PATERSON RESOURCES LTD — Capital/Financing Update 2021

Dec 14, 2021

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ASX ANNOUNCEMENT 15 December 2021

High grade gold results returned at Grace Project 25km from the Telfer Gold mine in the Paterson Province

HIGHLIGHTS

• Assay results received for first EIS-funded drill hole from maiden diamond drilling program at Grace Project in the highly prospective Paterson Province which hosts the world class Telfer Gold Mine.

• Gold mineralisation within a wide silica-carbonate rich brecciated ore system over returning 20.8m @ 2.0/t Au from 203.2m including high grade intercepts of 2m @ 3.6g/t Au from 216m and 3m @ 8.38 g/t Au from 221m.

• In addition, 15.7m @ 0.39g/t Au was returned from 762m which is associated with a silica altered felsic intrusive which represents a new style of mineralisation at the Grace Project.

• Further Results from PDD0001 and from a further 4 diamond drill holes and 1 reverse circulation (“RC”) hole expected over the coming weeks.

• The Intrusive related gold mineralisation highlights the prospectivity of the numerous untested magnetic targets at the Grace Project.

• Mineralised interval has been intersected over 200m from the nearest drilling and remains open to the east and west and at depth.

• A combined diamond and RC drilling programme planned to commence in first quarter 2022 to test high-priority targets at Grace Project.

Paterson Resources Executive Director, Matt Bull commented:

“The drilling campaign was designed to test high-priority geophysical targets and target mineralisation along the Grace-Bemm Shear Zone. Historically, this has only been drilled with wide spaced and generally shallow drill-holes. The drilling program successfully intersected wide sulphiderich breccia zones in several of the diamond holes. Further, the first assay results received confirm they can host high-grade mineralisation. The results confirm a large mineral system with multiple mineralisation styles and the company will now delineate the resource which remains open in all directions and test multiple magnetic targets.”

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Figure 1 : Assay results of the EIS drill-hole PDD001 at the Grace Project

Paterson Resources Limited (“Paterson” or “the Company”) (ASX: PSL) is pleased to announce the first results from the 2021 drilling campaign have returned encouraging results within a broad zone of brecciated silica-carbonate altered siltstone: 20.8m @ 2.0 g/t AU from 203.2m including 2m @ 3.6g/t and 3m @ 8.38 g/t Au from 221m (Figure 1). The campaign was designed to test a series of priority targets outlined from geophysics and historical drilling, which has identified gold-copper mineralisation similar in style to the ore system at the world-class Telfer gold-copper mine (25km north-west) and Havieron gold deposit (40km north-east).

On completion of the EIS hole, the core was reviewed by consultant geologists. Encouragingly, the shallow mineralisation highlighted the potential for a more significant underlying system. As a result, Paterson has focused on following up these results to better understand the structural relationships of the mineralisation with more diamond drilling. In turn, this will enable the new interpretation to be fully tested.

Figure 2 shows the highly altered quartz/carbonate/pyrite veining which returned multiple highgrade results over a 20m width. A summary of the assay results are listed in table 1. The style of mineralisation was noted in several of the holes and increases the confidence that there will be more high-grade intercepts in the outstanding assays yet to be returned.

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Figure 2 : Silicic-carbonate veining and alteration in PDD0001 with pervasive sulphidation. Gold grades noted over the intervals from 216m to 224m.

Hole ID	From	To	Width (m)	Au Grade (g/t)
PDD0001	197	198	1	0.40
	203.2	224	20.8	2.0
	Inc 216	218	2	3.6
	Inc 221	224	3	8.38
	762.3	778	15.7	0.4
	Inc 762.3	762.6	0.3	3.14
PDD0002	Awaiting assay results
PDD0003	Awaiting assay results
PDD0004	Awaiting assay results
PDD0005	Awaiting assay results
PRC0001	Awaiting assay results

Table 1 Significant results of the diamond drilling hole PDD0001

Figure 3 shows the location of PDD0001 along with historic drilling in the project area. Mineralisation intercepted in PDD0001 within the felsic intrusive at 762.3m is highly encouraging. Anomalous gold is associated with pervasive silicic alteration at the contact of the intrusive and extends further into the felsic unit. Further assaying has been undertaken to understand the full extent of the mineralisation.

The presence of gold mineralisation is considered highly encouraging. The felsic unit has significant zones of pervasive chlorite-magnetite alteration which likely give rise to the characteristic magnetic trends seen at the Grace Project and which is underly several historic high grade gold hits.

Preliminary interpretations suggest the felsic intrusive and alteration system is potentially driving the hydrothermal fluid flow up the rock profile and depositing secondary gold mineralization in zone of silicic-carbonate rich breccia zones that have previously been intersected at the Grace Project.

This hypothesis highlights multiple other high priority, largely unexplored, magnetic highs near to the Grace Project that will be tested in the upcoming drilling program.

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Figure 3 : Map of EIS hole location at the Grace Project with the Historic Drilling.

Future Exploration

Paterson has commenced planning a follow up RC and diamond drilling program at the Grace Project. The program will delineate extensions to the known mineralised system and test multiple high-quality targets along strike and at depth.

The Company is in the process of finalising access surveys with the Western Desert Land Aboriginal Corporation (“WDLAC”) to clear areas for drilling. It is anticipated access surveys will be finalised in the first quarter of 2022.

Grace Project Location

The Grace Gold-Copper Project is located in the heart of the Paterson Province, where multiple major exploration groups including Rio Tinto, Newcrest and Greatland Gold, are actively exploring within the region. Significant discoveries proximal to Paterson’s Grace Gold-Copper Project include Havieron to the north-east, Maroochydore to the south and world-class Telfer Mine located 25km northwest.

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Figure 4: Map showing the location of the Grace Copper-Gold Project and Paterson Resources tenements (yellow outline), and nearby significant gold-copper deposits over an image of Paterson Province geology draped over a filtered magnetic anomaly image .

This announcement has been approved for release to ASX by the Board of Paterson Resources

COMPETENT PERSON’S STATEMENT:

The information in this announcement that relates to exploration results is based on and fairly represents information reviewed or compiled by Mr Matt Bull, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Bull is a Director of Paterson Resources Limited. Mr Bull has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Bull has provided his prior written consent to the inclusion in this announcement of the matters based on information in the form and context in which it appears.

Disclaimer

Some of the statements appearing in this announcement may be in the nature of forward-looking statements. You should be aware that such statements are only predictions and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to the industries in which Paterson operates and proposes to operate as well as general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets, among other things. Actual events or results may differ materially from the events or results expressed or implied in any forward-looking statement. No forward-looking statement is a guarantee or representation as to future performance or any other future matters, which will be influenced by a number of factors and subject to various uncertainties and contingencies, many of which will be outside Paterson Resources (PSL) control.

The Company does not undertake any obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions or conclusions contained in this announcement. To the maximum extent permitted by law, none of PSL, its Directors, employees, advisors or agents, nor any other person, accepts any liability for any loss arising from the use of the information contained in this announcement. You are cautioned not to place undue reliance on any forward-looking statement. The forward-looking statements in this announcement reflect views held only as at the date of this announcement.

This announcement is not an offer, invitation, or recommendation to subscribe for, or purchase securities by PSL. Nor does this announcement constitute investment or financial product advice (nor tax, accounting or legal advice) and is not intended to be used for the basis of making an investment decision. Investors should obtain their own advice before making any investment decision.

Hole ID	Zone	Easting	Northing	RL	Azimuth	Dip	Depth
PDD001	Grace	430800	7574600	295	196	-70.0	879.9
PDD002	Grace	431693	7574120	295	202	-60.0	149.6
PDD003	Grace	430966	7574526	295	202	-60.0	248.6
PDD004	Grace	430937	7574456	295	202	-60.0	149.3
PDD005	Grace	431696	7574120	295	330	-60.0	177.4
PRC0001	Grace	431865	7573993	297	202	-60.0	89.4

Table 2 – Grace Project drill hole summary table

Note: Northing, Easting, RL and Depth are measured in metres (m). Northing and Easting are GDA94, Zone 51. Azimuth and Dip are measured in degrees. All numbers are rounded to nearest 1 metre or 1 degree.

Section 1 – Sampling Techniques and Data

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

Criteria	JORC Code explanation	Commentary
Sampling	• Nature and quality of sampling (eg cut	• Diamond drilling core samples were collected in HQ and
techniques	channels, random chips, or specific	NQ sized core trays with run lengths of either 3m or 6m.
	specialised industry standard measurement
	tools appropriate to the minerals under
	investigation, such as down hole gamma
	sondes, or handheld XRF instruments, etc).
	These examples should not be taken as
	limiting the broad meaning of sampling.
	• Include reference to measures taken to
	ensure sample representivity and the
	appropriate calibration of any
	measurement tools or systems used.
	• Aspects of the determination of
	mineralisation that are Material to the
	Public Report.
	• In cases where ‘industry standard’ work has
	been done this would be relatively simple
	(eg ‘reverse circulation drilling was used to
	obtain 1 m samples from which 3 kg was
	pulverised to produce a 30 g charge for fire
	assay’). In other cases more explanation
	may be required, such as where there is
	coarse gold that has inherent sampling
	problems. Unusual commodities or
	mineralisation types (eg submarine
	nodules) may warrant disclosure of
	detailed information.
Drilling	• Drill type (eg core, reverse circulation,	• Diamond Drilling was conducted using triple tube in HQ
techniques	open-hole hammer, rotary air blast, auger,	from surface decreasing to NQ from 374.7m depth to
	Bangka, sonic, etc) and details (eg core	879.9m EOH.
	diameter, triple or standard tube, depth of	• The hole was inclined at 70 degrees and oriented at 196
	diamond tails, face-sampling bit or other	degrees completed by DDH1 Drilling Pty Ltd.
	type, whether core is oriented and if so, by	• Core from the drill hole was oriented on the 3m or 6m run
	what method, etc).	using a Reflex Mark III core orientation kit where the
		bottom of the hole position is marked by the driller, later
		transferred to the whole drill core run length as a bottom
		of hole reference line.
Drill sample	• Method of recording and assessing core	• Drill core recovery is regularly recorded for each run of
recovery	and chip sample recoveries and results	drilling as the hole advances. These recoveries are
	assessed.	reconciled against the driller’s depth blocks in each core
	• Measures taken to maximise sample	tray and the data captured for database recording. The
	recovery and ensure representative nature	drillers depth blocks provided the information associated
	of the samples.	with current hole depth; interval of core drilled; interval
	• Whether a relationship exists between	of core recovered; and the understood core loss.
	sample recovery and grade and whether	• Greater than 95% of the core was recovered.
	sample bias may have occurred due to
	preferential loss/gain of fine/coarse
	material.
Logging	• Whether core and chip samples have been	• Logging was conducted on site for the entirety of the hole
	geologically and geotechnically logged to a	by a suitably trained geologist for geological and
	level of detail to support appropriate	structural information.
	Mineral Resource estimation, mining	• This included lithology, alteration, mineralisation, veining
	studies and metallurgical studies.	and structures.
	• Whether logging is qualitative or	• Geotechnical measurements were recorded by way of
	quantitative in nature. Core(or costean,	RockQualityDesignation(RQD),core recoveryand

Criteria	JORC Code explanation	Commentary
	channel, etc) photography.	qualitative rock strengths.
	• The total length and percentage of the	• Structures were assigned quality based on orientation
	relevant intersections logged.	confidence.
		• Magnetic Susceptibility measurements were recorded
		every metre.
		• All core was photographed prior to dispatch from the site.
Sub-sampling	• If core, whether cut or sawn and whether	• Diamond core sampling was carried out under Paterson
techniques	quarter, half or all core taken.	Resources protocols and QAQC procedures as per
and sample preparation	• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet	industry best practice. • Mineralised intersections were cut in half with an
	or dry.	automatic core saw. All available half core was sampled,
	• For all sample types, the nature, quality	nominally as one metre samples but at times adjusted for
	and appropriateness of the sample	major geological boundaries. Samples range between 0.3
	preparation technique.	and 1.2m. Half diamond drill core samples are prepared
	• Quality control procedures adopted for all	for assay and the remaining half core archived. All drill
	sub-sampling stages to maximise	core was logged and photographed by the geology time
	representivity of samples.	prior to cutting.
	• Measures taken to ensure that the	• Sample preparation was carried out at Minanalytical
	sampling is representative of the in situ	Laboratory using industry standard crush and/or
	material collected, including for instance	pulverizing techniques. Preparation includes drying and
	results for field duplicate/second-half	pulverizing of the entire sample to a grind size of 85%
	sampling.	passing 75 µm.
	• Whether sample sizes are appropriate to	• The sample sizes are considered appropriate for the style
	the grain size of the material being	of mineralisation at the Grace deposit.
	sampled.
Quality of	• The nature, quality and appropriateness of	• All samples were submitted to Minanalytical in Perth for
assay data	the assaying and laboratory procedures	preparation and analysis.
and laboratory tests	used and whether the technique is considered partial or total. • For geophysical tools, spectrometers,	• All samples were dried, crushed, pulverised and split to produce a sub-sample of 25g which is digested using Aqua Regia. Analytical analysis is performed using a
	handheld XRF instruments, etc, the	combination of ICP-OES and ICP-MS (Ag, Al, As, Ba, Be, Bi,
	parameters used in determining the	Ca, Cd, Ce, Co, Cr, Cs, Cu, Fe, Ga, Fg, In, K La, Li Mg, Mn,
	analysis including instrument make and	Mo, Na, Nb, Ni, P, Pb, Rb, Re, Sb, Sc, Se, Sn, Sr, Ta, Te, Th
	model, reading times, calibrations factors	Ti, Tl, U, V, W, Y, Zn, Zr)
	applied and their derivation, etc.	• A lead collection fire assay on a 50g sample with Atomic
	• Nature of quality control procedures	Absorption Spectrosopy undertaken to determine gold
	adopted (eg standards, blanks, duplicates,	content with a detection limit of 0.005ppm.
	external laboratory checks) and whether	• Field QC procedures involve the use of commercial
	acceptable levels of accuracy (ie lack of	certified reference material (CRM’s) for assay standards
	bias) and precision have been established.	and blanks. Standards are inserted ever 20 metres. The
		grade of the inserted standard is not revealed to the
		laboratory.
		• Inter laboratory cross-check analysis programmes have
		not been conducted at this stage.
		• In addition to Paterson supplied CRM’s, Minanalytical
		includes in each sample batch assayed certified reference
		materials, blanks and up to 10% replicates.
Verification of	• The verification of significant intersections	• Significant intersections of the drilling have been visually
sampling and	by either independent or alternative	verified by the Exploration Manager.
assaying	company personnel.	• There have been no twinned diamond holes at this
	• The use of twinned holes.	current stage of the drill programme.
	• Documentation of primary data, data entry	• All logging is entered directly into a notebook computer
	procedures, data verification, data storage	using the Paterson logging system which is based on
	(physical and electronic) protocols.	Microsoft Excel. The logging system uses standard look up
	• Discuss any adjustment to assay data.	tables that does not allow invalid logging codes to be
		entered. Further data validation is carried out during the
		upload to Paterson’s master Access database.
		• No adjustments or calibrations have been made to any

Criteria	JORC Code explanation	Commentary
		assay data collected.
Location of	• Accuracy and quality of surveys used to	• Drill collar location was surveyed by handheld GPS to a
data points	locate drill holes (collar and down-hole	stated accuracy of +/-3m.
	surveys), trenches, mine workings and	• Rig was initially aligned on surface and direction of drilling
	other locations used in Mineral Resource	was collected and checked on regular 30m intervals using
	estimation.	a single shot Axis North Seeking Gyro.
	• Specification of the grid system used.	• Datum GDA94 and projected MGA Zone 51
	• Quality and adequacy of topographic	• Topographic data was also achieved using the North
	control.	Seeking Gyro.
Data spacing	• Data spacing for reporting of Exploration	• Drilling was designed to intersect target within the
and	Results.	modelled geophysical anomalies.
distribution	• Whether the data spacing and distribution	• The drilling is part of a first pass program, at depths in this
	is sufficient to establish the degree of	area not previously explored.
	geological and grade continuity	• The data obtained has not yet been used for any resource
	appropriate for the Mineral Resource and	calculations.
	Ore Reserve estimation procedure(s) and
	classifications applied.
	• Whether sample compositing has been
	applied.
Orientation of	• Whether the orientation of sampling	• The drill hole was orientated approximately 90 degrees to
data in	achieves unbiased sampling of possible	the Grace-Bemm shear zones as defined by both the
relation to	structures and the extent to which this is	VTEM and the IP survey’s.
geological structure	known, considering the deposit type. • 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	• Not Applicable
security	security.
Audits or	• The results of any audits or reviews of	• The data has not been audited as it is not required at this
reviews	sampling techniques and data.	stage.

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	• P45/2905-2909, E45/4524 & E45/5310 are held directly or
tenement and	and ownership including agreements or	by entities controlled by Paterson Resources.
land tenure	material issues with third parties such as	• All tenements are contained completely within land where
status	joint ventures, partnerships, overriding	the Martu People have been determined to hold native title
	royalties, native title interests, historical	rights. To the Company’s knowledge no historical or
	sites, wilderness or national park and	environmentally sensitive sites
	environmental settings.	• have been identified in the area of work. • The tenements
	• The security of the tenure held at the time	are in good standing and no known impediments exist.
	of reporting along with any known
	impediments to obtaining a licence to
	operate in the area.
Exploration	• Acknowledgment and appraisal of	• Previous exploration was completed by Newcrest Mining
done by other	exploration by other parties.	Limited (Newcrest), including its predecessor Newmont
parties		Mining Australia, owners of the Telfer Gold Mine.
		• Exploration completed included geological mapping,
		geophysical surveys (IP, ground magnetics and ground
		gravity), rock chip sampling and drilling (RAB, RC and
		diamond core drilling).
		• WAMEX reports reviewed and utilised to complete the data
		compilation include A29118,A30479,A31642,A34922,

Criteria	JORC Code explanation	Commentary
		A37495, A43922, A46877, A50323, A53741, and A79774.
		• Open file data available from the Geological Survey of
		Western Australia and Geoscience Australia has also been
		reviewed.
Geology	• Deposit type, geological setting and style	• The geological setting is the Paterson Province Proterozoic
	of mineralisation.	aged meta-sediment hosted hydrothermal shear, fault and
		strata/contact controlled precious and/or base metal
		mineralisation which is typically sulphide bearing. The
		mineralisation in the region is interpreted to be granite
		intrusion related. The Paterson is a low grade metamorphic
		terrane, but local hydrothermal alteration and/or contact
		metamorphic mineral assemblages and styles are indicative
		of a high-temperature local environment. Mineralisation
		styles include vein, stockwork, breccia and skarns.
		• The Grace Gold-Copper Project, gold-copper mineralisation
		is hosted by laminated and banded carbonaceous pyritic
		dolomitic siltstones and micritic dolomite. Intrusive dolerite
		sill units are also known to be associated with
		mineralisation within the sequence, but granitic intrusion
		could occur at depth below the project area. The host rocks
		are variably contorted and brecciated with intense albite
		alteration. High grade gold, chalcopyrite, +/-arsenopyrite,
		+/- pyrite occurs as veins which appear linear features and
		are spaced up to 50m apart. Based on recent Leapfrog
		modelling of past work undertaken by Criterion, there
		appears to be ore shoots associated with secondary
		structures cutting the veins that have a plunge and have
		not been adequately tested.
		• Two principal targets are being targeted. Stacked reefs
		associated with domal structure similar to the Telfer Gold–
		Copper Mine. The second target is gold mineralisation
		associated with shear zones cross cutting dolerite units
		intruding the sedimentary sequence.
Drill hole	• A summary of all information material to
Information	the understanding of the exploration
	results including a tabulation of the
	following information for all Material drill
	holes:
	o easting and northing of the drill hole
	collar
	o elevation or RL (Reduced Level –
	elevation above sea level in metres) of
	the drill hole collar
	o dip and azimuth of the hole
	o down hole length and interception
	depth
	o hole length.
	• If the exclusion of this information is
	justified on the basis that the information
	is not Material and this exclusion does
	not detract from the understanding of the
	report, the Competent Person should
	clearly explain why this is the case.
Data	• In reporting Exploration Results,	• Length weighted average technique has been applied
aggregation	weighting averaging techniques,	where required (i.e. for intervals consisting of > one
methods	maximum and/or minimum grade	sample) to report results from DD drilling.
	truncations (eg cutting of high grades)	• No top-cuts to gold have been applied.
	and cut-off grades are usually Material	• A nominal 0.4 g/t gold lower cut-off grades have been
	and should be stated.	applied duringdata aggregation.

Criteria	JORC Code explanation	Commentary
	• Where aggregate intercepts incorporate	• Higher grade intervals of mineralisation internal to broader
	short lengths of high grade results and	zones of mineralisation are reported as include intervals.
	longer lengths of low grade results, the	• Metal equivalence is not used in this report.
	procedure used for such aggregation
	should be stated and some typical
	examples of such aggregations should be
	shown in detail.
	• The assumptions used for any reporting
	of metal equivalent values should be
	clearly stated.
Relationship	• These relationships are particularly	• The relationship between the drill hole and the
between	important in the reporting of Exploration	mineralisation is shown in Figure 1. All intercepts are
mineralisation	Results.	reported as downhole intersections.
widths and intercept lengths	• If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.
	• If it is not known and only the down hole
	lengths are reported, there should be a
	clear statement to this effect (eg ‘down
	_hole length, true width not known’). _
Diagrams	• Appropriate maps and sections (with	• Included in announcement
	scales) and tabulations of intercepts
	should be included for any significant
	discovery being reported These should
	include, but not be limited to a plan view
	of drill hole collar locations and
	appropriate sectional views.
Balanced	• Where comprehensive reporting of all	• Results of the drilling are preliminary in nature and the core
reporting	Exploration Results is not practicable,	has been sent to Perth for analysis
	representative reporting of both low and
	high grades and/or widths should be
	practiced to avoid misleading reporting of
	Exploration Results.
Other	• Other exploration data, if meaningful and	• Not Applicable
substantive	material, should be reported including
exploration	(but not limited to): geological
data	observations; geophysical survey results;
	geochemical survey results; bulk samples
	– size and method of treatment;
	metallurgical test results; bulk density,
	groundwater, geotechnical and rock
	characteristics; potential deleterious or
	contaminating substances.
Further work	• The nature and scale of planned further	• Further work is planned to include assaying of the core and
	work (eg tests for lateral extensions or	further RC drilling of other targets in the project area. The
	depth extensions or large-scale step-out	final location of future drill holes is yet to be determined.
	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.