PATERSON RESOURCES LTD — Capital/Financing Update 2022

Jun 30, 2022

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ASX ANNOUNCEMENT

1 July 2022

Exploration Update

High priority targets identified at Burraga Project from detailed Aeromagnetic Survey Reinterpretation

HIGHLIGHTS

• Detailed reprocessing of 2014 aeromagnetic survey conducted by Thomson Aviation for Elysium

Resources completed by Perth-based geophysical consultancy Resource Potentials.

• A cluster of high priority 3D anomalies identified only 500m south of historic Lloyds Copper (Zinc-

• Lead-Silver) Mine in under-explored terrain.

• Previous drilling returned assay values up to 8.1% Zinc

• Land access negotiations underway

Paterson’s Executive Director Matt Bull commented on the results, “We are highly encouraged by the distinct bullseye anomalies identified through the reprocessing of Elysium Resource’s 2014 aeromagnetic survey. The anomalies are sited only 1.5km along strike and south of to the historic Lloyds copper mine in an area where very little exploration has taken place. Several intriguing copper and zinc intercepts nearby the anomalies warrant further immediate investigation and follow-up. Coupled with the upcoming drilling program at the Grace Gold-Copper Project in Western Australia’s prolific Paterson Province, Paterson Resources are entering an exciting exploration phase and we look forward to keeping the market updated in due course.”

Paterson Resources Limited (“Paterson” or “the Company”) (ASX: PSL); is pleased to provide an update on progress of the Company’s exploration efforts at its New South Wales Burraga Project.

Perth-based geophysical consultancy Resource Potentials was engaged to reprocess a detailed airborne geophysical survey conducted by Elysium Resources in in April 2014. Thomson Aviation flew a magnetic and radiometric survey (MAG) over three contiguous tenements at Burraga including EL6463, EL6874 and EL7975. The survey was flown on a 60m line spacing at a nominal terrain clearance of 60m and was intended to provide better resolution data than the government and open file data available.

At the time, a preliminary interpretation of the data by geophysical consultant Kim Cook of GeoMagik identified a cluster of 3 high priority targets (Target 4, Target 5 and Target 8 – Figure 1) 500m to 1.5km to the south of the historic Lloyds Copper Mine. The anomalies were given as two-dimensional projections at surface

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with no depth or size indicators provided.

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Figure 1: Location of Targets identified by geophysical consultants GeoMagik in 2014

Resource Potential completed unconstrained 3D magnetic vector inversion (MVI) modelling of the Burraga 2014 airborne magnetic (AMAG) data using Geosoft’s VOXI modelling algorithm in order to resolve the depth and geometry of these magnetic source bodies.

Target 8 is located on the eastern limb of the Lloyds syncline within an interbedded sequence of sericitized siltstones, lapilli tuffs, mafic schists and sulphidic cherts of the Rockley Volcanics (Figure 1) and Target 4 is sited on the western limb with regional thrust faulting offsetting the sequence.

The central potassium anomaly is located in a structural corridor and presents as a potential intrusion. The Priority 1 targets coincide with the remnantly magnetised potassium anomaly and the cross-cutting structures to the north could provide potential mineralised fluid traps for the suspected central intrusion.

The MVI model has resolved a high-amplitude magnetic source target corridor with amplitudes up to +0.01 SI, located within and proximal to Target 8 extending along strike for nearly 2.4km (Figure 2). The southern part of the magnetic anomaly corridor contains a very strong magnetic anomaly source with an amplitude of +0.05 SI, the centre of which is modelled at a depth of 300 m below ground level and strikes for 370m.

An additional strong modelled magnetic source body is coincident with Target 4 with a maximum amplitude of 0.04 SI and is proximal to an interpreted coarse-grained leucogranite intruding into the volcanic sequence. The target corridor with amplitudes up to +0.01 SI extends for 1.2km on the western limb of the Lloyds syncline

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and could represent a possible fold repetition of the anomaly on the eastern limb. Both of the modelled magnetic anomalies are proximal to or coincident with identified potassium anomalies (Figure 2).

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Figure 2: Surface projection of 3D magnetic vector inversion isosurfaces completed by Resource Potentials

Much of the historical exploration at Paterson’s Burraga project has been focused near the Lloyds copper mine that were mined mainly during the late 19[th] century. The largest producer was the Lloyds Copper Mine which produced 19,443 tonnes of copper (470,000 tonnes of ore at 3.6% Cu) from a complex quartz – carbonate - sulphide vein system located within a significant altered shear zone.

Limited historical exploration has been conducted over the Burraga South workings and nearby Spragues Mine with Getty Oil Development Company completing 10 diamond drill holes (Figure 3: DB1-DB9 and DB9A) for 2,791m in 1983 designed to test a series of geophysical anomalies and the depth extent of mapped gossans (Figure 3). Significant intercepts from the program included:

• 4m @ 3.43% Zn, 0.15% Cu and 12g/t Ag rom 110m including 1m @ 8.1% Zn from 111m (DB4)

• 5m @ 1.11% Zn, 0.27% Cu and 7.62g/t Ag from 129m (DB4)

• 1m @ 5.16% Zn, 0.19% Cu and 29g/t Ag from 150m (DB4)

• 2m @ 1.26% Zn, 0.15% Cu, 2.21% Pb and 41.9g/t Ag from 244m (DB4)

• 4m @ 1.79% Zn, 0.07% Cu, and 5.5g/t Ag from 187m (DB7)

• 9m @ 1.08% Zn and 11.33g/t Ag from 228m (DB7)

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62B3: 1.83m @ 0.42% Zn & 10.1g/t Ag from 82.9m
RCR009: 5m @ 0.79% Zn & 0.17% Cu from 42m
DB4: 5m @ 1.11% Zn, 0.27% Cu & 7.62 g/t Ag from 129m
1m @ 5.16% Zn, 0.186% Cu & 29 g/t Ag from 150m
2m @ 1.26% Zn, 0.15% Cu, 2.12% Pb & 41.9 g/t Ag from 244m
DB9A: 7m @ 0.57% Zn & 0.1% Cu from 335m
DB7 : 4m @ 1.79% Zn, 0.07% Cu & 5.5 g/t Ag from 187m
3m @ 1.09% Zn from 198m
9m @ 1.08% Zn & 11.33 g/t Ag from 228m 8m @ 1.02% Zn from 207m DB3: 1m @ 0.7% Zn & 5g/t Ag from 59m
RCR010: 3m @ 1.70% Zn and 0.08% Cu from 104m
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Figure 3: Location of historical drilling relative to 3D magnetic vector inversion surfaces

Analysis of the drill core at the time by Getty highlighted the pyrrhotite, sphalerite and chalcopyrite mineralisation assemblage within variable quartz and K-feldspar veining suggested a skarn ore mineralisation model. Latter analysis of the core from drillholes DB1 and DB3 by Michelago Ltd in 1994 identified elevated arsenic up to 1,120ppm, molybdenum up to 67ppm, and barium up to 6.01% indicating proximity to a strongly mineralizing intrusive/porphyry body (Figure 4).

A further three RC drill holes (RCR006, RCR009 and RCR0010) were completed by Republic Gold in 2007. Anomalous intercepts included:

• 5m @0.79% Zn and 0.17% Cu from 42m (RCR009)

• 3m @ 1.7% Zn ad 0.08% Cu from 104m (RCR010)

Whilst elevated base metals were intersected in the historical drilling, it appears the drilling has skirted around the anomalous high MVI model interpretation (Figure 5).

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Burraga Schematic Section
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Figure 4: Ore mineralisation model suggested for Burraga South and Sprague’s Prospects

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Figure 5: Cross-Section A-B of historical drilling through 3D MVI model

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Future Work

Historical exploration conducted by previous explorers includes valuable geological mapping and the identification of outcropping gossans in the Burraga South-Sprague’s Mine prospect area. The company is currently in negotiations with local land holders to access the area and validate the mapping. Moving forward the Company will:

• Digitally capture previous mapping to incorporate into the 3D geological model

• Conduct rock chip sampling over gossans to validate results

• Prepare a maiden drilling program to test high priority 3D MVI anomalies

About the Burraga Project

The Burraga gold deposits and prospects are hosted by sediments & volcanics of Ordovician to Devonian age within the complexly folded and faulted Hill End Trough. These deformed rocks were subsequently locally intruded by granite batholiths of Carboniferous age.

At Lucky Draw and Hackneys Creek (which lie close to the margin of the Burraga granite intrusion), the host rocks are metasomatised and have been described as skarn like.

The McPhillamy’s Gold Deposit (located 50 km to the north of Burraga) is considered to be an Orogenic type gold deposit, and lies in a similar geological setting to that at Burraga.

The Lucky Draw deposit comprises multiple 2 m to 15m thick zones within an overall package about 70 m thick. Both the individual zones and the package strike north south and dips gently (20° - 30°) to the west. Gold mineralisation at Lucky Draw has been defined by drilling over a strike length of 400 m and 200 m down dip to a depth of about 100 m below surface.

At Hackney’s Creek gold mineralisation also occurs in multiple 2 m to 20m thick zones within an overall package about 120 m thick. Mineralisation also strikes north and dips 50° to 60° to the west. Drilling has defined gold mineralisation over a strike length of 220 m and 250 m down dip to about 250 m below surface.

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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 Australian Institute of Geoscientists. 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.

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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.

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

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	• RC and diamond drilling was conducted at Burraga South
techniques	channels, random chips, or specific	Mine and Sprague’s Mine prospect areas in the 1980’s
	specialised industry standard measurement	and 2000’s
	tools appropriate to the minerals under	• Drilling was sampled selectively on mostly 1m and 2m
	investigation, such as down hole gamma	intervals.
	sondes, or handheld XRF instruments, etc).	• No description of the RC and diamond drilling methods
	These examples should not be taken as	has been located.
	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,	• No description of the RC and diamond drilling methods
techniques	open-hole hammer, rotary air blast, auger,	has been located.
	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). _
Drill sample	• Method of recording and assessing core	• RC and diamond drilling recovery was not recorded.
recovery	and chip sample recoveries and results	• No relationship between grade and recovery can be
	assessed.	determined due to the lack of drilling recovery data.
	• 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	• The logging is qualitive (descriptive).
	geologically and geotechnically logged to a
	level of detail to support appropriate
	Mineral Resource estimation, mining
	studies and metallurgical studies.
	• Whether logging is qualitative or
	quantitative in nature. Core (or costean,
	channel, etc) photography.
	• The total length and percentage of the
	relevant intersections logged.

Criteria	JORC Code explanation	Commentary
Sub-sampling	• If core, whether cut or sawn and whether	• No description of the RC/Diamond drilling methods has
techniques	quarter, half or all core taken.	been located.
and sample preparation	• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet	• The quality control measures (if any) taken to ensure representivity of the samples were not recorded.
	or dry.	• The sample size was not recorded.
	• For all sample types, the nature, quality
	and appropriateness of the sample
	preparation technique.
	• Quality control procedures adopted for all
	sub-sampling stages to maximise
	representivity of samples.
	• 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.
	• Whether sample sizes are appropriate to
	the grain size of the material being
	sampled.
Quality of	• The nature, quality and appropriateness of	• To date, no QAQC data have been found for this data.
assay data	the assaying and laboratory procedures
and	used and whether the technique is
laboratory tests	considered partial or total. • For geophysical tools, spectrometers,
	handheld XRF instruments, etc, the
	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	• The data have not been verified.
sampling and	by either independent or alternative
assaying	company personnel.
	• 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	• The collar location survey method is unknown.
data points	locate drill holes (collar and down-hole	• The accuracy of the collar locations is unknown.
	surveys), trenches, mine workings and	• The collars were surveyed using a local grid.
	other locations used in Mineral Resource
	estimation.
	• Specification of the grid system used.
	• Quality and adequacy of topographic
	control.
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 would not be used for any resource
	appropriate for the Mineral Resource and	calculations at present.
	Ore Reserve estimation procedure(s) and
	classifications applied.
	• Whether sample compositing has been
	applied.

Criteria	JORC Code explanation	Commentary
Orientation of	• Whether the orientation of sampling	• The geometry of the mineralisation intersected by the
data in	achieves unbiased sampling of possible	exploration holes is not yet known and so no conclusion
relation to	structures and the extent to which this is	can be drawn regarding the appropriateness of the
geological structure	known, considering the deposit type. • If the relationship between the drilling	orientation of these holes.
	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	• The measures (if any) taken to ensure sample security
security	security.	were not recorded.
Audits or	• The results of any audits or reviews of	• The data has not been audited. This is because the project
reviews	sampling techniques and data.	is at an early stage of assessment and it is possible that
		further data may be recovered from the archives resulting
		in a change to the assessment of the quality of the base
		data.

Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	Commentary	Commentary
Mineral	• Type, reference name/number, location	•	The data reported on are located in EL6463, 100% owned
tenement and	and ownership including agreements or		by Paterson Resources through its subsidiary BC
land tenure	material issues with third parties such as		Exploration.
status	joint ventures, partnerships, overriding	•	There are no known impediments to development of a
	royalties, native title interests, historical		mining operation on these leases other than the usual
	sites, wilderness or national park and		granting of a mining licence and the various permits
	environmental settings.		required to operate.
	• 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	•	All data reported on was acquired by Getty Oil
done by other	exploration by other parties.		Development Company between 1984-1985 and Republic
parties			Gold in 2007.
Geology	• Deposit type, geological setting and style	•	The geological setting is a possible deep-seated porphyry
	of mineralisation.		intrusive copper (lead-zinc-silver-gold) system intruded into
			the Rockley Volcanics and Lovett Formation of Ordivician-
			Silurian age with possible skarn-style mineralisation.
		.
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

Criteria	JORC Code explanation	Commentary
	not detract from the understanding of the
	report, the Competent Person should
	clearly explain why this is the case.
Data	• In reporting Exploration Results,	• Historical results reported are length weighted averages of
aggregation	weighting averaging techniques,	assay results.
methods	maximum and/or minimum grade	• Only results that are considered to be economically
	truncations (eg cutting of high grades)	significant due to their grade, width and or geological
	and cut-off grades are usually Material	setting are reported. A cut-off grade of 0.5% Zn was used
	and should be stated.	with accompanying grades of Cu, Pb and Ag included.
	• Where aggregate intercepts incorporate	• No metal equivalents are reported.
	short lengths of high grade results and
	longer lengths of low grade results, the
	procedure used for such aggregation
	should be stated and some typical
	examples of such aggregations should be
	shown in detail.
	• The assumptions used for any reporting
	of metal equivalent values should be
	clearly stated.
Relationship	• These relationships are particularly	• Only down-hole lengths have been reported. Drill spacing
between	important in the reporting of Exploration	and density is such that the geometry of the mineralsiation
mineralisation	Results.	cannot yet be ascertained and true-widths are not known.
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	• For the exploration results only significant historical
reporting	Exploration Results is not practicable,	exploration results are reported.
	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	• Other exploration data has been collected and interpreted
substantive	material, should be reported including	from within the tenement. This work is summarised in the
exploration	(but not limited to): geological	announcement and includes air borne geophysical surveys
data	observations; geophysical survey results;	and regional geological mapping.
	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 and includes geological mapping,
	work (eg tests for lateral extensions or	rock chip sampling and drilling to identify additional
	depth extensions or large-scale step-out	resources.
	drilling).
	• Diagrams clearly highlighting the areas of
	possible extensions, including the main
	geological interpretations andfuture

Criteria	JORC Code explanation	Commentary
	drilling areas, provided this information is
	not commercially sensitive.