PATERSON RESOURCES LTD — Interim / Quarterly Report 2015

Apr 23, 2015

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Quarterly Activities Report Quarter ended 31[st] March 2015

Exploration Activities

NSW

EL6463 (100%) EL6874 (100%) EL7975 (100%)

Development

The first 3 months of data from the water monitoring bores required as part of the EIS and established in December, has been downloaded by Coffey Geotechnics Pty Ltd (“Coffey”) who are assisting the Company in establishing a groundwater model. Coffey is a recognised consultancy well-versed in the hydrogeological requirements for mine permitting in NSW. The preliminary model will be created once 6 months of data is available or in about May of 2015.

As announced February 24[th] 2015, a total of 19 resource development RC drill-holes (for 1,501m) has been added to the Lloyds database to facilitate the Company’s aim of upgrading a resource estimate carried out by Burraga Copper Limited (BCL) in 2012. The results consolidate historical records and previous drilling that a halo of mineralisation remains around the old underground workings grading up to 3% copper and occasionally higher where pillars are encountered and areas the historic mining was unable to access. Further evidence of broad mineralised halo widths are beyond what has been assumed in BCL’s 2011 pre-feasibility study and will enhance the economic viability of the Project. This drilling campaign was, in part, planned to confirm previous drilling in the area which was not included by BCL in the 2012 resource estimates as a precautionary measure due to the high grades and broad widths. With the confirmatory grades and widths received during this drilling campaign, the Company is now comfortable that the “SP” series of holes be included in the resource which will give an increased level of confidence to the estimate. The best intercept from the SP series of drill-holes is from SP2: 35m @ 1.49% Cu from 24m. This now completes the Lloyds area resource development drilling, a resource estimate update is planned for May, 2015.

The 200kg sample collected from three diamond drill-holes and dispatched to the Bureau Veritas laboratory in Adelaide has been undergoing comminution and flotation test-work since December. A further 6 diamond core holes (for 250.9m) were drilled during the March quarter for variability test-work. The variability drill-holes are positioned throughout the mineralisation to test whether there is significant variance in metallurgical response that may need to be considered in the final process design. The variability samples are planned for dispatch to the laboratory in April.

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Drilling, which also included pit and infrastructure site drilling for geotechnical assessment, concluded in late March with the contractors de-mobilizing during the final week of March.

Elysium Resources Limited

ABN 45 115 593 005 Suite 705, 3 Spring Street, Sydney NSW 2000 PO Box H238, Australia Square NSW 1215 Phone: +61 2 9247 7744 Fax: +61 2 9247 7244 Email: info@elysiumresources.com.au Web: www.elysiumresources.com.au

Exploration

Two deeper diamond core holes were drilled to confirm the prospectivity of the Priority 1 exploration targets (see Figure 2.) 1-2 km south of the historic Lloyds Mine. This target is in proximity to the preliminary location of the tailings storage facility. The core is in the process of being logged.

As announced March 4[th] , 2015, EYMRC-021 and EYMRC-024 were drilled through the southern slag dump to assist with the slag profile modelling and also to investigate the magnetic anomaly that lies beneath the slag dump. EYM-021 was only drilled to 18m, confirming the depth of the slag in that area to 4m. EYMRC-024, drilled to 150m depth to confirm the basement of the slag and investigate the magnetic anomaly, intersected 5m @ 1.38 % Cu from 47m; what appears to be the southern extension of an earlier drill result by Dominion Mining (“Dominion”) of 5m @ 1.87% Cu from 59m in drill-hole P27 some 200m to the north. Dominion drill-hole P22 with an intercept of 6m @ 1.48% Cu from 150m potentially intersects the north-easterly extent of the new shoot. These three drill intercepts define a tabular geometry with an orientation similar to the Lloyds shoot. The new shoot is bounded by the Melbourne Fault to the west; this is identical to Lloyds and suggest that the new shoot occurs higher up in the system. As postulated by the structural mapping carried out by Dr Steve King in December 2012, the Melbourne Fault is showing to be a defining western structure to a stacked system of mineralized copper shoots.

Historical shafts exist in the area, however the extent of mining appears to be significantly less than what occurred at Lloyds and to shallower depths than the drilling intercepts. This is an excellent result as it now gives the Company a new area ready for resource definition drilling which is of a scale and grade potentially comparable to Lloyds. Being approximately 500m from Lloyds and within 1km of the proposed processing facility, the current EIS study captures the new area with little additional work required to extend the proposed operation. The Company will now consider when this new area should be drilled in the context of the current program of work progressing towards re-treatment of the two slag dumps, tailings and mining of the Lloyds open pit.

Indonesia – Malang Project

IUP(Industrial) number: 180/005/IUPE/421.302/2013 (earn to 67.5%)

No activity

WA

Horseshoe South Project

EL52/2569 (100%)

Horseshoe Metals Ltd (ASX:HOR) is managing this tenement under an option agreement. No activity has been reported for the quarter.

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Figure 1. Apparent long-section (looking towards 285[0] ) showing selected significant drilling intercepts for EYMRC-024 and historical intercept in drill-hole P27.

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7m @ 0.76% Cu (slag)
3m @ 1.87% Cu
5m @ 1.38% Cu
~500m to Lloyds 5m @ 1.87% Cu
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Figure 2. EYMRC-024 drilled into Priority 2 target, ~500m north of the Lloyds Historic Mine.

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P27
P22
EYMRC-024
~500m
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Max Carling Director 24 April 2015

EYM tenements held as at 31[st] March 2015.

Permit Type	Permit Number	Location	Held Via	Beneficial %	Agreement Type
EL	6463	Australia, NSW	BC Exploration Pty Ltd	100.0%
EL	6874	Australia, NSW	BC Exploration Pty Ltd	100.0%
EL	7975	Australia, NSW	BC Exploration Pty Ltd	100.0%
E	52/2569	Australia, WA	Elysium Resources Limited	100.0%	Under option
IUPE	421.302/2013	Indonesia, JAVA	Malang Resources PtyLtd	67.5%	Farm-in

The information in this announcement that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore reserves is based on information reviewed or compiled by Neb Zurkic BAppSc(Geol), MSc(Min & Energy Economics), a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and a Registered Professional Geoscientist with the Australian Institute of Geoscientists. Mr. Zurkic is employed by Zurkic Mining Consultants Pty Ltd. Mr. Zurkic 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 Mineral Resources and Ore Reserves”. Mr. Zurkic consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears. Zurkic Mining Consultants Pty Ltd, which is owned and controlled by Mr. Zurkic, owns shares in Elysium Resources.

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