PATERSON RESOURCES LTD — Investor Presentation 2014

Jun 9, 2014

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ASX ANNOUNCEMENT 10[th] June 2014 FOR IMMEDIATE RELEASE

COMPANY UPDATE AND COMPANY PRESENTATION: CLARIFICATION.

Elysium Resources Limited (“Elysium” or "Company") (ASX:EYM) is pleased to provide further information regarding previously released production targets and financial forecasts for the Company's flagship Burraga Copper Project.

Highlights

• This release clarifies the basis for the production and financial forecasts presented in the Company Update, 14 May, 2014.

• This release clarifies the basis for the production and financial forecasts announced in the Company Presentation, 2 June, 2014.

Information for the production targets and financial forecasts is sourced from the 2011 Pre-feasibility Study[1] (PFS), JORC compliant resources[2] and recent updates to that information to reflect recent metal prices and economic conditions. Specifically, assumptions to support the production targets on pages 7 and 13 in the Company Update, and page 13 of the Company Presentation are given in the tables and explanatory information below. Preliminary pit optimisation based on the information below, including Tables 1-7, were carried out to confirm that the "Lloyd's Hard-rock" resource listed in Table 2 is potentially viable and that it could potentially provide the proportions of material as assumed in the 2011 PFS to support the production target as presented in the Company Update and Company Presentation.

Information to support the financial forecasts on pages 6, 7 and 13 in the Company Update, and page 7 and 13 of the Company Presentation are given in the tables and explanatory information below.

Resources

The resources used in the PFS are stated in Table 1. This table comprises JORC compliant “Tailings” resources, “Slag” resources which are back calculated from historical production and an Exploration Target titled “Lloyd's Hard-rock”. Table 2 represents the JORC compliant resources estimated after the compilation of the PFS. The Inferred “Lloyds (Hard-rock)” resource in Table 2 is confirmation of the resource used in the PFS (in Table 1). The grade-tonnage curve for the “Lloyds (Hard-rock)” JORC compliant resource in Table 2 exists; this supports the Exploration Target used in the PFS for the “Lloyds (Hard-rock)” component. The “Slag” component of the PFS remains as a back calculated quantity from historical production records and would therefore remains an Exploration Target. A recent sampling program (as announced 15 May, 2014) and metallurgical results (below) indicate the grade of the slag, however, volumes are yet to be confirmed.

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Cautionary Statement There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.

1 www.elysiumresources.com.au/2013-07-12-06-27-23/reports

2 www.elysiumresources.com.au/projects/burraga/mineral-resource-statement

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

The potential quantity and grade of an exploration target is conceptual in nature, there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources or that the production target itself will be realised.

JORC Compliance Statement 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 Limited and provides consulting services as required to both companies.

Exploration Targets References to Exploration Targets or Targets in this document are in accordance with guidelines of the JORC Code (2012). As such it is important to note that the reported Targets are based on existing data, historical production and geology models. Any references to grade and quantity are conceptual in nature. Exploration carried out to date is insufficient to be able to estimate and report mineral resources in accordance with the JORC Code (2012). It is uncertain if further exploration will result in the determination of a Mineral Resource.

Material Feed	Quantity (tonnes)	Grade (% Copper)
Tailings	234,000	1.20
Slag	140,000	0.90
Lloyd's (Hard-rock)	1,000,000	1.00
**Total **	1,374,000	**1.01 **

Table 1. Plant Feed quantity and Copper Grade (as used in 2011 PFS)

By Deposit	Category Tonnes(Kt) Cu(%) Au(gpt) Pb(%) Zn(%) Ag (gpt)	Category Tonnes(Kt) Cu(%) Au(gpt) Pb(%) Zn(%) Ag (gpt)	Category Tonnes(Kt) Cu(%) Au(gpt) Pb(%) Zn(%) Ag (gpt)	Category Tonnes(Kt) Cu(%) Au(gpt) Pb(%) Zn(%) Ag (gpt)	Category Tonnes(Kt) Cu(%) Au(gpt) Pb(%) Zn(%) Ag (gpt)	Category Tonnes(Kt) Cu(%) Au(gpt) Pb(%) Zn(%) Ag (gpt)	Category Tonnes(Kt) Cu(%) Au(gpt) Pb(%) Zn(%) Ag (gpt)
Lloyd's (Hard-rock)	Measured Indicated Inferred	2,961	0.5	0.1	0.1	0.3	6.2
	Total	2,961	0.5	0.1	0.1	0.3	6.2
Lloyd's (Tailings)	Measured Indicated Inferred	125 109	1.2 1.2	0.3 0.3	0.0 0.0	0.2 0.2	10.0 9.7
	Total	234	1.2	0.3	0.0	0.2	9.8

Table 2. JORC Compliant Resources Compiled in 2012.

Metallurgy

Three metallurgy tests were performed to support the flotation processing option and the recoveries as stated in the PFS. "Met 1" and "Met 2" in Table 3 below are from samples sourced from the Tailings dump and "Met 3" in Table 4 is from samples sourced from the Slag dumps (refer Table 1 for these resource types).

Cautionary Statement There is no metallurgical test-work carried out to date for the in-situ mineralisation which is represented in the resource tables (1 and 2 above) as "Lloyd's Hard-rock". The PFS assumes that the both the Tailings and Slag are derived from the "Lloyd's Hard-rock" and therefore will be similar in metallurgical response; the recoveries assumed are: 75% for Oxide material, 82.5% for Transitional material

and 90% for Primary material. These assumptions have a low level of metallurgical confidence and there is no certainty that further metallurgical test-work will result in the assumed metallurgical recoveries, and that support the production targets stated elsewhere.

		Met 1
Metal	Head	Tail	Concentrate	Recovery %
Cu Ag Au Yield	1.22 % 8 ppm 0.18 ppm	0.47 % 2 ppm 0.04 ppm	27.26 % 188 ppm 4.40 ppm 2.4 %	62.6 75.8 78.5
		Met 2
Cu Ag Au Yield	1.13 % 9 ppm 0.13 ppm	0.33 % 3 ppm 0.04 ppm	21.82 % 166 ppm 4.75 ppm 3.3 %	71.9 67.9 69.9
		Average
Cu Ag Au Yield	1.18% 8.5 ppm 0.16 ppm	0.40 % 2.5 ppm 0.04 ppm	24.54 % 177 ppm 4.58 ppm 2.85 %	67.3 71.9 74.2

Table 3 Overall Metal Recoveries for Samples Met 1 and 2 (2011 PFS)

		Met 3
Metal	Head	Tail	Concentrate	Recovery %
Cu Ag Au Yield	0.90 % 6 ppm 0.14 ppm	0.42 % 2 ppm 0.12 ppm	21.27 % 163 ppm 4.50 ppm 2.1 %	54.4 67.5 14.7

Table 4 Overall Metal Recoveries for Met 3 Sample (2011 PFS)

Operating Costs

The metal prices used in the PFS and reflected in the tables 5-7 below are:

 USD$10,000 per tonne Copper  USD$1,500 per ounce Gold  USD$30 per ounce Silver  1.00:1.00 exchange rate USD:AUD

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Outcomes of different methods and scale of operation are presented in the 2011 PFS. The production target and financial forecasts in the Company Update (page 7) and Company Presentation (page 13) reflect the "300k" case in Table 5 below.

To reflect current conditions, the metal prices for the operating and capital costs per tonne, and, NPV and cash-flow metrics shown on pages 6,7 and 13 in the Company Update, and on pages 7 and 13 in the Company Presentation are shown below. These are used in the context of the remainder of the relevant information in the PFS and presented here as tables 1-7.

 USD$7,000 per tonne Copper  USD$1,300 per ounce Gold  USD$20 per ounce Silver  0.95:1.00 exchange rate USD:AUD

Item	Tailings ($/t)	Tailings ($/t)	Slag ($/t)	Slag ($/t)	Lloyd's Hard-rock ($/t)	Lloyd's Hard-rock ($/t)
	**150k **	**300k **	**150k **	**300k **	**150k **	**300k **
Mining	3.00	3.00	3.00	3.00	12.00	9.00
Processing	12.00	6.95	16.00	10.30	16.00	10.30
G & A	1.80	1.00	1.80	1.00	1.80	1.00
Concentrate Charges	5.65	5.65	5.65	5.65	6.20	6.20
**Reclamation **	0.10	0.10	0.10	0.10	0.10	0.10
**Total **	22.55	16.70	27.05	20.05	36.10	26.60

Table 5 Operating Cost Summary (2011 PFS)

Capital Costs

Outcomes of different methods and scale of operation are presented in the 2011 PFS. The production target and financial forecasts in the Company Update (page 7) and Company Presentation (page 13) reflect the "300k" case in Table 6 below.

A review of the significant cost items was undertaken in 2013 to confirm that the Capital cost estimates in the 2011 PFS (Table 6 below) remain valid.

**Item **	150k tpa ($)	300k tpa ($)
Metallurgical Tests	53,000	53,000
Permitting	420,000	420,000
Plant andInfrastructure	8,014,000	9,856,000
Deferred Capital - Plant Upgrade - TSF stages	2,869,000 1,000,000	2,869,000 1,000,000
ResidualCapital Return	-1,088,000	-1,273,000
**Total **	11,268,000	12,925,000

Table 6 Capital Expenditure Summary (2011 PFS)

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Financial

Outcomes of different methods and scale of operation are presented in the 2011 PFS. The production target and financial forecasts in the Company Update (page 7) and Company Presentation (page 13) reflect the "300k" case in Table 7 below.

Item	150k tpa	150k tpa	300k tpa	300k tpa	Tolltreatment	Tolltreatment
	T& S~~1~~	Total~~2~~	T& S	**Total **	T& S	**Total **
Life of Mine (Yrs)	2.0	8.7	1.0	4.4	2.7	11.6
Total Mill Throughput (‘000t) Total Copper Produced (t) Total Silver Produced (oz) Total Gold Produced (oz)	374 2,575 65,679 796	1,374 10,900 293,185 4,275	374 2,575 65,679 796	1,374 10,900 293,185 4,275	374 2,575 65,679 796	1,374 10,900 293,185 4,275
Initial Project Capital Cost ($M) Deferred Capital Cost ($M) Life of Mine Operating Cost ($M)	8.5 1.7 9.0	8.5 3.9 45.1	10.3 1.7 6.7	10.3 3.9 33.3	0.5 0.0 18.0	0.5 0.0 71.8
NPV ($M) - 0% Discount Rate - 10 % “ “	8.1 6.5	67.9 38.3	8.5 7.1	76.7 53.2	10.4 8.2	51.9 25.2

• 1 = Tailings and slag reprocessing

2 = Tailings, slag and Lloyd's Hard-rock processing

Table 7 Financial Summary (2011 PFS)

Elysium Resources Limited

Mark Ohlsson Company Secretary 0400 801 814 Email: markohlsson@elysiumresources.com.au

Elysium Resources Limited Nebojsa Zurkic Technical Director 03 9329 4075 Email: nebzurkic@elysiumresources.com.au

For and on behalf of the Board of Directors

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Mark Ohlsson, Company Secretary, Elysium Resources Limited

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