of this Prospectus which identifies circumstances that the Board regards as major risks associated with an investment in the Company, and to seek professional advice if required.

I look forward to you joining us as a Shareholder and sharing in what the Directors expect to be exciting times ahead for the Company.

Yours faithfully

Mr David Berrie Non-Executive Chairman

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KEY OFFER INFORMATION

KEY DATES - Indicative timetable*

Lodgement of Prospectus with the ASIC	24 March 2017
Exposure Period ends	31 March 2017
Opening Date	3 April 2017
Closing Date	21 April 2017
Allotment of securities	26 April 2017
Despatch of holding statements	28 April 2017
Expected date for quotation on ASX	3 May 2017

* The above dates are indicative only and may change without notice. The Exposure Period may be extended by the ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act. The Company reserves the right to extend the Closing Date or close the Offer early without prior notice. The Company also reserves the right not to proceed with the Offer at any time before the issue of Securities to Applicants.

KEY OFFER DETAILS

Offer Price per Share	$0.20
Shares currently on issue	500
Options currently on issue	Nil
Performance Shares currently on issue	Nil
Shares to be issued under Offer	20,000,000
Options to be issued under the Offer	10,000,000
Total number of Shares on issue following the Share	80,000,000
Split and Offer
Total number of Options on issue following the Offer	27,000,000
Total number of Performance Share on issue following	16,000,000
the Offer
Gross proceeds of the Offer	$4,000,000

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1. INVESTMENT OVERVIEW SECTION

Item	Summary	Further Information
A. Company
Who is the issuer of the Prospectus?	Magmatic Resources Limited (ACN 615 598 322) (CompanyorMagmatic).	Section 3
Who is the Company?	Magmatic is a Copper and Gold exploration company, with interests in other Base Metals, with corporate offices in Perth and a fully operational exploration office in Orange, NSW. The Company was incorporated as an unlisted public company limited by shares on 28 October 2016. Since incorporation, the Company acquired 100% of the issued capital of Modeling Resources Pty Ltd (ACN 169 211 876) (ModelingorSubsidiary). In 2015 Modeling purchased 4 Copper/Gold porphyry, Gold, Base Metals projects (Myall, Moorefield, Wellington North and Parkes) covering 869 sq/km in East Lachlan, NSW, Australia from Gold Fields (a subsidiary of Gold Fields Limited, the world’s 7thlargest Gold producer). East Lachlan is Australia's 2ndlargest Gold endowed region and sole economic porphyry Copper/Gold region with a number of world class discoveries being made in the past 20 years, including Australia's largest Gold mine Cadia Valley (JORC Resource of 43Moz Gold and 8.4Mt Copper), Northparkes mine (JORC Resource of 2.86Moz Gold and 2.78Mt Copper) and Cowal mine (JORC Resource of 5.046Moz Gold). Gold Fields spent approximately $13.6m on exploration on the Projects, building knowledge of the area to understand the geology and potential, and define a portfolio of significant targets. Gold Fields Australia Pty Ltd (ACN 098 385 285) (Gold Fields Australia), a related body corporate of Gold Fields, currently owns 20% of Magmatic. Magmatic’s focus is on exploring its multiple Gold targets that are near surface/outcropping and have open pit potential, while advancing and developing its Copper/Gold porphyry projects with large strategic joint venture partners.	Sections 3.1 and 5

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Figure 1: Project Locations

Porphyry deposits provide over 60% of the world’s copper and include other important metals such as molybdenum, gold and silver. Porphyry copper deposits are known for their low grades and very high tonnage.

The Myall, Wellington North and Parkes projects offer multiple Copper Gold Porphyry targets and Magmatic have agreed to form a Joint Venture with Japan Oil Gas Metals National Corporation ( JOGMEC ) with respect to the Parkes Project, the Japanese government Agency in charge of global resource exploration (refer to Section 10.2 for details).

The Myall Moorefield, and Wellington North Projects (excluding the Combo tenement) have a Net Smelter Return ( NSR ) of 2.5% to Clancy Exploration Ltd and the Parkes Project has a NSR of 2% to Clancy Exploration Ltd.

Proximate Statements - Disclaimer

Please note, this section contains references to JORC Mineral Resources derived by other parties

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	either nearby or proximate to the Company’s Projects and includes references to topographical or geological similarities to that of the Company’s Projects.It is important to note that such discoveries or geological similarities do not in any way guarantee that the Company will have any success or similar successes in delineating a JORC compliant Mineral Resource on its Projects, if at all.
What is the Company’s interest in the Myall Project?	The Company’s Subsidiary has 100% ownership of the Myall Project. The Myall Project consists of one granted exploration licence being, EL6913 and covers 243.4 sq/km. The Myall project covers one of the largest volcano- intrusive complexes in the East Lachlan and has the same age and fundamental geological characteristics as Australia’s largest Gold mine, Cadia Valley and the Northparkes mine. Myall is prospective for porphyry Copper-Gold and elated epithermal deposits with 9 prospective targets, including: 1. The Kingswood target - Porphyry style Copper- Gold-Molybdenum & epithermal style Gold- Silver-Zinc. 2. The Barina target – doughnut magnetic anomaly with Zinc and epithermal Gold. 3. The Gemini target – quartz monzodiorite to quartz monzonite porphyries and Lake Cowal style epithermal Gold. Refer to the Independent Geologist’s Report at Section 5 for significant drill results relating to the Myall Project and Appendix 1 of the Independent Geologist’s Report for details of all drill results.	Sections 3.3 and 7
What is the Company’s interest in the Parkes Project?	The Company’s Subsidiary has 100% ownership of the Parkes Project. The Parkes Project consists of two granted exploration licences, being EL7424 and EL7676 and covers 159.4 sq/km. The Parkes Project is located within the Junee Narromine Volcanic Belt and part of the Northparkes cluster, which like the Cadia Valley deposits, is associated with a late Ordovician volcanic-intrusive centre, and porphyry Copper- Gold targets similar to Northparkes Copper-Gold mine. Epithermal and orogenic style Gold with a style similar to Alkanes’ historical Peak Hill epithermal Goldmine andTomingley JORCResource of0.8Moz	Section 3.4 and 7

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	Gold orogenic deposit have also been targeted. The Project’s 9 targets include: 1. The Buryan target - Copper/Gold porphyry and IS epithermal Gold-Lead-Zinc. 2. Glenroy target -HS epithermal Gold prospect has analogous alteration zone to nearby historical Peak Hill Gold mine, and has untested geophysical anomaly to the North. 3. The MacGregors target - orogenic Gold. 4. The Stockman’s target – porphyry. Refer to the Independent Geologist’s Report at Section 5 for significant drill results relating to the Parkes Project and Appendix 1 of the Independent Geologist’s Report for details of all drill results.
What is the Company’s interest in the Wellington North Project?	The Company’s Subsidiary has 100% ownership of the Wellington North Project. The Wellington North Project consists of three granted exploration licences, being EL6178, EL7440 and EL8357, covering 176.7 sq/km. The Wellington North project covers the northern extension of the Molong Rise which hosts the Cadia Valley porphyry Copper-Gold mine to the south. Several porphyry Copper-Gold targets have advanced through initial drilling by Gold Fields and have intersected mineralisation. The project also covers the historic Mitchell Creek and Dicks Reward Gold mines (Bodangora), historical production 230koz gold @ 26g/t. Magmatic is exploring the project for epithermal Gold, and Copper/Gold deposits similar to Cadia Valley. The Project’s 10 targets include: 1. The Bodangora target: mineralization may be present in areas under cover and identified by combining the structural framework with geological modelling and interpretation. 2. The Rose Lawn target:  C1 is an alkalic Copper/Gold porphyry target.  C2 is an alkalic Copper/Gold porphyry target.	Section 3.5 and 7

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	 C3 is an alkalic Copper/Gold porphyry target.  C4 is an orogenic Gold style quartz- sulphide vein target. 3. The Rose Hill target – Copper/Gold. Refer to the Independent Geologist’s Report at Section 5 for significant drill results relating to the Wellington North Project and Appendix 1 of the Independent Geologist’s Report for details of all drill results.
What is the Company’s interest in the Moorefield Project?	The Company’s Subsidiary has 100% ownership of the Moorefield Project. The Moorefield Project consists of one granted exploration licence, being EL7675, covering 289.7 sq/km. The Moorefield project covers both the Ordovician Girilambone Group and the volcanic units of the Silurian-Devonian Derriwong Group of rocks prospective for vein-hosted Gold and skarn-related and VHMS-hosted Base Metals (± Gold). It is host to at least 8 copper deposits, including the Tritton mine. Moorefield is prospective for intrusive related Gold (IRG), porphyry Copper/Gold, epithermal Gold and Gold-rich Cobar type deposits. The Moorefield Project includes outcropping Gold mineralisation confirmed in diamond drilling and has 12 targets including: 1. The Boxdale Gold/Copper target with shallow cover intercepts. 2. The Carlisle reefs Gold target with significant, un-drilled historical workings on high grade quartz veins. 3. The Ghost Hill skarn target – anomalous Lead, Zinc, Copper and Gold which been intersected in diamond drill holes, and the thickness of the skarn unit suggest proximity to an intrusive source and possible porphyry Copper/Gold mineralisation. The anomaly remains open to the North. Refer to the Independent Geologist’s Report at Section 5 for significant drill results relating to the Moorefield Project and Appendix 1 of the Independent Geologist’s Report for details of all drill results.	Section 3.6 and 7

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What is the Company’s business model	A detailed explanation of the Company’s business model is provided at Section 3.7.	Section 3.7.
B. Business Model
What are the key business objectives of the Company?	The Company’s main objectives on completion of the Offer is to: (a) undertake drilling programs which specifically target the near surface Gold opportunities initially focusing on close to surface/outcropping Gold targets that are both near toll treatment and have the potential to be open pit; (b) advance its 3 Copper-Gold porphyry projects, both through its own exploration and by seeking JV partners, such as its Joint Venture Agreement with JOGMEC on the Parkes project (refer to Section 10.2 for details); (c) progress to a JORC Resource on the Company’s Projects as quickly as practicable; and (d) implement a growth strategy to seek out further exploration, acquisition and joint venture opportunities in Australia. The Directors are satisfied that on completion of the Offer, the Company will have sufficient funds to carry out its stated objectives.	Section 3.7
C. Key Advantages and Key Risks
What are the key advantages of an investment in the Company?	The Directors are of the view that an investment in the Company provides numerous (non-exclusive) advantages, such as the following: (a) Magmatic’s Projects offer exposure to the East Lachlan province in New South Wales which has historically played host to major Copper-Gold mining operations, including Cadia Valley – Australia’s largest gold mine; (b) approximately $13.6m was historically spent on exploration on the Projects to date (2,000 holes and 160,000m drilling) by the Projects previous owner, Gold Fields, and its partners, with a number of Gold and polymetallic prospective targets identified; (c) with its focus on Gold, Gold Fields did not follow up on Copper and other base metal anomalies identified in their exploration. This presents as a significant opportunityfor	Section 3

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	Magmatic to pursue further targets; and (d) the Company has inherited an expansive geophysical and geological data set which will facilitate the ongoing exploration of the Projects and their targets.
What are the key risks of an investment in the Company?	A non-exhaustive list of the key risk factors affecting the Company are: (a) Proposed Solar Farm Projects at Parkes:Two recent government approved solar farm projects, including a grid connection and transport hub, are being proposed to be built on an area covering the Company’s Parkes tenement, EL 7676, with construction likely to go ahead this year (Proposed Solar Projects). The Company estimates that the Proposed Solar Projects would together occupy around 9% of this tenement. The Company has recently registered an objection with the Planning Department of New South Wales regarding these Proposed Solar Projects as it was never informed of the applications for the Proposed Solar Farms and is awaiting an outcome. Although there is a risk that the proposed development will proceed, the Company is not aware of any known mineral occurrences in the designated area for the Proposed Solar Projects, nor are any of the Company’s targets located in these areas. (b) Tenure:all of the tenements in which the Company has an interest (or tenements in which the Company may acquire an interest in the future), will be subject to applications for renewal or exemption from expenditure (as the case may be). If a tenement is not renewed or granted an exemption from expenditure, the Company may suffer damage through loss of opportunity to develop and discover minerals on that tenement. (c) Joint Venture Risk:The Company has a Joint Venture arrangement with JOGMEC to fund the exploration and future development of the Company’s Parkes Project. The Company is subject to the risk that changes in the status of the proposed Joint Venture (including changes caused by financial failure or default by JOGMEC) may adversely affect the operations and performance of the Company. Further, if JOGMEC defaults in the performance of its obligations, it may be necessary for the Company to approach a court to seek a legal remedy, which could be	Section 4

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	costly. (d) Limited exploration:early stage exploration has previously been conducted on the Company’s Projects, however, the Company has only recently commenced its own review and assessment of the exploration activities at the projects. No assurance can be given that the Company will achieve commercial viability through the successful exploration and/or mining of the Projects. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses. (e) Exploration success: there can be no assurance that exploration of the Company’s tenements or any tenements acquired in the future, will result in the discovery of Mineral Resources or an economic ore deposit. Even if Mineral Resources or an apparently viable deposit is identified, there is no guarantee that it can be economically exploited; (f) Funding: at the date of this Prospectus, the Company has no income producing assets and will generate losses for the foreseeable future. Until it is able to develop a project and generate appropriate cash flow, it is dependent upon being able to obtain future equity or debt funding to support long term exploration, after the expenditure of the net proceeds raised under the Offer. The Directors believe that the proceeds of the Offer should be adequate to fund the Company’s business activities and to continue as a going concern in the short term however changes to operational requirements may mean further funding is required by the Company. Additional Company specific risks as well as industry specific and general risks are disclosed at Section 4 of the Prospectus.
D. Directors and Key Management Personnel
Who are the Directors?	The current Board is not anticipated to change upon admission to the Official List and will be comprised of: (a) Mr. David Berrie - Non-Executive Chairman; (b) Mr. David Richardson - Managing Director; and (c) Mr. Malcolm Norris – Non-Executive Director.	Section 8.1

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Other Key Management Personnel?	The Company’s Chief Financial Officer and Company Secretary is Mr. Ian Hobson. The Company’s General Manager – Exploration, is Mr. Gordon Barnes.	Section 8.1
What are the Director’s interests in the Company?	Each Director’s interest in the Company is set out at Section 8.2.	Section 8.2
E. Financial Information
What is the Company’s financial performance?	The Company was incorporated on 28 October 2016 and has a limited financial history. As such, the historical information of Magmatic included in the Investigating Accountant’s Report in Section 6 is presented as a continuation of the pre-existing accounting values of Modeling, which was incorporated in April 2014. The Investigating Accountant’s Report in Section 6 sets out the audited statements of financial position, performance and cash flows of the Consolidated Group for the half year ended 31 December 2016. The information in respect of the historical performance of the Company should not be regarded as an indication of the future performance of the Company. Prospective investors should be aware that there is no certainty that the future performance of the Company will be similar to the historical performance of the Company.	Section 6
What is the financial outlook for the Company?	Given the current status of the Company’s Projects and the speculative nature of mineral exploration and development, the Directors do not consider it is appropriate to forecast future earnings. Any forecast or projection information could contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection on a reasonable basis.

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F. Offer
What is being offered?	The Offer is an offer of 20,000,000 Shares at an issue price of $0.20 per Share to raise $4,000,000 (before costs), together with one (1) free attaching Loyalty Option for every two (2) Shares subscribed for and issued. The Offer is conditionally underwritten by Patersons Securities Limited (refer to Section 10.11 for details). The purpose of the Offer is to facilitate an application by the Company for admission of the Company to the Official List and to position the Company to achieve the objectives stated at section B above. The Board believes that on completion of the Offer, the Company will have sufficient working capital to achieve its objectives.	Sections 2 and 10.11
What will the Company’s capital structure look like after the completion of the Offer?	The Company’s capital structure on a post-Offer basis is set out in Section 3.14.	Section 3.14
What are the terms of the Securities offered under the Offer?	A summary of the material rights and liabilities attaching to the Shares and free attaching Loyalty Options offered under the Offer is set out in Sections 11.2 and 11.3 respectively. Each free attaching Loyalty Option has an exercise price of $0.30 with a 36 month expiry period from the date of admission to the Official List of the ASX. The Loyalty Options will be issued for nil consideration. The Loyalty Options are subject to a vesting condition that the Loyalty Option holder holds Shares on the date that is 6 weeks following the commencement of trading of the Company’s Shares on the ASX (Vesting Date). Up to the Vesting Date, the Loyalty Options are non-transferable. The Company will seek to have the Loyalty Options quoted on the ASX from the Vesting Date, and they will thereafter be freely tradeable. The number of Loyalty Options to vest will be the lesser of: (a) the number of Loyalty Options held by the holder on the Vesting Date; and (b) the number of Shares held by the holder on the Vesting Date divided by 2.	Sections 11.2 and 11.3

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Will any of the Securities issued under the Offer be subject to escrow?	No, none of the Shares or Loyalty Options issued under the Offer will be subject to escrow.	Section 3.16
Will the Securities issued under the Offer be quoted?	The Company will make an application to the ASX for quotation of all Shares and Loyalty Options to be issued under the Offer.	Section 2.6
What are the key dates of the Offer?	The key dates of the Offer are set out in the Indicative timetable in the Key Offer Information Section.	Key Offer Information Section
What is the minimum investment size under the Offer?	Applications under the Offer must be for a minimum of $2,000 worth of Shares (10,000 Shares) and thereafter, in multiples of $500 worth of Shares (2,500 Shares).	Section 2.5
Are there any conditions to the Offer?	No, other than the Minimum Subscription, the Offer is unconditional.	Section 2.2
G. Use of proceeds
How will the proceeds of the Offer be used?	The Offer proceeds and the Company’s existing cash reserves will be used: (a) to systematically explore and develop the Company’s Projects; (b) to implement a growth strategy to seek out further exploration, acquisition and joint venture opportunities in Australia; (c) for administration and corporate costs; (d) to repay outstanding loans; (e) costs of the Offer; and (f) to provide working capital for the Company. Further details are set out in Section 2.3.	Section 2.3
H. Additional Information
Who are the Substantial Shareholders?	Those Shareholders holding more than 5% or more of the Shares on issue as at the date of this Prospectus and on completion of the Offer (assuming full subscription) are set out in Section 3.15.	Section 3.15

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Is there any brokerage commission or stamp duty payable by applicants?	No brokerage, commission or duty is payable by Applicants on the acquisition of Securities under the Offer. However, the Company will pay a selling/underwriting fee to Patersons Securities Limited of 6% (ex GST) of the gross amount raised under the Prospectus.	Sections 2.4 and 2.11
What are the tax implications of investing in Securities?	Securities may be subject to Australian tax on dividends and possibly capital gains tax on a future disposal of Securities issued under this Prospectus. The tax consequences of any investment in Securities will depend upon an investor’s particular circumstances. Applicants should obtain their own tax advice prior to deciding whether to subscribe for Securities offered under this Prospectus.	Section 2.4
What are the corporate governance principles and policies of the Company?	To the extent applicable, in recognition of the Company’s size and nature, the Company has adopted_The Corporate Governance Principles and_ Recommendations _(3rd Edition)_as published by ASX Corporate Governance Council (Recommendations). The Company’s main corporate governance policies and practices as at the date of the Prospectus are outlined in Section 9 of this Prospectus. In addition, the Company’s complete Corporate Governance Plan is available from the Company’s website at www.magmaticresources.com. Prior to admission to the Official List, the Company will announce its main corporate governance policies and practices and the Company’s compliance and departures from the Recommendations.	Section 9
Where can I find more information?	(a) By speaking to your sharebroker, solicitor, accountant or other independent professional advisor. (b) By contacting the Company Secretary on +61 8 6102 2709. (c) By contacting the Company’s share registry on 1300 850 505.

This Section is a summary only and not intended to provide full information for investors intending to apply for Securities offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety.

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2. DETAILS OF THE OFFER

2.1 The Offer

Pursuant to this Prospectus, the Company invites applications for 20,000,000 Shares at an issue price of $0.20 per Share to raise $4,000,000, together with one (1) free attaching Loyalty Option for every two (2) Shares subscribed for and issued.

The Shares offered under this Prospectus will rank equally with the existing Shares on issue. A summary of the material rights and liabilities attaching to the Shares offered under the Offer is set out in Section 11.2. The Loyalty Options offered under the Offer will be issued on the terms and conditions set out in Section 11.3.

Each free attaching Loyalty Option has an exercise price of $0.30 with a 36 month expiry period from the date of admission to the Official List of the ASX. The Loyalty Options will be issued for nil consideration.

The Loyalty Options are subject to a vesting condition that the Loyalty Option holder holds Shares on the date that is 6 weeks following the commencement of trading of the Company’s Shares on the ASX ( Vesting Date ). Up to the Vesting Date, the Loyalty Options are non-transferable. The Company will seek to have the Loyalty Options quoted on the ASX from the Vesting Date, and they will thereafter be freely tradeable.

The number of Loyalty Options to vest will be the lesser of:

(a) the number of Loyalty Options held by the holder on the Vesting Date; and
(b) the number of Shares held by the holder on the Vesting Date divided by 2.

All Shares issued on conversion of the Loyalty Options will rank equally with the Shares on issue at the date of this Prospectus.

2.2 Minimum subscription

The minimum amount which must be raised under this Prospectus is $4,000,000 ( Minimum Subscription ).

If the Minimum Subscription has not been raised within 4 months after the date of this Prospectus, the Company will not issue any Securities and will repay all application monies for the Securities within the time prescribed under the Corporations Act, without interest.

2.3 Use of Funds

The Company intends to apply funds raised from the Offer, together with existing cash reserves, over the first two years following admission of the Company to the official list of ASX as follows:

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Funds available	Minimum and full Subscription ($4,000,000)	Percentage of Funds (%)
Funds raised from the Offer	$4,000,000	100%
TOTAL	$4,000,000	100%
Allocation of funds
Projects1
Myall Project	$518,725	13.0%
Parkes Project5	$51,250	1.3%
Wellington North Project	$428,750	10.7%
Moorefield Project	$701,000	17.5%
Total - Exploration expenditure	$1,699,725	42.5%
Other
Administration costs2	$1,298,307	32.5%
Working capital	$116,368	2.9%
Loan repayment3	$400,000	10.0%
Costs of the Offer4	$485,600	12.1%
Total Costs - Other	$2,300,275	57.5%
TOTAL	$4,000,000	100.0%

Notes:

Refer to Section 3.8 and the Independent Geologist’s Report in Section 5 of this Prospectus for further information on the planned exploration activities and expenditure budget for each of the Company’s Projects.
This includes staff and executive salaries, occupancy costs and office overheads, ASX fees and other general administration costs.
Due to limited cash flow in the lead up to lodgement of this Prospectus, certain interim costs have been funded by additional loans to the Company by Directors. Refer to Sections 10.6 and 10.8 for details.
Refer to Section 11.11 of this Prospectus for further details.
Pursuant to the Joint Venture Agreement with JOGMEC, and subject to obtaining Foreign Investment Board Approval, the Company is anticipating the receipt of $300,000 in initial funding from JOGMEC towards its Parkes Project. Refer to Section 10.2 for further details. In the event approval is obtained and JOGMEC assumes this obligation, existing funds allocated to the Parkes Project will be re-distributed amongst the Company’s other projects.

Further details of the Company’s proposed exploration program and budgets are outlined in Section 3 of this Prospectus.

It should be noted that the Company’s budgets will be subject to modification on an ongoing basis depending on the results obtained from exploration and evaluation work carried out. This will involve an ongoing assessment of the Company’s mineral interests. The results obtained from exploration and evaluation programs may lead to increased or decreased levels of expenditure on certain Projects reflecting a change in emphasis.

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The above table is a statement of current intentions as of the date of this Prospectus. As with any budget, intervening events (including exploration success or failure) and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

The Directors consider that following completion of the Offer, the Company will have sufficient working capital to carry out its stated objectives. It should however be noted that an investment in the Company is speculative and investors are encouraged to read the risk factors outlined in Section 4.

2.4 Taxation

The acquisition and disposal of Securities will have tax consequences, which will differ depending on the individual financial affairs of each investor.

It is not possible to provide a comprehensive summary of the possible taxation positions of all potential applicants. As such, all potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Securities from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability and responsibility with respect to the taxation consequences of subscribing for Securities under this Prospectus.

No brokerage, commission or duty is payable by Applicants on the acquisition of Securities under the Offer.

2.5 Applications

Applications for Securities under the Offer must be made using the Application Form.

By completing an Application Form, each Applicant under the Offer will be taken to have declared that all details and statements made by you are complete and accurate and that you have personally received the Application Form together with a complete and unaltered copy of the Prospectus.

Applications for Shares must be for a minimum of 10,000 Shares and thereafter in multiples of 2,500 Shares and payment for the Shares must be made in full at the issue price of $0.20 per Share.

Completed Application Forms and accompanying cheques, made payable to “ Magmatic Resources Limited – Share Offer Account ” and crossed “ Not Negotiable ”, must be mailed or delivered to the address set out on the Application Form by no later than 5:00pm (WST) on the Closing Date.

The Company reserves the right to close the Offer early.

If you require assistance in completing an Application Form, please contact the Share Registry on 1300 850 505.

2.6 Defects in Applications

If an Application Form is not completed correctly or if the accompanying payment is the wrong amount, the Company may, in its discretion, still treat the Application Form to be valid. The Company’s decision to treat an Application as valid, or how to construe, amend or complete it, will be final.

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2.7 ASX listing

Application for Official Quotation by ASX of the Securities offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus.

If the Securities are not admitted to Official Quotation by ASX before the expiration of 3 months after the date of issue of this Prospectus, or such period as varied by the ASIC, the Company will not issue any Securities and will repay all application monies for the Securities within the time prescribed under the Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Securities is not to be taken in any way as an indication of the merits of the Company or the Securities now offered for subscription.

2.8 Issue

Subject to the Minimum Subscription to the Offer being reached and ASX granting conditional approval for the Company to be admitted to the Official List, the issue of Securities offered by this Prospectus will take place as soon as practicable after the Closing Date.

Pending the issue of the Securities or payment of refunds pursuant to this Prospectus, all application monies will be held by the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

The Directors will determine the recipients of the issued Securities in their sole discretion. The Directors reserve the right to reject any application or to allocate any applicant fewer Securities than the number applied for. Where the number of Securities issued is less than the number applied for, or where no issue is made, surplus application monies will be refunded without any interest to the Applicant as soon as practicable after the Closing Date.

2.9 Applicants outside Australia

This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia, Hong Kong, Singapore, China and Japan may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the Securities or otherwise permit a public offering of the Securities the subject of this Prospectus in any jurisdiction outside Australia, Hong Kong, Singapore, China and Japan. Applicants who are resident in countries other than Australia, Hong Kong, Singapore, China and Japan should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed.

If you are outside Australia, Hong Kong, Singapore, China or Japan it is your responsibility to obtain all necessary approvals for the issue of the Securities pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by you that all relevant approvals have been obtained.

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Hong Kong

This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the "SFO"). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the Securities have not been and will not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO).

Singapore

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China

Japan

2.10 Lead Manager and Underwriter

Patersons Securities Limited has been appointed as lead manager and underwriter to the Offer.

The Offer is conditionally underwritten by Patersons Securities Limited. Please refer to Section 10.10 for further details regarding the engagement of Patersons Securities Limited as lead manager and Section 10.11 for a summary of the Underwriting Agreement.

2.11 Commissions payable

The Company reserves the right to pay a commission of up to 5% (exclusive of goods and services tax) of amounts subscribed through any licensed securities dealers or Australian financial services licensee in respect of any valid applications lodged and accepted by the Company and bearing the stamp of the licensed securities dealer or Australian financial services licensee. Payments will be subject to the receipt of a proper tax invoice from the licensed securities dealer or Australian Financial Services licensee. Patersons Securities Limited will be responsible for paying all commissions that Patersons Securities Limited and the Company agree with any other licensed securities dealers or Australian financial services licensee out of the fees paid by the Company to Patersons Securities Limited under the Patersons Mandate.

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3. COMPANY AND PROJECTS OVERVIEW

3.1 Proximate statements

Please note, this section contains references to JORC Mineral Resources derived by other parties either nearby or proximate to the Company’s Projects and includes references to topographical or geological similarities to that of the Company’s Projects. It is important to note that such discoveries or geological similarities do not in any way guarantee that the Company will have any success or similar successes in delineating a JORC compliant Mineral Resource on its Projects, if at all.

3.2 Company Background

Magmatic Resources Ltd ( Magmatic ) was incorporated as an unlisted public company limited by shares on 28 October 2016. On this date, the Company was transferred 100% of the issued capital of Modeling Resources Pty Ltd (ACN 169 211 876) ( Modeling or Subsidiary ). Magmatic is a Gold and Copper exploration company with interests in other Base Metals.

Modeling was incorporated in April 2014 to acquire four mineral projects from Gold Fields, being the Myall Project, Parkes Project, Wellington North Project and the Moorefield Project ( Projects ) together with a fully operational exploration office in the East Lachlan region of New South Wales, Australia (NSW).

The Gold Fields Limited group is the world’s 7[th] largest Gold producer, and Gold Fields (a wholly owned subsidiary of Gold Fields Limited) owned and developed the Projects, spending approximately $13,600,000 on exploration. Gold Fields divested the Projects to Modeling following a change of strategy to divest certain green fields exploration projects and focus on production assets. The Gold Fields Limited group, through Gold Fields Australia, still maintains an interest in the projects via its 20% shareholding in Magmatic.

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Figure 2: Project Locations

The tenements that comprise the Projects are 100% owned by Modeling and cover a total area of approximately of 869km[2] in the highly prospective East Lachlan region of NSW are located in the Ordovician Macquarie Arc in the East Lachlan region.

The East Lachlan region is recognised as being the most prospective in Australia for large Copper-Gold porphyry deposits and is the second most endowed Gold province in Australia, including one of Australia’s largest Gold mines, Cadia Valley (JORC Resource of 43Moz Gold and 8.4Mt Copper) owned by Newcrest Mining Limited.

The region also hosts the Northparkes mine (JORC Resource of 2.78Mt Copper and 2.86Moz Gold) a joint venture between China Molybdenum, Sumitomo Metal Mining Oceania and Sumitomo Corporation, the Cowal mine (JORC Resource of 5.046Moz Gold) owned by Evolution Mining Ltd, as well as significant exploration and development projects including McPhillamys (JORC Resource of 2.21Moz Gold), Marsden (JORC Resource of 1.1Moz Gold and 0.67Mt Copper), Temora (JORC Resource of 2.065Moz Gold and 0.826Mt Copper), Copper Hill (JORC Resource of 0.48Moz Gold and 0.16Mt Copper) and Tomingley mine (JORC Resource of 0.579Moz Gold) owned by Alkane Resources Ltd.

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As set out in the Solicitor’s Report on Tenements (Section 7 of this Prospectus) and the Independent Geologist’s Report (Section 5 of this Prospectus), the Company’s Projects consist of the following tenements:

(a) Myall Project, EL6913
(b) Parkes Project, EL7424 and EL7676;
(c) Wellington North Project, EL6178, EL7440 and EL8375; and
(d) Moorefield Project, EL7675,

(together, the Tenements ).

Figure 3: Prospect Pipeline

Historical exploration has been directed towards the discovery of large, highgrade Gold-rich porphyry Copper systems, similar in style to the Cadia Valley and the Northparkes Gold-Copper porphyry.

Epithermal style mineralisation such as carbonate-base metal Gold deposits at Lake Cowal, high sulphidation epithermals at Gidginbung and Peak Hill, and orogenic Gold such as McPhillamy’s and Tomingley/Wyoming are other mineralisation styles of interest that occur in the region.

Magmatic considers the East Lachlan Fold Belt to be under explored, with a number of world-class discoveries being made in the past twenty years. Magmatic is committed to exploring the Projects systematically.

3.3 Myall Project

The Company’s Subsidiary has 100% ownership of the Myall Project. The Myall Project consists of one granted exploration licence being, EL6913 and covers 243.4 sq/km.

The Myall project covers one of the largest volcano-intrusive complexes in the East Lachlan and has the same age and fundamental geological characteristics as Australia’s largest Gold mine, Cadia Valley mine.

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Gold Fields spent approximately $7,300,000 on exploration on the Myall Project. This resulted in Magmatic inheriting an expansive geophysical and geological data set which will facilitate the ongoing exploration of the Myall Project and means that much of the work to identify targets has been completed.

Prospective for porphyry Copper-Gold and elated epithermal deposits, the project has 9 targets: Kingswood, Kingswood North, Barina, Gemini, Calais, SLR, FJ, Monaro and Torana:

The Kingswood target - Porphyry style Copper-Gold-Molybdenum & epithermal style Gold-Silver-Zinc with intercepts including:
107m @ 0.43% Copper & 0.11g/t Gold from 192m, Incl. 16m @ 0.32g/t Gold & 1.01% Copper.
70m @ 0.54% Copper & 0.15% Gold from 141m, Incl. 25m @ 0.82% Copper & 0.31 % Gold.
The Barina target - alkalic carbonate base metal epithermal Gold:
Doughnut magnetic anomaly with coincident Zinc and Gold anomaly (850m x 650m) analogous to Northparkes mine (14Mt Copper and 3Moz Gold).
0.5m @ 204g/t Gold from 221m.
The Gemini target – quartz monzodiorite to quartz monzonite porphyries:
Belong to a high potassium calc-alkaline to shoshonitic intrusive association equivalent to these at Cadia Valley and Northparkes.
A porphyry system has been identified which is open to the north and west and there is also the potential for Lake Cowl style epithermal Gold veins.

Refer to the Independent Geologist’s Report at Section 5 for significant drill results relating to the Myall Project and Appendix 1 of the Independent Geologist’s Report for details of all drill results.

In the past, Gold Fields explored for large Copper-Gold porphyry systems with a strong reliance on recognition of these systems through alteration logging, spectral analysis and diamond drilling. Exploration work will continue to focus on regolith interpretation and geochemical understanding of the area to build on the comprehensive work already completed. Regolith dispersion of ore-related elements beneath cover (40m to plus 150m) is difficult to interpret and further infill aircore drilling is required to better delineate diamond drilling targets.

Magmatic plans to continue the work previously conducted by Gold Fields, but also considers that there is scope for Lake Cowal style mineralisation. The proposed exploration program at the Myall Project includes:

(a) drilling for Gold/Copper at Barina and Copper-Gold porphyry deposits at Kingswood; and
(b) further work to gauge the potential for Lake Cowal Style Gold mineralisation of the Myall Project.

Refer to the Solicitor’s Report on Tenements at Section 7 for further information.

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Further details of the Company’s intended exploration program are contained in the Independent Geologist’s Report in Section 5.

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Figure 4: Myall Aeromagnetic Image

3.4 Parkes Project

The Company’s Subsidiary has 100% ownership of the Parkes Project. The Parkes Project consists of two granted exploration licences, being EL7424 and EL7676 and covers 159.4 sq/km. Gold Fields only spent $0.9m on exploring the project which remains largely underexplored.

The Parkes Project is located within the Junee Narromine Volcanic Belt and part of the Northparkes cluster, which like the Cadia Valley deposits, is associated with a late Ordovician volcanic-intrusive centre, and porphyry Copper-Gold targets similar to Northparkes Copper-Gold mine.

Epithermal and orogenic style Gold with a style similar to Alkanes’ historical Peak Hill epithermal Gold mine and Tomingley (JORC Resource of 0.8Moz Gold) orogenic deposit have also been targeted.

Prospective for orogenic Gold, Copper-Gold porphyry, HS epithermal Gold, the project has 9 targets: MacGregors, Brolgan, Buryan, Mertondale, Glenroy, Stockmans Reef, Sherlaw and Jones, Davey’s Diggings and Mt Morgan:

The Buryan target is a significant Copper/Gold porphyry target.

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Glenroy HS epithermal Au prospect has analogous alteration zone to nearby Peak Hill Gold mine, and has untested geophysical anomaly to the North.
The MacGregors orogenic Gold target with intercepts including:
- 16m @ 1.22g/t Gold from 13m.
- 18m @ 0.72g/t Gold from 33m.
- 22m @ 0.50g/t Gold from 94m, Incl. 4m @ 1.3g/t Gold and 4m @ 0.91g/t Gold.
The Stockman’s target with intercepts including:
- 22m @ 0.79g/t Gold from 45m Incl. 14m @ 1.1g/t Gold.
- 12m @ 1.42g/t Gold from 7m, Incl. 6m @ 2.44% Gold.

Refer to the Independent Geologist’s Report at Section 5 for significant drill results relating to the Parkes Project and Appendix 1 of the Independent Geologist’s Report for details of all drill results.

The proposed exploration program for the Parkes Project includes:

(a) drilling at the MacGregors prospect for Gold;
(b) complete target definition activity on the Mertondale and Buryan porphyry, and Glenroy high sulphidation targets; and
(c) various geochemical and geophysical work.

Further details of the Company’s intended exploration program are contained in the Independent Geologist’s Report in Section 5.

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Figure 5: Parkes Aeromagnetic Image

3.5 Wellington North Project

The Company’s Subsidiary has 100% ownership of the Wellington North Project. The Wellington North Project consists of three granted exploration licences, being EL6178, EL7440 and EL8357, covering 176.7 sq/km and the northern extension of the Molong Rise which hosts the Cadia Valley porphyry CopperGold mine to the south.

Gold Fields spent $3.7m exploring the project and several porphyry Copper-Gold targets were advanced through initial drilling and have intersected mineralisation.

The project also covers the historic Mitchell Creek and Dicks Reward Gold (Bodangora mine) mines.

Magmatic is exploring the project for potential epithermal Gold, and Copper/Gold deposits similar to Cadia Valley.

Prospective for epithermal Gold, orogenic Gold, and Copper Gold porphyries the project has 10 targets: Mitchells Creek Gold Mine, Dicks Reward Gold Mine, Bodangora, Rose Hill, Rose Lawn, Mayhurst, Knowles, Dunbell, Glenrowan and GEUR007:

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The Bodangora mine target: further mineralization may be present in areas under cover and identified by combining the structural framework with geological modelling and interpretation.
The Rose Lawn target:
- a. C1 is an alkalic Copper/Gold porphyry target.
- b. C2 is an alkalic Copper/Gold porphyry target.
- c. C3 is an alkalic Copper/Gold porphyry target.
- d. C4 is an orogenic Gold style quartz-sulphide vein target.
The Rose Hill target - with best intercepts including:
71m @ 0.30g/t Gold, 0.43% Copper and 57ppm Molybdenum from 0m, Incl. 6m @ 0.994g/t Gold, 1.47% Copper and 123ppm Molybdenum, 7m @ 0.77g/t Gold, 0.65% Copper, 2m @ 1.05g/t Gold and 0.96% Copper and 8m @ 0.52g/t Gold,1.341% Copper and 239.39ppm Molybdenum.
36m @ 0.11g/t Gold, 0.22% Copper and 353ppm Molybdenum from 103m Incl. 1m @0.6g/t Gold, 1.55% Copper and 872ppm Molybdenum, and 2m @ 0.64g/t Gold, 1.85% Copper and 1126ppm Molybdenum.

Refer to the Independent Geologist’s Report at Section 5 for significant drill results relating to the Wellington North Project and Appendix 1 of the Independent Geologist’s Report for details of all drill results.

The prospectivity of the Wellington North area for porphyry Copper-Gold style mineralisation is recognised by the presence of porphyry related alteration and mineralisation identified in both outcrop and drilling and the Kaiser alkalic Copper-Gold porphyry prospect adjacent to the property.

Exploration will be aimed towards the discovery of high-grade, Gold-rich porphyry Copper systems, such as those found in the Cadia Valley and North Parkes districts.

The exploration program at the Wellington North Project will include:

(a) drilling on for Gold/coper on the Combo tenement at the Lyndhurst prospect;
(b) drilling for Gold near Bodangora and the historical Dicks Reward and Mitchell Creek Gold mines; and
(c) various geochemical and geophysical surveys.

Further details of the Company’s intended exploration program are contained in the Independent Geologist’s Report in Section 5.

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Figure 6: Wellington North Aeromagnetic Image

3.6 Moorefield Project

The Company’s Subsidiary has 100% ownership of the Moorefield Project. The Moorefield Project consists of one granted exploration licence, being EL7675, covering 289.7 sq/km. Gold Fields only spent $700,000 on exploring the project, which remains largely underexplored.

The Moorefield project covers both the Ordovician Girilambone Group and the volcanic units of the Silurian-Devonian Derriwong Group of rocks is prospective for intrusive related Gold (IRG), porphyry Copper/Gold, epithermal Gold and

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Gold-rich Cobar type deposits. It is host to a number of copper deposits including the Tritton mine.

The project includes outcropping Gold mineralisation confirmed in diamond drilling. The Moorefield project has 12 targets: Boxdale, Carlisle Alluvials, Carlisle Reefs, The Dam, Elswick Road, Ghost Hill, Golden Gulch, L’Estrange Reef, Lima, Meloola, Moorefield and Pattons.

The Boxdale target has shallow cover and intercepts include:
19m @1.28% Gold from 114m Incl. 4m @4.4g/t Gold.
15m @ 1.0g/t Gold from 85m Incl. 6m @2.11g/t Gold.
The Carlisle reefs target has significant, un-drilled historical workings on high grade quartz veins.
The Ghost Hill skarn target – anomalous Lead, Zinc, Copper and Gold have been intersected in diamond drill holes, and the thickness of the skarn unit suggest proximity to an intrusive source and possible porphyry Copper/Gold mineralisation. The anomaly remains open to the North. Drilling by Shell at Ghost Hill intercepted:
6m @ 1.3 g/t Gold from 102m.
6.25m at 0.01g/t Gold, 1.08% Zinc from 161m. The anomaly remains open.

Refer to the Independent Geologist’s Report at Section 5 for significant drill results relating to the Moorefield Project and Appendix 1 of the Independent Geologist’s Report for details of all drill results.

Magmatic believes that EL 7675 is prospective for intrusive related Gold ( IRG ), porphyry Copper-Gold, epithermal Gold and Gold-rich Cobar type deposits. Magmatic intends to assess and test a number of these targets in its early exploration programs.

Many of the prospects within the Moorefield Project have yet to be fully tested with drilling or other exploration techniques. Magmatic has several near surface drill ready Gold targets and numerous other targets which can be ready for drilling with some further work.

The proposed exploration program at the Moorefield Project includes:

(a) drilling for Gold at Carlisle Reefs prospect, the Company notes that a drill program has been prepared;
(b) geological mapping and surface geochemistry at the Boxdale prospect;
(c) drilling for zinc, Copper-Gold and other Base Metals at the Ghost Hill skarn; and
(d) geophysics.

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Figure 7: Moorefield Project Geology Plan (EL7675)

Refer to the Independent Geologist’s Report at Section 5 for further information in respect of the Company’s Projects.

3.7 Business Model

The Company aims to continue the exploration of the Projects by pursuing the multiple near surface Gold opportunities located on the Tenements. In addition, it will continue to progress exploration on other Gold, Copper and base minerals prospects. The Company’s corporate objectives include to:

(a) undertake drilling programs which specifically target the near surface Gold opportunities initially focusing on close to surface/outcropping

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Gold targets that are both near toll treatment and have the potential to be open pit;

(b) advance its 3 Copper-Gold porphyry projects, both through its own exploration and by seeking JV partners, such as its Joint Venture Agreement with JOGMEC on the Parkes project.
(c) progress to a JORC Resource on the Company’s Projects as quickly as practicable; and
(d) implement a growth strategy to seek out further exploration, acquisition and joint venture opportunities in Australia.

The Board of Directors and management team of Magmatic have a proven track record in developing exploration assets and have demonstrated a determined, methodical and cost effective approach to exploration and fast tracking the completion of JORC Resources.

The Board of Directors believe that such a track record, combined with the historical work conducted by Gold Fields and the engagement of experienced personnel, places the Company in a good position to promote Shareholder value early in the history of the Company. Further, the accumulation of knowledge available to the Company in the form of data transferred during the acquisition of the Tenements from Gold Fields and the engagement of exploration personnel will enable an immediate commencement of work on the Projects.

Further details of the Company’s intended exploration program are contained in the Independent Geologist’s Report in Section 5.

3.8 Proposed Exploration Program Expenditure

The Company proposes to fund its exploration activities over the first two years, as outlined in the table below.

Planned Exploration Expenditure

	Total ($)	% of Exploration Expenditure	Year 1	Year 2
			($)	($)

Myall Project
Staff	129,993	25.06%	76,374	53,618
Vehicles	8,193	1.58%	5,029	3,164
Assays	69,864	13.47%	42,882	26,982
Drilling	282,775	54.51%	173,565	109,210
Geophysics	-	0%	-	-
Accommodation and meals	12,164	2.34%	7,466	4,698
Project administration	15,736	3.03%	9,659	6,077
Sub Total Myall Project	518,725	25.94%	314,975	203,750
Parkes Project
Staff	83,796	23.86%	63,848	19,948

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Vehicles	5,637	1.60%	4,002	1,635
Assays	48,067	13.68%	34,130	13,938
Drilling	194,554	55.39%	138,140	56,413
Geophysics	-	0.00%	-	-
Accommodation and meals	8,369	2.38%	5,942	2,427
Project administration	10,827	3.08%	7,687	3,139
Sub Total Parkes Project	351,2501	17.56%	253,7501	97,5001
Wellington North Project
Staff	95,676	22.32%	38,720	56,955
Vehicles	7,020	1.64%	3,173	3,847
Assays	59,861	13.96%	27,054	32,807
Drilling	242,288	56.51%	109,500	132,788
Geophysics	-	0.00%	-	-
Accommodation and meals	10,422	2.43%	4,710	5,712
Project administration	13,483	3.14%	6,094	7,390
Sub Total Wellington North Project	428,750	21.44%	189,250	239,500
Moorefield Project
Staff	166,826	23.80%	83,924	82,901
Vehicles	9,572	1.37%	4,828	4,744
Assays	96,625	13.78%	56,170	40,455
Drilling	330,379	47.13%	166,636	163,743
Geophysics	65,000	9.27%	65,000	-
Accommodation and meals	14,212	2.03%	7,168	7,044
Project administration	18,385	2.62%	9,273	9,112
Sub Total Moorefield Project	701,000	35.05%	393,000	308,000
Total	1,999,7251	100%	1,150,9751	848,7501

Notes

Figure includes $300,000 of funding towards to the Parkes Project expected to be contributed by JOGMEC pursuant to the Joint Venture Agreement (refer to section 10.2 for details).

The exploration programs and budgeted expenditure outlined above are subject to modification on an ongoing basis and are contingent on circumstances, results and other opportunities. Expenditure may be reallocated as a consequence of such changes or new opportunities arising and will always be prioritised in accordance with regard to geological merit and other business decisions related to the Company’s activities. Ongoing assessment of the

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Company’s Projects may lead to increased or decreased levels of expenditure reflecting a change of emphasis.

3.9 Competent Person’s Statement

The information in this Prospectus that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Malcolm Castle (BSc (Hons), GCertAppFin (Sec Inst), MAusIM)) a competent person who is a member of the Australasian Institute of Mining and Metallurgy and is bound by and follows the Institute’s codes and recommended practices. Mr Castle is an employee of Agricola Mining Consultants Pty Ltd who is engaged as the independent geologist by the Company. Mr Castle has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity to which he is undertaking to qualify as an expert and competent person as defined in the VALMIN Code and JORC Code (2012 Edition). Mr Castle consents to the inclusion in this Prospectus of the matters based on his information in the form and context in which it appears.

3.10 Strategy Post Listing

The primary objective of the Company has been to focus on mineral exploration of resource opportunities that have the potential to deliver Company growth for the benefit of Shareholders. In order to achieve this objective following admission to the Official List, the Company proposes to undertake the exploration programs highlighted above and further explained in the Independent Geologist’s Report in Section 5 of this Prospectus. The results of the exploration programs will determine the economic viability and possible timing for the commencement of further testing including pre-feasibility studies and commencement of other mining operations on the Projects.

In addition to its existing exploration activities, the Company may pursue other acquisitions that have a strategic fit for the Company.

Further information regarding the Company’s planned activities is set out in Independent Geologist’s Report in Section 5 of this Prospectus.

3.11 Directors and key personnel

Directors

The Board of the Company consists of the following:

David Berrie

Non-Executive Chairman (appointed 28 October 2016)

Mr. David Berrie has over 30 years’ experience in the mining industry. Mr Berrie worked as a solicitor in the mining team at Clayton Utz before joining the international mining house Western Mining Corporation in 1987 with much of that time spent in the exploration division before transitioning over to BHP Billiton. Mr Berrie has extensive public company experience and continues to be a director of Summit Resources Ltd, which is listed on the ASX (ASX: SMM). Mr Berrie has a Bachelor of Laws and a Bachelor of Juris prudence from the University of Western Australia.

Mr Berrie is not considered to be independent due to his interest in the securities of the Company.

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David Richardson

Managing Director (appointed 28 October 2016)

Mr. David Richardson is an experienced international Executive and has worked in strategic partnerships, international business development and fund-raising in the Asia-Pacific region for over 25 years. He has lived and worked in Asia extensively, speaks fluent Japanese and is a founding board member of the Telethon Adventurers charity for childhood cancer research. David holds a Masters of Business Administration from the University of Southern California in Los Angeles and undertook post graduate Japanese studies at Keio University in Tokyo.

Mr Richardson is not considered to be independent due to his executive role as Managing Director of the Company and interest in the securities of the Company.

Malcolm Norris

Non-Executive Director (appointed 20 December 2016)

Mr. Malcolm Norris is a geologist with extensive experience in business management, asset transactions and exploration with a focus on porphyry discovery. He is currently the managing director of Avalon Minerals Limited (ASX:AVI) and is a director of Afranex Gold Limited. Previously chief executive officer and managing director of SolGold Plc, Mr Norris holds a Bachelor of Science (Geology, Hons 1) from the University of Queensland, a Master of Science from the University of Western Ontario and a Master of Applied Finance (Kaplan).

The Board considers Mr. Norris to be an independent Director as he is not a member of management and is free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his capacity to bring an independent judgement to bear on issues before the Board.

Other Management

Ian Hobson

Chief Financial Officer and Company Secretary (appointed 20 January 2017)

Ian Hobson is a chartered accountant and company secretary with over 30 years’ experience working in Australia, London and Toronto. Ian worked in corporate finance and restructuring for international chartered accounting firms for 20 years before commencing his own practice. For the past 10 years, Ian has specialised in providing company secretarial, financial control and nonexecutive director roles for ASX listed companies. He is currently company secretary for a number of small ASX listed companies as well as non-executive director of Castle Minerals Ltd.

Gordon Barnes

Exploration Manager (appointed 10 October 2016)

Mr. Gordon Barnes was previously managing director and exploration manager for Clancy Exploration Ltd ( Clancy ). Mr Barnes lead the sale of the Company’s Projects from Clancy to Gold Fields and as such has a deep understanding of the Company’s East Lachlan Projects. He has previously held senior geologist positions with Normandy Exploration Limited and Freeport-McMoran. He holds a Master of Science (Geology) from the University of Western Australia and a Bachelor of Science (Applied Science) from RMIT.

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The Company is aware of the need to have sufficient management to properly supervise the exploration and (if successful) for the development of the projects in which the Company has, or will in the future have, an interest and the Board will continually monitor the management roles in the Company. As the Company’s Projects require an increased level of involvement the Board will look to appoint additional management and/or consultants when and where appropriate to ensure proper management.

3.12 Additional Information

Prospective investors are referred to and encouraged to read in its entirety both:

(a) the Independent Geologist’s Report in Section 5 for further details about the geology, location and mineral potential of the Company’s Projects; and
(b) the Solicitor’s Report on Tenements in Section 7 for further details in respect to the Company’s interests in the Tenements.

3.13 Dividend Policy

The Board anticipates that significant expenditure will be incurred in the exploration and evaluation of the Company’s Projects. These activities, together with the possible acquisition of interests in other projects, are expected to dominate at least, the two year period following the date of this Prospectus. Accordingly, the Company does not expect to declare any dividends during that period.

Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend on the availability of distributable earnings and operating results and financial condition of the Company, future capital requirements and general business and other factors considered relevant by the Directors. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.

3.14 Capital Structure

The capital structure of the Company following completion of the Offer is summarised below:

Shares[1]

	Number
Shares currently on issue	500
Shares on issue after proposed 1:107,765 Share Split2	53,882,353
Shares to be issued on conversion of Director Loans3	3,176,471
Shares to be issued on conversion of Convertible Notes4	2,941,176
Shares to be issued pursuant to the Offer	20,000,000
Total Shares on completion of the Offer	80,000,000

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Options

	Number
Options currently on issue	Nil
Options to be issued to the Lead Manager and Underwriter5	8,000,000
Options to be issued to Gold Fields Australia6	7,500,000
Options to be issued to Directors and management of the Company7	1,500,000
Loyalty Options to be issued pursuant to the Offer8	10,000,000
Total Options on completion of the Offer	27,000,000

Performance Shares

	Number
Performance Shares currently on issue	Nil
Performance Shares to be issued to the Vendors9	16,000,000
Performance Shares to be issued pursuant to the Offer	Nil
Total Performance Shares on completion of the Offer	16,000,000

Notes:

The rights attaching to the Shares are summarised in Section 11.2 of this Prospectus.
The Share-Split will occur upon receipt of a draft decision from ASX to admit the Company to the Official List of ASX. Refer to Section 10.1 for details.
Refer to Sections 10.5 and 10.7 for details.
Refer to Section 10.8 for details.
Quoted and exercisable at $0.30 each on or before the date which is 36 months from the date the Company is admitted to the Official List of ASX. Refer to Sections 10.10, 10.11 and 11.4 for further information and full terms and conditions of these Options.
Comprising 2,500,000 unquoted Options exercisable at a price that is the greater of $0.20 or a 5% discount to the 20 day VWAP with a 12 month expiry period from the date of issue, 2,500,000 unquoted Options exercisable at a price that is the greater of $0.20 or a 5% discount to the 20 day VWAP with a 24 month expiry period from the date of issue, 2,500,000 unquoted Options exercisable at a price that’s the greater of $0.20 or a 5% discount to the 20 day VWAP with a 36 month expiry period from the date of issue. Refer to Sections 10.1 and 11.5 for further information and full terms and conditions of the Options.
Comprising 750,000 Options to be issued to Malcom Norris (refer to Section 10.15 for details) and 750,000 Options to be issued to certain management personnel of the Company. Each Option will be quoted and exercisable at $0.30 on or before the date which is 36 months from the date the Company is admitted to the Official List of ASX. Refer to Section 11.4 for full terms and conditions of these Options.
Quoted and exercisable at $0.30 each on or before the date which is 36 months from the date the Company is admitted to the Official List of ASX and subject to certain vesting conditions. Refer to Section 11.3 for full terms and conditions of the Loyalty Options.
Consisting of 8,000,000 Class A Performance Shares and 8,000,000 Class B Performance Shares. The Performance Shares are being issued to the Vendors as deferred consideration as part of the Company’s acquisition of 100% of the issued share capital of Modeling. The Performance Shares will be issued as follows:

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Vendor	Class A		Class B	Class B
	Number	%	Number	%
Gold Fields Australia	1,600,000	20	1,600,000	20
Bilingual Software Pty Ltd ATF Let’ Go Investment Trust1	4,480,000	56	4,480,000	56
Davthea Pty Ltd ATF the David Berrie Superannuation Fund2	1,360,000	17	1,360,000	17
Alan John Tate	400,000	5	400,000	5
Thomas Asset Discovery Limited	160,000	2	160,000	2
TOTAL	8,000,000	100	8,000,000	100

Notes:

Mr Richardson is a director and sole shareholder of Bilingual Software Pty Ltd and beneficiary under the Let’s Go Investment Trust.
Mr Berrie is a director and sole shareholder of Davthea Pty Ltd and beneficiary under the David Berrie Superannuation Fund.

The terms, conditions and milestones of the Class A Performance Shares and Class B Performance Shares are set out in Section 11.6.

3.15 Substantial Shareholders

Those Shareholders holding 5% or more of the Shares on issue both as at the date of this Prospectus and on completion of the Offer (assuming full subscription) are set out in the respective tables below.

As at the date of the Prospectus

Shareholder	Shares	Options	Performance Shares	% (undiluted)	% (fully diluted)
Bilingual Software Pty Ltd 1	280	Nil	Nil	56%	56%
Gold Fields Australia Pty Limited	100	Nil	Nil	20%	20%
Davthea Pty Ltd Superannuation Fund>6	85	Nil	Nil	17%	17%

Notes:

Mr Richardson is a director and sole shareholder of Bilingual Software Pty Ltd and beneficiary under the Let’s Go Investment Trust.
Mr Berrie is a director and sole shareholder of Davthea Pty Ltd and beneficiary under the David Berrie Superannuation Fund.

On completion of the Offer (assuming no existing substantial Shareholder subscribes and receives additional Shares pursuant to the Offer)

Shareholder	Shares	Options	Performance Shares	% (undiluted)	% (fully diluted)
Bilingual Software Pty Ltd Go Investment Trust>1,8	28,502,941	750,0009	8,960,0002	35.62%	31.07%

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Gold Fields Australia Pty Limited	16,000,0007	7,500,0003	3,200,0004	20.00%	21.71%
Davthea Pty Ltd Superannuation Fund>6,8	9,241,176	750,0009	2,720,0005	11.55%	10.33%

Notes:

Mr Richardson is a director and sole shareholder of Bilingual Software Pty Ltd and beneficiary under the Let’s Go Investment Trust.
Comprising 4,480,000 Class A Performance Shares and 4,480,000 Class B Performance Shares. Refer to Section 11.6 for the terms and conditions of the Performance Shares.
Refer to Section 11.5 for terms and conditions of these Options.
Comprising 1,600,000 Class A Performance Shares and 1,600,000 Class B Performance Shares. Refer to Section 11.6 for the terms and conditions of the Performance Shares.
Comprising 1,360,000 Class A Performance Shares and 1,360,000 Class B Performance Shares. Refer to Section 11.6 for the terms and conditions of the Performance Shares.
Mr Berrie is a director and sole shareholder of Davthea Pty Ltd and beneficiary under the David Berrie Superannuation Fund.
As part of the consideration for the acquisition of the Projects from Gold Fields (which were acquired by the Company’s subsidiary, Modeling), the Company has agreed to issue to Gold Fields Australia at listing, that number of Shares (on an undiluted basis) that will amount to an overall interest of 20% in the Company as at the time of listing.
This table assumes that neither Bilingual nor Davthea subscribe for any Securities under the Offer. However, each of these entities may acquire additional Securities pursuant to their respective sub-underwriting commitments under the priority sub-underwriting agreements detailed in Section 10.12. As a result, the respective interests of these entities in the securities of the Company may increase.
Pursuant to the priority sub-underwriting agreements detailed in Section 10.12, Bilingual and Davthea will, upon successful completion of the Offer, each be issued 750,000 Underwriter Options for sub-underwriting $500,000 under the Offer.

3.16 Restricted Securities

Subject to the Company being admitted to the Official List, certain securities on issue prior to the Offer will be classified by ASX as restricted securities and will be required to be held in escrow for up to 24 months from the date of Official Quotation. During the period in which these securities are prohibited from being transferred, trading in Securities may be less liquid which may impact on the ability of a Shareholder to dispose of his or her Securities in a timely manner.

The Company will announce to the ASX full details (quantity and duration) of the securities required to be held in escrow prior to the Securities commencing trading on ASX.

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4. RISK FACTORS

The Securities offered under this Prospectus are considered speculative. An investment in the Company is not risk free and the Directors strongly recommend potential investors to consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Securities and to consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

There are specific risks which relate directly to the Company’s business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The risks identified in this section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the Securities.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

4.1 Company specific

(a) Proposed Solar Farm Projects at Parkes

Two recent government approved solar farm projects, including a grid connection and transport hub, are being proposed to be built on an area covering the Company’s Parkes tenement, EL 7676, with construction likely to go ahead this year ( Proposed Solar Projects ). The Company estimates that the Proposed Solar Projects would together occupy around 9% of this tenement. The Company has recently registered an objection with the Planning Department of New South Wales regarding these Proposed Solar Projects as it was never informed of the applications for the Proposed Solar Farms and is awaiting an outcome. Although there is a risk that the proposed development will proceed, the Company is not aware of any known mineral occurrences in the designated area for the Proposed Solar Projects, nor are any of the Company’s targets located in these areas.

(b) Tenure, access and grant of applications

Interests in tenements in New South Wales are governed by the mining acts and regulations that are current in that State and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in the Tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

All of the Tenements in which the Company has an interest (or tenements in which the Company may acquire an interest in the future), will be subject to applications for renewal or exemption from expenditure (as the case may be). The renewal or exemption from expenditure for a tenement is usually determined at the discretion of the relevant government authority.

If a Tenement is not renewed or granted an exemption from expenditure, the Company may suffer damage through loss of opportunity to develop and discover minerals on that tenement.

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Please refer to the Solicitor’s Report on Tenements in Section 7 for further details.

(c) Management

The Company’s operational success will depend substantially on the continuing efforts of Directors and senior management. The loss of services of one or more Directors or senior management may have an adverse effect on the Company’s operations. Furthermore, if the Company is unable to attract, train and retain key individuals and other highly skilled employees and consultants, its business may be adversely affected. Key personnel have been covered by executive services agreements and contractor agreements and in most instances, incentive plans to ensure that key personnel are incentivised and rewarded for performance.

(d) Limited exploration

Exploration has previously been conducted on the Projects, however, the Company has only recently commenced its own review and assessment of the exploration activities at the Projects. No assurance can be given that the Company will achieve commercial viability through the successful exploration and/or mining of the Projects. Until the Company is able to realise value from its Projects, it is likely to incur ongoing operating losses.

(e) Exploration success

The Tenements are at various stages of exploration, and potential investors should understand that mineral exploration and development are high-risk undertakings.

There can be no assurance that exploration of the Tenements, or any other licenses that may be acquired in the future, will result in the discovery of Mineral Resources or an economic ore deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.

The Company has not yet published resource estimates for any prospects. There is no assurance that exploration or project studies by the Company will result in the definition of an economically viable mineral deposit or that the exploration tonnage estimates and conceptual project developments discussed in this Prospectus are able to be achieved.

(f) Exploration costs

The exploration costs of the Company are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the Company’s viability.

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(g) Joint Venture Risk

The Company has a Joint Venture arrangement with JOGMEC to fund the exploration and future development of the Company’s Parkes Project.

The Company is subject to the risk that changes in the status of the proposed Joint Venture (including changes caused by financial failure or default by JOGMEC) may adversely affect the operations and performance of the Company. Further, if JOGMEC defaults in the performance of its obligations, it may be necessary for the Company to approach a court to seek a legal remedy, which could be costly.

(h) Future capital needs

The future capital requirements of the Company will depend on many factors. The Directors believe that the proceeds of the Offer (based on raising the minimum subscription) should be adequate to fund its business activities and to continue as a going concern in the short term however changes to operational requirements, market conditions and the identification of other opportunities may mean further funding is required by the Company at an earlier stage than is currently anticipated.

Should the Company require additional funding, there can be no assurance that additional financing will be available, either on acceptable terms or at all. Any inability to obtain additional funding, if required, will have a material adverse effect on the Company's business, its financial condition and performance, and its ability to continue as a going concern.

Any additional equity financing may be dilutive to Shareholders, may be undertaken at lower prices than the Offer and may involve restrictive covenants which limit the Company’s operations and business strategy. Debt financing, if available, may involve restrictions on financing and operating activities.

The Company may undertake offerings of securities convertible into Shares in the future. The increase in the number of Shares issued and outstanding may have a depressive effect on the price of Shares. In addition, as a result of such additional Shares, the voting power of the Company’s existing Shareholders will be diluted.

(i) Restricted securities reducing liquidity

The Company will announce to the ASX full details (quantity and duration) of the securities required to be held in escrow prior to the Securities commencing trading on ASX.

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(j) Limited History

Having been incorporated in October 2016, the Company does not have any operating history, although it should be noted that the Directors have between them significant operational experience. No assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining of its Tenements. Until the Company is able to realise value from its Projects, it is likely to incur ongoing operating losses.

4.2 Industry specific

(a) Mineral Resources Estimates

Mineral Resource estimates are expressions of judgment based on drilling results, past experience with mining properties, knowledge, experience, industry practice and many other factors. Estimates which are valid when made may change substantially when new information becomes available.

The actual quality and characteristics of mineral deposits cannot be known until mining takes place, and will almost always differ from the assumptions used to develop Mineral Resources. Consequently, the actual Mineral Resources may differ from those estimated, which may result in either a positive or negative effect on operations.

Should the Company’s projects encounter mineralisation or formations different from those predicted by past drilling, sampling and similar examinations, Mineral Resource estimates may have to be adjusted and mining plans may have to be altered in a way which could adversely affect the Company’s operations.

(b) Results of studies

Subject to the results of exploration and testing programs to be undertaken, the Company may progressively undertake a number of studies in respect to the Company’s Projects. These studies may include scoping, pre-feasibility, definitive feasibility and bankable feasibility studies.

These studies will be completed within parameters designed to determine the economic feasibility of the Company’s Projects within certain limits. There can be no guarantee that any of the studies will confirm the economic viability of the Company’s Projects or the results of other studies undertaken by the Company (e.g. the results of a feasibility study may materially differ to the results of a scoping study).

Further even if a study determines the economics of the Company’s Projects, there can be no guarantee that the project will be successfully brought into production as assumed or within the estimated parameters in the feasibility study once production commences including but not limited to operational costs, mineral recoveries and commodity prices. In addition, the ability of the Company to complete a study may be dependent on the Company’s ability to raise further funds to complete the study if required.

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(c) Exploration risk

The exploration for, and development of, mineral deposits involves a high degree of risk. Few properties which are explored are ultimately developed into producing mines. Resource exploration and development is a speculative business, characterised by a number of significant risks, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits, but also from finding mineral deposits that, although present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors that are beyond the control of the Company and that cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection, the combination of which factors may result in the Company not receiving an adequate return on investment capital.

Whether a mineral deposit will be commercially viable depends on a number of factors, which include, without limitation, the particular attributes of the deposit, such as size, grade and proximity to infrastructure, metal prices, which fluctuate widely, and government regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The combination of these factors may result in the Company expending significant resources (financial and otherwise) on a property without receiving a return. There is no certainty that expenditures made by the Company towards the search and evaluation of mineral deposits will result in discoveries of an economically viable mineral deposit.

The Company has relied on and may continue to rely on consultants and others for mineral exploration and exploitation expertise. The Company believes that those consultants and others are competent and that they have carried out their work in accordance with Australian recognised industry standards. However, if the work conducted by those consultants or others is ultimately found to be incorrect or inadequate in any material respect, the Company may experience delays or increased costs in developing its properties.

(d) Safety risks

Safety is a fundamental risk for any exploration and production company in regards to personal injury, damage to property and equipment and other losses. The occurrence of any of these risks could result in legal proceedings against the Company and substantial losses to the Company due to injury or loss of life, damage to or destruction of property, regulatory investigation, and penalties or suspension of operations. Damage occurring to third parties as a result of such risks may give rise to claims against the Company.

The Company intends on developing a set of safety procedures to identify issues and mitigation strategies.

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(e) Native title

The Native Title Act 1993 (Cth) recognises and protects the rights and interests in Australia of Aboriginal and Torres Strait Islander people in land and waters, according to their traditional laws and customs. There is significant uncertainty associated with native title in Australia and this may impact on Magmatic’s operations and future plans.

Native title can be extinguished by valid grants of land or waters to people other than the native title holders or by valid use of land or waters. It can also be extinguished if the indigenous group has lost their connection with the relevant land or waters. Native title is not extinguished by the grant of mining leases, as they are not considered to be grants of exclusive possession. A valid mining lease prevails over native title to the extent of any inconsistency for the duration of the title.

For tenements to be validly granted (or renewed) after 23 December 1996 the special “right to negotiate” regime established by the Native Title Act must be followed.

It is important to note that the existence of a native title claim is not an indication that native title in fact exists to the land covered by the claim, as this is a matter ultimately determined by the Federal Court.

Magmatic must also comply with Aboriginal heritage legislation requirements which require heritage survey work to be undertaken ahead of the commencement of exploration and mining operations.

The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

Refer to the Solicitor’s Report on Tenements in Section 7 of this Prospectus for further details.

(f) Government Regulation

Any material adverse changes in government policies or legislation that affect mining, processing, development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and environmental issues may affect the viability and profitability of the Company’s current and future projects.

The mining, processing, development and mineral exploration activities of the Company’s Projects are subject to various laws governing prospecting, development, production, taxes, labour standards and occupational health, mine safety, toxic substances, land use, water use, indigenous land claims, and other matters. Furthermore, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail production or development. Amendments to current laws and regulations governing operations and activities of mining or more stringent implementation thereof could have a substantial adverse impact on the current and any future project and hence the Company.

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(g) Environmental

The operations and proposed activities of the Company are subject to State and Federal laws and regulations concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

Mining operations have inherent risks and liabilities associated with safety and damage to the environment and the disposal of waste products occurring as a result of mineral exploration and production. The occurrence of any such safety or environmental incident could delay production or increase production costs. Events, such as unpredictable rainfall or bushfires may impact on the Company’s ongoing compliance with environmental legislation, regulations and licences. Significant liabilities could be imposed on the Company for damages, clean-up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous operations or non-compliance with environmental laws or regulations.

The disposal of mining and process waste and mine water discharge are under constant legislative scrutiny and regulation. There is a risk that environmental laws and regulations become more onerous making the Company’s operations more expensive.

Approvals are required for land clearing and for ground disturbing activities. Delays in obtaining such approvals can result in the delay to anticipated exploration programmes or mining activities.

(h) Equipment and availability

The Company’s ability to undertake mining and exploration activities is dependent upon its ability to source and acquire appropriate mining equipment. Equipment is not always available and the market for mining equipment experiences fluctuations in supply and demand. If the Company is unable to source appropriate equipment economically or at all then this would have a material adverse effect on the Company's financial or trading position.

4.3 General risks

(a) Commodity price volatility and exchange rate risks

If the Company achieves success leading to mineral production, the revenue it will derive through the sale of product exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors.

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(b) Competition risk

The industry in which the Company will be involved is subject to domestic and global competition. Although the Company will undertake reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or actions of its competitors, which activities or actions may, positively or negatively, affect the operating and financial performance of the Company’s Projects and business.

(c) Currently no market

There is currently no public market for the Company’s Securities, the price of its Securities is subject to uncertainty and there can be no assurance that an active market for the Company’s Securities will develop or continue after the Offer.

The price at which the Company’s Securities trade on ASX after listing may be higher or lower than the Offer price and could be subject to fluctuations in response to variations in operating performance and general operations and business risk, as well as external operating factors over which the Directors and the Company have no control, such as movements in mineral prices and exchange rates, changes to government policy, legislation or regulation and other events or factors.

There can be no guarantee that an active market in the Company’s Securities will develop or that the price of the Securities will increase.

There may be relatively few or many potential buyers or sellers of the Securities on ASX at any given time. This may increase the volatility of the market price of the Securities. It may also affect the prevailing market price at which Shareholders are able to sell their Securities. This may result in Shareholders receiving a market price for their Securities that is above or below the price that Shareholders paid.

(d) Securities investments

There are risks associated with any securities investment. The prices at which the Company’s Securities trade on ASX may fluctuate in response to a number of factors including:

(i) the recruitment or departure of key personnel;
(ii) actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
(iii) variations in the Company’s financial results or those of companies that are perceived to be similar to the Company including changes caused by changes in financial accounting standards or practices or taxation rules or practices;
(iv) announcements regarding litigation or other proceedings that involve the Company;
(v) war or acts of terrorism or catastrophic disasters that disrupt world trade or adversely affect confidence in financial markets; and

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(vi) other general economic, industry and market conditions.

(e) Share market conditions

Share market conditions may affect the value of the Company’s quoted securities, regardless of the Company's operating performance. Share market conditions are affected by many factors such as:

(i) general economic outlook;
(ii) introduction of tax reform or other new legislation;
(iii) interest rates and inflation rates;
(iv) changes in investor sentiment toward particular market sectors;
(v) the demand for, and supply of, capital; and
(vi) terrorism or other hostilities.

The market price of the Company’s securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and mining and resources related stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

Applicants should be aware that there are risks associated with any securities investment. Securities listed on the stock market, and in particular securities of exploration companies experience extreme price and volume fluctuations that have often been unrelated to the operating performance of such companies. These factors may materially affect the market price of the Securities regardless of the Company’s performance.

(f) Liquidity risk

There is no guarantee that there will be an ongoing liquid market for the Company’s securities. Accordingly, there is a risk that, should the market for the Company’s securities become illiquid, Shareholders will be unable to realise their investment in the Company.

(g) Economic risk

The future viability of the Company is also dependent on a number of other factors affecting performance of all industries and not just the mining and resources industries including, but not limited to, the following:

(i) general economic conditions in Australia and worldwide;
(ii) changes in government policies, taxation and other laws in jurisdictions in which the Company operates;
(iii) the strength of the equity and share markets in Australia and throughout the world, and in, particular, investor sentiment towards the mining and resources sector;

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(iv) movement in, or outlook on, interest rates and inflation rates in jurisdictions in which the Company operates; and
(v) natural disasters, social upheaval or war in jurisdictions in which the Company operates.

(h) Taxation

The acquisition and disposal of Securities will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Securities from a taxation viewpoint and generally.

(i) Policies and legislation

The introduction of new legislation or amendments to existing legislation by the Australian government, and the decisions of courts and tribunals, can impact adversely on the assets, operations and, ultimately, the financial performance of the Company.

Any adverse developments in political and regulatory conditions could materially affect the Company’s prospects. Political changes, such as changes in both monetary and fiscal policies, expropriation, methods and rates of taxation and currency exchange controls may impact the performance of the Company as a whole.

(j) Force majeure

The Company’s Projects now or in the future may be adversely affected by risks outside the control of the Company including labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, epidemics or quarantine restrictions.

(k) Litigation risks

The Company is exposed to possible litigation risks including native title claims, tenure disputes, environmental claims, occupational health and safety claims and employee claims. Further, the Company may be involved in disputes with other parties in the future which may result in litigation. Any such claim or dispute if proven, may impact adversely on the Company’s operations, financial performance and financial position. The Company is not currently engaged in any litigation.

(l) Joint venture, acquisitions or other strategic investments

The Company may make strategic investments in complementary businesses, or enter into strategic partnerships or alliances with third parties in order to enhance its business. At the date of this Prospectus, the Company is not aware of the occurrence or likely occurrence of any such risks which would have a material adverse effect on the Company or its subsidiaries.

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(m) Insurance

The Company has insured its operations in accordance with industry practice. However, in certain circumstances the Company’s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company.

Insurance of all risks associated with mineral exploration and production is not always available and where available the costs can be prohibitive.

(n)

Regulatory risks

The Company’s exploration and development activities are subject to extensive laws and regulations relating to numerous matters including resource licence consent, conditions including environmental compliance and rehabilitation, taxation, employee relations, health and worker safety, waste disposal, protection of the environment, native title and heritage matters, protection of endangered and protected species and other matters. The Company requires permits from regulatory authorities to authorise the Company’s operations. These permits relate to exploration, development, production and rehabilitation activities.

Obtaining necessary permits can be a time consuming process and there is a risk that the Company will not obtain these permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could materially delay or restrict the Company from proceeding with the development of a project or the operation or development of a mine. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result in material fines, penalties or other liabilities. In extreme cases, failure could result in suspension of the Company’s activities or forfeiture of one or more of the Tenements.

4.4 Investment Speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above may, in the future, materially affect the financial performance of the Company and the value of the Company’s securities.

Therefore, the Securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Securities.

Potential investors should consider that investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

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5. INDEPENDENT GEOLOGIST’S REPORT

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Malcolm Castle Agricola Mining Consultants Pty Ltd P.O. Box 473, South Perth, WA 6951 Mobile: 61 (4) 1234 7511 Email: [email protected] ABN: 84 274 218 871

24 March 2017 The Directors Magmatic Resources Ltd Level 1, 11 Lucknow Place, West Perth WA 6005

Dear Sirs,

Re: INDEPENDENT GEOLOGIST’S REPORT ON MINERAL PROJECTS IN CENTRAL NEW SOUTH WALES

Agricola Mining Consultants Pty Ltd (“Agricola”) has been commissioned by the Directors of Magmatic Resources Limited (“Magmatic”) to provide an independent technical report (“Report”) on mineral exploration projects in central west New South Wales (“Projects”) held by Modeling Resources Pty Ltd (the “Company”) that is held as a 100% subsidiary of Magmatic. This Report is to be included in a Prospectus to be lodged by Magmatic with the Australian Securities and Investments Commission (“ASIC”) in respect of the Magmatic’s initial public offer (“Offer”). The funds raised under the Offer will be used to undertake detailed geological exploration and working capital requirements.

The Projects

The Moorefield Project is located 30 km north east of Condobolin, in central west NSW. The tenement consists of gently undulating, broad-acre farmland and forested ridges. The Condobolin-Tullamore Road passes through the south and access to the tenement is along sealed and unsealed roads. Moorefield covers part of the Parkes Terrace, a broad north-trending belt which is part of the Girilambone Anticlinorial Zone.

The Myall Project overlies the Narromine Igneous Complex, which is part of the Ordovician Macquarie Arc and consists of a complex of basaltic to intermediate volcanic and volcaniclastic rocks intruded by plutons of gabbro to diorites and quartzmonzodiorites, and then a later porphyritic intrusive suite, some associated with mineralisation.

The Parkes Project is located within Junee Narromine Volcanic Belt, and is part of the Ordovician Macquarie Arc volcanic complex. The project covers parts of the TumutMt Forster zone, which is located between the Parkes Thrust and Narromine–Coolac Suture. This area forms part of the Forbes to Tomingley gold belt and is made up of Ordovician to Silurian volcanics, volcaniclastics and other related sediments and is host to the Northparkes porphyry Cu-Au mine.

The Wellington North Project includes three exploration licenses 5km north of Wellington in central west NSW. The tenements are situated in the Ordovician Macquarie Arc within the East Lachlan Fold Belt. The project targets the Ordovician stratigraphy of the Molong Volcanic Rise, which hosts the Cadia-Ridgeway porphyry copper-gold deposits.

Total land holding in the central west of New South Wales is 869.2km[2] .

Declarations

Relevant codes and guidelines

This Report has been prepared as a technical assessment in accordance with the Australasian Code for Public Reporting of Technical Assessment of Mineral Assets (the “VALMIN Code”, 2015 Edition), which is binding upon Members of the Australasian Institute of Mining and Metallurgy (“AusIMM”) and the Australian Institute of Geoscientists (“AIG”), as well as the rules and guidelines issued by the Australian Securities and Investments Commission (“ASIC”) and the ASX Limited (“ASX”) which pertain to Independent Expert Reports (Regulatory Guides RG111 and RG112, March 2011).

Where exploration results and mineral resources have been referred to in this report, the information was prepared and first disclosed under the ”Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”), prepared by the Joint Ore Reserves Committee of the AusIMM, the AIG and the Minerals Council of Australia 2012.

The author of this Report is not aware of any new information or data that materially affects the information included in the earlier reports and all the material assumptions and technical parameters underpinning the estimates in the report continue to apply and have not materially changed.

Under the definition provided by the VALMIN Code, the mineral projects are classified as ‘early stage exploration projects’ where mineralisation may or may not have been identified, but where Mineral Resources have not been estimated in accordance with the JORC Code (2012). The properties are considered to be sufficiently prospective, subject to varying degrees of risk, to warrant further exploration and development of their economic potential.

This Report is not a Valuation Report (as defined in the VALMIN Code) and does not express an opinion as to the value of the mineral assets or make any comment on the fairness and reasonableness of any transactions related to the Offer. Aspects reviewed in this Report may include prices, socio-political issues and environmental considerations; however, the author does not express an opinion regarding the specific value of the assets and tenements involved.

Sources of Information

The statements and opinion contained in this Report are given in good faith and this Report is based on information provided by the title holders, along with technical reports prepared by consultants, previous tenements holders and other relevant published and unpublished data for the area. Agricola has endeavoured, by making all reasonable enquiries, to confirm the authenticity, accuracy and completeness of the technical data upon which this Report is based. A final draft of this Report was provided to the Company along with a written request to identify any material errors or omissions prior to lodgement.

In compiling this Report, Agricola did not carry out a site visit to the Project areas. Based on my professional knowledge and experience, earlier visits to the areas in New South Wales and the availability of extensive databases and technical reports made available by various government agencies, Agricola considered that sufficient current information was available to allow an informed appraisal to be made without such a visit.

This Report has been compiled based on information available up to and including the date of this Report. Consent has been given for the inclusion of this Report in the Prospectus relating to the Offer and distribution of this Report in the form and context in which it appears. Agricola has no reason to doubt the authenticity or substance of the information provided.

This Report contains statements attributable to third persons. These statements are made in, or based on statements made in previous geological reports that are publicly available from either a government department or the ASX. The authors of these previous reports have not consented to the statements’ use in this Report, and these statements are included in accordance with ASIC Corporations Instrument 2016/72 (Consents to Statements).

Qualifications and Experience

The person responsible for the preparation of this report is:

Malcolm Castle, B.Sc.(Hons), GCertAppFin (Sec Inst), MAusIMM

Malcolm Castle has over 40 years’ experience in exploration geology and property evaluation, working for major companies for 20 years as an exploration geologist. He established a consulting company over 20 years ago and specializes in exploration management, technical audit, due diligence and property valuation at all stages of development. He has wide experience in a number of commodities including uranium, gold, base metals, iron ore and mineral sands. He has been responsible for project discovery through to feasibility study in Australia, Fiji, Southern Africa and Indonesia and technical audits in many countries. He has completed numerous Independent Geologist’s Reports and Mineral Asset Valuations over the last decade as part of his consulting business.

Mr Castle is a qualified and competent witness in a court or tribunal capable of supporting his valuation reports or to give evidence of his opinion of market value issues.

Mr Castle completed studies in Applied Geology with the University of New South Wales in 1965 and has been awarded a B.Sc.(Hons) degree. He has completed postgraduate studies with the Securities Institute of Australia in 2001 and has been awarded a Graduate Certificate in Applied Finance and Investment in 2004.

Declaration – VALMIN Code: The information in this report that relates to Technical Assessment and Valuation of Mineral Assets reflects information compiled and conclusions derived by Malcolm Castle, who is a Member of The Australasian Institute of Mining and Metallurgy. Malcolm Castle is not a permanent employee of the Company.’

Malcolm Castle has sufficient experience relevant to the Technical Assessment and Valuation of the Mineral Assets under consideration and to the activity, which he is undertaking to qualify as a Practitioner as defined in the 2015 edition of the ‘Australasian Code for the Public Reporting of Technical Assessments and Valuations

of Mineral Assets’. Malcolm Castle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.’

Competent Persons Statement – JORC Code: The information in this report that relates to Exploration Results and Mineral Resources of the Company has been reviewed by Malcolm Castle, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Castle has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which they are undertaking to qualify as an Expert and Competent Person as defined under the VALMIN Code and in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Castle consents to the inclusion in this report of the matters based on the information in the form and context in which they appear.

Independence

Agricola or its employees and associates are not, nor intend to be a director, officer or other direct employee of the Company and have no material interest in the projects. The relationship with the Company is solely one of professional association between client and independent consultant. The review work and this report are prepared in return for professional fees of $10,000 plus GST based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this Report.

Yours faithfully

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Malcolm Castle B.Sc.(Hons), MAusIMM, GCertAppFin (Sec Inst) Agricola Mining Consultants Pty Ltd

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Location of the Company’s Projects in Central NSW showing mineral resources[1] for mines and major projects.

1 Resource information (Owner) current to: 31/12/2015 for Cadia (Newcrest), Northparkes (CMOC) , Cowal (Evolution) and Marsden (Evolution); 30/06/2016 for Tomingley (Alkane); 31/03/2016 for McPhillamys (Regis); 30/06/2015 for Temora (Straits/Sandfire) and 24/03/2015 for Copper Hill (Golden Cross).Sourced from company annual mineral resource and reserve statements, company annual reports and stock exchange releases (see References)

OVERVIEW

The early Ordovician to early Silurian Macquarie Arc of the Lachlan Orogen in NSW is Australia’s only economic porphyry Cu-Au province. The province is currently host to a number of active mines and additional significant porphyry systems exist within the Macquarie arc. Numerous other minor occurrences with porphyry or porphyryrelated characteristics occur throughout the arc.

The deposits are not uniformly distributed throughout the volcanic belts and clustering is evident at all scales. The location of the known systems is heavily skewed toward four productive districts. These districts occupy approximately 11% of the explored volcanic belts but contain 92% of the known systems. Two of the districts contain all of the known economic and feasibility stage systems. These districts can be distinguished to a certain extent from much of the remaining Macquarie Arc, but no single or combination of features can definitively distinguish them.

One of the most critical and striking aspects of the districts is the abundance of intrusive rocks compared to the Macquarie Arc outside the productive districts. The Cadia-Forest Reefs District has an area of 430 km[2] and within this mapped intrusive rocks occupy 51 km[2] . Therefore approximately 12% of the total area of the Cadia Forest Reefs District is represented by intrusive rocks compared to 3.5% in the Molong Volcanic Belt as a whole.

The Ordovician volcanic belts display compositions ranging from ultramafic to felsic; however the dominant compositions are within the basalt to andesite range. Within the Porphyry Districts, compositions are relatively more felsic with a greater representation of andesitic and trachytic rocks.

Tenement Schedule

Tenement	Holder	Approx. Area	Grant Date	Expiry Date	Required Expenditure
Wellington North Project
EL 6178	Modeling Resources Pty Ltd	113 sq km	19.01.2004	18.01.2018	$69,000 pa
EL 7440	Modeling Resources Pty Ltd	17 sq km	08.01.2010	08.01.2018	$36,000 pa
EL 8357	Modeling Resources Pty Ltd	46 sq km	08.04.2015	08.04.2018	$28,000 pa
Parkes Project
EL 7424	Modeling Resources Pty Ltd	63 sq km	30.11.2009	30.11.2017	$52,000 pa
EL 7676	Modeling Resources Pty Ltd	95 sq km	11.01.2011	11.01.2018	$63,000 pa
Myall Project
EL 6913	Modeling Resources Pty Ltd	243 sq km	18.10.2007	18.10.2017	$114,000 pa
Moorefield Project
EL 7675	Modeling Resources Pty Ltd	289 sq km	11.01.2011	11.01.2018	$130,000 pa

The Company’s Tenement Schedule

Total land holding in the central west of New South Wales is 869.2km[2] .

The status of the tenements has been reviewed and confirmed by reference to the online database of the Department of Industry, Resources and Energy, NSW, pursuant to section 7.2 of the Valmin Code, 2015. The tenements are believed to be in good standing.

THE GIRILAMBONE DISTRICT

Regional Setting and Mineralisation

The Girilambone District contains at least eight copper deposits, including Girilambone North (Larsens East, North East, Double Tanks and Hartmans), Girilambone (Murrawombie) and Girilambone Deeps, Tritton, Budgerygar, Great Hermidale, Bonnie Dundee and Budgery. These deposits are distributed over a strike length of around 60 km. The original Girilambone deposit is located 45 km north-west of Nyngan and 105 km ENE of Cobar in central-western New South Wales, Australia, whilst Tritton is 10 km to the SW.

The Girilambone deposits are located in the western section of the Palaeozoic Lachlan Fold Belt of the Tasman Orogen in eastern Australia. They are hosted by the Ordovician Girilambone Group flysch sequence, which is largely composed of medium grained quartz-wackes and has been regionally metamorphosed to quartz-chlorite-sericite schist. This sequence extends from as far south as Wagga Wagga to the north of Girilambone. In the Girilambone district 'basement' semi-pelitic and mafic schists of this succession are unconformably overlain by mafic schists and quartz-greywacke of the Caro schist and by the Tritton Formation quartz-wacke, sandstone and phyllite. Near Girilambone the 'basement schists' are intruded by syn- and post-tectonic granitoids, intermediate, mafic and ultramafic Alaskan-type intrusive rocks. Only some of the younger of these intrude the Caro Schist and Tritton Formation.

The significant massive sulphide deposits of the district occur within the Caro schist near the base of the greywacke succession and is associated with intervals of

chloritisation, siderite and epidote alteration, thin magnetite lenses, hematite alteration and intense silicification. Not all of these features are recognised at all deposits. Complexly folded quartzite ridges extend discontinuously over a strike length of up to 150 km and consist of intensely silicified greywacke. All of the known deposits are located close to such ridges.

Pink quartzite of these ridges, including red jasper with disseminated pyrite within mafic schists occur adjacent to some large ultramafic and mafic intrusives and are developed throughout the region at different stratigraphic positions, indicating the quartzite is not a stratigraphic unit, but rather is of low temperature hydrothermal origin.

The mineralisation in the Girilambone district is polymetallic, comprising pyrite, chalcopyrite, chalcocite, sphalerite and galena, with <0.5 g/t Au and <20 g/t Ag. Ore occurs within steep dipping, WNW striking shears within quartz-chlorite-sericite schist and psammitic turbidites of the Caro schist.

The resources at the Tritton deposit are estimated at Measured Resource: 3.85 Mt @ 1.9%Cu Indicated Resource: 4.95 Mt @ 1.2%Cu + Inferred Resources: 1.96 Mt @ 1.2% Cu The Tritton mine is operated by Aeris Resources Ltd. Source: Aeris Annual Report 2016

The Moorefield Project

EL7675 Moorefield covers about 289.7km[2] and is located 30 km north east of Condobolin, in central west NSW. The tenement consists of gently undulating, broadacre farmland and forested ridges. The Condobolin-Tullamore Road passes through the south and access to the tenement is along sealed and unsealed roads.

Geological Setting

EL7675 Moorefield covers part of the Parkes Terrace, a broad north-trending belt, which is part of the Girilambone Anticlinorial Zone. The Girilambone Anticlinorial Zone is bound to the southwest by the north-northwest trending Gilmore Suture. An eastern splay off the Gilmore Suture transects the licence.

The Girilambone Group consists of occasionally outcropping, multiply-deformed metasediments of lower greenschist (grade) facies. Slivers of thinly bedded chert are also present within the Girilambone Group and crop out in the east of the tenement area in the hinge zones of NW-SE oriented folds. The Girilambone Group is unconformably overlain by Siluro-Devonian volcanic and sedimentary rocks of the Derriwong Group to the east and west of the tenement in the Tullamore and Murda Synclines respectively, which are prospective for stratabound base metal mineralisation. The Derriwong Group subcrops and outcrops in the north-western portion of the tenement. Volcanic units within the Derriwong Group include the Meloola Volcanics which are considered correlates of the Mineral Hill Volcanics, which host the Mineral Hill deposit 30 kilometres to the north-west of EL7675. The Derriwong Group is overlain by shallow west dipping early Devonian sediments of the Yarra-Yarra Creek Group in the Murda Syncline.

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Moorefield Aeromagnetic RTP Image (mosaic of sub-sampled regional survey data over regional survey) showing key prospects.

Late Ordovician mafic-ultramafic intrusions occur along a major north-west trending crustal structure extending from Condobolin to Bourke. The intrusions include serpentinite, wehrlite, clinopyroxenite, hornblendite, gabbro, diorite and monzonite.

EL7675 is partially covered by Quaternary alluvium, interpreted to reach depths of 80m across some parts of the tenement.

Moorefield is host to several different styles of mineralisation. The Ordovician Girilambone Group hosts several small occurrences of narrow gold-bearing quartz veins. Examples include the Boxdale, Carlisle Reefs, Northern Veins and Golden Gulch

prospects, some of which were mined in the early 20th century. Gold mineralisation is often associated with arsenopyrite, and localized in NW-SE trending structures.

Early exploration in the area focussed on base metal exploration in Siluro-Devonian volcanic rocks of the Derriwong Group. The Meloola Volcanics were the focus of exploration as they were interpreted to be contemporaneous with volcanic rocks hosting the Mineral Hill deposit. Sphalerite-galena-pyrite disseminations were observed in outcrops in the Lima and Moorefield areas, however, drilling results were variable. Drillholes originally assayed for base metals were later re-assayed for gold, with disappointing results. The Ghost Hill skarn is an advanced target hosted by SiluroDevonian sequences. Anomalous lead, zinc, copper and gold have been intersected in diamond drillholes at Ghost Hill, and the thickness of the skarn unit suggests proximity to an intrusive source and possible porphyry Cu-Au mineralization.

Previous Exploration

EL7675 has had a long history of exploration and mining. The Boxdale mine, originally referred to as the Coronation Mine started in 1955 and the Carlisle Reef Prospect has reports of alluvial mining being carried out as early as 1894 with reef mining beginning in 1897.

A high resolution ground magnetic survey was completed over the Carlisle Reefs prospect. A total of 70km line-kms of data was collected on 20m spaced NS lines. A high resolution gradient array resistivity/IP survey and two pole-dipole IP lines at Carlisle Reefs were completed. The gradient array survey was split into a southern block which was completed on a 50m x 25m grid over the known historical gold workings and a northern block on a 100m x 50m grid over the interpreted extension of the Carlisle Reefs Goldfield under shallow colluvium cover to the north. A total of 241 surface rock chip samples were collected at the Carlisle Reefs, Carlisle Alluvials, L’Estrange Reef, Pattons, Golden Gulch, Elswick Road, Boxdale and The Dam prospects during the reporting period. High-grade gold in rock chips was returned from Carlisle Reefs gold prospect over 1.2km of strike, where visible gold was observed in quartz-arsenopyrite-pyrite veined, quartz-sericite-carbonate altered schist. In addition significant gold in rock chip results were returned from L’Estrange Reef gold prospect over 200-300m of strike and at Patton’s gold prospect over 400m of strike.

A total of 271 auger holes have been completed at the Elswick Road, Boxdale East, Boxdale, Boxdale NW and The Dam prospects for a total of 1,387.5m on a 20m x 140m grid using a trailer mounted Christie Engineering auger rig. Auger hole depths range from 3 to 15m, averaging 5.1m. The last 1.5m was sampled at auger refusal depth. At the Elswick Road gold prospect auger drilling defined a gold–arsenic auger geochemical anomaly over 1.4km in length and up to 140m wide associated with anomalous gold in rock chip results.

An orientation soil geochemical survey was conducted over the ‘Eastern Stockwork’ target at Carlisle Reefs with 43 samples collected on a 70m x 35m grid over 5 lines. Previous shallow soil sampling at Carlisle Reefs has been largely ineffective due to thin colluvium cover and contamination caused by historic mining activities. In order to mitigate against surface contamination samples were collected from 30cm-50cm below surface at the soil – schist bed-rock interface. Where bedrock could not be reached due to thick colluvium cover no sample was taken. The samples defined a coherent arsenic anomaly.

Exploration Potential

EL7675 includes two distinct geological domains:

The Ordovician Girilambone Group in the southern portion of the tenement area consists of multiply-deformed metasediments of lower grade greenschist facies. The metasediments are host to several occurrences of narrow high-grade, auriferous quartz veins.
The Derriwong Group subcrops and outcrops in the northern portion of the tenement. The Meloola Volcanics within the Derriwong Group are considered correlations of the Mineral Hill Volcanics that host the Mineral Hill deposit 30km NW of EL7675

EL7675 is prospective for intrusive related gold (IRG), porphyry Cu-Au, epithermal Au and Au-rich Cobar type deposits. Features of the project area include:

Ordovician Girilambone and Silurian-Devonian Derriwong Groups
RC drilling 14 holes for 2351m and Diamond drilling 2 holes for 503.4m.
Carlisle Reefs prospect : workings on high grade quartz veins traced intermittently to 500m long and workings less than 30m deep. No drilling has been completed at Carlisle Reefs.
Boxdale prospect: minor copper workings and shallow cover. Previous RC drilling results are shown in the following table.
Ghost Hill prospect: Volcanic units of the Derriwong Group targeted previously by Getty, Shell and Billiton for, initially base metals and then epithermal gold. Identified and drilled outcropping mineralisation at the Ghost Hill base metal gold skarn are coincident with a buried aeromagnetic anomaly. The anomaly remains open to the north. Drilling results from Shell and Triako at Ghost Hill are shown in Appendix 1.

MOOREFIELD PROJECT

by Getty, Shell and Billiton for, initially base metals and then epithermal gold. Identified and drilled outcropping mineralisation at the_Ghost Hill_base metal gold skarn are coincident with a buried aeromagnetic anomaly. The anomaly remains open to the north. Drilling results from Shell and Triako at Ghost Hill are shown in Appendix 1.	by Getty, Shell and Billiton for, initially base metals and then epithermal gold. Identified and drilled outcropping mineralisation at the_Ghost Hill_base metal gold skarn are coincident with a buried aeromagnetic anomaly. The anomaly remains open to the north. Drilling results from Shell and Triako at Ghost Hill are shown in Appendix 1.	by Getty, Shell and Billiton for, initially base metals and then epithermal gold. Identified and drilled outcropping mineralisation at the_Ghost Hill_base metal gold skarn are coincident with a buried aeromagnetic anomaly. The anomaly remains open to the north. Drilling results from Shell and Triako at Ghost Hill are shown in Appendix 1.	by Getty, Shell and Billiton for, initially base metals and then epithermal gold. Identified and drilled outcropping mineralisation at the_Ghost Hill_base metal gold skarn are coincident with a buried aeromagnetic anomaly. The anomaly remains open to the north. Drilling results from Shell and Triako at Ghost Hill are shown in Appendix 1.	by Getty, Shell and Billiton for, initially base metals and then epithermal gold. Identified and drilled outcropping mineralisation at the_Ghost Hill_base metal gold skarn are coincident with a buried aeromagnetic anomaly. The anomaly remains open to the north. Drilling results from Shell and Triako at Ghost Hill are shown in Appendix 1.	by Getty, Shell and Billiton for, initially base metals and then epithermal gold. Identified and drilled outcropping mineralisation at the_Ghost Hill_base metal gold skarn are coincident with a buried aeromagnetic anomaly. The anomaly remains open to the north. Drilling results from Shell and Triako at Ghost Hill are shown in Appendix 1.	by Getty, Shell and Billiton for, initially base metals and then epithermal gold. Identified and drilled outcropping mineralisation at the_Ghost Hill_base metal gold skarn are coincident with a buried aeromagnetic anomaly. The anomaly remains open to the north. Drilling results from Shell and Triako at Ghost Hill are shown in Appendix 1.
MOOREFIELD PROJECT
Prospect	Hole ID	Sub- interval	From	To	Interval (m)	Au ppm
Boxdale	BDRC001	incl	114 120	133 124	19 4	1.28 *4.30*
	BDRC003	Incl.	85 92	100 98	15 6	1.00 *2.11*
1

Significant Drill Intercepts at the Moorefield Project

A review of the assays from the Moorefield Project (Appendix 1) indicates the following spread of values for the Boxdale & Ghost Hill Prospects:

Distribution	of Assay Values	– EL7675 Moorefield Project	– EL7675 Moorefield Project	(Boxdale and Ghost Hill)	(Boxdale and Ghost Hill)
			Percentile
	10%	25%	50%	75%	90%
Cu %	0.05	0.05	0.10	0.12	0.00
Au ppm	0.03	0.05	0.05	0.66	0.12
Pb %	0.05	0.06	0.13	0.23	0.87
Zn %	0.09	0.10	0.15	0.22	0.38
Ag ppm	8.20	8.50	9.00	24.50	33.80

Compliance of the Exploration Results with the JORC Code 2012

 Details of all drill locations, intercepts and other details are included in the appendix before Table 1 of this report. The drill holes at Moorefield from 1983 to 2011 presented in the table include the significant intercepts from the prospects but are not exhaustive. Excluded holes did not intersect the mineralised zones and did not return any anomalous results. The excluded information is not considered relevant and has not been provided.

 The historical reporting of exploration results as contained in this report are of significant materiality and relevance to the Company as they represent an important part of the assessments of the prospectivity of the mineralisation, which are available to the Company. In context it is made clear they are not misleading. If the references were unable to be included the report would be misleading by omission as investors would not be able to form any opinion as to the prospectivity or otherwise of prospects involved.

 Details of the historic exploration results as presented in earlier exploration reports to the Department of Industry, Resources and Energy, NSW under the then current version of the JORC Code or normal professional practice are as set out in this report. All such historic results may not comply fully with the 2012 JORC Code. The primary differences are the inclusion of Table 1 and formal Competent Person attributions in the original reports.

 To the extent known, the data on which the historic exploration results were based are as disclosed in Table 1 (this report) and were prepared under and in accordance with the standards required by the provisions of the JORC Code or usual professional practice in force at the time they were reported.

THE COWAL AREA

Regional Setting and Mineralisation

The Cowal epithermal gold deposit is located on the western edge of Lake Cowal, approximately 35 km NNE of West Wyalong in central New South Wales, Australia. The deposit falls within the Macquarie volcanic arc of the Palaeozoic Lachlan Fold Belt of southeastern Australia.

Gold mineralisation at Cowal is hosted by the Ordovician Lake Cowal Volcanic Complex, exposed as a north-south elongated 40 x 15 km window of intermediate calcalkaline intrusives, volcanics and volcaniclastics surrounded by unconformably overlying Siluro-Devonian sediments and volcanics. Immediately to the west of this window a highly deformed north-south zone within the Siluro-Devonian defines the broad Booberoi Fault Zone.

The deposit is covered by 30 m of lake sediments and an underlying Tertiary laterite profile with no outcrop of the host volcanics, apart from some minor gossanous float.

The gold mineralisation is primarily in narrow dilatant veins of quartz-carbonatesulphide (with common adularia) and carbonate±quartz-sulphide and narrow, healed faults with a similar mineralogy. Gold occurs to a lesser extent in pyrite stringers and as disseminations, shear chlorite-carbonate veins and chlorite-carbonate-sulphide veins. Approximately 20% of the orebody is in the oxide zone where gold is more erratic, reflecting leaching and dispersion. The veins generally strike at 305° and dip 35°SW and are at their highest density in the Golden Lava, although those in the Muddy Lake Diorite are usually thicker. The veins are typically parallel sided and from <1 to 100 mm thick. Vein alteration haloes are rare and the main sulphides are quartz, sphalerite, chalcopyrite, galena and pyrrhotite, with minor associated visible gold. The best gold accompanies sphalerite and to a lesser extent adularia

The resources at the Lake Cowal deposit are estimated at Measured Resource: 39.93 Mt @ 0.71g/tAu Indicated Resource: 95.68 Mt @ 1.05g/tAu Inferred Resources: 28.51 Mt @ 1.00g/tAu The Lake Cowal mine is operated by Evolution Mining Ltd.. Source: Evolution Annual Report 2016

The Myall Project

The Myall Project, EL6913, is located 20km south west of Narromine, NSW, and covers an area of 243.4km[2] . The project is covered by a network of sealed and unsealed roads, farm tracks and property fence lines. The topography of the area is relatively flat. Land use consists of dry land and irrigated cropping, along with sheep and cattle grazing.

Geological Setting

EL6913 overlies the Narromine Igneous Complex, which is part of the Ordovician Macquarie Arc. The Macquarie Arc hosts major gold and copper-gold deposits including Cadia, Northparkes and Cowal. The Narromine Igneous Complex consists of a complex of basaltic to intermediate volcanic and volcaniclastic rocks intruded by plutons of gabbro to diorites and quartz-monzodiorites, and then a later porphyritic intrusive suite, some associated with mineralisation. The Narromine Igneous Complex is structurally bounded to the west by Ordovician-Silurian sedimentary rocks and to the east by Devonian sedimentary rocks. Geophysical interpretations indicate that the complex is transected by north-northwest striking faults.

Recent discoveries of epithermal-style gold in carbonate base-metal veins at the Barina prospect suggest that the geology of EL6913 could also host deposits similar to the Cowal mine in the Lake Cowal Complex.

Previous Exploration

Most previous drilling work was completed by Goldfields, (an unrelated party to Gold Fields Australasia Pty Ltd), Resolute, and Newcrest who identified several target areas.

The Calais prospect is a 1.5km by 500m copper-gold anomaly with multiple bottom of hole (BOH) aircore copper and gold anomalies. The prospect is associated with a magnetic high with coincident gravity low. Initial diamond drilling intersected porphyry-style altered diorite (propylitic, phyllic and sodic-altered) intruded by quartz monzodiorite porphyry dykes with sulphides (pyrite, chalcopyrite, bornite and chalcocite). Two targets were identified within the area: Target 1 is associated with BOH geochemical anomalies and Target 2 is associated with the intersection of an interpreted molybdenum trend with the copper anomaly.

Kingswood is a 2km by 3km hydrothermally-altered multiphase intrusive system and two types of mineralisation have been identified here: breccia style copper-gold mineralisation open to the north/northwest and east and vein style mineralisation potentially open south and east. There is post mineralisation porphyry mapped ('wipeout prophyry') and a significant post-mineralisation structure has been identified.

Kingswood North is interpreted as being of similar style to Kingswood but at a more favourable preservation level and the alteration has been interpreted as 'lithocap' style. Drilling has intercepted hydrothermally-altered ('reddened') and quartz sulphide veined felsic porphyry and feldspar porphyry.

The SLR Trend contains two 1km scale gold-copper anomalies and lies within a northeast trending aeromagnetic feature which has been interpreted as a cross-arc graben structure. There are two diamond drill holes in the area, one of which shows rare sheeted quartz- pyrite-chalcopyrite veins with reddened hematite selvages. The large scale anomalies, combined with favourable geology, led to an additional five diamond holes being proposed for the area.

==> picture [417 x 523] intentionally omitted <==

Myall Aeromagnetic RTP Image (mosaic of high-resolution survey over regional survey) showing key prospects.

The quartz monzodiorite to quartz monzonite porphyries at Gemini belong to a high potassium calc-alkaline to shoshonitic intrusive association equivalent to those at Cadia and Northparkes. A porphyry system has been identified which is open to the north and west and there is also the potential for Lake Cowal-style epithermal gold veins.

Barina is a doughnut magnetic anomaly ('Barina') with a coincident zinc and gold anomaly. Diamond drilling at Barina confirmed hydrothermal alteration of micro diorite, micro monzodiorite, a polymictic hydrothermal breccia and monzonite porphyry dykes. Barina Trend is the extension to the southeast from Barina. An eleven hole air core program is being considered for the area.

==> picture [415 x 297] intentionally omitted <==

Myall maximum in hole Cu (left) and Au (right) over RTP aeromagnetic image.

Exploration Potential

EL6913 Myall covers the Narromine Igneous Complex and Gold Fields explored for large copper-gold porphyry systems with a strong reliance on recognition of these systems through multi-element geochemistry, alteration logging, spectral analysis (ASD), high resolution magnetics and gravity data, as well as an extensive grid of 500m by 500m and 250m by 250m aircore drilling with follow up diamond drilling. The exploration strategy focussed on targeting systems beneath the post mineral cover.

Although some of the tenement has 250m by 250m air-core coverage a large portion of EL6913 Myall has only been drilled at approximately 1000m by 1000m or 500 by 500m aircore drill hole spacing. The current strategy is to better define the porphyry centres based on strategic geological features and combine that information with the multielement geochemistry. Selective aircore infill drilling to 125m by 125m would then be completed.

Previous exploration has focused on large copper-gold porphyry systems with a strong reliance on recognition of these systems through alteration logging, spectral analysis (ASD) and diamond drilling. Exploration work will continue to focus on regolith interpretation and geochemical understanding of the area to build on the comprehensive work already completed. Regolith dispersion of ore-related elements beneath cover (40m to plus 150m) is difficult to interpret and further in-fill air-core drilling is required to better delineate diamond drilling targets. Features of the project area include:

One of the largest volcano-intrusive complexes in the East Lachlan with medhigh K calc-alkaline island arc volcanics and multiphase intrusive centres. Underexplored due to post-mineral cover 50+ deep.
Multi-disciplinary datasets including high resolution 50m line spaced aeromagnetics and 500m x 500m gravity data in-filled to 250m x 250m.
Systematic full-field air-core at 500m x 500m spacing with infill down to 250m x 250m has identified large alteration systems with associated anomalous geochemistry Air Core drilling 55 hole for 19671m and Diamond drilling 1 holes for 376.9m.
Kingswood prospect: vein and hydrothermal breccia style porphyry system. Kingswood North prospect: porphyry style quartz sulphide vein system in hydrothermally altered ‘reddened’ feldspar porphyry. Significant intercepts are shown in the following table.
Barina prospect: alkalic carbonate base metal epithermal Au-Ba-Te signature telescoped on reddened potassic altered feldspar porphyry dykes. Significant intercepts are shown in the following table. Gemini prospect : quartz carbonate base metal gold system with significant gold intercepts over 2km strike overlying an underexplored porphyry system. Significant intercepts are shown in the following table.

MYALL PROJECT

MYALL PROJECT	MYALL PROJECT	MYALL PROJECT	MYALL PROJECT	MYALL PROJECT	MYALL PROJECT	MYALL PROJECT	MYALL PROJECT	MYALL PROJECT
Prospect	Hole ID	Sub- interval	From	To	Interval (m)	Au ppm	Cu %	Intercept Note
Kingswood	ACDNM090	Incl. Incl.	192 211 227	299 217 243	107 6 16	0.11 *0.26* *0.32*	0.43 *1.14* *1.01*	2
	ACDNM093	Incl.	238 250	261 259	23 9	0.03 *0.06*	0.46 *0.9*	2
	MYACD001	Incl. Incl.	141 158 260 268	211 183 322 278	70 25 62 10	0.15 *0.31* 0.13 *0.61*	0.54 *0.82* 0.27 *0.64*	2
Barina	MYACD368		221.9	222.4	0.5	204.00		3
Gemini	ACDNM081	Incl. Incl.	359 360 363	368 361 365	9 1 2	3.19 *8.83* *6.38*		3
	ACDNM112	Incl. Incl. Incl.	692 692 702 702 718 725	695 693 705 704 726 726	3 1 3 2 8 1	5.06 *13.25* 3.86 *5.55* 0.92 *5.41*		3
2. 0.10% Cu 3. 0.2g/t Au	cutoff nominally with <= 2m of contiguous internal dilution & >1m down hole thickness cutoff nominallywith <= 2m of contiguous internal dilution & >0.5m down hole thickness

Significant Drill Intercepts at the Myall Project

A review of the assays from the Myall Project (Appendix 1) indicated the following spread of values :

	Distribution of Assay Values - EL6913 Myall Project (Kingswood) Percentile 10% 25% 50% 75% 90% Cu % 0.11 0.12 0.14 0.19 0.27
	16

Auppm	0.01	0.01	0.02	0.03	0.07

	Distribution of Assay Values	- EL6913 Myall Project (Barina		and Gemini)
			Percentile
	10%	25%	50%	75%	90%
Auppm	0.24	0.29	0.48	1.19	5.41

Compliance of the Exploration Results with the JORC Code 2012

 Details of all drill locations, intercepts and other details are included in the appendix before Table 1 of this report. The drill holes at Myall from 1997 to 2003 presented in the table include the significant intercepts from the prospects but are not exhaustive. Excluded holes did not intersect the mineralised zones and did not return any anomalous results. The excluded information is not considered relevant and has not been provided.

JUNEE NARROMINE VOLCANIC BELT

Regional Setting and Mineralisation

The Northparkes group of porphyry copper-gold deposits including Northparkes/Goonumbla, Endeavour, E26, E22, E27, E48 is located 125 km WNW of the Cadia-Ridgeway deposits and ~30 km NNW of the city of Parkes in the Bogan Gate Synclinorial Zone of the Lachlan Fold Belt in central New South Wales

Like the Cadia-Ridgeway deposits, the Northparkes cluster is associated with a late Ordovician shoshonitic volcano-intrusive centre - the Goonumbla Igneous Complex. The Northparkes porphyry intrusives are very similar to that at Ridgeway, with the main difference being the relative importance of gold and copper.

The Goonumbla Igneous Complex, is part of the Ordovician to Early Silurian JuneeNarromine Volcanic Belt, a remnant of the Macquarie Volcanic Arc. The complex is divided into two parts, both products of the third pulse of arc volcanism.

The Goonumbla Volcanics, are 2500 to 4000m thick and comprise a Middle to Late Ordovician sequence of coherent basaltic andesitic to trachyandesitic volcanic rocks, including lavas and shallow sills with peperitic margins, volcaniclastic rocks of similar composition, and minor intercalated limestones.

The Wombin Volcanics are 700 to 1000m thick and of Late Ordovician age, are typically dark red hematite-dusted glassy lavas, ignimbrites, polymictic volcanic breccias and other volcanic sediments, with less abundant porphyritic trachyandesitic and flow banded trachytic lavas.

Mineralisation occurs as disseminated and quartz vein stockworks, both within the intrusives and the surrounding wall rocks. The strongest grades are associated with quartz vein stockworks developed within the central potassic alteration zone, decreasing outwards as the vein and fracture density decreases. The mineralisation in individual deposits is controlled by the size of the intrusive and the intensity of alteration. In general each deposit has a high grade bornite (and lesser chalcocite) core which passes outwards into a chalcopyrite dominant zone to an outer patchy pyritic (up to 3%) halo.

Intense mineral destructive alteration is generally absent, with the potassic core being present as pink-red K-spar fractures and vein selvages. In zones of intense fracturing and veining these selvages merge. Weak pervasive biotite is also developed in the potassic core. The potassic core, greatest vein density and highest grade are centred on the intrusive pipes. Widespread pervasive, often intense, quartz-sericite-pyrite alteration is semi-regional related to major structures, and not individual deposits, with a regional propylitic phase. Copper:gold ratios are variable across the field, ranging from 1:1 (Cu%:Au g/t) to others where gold is much less abundant.

At the end of 2012 the resources at the Northparkes deposit are estimated at Measured Resource: 14.0 Mt @ 0.91%Cu Indicated Resource: 3.7 Mt @ 0.71%Cu + Inferred Resources: 271 Mt @ 0.55% Cu

The Northparkes mine is operated by China Molybdenum Company Limited. Source: Rio Tinto Annual Report 2012

The Parkes Prospect

The Parkes Project includes two Exploration Licences, EL7676 and EL7424 and covers 159.4km[2] . The Project is located north west of Parkes, NSW. It is bordered to the south by the exploration exclusion zone surrounding the Parkes Observatory and to the east by the Goobang National Park. The terrain is mostly flat to undulating with access via sealed and unsealed roads. The land use is mainly cropping with minor grazing.

Geological Setting

The Parkes Project is within the Junee Narromine Volcanic Belt in Central Western NSW. The Junee-Narromine Belt is predominantly covered by transported Quaternary and Cainozoic cover. The surface geology in the vicinity of the project consists of a veneer of colluvial sheet wash and scree slopes, with scattered occurrences of Middle Ordovician Goonumbla Volcanics on the faulted eastern limb of the N-S striking Forbes Anticline. Andesitic lavas and breccias with volcaniclastic sandstone and conglomerate characterise the unit. In the project area, the Goonumbla Volcanics sit along the western side of the interpreted Parkes Thrust Zone and are therefore commonly altered and sheared.

The Goonumbla Volcanic group is a series of folded trachyandesitic volcanics and volcaniclastic sediments interpreted to have formed in a shallow marine environment of a shoshonitic Ordovician magmatic arc that extends from Temora in the South to beneath Great Australian Basin cover rocks to the north. The shoshonitic trend of rocks that dominates the Parkes zone to the west of the Project area is known to host the

Northparkes porphyry copper - gold deposits as well as the Lake Cowal Gold Mine, and the Peak Hill and Gidgingbung epithermal deposits.

==> picture [416 x 520] intentionally omitted <==

Parkes Aeromagnetic RTP Image (mosaic of high-resolution survey over regional survey) showing key prospects.

Exploration License EL7424 overlies a portion of the Ordovician Goobang Volcanics. The Goobang Volcanics are a formation within the Goonumbla Volcanic Group and consist of intermediate-mafic volcanics, intrusives and sediments, truncated on both margins and possibly reverse faulted. The project area lies within the Mt Foster- Tumut zone, between the Parkes Thrust to the west, and the Coolac-Narromine Suture in the east, which runs through the western part of EL7424, and corresponds with the southern portion of the Forbes- Parkes-Peak Hill-Tomingley gold belt.

The surface geology in the vicinity of EL7676 consists of outcrop and areas of recent and older age alluvial and colluvial sheet wash plains of variable thickness. In the southern block of the tenement the basement geology crops out as scattered occurrences of Middle Ordovician Goonumbla Volcanics on the faulted western limb of the N-S striking Forbes Anticline. Andesitic lavas and breccias with volcaniclastic sandstone and conglomerate characterise the Goonumbla Volcanics. The Goonumbla Volcanics are host to the large Northparkes porphyry Cu-Au deposits, located to the north-east of the tenement. The northern block of the tenement is comprised dominantly of undifferentiated Silurian and Devonian sediments of the Tullamore Trough.

The eastern extent of the northern block consists of interpreted monzonitic intrusions of the Ordovician Northparkes Volcanic Group. The intrusions are pyroxene-quartz monzonites to monzodiorites, some associated with sulphide mineralisation. They have a K calc-alkaline to shoshonitic affinities, similar to the surrounding volcanic rocks and alteration products including clay, sericite, epidote and chlorite have been observed.

Previous Exploration

EL7424: Alkane Resources Ltd mapped, soil sampled, rock chipped and drilled four percussion holes at the workings in the Stockmans area in 1980. The workings consisted of small scale diggings dating back to early 1900s and include: Monte Carlo Mine, Stockmans Reef, Sherlaw and Jones, and Davey’s Diggings. Alkane analysed newly compiled aeromagnetic data and drilled three auger holes at Glenroy, however, the locations of those holes is not known. In 1985, Gold Fields Exploration completed rock chip sampling and drilling at Glenroy. Although they mapped the single small working at Glenroy, they do not appear to have drilled or sampled them.

Geopeko completed mapping, rock chip sampling, RAB (142 holes, 5269.7m) and percussion (1 hole, 181m) drilling at Glenroy in 1990. Elevated gold values were recovered from the rock chip sampling was from a schist sample at the Glenroy working. Geopeko considered the outcropping alteration at Glenroy to be similar to the Peak Hill mine. It completed RAB drilling on 200m and 400m line spacing with holes 50 to 100m apart and one percussion hole. Results were considered disappointing. The percussion hole tested the zone of most intense silicification and quartz-pyrophyllitepyrite alteration.

Compass Resources completed mapping and RC drilling (16 holes, 976m) in the Stockmans area in 1995 and identified the Buryan area as a porphyry system through an AC and DDH program. It drilled 103 AC holes for 5507m and 2 DDH holes for 435m at Buryan, Glenroy South and Mountain View and then joint ventured the project to Newcrest. The reason for drilling at Buryan was to investigate the aeromagnetic low, which had similarities to Northparkes. Newcrest was interested in the porphyry style mineralisation identified by Compass at Buryan and completed AC, RC and precollared DDH holes. It also completed one RC hole at Glenroy.

EL7676: Sipa Resources held an extensive tenement portfolio stretching from Peak Hill in the north to Forbes in the south. It completed regional geochemical programs and drilling, which included two RC programs at MacGregors. Total drilling was 43 holes for 2232m. All the other prospects were not on EL7676 Parkes East.

BHP Gold Mines Pty Ltd (BHP Gold) were active in the area during mining at its Victoria London operations in 1990 (not on EL7676). Exploration activities covered areas that included Mt Morgan and Nibblers Hill. Newcrest took over the operation in the early 1990s and mining ceased in September 1990 after production of about 3Mt at 1.5 g/t Au (about 150k ounces of gold). During the BHP Gold – Newcrest period old workings were tested and the data is recorded in the annual reports. BHP Gold

completed BLEG and percussion drilling over a regional area covering the workings in the Mt Morgan and Nibblers Hill area of EL7676.

Exploration Potential

Drilling in 2011 targeted the Glenroy, Buryan and Mertondale prospects on EL7424 although initial results were disappointing. Further work is warranted at Glenroy and Stockdale as well as a geological review of the entire area. Buryan is a significant porphyry target and new approaches to evaluation of this prospect are warranted.

Three key areas within EL7676 were identified as MacGregors, Brolgan and Mt Morgan. The MacGregors south auger anomaly warrants RC drill testing and Brolgan has a Zn-Cu-Sb-Tl-Cs-Cd anomaly that requires further work. The results from drilling at Mt Morgan indicate that auger and RC drilling may be warranted.

Previous exploration has targeted large copper-gold porphyry systems with a strong reliance on recognition of these systems through alteration logging, spectral analysis (ASD), geochemical and geophysical interpretation and drilling. Epithermal and orogenic style gold with a style similar to Alkane’s historical Peak Hill mine (epithermal Au-Ag-Cu), and Tomingley/Wyoming orogenic Au deposit have also been targeted. Features of the project area include:

Ordovician Goonumbla and Nelungaloo volcano-intrusive centres and Junee-Narromine Volcanic Belt.
Tenement wide aeromagnetic and radiometric data-sets acquired and imaged. Prospect scale high resolution ground magnetic, gravity and IP data-sets acquired with undrilled geophysical anomalies. Prospect scale soil, rock chip air-core and auger drilling (342 holes for 11,974m) data sets acquired with comprehensive EOH multi-element geochemistry with undrilled Au/Cu and pathfinder geochemical anomalies.
Air Core drilling 31 holes for 1608m, RC drilling 5 holes for 450m and Diamond drilling 1 hole for 216.7m completed confirming hydrothermal systems with anomalous Au or Cu-Au at several prospects.
MacGregors orogenic gold prospect: two holes completed by Gold Fields Australasia intersected quartz-pyrite-arsenopyrite veining. Significant intercepts are shown in the following table.
Glenroy HS epithermal Au prospect: RC drilled quartz-muscoviteparagonite-pyrite alteration zone analogous to nearby Peak Hill HS epithermal Au deposit with untested geophysical (IP, gravity and magnetics) anomaly to the north.
Buryan porphyry Cu-Au prospect: RC drilled porphyry style quartz-pyritechalcopyrite veins in andesitic volcaniclastic rocks and diorite. Buryan IS epithermal Au-Pb-Zn prospect: RC/DD drilled quartz-carbonate-sulphide (py- sph-ga-cpy) veins and matrix infill in phyllic and propylitic altered polymictic breccias.

PARKES PROJECT	PARKES PROJECT	PARKES PROJECT	PARKES PROJECT	PARKES PROJECT	PARKES PROJECT	PARKES PROJECT	PARKES PROJECT
Prospect	Hole ID	Sub- interval	From	To	Interval (m)	Au ppm	Intercept Note
Stockmans	S1	Incl.	45 47	67 61	22 14	0.79 *1.01*	1
	S2	Incl.	7 9	19 15	12 6	1.42 *2.44*	1
MacGregors	MGD001	Incl.	76 77	91 83	15 6	0.66 *1.03*	1
	MGD002	Incl. Incl. Incl.	52 78 80 95 95 104	64 88 84 114 96 107	12 10 4 19 1 3	0.41 0.51 0.9 0.63 *5.75* 0.93	1
	MM31	Incl.	0 12 18	4 42 23	4 30 5	1.13 0.46 *1.02*	1
	MM32	Incl. Incl.	10 20 34 58	24 23 60 60	14 3 26 2	0.62 *1.11* 0.55 *1.73*	1
	MM33	Incl. Incl. Incl.	13 17 28 33 45	29 18 29 51 50	16 1 1 18 5	1.22 *4.7* *5.53* 0.72 *1.28*	1
	MM34	Incl.	44 46	51 47	7 1	1.06 *2.42*	1
	MM39	Incl.	28 38	40 39	12 1	0.49 *3.09*	1
	MM40		24	28	4	1.03	1
1. 0.2g/t Au cutoff nominally with <= 2m of contiguous internal dilution & >1m down hole thickness

Significant Drill Intercepts at the Parkes Project

A review of the assays from the Parkes Project (Appendix 1) indicates the following spread of values:

	Distribution of Assay Values - EL7676 & EL7424 Parkes Project Percentile 10% 25% 50% 75% 90% Auppm 0.23 0.28 0.45 0.93 1.36

Compliance of the Exploration Results with the JORC Code 2012

 Details of all drill locations, intercepts and other details are included in the appendix before Table 1 of this report. The drill holes at Parkes from 1983 to 2011 presented in the table include the significant intercepts from the prospects but are not exhaustive. Excluded holes did not intersect the mineralised zones and did not return any anomalous results. The excluded information is not considered relevant and has not been provided.

were unable to be included the report would be misleading by omission as investors would not be able to form any opinion as to the prospectivity or otherwise of prospects involved.

THE MOLONG VOLCANIC RISE

Regional Setting and Mineralisation

The Cadia and Ridgeway porphyry gold-copper deposits are located 20 km south of Orange in the central tablelands of New South Wales. Cadia Hill and related adjacent resources are low grade, bulk mining, porphyry style Au-Cu deposits while Ridgeway, 3 km to the north-west of the Cadia Hill open pit and 500 m below surface, comprises quartz veins, sheeted and stockwork quartz and quartz-sulphide veins and disseminated mineralisation with higher grade gold and associated copper mineralisation.

The Cadia district falls within the Molong Volcanic Belt in the eastern part of the Lachlan Orogen. The Cadia-Ridgeway cluster of deposits is principally associated with a 3 x 1.5 km late Ordovician composite quartz-monzonite to dioritic porphyry stock and its probable co-magmatic volcanic wall rocks and intercalated volcaniclastics that together form part of an Ordovician volcano-intrusive Cadia Intrusive Complex. The intrusive complex is represented as the stock at Cadia Hill and Cadia Quarry, a narrow restricted pipe-like intrusion at Ridgeway and as a series of dykes at Cadia East. Overall the stock has an alkaline composition, with mineralisation and alteration being associated with porphyritic quartz-monzonite phases that are altered over an area of 5.5 x 3 km and to a depth of up to 1.6 km, defining a NW trending corridor that encloses the known deposits.

Mineralisation at Cadia Hill is present as chalcopyrite, native gold, lesser pyrite and bornite, which are disseminated within and immediately adjacent to the quartzcarbonate veins of a low density sheeted vein array. This array forms a broadly tabular envelope that is approximately 300 m wide, dips SW at around 60° and strikes NW. The sheeted vein envelope persists over a length of some 900 m and to a depth of at least 800 m beneath the surface, although grades decrease below 600 m. Within the envelope, veins range from a millimetre to 10 centimetres in width with densities from 2 to 10 per metre, but locally in the core of the deposit may exceed 15 per metre.

Ridgeway is a high-grade gold-copper porphyry deposit. It is the deepest formed and highest grade of the four main deposits within the Cadia-Ridgeway mineralised corridor. The deposit is an upright, bulbous body of stockwork quartz veining and alteration zoned around a 50 to 100m diameter, vertically attenuated, alkalic intrusive plug of porphyritic Cadia Hill Monzonite, which is of monzodioritic to quartz monzonitic composition. Mineralisation and alteration are hosted both by the intrusive and by the surrounding volcanic rocks of the Forest Reefs Volcanics, at and just above, the contact with the underlying Weemalla Formation. The dominant volcanic host

occurs as massive bands that are >50 m thick of intercalated volcanic lithic conglomerates to breccias, and bedded volcanic sandstone.

The resources at the Cadia East Underground deposit are estimated at Measured Resource: 1.5 Mt @ 1.2g/tAu Indicated Resource: 2,500 Mt @ 0.41g/tAu Inferred Resources: 360 Mt @ 0.34g/tAu

The resources at the Ridgway Underground deposit are estimated at Measured Resource: 0.92 Mt @ 0.48g/tAu Indicated Resource: 110 Mt @ 0.56g/tAu Inferred Resources: 41 Mt @ 0.38g/tAu

The resources at other deposits in the Cadia Province are estimated at Measured Resource: 140 Mt @ 0.47g/tAu Indicated Resource: 120 Mt @ 0.38g/tAu Inferred Resources: 39 Mt @ 0.40g/tAu The Lake Cowal mine is operated by Newcrest Mining Ltd.. Source: Newcrest Annual Report 2016

The Wellington North Project

The Wellington North Project includes three Exploration Licences, EL7440, EL6178 and EL8357 and covers 176.7 km[2] . The project is 5km north of Wellington in central west NSW. The Company is exploring the region for epithermal gold and copper-gold deposits similar to Cadia. Access to the project is along the Dunedoo Road or the Mitchell Highway north of Wellington, and then sealed and unsealed roads. The land is gently rolling and consists of grazing and cultivated land.

Geological Setting

The Project area is situated in the Ordovician Macquarie Arc within the East Lachlan Fold Belt. The Ordovician stratigraphy of the Molong Volcanic Rise is locally referred to as the Oakdale Formation, which plunges beneath Napperby Formation of the Gunnedah Basin at the northern end of the tenements.

regional survey) showing key prospects.

The Oakdale Formation consists of latitic to basaltic volcanics and volcaniclastics, which have been intruded by dioritic to quartz-monzonitic bodies. To the east is the Silurian Gleneski Formation, which is comprised of rhyolitic to latitic lava, intrusives, tuff and volcaniclastic sandstone. To the west is the Devonian Garra Formation with well bedded, fossiliferous limestone, calcareous sandstone, siltstone, shale and minor tuffaceous sandstone. The Mesozoic Napperby Formation that overlies the Gleneski and Oakdale Formations at the northern end of the project area is characterised by quartz-lithic sandstones and rare conglomerates. Magnetic Tertiary basalts form both plugs and flows, which occur locally as topographic highs. Transported cover overlying the Ordovician Oakdale Formation varies in thickness from non-existent where the Oakdale Formation is outcropping in the south, to greater than 100m thick in the northeast of the tenement package.

==> picture [424 x 528] intentionally omitted <==

Wellington Aeromagnetic RTP Image (mosaic of high-resolution surveys over

The deformation history within the Wellington North Project is considered to be complex. The Ordovician Oakdale Formation is structurally bound by the arc parallel, east dipping Nindethana Fault in the east; and the north-east dipping Macquarie Fault to the west. The north-west trending transfer structures that are evident in the Wellington area may form part of a 2nd order, Lachlan Transfer Zone - parallel structural corridor. A number of magnetite destructive north-north-east striking faults are evident in the northern portion of the project area, and have been interpreted as wrench faults, with 2nd order north-north-west extensional faults forming a broad “horse-tail”-style accommodation zone.

Mineralisation observed within and immediately surrounding the Project is varied, with both gold and copper mined at various scales. The most significant production was

obtained from the Mitchell’s Creek (Bodangora) mine which is considered an orogenicstyle Au deposit. A number of alluvial gold workings were operated around the 1900’s with the interpretation that most of Au had shed from the Mitchell’s Creek lode. A number of shallow Cu and Au mines were worked from the early 1900’s to the late 1930’s with source of ore either primary sulphide veins or secondary malachite ± azurite. The Kaiser mine which lies between EL6178 and EL7440 has been identified as and alkalic Au-Cu porphyry prospect.

Previous Gold Production

Both the Mitchell Creek and Dicks Reward (EL7440) mines are near the small village of Bodangora. Mineralisation was reported as 0.2-1.2m wide quartz veins with pyrite ± galena ± chalcopyrite association. Production estimated by Alkane was 270,000t at 26g/t gold (230koz Au), mostly between 1890 and 1917. Cluff and Alkane completed modern work including drilling. Alkane partially relinquished the area in 2008 and Gold Fields applied for the authority.

Although these deposits are characterised by high grades, the modern drilling completed appears to have closed off the strike and depth extensions of these deposits. However, the production of 230koz Au is considered significant and further mineralisation may be present in areas under cover and identified by combining the structural framework with geological modelling and interpretation.

The Knowles deposit is located south of the Mitchell Creek mine, and it is speculated that this may be an offset of the Mitchell Creek lode. There is minor production from this lode. Other minor reefs in the Bodangora area also include Dunne’s Reef, Nameless Reef, Trig Reef and X-Reef. Cluff focused drilling at Dicks Reward. True width was not reported. Cluff used mostly diamond drilling and selectively sampled the veins. Alkane used RC drilling and carefully logged veins and appeared to have identified the target horizons, however, the use of RC would have reduced grade of narrow veins during sampling. It is possible that the vein is actually much narrower and higher grade.

Although there is significant production from the Bodangora mines area it appears to have been sourced from narrow (0.1-0.3m) veins with grades of around 20-30 g/t Au. Both Cluff and Alkane tested for extensions without success.

Previous Exploration

CRA identified two magnetic features, which they followed up with surface geochemistry. Sampling programs are reported as a bulk sample or bulk soil using a hand-held power auger. CRA completed a soil sampling program (38 samples) and ground magnetics (3.05 line km) over anomaly GEUR007. CRA completed a soil sampling program (149 samples), rock chip sampling (3 samples) and ground magnetics (1.5 line km) over anomaly GEUR012.

Aircore drilling by Newcrest was completed at 500m spacing over large area of cover within the Bodangora Creek valley. Elevated gold values were encountered associated with intrusive rocks. This result lay coincident with CRA aeromagnetic feature GEUR007 however no further work was completed by Newcrest.

Clancy held the ground as part of EL6178. A prospect review was completed on the CRA anomaly GEUR007, which Clancy referred to as Yarran Grove. Gold Fields Australasia (Gold Fields) entered into a joint venture agreement with the licence holder over Clancy’s Wellington North project. In 2010 Gold Fields completed regional geophysical surveys that included the project area. The regional aeromagnetic and radiometric survey had a line spacing of 50m and a flight height of 40m. A gravity survey was completed by taking gravity readings at 500m spacing along public roads.

The pre-existing detailed gravity surveys were merged with this data to produce a gravity map.

Gold Fields completed 8 auger holes at the Rose Lawn prospect in 2012. Gold Fields identified four targets (C1-C4), but had to relinquish the project due to corporate restructuring. The area was subsequently pegged by by Modeling Resources as EL8357.

C1 is an alkalic copper-gold porphyry target in the west of the project comprising a series of sub-circular magnetic lows thought to be caused by magnetite destructive hydrothermal alteration and a magnetic high thought to be related to magnetite hydrothermal alteration. The target lies along an ENE fault zone with minor internal NW fractures. Rock chips comprise altered volcaniclastic rocks hosting malachiteazurite fractures and quartz-epidote breccia veins with malachite-chalcopyrite- bornite infill. Rock chip sample N354R-072 returned anomalous copper and gold.

C2 is an alkalic copper-gold porphyry target. It is characterised by an indistinct nonstratigraphic sub-circular magnetic high (500m x 500m) and a semi-coincident potassium radiometric anomaly. The target is located at the junction of a north trending extensional sector and WNW fault zone. Anomalous gold and copper values were detected in air-core drilling with peripheral As-Zn anomalism. C2 is equivalent to CRA’s GEUR007 and Clancy’s Yarran Grove target.

C3 is an alkalic copper-gold porphyry target and is located on the northern boundary of the project at the intersection between two major NE and NW structures. Anomalous gold and copper in surface rock chip samples are associated with magnetic lows peripheral to a north trending linear magnetic high. High-grade copper values have been returned in rock-chips of altered andesite.

C4 is an orogenic gold style quartz-sulphide vein target and is located in the NE corner of the project and is interpreted as the NW extensions of the Bodangora orogenic quartz-sulphide vein system under shallow transported cover. The Bodangora gold mine is located immediately east of the project.

Exploration Potential

Exploration is aimed towards the discovery of high-grade, gold-rich porphyry copper systems, such as those found in the Cadia and Northparkes districts. The East Lachlan Fold Belt is considered to be under explored, with a number of world-class discoveries being made in the past 20 years. The prospectivity of the Wellington North area for porphyry copper-gold style mineralisation is recognised by the presence of porphyry related alteration and mineralisation identified in both outcrop and drilling and the Kaiser alkalic copper-gold porphyry prospect adjacent to the property.

Numerous geophysical and geochemical anomalies considered prospective for porphyry Cu-Au deposits remain untested and are ready for RC and diamond drill testing. Features of the project area include:

Large volcanic–intrusive centre on Ordovician Molong Rise with crustal-scale arc-parallel and cross-arc structures. High K to shoshonitic volcanics with high K to alkalic intrusions with outcropping mineralisation.
Tenement wide aeromagnetic, radiometric and gravity data-sets. Prospect scale high resolution ground magnetic, gravity and IP (3DIP, gradient array and poledipole) data-sets with undrilled geophysical anomalies.

Rock chip sampling and auger drilling (1,246 holes for 6,193m) – comprehensive end-of-hole multi-element geochemistry and ASD mineralogy data-sets with undrilled Cu-Au and pathfinder geochemical anomalies.
RC drilling 10 holes for 1635m and Diamond drilling 2 holes for 807.3m. testing multi- disciplinary anomalies and confirming hydrothermal systems with anomalous Cu-Au at Mayhurst and Rose Hill prospects.
Mayhurst prospect: high K calc-alkaline volcano-intrusive complex (Comobella Intrusive Complex). Rock chips with pyrite- chalcopyritemagnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.
Rose Hill prospect: Pyrite-chalcopyrite-bornite-malachite-native Cu in calcpotassic and calc-sodic altered diorite. Significant drill results are shown in the following table.

magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.	magnetite and ‘red-rock’ (hematite-feldspar-sulphide) alteration at surface. At least three porphyry systems have been drilled.  _Rose Hill prospect:_Pyrite-chalcopyrite-bornite-malachite-native Cu in calc- potassic and calc-sodic altered diorite. Significant drill results are shown in the following table.
WELLINGTON PROJECT
Prospect	Hole ID	Sub- interval	From	To	Interval (m)	Au ppm	Cu %	Mo ppm	Intercept Note
Rose Hill	RHRC005	Incl. Incl. Incl. Incl.	0 0 20 42 47	71 6 27 44 55	71 6 7 2 8	0.3 *0.99* *0.77* *1.05* *0.52*	0.43 *1.47* *0.65* *0.96* *1.34*	57.23 *123.4* 31 *95.7* *239.39*	4
	RHRC006	Incl. Incl. Incl. Incl.	6 21 64 66 103 103 125	29 22 76 72 139 104 127	23 1 12 6 36 1 2	0.41 *7.37* 0.24 *0.43* 0.11 *0.6* *0.64*	0.11 *0.75* 0.49 *0.87* 0.22 *1.55* *1.85*	3.4 *19.6* 5.4 *5.9* 353 *872* *1126*	4
4	0.05% Cu cutoff nominallywith <= 5m of contiguous internal dilution & >1m down hole thickness

Significant Drill Intercepts at the Wellington North Project

A review of the assays from the Wellington North Project (Appendix 1) indicates the following spread of values:

	Distribution of Assay Values - EL6178 Wellington	Distribution of Assay Values - EL6178 Wellington	Distribution of Assay Values - EL6178 Wellington	Project
			Percentile
	10%	25%	50%	75%	90%
Cu %	0.08	0.10	0.13	0.50	1.34
Au ppm	0.03	0.07	0.15	0.45	0.95
Moppm	2.60	5.40	19.60	62.00	345.00

Compliance of the Exploration Results with the JORC Code 2012

 Details of all drill locations, intercepts and other details are included in the appendix before Table 1 of this report. The drill holes at Wellington North from 2008 to 2009 presented in the table include the significant intercepts from the prospects but are not exhaustive. Excluded holes did not intersect the mineralised zones and did not return any anomalous results. The excluded information is not considered relevant and has not been provided.

PROPOSED EXPLORATION AND BUDGET

Moorefield Project

Exploration Methodology, Strategy & Comments

RC drilling across lode structures at Carlisle Reefs
Systematic auger geochemical & geological drilling along the magnetic high anomaly.
First pass evaluation of >4km long, NW-SE striking, magnetic high anomaly for VAMS Cu-Au systems.
Specifically targeting magnetic highs, magnetic gradients & structural ‘breaks’ associated with an exhalative horizon.
Suggested 200m spaced SW-NE orientated auger lines with 20m spaced holes.
Aim of the program is to delineate a Cu-Au geochemical anomalism for infill auger drilling & later RC drill testing.
Initial RC drill testing under the historic prospecting pit associated with the malachite stained exhalative horizon & anomalous Au-Cu in rock chip results.
Initial shallow RC drill test (<150m deep holes) resultant geochemical / geology targets generated from the auger drill program.
Consider geophysics (e.g. IP, magnetics, EM or gravity) to refine targets before deeper RC drill testing –’blind’ Cu-Au VAMS deposits can have compelling geophysical anomalies.

Moorefield Project -$4M Capital Raising	Moorefield Project -$4M Capital Raising	Moorefield Project -$4M Capital Raising
Item	Year 1($)	Year 2($)	Total($)
Staff Vehicles Assays Drilling Geophysics Accommodation & meals Project administration	83,924 4,828 56,170 166,636 65,000 7,168 9,273	82,901 4,744 40,455 163,743 - 7,044 9,112	166,826 9,572 96,625 330,379 65,000 14,212 18,385
Total	393,000	308,000	701,000

Myall Project

Exploration Methodology, Strategy & Comments

Lake Cowal, Marsden and Northparkes were discovered with Air Core Drilling.
Complete infill & extensional AC drilling around broad spaced low level CuAu & Au-Zn geochemical anomalies with supporting geology (alteration/ mineralisation & host rocks).
Barina to SLR to Gemini trends - Low to intermediate sulphidation, alkalic, epithermal, carbonate base metal Au-Ag targets defined. Latest research from Lake Cowal Au Mine defines a clear exploration rationale to be applied to Barina.
Exploit current low AC drill rates ~($20/m).
The aim is to define robust multi-point, geochemical anomalies with distinct higher grade centres for targeted diamond drill testing. Staged, disciplined, efficient.
Diamond drill test resultant AC geochemical anomalies – success measured by economic porphyry Cu-Au or epithermal Au-Zn drill intersections.
Follow up Kingswood breccia hosted Cu-Au-Mo drill intersections, with a deep diamond hole to test for a porphyry Cu-Au stockwork vein zone at depth.
Myall is ~80kms by road to the Northparkes Mine and 50km by road to the Tomingley Gold Mine (Alkane Resources).

Myall Project -$4M Capital Raising	Myall Project -$4M Capital Raising	Myall Project -$4M Capital Raising
Item	Year 1($)	Year 2($)	Total($)
Staff Vehicles Assays Drilling Geophysics Accommodation & meals Project administration	76,374 5,029 42,882 173,565 - 7,466 9,659	53,618 3,164 26,982 109,210 - 4,698 6,077	129,993 8,193 69,864 282,775 - 12,164 15,736
Total	314,975	203,750	518,725

Parkes Project

All required geophysical surveys have been completed.
RC Drill programs at Buryan Porphyry and infill RC at Epithermal targets to establish orientation and continuity.
Complete previously designed shallow RC drill program at Glenroy including one deeper hole testing deeper porphyry potential.
FpXRF and conventional soil programs with Auger drilling at the Stockmans / Sherlaw & Jones targets to define strike extensions away from the main ridge line.
Shallow RC (~100m) infill and extensional drilling near the S2 hole for shallow oxide and high grade primary mill feed to Tomingley.

Parkes Project -$4M Capital	Parkes Project -$4M Capital	Raising
Item	Year 1($)	Year 2($)	Total($)
Staff Vehicles Assays Drilling Geophysics Accommodation & meals Project administration	63,848 4,002 34,130 138,140 - 5,942 7,687	19,948 1,635 13,938 56,413 - 2,427 3,139	83,796 5,637 48,067 194,554 - 8,369 10,827
Total	253,750	97,500	351,250

Wellington Project

RC & auger drill programs at the Rose Hill alkalic porphyry Cu-Au-Mo prospect & associated regional corridor (EL6178 Duke).
RC drill programs at the Mayhurst West & East alkalic porphyry Cu-Au-Mo prospects (EL6178 Duke).
Auger drill program at the historic Rose Lawn Cu-Au mine; a conceptual alkalic porphyry Cu-Au target (EL6178 Duke).
AC drill program at the Yarindery shear zone; a conceptual epithermal to mesothermal Au target (EL6178 Duke).
Auger & air-core drill programs at the Bodangora gold field testing under shallow regolith cover adjacent to exposed high grade veins, for a concealed epithermal to mesothermal Au deposit (EL7440 Bodangora).
Air core drill programs at the GUER007 & Maryvale Cu-Au targets (EL8357 Combo).
Geological mapping & surface geochemistry at regional prospects (EL6178 Duke, EL7440 Bodangora & EL8357 Combo).

Wellington Project -$4M Capital Raising	Wellington Project -$4M Capital Raising	Wellington Project -$4M Capital Raising
Item	Year 1($)	Year 2($)	Total($)
Staff Vehicles Assays Drilling Geophysics Accommodation & meals Project administration	38,720 3,173 27,054 109,500 - 4,710 6,094	56,955 3,847 32,807 132,788 - 5,712 7,390	95,676 7,020 59,861 242,288 - 10,422 13,483
Total	189,250	239,500	428,750

Summary

	$4M Capital Raising	$4M Capital Raising
Project	Year 1($)	Year 2($)	Total($)
Moorefield	393,000	308,000	701,000
Myall	314,975	203,750	518,725
Parkes	253,750	97,500	51,250*
Wellington	189,250	239,500	428,750
Total	1,150,975	848,750	1,699,725

*Pursuant to the Joint Venture Agreement with JOGMEC, and subject to obtaining Foreign Investment Board Approval, the Company is anticipating the receipt of $300,000 in initial funding from JOGMEC towards its Parkes Project in April 2017.

The exploration budget will be subject to modification on an ongoing basis depending on the results obtained from exploration activities as they progress. It is also noted that proposed expenditure under the minimum raise scenario is sufficient to cover the minimum expenditure obligation.

It is considered that the Company has a reasonable proposed exploration budget over two years consistent with its stated objectives and that this program is warranted and justified on the basis of the historical exploration activity and demonstrated potential for discovery of an economic mineral deposit on the properties.

REFERENCES

Feebrey, C. 2014, ‘EL7675 Moorefield Third Annual Report Period 11 January 2013 to 10 January 2014’ GOLD FIELDS AUSTRALASIA PTY LTD

Mowat, B, “CHARACTERISTICS OF PORPHYRY Au-Cu SYSTEMS IN THE ORDOVICIAN MACQUARIE ARC OF NSW”, Http://Www.Smedg.Org.Au/Mowaab.Pdf

Oxenburgh, S, 2014, “EL7424 ALECTOWN Fifth Annual Report, 2014” GOLD FIELDS AUSTRALASIA PTY LTD

Oxenburgh, S, 2014, “EL6913 MYALL Seventh Annual Report, 2014” GOLD FIELDS AUSTRALASIA PTY LTD

Oxenburgh, S, 2015, “Wellington North Combined Annual Report EL6178 Duke And EL7440 Bodangora Eleventh Annual Report, 2015”, GOLD FIELDS AUSTRALASIA PTY LTD

Oxenburgh, S, 2015, “EL7424 ALECTOWN Sixth Annual Report, 2015”, GOLD FIELDS AUSTRALASIA PTY LTD

Oxenburgh, S, 2015, “EL7676 Parkes East Fourth Annual Report, 2015”, GOLD FIELDS AUSTRALASIA PTY LTD

Oxenburgh, S, 2015, “EL6913 MYALL Eighth Annual Report, 2015”, GOLD FIELDS AUSTRALASIA PTY LTD

Oxenburgh, S, 2015, EL7675 Moorefield Fourth Annual Report, 2015 GOLD FIELDS AUSTRALASIA PTY LTD

Oxenburgh, S, 2016, “Annual Report For The Lady Ilse Project EL8357 for the Period 8 April 2015 to 7 April 2016”, MODELING RESOURCES PTY LTD

Mines and Major Projects in Central NSW

Cadia – 43Moz Au and 8.4Mt Cu (@31 Dec 2015, (Newcrest Mining Ltd Annual Mineral Resources and Ore Reserves Statement dated 15 Feb 2016)

Northparkes Mine – 2.86Moz Au and 2.78Mt Cu (@ 31 Dec 2015, (China Molybdenum Co. Ltd 2015 Annual Report dated 24 March 2016)

Cowal – 5.046Moz Au (@31 Dec 2015, (Evolution Mining Ltd Annual Mineral Resources and Ore Reserves Statement dated 21 April 2016)

Tomingley – 0.579Moz Au (@30 June 2016, (Alkane Resources Ltd Resources and Reserves Statements dated 22 September 2016)

McPhillamys – 2.21Moz Au (@ 31 March 2016, (Regis Resources Ltd Mineral Resource and Ore Reserve Statement dated 7 July 2016)

Marsden – 1.1Moz Au and 0.67Mt Cu (@31 Dec 15, (Evolution Mining Ltd ASX Release dated 17 October 2016, Newcrest Mining Ltd Annual Mineral Resources and Ore Reserves Statement dated 15 Feb 2016)

Temora – 2.065Moz Au and 0.826Mt Cu (@30 June 2015, (Straits Resources Ltd Annual Report dated 23 October 2015)

Tritton – 0.169Mt Cu (@30 June 2016, (Aeris Resources Ltd Annual Report dated 6 October 2016)

Copper Hill – 0.48Moz Au and 0.16Mt Cu (Golden Cross Resources Limited ASX Release dated 24 March 2015

GLOSSARY OF TECHNICAL TERMS

	GLOSSARY OF TECHNICAL TERMS
aeolian	Formed or deposited by wind.
aerial photography	Photographs of the earths surface taken from an aircraft.
	A survey undertaken by helicopter or fixed-wing aircraft for the purpose of
aeromagnetic	recording magnetic characteristics of rocks by measuring deviations of the
	earths magnetic field.
airborne geophysical	Data pertaining to the physical properties of the earths crust at or near surface
data	and collected from an aircraft.
aircore	Drilling method employing a drill bit that yields sample material which is delivered to the surface inside the rod string by compressed air.
alluvial	Pertaining to silt, sand and gravel material, transported and deposited by a river.
	Clay silt, sand, gravel, or other rock materials transported by flowing water
alluvium	and deposited in comparatively recent geologic time as sorted or semi-sorted sediments in riverbeds, estuaries, and flood plains, on lakes, shores and in
	fans at the base of mountain slopes and estuaries.
alteration	The change in the mineral composition of a rock, commonly due to hydrothermal activity.
andesite	An intermediate volcanic rock composed of andesine and one or more mafic minerals.
anomalies	An area where exploration has revealed results higher than the local background level.
anticline	A fold in the rocks in which strata dip in opposite directions away from the central axis.
antiformal	An anticline-like structure.
Archaean	The oldest rocks of the Precambrian era, older than about 2,500 million years.
assayed	The testing and quantification metals of interest within a sample.
auger sampling	A drill sampling method using an auger to penetrate upper horizons and obtain a sample from lower in the hole.
axial plane	The plane that intersects the crest or trough of a fold, about which the limbs are more or less symmetrically arranged.
basalts	A volcanic rock of low silica (<55%) and high iron and magnesium composition, composed primarily of plagioclase and pyroxene.
polymetallics	A non-precious metal, usually referring to copper, lead and zinc.
bedrock	Any solid rock underlying unconsolidated material.
BIF	A rock consisting essentially of iron oxides and cherty silica, and possessing a marked banded appearance.
brittle	Rock deformation characterised by brittle fracturing and brecciation.
Cainozoic	An era of geological time spanning the period from 65 million years ago to the present.
carbonate	Rock of sedimentary or hydrothermal origin, composed primarily of calcium, magnesium or iron and CO3. Essential component of limestones and marbles.

chemical symbols	Gold (Au), silver (Ag), barium (Ba), copper Cu), zinc (Zn), lead (Pb) antimony (As), Antimony (Sb).
chert	Fine grained sedimentary rock composed of cryptocrystalline silica.
chlorite	A green coloured hydrated aluminium-iron-magnesium silicate mineral (mica) common in metamorphic rocks.
clastic	Pertaining to a rock made up of fragments or pebbles (clasts).
clays	A fine-grained, natural, earthy material composed primarily of hydrous aluminium silicates.
colluvium	A loose, heterogeneous and incoherent mass of soil material deposited by slope processes.
conduits	The main pathways that facilitate the movement of hydrothermal fluids.
conglomerate	A rock type composed predominantly of rounded pebbles, cobbles or boulders deposited by the action of water.
dacite	An extrusive rock composed mainly of plagioclase, quartz and pyroxene or hornblende or both.
depletion	The lack of gold in the near-surface environment due to leaching processes during weathering.
diamond drill hole	Mineral exploration hole completed using a diamond set or diamond impregnated bit for retrieving a cylindrical core of rock.
dilational	Open space within a rock mass commonly produced in response to folding or faulting.
dolerite	A medium grained mafic intrusive rock composed mostly of pyroxenes and sodium-calcium feldspar.
ductile	Deformation of rocks or rock structures involving stretching or bending in a plastic manner without breaking.
dykes	A tabular body of intrusive igneous rock, crosscutting the host strata at a high angle.
en-echelon	Repeating parallel, but offset, occurrences of lenticular bodies such as ore veins.
erosional	The group of physical and chemical processes by which earth or rock material is loosened or dissolved and removed from any part of the earths surface.
fault zone	A wide zone of structural dislocation and faulting.
feldspar	A group of rock forming minerals.
felsic	An adjective indicating that a rock contains abundant feldspar and silica.
folding	A term applied to the bending of strata or a planar feature about an axis.
foliated	Banded rocks, usually due to crystal differentiation as a result of metamorphic processes.
follow-up	A term used to describe more detailed exploration work over targets generated by regional exploration.
g/t	Grams per tonne, a standard volumetric unit for demonstrating the concentration of precious metals in a rock.
gabbro	A fine to coarse grained, dark coloured, igneous rock composed mainly of calcic plagioclase, clinopyroxene and sometimes olivine.
geochemical	Pertains to the concentration of an element.
geophysical	Pertains to the physical properties of a rock mass.
GIS database	A system devised to present partial data in a series of compatible and interactive layers.
gneissic	Coarse grained metamorphic rocks characterised by mineral banding of the light and dark coloured constituent minerals.
granite	A coarse-grained igneous rock containing mainly quartz and feldspar minerals and subordinate micas.

granoblastic	A term describing the texture of a metamorphic rock in which the crystals are of equal size.
granodiorite	A coarse grained igneous rock composed of quartz, feldspar and hornblende and/or biotite.
greenschist	A metamorphosed basic igneous rock which owes its colour and schistosity to abundant chlorite.
greenstone belt	A broad term used to describe an elongate belt of rocks that have undergone regional metamorphism to greenschist facies.
greywackes	A sandstone like rock, with grains derived from a dominantly volcanic origin.
GSWA	Geological Survey of Western Australia.
gypsum	Mineral of hydrated, or water-containing, calcium sulphate.
halite	Impure salt deposit formed by evaporation.
hangingwall	The mass of rock above a fault, vein or zone of mineralisation.
hematite	Iron oxide mineral, Fe2O3.
hinge zone	A zone along a fold where the curvature is at a maximum.
hydrothermal fluids	Pertaining to hot aqueous solutions, usually of magmatic origin, which may transport metals and minerals in solution.
igneous	Rocks that have solidified from a magma.
infill	Refers to sampling or drilling undertaken between pre-existing sample points.
insitu	In the natural or original position.
interflow	Refers to the occurrence of other rock types between individual lava flows within a stratigraphic sequence.
intermediate	A rock unit which contains a mix of felsic and mafic minerals.
intrusions	A body of igneous rock which has forced itself into pre-existing rocks.
intrusive contact	The zone around the margins of an intrusive rock.
ironstone	A rock formed by cemented iron oxides.
isoclinal	A series of folds that dip in the same direction at the same angle.
joint venture	A business agreement between two or more commercial entities.
komatiitic	Magnesium-rich mafic to ultramafic extrusive rock.
laterite	A cemented residuum of weathering, generally leached in silica with a high alumina and/or iron content.
lineament	A significant linear feature of the earth’s crust, usually equating a major fault or shear structure.
lithological contacts	The contacts between different rock types.
lithotypes	Rock types.
metamorphic	A rock that has been altered by physical and chemical processes involving heat, pressure and derived fluids.
metasedimentary	A rock formed by metamorphism of sedimentary rocks.
monzogranite	A granular plutonic rock containing approximately equal amounts of orthoclase and plagioclase feldspar, but usually with a low quartz content.
Moz	Millions of ounces.
Mt	Million Tonnes.
mylonite	A hard compact rock with a streaky or banded structure produced by extreme granulation of the original rock mass in a fault or thrust zone.
nickel laterite	Nickel ore hosted within the laterite profile, usually derived from the weathering of olivine-rich ultramafic rocks.
open pit	A mine working or excavation open to the surface.
Orthoimage	A geographically located composite plan using aerial photography as a base.

outcrops	Surface expression of underlying rocks.
palaeochannels	An ancient preserved stream or river.
	A very coarse grained intrusive igneous rock which commonly occurs in
pegmatite	dyke-like bodies containing lithium-boron-fluorine-rare earth bearing
	minerals.
	Describes the prevalence of rounded manganese, iron or alumina-rich
pisolitic	chemical concretions, frequently comprising the upper portions of a laterite
	profile.
playa lake	Broad shallow lakes that quickly fill with water and quickly evaporate, characteristic of deserts.
polymictic	Referring to coarse sedimentary rocks, typically conglomerate, containing clasts of many different rock types.
porphyries	Felsic intrusive or sub-volcanic rock with larger crystals set in a fine groundmass.
ppb	Parts per billion; a measure of low level concentration.
Proterozoic	An era of geological time spanning the period from 2,500 million years to 570 million years before present.
pyroxenite	A coarse grained igneous intrusive rock dominated by the mineral pyroxene.
quartz reefs	Old mining term used to describe large quartz veins.
quartzofeldspathic	Compositional term relating to rocks containing abundant quartz and feldspar, commonly applied to metamorphic and sedimentary rocks.
quartzose	Quartz-rich, usually relating to clastic sedimentary rocks.
RAB drilling	A relatively inexpensive and less accurate drilling technique involving the collection of sample returned by compressed air from outside the drill rods.
RC drilling	A drilling method in which the fragmented sample is brought to the surface inside the drill rods, thereby reducing contamination.
regolith	The layer of unconsolidated material which overlies or covers insitu basement rock.
residual	Soil and regolith which has not been transported from its point or origin.
resources	Insitu mineral occurrence from which valuable or useful minerals may be recovered.
rhyolite	Fine-grained felsic igneous rock containing high proportion of silica and felspar.
rock chip sampling	The collection of rock specimens for mineral analysis.
saprolite	Disintegrated, in-situ rock, partially decomposed by the chemical and physical processes of oxidation and weathering.
satellite imagery	The images produced by photography of the earth’s surface from satellites.
schist	A crystalline metamorphic rock having a foliated or parallel structure due to the recrystallisation of the constituent minerals.
scree	The rubble composed of rocks that have formed down the slope of a hill or mountain by physical erosion.
sedimentary	A term describing a rock formed from sediment.
sericite	A white or pale apple green potassium mica, very common as an alteration product in metamorphic and hydrothermally altered rocks.
shale	A fine grained, laminated sedimentary rock formed from clay, mud and silt.
sheared	A zone in which rocks have been deformed primarily in a ductile manner in response to applied stress.

	Referring to sediment, usually sand size, deposited over broad areas
sheet wash	characterised by sheet flood during storm or rain events. Superficial deposit formed by low temperature chemical processes associated with ground
	waters, and composed of fine grained, water-bearing minerals of silica.
	Superficial deposit formed by low temperature chemical processes associated
silcrete	with ground waters, and composed of fine grained, water-bearing minerals of
	silica.
silica	Dioxide of silicon, SiO2, usually found as the various forms of quartz.
sills	Sheets of igneous rock which is flat lying or has intruded parallel to stratigraphy.
silts	Fine-grained sediments, with a grain size between those of sand and clay.
soil sampling	The collection of soil specimens for mineral analysis.
stocks	A small intrusive mass of igneous rock, usually possessing a circular or elliptical shape in plan view.
strata	Sedimentary rock layers.
stratigraphic	Composition, sequence and correlation of stratified rocks.
stream sediment	The collection of samples of stream sediment with the intention of analysing
sampling	them for trace elements.
strike	Horizontal direction or trend of a geological structure.
subcrop	Poorly exposed bedrock.
sulphide	A general term to cover minerals containing sulphur and commonly associated with mineralisation.
supergene	Process of mineral enrichment produced by the chemical remobilisation of metals in an oxidised or transitional environment.
syenite	An intrusive igneous rock composed essentially of alkali feldspar and little or no quartz and ferromagnesian minerals.
syncline	A fold in rocks in which the strata dip inward from both sides towards the axis.
talc	A hydrous magnesium silicate, usually formed due to weathering of magnesium silicate rocks.
tectonic	Pertaining to the forces involved in or the resulting structures of movement in the earth’s crust.
tholeiitic	A descriptive term for a basalt with little or no olivine.
thrust fault	A reverse fault or shear that has a low angle inclination to the horizontal.
tremolite	A grey or white metamorphic mica of the amphibole group, usually occurring as bladed crystals or fibrous aggregates.
ultramafic	Igneous rocks consisting essentially of ferromagnesian minerals with trace quartz and feldspar.
veins	A thin infill of a fissure or crack, commonly bearing quartz.
volcaniclastics	Pertaining to clastic rock containing volcanic material.
volcanics	Formed or derived from a volcano.
zinc	A lustrous, blueish-white metallic element used in many alloys including brass and bronze.

Appendix 1 Validated Drill Intercepts that encountered mineralization.

EL7675 Moorefield Project

Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes

Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes	Boxdale & Ghost Hill Prospects: RC & Diamond Drill Holes
Validated Interceptsin mineralization nominallywith > or equal to 0.2g/t Au,with < or equal to 2m internal dilution & >1m down hole thickness
Hole_ID	Hole_Type	NAT1_East	NAT1_North	NAT1_RL	Dip	GDA_Azimuth	Max_Depth	Prospect		From_m	To_m	Interval_m	Au ppm	Cu %	Pb %	Zn %	Ag ppm
BDRC001	RC	527457	6361799	295	-60	169	150.0	Boxdale	Incl.	97 107 114 120	100 111 133 124	3 4 19 4	0.26 0.23 1.28 4.30
BDRC002	RC	527465	6361830	299	-58	172	250.0	Boxdale		114 164	116 166	2 2	0.44 0.47
BDRC003	RC	527530	6361705	300	-58	250	200.0	Boxdale	Incl. Incl.	26 32 32 56 72 85 92 138	28 36 34 67 76 100 98 140	2 4 2 11 4 15 6 2	0.23 0.70 1.20 0.40 0.23 1.00 2.11 0.20
BDRC004	RC	527610	6361610	307	-60	249	138.0	Boxdale		74 83	77 91	3 8	0.26 0.23
BDRC005	RC	528400	6361360	310	-60	249	150.0	Boxdale		32 56	44 58	12 2	0.26 0.34
BX-1	RC	527400	6361787	300	-59	182	80.0	Boxdale		44 56	48 67	4 11	0.28 0.27
BX-2	RC	527448	6361784	300	-61	182	80.0	Boxdale
BX-3	RC	527501	6361787	300	-60	185	80.0	Boxdale		68	70	2	1.70
BX-4	RC	527540	6361784	300	-60	181	80.0	Boxdale		43 74	46 79	3 5	0.30 0.43
DDH1	DD	527438	6361802	300	-60	141	123.4	Boxdale
DDHGH1	DD	521059	6364249	300	-70	79	380.0	GhostHill		145.23	168	21.27	0.02	0.05	0.05	0.38

									Incl. Incl.	161.75 274 303	168 332 308	6.25 58 5	0.01	0.08 0.11 0.31	0.06 <0.01 <0.01	1.08 <0.01 <0.01
SR20	PC	521185	6364234	300	-90	360	111.0	GhostHill	Incl.	93 102	108 108	15 6	0.64 1.30	0.03 0.03	0.1 0.13	0.12 0.15
SR21	PC	521196	6364285	300	-90	360	114.0	GhostHill		30	78	48	<0.05	0.06	0.15	0.2
TGH001	RC	521078	6364219	250	-70	136	196.0	GhostHill		64 164	96 168	32 4	0.01 <0.01	0.01 <0.01	0.06 0.01	0.24 0.17
TGH002	RC	521219	6364361	250	-70	136	226.0	GhostHill	Incl.	40 120	160 132	120 12	0.04 0.07	0.05 0.12	0.27 0.87	0.09 0.03	9 40
TGH003	RC	520901	6364113	250	-70	136	239.0	GhostHill		229	230	1	0.03	<0.01	1.11	0.09	8
TGH004	RC	520441	6363724	250	-70	136	250.0	GhostHill
TGH005	RC	521590	6363707	250	-70	136	232.0	GhostHill		36	49	13	0.07	0.04	0.18	0.1

		Distribution of	Assay Valuea
			Percentile
	10%	25%	50%	75%	90%
Cu %	0.05	0.05	0.10	0.12	0.00
Au ppm	0.03	0.05	0.05	0.66	0.12
Pb %	0.05	0.06	0.13	0.23	0.87
Zn %	0.09	0.10	0.15	0.22	0.38
Ag ppm	8.20	8.50	9.00	24.50	33.80

L6913 Myall Project

Kingswood Prospect: Diamond Drill Holes

Validated Intercepts in mineralisation with > or equal to 0.10% Cu, with < or equal to 2m internal dilution & >1m down hole thickness

Hole_ID	Hole_Type	NAT1_East	NAT1_North	NAT1_RL	Dip	GDA_Azimuth	Max_Depth	Prospect		From_m	To_m	Interval_m	Cu %	Au ppm
ACDNM082	ROTD	597939	6418777	225	-57	238	636.0	Kingswood		148 169 236 273	166 221 248 277	18 52 12 4	0.21 0.16 0.23 0.25	0.03 0.02 0.02 0.01

										280 294 317 342 357 364 372 388 415 430 442 453 619	291 314 329 354 359 368 378 410 427 437 446 461 621	11 20 12 12 2 4 6 22 12 7 4 8 2	0.12 0.14 0.27 0.17 0.55 0.15 0.16 0.14 0.16 0.12 0.10 0.10 0.13	<0.01 0.01 0.06 0.10 0.08 0.01 0.01 0.01 0.02 0.01 0.02 0.01 0.01
ACDNM090	ROTD	598208	6418944	216	-55	238	698.3	Kingswood	Incl. Incl.	168 186 192 211 227 351 360 375 387 537 555 569 589 600	178 189 299 217 243 353 365 378 405 539 557 572 592 607	10 3 107 6 16 2 5 3 18 2 2 3 3 7	0.11 0.32 0.43 1.14 1.01 0.17 0.19 0.14 0.13 0.14 0.15 0.13 0.19 0.14	0.01 0.02 0.11 0.26 0.32 0.01 0.01 0.04 0.02 <0.01 0.01 <0.01 0.02 0.02
ACDNM091	ROTD	598303	6418994	215	-55	238	629.4	Kingswood		189 200 225 238 247	192 204 229 241 249	3 4 4 3 2	0.14 0.12 0.12 0.11 0.12	<0.01 <0.01 0.01 0.06 0.01

										277 285 302 314 348 361 418 428 443 472	281 289 311 343 353 395 421 432 449 475	4 4 9 29 5 34 3 4 6 3	0.10 0.13 0.16 0.24 0.15 0.23 0.11 0.18 0.13 0.12	0.01 0.01 0.01 0.04 0.05 0.06 <0.01 0.03 0.02 0.02
ACDNM092	ROTD	598163	6419014	225	-55	238	590.3	Kingswood		161 178 184 219 251 276 290 302 317 328 368 374 431 455 498 518	173 180 216 225 253 286 297 311 321 365 371 382 434 492 514 520	12 2 32 6 2 10 7 9 4 37 3 8 3 37 16 2	0.19 0.16 0.26 0.14 0.11 0.28 0.18 0.12 0.15 0.21 0.22 0.12 0.38 0.22 0.14 0.14	0.01 0.01 0.03 0.01 0.01 0.05 0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.06 0.04 0.07
ACDNM093	ROTD	598273	6418849	213	-55	238	605.7	Kingswood	Incl.	147 191 205 225 238 250	151 195 210 230 261 259	4 4 5 5 23 9	0.12 0.17 0.22 0.12 0.46 0.90	0.02 0.01 0.01 0.01 0.03 0.06

										266 318 338 348 361 366 593	307 330 343 350 363 368 601	41 12 5 2 2 2 8	0.16 0.16 0.11 0.11 0.16 0.16 0.27	0.03 0.01 0.02 0.01 0.01 0.02 0.03
MYACD001	ACD	597784	6418627	206	-60	243	407.2	Kingswood	Incl. Incl.	103 141 158 214 229 239 260 268 325 378 398	138 211 183 224 232 249 322 278 328 381 401	35 70 25 10 3 10 62 10 3 3 3	0.26 0.54 0.82 0.15 0.16 0.19 0.27 0.64 0.10 0.19 0.41	0.02 0.15 0.31 0.01 0.01 0.02 0.13 0.61 0.01 0.01 0.01
MYACD002	ACD	597658	6418443	206	-60	50	336.3	Kingswood		129 138 149 169 220 265 280 308	133 142 154 171 260 271 282 311	4 4 5 2 40 6 2 3	0.14 0.10 0.16 0.14 0.27 0.14 0.13 0.20	<0.01 0.01 0.02 0.01 0.03 0.01 0.01 0.44
MYACD127	ACD	597860	6419980	214	-90	0	189.0	Kingswood		123 130	126 136	3 6	0.12 0.15	<0.01 <0.01
MYACD146	ACD	597692	6419838	219	-60	34	546.7	Kingswood		283 398	285 400	2 2	0.12 0.14	0.03 0.01
MYACD181	ACD	597720	6418050	219	-60	79	390.6	Kingswood		134 140	136 143	2 3	0.14 0.11	0.02 0.01

									151 162 168 212 234 271 282 288 296 341 350	156 165 172 217 239 278 284 292 298 346 363	5 3 4 5 5 7 2 4 2 5 13	0.15 0.12 0.11 0.14 0.13 0.13 0.13 0.12 0.16 0.14 0.11	0.02 0.01 0.03 <0.01 <0.01 0.02 <0.01 <0.01 0.01 0.02 0.01
MYACD183	ACD	597740	6418450	211	-60	259	522.8	Kingswood	130 167 191 207 225 246 329 346 496	162 172 204 222 234 248 332 359 503	32 5 13 15 9 2 3 13 7	0.18 0.12 0.12 0.17 0.14 0.14 0.14 0.10 0.10	0.01 0.01 0.01 0.03 0.02 0.01 <0.01 0.01 0.01
MYACD184	ACD	597680	6418350	212	-60	79	333.6	Kingswood	130 158.55 187 195	156 174 192 283	26 15.45 5 88	0.17 0.18 0.20 0.19	0.02 0.02 0.01 0.04
MYACD185	ACD	597530	6418350	200	-60	90	486.9	Kingswood	138 166 195 259 306 371 379 406	152 170 197 272 308 373 388 410	14 4 2 13 2 2 9 4	0.16 0.17 0.12 0.10 0.13 0.20 0.17 0.15	0.01 0.01 0.01 0.01 0.01 0.03 0.01 0.01

									422 426 436 441 480	424 429 438 446 485	2 3 2 5 5	0.12 0.12 0.11 0.13 0.11	<0.01 <0.01 0.02 0.01 <0.01
MYACD186	ACD	597470	6418040	218	-60	79	396.7	Kingswood	267	269	2	0.14	<0.01
MYACD187	ACD	597670	6417800	223	-60	79	373.8	Kingswood	159 169 225 272 279 291 313	166 174 233 274 288 305 319	7 5 8 2 9 14 6	0.12 0.27 0.19 0.15 0.14 0.23 0.22	0.07 0.07 <0.01 0.03 0.01 0.02 0.01
MYACD188	DD	597300	6417750	219	-60	92	376.9	Kingswood	191 199 218 254 263 268 296 345 369	194 204 222 256 265 274 298 348 372	3 5 4 2 2 6 2 3 3	0.13 0.13 0.12 0.18 0.20 0.11 0.28 0.12 0.13	0.02 0.03 0.02 0.01 0.01 0.01 0.02 0.02 0.04
MYACD374	ACD	597701	6418952	221	-60	241	348.9	Kingswood	168	171	3	0.12	<0.01
NACD008	ACD	598027	6418273	226	-90	0	138.3	Kingswood	128	138.3	10.3	0.12	0.04
NACD009 NACD081	ACD ACD	598113 597619	6417184 6418184	219 216	-90 -90	0 0	136.9 148.7	Kingswood Kingswood
NACD082	ACD	598617	6418184	221	-90	0	153.0	Kingswood
NACD083	ACD	598114	6417687	215	-90	0	171.5	Kingswood	152 166	154 170	2 4	0.13 0.15	0.03 0.03
NACD084	ACD	598105	6417935	217	-90	0	141.2	Kingswood
NACD085	ACD	598363	6418167	220	-90	0	134.6	Kingswood	115	129	14	0.25	<0.01
NACD086	ACD	598004	6418437	230	-90	0	140.1	Kingswood	112	116	4	0.13	<0.01

									120	123	3	0.12	<0.01
NACD087	ACD	597865	6418184	222	-90	0	149.9	Kingswood	114 139 148	131 143 149.9	17 4 1.9	0.23 0.12 0.11	0.01 0.03 0.01
NACD088	ACD	598087	6419186	237	-90	0	150.2	Kingswood	147	149	2	0.15	0.01
NACD089	ACD	597613	6419184	224	-90	0	153.0	Kingswood	116 130 149	126 144 153	10 14 4	0.15 0.14 0.12	0.08 0.05 0.03
NACD090	ACD	597853	6417184	223	-70	270	161.9	Kingswood
NACD091	ACD	598008	6418683	224	-90	0	156.3	Kingswood	114 147	141 149	27 2	0.20 0.19	0.02 0.03
NACD093	ACD	597613	6417734	221	-90	0	162.2	Kingswood	126 138 148	130 144 155	4 6 7	0.16 0.10 0.12	0.02 0.01 <0.01
NACD094	ACD	598613	6417184	220	-90	0	145.6	Kingswood
NACD137	ACD	598113	6416734	217	-90	0	123.0	Kingswood
NACD152	ACD	597974	6417684	220	-60	90	309.5	Kingswood	128	132	4	0.15	0.03
NACD153	ACD	598344	6417684	217	-60	90	363.3	Kingswood	180 194 212 230 299 308 321 353	186 206 214 241 303 312 328 354.5	6 12 2 11 4 4 7 1.5	0.14 0.10 0.22 0.11 0.14 0.10 0.13 0.27	0.02 0.02 0.03 0.02 0.05 0.01 0.02 0.03
NACD154	ACD	597913	6418184	222	-60	90	322.4	Kingswood	129 158 162.55	142.1 159.7 179	13.1 1.7 16.45	0.21 0.27 0.14	0.01 0.02 0.01
NACD155	ACD	598363	6418184	220	-60	90	305.0	Kingswood	135 146 158 163	141 150 159.2 165	6 4 1.2 2	0.12 0.11 0.13 0.14	0.01 0.01 0.01 <0.01

										175 205 213 278	197 207 217 280	22 2 4 2	0.19 0.11 0.24 0.13	0.01 <0.01 0.01 0.01
NACD156	ACD	597613	6418964	216	-60	360	413.5	Kingswood		132 146 161 177 221 235 298 374 400 408	136 148.7 163 217 222.2 263 301 396 402 413.5	4 2.7 2 40 1.2 28 3 22 2 5.5	0.51 0.12 0.18 0.11 0.15 0.17 0.15 0.21 0.12 0.12	0.02 0.02 0.02 0.04 0.08 0.09 0.06 0.20 0.05 0.09
NACD158	ACD	597893	6418684	214	-60	90	326.1	Kingswood		132 212 224.1 249	144 214 243 251	12 2 18.9 2	0.12 0.11 0.20 0.30	0.01 0.01 0.30 1.03

		Distribution of	Assay Valuea
			Percentile
	10%	25%	50%	75%	90%
Cu %	0.11	0.12	0.14	0.19	0.27
Auppm	0.01	0.01	0.02	0.03	0.07

EL6913 Myall Project

Barina & Gemini Prospects: Diamond Drill Holes

Validated Intercepts in mineralisation with > or equal to 0.2g/t Au, with < or equal to 2m internal dilution & > or equal to 0.5m down hole thickness

Hole_ID	Hole_Type	NAT1_East	NAT1_North	NAT1_RL	Dip	GDA_Azimuth	Max_Depth	Prospect		From_m	To_m	Interval_m	Au ppm
MYACD149	ACD	594085	6421965	228	-60	45	608.3	Barina		181 209 295	182 210 296	1 1 1	0.51 1.48 0.36
MYACD368	ACD	594528	6421360	224	-60	45	633.9	Barina		118 221.9 294 304	119 222.4 295 305	1 0.5 1 1	1.45 204 0.27 0.72
MYACD373	ACD	594768	6421605	231	-60	45	634.0	Barina
MYACD389	ACD	594519	6421434	224	-58	90	300.0	Barina		128	132	4	0.20
MYACD390	ACD	594489	6421436	224	-60	90	163.5	Barina
MYACD390W1	DW	594489	6421436	224	-60	90	350.0	Barina		267.2	267.75	0.55	0.34
MYACD391	ACD	594459	6421434	224	-60	89	145.5	Barina
ACDNM079	ACD	596908	6419419	216	-90	0	197.0	Gemini		159 171 190	160 176 191	1 5 1	0.21 0.29 0.29
ACDNM080	ROTD	597502	6419535	213	-60	238	513.2	Gemini
ACDNM081	ROTD	597273	6419395	220	-55	238	487.5	Gemini	Incl. Incl.	359 360 363	368 361 365	9 1 2	3.19 8.83 6.38
ACDNM112	ROTD	597166	6419453	217	-55	238	751.0	Gemini	Incl.	422 426 600 619 664 688 692 692	423 427 604 620 665 689 695 693	1 1 4 1 1 1 3 1	0.51 0.82 0.28 0.24 0.24 0.25 5.06 13.25

									Incl. Incl.	702 702 718 725 742	705 704 726 726 743	3 2 8 1 1	3.86 5.55 0.92 5.41 0.35
ACDNM113	ROTD	596991	6418941	218	-55	335	793.0	Gemini		151 187 251 342 354 459 493 545 655 659 789	152 188 253 343 355 461 494 549 656 660 790	1 1 2 1 1 2 1 4 1 1 1	0.23 0.27 0.48 0.86 0.55 0.75 0.36 0.26 0.35 0.64 0.42
ACDNM114	ROTD	596780	6419370	216	-55	245	817.0	Gemini		228 273 336 403 648 768	230 274 337 405 650 769	2 1 1 2 2 1	0.37 0.23 2.83 0.44 0.89 0.22
MYACD147	ACD	597109	6419179	214	-60	349	348.7	Gemini
MYACD148	ACD	596861	6419170	216	-60	349	431.2	Gemini	Incl.	186 215 221 322 325 342	187 217 222 326 326 343	1 2 1 4 1 1	0.45 0.39 0.64 0.64 1.59 0.32
MYACD375	ACD	597215	6418824	227	-60	241	465.4	Gemini
NACD129	ACD	597113	6419184	214	-90	0	134.0	Gemini

		Distribution of	Assay Valuea
			Percentile
	10%	25%	50%	75%	90%
Auppm	0.24	0.29	0.48	1.19	5.41

EL7676 & EL7424 Parkes Project

MacGregors & Stockmans Prospects: RC & Diamond Drill Holes

Validated Intercepts in mineralization nominally with > or equal to 0.2g/t Au, with < or equal to 2m internal dilution & >1m down hole thickness

Hole_ID	Hole_Type	NAT1_East	NAT1_North	NAT1_RL	Dip	GDA_Azimuth	Max_Depth	Prospect		From_m	To_m	Interval_m	Au ppm
AE12	RC	618402	6357633	390	-60	90	66	Stockmans		16	18	2	0.21
AE13	RC	618443	6357584	390	-60	272	72	Stockmans		6 24 62	8 26 64	2 2 2	0.64 0.31 0.71
AE14	RC	618446	6357537	390	-60	252	66	Stockmans
AE15	RC	618464	6357477	390	-60	253	60	Stockmans		10	12	2	1.16
S1	OH	618398	6357609	300	-60	70	72	Stockmans	Incl.	13 45 47	15 67 61	2 22 14	0.24 0.79 1.01
S2	OH	618389	6357552	300	-60	75	55	Stockmans	Incl.	7 9 21	19 15 27	12 6 6	1.42 2.44 0.32
S3	OH	618373	6357539	300	-60	70	81	Stockmans		9	11	2	0.31
S4	OH	618358	6357514	300	-60	70	90	Stockmans
MGD001	DD	608905	6344130	350	-60	272	216.7	MacGregors	Incl.	48 62 67 76 77 102 123	49 63 69 91 83 109 124	1 1 2 15 6 7 1	0.97 0.41 1.14 0.66 1.03 0.38 0.24

										126 135	127 138	1 3	0.92 0.20
MGD002	RC	608785	6344030	350	-60	270	186	MacGregors	Incl. Incl. Incl.	38 46 52 78 80 95 95 104 121 125 135 137	39 47 64 88 84 114 96 107 122 126 136 138	1 1 12 10 4 19 1 3 1 1 1 1	0.31 0.88 0.41 0.51 0.90 0.63 5.75 0.93 0.31 0.37 0.28 0.26
MM01	PC	608538	6343834	350	-60	270	50	MacGregors		10 18	11 22	1 4	0.32 0.26
MM02	PC	608563	6343834	350	-60	270	50	MacGregors		25 31	26 34	1 3	0.30 0.25
MM03	PC	608589	6343834	350	-60	270	50	MacGregors		0 5 34	1 7 35	1 2 1	0.20 0.78 0.28
MM04	PC	608613	6343834	350	-60	270	50	MacGregors		6	20	14	0.36
MM05	PC	608638	6343834	350	-60	270	50	MacGregors		18 21 24 43	19 22 28 48	1 1 4 5	0.27 0.21 0.21 0.45
MM06	PC	608663	6343834	350	-60	270	50	MacGregors		34	40	6	0.20
MM07	PC	608688	6343834	350	-60	270	50	MacGregors		5 20	9 21	4 1	0.26 0.51
MM08	PC	608714	6343834	350	-60	270	50	MacGregors		2 22 47	6 23 49	4 1 2	0.25 0.27 0.73

MM09	PC	608738	6343834	350	-60	270	50	MacGregors		11	19	8	0.34
MM10	PC	608763	6343834	350	-60	270	50	MacGregors		24	34	10	0.33
MM15	PC	608938	6344028	350	-60	280	50	MacGregors		42	43	1	0.23
MM16	PC	608914	6344034	350	-60	270	50	MacGregors		29	30	1	0.76
MM17	PC	608888	6344034	350	-60	270	50	MacGregors		7 24	8 25	1 1	0.36 0.22
MM18	PC	608863	6344034	350	-60	270	50	MacGregors		31	32	1	0.25
MM19	PC	608838	6344034	350	-60	270	50	MacGregors		20	21	1	1.82
MM20	PC	608813	6344034	350	-60	270	50	MacGregors		1	2	1	0.27
MM21	PC	608612	6344034	350	-60	270	52	MacGregors		24	28	4	0.30
MM28	PC	608739	6344134	350	-60	270	52	MacGregors
MM29	PC	608763	6344134	350	-60	270	52	MacGregors
MM30	PC	608788	6344134	350	-60	270	52	MacGregors
MM31	PC	608813	6344134	350	-60	270	52	MacGregors	Incl.	0 12 18	4 42 23	4 30 5	1.13 0.46 1.02
MM32	PC	608838	6344134	350	-60	270	60	MacGregors	Incl. Incl.	10 20 28 34 58	24 23 30 60 60	14 3 2 26 2	0.62 1.11 0.91 0.55 1.73
MM33	PC	608864	6344134	350	-60	270	52	MacGregors	Incl. Incl. Incl.	13 17 28 33 45	29 18 29 51 50	16 1 1 18 5	1.22 4.70 5.53 0.72 1.28
MM34	PC	608888	6344134	350	-60	270	52	MacGregors	Incl.	44 46	51 47	7 1	1.06 2.42
MM35	PC	608913	6344134	350	-60	270	52	MacGregors
MM36	PC	608812	6344234	350	-60	270	52	MacGregors		16	20	4	0.20
MM37	PC	608838	6344234	350	-60	270	52	MacGregors		16	32	16	0.31

MM38	PC	608863	6344234	350	-60	270	52	MacGregors		24	28	4	0.72
MM39	PC	608888	6344234	350	-60	270	60	MacGregors	Incl.	28 38	40 39	12 1	0.49 3.09
MM40	PC	608913	6344234	350	-60	270	60	MacGregors		24 48	28 52	4 4	1.03 0.42
MM41	PC	608937	6344234	350	-60	270	56	MacGregors		28 48	32 56	4 8	0.33 0.44

		Distribution of	Assay Valuea
			Percentile
	10%	25%	50%	75%	90%
Auppm	0.23	0.28	0.45	0.93	1.36

EL6178 Wellington Project (Duke EL6178)

Rose Hill Prospect: Diamond & RC Drill Holes

Validated Intercepts in mineralization with > or equal to 0.05% Cu, with < or equal to 5m internal dilution & >1m down hole thickness

Hole_ID	Hole_Type	NAT1_East	NAT1_North	NAT1_RL	Dip	GDA_Azimuth	Max_Depth	Prospect		From_m	To_m	Interval_m	Cu %	Au ppm	Mo ppm
RHD001	DD	679596	6414096	443	-60	269	366.3	Rose Hill
RHRC001	RC	678412	6412745	415	-60	319	150.0	Rose Hill
RHRC002	RC	678390	6412235	401	-60	111	150.0	Rose Hill		21 40 60 69 95	23 49 62 73 117	2 9 2 4 22	0.17 0.08 0.13 0.10 0.11	0.09 0.07 0.08 0.03 0.05	52 17 33 3 345
RHRC003	RC	678452	6412176	398	-60	112	150.0	Rose Hill	Incl.	2 59 59 87 143	16 76 60 89 147	14 17 1 2 4	0.09 0.10 0.50 0.08 0.06	0.07 0.09 0.24 0.11 0.08	1 20 37 19 9

RHRC004	RC	678728	6412498	399	-60	112	150.0	Rose Hill		122	123	1	0.11	0.58	4
RHRC005	RC	678442	6412257	399	-60	190	114.0	Rose Hill	Incl. Incl. Incl. Incl.	0 0 20 42 47 79	71 6 27 44 55 83	71 6 7 2 8 4	0.43 1.47 0.65 0.96 1.34 0.07	0.30 0.99 0.77 1.05 0.52 0.03	57 123 31 96 239 1016
RHRC006	RC	678460	6412326	399	-60	190	225.0	Rose Hill	Incl. Incl. Incl. Incl. Incl. Incl.	6 21 37 48 64 66 86 92 103 103 125	29 22 56 49 76 72 93 93 139 104 127	23 1 19 1 12 6 7 1 36 1 2	0.11 0.75 0.11 0.41 0.49 0.87 0.18 0.78 0.22 1.55 1.85	0.41 7.37 0.19 0.94 0.24 0.43 0.05 0.15 0.11 0.60 0.64	3 20 6 14 5 6 34 62 353 872 1126
RHRC007	RC	678581	6412219	394	-60	190	165.0	Rose Hill		36	38	2	0.07	0.14	2
RHRC008	RC	678593	6412283	395	-60	190	189.0	Rose Hill		63	66	3	0.11	0.17	4
RHRC009	RC	678516	6412568	405	-60	190	225.0	Rose Hill		100 183 206	103 185 218	3 2 12	0.10 0.10 0.08	0.03 0.06 0.02	3 2 25
RHRC010	RC	679596	6413414	427	-60	11	117.0	Rose Hill
RHD002	DD	678476	6412394	400	-60	188	441.0	Rose Hill	Incl.	64 72 87 139 209 247	79 73 132 148 211 248	15 1 45 9 2 1	0.19 1.44 0.11 0.08 0.08 0.49	0.23 1.37 0.06 0.12 0.02 0.19	13 74 22 76 12 8

252 339	255 340	3 1	0.09 0.34	0.15 <0.01	3 1

		Distribution of	Assay Valuea
			Percentile
	10%	25%	50%	75%	90%
Cu %	0.08	0.10	0.13	0.50	1.34
Au ppm	0.03	0.07	0.15	0.45	0.95
Moppm	2.60	5.40	19.60	62.00	345.00

Source: The drill hole locations and results have been compiled by the Company from a large number of company reports many of which are available from the NSW Mines Department. Some reports remain confidential for current tenements. The Company has verified the accuracy of all results in the tables.

Appendix 2:

JORC Code, 2012 Edition - Table 1

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Sampling	 Nature and quality of sampling (eg cut channels, random chips, or specific	Percussion (PC) Drilling
techniques	specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad	 PC samples were collected as 1m intervals, it is unknown if these were spear or split sampled and results are taken as being indicative only.
	meaning of sampling.	RC Drilling
	 Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.  Aspects of the determination of mineralisation that are Material to the Public Report.  In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire	 Normal practice would be to collect single metre intervals and composited into 2m or 4m intervals for first pass assay. Samples identified as anomalous were usually resubmitted as single metre intervals. Samples are assumed to have been split through a cyclone to produce a composite and single metre sample but it is unknown if this was done through a cone or riffle splitter.
	assay’). In other cases more explanation may be required, such as where	Diamond Drilling
	there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.	 Normal practice at the time of the drilling would have been to collect half core samples at nominal 1m intervals and limited by geological logging were collected sent for analysis
Drilling	 Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast,	Wellington North Project
techniques	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 method, etc).	 RC drilling 10 holes for 1635m, assumed face sampling bit  Diamond drilling 2 holes for 807.3m. It is unknown if the core was orientated.
		Parkes Project
		 Air Core drilling 31 hole for 1608m
		 RC drilling 5 holes for 450m, assumed face sampling bit
		 Diamond drilling 1 holes for 216.7m. It is unknown if the core was
		orientated.

Criteria	JORC Code explanation	Commentary
		Myall Project
		 Air Core drilling 55 hole for 19671m
		 Diamond drilling 1 holes for 376.9m. It is unknown if the core was
		orientated.
		Moorefield Project
		 RC drilling 14 holes for 2351m, assumed face sampling bit
		 Diamond drilling 2 holes for 503.4m. It is unknown if the core was
		orientated.
Drill sample	 Method of recording and assessing core and chip sample recoveries and	 Not documented in historic reporting.
recovery	results assessed.
	 Measures taken to maximise sample recovery and ensure representative
	nature of the samples.
	 Whether a relationship exists between sample recovery and grade and
	whether sample bias may have occurred due to preferential loss/gain of
	fine/coarse material.
Logging	 Whether core and chip samples have been geologically and geotechnically	 All drillholes have been geologically logged. PC, RC and DD
	logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.	 It is assumed the logging is of insufficient quality for Mineral Resource estimation.
	 Whether logging is qualitative or quantitative in nature. Core (or costean,
	channel, etc) photography.
	 The total length andpercentage of the relevant intersections logged.
Sub-sampling	 If core, whether cut or sawn and whether quarter, half or all core taken.	 Diamond Drilling
techniques and	 If non-core, whether riffled, tube sampled, rotary split, etc and whether	 Half core samples collected.
sample preparation	sampled wet or dry.  For all sample types, the nature, quality and appropriateness of the sample	 RC Drilling  The collection of 4m composites and single meter intervals infers
	preparation technique.  Quality control procedures adopted for all sub-sampling stages to maximise	sample splitting but methodology is unknown.  PC Drilling
	representivity of samples.	 The collection of 1m composites - methodology unknown.
	 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.	 The quality control measures adopted by previous explorers have not been
	 Whether sample sizes are appropriate to the grain size of the material being	documented in available reporting.
	sampled.
Quality of	 The nature, quality and appropriateness of the assaying and laboratory	 Not documented in historic reporting
assay data and	procedures used and whether the technique is consideredpartial or total.

Criteria	JORC Code explanation	Commentary
laboratory	 For geophysical tools, spectrometers, handheld XRF instruments, etc, the
tests	parameters used in determining the analysis including instrument make and
	model, reading times, calibrations factors applied and their derivation, etc.
	 Nature of quality control procedures adopted (eg standards, blanks,
	duplicates, external laboratory checks) and whether acceptable levels of
	accuracy (ie lack of bias) andprecision have been established.
Verification of	 The verification of significant intersections by either independent or	 Not documented in historic reporting.
sampling and	alternative company personnel.
assaying	 The use of twinned holes.
	 Documentation of primary data, data entry procedures, data verification,
	data storage (physical and electronic) protocols.
	 Discuss any adjustment to assay data.
Location of	 Accuracy and quality of surveys used to locate drill holes (collar and down-	 Not documented in historic reporting. No Mineral Resource estimation
data points	hole surveys), trenches, mine workings and other locations used in Mineral	attempted.
	Resource estimation.
	 Specification of the grid system used.
	 Quality and adequacy of topographic control.
Data spacing	 Data spacing for reporting of Exploration Results.	 The location of all drill holes is shown in the various tables in the
and	 Whether the data spacing and distribution is sufficient to establish the	Independent Geologist’s Report.
distribution	degree of geological and grade continuity appropriate for the Mineral
	Resource and Ore Reserve estimation procedure(s) and classifications
	applied.
	 Whether sample compositing has been applied.
Orientation of	 Whether the orientation of sampling achieves unbiased sampling of possible	 The drill holes are either grid based or approximately perpendicular to the
data in relation	structures and the extent to which this is known, considering the deposit	strike of the regional geological trend.
to geological	type.
structure	 If the relationship between the drilling orientation and the orientation of key
	mineralised structures is considered to have introduced a sampling bias, this
	should be assessed and reported if material.
Sample	 The measures taken to ensure sample security.	 Not documented in historic reporting.
security
Audits or	 The results of any audits or reviews of sampling techniques and data.	 Not documented in historic reporting.
reviews

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, location and ownership including agreements	 Tenement details are included in the tenement Schedule section of the
tenement and	or material issues with third parties such as joint ventures, partnerships,	Independent Geologist’s Report.
land tenure	overriding royalties, native title interests, historical sites, wilderness or
status	national park and environmental settings.
	 The security of the tenure held at the time of reporting along with any known
	impediments to obtaining a licence to operate in the area.
Exploration	 Acknowledgment and appraisal of exploration by other parties.	 Previous exploration for each of the projects is detailed in the Independent
done by other		Geologist’s Report
parties
Geology	 Deposit type, geological setting and style of mineralisation.	 As referenced in the body of the Independent Geologists Report
Drill hole	 A summary of all information material to the understanding of the	 The various tables of significant results for each project in the independent
Information	exploration results including a tabulation of the following information for all	geologists report tabulates all geographic data relating to the drilling
	Material drill holes:	undertaken.
	`o` easting and northing of the drill hole collar	 The drill holes presented in the tables include the significant intercepts from
	`o` elevation or RL (Reduced Level – elevation above sea level in metres) of	the prospects but are not exhaustive. Excluded holes did not intersect the
	the drill hole collar	mineralised zones and did not return any anomalous results. This information
	`o` dip and azimuth of the hole	is not considered relevant and has not been provided.
	`o` down hole length and interception depth	 Details of the date completed, company and technical report are include in
	`o` hole length.	the tables following Table 1 in this Report.
	 If the exclusion of this information is justified on the basis that the
	information is not Material and this exclusion does not detract from the
	understanding of the report, the Competent Person should clearly explain
	why this is the case.
Data	 In reporting Exploration Results, weighting averaging techniques, maximum	 Intercepts as quoted in the Independent Geologists Report are derived from
aggregation	and/or minimum grade truncations (eg cutting of high grades) and cut-off	the various reports presented to the Department of Mines as required for
methods	grades are usually Material and should be stated.	annual reporting.
		 Significant intercepts are weighted averaged based on drill hole length with
	 Where aggregate intercepts incorporate short lengths of high grade results	no top cut applied.
	and longer lengths of low grade results, the procedure used for such	 No metal equivalents have been stated.
	aggregation should be stated and some typical examples of such
	aggregations should be shown in detail.
	 The assumptions usedfor any reporting of metal equivalent values should be

Criteria	JORC Code explanation	Commentary
	clearly stated.
Relationship	 These relationships are particularly important in the reporting of	 Drilling is predominantly RC and some DD and the relationship between
between	Exploration Results.	drill intercept and mineralisation widths is unknown.
mineralisation	 If the geometry of the mineralisation with respect to the drill hole angle is
widths and	known, its nature should be reported.
intercept	 If it is not known and only the down hole lengths are reported, there should
lengths	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 intercepts	 Included in Independent Geologists Report
	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 Exploration Results is not practicable,	 Tables of drilling results are included in the mail report which
reporting	representative reporting of both low and high grades and/or widths should	illustrates the spread of results obtained
	bepracticed to avoid misleading reporting of Exploration Results.
Other	 Other exploration data, if meaningful and material, should be reported	 All meaningful data has been included in the main report.
substantive	including (but not limited to): geological observations; geophysical survey
exploration	results; geochemical survey results; bulk samples – size and method of
data	treatment; metallurgical test results; bulk density, groundwater,
	geotechnical and rock characteristics; potential deleterious or
	contaminating substances.
Further work	 The nature and scale of planned further work (eg tests for lateral extensions	 Included in Independent Geologists Report.
	or depth extensions or large-scale step-out drilling).
	 Diagrams clearly highlighting the areas of possible extensions, including the
	main geological interpretations and future drilling areas, provided this
	information is not commercially sensitive.

6. INVESTIGATING ACCOUNTANT’S REPORT ON FINANCIAL INFORMATION

117

4458-01/1674882_3

MAGMATIC RESOURCES LIMITED Investigating Accountant’s Report

24 March 2017

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24 March 2017

The Directors Magmatic Resources Limited Level 1, 11 Lucknow Place WEST PERTH WA 6872

Dear Directors

INVESTIGATING ACCOUNTANT’S REPORT

1. Introduction

BDO Corporate Finance (WA) Pty Ltd ( ‘BDO’ ) has been engaged by Magmatic Resources Limited ( ‘Magmatic’ or ‘the Company’ ) to prepare this Investigating Accountant's Report ( ‘Report’ ) in relation to certain financial information of Magmatic, for the Initial Public Offering of shares in the Company, for inclusion in the Prospectus. Magmatic is a newly incorporated gold, copper and base metals exploration company with four mineral projects located in New South Wales (‘Projects’). Magmatic’s projects are held by its wholly owned subsidiary, Modeling Resources Pty Ltd (‘Modeling’) which acquired the Projects from Gold Fields Australia Pty Ltd (‘Gold Fields’) together with a fully operational exploration office in the East Lachlan region of New South Wales.

Broadly, the Prospectus will offer 20 million Shares at an issue price of $0.20 each to raise $4 million before costs, together with one free attaching Loyalty Option for every two Shares subscribed for and issued (‘ the Offer ’). Each Loyalty Option has an exercise price of $0.30 with a 36 month expiry period from the date of admission to the Official List of the Australian Securities Exchange ( ‘ASX’ )

Expressions defined in the Prospectus have the same meaning in this Report. BDO Corporate Finance (WA) Pty Ltd ( ‘BDO’ ) holds an Australian Financial Services Licence (AFS Licence Number 316158).

This Report has been prepared for inclusion in the Prospectus. We disclaim any assumption of responsibility for any reliance on this Report or on the Financial Information to which it relates for any purpose other than that for which it was prepared.

2. Scope

You have requested BDO to perform a review engagement in relation to the historical and pro forma historical financial information described below and disclosed in the Prospectus.

The historical and pro forma historical financial information is presented in the Prospectus in an abbreviated form, insofar as it does not include all of the presentation and disclosures required by Australian Accounting Standards and other mandatory professional reporting requirements

BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

applicable to general purpose financial reports prepared in accordance with the Corporations Act 2001.

The Company was incorporated on 28 October 2016 and has a limited financial history. As such, the historical information of Magmatic will be presented as a continuation of the pre-existing accounting values of Modeling. Modeling was incorporated in April 2014 and was acquired by the Company on 28 October 2016.

The acquisition of Modeling by the Company (the ‘Group Reorganisation’ ) was not considered to be a business combination and does not result in any change of economic substance. Accordingly, following the Group Reorganisation on 28 October 2016, the consolidated financial statements of the Company represent a continuation of the operations of Modeling. The Company and Modeling together form the ‘Group’ . As such the financial statements for the period ended 31 December 2016 represent the consolidated financial statements of the Group as this is the first reporting date after the Group Reorganisation. The comparative amounts shown at 31 December 2015, and 30 June 2016, relate to the financial statements of Modeling Resources Pty Ltd, as a single entity.

You have requested BDO to review the following historical financial information (together the ‘Historical Financial Information’) of the Group and Modeling included in the Prospectus:

the audited historical statements of financial performance and cash flows of Modeling for the years ended 30 June 2015 and 30 June 2016 and the half year ended 31 December 2015;
the reviewed historical consolidated statements of comprehensive income and cash flow of the Group for the half year ended 31 December 2016; and
the reviewed historical consolidated statement of financial position for the Group at 31 December 2016.

(together the ‘Historical Financial Information’ )

The Historical Financial Information has been prepared in accordance with the stated basis of preparation, being the recognition and measurement principles contained in the Australian Accounting Standards and the Group’s adopted accounting policies. The Historical Financial Information has been extracted from the respective financial reports for the years ended 30 June 2015 and 30 June 2016 and for the half years ended 31 December 2015 and 31 December 2016.

The financial reports for the years ended 30 June 2015 and 30 June 2016 were audited by BDO Audit (WA) Pty Ltd (‘BDO WA’) in accordance with the Australian Auditing Standards. BDO WA issued unmodified audit opinions on the financial reports for the years ended 30 June 2015 and 30 June 2016. However, each of the financial reports included an Emphasis of Matter paragraph which indicated that the ability of Modeling to continue as a going concern was dependent on the success of the fundraising under the Prospectus and the continued financial support from its shareholders.

The financial report for the half years ended 31 December 2015 and 31 December 2016 were reviewed by BDO WA in accordance with the Australian Auditing Standards. BDO WA issued an unmodified review conclusion on the financial report for the half year ended 31 December 2016. However, the financial report included an Emphasis of Matter paragraph relating to going concern, which indicated the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

Pro Forma Historical Financial Information

You have requested BDO to review the following pro forma historical financial information (the ‘Pro Forma Historical Financial Information’ ) of the Group included in this Report:

the pro forma historical consolidated statement of financial position of the Group as at 31 December 2016, which includes:
the subsequent events outlined in section 6 of our Report; and
the pro forma adjustments for the events outlined in section 7 of our Report.

The stated basis of preparation is the recognition and measurement principles contained in Australian Accounting Standards applied to the historical financial information and the events or transactions to which the pro forma adjustments relate, as described in Section 6 and Section 7 of this Report, as if those events or transactions had occurred as at the date of the historical financial information. Due to its nature, the Pro Forma Historical Financial Information does not represent the group’s’s actual or prospective financial position or financial performance.

The Pro Forma Historical Financial Information has been compiled by the Group to illustrate the impact of the events or transactions described in Section 6 and Section 7 of the Report on the Group’s financial position as at 31 December 2016. As part of this process, information about the Group’s financial position has been extracted by the Group from its financial statements for the period ended 31 December 2016.

3. Directors’ responsibility

The directors of Magmatic are responsible for the preparation and presentation of the Historical Financial Information and Pro Forma Historical Financial Information, including the selection and determination of pro forma adjustments made to the Historical Financial Information and included in the Pro Forma Historical Financial Information. This includes responsibility for such internal controls as the directors determine are necessary to enable the preparation of Historical Financial Information and Pro Forma Historical Financial Information are free from material misstatement, whether due to fraud or error.

4. Our responsibility

Our responsibility is to express limited assurance conclusions on the Historical Financial Information and the Pro Forma Historical Financial Information. We have conducted our engagement in accordance with the Standard on Assurance Engagement ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information .

Our review procedures consisted of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A limited assurance engagement is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain reasonable assurance that we would become aware of all significant matters that might be identified in a reasonable assurance engagement. Accordingly, we do not express an audit opinion.

Our engagement did not involve updating or re-issuing any previously issued audit or limited assurance reports on any financial information used as a source of the financial information.

5. Conclusion

Historical Financial Information

Based on our review engagement, which is not an audit, nothing has come to our attention that causes us to believe that the Historical Financial Information, as described in the Appendices to this Report, and comprising:

the audited historical statements of financial performance and cash flows of Modeling for the years ended 30 June 2015 and 30 June 2016 and the half year ended 31 December 2015;
the reviewed historical consolidated statements of comprehensive income and cash flow of the Group for the half year ended 31 December 2016; and
the reviewed historical consolidated statement of financial position for the Group at 31 December 2016.

are not presented fairly, in all material respects, in accordance with the stated basis of preparation, as described in Section 2 of this Report.

Pro Forma Historical Financial information

Based on our review engagement, which is not an audit, nothing has come to our attention that causes us to believe that the Pro Forma Historical Financial Information as described in the Appendices to this Report, and comprising:

the pro forma historical consolidated statement of financial position of the Group as at 31 December 2016 which include:
the subsequent events outlined in section 6 of our Report; and
the pro forma adjustments for the events outlined in section 7 of our Report,

is not presented fairly, in all material respects, in accordance with the stated basis of preparation, as described in Section 2 of this Report.

6. Subsequent Events

The pro forma historical consolidated statement of financial position reflects the following events that have occurred subsequent to 31 December 2016:

In February 2017, the Group received an additional funding facility from existing shareholders up to $400,000, to fund the working capital requirements of the Group. As at the date of the Prospectus the Group has drawn down $200,000 of this loan, however expects to draw down the full $400,000 prior to listing on the ASX.

Apart from the matters dealt with in this Report, and having regard to the scope of this Report and the information provided by the Directors, to the best of our knowledge and belief no other material transaction or event outside of the ordinary business of the Group not described above, has come to our attention that would require comment on, or adjustment to, the information referred to in our Report or that would cause such information to be misleading or deceptive.

7. Assumptions Adopted in Compiling the Pro-forma Statement of Financial Position

The pro forma historical consolidated statement of financial position is shown in Appendix 2. This has been prepared based on the financial statements as at 31 December 2016, the subsequent

events set out in Section 6, and the following transactions and events relating to the issue of Shares under this Prospectus:

The issue of 20 million Shares at an issue price of $0.20 each to raise $4 million before costs.
Costs of the Offer are estimated to be $485,600 based on the subscription. The costs that relate to the issue of new shares have been offset against contributed equity while the remaining costs have been expensed;
The issue of 2.9 million Shares upon the conversion of the Convertible Notes, upon completion of the Offer. The convertible notes have been converted to shares at a 15% discount to the ASX listing price and hence a finance cost of $47,039 has been recognised;
The issue of 3.2 million Shares upon conversion of the Shareholder loans to equity. The terms of the shareholder loans are the same as the terms of the Convertible Notes and the loans have been converted at a 15% discount to the listing price resulting in a finance cost of $87,419 being recognized;
The Vendors will receive the following Performance rights as Deferred Consideration:
8,000,000 Class A Performance Rights
8,000,000 Class B Performance Rights

Currently there are no reasonable grounds on which to assess the likelihood of the various performance milestones being met, resulting in the conversion or payment of the Deferred Consideration. Modeling’s business is at an early stage of exploration activity and has therefore been loss making in each financial year since incorporation, including the most recent half-year ended 31 December 2016. In addition, the Prospectus does not include financial forecasts as the Directors do not consider that they have a reasonable basis to reliably forecast future financial performance at this point in time. Therefore, at the date of the pro forma balance sheet we do not consider that it is probable the performance milestones will be met (this being the best available estimate) and as such no value has been assigned to the Deferred Consideration at the pro forma date. However, in accordance with AASB 2 Share based payments, the Group will be required to re-assess the probability of each performance milestone being achieved up until expiry of the Performance Rights:

The issue of 8,000,000 Broker Options to Patersons Securities Limited upon successful admission of the Group to the Official List of the ASX. These Broker options have been valued using the Black Scholes option pricing model. As these have been issued in consideration for capital raising services provided, the value has been offset against contributed equity;
The issue of 7.5 million Goldfields Options, each exercisable in three equal tranches within 12 months, 24 months and 36 months. The exercise price being the greater of $0.20 and a 5% discount to the volume weighted average market price. The options have been granted as deferred consideration for the acquisition of tenements from Goldfields; issued in accordance with the Shareholders’ agreement between Modeling and Goldfields and have been valued using the Black Scholes option pricing model; and
The issue of 1.5 million Employee Options which have been valued using the Black Scholes option pricing model.

8. Independence

BDO is a member of BDO International Ltd. BDO does not have any interest in the outcome of the Offer other than in connection with the preparation of this Report and participation in due diligence procedures, for which professional fees will be received. BDO Audit (WA) Pty Ltd is the auditor of Magmatic and from time to time, BDO and its related entities also provides Magmatic with certain other professional services for which normal professional fees are received.

9. Disclosures

This Report has been prepared, and included in the Prospectus, to provide investors with general information only and does not take into account the objectives, financial situation or needs of any specific investor. It is not intended to be a substitute for professional advice and potential investors should not make specific investment decisions in reliance on the information contained in this Report. Before acting or relying on any information, potential investors should consider whether it is appropriate for their objectives, financial situation or needs.

Without modifying our conclusions, we draw attention to Section 2 of this Report, which describes the purpose of the financial information, being for inclusion in the Prospectus. As a result, the financial information may not be suitable for use for another purpose.

BDO has consented to the inclusion of this Report in the Prospectus in the form and context in which it is included. At the date of this Report this consent has not been withdrawn. However, BDO has not authorised the issue of the Prospectus. Accordingly, BDO makes no representation regarding, and takes no responsibility for, any other statements or material in or omissions from the Prospectus.

Yours faithfully

BDO Corporate Finance (WA) Pty Ltd

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Sherif Andrawes

Director

APPENDIX 1 MAGMATIC RESOURCES LIMITED

HISTORICAL STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Historical Statement of Profit or Loss and Other Comprehensive Income	Magmatic Modeling Modeling Modeling Reviewed for the half year Audited for the year Reviewed for the half year Audited for the year ended 31-Dec-16 ended 30-Jun-16 ended 31-Dec-15 ended 30-Jun-15 $ $ $ $
Revenue Expenses Corporate and administrative expenses Exploration and evaluation expenses Finance Expenses Loss before income tax expense Income tax benefit/(expense) Net Loss for the period	753 104 40 365 (367,171) (71,354) (16,221) (26,703) (74,183) (132,011) (5,730) (130,519) (49,848)
	(490,449) (203,261) (21,911) (156,857) - - - -
	(490,449) (203,261) (21,911) (156,857)

The historical statements of profit or loss and other comprehensive income show the historical financial performance of the Group and Modeling and are to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 4. Past performance is not a guide to future performance.

APPENDIX 2 MAGMATIC RESOURCES LIMITED

PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes	Magmatic Reviewed as at Subsequent Pro-forma adjustments Pro-forma after offer 31-Dec-16 events $ $ $ $
CURRENT ASSETS Cash and cash equivalents 2 Trade and other receivables TOTAL CURRENT ASSETS NON CURRENT ASSETS Other Property plant & equipment Exploration expenditure TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Borrowings 3 TOTAL CURRENT LIABILITES TOTAL LIABILITIES NET ASSETS/(LIABILITIES) EQUITY Contributed equity 4 Reserves 5 Accumulated losses 6 TOTAL EQUITY	196,713 400,000 3,114,400 3,711,113 28,226 - - 28,226
	224,939 400,000 3,114,400 3,739,339 71,300 - - 71,300 38,770 - - 38,770 50 - - 50
	110,120 - - 110,120
	335,059 400,000 3,114,400 3,849,459
	109,170 - - 109,170 1,089,071 400,000 (1,489,071) -
	1,198,241 400,000 (1,489,071) 109,170 1,198,241 400,000 (1,489,071) 109,170
	(863,182) - 4,603,471 3,740,289
	500 - 4,061,529 4,062,029 - - 1,808,000 1,808,000 (863,682) - (1,266,058) (2,129,740)
	(863,182) - 4,603,471 3,740,289

The pro-forma consolidated statement of financial position after the Offer is as per the consolidated statement of financial position before the Offer adjusted for any subsequent events and the transactions relating to the issue of shares pursuant to this Prospectus. The pro-forma consolidated statement of financial position is to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 4.

APPENDIX 3 MAGMATIC RESOURCES LIMITED

STATEMENT OF CASH FLOWS

Historical Statement of Cash Flows	Magmatic Modeling Modeling Modeling Reviewed for the half year Audited for the year Reviewed for the half year Audited for the period ended 31-Dec-16 ended 30-Jun-16 ended 31-Dec-15 ended 30-Jun-15 $ $ $ $
Cash flows from operating activities Receipts from customers Payments to suppliers and consultants (inclusive of GST) Payments for exploration expenditure Interest received Other revenue GST refunds/(payments) Net cash flows used in operating activities Cash flows from investing activities Tenement security deposits Payments for Property, plant and equipment Net cash flows used in investing activities Cash flows from financing activities	- - - - (269,488) (185,456) (20,083) (177,975) (83,066) - - 104 40 365 - - - - (16,372) 16,469 (1,081) -
	(368,926) (168,883) (21,124) (177,610)
	(61,300) - - (10,000) (17,749) (26,576) - (4,774)
	(79,049) (26,576) - (14,774)

Proceeds from borrowings Proceeds from issue of convertible notes Proceeds from issue of shares	98,878 228,645 27,000 125,699 500,000 - 250 75 125 25
Net cash flows provided by financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of financial year	599,128 228,720 27,125 125,724
	151,153 33,261 6,001 (66,660) 45,560 12,299 12,299 78,959
	196,713 45,560 18,300 12,299

The historical statements of cash flows shows the historical cash flows of the Group and Modeling and are to be read in conjunction with the notes to and forming part of the Historical Financial Information set out in Appendix 4.

APPENDIX 4 MAGMATIC RESOURCES LIMITED

NOTES TO AND FORMING PART OF THE HISTORICAL FINANCIAL INFORMATION

Basis of preparation of Historical Financial Information

The Historical Financial Information has been prepared in accordance with the recognition and measurement, but not all the disclosure requirements of the Australian equivalents to International Financial Reporting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001.

Going Concern

The Historical Financial Information has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The ability of the Group to continue as a going concern is dependent on the success of the fundraising under the Prospectus. The Directors believe that the Group will continue as a going concern. As a result the Historical Financial Information has been prepared on a going concern basis. However should the fundraising under the Prospectus be unsuccessful, the entity may not be able to continue as a going concern. No adjustments have been made relating to the recoverability and classification of liabilities that might be necessary should the Group not continue as a going concern.

Reporting Basis and Conventions

The Report is also prepared on an accrual basis and is based on historic costs and does not take into account changing money values or, except where specifically stated, current valuations of non-current assets.

The following is a summary of the material accounting policies adopted by the Group in the preparation of the Historical Financial Information. The accounting policies have been consistently applied, unless otherwise stated.

Capital Restructure – Script Transfer

The Company was incorporated on 28 October 2016 with $250 in issued capital (500 Shares issued at $0.50 per Share) and acquired Modeling on 28 October 2016. The acquisition of Modeling by the Company was not considered to be a business combination and does not result in any change of economic substance. Accordingly, following the Group Reorganisation on 28 October 2016, the consolidated financial statements of the Company represent a continuation of the operations of Modeling.

The Company and Modeling, together form the Group. As such the financial statements for the period ended 31 December 2016 represent the consolidated financial statements of the Group as this is the first reporting date after the Group Reorganisation. The comparative amounts shown at 30 June 2016, 30 June 2015 and 31 December 2015 relate to the Modeling Resources Pty Ltd, as a single entity.

Principles of Consolidation

The Historical Financial Information incorporates all of the assets, liabilities and results of the parent entity (Magmatic Resources Limited) and all of the subsidiaries (including any structured entities). Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.

Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling interests”. The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, noncontrolling interests are attributed their share of profit or loss and each component of other comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of financial position and statement of comprehensive income.

Income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

The Group accounts for long term restricted security deposits as ‘other’ non-current assets.

Trade and other receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash

flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

Other receivables are recognised at amortised cost, less any provision for impairment.

Property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows:

Plant and equipment 3-7 years

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the company. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cashgenerating unit.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Exploration expenditure

Exploration expenditure is expensed to the statement of profit or loss as incurred and acquisition costs are capitalised as non-current assets. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Where uncertainty exists as to the future viability of certain areas, the value of the area of interest is written off or provided against.

The carrying value of capitalised exploration expenditure is assessed for impairment at the cash generating unity level whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amounts.

An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in the profit and loss account.

Borrowings

Loans and borrowings are initially recognised at the fair value of consideration received, net of transaction costs. They are subsequently measured at amortised cost using effective interest method.

Share based payments

Equity-settled share based payments in return for goods and services are measured at fair value of the goods and services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments.

Issued capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

Deferred tax

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Critical accounting estimates

The preparation of the Historical Financial Information requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Historical Financial Information, are outlined below:

a. Provision for impairment of receivables

The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtors financial position.

b. Provision for impairment of inventories

The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.

c. Estimation of useful lives of assets

The company determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or nonstrategic assets that have been abandoned or sold will be written off or written down.

d. Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

The company assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting date by evaluating conditions specific to the company and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.

NOTE 2. CASH AND CASH EQUIVALENTS	Reviewed Pro forma Balance after Offer $ $	Reviewed Pro forma Balance after Offer $ $
Cash and cash equivalents	196,713 3,711,113

Reviewed balance of Magmatic as at 31 December 2016		196,713
Subsequent events: Proceeds from Issue of Shareholder Loan Pro-forma adjustments: Proceeds from shares issued under this Prospectus Repayment of Shareholder Loan Capital raising costs Pro-forma Balance		400,000
		400,000 4,000,000 (400,000) (485,600)
		3,114,400
		3,711,113

NOTE 3. BORROWINGS	Reviewed Balance $	Pro forma after Offer $
Loan	1,089,071 -

Reviewed balance of Magmatic as at 31 December 2016		1,089,071
Subsequent events: Issue of Shareholder Loan to Magmatic Pro-forma adjustments: Repayment of Shareholder Loan Conversion of Convertible Note Conversion of Shareholder Loan Pro-forma Balance		400,000
		400,000 (400,000) (541,196) (547,875)
		(1,489,071)
		-

NOTE 4. CONTRIBUTED EQUITY	Reviewed Pro forma Balance after Offer $ $
Contributed equity	500 4,062,029
	Number of shares A$
*Reviewed balance of Magmatic as at 31 December 2016	500 500
Pro-forma adjustments: *Issue of shares to Modeling Shareholders from share split Proceeds from shares issued pursuant to the Offer Costs of the Offer Issue of shares upon conversion of Convertible Notes Issue of Broker Options Issue of shares upon conversion of Shareholder Loans Pro-forma Balance	53,882,353 - 20,000,000 4,000,000 - (290,000) 2,941,176 588,235 - (872,000) 3,176,471 635,294
	80,000,000 4,061,529
	80,000,000 4,062,029

A Share-Split of 1:107,765 will occur upon receipt of a draft decision from ASX to list on the ASX.

NOTE 5. RESERVES	Reviewed Balance $	Pro forma after Offer $
Reserves	-	1,808,000

Reviewed balance of Magmatic as at 31 December 2016		-
Pro-forma adjustments: Issue of Employee Options Issue of Goldfield Options Issue of Broker Options Pro-forma Balance		163,500 772,500 872,000
		1,808,000
		1,808,000

Using the Black Scholes option pricing valuation methodology, the value of the Employee Options to be issued has been calculated. The following inputs were used:

	Employee Options
Number of Employee Options	1,500,000
Exercise price	$0.30
Expected volatility	100%
Implied option life (years)	3.00
Expected dividend yield	nil%
Risk free rate	1.91%

Using the Black Scholes option pricing valuation methodology, the value of the Broker Options to be issued has been calculated. The following inputs were used:

	Broker Options
Number of Broker Options	8,000,000
Exercise price	$0.30
Expected volatility	100%
Implied option life (years)	3.00
Expected dividend yield	nil%
Risk free rate	1.91%

Using the Black Scholes option pricing valuation methodology, the value of the Goldfields Options to be issued has been calculated. The following inputs were used:

Goldfields Options	12 month	24 month	36 month
Number of Broker Options	2,500,000	2,500,000	2,500,000
Exercise price	$0.20	$0.20	$0.20
Expected volatility	100%	100%	100%
Implied option life (years)	1.00	2.00	3.00
Expected dividend yield	nil%	nil%	nil%
Risk free rate	1.91%	1.91%	1.91%

NOTE 6. ACCUMULATED LOSSES	Reviewed Pro forma Balance after Offer $ $	Reviewed Pro forma Balance after Offer $ $
Accumulated losses	(863,682) (2,129,740)

Reviewed balance of Magmatic as at 31 December 2016		(863,682)
Pro-forma adjustments: Finance expense associated with conversion of Convertible Notes Finance expense associated with conversion of Shareholder Loans Costs of the Transaction Issue of Employee Options Issue of Goldfield Options Pro-forma Balance		(47,039) (87,419) (195,600) (163,500) (772,500)
		(1,266,058)
		(2,129,740)

NOTE 7: RELATED PARTY DISCLOSURES

Transactions with Related Parties and Directors Interests are disclosed in the Prospectus.

NOTE 9: COMMITMENTS AND CONTINGENCIES

At the date of the report no material commitments or contingent liabilities exist that we are aware of, other than those disclosed in the Prospectus.

7. SOLICITOR’S REPORT ON TENEMENTS

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RESOURCES LEGAL PTY LTD ABN 67 097 228 870

RL

1A Rosemead Rd Hornsby NSW 2077

Telephone: +612 9476 4480 Facsimile: +612 9476 4148

Liability limited by a scheme approved under Professional Standards Legislation

24 March 2017

The Directors Magmatic Resources Limited Level 1, 11 Lucknow Place West Perth WA 6005 Australia

Dear Sirs

SOLICITOR’S REPORT ON TENEMENTS

1. INTRODUCTION

This report is prepared for inclusion in a prospectus ( Prospectus ) for issue by Magmatic Resources Limited (ACN 615 598 322) ( Magmatic Resources ) to be lodged with the Australian Securities and Investments Commission for an Offer of 20,000,000 Shares at an issue price of $0.20 per Share to raise $4,000,000, together with one free attaching Loyalty Option for every two Shares subscribed for and issued.

The report relates to the mining tenements in which Magmatic Resources’ wholly-owned subsidiary Modeling Resources Limited (ACN 169 211 876) ( Modeling Resources or Company ) holds an interest ( Tenements ). All of the Tenements are located in New South Wales ( NSW ). The attached Tenement Schedule ( Schedule) and notes to the Schedule contain an overview of the Tenements.

Modeling Resources holds a 100% interest in all of the Tenements, and there are no encumbrances registered against any of the Tenements.

2. OPINION

Based on our searches and enquiries, and subject to the assumptions and qualifications set out below, we confirm at the date of the searches that:

(a) the details of the Tenements referred to in the Schedule are accurate as to the status and registered holder of the Tenements;
(b) unless otherwise specified in this report, the Tenements are in good standing, and all applicable rents and levies have been paid;
(c) there are no encumbrances or dealings registered against any of the Tenements;
(d) none of the Tenements are subject to any unusual conditions of a material nature other than as disclosed in the Schedule; and

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(e) subject to the comments below relating to standard administrative authorisations, which are normally applied for at the time of finalising the details of individual exploration programs, or as otherwise detailed in this Prospectus, there are no legal, regulatory or contractual impediments to the Company undertaking the proposed exploration on the Tenements as detailed elsewhere in the Prospectus.

3. SEARCHES

For the purpose of this report, we have obtained and reviewed:

(a) searches of the Tenements in the mining tenement register ( Register ) maintained by the Division of Resources and Energy of the NSW Department of Industry ( DRE ) pursuant to the Mining Act 1992 (NSW) and Mining Regulation 2016 (NSW) ( Mining Act ) conducted on 31 January 2017;
(b) summary searches of the NSW Tenements on the ‘MinView’ online system maintained by the DRE conducted on 31 January 2017;
(c) searches of the native title register maintained by the National Native Title Tribunal on 31 January 2017; and
(d) searches of the Aboriginal Heritage Information Management System maintained by the Office of Environment and Heritage (NSW) on 6 January 2017.

4. ASSUMPTIONS AND QUALIFICATIONS

In preparing this report:

(a) we have assumed the accuracy and completeness of results of the searches of the Register and other information obtained from the various government agencies;
(b) We have been advised that there are no contracts, agreements or arrangements relating to the Tenements;
(c) where any agreement, dealing or act (including disturbing the land for exploration) affecting the Tenements requires an authorisation, approval, permission or consent ( Authorisation ) under the Mining Act, or any other relevant legislation, we have assumed that Authorisation has been or will be granted in due course;
(d) where any dealing in the Tenements has been lodged for registration but is not yet registered, we express no opinion as to whether the registration will be effected, or the consequences of non-registration;
(e) we have assumed that the Company has complied with all applicable provisions of the Mining Act and all other legislation relating to the Tenements; and
(f) we have not researched the underlying land tenure in respect of the Tenements to determine if:
(i) native title rights have or have not been extinguished, or the extent of any extinguishment; or
(ii) the Tenements encroach on any private land in which the rights to minerals have been reserved to the owner of the land.

5. TENEMENT SCHEDULE

The Schedule sets out a brief description of the Tenements and a summary of any encumbrances. In relation to the Schedule, we make the following comments:

(a) the area of each Tenement is described by units, given by one minute of latitude by one minute of longitude on the earth’s surface. In the general location of the

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Tenements each unit is approximately 2.9 sq km. Areas given in sq km are therefore approximate only. It is not possible to verify those areas without conducting a survey;

(b) the area of each Tenement might be reduced by the existence of pre-existing mining tenements situated within the boundaries of the relevant Tenement and a subsequent requirement that the area of the earlier mining tenement is excised from the grant of the Tenement; and
(c) the rights of a holder of a mining tenement are subject to compliance by that holder with the provisions of the Mining Act and the terms and conditions of the tenement, in this case the terms and conditions of the relevant exploration licence.

6. EXPLORATION LICENCES

The Tenements comprise seven exploration licences (prefix EL ) granted under the Mining Act. The ELs are all for Group 1 Minerals, comprising metallic minerals.

(a) Rights of a holder of an EL

The rights of a holder of an EL are subject to compliance by that holder with the provisions of the Mining Act and the terms and conditions of the licence.

An EL gives the holder the exclusive right to explore for minerals over a specific area of land. The holder of an EL may, in accordance with the terms and conditions of the EL and subject to the Mining Act, conduct exploration activities on the land specified in the EL for the group of minerals specified in the licence.

An EL does not permit mining, and an EL holder will not necessarily be permitted to mine in the future if a discovery is made.

(b) Term and transfer

An EL may be granted for up to of six years, and may be extended by successive periods of up to six years, on application by the holder. Generally, however, ELs are granted and renewed for periods of three years, depending in each case on the proposed work program and other factors. An EL may be transferred to another person upon approval by the Minister. In approving a transfer, the Minister may impose amended or additional conditions on the holder of the EL.

(c) Renewal

An EL will not usually be renewed over more than half the number of units comprising the original EL unless the Minister is satisfied that special circumstances exist, including that the conditions of the licence have been satisfactorily complied with, the full area of the EL has been effectively explored, and the proposed program satisfactorily covers the full area to be renewed.

All of the Tenements are either up for renewal at the end of 2017 or in early 2018. Provided the conditions of the Tenements continue to be met, we do not see any reason why the Minister would not grant a renewal of the Tenements for further periods of three years.

(d) Conditions

Each of the Tenements are subject to standard conditions that must be complied with, including annual expenditure or work requirements, payment of government fees, and the requirement to lodge annual technical reports. Standard conditions also stipulate that a tenement holder obtain the consent of an officer of the DRE prior to conducting any ground disturbing work, and include basic environmental and rehabilitation conditions, such as the removal of all waste, capping of drill holes, etc.

Holders must also comply with the Exploration Codes of Practice, including the Environmental Management Code, the Rehabilitation Code, which requires the holder to rehabilitate, level, regrass, reforest or contour land that has been damaged or adversely

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affected by exploration activities, and the Community Consultation Code. A Review of Environmental Factors and an Agricultural Impact Statement may be required for surfacedisturbing exploration activities such as drilling.

Failure by the holder of an EL to comply with these conditions may render the EL liable to cancellation.

(e) Environmental and planning legislation

Licence holders may also be required to obtain approvals under and comply with environmental and planning and other legislation, including:

(i) Environmental and Planning Assessment Act 1979 (NSW);
(ii) Protection of the Environment Operations Act 1997 (NSW); and
(iii) Water Act 1912 and Water Management Act 2000 (NSW).

(f) Access agreements

Prior to commencing exploration activities on private land, an access agreement must be entered into with the owner or occupier of the land[1] . Compensation is payable for any loss or damage caused by the activities[2] .

There are currently no access agreements in place.

(g) Annual rents and levies

An annual rental and an administrative levy are payable, based on the size of the EL. ELs are also subject to minimum annual expenditure requirements. These rental, levy and expenditure requirements are set out in Schedule 1. Payment of rentals and levies are currently up to date. Failure to comply with expenditure requirements may render the EL liable to cancellation.

7. ROYALTIES

Tenement holders must pay royalties to the NSW government on minerals (including material containing minerals) obtained from a mining tenement. Royalties are payable quarterly and must be accompanied by a royalty return in the approved form. The holder of a mining tenement must provide a quarterly production report commencing at the expiration of the first quarter during which any mineral is produced or obtained from that mining tenement. Royalty rates for Group 1 Minerals, comprising metallic minerals, are generally 4% of the value of the mineral recovered[3] .

8. REHABILITATION SECURITIES

The holder of a Tenement is required to lodge a security by way of a cash deposit or banker's undertaking for the performance of its rehabilitation and other obligations arising under the Tenement.

The searches indicate that the Company has lodged a $10,000 security in respect of each of the Tenements.

1 Section 140 Mining Act 1992 (NSW)

2 Section 263 Mining Act 1992 (NSW)

3 Section 73, Mining Regulation 2016 (NSW)

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9. NATIVE TITLE

(a) Background

Native title or claims for native title exist over parts of NSW.

The existence of a lodged claim does not necessarily mean that native title exists over the area claimed, nor does the absence of a claim necessarily indicate that no native title exists in an area. The existence of native title will be established pursuant to the determination of claims by the Federal Court.

The grant of a mining tenement is a ‘Future Act’ for the purposes of the Native Title Act 1993 (Cth) ( NTA )[4] . A Future Act is an activity or development on land or waters that affects native title. Native title claimants gain the “right to negotiate” in relation to the grant of certain mining tenements if their native title claim is registered at the time the government issues a notice, known as a section 29 notice, stating it intends to do the act, in this case grant the mining tenement, or if their claim becomes registered within four months after that notice.

(b) Right to negotiate

The right to negotiate applies in the main to the grant of a mining lease and describes a process whereby the tenement applicant and native title claimant must negotiate in good faith to attempt to resolve any potential concerns the native title claimants may have arising from the mining lease application or its grant. If the parties cannot reach agreement as to the terms of grant, a negotiation party may apply to the National Native Title Tribunal ( NNTT ) to make a determination as to whether the grant may proceed (and if so, on what conditions).

The right to negotiate process does not necessarily have to be followed in locations where an Indigenous Land Use Agreement ( ILUA ) has been negotiated with the relevant Aboriginal people and registered with the NNTT. In such cases the procedures set out in the ILUA must be followed for the ML to be granted.

(c) Searches

Searches conducted in the register maintained by the NNTT on 31 January 2017 showed that none of the Tenements overlaps with a registered native title claim. The searches also showed that none of the Tenements is subject to a registered ILUA.

(d) Effect of native title on the Tenements

ELs are generally subject to a condition that requires the holder to obtain the Minister’s consent before carrying out exploration activity on land where native title has not been extinguished. Ministerial consent will only be granted after the right to negotiate process has been followed, or the land on which native title has not been extinguished has been excised from the EL. The grant of a mining lease over land where native title has not been extinguished is also subject to the right to negotiate process.

The DRE has published guidelines on the evidence required to demonstrate extinguishment of native title. Native title has been wholly extinguished over much of NSW, including through the grant of freehold estates, leases in perpetuity for grazing purposes under the Western Lands Act 1901 , and the establishment of public works.

(e) Compensation

The Mining Act makes mining tenement holders liable for any native title compensation that may be payable as a result of the grant of the mining tenement[5] . If the existence of native title is proven over any of the land subject to the Tenements, and the native title holders make an application to the Federal Court for compensation, the Tenement holder may be liable to pay any compensation awarded.

4 Section 233, Native Title Act 1993 (Cth)

5 Section 281B Mining Act 1992 (NSW)

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10. ABORIGINAL HERITAGE

(a) Commonwealth

The Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) ( Commonwealth Heritage Act ) is aimed at the preservation and protection of any Aboriginal areas and objects that may be located on the Tenements.

Under the Commonwealth Heritage Act, the Minister for Aboriginal Affairs may make interim or permanent declarations of preservation in relation to significant Aboriginal areas or objects, which can affect exploration activities. Compensation is payable by the Minister to a person who is, or is likely to be, affected by a permanent declaration of preservation.

(b) New South Wales

Under the National Parks and Wildlife Act 1974 (NSW) ( NSW Heritage Act ), land containing Aboriginal objects or sites may be reserved as an “Aboriginal area” for the purpose of identifying, protecting and conserving such objects or sites. It is unlawful to prospect or mine for minerals in an Aboriginal area unless expressly authorised by an Act of Parliament or, among other things, an authority issued under the Mining Act. Subject to this exception, the NSW Heritage Act excludes the application of the Mining Act to lands in an Aboriginal area.

The NSW Heritage Act also authorises the Minister to declare a place that is or was of special significance to Aboriginal culture to be an ‘Aboriginal place’ and makes it an offence knowingly to destroy, deface or damage, or knowingly to permit the destruction, defacement of or damage to, an Aboriginal object or “Aboriginal place” without the consent of the Director-General.

(c) Heritage surveys

To satisfy the obligations under the relevant Heritage Act, tenement holders commonly undertake Aboriginal heritage surveys, which involve the relevant traditional owners and as necessary, an archeologist or anthropologist walking the land, identifying sites and discussing the impact of proposed exploration activity. The costs of a heritage survey are met by the tenement holder.

(d) Heritage searches

We obtained and reviewed searches of the Aboriginal Heritage Information Management System maintained by the Office of Environment and Heritage (NSW) on 6 January 2017. The searches showed that the Tenements, with the exception of EL 7424 at Parkes East, each contain a number of known Aboriginal sites. The Company will review the location of each site when planning its exploration programmes so as to ensure that activities near Aboriginal sites meet the requirements of the Commonwealth Heritage Act and the NSW Heritage Act.

There are currently no Aboriginal heritage agreements or arrangements in place affecting the Tenements.

11. CONSENT

This report is made on 31 January 2017 and speaks only to the laws in force on that date. Resources Legal Pty Ltd has consented to the inclusion of this report in the Prospectus in the form and context in which it is included and has not withdrawn that consent prior to the lodgment of the Prospectus with ASIC.

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12. DISCLOSURE OF INTEREST

Resources Legal Pty Ltd will be paid normal and usual professional fees for the preparation of this report and related matters, as set out elsewhere in the Prospectus.

Yours faithfully

==> picture [132 x 41] intentionally omitted <==

Daven Timms Director Principal Resources Legal Pty Ltd

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SCHEDULE 1 – TENEMENTS

Tenement	Holder	No units/ approx. area sq km1	Grant Date	Expiry Date	Rental and levy2	Required Expen- diture	Encum- brances
Wellington North Project
EL 6178	Modeling Resources	39/113	19.01.2004	18.01.2018	$2,440 pa	$69,000 pa	Nil
EL 7440	Modeling Resources	6/17	08.01.2010	08.01.2018	$460 pa	$36,000 pa	Nil
EL 8357	Modeling Resources	16/46	08.04.2015	08.04.2018	$1,060 pa	$28,000 pa	Nil
Parkes East Project
EL 7424	Modeling Resources	22/63	30.11.2009	30.11.2017	$1,420 pa	$52,000 pa	Nil
EL 76763	Modeling Resources	33/95	11.01.2011	11.01.2018	$2,080 pa	$63,000 pa	Nil
Myall Project
EL 6913	Modeling Resources	84/243	18.10.2007	18.10.2017	$5,140 pa	$114,000 pa	Nil
Moorefield	Project
EL 7675	Modeling Resources	100/289	11.01.2011	11.01.2018	$6,100 pa	$130,000 pa	Nil

Notes

One unit is the area bounded by one minute of latitude by one minute of longitude and, depending on the location in NSW, comprises an area of approximately 2.9 square kilometres.
The annual tenement rental is $60 per unit. The annual administrative levy is 1% of the security deposit (1% of $10,000 = $100 for each tenement).
EL 7676 is located immediately to the north west of the town of Parkes, and contains the proposed Goonumbla Solar Farm, Parkes Solar Farm and Parkes Transport Hub. These developments would occupy around 9% of the area of EL 7676. There is a risk that the proposed development area will not be available for exploration. We understand that there are no known mineral occurrences within the proposed development area and no significant exploration has taken place. There are no agreements in place affecting the Tenements in relation to the proposed developments.

8. BOARD, MANAGEMENT AND INTERESTS

8.1 Directors and key personnel

The Board of the Company consists of:

(a) David Berrie – Non-Executive Chairman – Refer to Section 3.11 for Mr Berrie’s biography ;
(b) David Richardson – Managing Director – Refer to Section 3.11 for Mr Richardson’s biography; and
(c) Malcolm Norris - Non-Executive Director – Refer to Section 3.11 for Mr Norris’ biography.

Other senior management positions held by the Company are Ian Hobson appointed as Chief Financial Officer and Company Secretary and Gordon Barnes appointed as Exploration Manager.

Biographies for Mr Hobson and Mr Barnes are contained in Section 3.11.

The Company is aware of the need to have sufficient management to properly supervise the exploration and (if successful) for the development of the Projects in which the Company has, or will in the future have, an interest and the Board will continually monitor the management roles in the Company. As the Company’s Projects require an increased level of involvement, the Board will look to appoint additional management and/or consultants when and where appropriate to ensure proper management of the Company’s Projects.

8.2 Disclosure of Interests

On completion of the Offer, the relevant interest of each of the Directors in the securities of the Company will be as follows:

Shares[1 ]

Director	Directly Held	Indirectly Held
David Berrie	Nil	9,241,1762
David Richardson	Nil	28,502,9413
Malcolm Norris	Nil	Nil

Options

Director	Directly Held	Indirectly Held
David Berrie	Nil	750,0007
David Richardson	Nil	750,0007
Malcolm Norris	750,0004	Nil

Class A Performance Shares[5 ]

Director	Directly Held	Indirectly Held
David Berrie	Nil	1,360,0002
David Richardson	Nil	4,480,0003

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Malcolm Norris Nil Nil

Class B Performance Shares[6 ]

Director	Directly Held	Indirectly Held
David Berrie	Nil	1,360,0002
David Richardson	Nil	4,480,0003
Malcolm Norris	Nil	Nil

Notes:

The material terms and conditions of the Shares are set out in Section 11.2.
Held by Davthea Pty Ltd as trustee for the David Berrie Superannuation Fund. Mr Berrie is a director and sole shareholder of Davthea Pty Ltd and beneficiary under the David Berrie Superannuation Fund.
Held by Bilingual Software Pty Ltd as trustee for the Let’s Go Investment Trust. Mr Richardson is a director and sole shareholder of Bilingual Software Pty Ltd and beneficiary under the Let’s Go Investment Trust.
Quoted and exercisable at $0.30 on or before the date which is 36 months from the date the Company is admitted to the Official List of ASX. Refer to Section 11.4 for full terms and conditions of these Options.
The terms and conditions of the Class A Performance Shares are set out in Section 11.5.
The terms and conditions of the Class B Performance Shares are set out in Section 11.5. 7. Pursuant to the priority sub-underwriting agreements detailed in Section 10.12, Bilingual and Davthea will, upon successful completion of the Offer, each be issued 750,000 Underwriter Options for sub-underwriting the Offer to the extent of $500,000.
These tables assume that Messrs Berrie and Richardson do not subscribe for any Securities under the Offer. However, each of Messrs Berrie and Richardson may acquire an indirect interest in additional Securities pursuant to their respective associations with the Priority Sub-underwriters (as defined in Section 10.12) who propose to subunderwrite the Offer to the extent of $500,000 and as a result, their respective interests in the Securities of the Company may increase. Refer to Section 10.12 for details for further details.

For each of the Directors, the remuneration paid during the two years preceding lodgement of this Prospectus and the proposed annual remuneration for the financial year following the Company being admitted to the Official List is set out in the table below.

Director	Directors’ Fees1	Wages, salaries and or bonuses	Benefits paid in the previous two years
David Berrie	$60,000	Nil	$32,000
David Richardson	Nil	$150,0001	$32,000
Malcolm Norris	$40,000	Nil	Nil

Notes:

Excludes statuary superannuation.

8.3 Agreements with Directors and Related Parties

The Company’s policy in respect of related party arrangements is:

(a) a Director with a material personal interest in a matter is required to give notice to the other Directors before such a matter is considered by the Board; and

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(b) for the Board to consider such a matter, the Director who has a material personal interest is not present while the matter is being considered at the meeting and does not vote on the matter.

The agreements between the Company and related parties are summarised in Section 10.

8.4 Agreements with Management

8.4.1 General Manager Exploration Employment Agreement - Mr Gordon Barnes

On 13 October 2016, Modeling entered into an employment agreement with Mr Gordon Barnes whereby Mr Barnes is appointed as a ‘General Manager - Exploration’ and is responsible for all aspects of Modeling’s exploration activities. The material terms of the employment agreement are as follows:

(a) ( Term ): the term of the agreement is for six months commencing on 10 October 2016. The term of employment may be extended for a further year by mutual agreement between Modeling and Mr Barnes;
(b) ( Salary ): $200,000 per annum (plus superannuation) is payable to Mr Barnes on a monthly basis;
(c) ( Expenses ): Modeling will reimburse Mr Barnes for all reasonable expenses incurred by him in the performance of his duties in connection with the business of Modeling;
(d) ( Termination ):
(i) Both Modeling and Mr Barnes may terminate the agreement by giving one month’s written notice; and
(ii) Modeling may summarily terminate the agreement, by notice in writing, where Mr Barnes:
- (A) engages in any act or omission constituting serious misconduct;
- (B) commits a serious or persistent breach or nonobservance of a term or terms of the agreement;
- (C) is dealt with by a court for a criminal offence, whether or not a conviction is recorded, which might tend to injure the reputation or the business of Modeling or its related bodies corporate;
- (D) refuses or neglects to comply with any lawful and reasonable instruction given by Modeling, the Board or any other person duly authorised by the Board; or
- (E) has, whether prior or during the term of the agreement, provided Modeling with information about his qualifications, experience, character or reputation which is misleading or was misleading or was intended to be false or misleading.

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The employment agreement otherwise contains terms considered standard for an agreement of its nature (including non-compete and non-solicitation clauses).

8.4.2 Company Secretary / CFO Agreement - Mr Ian Hobson

The Company and Ian Hobson have entered into an agreement pursuant to which Mr Ian Hobson has been appointed as Company Secretary and Chief Financial Officer of the Company ( Hobson Agreement ).

Under the Hobson Agreement, until otherwise agreed by the parties, Mr Hobson will receive $200 an hour for company secretarial and CFO services.

8.5 Deeds of indemnity, insurance and access

The Company has entered into a deed of indemnity, insurance and access with each of its Directors. Under these deeds, the Company will agree to indemnify each officer to the extent permitted by the Corporations Act against any liability arising as a result of the officer acting as an officer of the Company. The Company will also be required to maintain insurance policies for the benefit of the relevant officer and allow the officers to inspect board papers in certain circumstances.

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9. CORPORATE GOVERNANCE

9.1 ASX Corporate Governance Council Principles and Recommendations

The Company has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company's needs.

To the extent applicable, the Company has adopted The Corporate Governance Principles and Recommendations (3rd Edition) as published by ASX Corporate Governance Council ( Recommendations ).

In light of the Company’s size and nature, the Board considers that the current Board is a cost effective and practical method of directing and managing the Company. As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed.

The Company’s main corporate governance policies and practices as at the date of this Prospectus are outlined below and the Company’s full Corporate Governance Plan is available in a dedicated corporate governance information section of the Company’s website (www.magmaticresources.com).

9.2 Board of Directors

The Board is responsible for corporate governance of the Company. The Board develops strategies for the Company, reviews strategic objectives and monitors performance against those objectives. The goals of the corporate governance processes are to:

(a) maintain and increase Shareholder value;
(b) ensure a prudential and ethical basis for the Company’s conduct and activities; and
(c) ensure compliance with the Company’s legal and regulatory objectives.

Consistent with these goals, the Board assumes the following responsibilities:

(a) developing initiatives for profit and asset growth;
(b) reviewing the corporate, commercial and financial performance of the Company on a regular basis;
(c) acting on behalf of, and being accountable to, the Shareholders; and
(d) identifying business risks and implementing actions to manage those risks and corporate systems to assure quality.

The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate Directors’ participation in the Board discussions on a fully-informed basis.

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9.3 Composition of the Board

Election of Board members is substantially the province of the Shareholders in general meeting. However, subject thereto:

(a) membership of the Board of Directors will be reviewed regularly to ensure the mix of skills and expertise is appropriate; and
(b) the composition of the Board has been structured so as to provide the Company with an adequate mix of directors with industry knowledge, technical, commercial and financial skills together with integrity and judgment considered necessary to represent shareholders and fulfil the business objectives of the Company.

The Board currently consists of three (3) directors of whom one (1) is considered independent, being Mr Malcolm Norris. The Board considers the current balance of skills and expertise is appropriate for the Company for its currently planned level of activity.

The Board undertakes appropriate checks before appointing a person as a Director or putting forward to Shareholders a candidate for election as a Director.

The Board ensures that Shareholders are provided with all material information in the Board’s possession relevant to a decision on whether or not to elect or reelect a Director.

The Company shall develop and implement a formal induction program for Directors which allows new directors to participate fully and actively in Board decision-making at the earliest opportunity, and enable new Directors to gain an understanding of the Company’s policies and procedures.

9.4 Identification and management of risk

The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational risks and their management will be recurring items for deliberation at Board meetings.

9.5 Ethical standards

The Board is committed to the establishment and maintenance of appropriate ethical standards.

9.6 Independent professional advice

Subject to the Chairman’s approval (not to be unreasonably withheld), the Directors, at the Company’s expense, may obtain independent professional advice on issues arising in the course of their duties.

9.7 Remuneration arrangements

The remuneration of an executive Director will be decided by the Board, without the affected executive Director participating in that decision-making process.

The total maximum remuneration of non-executive Directors is initially determined by the Company in a general meeting and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable.

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The determination of non-executive Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each non-executive Director. This amount is proposed to be set at an amount not to exceed $250,000 per annum.

In addition, a Director may be paid fees or other amounts (i.e. subject to any necessary Shareholder approval, non-cash performance incentives such as Options) as the Directors determine where a Director performs additional or special duties or otherwise performs services outside the scope of the ordinary duties of a Director.

Directors are also entitled to be paid reasonable travelling and other expenses incurred by them respectively in or about the performance of their duties as Directors.

The Board reviews and approves the remuneration policy to enable the Company to attract and retain executives and Directors who will create value for Shareholders having consideration to the amount considered to be commensurate for a company of its size and level of activity as well as the relevant Directors’ time, commitment and responsibility. The Board is also responsible for reviewing any employee incentive and equity-based plans including the appropriateness of performance hurdles and total payments proposed.

9.8 Trading policy

The Board has adopted a policy that sets out the guidelines on the sale and purchase of securities in the Company by its directors, officers, employees and contractors. The policy generally provides that for directors, the written acknowledgement of the Chair (or the Board in the case of the Chairman) must be obtained prior to trading.

9.9 External audit

The Company in general meetings is responsible for the appointment of the external auditors of the Company, and the Board from time to time will review the scope, performance and fees of those external auditors.

9.10 Audit committee

The Company will not have a separate audit committee until such time as the Board is of a sufficient size and structure, and the Company’s operations are of a sufficient magnitude for a separate committee to be of benefit to the Company. In the meantime, the full Board will carry out the duties that would ordinarily be assigned to that committee under the written terms of reference for that committee, including but not limited to, monitoring and reviewing any matters of significance affecting financial reporting and compliance, the integrity of the financial reporting of the Company, the Company’s internal financial control system and risk management systems and the external audit function.

9.11 Diversity policy

The Board has adopted a diversity policy which provides a framework for the Company to achieve, amongst other things, a diverse and skilled workforce, a workplace culture characterised by inclusive practices and behaviours for the benefit of all staff, improved employment and career development

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opportunities for women and a work environment that values and utilises the contributions of employees with diverse backgrounds, experiences and perspectives.

9.12 Departures from Recommendations

Under the ASX Listing Rules, the Company will be required to provide a statement in its annual financial report or on its website disclosing the extent to which it has followed the Recommendations during each reporting period. Where the Company has not followed a Recommendation, it must identify the Recommendation that has not been followed and give reasons for not following it.

The Company’s compliance and departures from the Recommendations are set out in its Corporate Governance Statement in the corporate governance information section of the Company’s website (www.magmaticresources.com).

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10. MATERIAL CONTRACTS

Set out below is a brief summary of the certain contracts to which the Company and the Subsidiary are a party and which the Directors have identified as material to the Company or are of such a nature that an investor may wish to have details of particulars of them when making an assessment of whether to apply for Securities.

To fully understand all rights and obligations of a material contract, it would be necessary to review it in full and these summaries should be read in this light.

10.1 Gold Fields Agreement

Modeling, Gold Fields Australia and the original shareholders of Modeling were parties to a shareholders’ agreement dated 17 December 2015 ( Shareholders Agreement ), established to govern the ownership, operations and the governance of Modeling. Gold Fields Australia had been issued shares in the capital of Modeling as consideration for the 100% sale of the Tenements held by Gold Fields Australia to Modeling.

The Shareholders’ Agreement has since been varied ( Variation ), whereby the terms of the Shareholders Agreement no longer apply (and are effectively terminated) and upon the Company receiving a draft decision from the ASX to admit the Company to the Official List of ASX (subject to terms acceptable to the Company, acting reasonably) the Company agrees to:

(a) undertake a pro rata share split such that Gold Fields Australia will have a voting power of 20% in the Company upon listing ( Share Split );
(b) issue Gold Fields Australia a total of 7,500,000 Options (on the terms and conditions set out in Section 11.5); and
(c) issue Gold Fields Australia a total of 3,200,000 Performance Shares (being 20% of the total Performance Shares) in the Company.

10.2 JOGMEC Joint Venture – Memorandum of Agreement

The Company, Modeling and Japan Oil, Gas and Metals National Corporation (an entity incorporated in Japan) ( JOGMEC , with JOGMEC and Modeling together being referred to as, the JV Parties ) have entered into a binding memorandum of agreement ( Joint Venture Agreement ) pursuant to which Modeling has agreed to grant JOGMEC the exclusive option to earn a 51% participating interest in an unincorporated joint venture between the JV Parties ( Joint Venture ) for the purpose of exploring and developing the Parkes Project ( Option ), through funding a cumulative $3,000,000 of exploration work on the Parkes Project.

The material terms of the Joint Venture Agreement are as follows:

(a) ( Conditions Precedent ): The Joint Venture Agreement is subject to the following conditions precedent ( Conditions ):
(i) JOGMEC notifying Modeling in writing of its decision to either participate or to decline to assume the $300,000 obligation of the First Earn-In Period (as defined below) not more than 90 days following the date on which the Joint Venture Agreement is executed ( Effective Date ), being no later than 4 April 2017 (with such 90-day period, the Standstill Period ); and

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(ii) during the Standstill Period, JOGMEC obtaining approval from the Australian Foreign Investment Review Board for the transactions envisaged by the Joint Venture Agreement.
(b) ( Earn-In Requirements ): JOGMEC may earn and shall be entitled to the Option by funding a cumulative amount not exceeding $3,000,000 (in cash or in kind) in expenditure with respect to the Parkes Project ( Expenditure ) during the Earn-in Period (as defined below) ( Earn-in Requirement ).
(c) ( Earn-In Periods )
(i) First Earn-In Period : From the period commencing on the Effective Date and ending 31 March 2017 ( First Earn-in Period ), JOGMEC must contribute or expend, in cash or in kind, a minimum of $300,000 toward Expenditure;
(ii) Second Earn-In Period : From the period commencing on completion of the First Earn-in Period and ending on 31 March 2018 ( Second Earn-in Period ), JOGMEC must contribute or expend, in cash or in kind, a cumulative amount of $1,000,000 toward Expenditure;
(iii) Third Earn-In Period : From the period commencing on completion of the Second Earn-in Period and ending on 31 March 2019 ( Second Earn-in Period ), JOGMEC must contribute or expend, in cash or in kind, a cumulative amount of $2,000,000 toward Expenditure; and
(iv) Fourth Earn-In Period: From the period commencing on completion of the Third Earn-in Period and ending on 31 March 2020 ( Second Earn-in Period ), JOGMEC must contribute or expend, in cash or in kind, a cumulative amount of $3,000,000 toward Expenditure, (the Earn-in Period ).
(d) ( Right to Exercise ): After fulfilling the Earn-In Requirement, JOGMEC (or its nominee) shall be entitled to exercise the Option at any time by providing written notice to Modeling. Upon exercising the Option, JOGMEC (or its nominee) will hold a 51% participating interest in the Joint Venture and is obligated to fund that percentage share of the Joint Venture’s costs and liabilities and is entitled to that percentage share of the Joint Venture’s assets and income.
(e) ( Pro-Rata Funding Period ): Upon JOGMEC satisfying the Earn-in Requirement and until such time as it elects to exercise the Option ( ProRata Funding Period ) the JV Parties will operate as if the Joint Venture had been formed, notwithstanding that JOGMEC has not exercised the Option.
(f)

( Termination ):

(i) JOGMEC may terminate the Joint Venture Agreement:
(A) by providing 30 days prior written notice to Modeling at any time after it has funded the first $300,000 of the Earn-in Requirement, subject to certain conditions;

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  - (B) with written notice if a materially adverse finding is likely to be made against Modeling by a court in relation to a claim or in respect of a permit, tenement, interest or other right that is part of the Parkes Project;

  - (C) with written notice if Modeling fail to remedy a material breach of the Joint Venture Agreement after a reasonable period of notice from JOGMEC (not exceeding 60 days).

(ii) Modeling may terminate the MOA where JOGMEC has failed to rectify (or take reasonable steps to rectify) a material breach of the Joint Venture Agreement following two 30 day notice periods from Modeling.
(g) ( Operator ): Modeling shall be the operator of the Joint Venture ( Operator ) on behalf of JOGMEC during the Earn-In Period. Upon the start of the Pro-Rata Funding Period, the party holding the majority of the participating interest in the Joint Venture (or entitlement thereto) will have the right to appoint the Operator. If both parties hold 50% of the interest, the Management Committee (defined below) will determine the Operator. The Operator shall be entitled to an operator’s fee of 10% of net expenditures incurred by the Operator in relation to the projects and budgets of the Joint Venture and 5% on any single third party contract for expenditure exceeding $50,000.
(h) ( Management Committee ): As soon as practicable after the Effective Date, the JV Parties will form a management committee ( Management Committee ) to discuss exploration activities and earn-in Expenditures to be undertaken and, upon JOGMEC satisfying the Earn-in Requirement, determine programs and budgets for the Joint Venture. The Management Committee will consist of up to four representatives, with each JV Party entitled to appoint two representatives. From the start of the Pro-Rata Funding Period, each Party’s representatives are entitled to exercise a collective vote in proportion to their JV Party’s then existing participating interest in the Joint Venture (or entitlement thereto) in respect of decisions of the Management Committee.
(i) ( Commercial Production ): Any production of minerals or mineral materials derived from the Parkes Project ( Mineral Products ), shall be taken by the JV Parties in proportion to their respective participating interests in the Joint Venture.
(j) ( Definitive Agreement ): If the JV Parties agree to proceed to commercial production of Mineral Products, each JV Party may request to the other JV Party to execute a definitive agreement to govern their relationship and the management of activities on the Parkes Project on terms and conditions typical for a transaction of that nature.

The Joint Venture Agreement otherwise contains terms considered standard for an agreement of this nature.

10.3 Royalty Deeds for Myall, Wellington North and Moorefield Projects

Clancy Exploration Ltd and Gold Fields were party to a joint venture agreement which was terminated on 12 February 2013. In consideration for termination of the joint venture agreement, the parties entered into a royalty deed for each of the Projects on 28 October 2013.

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Modeling assumed all future rights and obligations of Gold Fields under the royalty deeds pursuant to deeds of assignment entered into on 17 December 2015.

The material terms of the royalty deeds for the Myall, Wellington North and Moorefield Projects are as follows:

(a) ( Royalty ): a 2.5% Net Smelter Return royalty is payable in cash or by direct deposit to Clancy within twenty business days of the last day of such Quarter in full in Australian dollars;
(b) ( Non-commercial production ): the royalty is not payable on any noncommercial production, being royalty products that are extracted from mineral properties for testing purposes but are not sold or otherwise disposed of;
(c) ( Disposal ):
(i) Modeling may not dispose of any right, title or interest under or in respect of any Tenement, or any of its right, obligations, liabilities and burdens under the royalty deeds to any third party unless the third party has executed a deed poll in favour of Clancy; and
(ii) Clancy may dispose of its right, interest or title under or in respect of the royalty and all of its obligations, liabilities and burdens under the royalty deeds to any third party provided the third party has executed a deed poll in favour of Modeling;
(d) ( Surrender ): except as set out below, Modeling owes no obligation to Clancy to keep the Tenements (or its interests in the Tenements) in good standing:
(i) Modeling must not surrender or fail to apply to renew a Tenement unless Modeling has given Clancy at least 45 day’s written notice of its intention to surrender, or permit the surrender of a Tenement, or not to ensure that an application is made for renewal ( Surrender Notice ). If Clancy gives notice of its desire to acquire a Tenement to Modeling within 30 days’ of receipt of the Surrender Notice, the parties agree to use reasonable endeavours (but at the cost of Clancy) to transfer the Tenement for a consideration of $100;
(ii) If Clancy does not exercise its right to acquire the Tenement, the subject of a Surrender Notice, Modeling may proceed to relinquish, surrender or not renew or extend the Tenement and the royalty deed no longer applies to the relevant Tenement from the date of such relinquishment, surrender or expiry; and
(iii) If Clancy does exercise its right to acquire the Tenement the subject of a Surrender Notice, then from that date Modeling shall have no further obligation to pay the royalty in relation to the relevant Tenement; and
(e) ( Termination ): Modeling may, from time to time, and at any time, terminate the royalty and the royalty deeds by providing a payment of $20,000,000 in immediately available funds to Clancy.

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The royalty deeds otherwise contains terms and conditions considered standard for agreements of their nature.

10.4 Royalty Deed for Parkes Project

Modeling and Clancy are also party to a royalty deed in respect of the Parkes Project, which is on the same terms and conditions as the royalty deeds described in Section 10.3 above, except for the following:

(a) ( Royalty ): a 2% Net Smelter Return royalty is payable in cash or by direct deposit to Clancy within twenty business days of the last day of such Quarter in full in Australian dollars; and
(f) ( Termination ): Modeling has no right to terminate the royalty and the royalty deeds by providing a payment of $20,000,000 in immediately available funds to Clancy.

10.5 Bilingual Loan Agreement

The Company, Modeling and Bilingual Software Pty Ltd (ACN 124 821 218) as trustee for Let’s Go Investment Trust ( Bilingual ), are parties to a loan agreement ( Bilingual Loan Agreement ) under which the debt incurred by Bilingual in funding the exploration requirements of Modeling, being an aggregate of $337,500, is intended to be at-call and repayable on demand. Mr Richardson is a director and sole shareholder of Bilingual Software Pty Ltd and beneficiary under the Let’s Go Investment Trust.

The material terms of the Bilingual Loan Agreement are as follows:

(a) ( Repayment ): Modeling may at any time and from time to time, repay the whole or part of the debt owing to Bilingual however the parties agree that the debt is not expected to be repaid (in whole or in part) prior to the listing of the Company on the ASX or when Modeling has the potential to become profitable by making a decision to mine and commencing production after a mine has been constructed.
(b) ( Conversion ): notwithstanding Section 10.5(a) above, the parties agree the debt may be repaid by way of conversion into Shares, at a conversion price of $0.17, on that date that is two business days after:
(i) Magmatic is given conditional approval to be admitted on the Official List of the ASX; and
(ii) Magmatic has closed its Offer having received valid applications for Shares offered pursuant to the Offer equivalent to or in excess of the minimum subscription for the Offer.

If Magmatic is not admitted to the Official List of ASX by 30 September 2017 (or such other date as agreed between the parties) the Company will repay the debt in accordance with Section 10.5(a) above; and

(c) ( Interest ): The debt will be interest free until Bilingual deems otherwise. From the time that the Company is admitted to the Official List of ASX or becomes profitable, the debt will incur interest at a rate agreed between the parties and will accrue daily and be compounded monthly.

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The Bilingual Loan Agreement otherwise contains terms and conditions that are considered standard for agreements of this nature.

10.6 Second Bilingual Loan Agreement

The Company, Modeling and Bilingual have entered into a loan agreement ( Second Bilingual Loan Agreement ) which sets out the terms and conditions upon which Modeling will repay funds contributed by Bilingual towards the exploration expenditure and administrative requirements of Modeling since 1 February 2017.

The Second Bilingual Loan Agreement provides that Modeling will repay amounts owed under the Second Bilingual Loan Agreement upon the listing of the Company on the ASX or when Modeling has the financial capacity to do so, whichever is earliest. The Debt is unsecured and will be interest free until Bilingual deems otherwise.

10.7 Davthea Loan Agreement

The Company, Modeling and Davthea Pty Ltd (ACN 125 870 064) as trustee for David Berrie Superannuation Fund ( Davthea ) are parties to a loan agreement ( Davthea Loan Agreement ) under which the debt incurred by Davthea in funding the exploration requirements of Modeling, being an aggregate of $202,500, is intended to be at-call and repayable on demand. Mr Berrie is a director and sole shareholder of Davthea Pty Ltd and beneficiary under the David Berrie Superannuation Fund.

The material terms of the Davthea Loan Agreement are as follows:

(a) ( Repayment ): Modeling may at any time and from time to time, repay the whole or part of the debt owing to Davthea however the parties agree that the debt is not expected to be repaid (in whole or in part) prior to the listing of the Company on the ASX or when Modeling has the potential to become profitable by making a decision to mine and commencing production after a mine has been constructed. Should Davthea cease to be shareholder of Modeling, the debt will become immediately repayable;
(b) ( Conversion ): notwithstanding Section 10.7(a) above, the parties agree the debt may be repaid by way of conversion into Shares, at a conversion price of $0.17, on that date that is two business days after:
(i) Magmatic is given conditional approval to be admitted on the Official List of the ASX; and
(ii) Magmatic has closed its Offer having received valid applications for Securities offered pursuant to the Offer equivalent to or in excess of the minimum subscription for the Offer.

If Magmatic is not admitted on the official list of the ASX by 30 September 2017 (or such other date as agreed between the parties), the Company will repay the debt in accordance with Section 10.7(a) above; and

(c) ( Interest ): The debt will be interest free until Davthea deems otherwise. From the time that the Company is admitted to the Official List of ASX or

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otherwise becomes profitable, the debt will incur interest at a rate agreed between the parties.

The Davthea Loan Agreement otherwise contains terms and conditions that are considered standard for agreements of this nature.

10.8 Second Davthea Loan Agreement

The Company, Modeling and Davthea have entered into a loan agreement ( Second Davthea Loan Agreement ) which sets out the terms and conditions upon which Modeling will repay funds contributed by Davthea towards the exploration expenditure and administrative requirements of Modeling since 1 February 2017.

The Second Davthea Loan Agreement provides that Modeling will repay amounts owed under the Second Davthea Loan Agreement upon the listing of the Company on the ASX or when Modeling has the financial capacity to do so, whichever is earliest. The Debt is unsecured and will be interest free until Davthea deems otherwise.

10.9 Convertible Notes

Modeling is party to various unsecured convertible note agreements dated 16 September 2016 and 19 September 2016, under which Modeling issued convertible notes ( Notes ) to investors (the Noteholders ) in consideration for an aggregate amount of $500,000. The Notes were subsequently varied upon the Company’s acquisition of 100% of the issued capital of Modeling so that the face value of the Notes will convert into Shares on the date that is two business days after:

(a) conditional approval is given by the ASX for the Company to be admitted to the Official List; and
(b) the Company has received valid applications for Securities offered under the Offer, equivalent to or in excess of the minimum subscription for the Offer,

(the Conversion Date ).

On the Conversion Date, the Notes will automatically convert into that number of Shares equal to the face value of the Notes divided by $0.17. A 5% coupon rate is payable on the face value of each note.

The Company will issue 2,941,176 Shares (at a deemed issue price of $0.17 per Share) to the Noteholders in consideration for the conversion of the notes.

10.10 Patersons Mandate

The Company has entered into a mandate with Patersons Securities Limited ( Patersons ) pursuant to which Patersons is engaged to act as lead manager and underwriter of the Offer ( Patersons Mandate ). The material terms of the Patersons Mandate are as follows:

(a) ( Fees ): the following fees (plus GST) are payable by the Company to Patersons Securities Limited on completion of the Offer:
(i) ( Lead Manager Fee ): $50,000 payable in cash;

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(ii) ( Selling/Underwriting Fee ): 6% of the gross amount raised under the Offer. All selling or sub-underwriting fees payable to third parties will be paid by Patersons from the fee; and
(iii) ( Underwriter Options ): 8,000,000 quoted options exercisable at $0.30 each on or before the date which is 36 months from the date the Company is admitted to the Official List of ASX ( Underwriter Options ). Refer to Section 11.4 for full terms and conditions of the Underwriter Options. Pursuant to the Patersons Mandate, Patersons will issue general sub-underwriters of the Offer one (1) Underwriter Option for every one (1) Share subunderwritten. Patersons will issue the Priority Sub-Underwriters (as defined in Section 10.12) a total of 1,500,000 Underwriter Options.
(b) ( Expenses ): Patersons is entitled to be reimbursed for all out-of-pocket expenses directly related to the Offer. Patersons will obtain the Company’s consent prior to incurring any single expense greater than $2,000; and
(c) ( Opportunity to Conduct Additional Engagements ): The Company agrees to offer Patersons the lead role in any further equity raising undertaking in connection with the Company for a period of 18 months following completion of the Offer.

The Patersons Mandate contains other standard terms which are customary in agreements of this type.

10.11 Underwriting Agreement

By an agreement between Patersons and the Company ( Underwriting Agreement ), Patersons has agreed to underwrite the Offer, subject to the following conditions:

(a) a minimum of $3,000,000 being subscribed pursuant to the Offer by the Closing Date ( Minimum Subscription Amount ); and
(b) the Directors of the Company introducing not less than $2,000,000 of the Minimum Subscription Amount.

Pursuant to the Underwriting Agreement, the Company has agreed to pay Patersons the fees outlined in Section 10.10(a) above.

In addition, the Company will pay and will indemnify and keep indemnified the Patersons against and in relation to, all reasonable costs and expenses of and incidental to the underwriting of the Offer, including but not limited to:

(a) the reasonable costs of advertising, printing and distributing the Prospectus;
(b) the professional fees payable to each expert whose reports appears in the Prospectus;
(c) the legal expenses and disbursements of Patersons on a full indemnity basis;
(d) reasonable accommodation and travelling expenses of Patersons relating to the underwriting of the Offer; and

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(e) all reasonable marketing and promotional expenditure related to the underwriting of the Offer.

Any amounts outstanding pursuant to invoices for fees, commissions or expenses will occur interest at the rate of 10% per annum.

Patersons may procure such persons to sub-underwrite the Offer as Patersons in its sole and absolute discretion thinks fit.

The obligation of Patersons to underwrite the Offer is subject to certain events of termination. Patersons may terminate its obligations under the Underwriting Agreement if:

(a) ( Indices fall ): any of the All Ordinaries Index or the Small Resources Index as published by ASX is for two (2) consecutive Business Days after the date of the Underwriting Agreement 10% or more below its respective level as at the close of business on the Business Day prior to the date of the Underwriting Agreement; or
(b) ( Prospectus ): the Company does not lodge the Prospectus on the Lodgement Date or the Prospectus or the Offer is withdrawn by the Company; or
(c) ( Copies of Prospectus ): the Company fails to provide an electronic copy of the Prospectus to Patersons, together with as many additional printed copies as reasonably request by Patersons prior to the Closing Date and such failure is not remedied within 2 days; or
(d) ( No Official Quotation ): Official Quotation has not been granted by the specified date pursuant to which the Company must give Patersons notice of any shortfall to the Offer ( Shortfall Notice Deadline Date ) or, having been granted, is subsequently withdrawn, withheld or qualified; or
(e) ( Exposure period ): during the exposure period, the ASIC notifies the Company of any deficiency of any kind in the Prospectus or ASIC gives any notice, whether written or oral, to the Company extending (or further extending) the exposure period or giving notice of its intention to so extend; or
(f) ( Supplementary prospectus ):
(i) Patersons, having elected not to exercise its right to terminate its obligations under the Underwriting Agreement as a result of an occurrence as described in (q) below, form the view on reasonable grounds that a supplementary or replacement prospectus should be lodged with ASIC for any of the reasons referred to in section 719 of the Corporations Act and the Company fails to lodge a supplementary or replacement prospectus in such form and content and within such time as Patersons may reasonably require; or
(ii) the Company lodges a supplementary or replacement prospectus without the prior written agreement of Patersons; or
(g) ( Non compliance with disclosure requirements ): it transpires that the Prospectus does not contain all the information that investors and their

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professional advisers would reasonably require to make an informed assessment of:

(i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; and
(ii) the rights and liabilities attaching to the Offer Shares;
(h) ( Misleading Prospectus ): it transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Prospectus (having regard to the provisions of sections 710, 711 and 716 of the Corporations Act) or if any statement in the Prospectus becomes or misleading or deceptive or likely to mislead or deceive or if the issue of the Prospectus is or becomes misleading or deceptive or likely to mislead or deceive;
(i) ( Restriction on allotment ): the Company is prevented from allotting the Offer Shares within the time required by the Underwriting Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi-governmental agency or authority;
(j) ( Withdrawal of consent to Prospectus ): any person (other than Patersons) who has previously consented to the inclusion of its, his or her name in the Prospectus or to be named in the Prospectus, withdraws that consent;
(k) ( ASIC application ): an application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Prospectus, the Shortfall Notice Deadline Date has arrived, and that application has not been dismissed or withdrawn;
(l) ( ASIC hearing ): ASIC gives notice of its intention to hold a hearing under section 739 of the Corporations Act in relation to the Prospectus to determine if it should make a stop order in relation to the Prospectus or the ASIC makes an interim or final stop order in relation to the Prospectus under section 739 of the Corporations Act;
(m) ( Takeovers Panel ): the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel;
(n) ( Hostilities ): there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of this agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of America, India, Pakistan, or the Peoples Republic of China, Israel or any member of the European Union, or a terrorist act (as declared by the country against which the act is perpetrated) is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries anywhere in the world;
(o) ( Authorisation ): any authorisation which is material to anything referred to in the Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to Patersons;

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(p) ( Indictable offence ): a director or senior manager of the Company or its subsidiaries ( Relevant Company ) is charged with an indictable offence;
(q) ( Termination Events ): any of the following events occurs:
(i) ( Default ): default or breach by the Company under the Underwriting Agreement of any terms, condition, covenant or undertaking;
(ii) ( Incorrect or untrue representation ): any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect;
(iii) ( Contravention of constitution or Act ): a contravention by a Relevant Company of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX;
(iv) ( Adverse change ): an event occurs which gives rise to a Material Adverse Effect (as defined in the Underwriting Agreement) or any adverse change or any development including a prospective adverse change after the date of the Underwriting Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of any Relevant Company including, without limitation, if any forecast in the Prospectus becomes incapable of being met or in Patersons’ reasonable opinion, unlikely to be met in the projected time;
(v) ( Error in Due Diligence Results ): it transpires that any of the due diligence results or any part of the verification material was false, misleading or deceptive or that there was an omission from them;
(vi) ( Significant change ): a "new circumstance" as referred to in section 719(1) of the Corporations Act arises that is materially adverse from the point of view of an investor;
(vii) ( Public statements ): without the prior approval of Patersons a public statement is made by the Company in relation to the Offer, the Issue or the Prospectus;
(viii) ( Misleading information ): any information supplied at any time by the Company or any person on its behalf to Patersons in respect of any aspect of the Offer or the Issue or the affairs of any Relevant Company is or becomes misleading or deceptive or likely to mislead or deceive;
(ix) ( Official Quotation qualified ): the Official Quotation is qualified or conditional and such conditions or qualifications would, in the reasonable opinion of Patersons, have a material adverse effect on the securities of the Company to be quoted;
(x) ( Change in Act or policy ): there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories any Act or prospective Act or budget or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a

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proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy;

(xi) ( Prescribed Occurrence ): a specified prescribed occurrence occurs, other than as disclosed in the Prospectus;
(xii) ( Suspension of debt payments ): the Company suspends payment of its debts generally;
(xiii) ( Event of Insolvency ): an event of insolvency occurs in respect of a Relevant Company;
(xiv) ( Judgment against a Relevant Company ): a judgment in an amount exceeding $25,000 is obtained against a Relevant Company and is not set aside or satisfied within 7 days;
(xv) ( Litigation ): litigation, arbitration, administrative or industrial proceedings are after the date of the Underwriting Agreement commenced or threatened against any Relevant Company, other than any claims foreshadowed in the Prospectus;
(xvi) ( Board and senior management composition ): there is a change in the composition of the Board or a change in the senior management of the Company before completion of the Offer without the prior written consent of Patersons;
(xvii) ( Change in shareholdings ): there is a material change in the major or controlling shareholdings of a Relevant Company or a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to a Relevant Company;
(xviii) ( Timetable ): there is a delay in any specified date in the timetable contained in the Underwriting Agreement which is greater than 3 Business Days;
(xix) ( Force Majeure ): a force majeure affecting the Company's business or any obligation under the Underwriting Agreement lasting in excess of 7 days occurs;
(xx) ( Certain resolutions passed ): a Relevant Company passes or takes any steps to pass a resolution under section 254N, section 257A or section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of Patersons;
(xxi) ( Capital Structure ): any Relevant Company alters its capital structure in any manner not contemplated by the Prospectus;
(xxii) ( Breach of Material Contracts ): any of the material contracts specified in Section 10 of the Prospectus is terminated or substantially modified;
(xxiii) ( Investigation ): any person is appointed under any legislation in respect of companies to investigate the affairs of a Related Company; or

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(xxiv) ( Market Conditions ): a suspension or material limitation in trading generally on ASX occurs or any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or other international financial markets.

The Underwriting Agreement otherwise contains terms and conditions considered standard for an agreement of this nature.

10.12 Priority Sub-underwriting Agreements

Patersons has entered into priority sub underwriting agreements with each of Davthea and Bilingual ( Priority Sub-underwriters ) pursuant to which the Priority Sub-underwriters have agreed to subscribe for up to the first $500,000 of any shortfall to the Offer ( Priority Sub-Underwriting Amount ) in the following proportions:

(a) Davthea – 50% (representing 1,250,000 Shares and 625,000 Loyalty Options); and
(b) Bilingual – 50% (representing 1,250,000 Shares and 625,000 Loyalty Options).

The Priority Sub-underwriters will receive, upon successful completion of the Offer, 750,000 Underwriter Options each as a fee for underwriting the Priority SubUnderwriting Amount.

The Priority Sub-underwriters may reallocate some or all of their proportional share of the Priority Sub-Underwriting Amount to other parties of their choosing provided that those parties fully comply with the terms and conditions of the priority sub underwriting agreements ( Offer Terms ), together with the relevant rules and regulations under the Corporations Act, the ASX Listing Rules and Prospectus. However, the Priority Sub-underwriters remain ultimately liable in the event of any non-compliance with the Offer Terms or any non-performance (either in whole or in part) by any party introduced by the Priority Subunderwriters that may take on some or all of the Priority Sub-Underwriting Amount.

10.13 Executive Services Agreement – Mr David Richardson

On 20 January 2017, the Company and Mr David Richardson entered into an executive services agreement ( Richardson ESA ) pursuant to which Mr Richardson is appointed as “Managing Director” effective on the date that the Company is admitted to Official Quotation ( Commencement Date ). The material terms of the Richardson ESA are as follows:

(a) ( Term ): Two years from the Commencement Date, provided that the term of employment may be extended for a further year by mutual agreement between the Company and Mr Richardson.
(i) ( Termination by the Company ): the Company may terminate Mr Richardson’s employment, summarily by notice in writing, if Mr Richardson commits certain actions or omissions which in the opinion of the board constitute serious misconduct. The Company may also terminate Mr Richardson’s employment at any time, by giving three months’ written notice.

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(ii) ( Termination by the Executive ): Mr Richardson may terminate his appointment at any time by giving the Company three months’ written notice.
(b) ( Remuneration ): a salary of $150,000 per annum is payable by the Company to Mr Richardson (exclusive of superannuation) ( Annual Base Salary ). Mr Richardson is entitled to receive the Annual Base Salary plus statutory superannuation contributions partly by way of salary and partly by way of such other benefits that Mr Richardson may elect and the Company may lawfully provide (provided certain specified conditions are met). Mr Richardson will not receive any additional director’s fees from the Company.
(c) ( Expenses ): the Company will reimburse Mr Richardson for all reasonable expenses incurred by him in the performance of his duties in connection with the business of the Company.

The Richardson ESA also contains various other terms and conditions that are considered standard for an agreement of this nature.

10.14 Non-Executive Chairman Appointment Letter – Mr David Berrie

The Company has entered into a letter of appointment with Mr David Berrie pursuant to which Mr Berrie is appointed as Non-Executive Chairman of the Company on the following terms:

(a) ( Fees ): director fees of $60,000 per annum (plus superannuation), are payable by the Company to Mr Berrie, on a monthly basis, effective on the date that the Company is admitted to Official Quotation; and
(b) ( Term ): the term of Mr Berrie’s appointment is subject to provisions of the Constitution and the ASX Listing Rules relating to retirement by rotation and re-election of directors and will automatically cease at the end of any meeting at which Mr Berrie is not re-elected as a director by Shareholders.

The appointment letter otherwise contains terms and conditions that are considered standard for agreements of this nature.

10.15 Non-Executive Director Appointment Letter – Mr Malcolm Norris

The Company has entered into a letter of appointment with Mr Malcolm Norris pursuant to which Mr Norris is appointed a Non-Executive Director of the Company on the following terms:

(a) ( Fees ): Director fees of $40,000 per annum (plus superannuation) are payable by the Company to Mr Norris on a monthly basis, effective 20 December 2016;
(b) ( Incentive Options ): In addition, Mr Norris (or his nominee) will be issued 750,000 quoted options exercisable at $0.30 each, on or before the date that is three years from the date of the Company’s admission to the Official List of ASX (refer to Section 11.4 for full terms); and
(c) ( Term ): the term of Mr Norris’ appointment is subject to provisions of the Constitution and the ASX Listing Rules relating to retirement by rotation and re-election of directors and will automatically cease at the end of

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any meeting at which Mr Norris is not re-elected as a director by Shareholders.

The letter of appointment otherwise contains terms and conditions that are considered standard for agreements of this nature.

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11. ADDITIONAL INFORMATION

11.1 Litigation

As at the date of this Prospectus, the Company and Modeling are not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company or the Subsidiary.

11.2 Rights attaching to Shares

The following is a summary of the more significant rights attaching to Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Full details of the rights attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

(a) General meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution.

(b) Voting rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:

(i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and
(iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited).

(c) Dividend rights

Subject to the rights of any preference Shareholders and to the rights of the holders of any shares created or raised under any special arrangement as to dividend, the Directors may from time to time declare a dividend to be paid to the Shareholders entitled to the dividend which shall be payable on all Shares according to the

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proportion that the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) in respect of such Shares.

No dividend shall carry interest as against the Company. The Directors may set aside out of the profits of the Company any amounts that they may determine as reserves, to be applied at the discretion of the Directors, for any purpose for which the profits of the Company may be properly applied.

(d) Winding-up

If the Company is wound up, the liquidator may, with the authority of a special resolution of the Company, divide among the shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

The liquidator may, with the authority of a special resolution of the Company, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no Shareholder is compelled to accept any Shares or other securities in respect of which there is any liability.

(e) Shareholder liability

As the Shares under the Prospectus are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

(f) Transfer of Shares

Generally, Shares are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act or the ASX Listing Rules.

(g) Variation of rights

Pursuant to Section 246B of the Corporations Act, the Company may, with the sanction of a special resolution passed at a meeting of Shareholders vary or abrogate the rights attaching to Shares.

If at any time the share capital is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the consent in writing of the holders of three-quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

(h) Alteration of Constitution

The Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general meeting. In addition, at least 28 days written notice specifying

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the intention to propose the resolution as a special resolution must be given.

11.3 Terms and Conditions of Loyalty Options

(a) Entitlement

Upon vesting, each Loyalty Option entitles the holder to subscribe for one Share upon exercise of the Loyalty Option.

(b) Exercise Price

Subject to paragraph (k), the amount payable upon exercise of each Loyalty Option will be $0.30 ( Exercise Price ).

(c)

Vesting Conditions

The Loyalty Options are subject to a vesting condition that the Loyalty Option holder holds Shares on the date that is six weeks following the commencement of trading of the Company’s Shares on the ASX ( Vesting Date ). Up to the Vesting Date, the Loyalty Options are nontransferable.

The number of Loyalty Options to vest will be the lesser of:

(i) the number of Loyalty Options held by the holder on the Vesting Date; and
(ii) the number of Shares held by the holder on the Vesting Date divided by 2.

(d)

Expiry Date

Each Loyalty Option will expire at 5:00 pm (WST) on that date which is 36 months from the date the Company is admitted to the Official List of ASX ( Expiry Date ). A Loyalty Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(e)

Exercise Period

The Loyalty Options may be exercised at any time after the Vesting Date and prior to the Expiry Date, in whole or part, upon payment of the exercise price per Loyalty Option ( Exercise Period ).

(f)

Notice of Exercise

The Loyalty Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Loyalty Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Loyalty Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(g)

Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment

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of the Exercise Price for each Loyalty Option being exercised in cleared funds ( Exercise Date ).

(h) Timing of issue of Shares on exercise

Within 15 Business Days after the later of the following:

(i) the Exercise Date; and
(ii) when excluded information in respect to the Company (as defined in section 708A(7) of the Corporations Act) (if any) ceases to be excluded information,

but in any case no later than 20 Business Days after the Exercise Date, the Company will:

(iii) issue the number of Shares required under these terms and conditions in respect of the number of Loyalty Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;
(iv) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and
(v) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Loyalty Options.

If a notice delivered under 11.4(g)11.4(g)(iv) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(i)

Shares issued on exercise

Shares issued on exercise of the Loyalty Options rank equally with the then issued shares of the Company.

(j) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Loyalty Options.

(k) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of a Loyalty Option holder are to be changed in a manner

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consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(l) Participation in new issues

There are no participation rights or entitlements inherent in the Loyalty Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Loyalty Options without exercising the Loyalty Options.

(m) Change in exercise price

A Loyalty Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Loyalty Option can be exercised.

(n) Quoted

Subject to their vesting in accordance with paragraph (c), the Company will apply for quotation of the Loyalty Options on ASX.

(o) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

11.4 Terms and Conditions of Options to be issued to Patersons Securities Limited and existing directors and management of the Company

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (i), the amount payable upon exercise of each Option will be $0.30 ( Exercise Price ).

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) on that date which is 36 months from the date the Company is admitted to the Official List of ASX ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for

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each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f)

Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g) Timing of issue of Shares on exercise

Within 15 Business Days after the later of the following:

(i) the Exercise Date; and
(ii) when excluded information in respect to the Company (as defined in section 708A(7) of the Corporations Act) (if any) ceases to be excluded information,

but in any case no later than 20 Business Days after the Exercise Date, the Company will:

(iii) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;
(iv) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and
(v) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(iv) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the Options rank equally with the then issued shares of the Company.

(i) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent

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with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(j) Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.

(k) Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(l) Quoted

The Company will apply for quotation of the Options on ASX.

(m) Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

11.5 Terms and Conditions of Options to be issued to Gold Fields Australia

The Options to be issued to Gold Fields Australia under the variation to the Shareholders Agreement (details of which are set out in Section 10.1) will be issued on the same terms and conditions set out in Section 11.4 above, except they will be unquoted, with an exercise price equal to the price that is the greater of $0.20 or a 5% discount to the 20 day volume weighted average price of Shares on the ASX and expiring on the following dates:

(a) 2,500,000 Options will expire at 5:00 pm (WST) on that date which is twelve (12) months from the date of issue;
(b) 2,500,000 Options will expire at 5:00 pm (WST) on that date which is twenty four (24) months from the date of issue; and
(c) 2,500,000 Options will expire at 5:00 pm (WST) on that date which is thirty six (36) months from the date of issue (Expiry Date).

11.6 Terms and Conditions of Performance Shares

11.6.1 Milestones

The Milestones for the Performance Shares are as follows:

(a) ( Class A Performance Shares ) both of the following being met:
(i) by no later than 31 December 2017, the Company entering into a JV agreement with a JV partner (with a minimum market capitalisation of $100m or is a Foreign Government Investor or equivalent) in a single existing project, being Myall, Moorefield, Wellington or Parkes, where the JV Partner agrees to spend

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$3,000,000 to acquire not more than a 51% stake in the JV asset; and

(ii) the JV Partner has spent $1,000,000 on exploration expenditure on the JV asset;
(b) ( Class B Performance Shares ) the Company achieving two of the following:
(i) signing a JV agreement with a JV partner (with a minimum market capitalisation of $100m or is a Foreign Government Investor or equivalent) in a single existing Modeling project, being Myall, Moorefield, Wellington or Parkes, where the JV partner agrees to spend $4,000,000 to acquire not more than a 51% stake in the JV asset, within the first 24 months post of admission to the Official List of the ASX; and/or
(ii) the 30 day VWAP in the trading of the Company’s Shares of a minimum of 25c per share within the first 12 months of admission to the Official List of the ASX; and/or
(iii) a minimum of $4m spent by the Company on exploration and associated costs with an emphasis on the near surface gold targets within the area covered by the existing East Lachlan tenement licences within the first 24 months of admission to the Official List of the ASX.

( Milestones , and each a Milestone ).

11.6.2 Terms of the Performance Shares

The terms of the Performance Shares are as follows:

(a) No Dividend

Holders of Performance Shares ( Holders ) are not entitled to a dividend.

(b) Conversion

Each Performance Share will convert into one Share upon the satisfaction of the relevant Milestone prior to the Expiry Date (defined below).

(c) Expiry Date

The applicable Milestones must be achieved on or before 5.00pm (WST) on the date on which each applicable Milestone must be completed ( Expiry Date ).

(d) No Conversion

To the extent that the Performance Shares have not converted into Shares on or before each applicable Expiry Date, then all such unconverted Performance Shares held by each Holder will automatically consolidate into one Performance Share which will then convert into one Share.

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(e) Conversion Procedure

The Company will issue a Holder with a new holding statement for the Share or Shares as soon as practicable following the conversion of each Performance Share.

(f) Ranking

Each Share into which the Performance Share will convert will upon issue:

(i) rank equally in all respects (including, without limitation, rights relating to dividends) with other issued Shares;
(ii) be issued credited as fully paid;
(iii) be duly authorised and issued by all necessary corporate action; and
(iv) be issued free from all liens, charges and encumbrances whether known about or not including statutory and other preemptive rights and any transfer restrictions.

11.6.3 Conversion on change of control

If there is a Change of Control in relation to the Company prior to the conversion of the Performance Shares, then:

(a) each Milestone will deemed to have been achieved; and
(b) each Performance Share will automatically and immediately convert into Shares,

however, if the number of Shares to be issued as a result of the conversion of all Performance Shares due to a Change of Control in relation to the Company is in excess of 10% of the total fully diluted share capital of the Company at the time of the conversion, then the number of Performance Shares to be converted will be pro-rated so that the aggregate number of Shares issued upon conversion of all Performance Shares is equal to 10% of the entire fully diluted share capital of the Company.

11.6.4 Rights attaching to Performance Shares

(a) Share Capital

Each Performance Share is a share in the capital of the Company.

(b) Non-transferrable

The Performance Shares are not transferrable.

(c) General meetings

Each Performance Share confers of a Holder the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to Shareholders. A Holder of Performance Shares has the right to attend general meetings of the Shareholders.

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(d) No voting rights

The Holders of Performance Shares shall have no right to vote, subject to the Corporations Act.

(e) No dividend rights

A Performance Share does not entitle a Holder to any dividends.

(f) Rights on winding up

Upon the winding up of the Company, the Performance Shares may not participate in the surplus profits or assets of the Company.

(g) Participation in new issues

There are no participation rights or entitlements inherent in the Performance Shares and Holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Performance Shares.

(h) Reorganisation of capital

If a reorganisation (including, but not limited to, consolidation, subdivision, reduction or return) of the issued capital of the Company, the rights of a Holder will be varied (as applicable) in accordance with the Listing Rules which apply to the reorganisation of capital at the time of the applicable reorganisation.

(i) No other rights

A Performance Share does not give a Holder any other rights than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

(j) Application to ASX

The Performance Shares will not be quoted on ASX. Upon conversion of the Performance Shares into Shares in accordance with these terms, the Company must within seven (7) days after the conversion apply for and use its best endeavours to obtain the official quotation on ASX of the Shares arising from the conversion.

11.7 Summary of Management Plan

The Company has adopted an employee incentive option plan ( Management Plan ) on the terms and conditions as set out below:

(a) Eligibility: the Board may from time to time determine a person eligible to participate in the Management Plan ( Eligible Participant );
(b) Invitation: Following determination that an Eligible Participant may participate in the Management Plan, the Board may make an invitation to the Eligible Participant to apply for Options on such terms and conditions as the Board decides from time to time ( Invitation );
(c) Cashless exercise: An Invitation may specify that a holder of Options, may at the time of exercise of those Options, elect to pay the exercise

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price by setting off the total Option exercise price against the number of Shares which they are entitled to receive upon exercise ( Cashless Exercise Facility ). Where an Eligible Participant elects to use the Cashless Exercise Facility, the Eligible Participant will only be issued or transferred that number of Shares (rounded down to the nearest whole number) as are equal in value to the difference between the total Option exercise price otherwise payable to the Company to exercise those Options and the then market value of the Shares as calculated in accordance with the formula set out in the Management Plan. The Cashless Exercise Facility may only be used if the difference between the Option exercise price per Option and the market value per Share at the time of exercise is greater than zero;

(d) Grant of Options: Following receipt of a duly signed and completed application form for Options from an Eligible Participant, together with payment for the Options (if any), the Company will grant the Eligible Participant the relevant number of Options subject to the terms set out in the Invitation and the Management Plan;
(e) Restrictions on dealing : An Eligible Participant may not sell, assign, transfer, grant a security interest over or otherwise deal with an Option that has been granted to them unless the relevant dealing is effected by force of law on death or incapacity to the Eligible Participant’s legal representative. The Company may require that an Option be forfeited if a sale, assignment, transfer, dealing or grant of a security interest occurs or is purported to occur than in accordance with the Management Plan;
(f) Listing : Unless determined otherwise by the Board in its absolute discretion, an Option granted under the Management Plan will not be quoted on the ASX;
(g) Vesting:
(i) An Option that is granted subject to vesting conditions, vests when both of the following have occurred:
- (A) the vesting conditions applicable to that Option have been determined by the Board (acting reasonably) to be satisfied, are waived by the Board, or are deemed to have been satisfied under the Management Plan; and
- (B) the Company has issued a vesting notice to the Eligible Participant informing him or her that the Option has vested;
(ii) An Option that is granted without vesting conditions vests on the date on which the Option is granted to the Eligible Participant;
(iii) A vesting condition may, subject to the Corporations Act, the Listing Rules (where applicable) and any other application laws and regulations, be waived by the Board by written notice to the relevant Eligible Participant and on such terms and conditions as determined by the Board and set out in that notice;

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(h) Exercise of Options: An Option may not be exercised unless and until that Option has bested, or such earlier date on which the Eligible Participant is entitled to exercise that Option in accordance with the Management Plan;
(i) Lapse of Option: An Option will lapse upon the earlier to occur of:
(i) the date determined by the Board and specified in the Invitation as the expiry date; or
(ii) if the invitation does not specify an expiry date, the date which is 15 years from the date of grant;
(j) Share ranking: Shares issued to an Eligible Participant on exercise of the Options will rank equally with the then issued Shares of the Company;
(k) Listing of Shares: if the Shares of the same class as those issued to an Eligible Participant upon the valid exercise of an Option under the Management Plan are quoted on the ASX, the Company will apply for quotation of those Shares within the time required by the Listing Rules;
(l) Disposal Restrictions: An Eligible Participant agrees that any Shares issued upon exercise of a vested Option will be subject to any disposal restrictions as set out in the Invitation and determined by the Board;
(m) Adjustment for bonus issue: If Shares are issued by the Company pro rata to Shareholders generally by way of bonus issue, the Eligible Participant is entitled, upon exercise of the Options, to receive, in addition to the Shares in respect of which the Options are exercised, and without payment of any further consideration, an allotment of as many additional Shares as would have been issued to a Shareholder who, on the date for determining entitlements under the bonus issue, held Shares equal in number to the Shares in respect of which the Options are exercised;
(n) Pro rata issues: Unless otherwise stated in an Invitation, if there is a pro rata issue (except a bonus issue) to Shareholders of the Company, the Option exercise price (if any) of each Option will be reduced in accordance with the formula set out in the Management Plan;
(o) Adjustment for reorganisation: In the event of any reorganisation of the capital of the Company, the rights of each Eligible Participant holding Options shall be reconstructed in accordance with the Listing Rules applicable to a reorganisation of capital at the time of the reorganisation;
(p) Amendments:
(i) Subject to subsection (ii) below, the Board may:
- (A) at any time, amend a provision of the Management Plan, including the terms and conditions upon which any Options have been granted under the Management Plan; and
- (B) determine that any amendments be given retrospective effect, immediate effect or future effect;

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(ii) No amendment to any provision of the Management Plan may be made if the amendment materially reduces the rights of any Eligible Participant as they existed before the date of the amendment, other than an amendment:
(A) introduced primarily for (among other things):
- (I) for the purposes of complying with or conforming to present or future legislation governing or regulating the Management Plan or like plans;
- (II) to correct any manifest error or mistake;
- (III) to enable the Management Plan to comply with its constituent documents, and any other application laws and regulations; or
- (IV) to take into consideration possible adverse tax implications in respect of the Management Plan including changes to applicable taxation legislation or the interpretation of legislation by a court of competent jurisdiction or any rulings from taxation authorities administering such legislation; or
(B) agreed to in writing by all Eligible Participants adversely affected by the amendment.

11.8 Interests of Directors

Other than as set out in this Prospectus, no Director or proposed Director holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to a Director or proposed Director:

(d) as an inducement to become, or to qualify as, a Director; or
(e) for services provided in connection with:
(i) the formation or promotion of the Company; or (ii) the Offer.

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11.9 Interests of Experts and Advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus; or
(b) promoter of the Company,

holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(c) the formation or promotion of the Company;
(d) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(e) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of these persons for services provided in connection with:

(f) the formation or promotion of the Company; or
(g) the Offer.

Agricola Mining Consultants Pty Ltd has acted as Independent Geologist and has prepared the Independent Geologist’s Report which is included in Section 5 of this Prospectus. The Company estimates it will pay Agricola Mining Consultants Pty Ltd a total of $10,000 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, Agricola Mining Consultants Pty Ltd has not received fees from the Company for any services.

BDO Corporate Finance (WA) Pty Ltd has acted as Investigating Accountant and has prepared the Investigating Accountant’s Report which is included in Section 6 of this Prospectus. The Company estimates it will pay BDO Corporate Finance (WA) Pty Ltd a total of $8,000 (excluding GST) for these services During the 24 months preceding lodgement of this Prospectus with the ASIC, BDO Corporate Finance (WA) Pty Ltd has not received fees from the Company for any services.

BDO Audit (WA) Pty Ltd has acted as auditor to the Company. The Company estimates it will pay BDO Audit (WA) Pty Ltd a total of $18,000 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, BDO Audit (WA) Pty Ltd has not received fees from the Company for any services.

Patersons Securities Limited has acted as Lead Manager and Underwriter to the Offer. The Company will pay Patersons the fees outlined in Section 10.10(a) for these services. Patersons Securities Limited has not received any fees for services provided to the Company during the 24 months preceding lodgement of this Prospectus with the ASIC.

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Resources Legal Pty Ltd has acted as the solicitors to the Company and has prepared the Solicitor’s Report on Tenements which is included in Section 7 of this Prospectus. The Company estimates it will pay Resources Legal Pty Ltd $5,000 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, Resources Legal Pty Ltd has not received fees from the Company for any services.

Steinepreis Paganin has acted as the solicitors to the Company in relation to the Offer. The Company estimates it will pay Steinepreis Paganin $25,000 (excluding GST) for these services. Subsequently, fees will be charged in accordance with normal charge out rates. During the 24 months preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has not received fees from the Company for any services.

11.10 Consents

Chapter 6D of the Corporations Act imposes a liability regime on the Company (as the offeror of the Securities), the Directors, the persons named in the Prospectus with their consent as Proposed Directors, any underwriters, persons named in the Prospectus with their consent having made a statement in the Prospectus and persons involved in a contravention in relation to the Prospectus, with regard to misleading and deceptive statements made in the Prospectus, Although the Company bears primary responsibility for the Prospectus, the other parties involved in the preparation of the Prospectus can also be responsible for certain statements made in it.

Each of the parties referred to in this Section:

(a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this section; and
(b) in light of the above, only to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this section.

Agricola Mining Consultants Pty Ltd has given its written consent to being named as Independent Geologist in this Prospectus and the inclusion of the Independent Geologist’s Report in Section 5 of this Prospectus in the form and context in which the report is included. Agricola Mining Consultants Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

BDO Corporate Finance (WA) Pty Ltd has given its written consent to being named as Investigating Accountant in this Prospectus and to the inclusion of the Investigating Accountant’s Report included in Section 6 of this Prospectus. BDO Corporate Finance (WA) Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

BDO Audit (WA) Pty Ltd has given its written consent to being named as auditor of the Company in this Prospectus and the inclusion of the reviewed financial information of the Company contained in the Investigating Accountant’s Report included in Section 6 of this Prospectus. BDO Audit (WA) Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

Patersons Securities Limited has given its written consent to being named as the Lead Manager and Underwriter to the Company in this Prospectus. Patersons

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Securities Limited has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Resources Legal Pty Ltd has given its written consent to being named as the solicitors to the Company in this Prospectus and to the inclusion of the Solicitor’s Report on Tenements in Section 6 of this Prospectus in the form and context in which the report is included. Resources Legal Pty Ltd has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

Steinepreis Paganin has given and has not, before lodgement of this Prospectus with ASIC, withdrawn its consent to be named in this Prospectus as lawyers to the Company in relation to the Offer.

Computershare Investor Services Pty Limited has given its written consent to being named as the share registry to the Company in this Prospectus. Computershare Investor Services Pty Limited has not withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

11.11 Expenses of the Offer

The total expenses of the Offer (excluding GST) are estimated to be approximately $485,600 and are expected to be applied towards the items set out in the table below:

Item of Expenditure	($)
ASX Fees ASIC Fees Lead Manager and Underwriter Fees Legal Fees Independent Geologist’s Fees Investigating Accountant’s Fees Printing, distribution and other expenses Miscellaneous TOTAL*	80,250 2,350 290,000 80,000 10,000 8,000 5,000 10,000
	485,600

Patersons Securities Limited will be responsible for paying all capital raising fees that Patersons Securities Limited and the Company agree with any other licensed securities dealers or Australian financial services licensee out of the fees paid by the Company to Patersons Securities Limited.

11.12 Continuous disclosure obligations

Following admission of the Company to the Official List, the Company will be a “disclosing entity” (as defined in Section 111AC of the Corporations Act) and, as such, will be subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company will be required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company’s securities.

Price sensitive information will be publicly released through ASX before it is disclosed to shareholders and market participants. Distribution of other information to shareholders and market participants will also be managed through disclosure to the ASX. In addition, the Company will post this information

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on its website after the ASX confirms an announcement has been made, with the aim of making the information readily accessible to the widest audience.

11.13 Electronic Prospectus

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please contact the Company and the Company will send you, for free, either a hard copy or a further electronic copy of this Prospectus or both. Alternatively, you may obtain a copy of this Prospectus from the website of the Company at www.magmaticresources.com.

11.14 Financial Forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

11.15 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will apply to participate in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company.

Electronic sub-registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with statements (similar to a bank account statement) that set out the number of Securities issued to them under this Prospectus. The notice will also advise holders of their Holder Identification Number or Security Holder Reference Number and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Electronic sub-registers also mean ownership of securities can be transferred without having to rely upon paper documentation. Further monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month.

11.16 Privacy statement

If you complete an Application Form, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder.

The information may also be used from time to time and disclosed to persons inspecting the register, including bidders for your securities in the context of takeovers, regulatory bodies including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the share registry.

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You can access, correct and update the personal information that the Company holds about you. If you wish to do so, please contact the share registry at the relevant contact number set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for Securities, the Company may not be able to accept or process your application.

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12. DIRECTORS’ AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with the ASIC.

Mr. David Berrie Non-Executive Chairman For and on behalf of Magmatic Resources Limited

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13. GLOSSARY

Where the following terms are used in this Prospectus they have the following meanings:

$ means an Australian dollar.

Applicant means a person or other entity that applies for Securities under this Prospectus.

Application Form means the application form attached to or accompanying this Prospectus relating to the Offer.

ASIC means Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it as the context requires.

ASX Listing Rules or Listing Rules means the official listing rules of ASX.

BDO Audit (WA) Pty Ltd means BDO Audit (WA) Pty Ltd (ACN 112 284 787).

Bilingual means Bilingual Software Pty Ltd (ACN 124 821 218) as trustee for Let’s Go Investment Trust, an entity associated with Mr David Richardson.

Board means the board of Directors as constituted from time to time.

Change of Control means:

(a) the occurrence of:
(i) the offeror under a takeover offer in respect of all Shares announcing that it has achieved acceptances in respect of 50.1% or more of the Shares; and
(ii) that takeover bid has become unconditional; or
(b) the announcement by the Company that:
(i) Shareholders of the Company have a court convened meeting of Shareholders voted in favour, by necessary majority, of a proposed scheme of arrangement under which all Shares are to be either:
- (A) cancelled; or
- (B) transferred to a third party; and
(c) the court, by order, approves the proposed scheme of arrangement.

Clancy Exploration Ltd or Clancy means Clancy Exploration Limited (ACN 105 578 756).

Closing Date means the closing date of the Offer as set out in the indicative timetable in the Key Offer Information Section of this Prospectus (subject to the Company reserving the right to extend the Closing Date or close the Offer early).

Company or Magmatic means Magmatic Resources Limited (ACN 615 598 322).

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Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Davthea means Davthea Pty Ltd (ACN 125 870 064) as trustee for David Berrie Superannuation Fund, an entity associated with Mr David Berrie.

Directors means the directors of the Company at the date of this Prospectus.

Exposure Period means the period of 7 days after the date of lodgement of this Prospectus, which period may be extended by the ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act.

Foreign Government Investor has the meaning given in section 17 of the Foreign Acquisitions and Takeovers Regulation 2015 (as amended, re-enacted or replaced).

Gold Fields means Gold Fields Australasia Pty Ltd (ACN 087 624 600).

Gold Fields Australia means Gold Fields Australia Pty Ltd (ACN 098 385 285).

Gross Revenue means, in respect of a Quarter:

(a) where royalty products are sold by Modeling ( Sales ) on an arms-length basis on normal commercial terms, and, (where such royalty product has been smelted, refined, concentrated or otherwise treated), the smelting, refinement, concentrating and other treatment has been carried out on arms-length terms, the total amounts actually received by Gold Fields from Sales during the relevant Quarter, less any refunds or discounts; and
(b) where royalty products are disposed of on any basis other than as described in part (a) of this definition, the deemed sales price multiplied by the quantity of the mineral product so sold or otherwise disposed of during the relevant Quarter.

Independent Geologist or Agricola or Agricola Mining Consultants Pty Ltd means Agricola Mining Consultants Pty Ltd (ACN 127 072 459).

Investigating Accountant or BDO Corporate Finance (WA) Pty Ltd means BDO Corporate Finance (WA) Pty Ltd (ACN 124 031 045).

JORC Code means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 Edition).

JV means joint venture.

km means kilometres.

Loyalty Option means an Option granted free attaching to Shares subscribed for under the Offer, on a 1:2 basis, with the terms and conditions set out in Section 11.3.

Modeling or Subsidiary means Modeling Resources Pty Ltd (ACN 169 211 876), a wholly owned subsidiary of the Company.

Moorefield Project means the project described at Section 3.6 of the Prospectus.

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Myall Project means the project described at Section 3.3 of the Prospectus.

Net Smelter Return means Gross Revenue for the relevant Quarter minus allowable charges incurred during that Quarter.

Offer means the offer of Securities pursuant to this Prospectus as set out in Section 2 of this Prospectus.

Official List means the official list of ASX.

Official Quotation means official quotation by ASX in accordance with the ASX Listing Rules.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Parkes Project means the project described at Section 3.4 of the Prospectus.

Patersons Mandate has the meaning given to that term in Section 10.10.

Patersons Securities Limited or Patersons means Patersons Securities Limited (ABN 69 008 896 311) (AFSL No. 239052).

Performance Shares means the Class A Performance Shares and Class B Performance Shares in the Company with terms and conditions set out at Section 11.6.

Projects means the Myall Project, Moorefield Project, Wellington North Project and Parkes Project.

Prospectus means this prospectus.

Quarter means the period commencing on 12 February 2013 and ending on the next to occur of 31 March, 30 June, 30 September or 31 December, and thereafter, each period of three consecutive calendar months ending of those dates.

Resources Legal Pty Ltd means Resources Legal Pty Ltd (ABN 67 097 228 070).

Section means a section of this Prospectus.

Securities means Shares and Loyalty Options.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of Shares.

Share Registry means Computershare Investor Services Pty Limited.

Share Split has the meaning given in Section 10.1(a).

Tenements means the mining tenements (including applications) in which the Company has an interest as described in the Solicitor’s Report on Tenements set out in Section 7 of this Prospectus or any one of them as the context requires.

Wellington North Project means the project described at Section 3.5 of the Prospectus.

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Vendors means the vendors of Modeling with respect to the Company’s acquisition of 100% of the issued share capital of Modeling.

VWAP means the volume weighted average market price (as defined in the Listing Rules) for Shares.

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AI assistant

MAGMATIC RESOURCES LIMITED — Capital/Financing Update 2017

65290_rns_2017-05-16_65369178-19a9-4ebf-9530-50d7df0418c5.pdf

MAGMATIC RESOURCES LIMITED ACN 615 598 322

PROSPECTUS

Lead Manager and Underwriter to the Offer: Patersons Securities Limited

IMPORTANT INFORMATION

TABLE OF CONTENTS

CORPORATE DIRECTORY

Directors

Registered and Business Office

Company Secretary and Chief Financial Officer

Proposed ASX Code

Lead Manager and Underwriter

Share Registry[1 ]

Investigating Accountant

Independent Geologist

Solicitors

Auditor

IMPORTANT NOTICE

Exposure Period

No offering where offering would be illegal

Hong Kong

Singapore

China

Japan

Web Site – Electronic Prospectus

Website

Forward-looking statements

Photographs and Diagrams

Definitions

Proximate statements

CHAIRMAN’S LETTER

Dear Investor

KEY OFFER INFORMATION

KEY DATES - Indicative timetable*

KEY OFFER DETAILS

1. INVESTMENT OVERVIEW SECTION

Proximate Statements - Disclaimer

2. DETAILS OF THE OFFER

2.1 The Offer

2.2 Minimum subscription

2.3 Use of Funds

Notes:

2.4

Taxation

2.5 Applications

2.6 Defects in Applications

2.7 ASX listing

2.8 Issue

2.9

Applicants outside Australia

Hong Kong

Singapore

China

Japan

2.10 Lead Manager and Underwriter

2.11 Commissions payable

3. COMPANY AND PROJECTS OVERVIEW

3.1 Proximate statements

3.2 Company Background

3.3 Myall Project

3.4 Parkes Project

3.5 Wellington North Project

3.6 Moorefield Project

3.7 Business Model

3.8 Proposed Exploration Program Expenditure

Planned Exploration Expenditure

Notes

3.9

Competent Person’s Statement

3.10 Strategy Post Listing

3.11 Directors and key personnel

Directors

David Berrie

David Richardson

Malcolm Norris

Other Management

Ian Hobson

Gordon Barnes

MAGMATIC RESOURCES LIMITED Capital/Financing Update 2017