PATERSON RESOURCES LTD — Interim / Quarterly Report 2021

Aug 1, 2021

30 July 2021

ASX ANNOUNCEMENT

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Quarterly Activities Report Quarter Ended 30 June 2021

HIGHLIGHTS

• Heritage Survey with native title holder successfully completed at the Grace project.

• DDH1 appointed contractor to complete a 3,500m drilling program at the Grace project including Diamond and RC drilling to commence in August.

• Large conceptual targets to be tested under Grace/Bemm shear zone with EIS co-funded drill hole.

• 2500m drilling program for Hackney’s Creek finalised targeting northerly strike extension and potential parallel mineralisation loads.

• Soil sampling to identify additional targets near Hackneys Creek completed. Results early Q3.

• Granting of EL9135 immediately north of EL6463 to cover the extension of Bi anomalies identified from historical stream sediment sampling; also containing Tralee prospect containing a rock chip samples of 0.93 g/t gold with anomalous Gold and Bismuth soil geochemistry.

The Board of Paterson Resources Limited ( Paterson or the Company ) (ASX: PSL) provides the following commentary for the quarter ended 30[th] June 2021.

Exploration Projects

Grace Project – Paterson Range, Western Australia

The Grace project is located in the highly prospective Paterson Province approximately 25 km south-east of the Telfer Copper/Gold mine. Discovery of a large and continuous deep Gold/Copper mineralised system below Havieron by Newcrest Mining Limited and Greatland Gold PLC, and the recent discovery of the Winu copper/gold deposit by Rio Tinto have provided a significant uplift in exploration and support for the prospectivity of this area.

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Figure 1: The Grace Project Area.

ACN 115 593 005 Suite 2 Level 1, 1 Altona Street, West Perth WA 6005 www.patersonresources.com.au

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Preparations for drilling are now well advanced for drilling in August, with DDH1 as the appointed contractor to complete the drilling program. Plan of Works (POW) was approved with the Western Australian DMIRS; and Heritage survey was successfully completed in June with the traditional owners and representatives from the Western Desert Lands Aboriginal Corporation (WDLAC). All holes were successfully cleared within the survey area and subsequentially, site preparations have commenced.

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Figure 2: Heritage Survey Area and location of proposed Diamond and RC drillholes.

The drilling will target numerous high impact targets with similarities to major deposits nearby in the Paterson Province. Relatively shallow historic drilling by Newmont Australia and Newcrest Mining has produced numerous excellent near surface high-grade gold mineralization, not yet been followed up including:

• 10.0m @ 20.95 g/t Au from 6.0m - GPB0801 (RAB)

• 33.0m @ 1.55 g/t Au from 53.0m - GR124502 (RC)

• 12.0m @ 14.38 g/t Au from 56.0m - GR037 (RC)

• 3.1m @ 8.28 g/t Au from 17.1m - GPC9106 (DDH)

• 22.0m @ 1.31 g/t Au from 71.0m - GR124002 (RC)

• 6.0m @ 5.61 g/t Au from 34.0m - GR128001 (RC)

• 4.0m @ 7.04 g/t Au from 38.0m - GR124501 (RC)

• 16.0m @ 2.64 g/t Au from 34.0m -BR8-5 (RAB)

• 4.0m @ 5.13 g/t Au from 30.0m - HK3-4 (RAB)

• (PSL Entitlement Issue Prospectus – ASX Ann 22 May 2020)

* PSL confirms that it is not aware of any new information or data that materially affects the information included in the previous market announcement and, in the case of estimates of mineral resources, that all material assumptions and technical parameters underpinning the estimates in the previous market announcement continue to apply and have not materially changed.

ACN 115 593 005 Suite 2 Level 1, 1 Altona Street, West Perth WA 6005 www.patersonresources.com.au

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The drilling targets were identified from recent geophysical surveying, as well as infill of significant gaps between known mineralization previously intersected in the Grace and Bemm Shear Zones. Drillhole targets are based on interpretation of geophysical data and anomalies identified from recent gradient array IP (GAIP), airborne electromagnetic (VTEM) surveying, and regional gravity and magnetic datasets. The primary focus for the 2021 drilling program is extension of historic shear zone-hosted gold mineralisation within the GraceBemm Shear Zone trend, which will be tested by fences of drillholes. Additional planned drillholes are targeting other IP and VTEM anomalies as well as interpreted structurally complex zones to the north-west of Grace Bemm, plus deeper geophysical anomaly sources to the south.

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Figure 3: Map showing proposed drillhole collars (black triangles) and drillhole traces (black lines) over an image of gradient array IP conductivity, which shows mineralization at Grace and Bemm prospects are generally aligned with conductive anomaly trends. IP conductivity anomaly trends potentially indicate gold mineralised structures located along strike and proximal to known mineralisation.

ACN 115 593 005 Suite 2 Level 1, 1 Altona Street, West Perth WA 6005 www.patersonresources.com.au

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Figure 4: Planned drillhole collar locations shown at a tenement scale over a filtered airborne magnetic anomaly image, with anomalies identified from mid- and late-time VTEM EM decay data (orange and red polygons respectively). Deeper drillholes to the west and south of Grace and Bemm are targeting geophysical anomaly sources that have not been tested by historic drilling.

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Figure 5: Cross section showing the planned EIS co-funded deep drillhole crossing the Grace/Bemm shear zone to test the source of the northern magnetic anomaly trend, which sits below anomalous Au and Cu from historical drilling.

ACN 115 593 005 Suite 2 Level 1, 1 Altona Street, West Perth WA 6005 www.patersonresources.com.au

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Burraga Copper Gold Project – Lachlan Fold Belt, New South Wales

The Burraga gold deposits and prospects are hosted by sediments and volcanics of Ordovician to Devonian age within the complexly folded and faulted Hill End Trough. These deformed rocks were subsequentially 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 metasomatized 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 15 m thick zones within an overall package about 70 m thick. Both the individual zones and the package strike north-south and dips gently 20[o] to 30[ o] to the west. Gold mineralization 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 Hackneys Creek, gold mineralisation also occurs in multiple 2 m to 20 m thick zones within an overall package about 120 m thick. Mineralisation also strikes north and dips 50[ o] to 60[ o] to the west. Drilling has defined gold mineralization over a strike length of 220 m and 250 m down dip to a depth of about 250 m below surface.

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Figure 6: The Burraga Project Area

ACN 115 593 005 Suite 2 Level 1, 1 Altona Street, West Perth WA 6005 www.patersonresources.com.au

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Hackneys Creek Drilling Program

A program of 2,500 m has been planned at Hackneys Creek to expand on the existing gold resource. Figure 7 shows the location of the planned holes which target northerly strike and down dip extension as well as testing potential parallel mineralised loads at Hackney’s Creek.

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Figure 7: Proposed RC drilling at Hackneys Creek in relation to historical drillholes

ACN 115 593 005

Suite 2 Level 1, 1 Altona Street, West Perth WA 6005 www.patersonresources.com.au

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Figure 8: Oblique view looking north-west of proposed drillholes on Hackneys Creek with resource model

Previous drilling at Hackneys Creek produced numerous near surface high grade intercepts including: (refer to ASX release “Hackneys Creek and Lucky Draw Gold Prospects Burraga NSW”, 26 August 2020)

• 21.3m @ 9.19 g/t Au from 89m, including 4m @ 40.38 g/t Au from hole LDD309

• 33.6m @ 2.27 g/t Au from 71.4m, including 5m @ 5.83 g/t Au from hole LXD283

• 25.0m @ 3.57 g/t Au from 20m, including 4m @ 7.48 g/t Au from hole LXD359

• 2.0m @ 11.25 g/t Au from 28m from hole LXD 282

• 16.0m @ 3.30 g/t Au from 34m from hole LRC 353

Hackneys Creek Soil Sampling

An initial orientation soil sampling survey was completed between Hackneys Creek and Lucky Draw to determine the appropriate multi element analytical technique and size fractions for assay. Results of the sampling program are expected in Q3. Current analytical techniques have substantially higher sensitivity compared to historical methods which should aid in the identification of subtle anomalies that host the gold mineralisation throughout the area. The orientation line was designed to cross a zone with a range of underlying lithologies and to identify additional drilling targets of a similar style to mineralization to Hackney’s Creek.

ACN 115 593 005 Suite 2 Level 1, 1 Altona Street, West Perth WA 6005 www.patersonresources.com.au

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This announcement has been authorised for release to ASX by the Board of Paterson Resources Limited.

For further information, please visit www.patersonresources.com.au:

ASX Listing Rule 5.3.1

Exploration and Evaluation expenditure during the quarter was $285k. The majority of this was spent on maintaining the Company’s tenement portfolio in goodstanding, native title, including payment of shire rates and tenement rents, as well as expenditure on the Company’s Grace Project.

ASX Listing Rule 5.3.2

There were no substantive mining production and development activities during the quarter.

ASX Listing Rule 5.3.5

The following table sets out the information as required by ASX Listing Rule 5.3.5 regarding payments to related parties of the entity and their associates:

Related Party	Amount	Description
Directors	$76,452	Periodical feespaid to Directors and/or Director related entities
Director	$-	Exploration consulting fees paid to a Director/Director related entities

The following table sets out the tenement information reported on a consolidated basis as required by ASX Listing Rule 5.3.3.

Mining tenements held at the end of the Quarter and their location

Project Name	Location		Tenement Licences	Interest held by Group
Bellary	WA		E47/3578	100%
Hamersley	WA		E47/3827	100%
Elsie North	WA		E45/5020	100%
Cheela	WA		E08/2880	100%
Grace	WA		E45/4524	100%
Grace	WA		P45/2905	100%
Grace	WA		P45/2906	100%
Grace	WA		P45/2907	100%
Grace	WA		P45/2908	100%
Grace	WA		P45/2909	100%
Grace	WA		E45/5130	100%
Burraga	NSW		EL6463	100%
Burraga	NSW		EL6874	100%
Burraga	NSW		EL7975	100%
Burraga	NSW		EL8826	100%

ACN 115 593 005

Suite 2 Level 1, 1 Altona Street, West Perth WA 6005

www.patersonresources.com.au

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1. The mining tenement interests acquired during the quarter and their location Not applicable.

2. Beneficial percentage interests held in farm-in or farm-out agreements at the end of the quarter Not applicable.

3. Beneficial percentage interests in farm-in or farm-out agreements acquired or disposed of during the quarter

Not applicable.

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.

ACN 115 593 005 Suite 2 Level 1, 1 Altona Street, West Perth WA 6005 www.patersonresources.com.au

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity Paterson Resources Limited ABN Quarter ended (“current quarter”) 45 115 593 005 30 June 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	(4) - - - (209) - - - - - -	(20) - - - (1,087) - - - - - -
	(213)	(1,107)
1.2(e) Administration and corporate costs includes costs associated with the Placement, Share Purchase Plan and Less than Marketable Parcel Sale Facility conducted during the period.
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments (f) other non-current assets	- - - (281) - -	- - - (981) - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - - -	- - - - - - - -
	(281)	(981)
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 (a) Payment of interest from the issue of convertible debt securities (b) Proceeds from the Less than Marketable Parcel Sale Facility (c) Payment of Marketable Parcel Sale Facility to shareholders 3.10 Net cash from / (used in) financing activities	- - - - - - - - - - -	2,358 - - - - - - - (18) 132 (132)
	-	2,340
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above)	2,702 (213)	1,956 (1,107)

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	(281) - -	(981) 2,340 -
	2,208	2,208
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	2,208 - - -	2,702 - - -
	2,208	2,702
6. Payments to related parties of the entity and their associates		Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 (76) 6.2 Aggregate amount of payments to related parties and their associates included in item 2 - Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.		(76)
		-

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

7. 7.1 7.2 7.3 7.4 7.5 7.6	Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities - - Credit standby arrangements - - Other (please specify) - - Total financing facilities - - Unused financing facilities available at quarter end - Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-
		-	-
	N/A

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (213) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (281) Total relevant outgoings (item 8.1 + item 8.2) (494) Cash and cash equivalents at quarter end (item 4.6) 2,208 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 2,208 Estimated quarters of funding available (item 8.6 divided by item 8.3) 4 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	(213) (281) (494) 2,208 -
		2,208
	Answer: N/A
	8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer: N/A

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer: N/A

Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Date: 30 July 2021

Authorised by: The Board of Paterson Resources Limited (Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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