PATERSON RESOURCES LTD — Regulatory Filings 2021

Oct 27, 2021

ASX ANNOUNCEMENT 28 October 2021

Grace Copper-Gold Project Update

HIGHLIGHTS

• A total of five diamond holes and one RC hole completed for 1,754m
• Pervasive pyrite-arsenopyrite-chalcopyrite sulphide mineralisation was intercepted within a silica-carbonate altered breccia zone in several holes
• The Grace Copper-Gold Project is located 25km southeast of Newcrest's world-class Telfer Mine and 40km southwest of the Havieron gold deposit in the Paterson Province

Paterson Resources Limited ("Paterson" or "the Company") (ASX: PSL) is pleased to announce a further update to the drilling campaign at the Grace Copper-Gold Project in the highly prospective Paterson Province, Western Australia. The campaign was designed to test a series of priority targets outlined from geophysics and historical drilling, which has identified similar styles of mineralisation to the world-class Telfer Copper- Gold 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. This will enable the new interpretation to be fully tested.

A full review of the structural information, coupled with petrophysical analysis, is now being undertaken, particularly over the encouraging widespread zones of alteration, veining and brecciation. The laboratory estimates the assay results from the drilling will be returned within 4 to 6 weeks.

Of final significance, the drill-holes were lined with PVC casing which will allow them to be logged and potentially enable off-hole conductors to be identified.

Paterson Resources Executive Director, Matt Bull commented:

"The drilling campaign was designed to follow up on high-priority geophysical targets and chase known mineralisation along the Grace-Bemm Shear Zone. Historically, this has only been drilled with wide spaced and generally shallow drill-holes in the past. The Board is highly encouraged from initial observations of the core so far, with wide sulphide-rich breccia zones being intercepted in several of the diamond holes. Moreover, these are associated pervasive silica and carbonate alteration characteristic which are prevalent in the proximal Havieron and Telfer gold-copper deposits."

"The Board continues to develop its understanding of the mineralised system apparent at the Grace Copper-Gold Project. Going forward, plans are in motion to progress shaping the next phase of exploration, subject to value add insights when the assay results are received."

Figure 1: Core from PDD0003 showing quartz-carbonate veining and pyrite associated with the Grace/Bemm fault zone from 245.0m to 246.6m.

Figure 2: Core from PDD0005 showing quartz-carbonate veining and pyrite associated with the Grace/Bemm fault zone from 122m to 125.95m.

Figure 3: Map of the drill holes at the Grace Project and the Historic Drilling.

Grace Project Location

The Grace Copper-Gold 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 Copper-Gold Project include Havieron to the north-east, Maroochydore to the south and world-class Telfer Mine located 25km northwest. Figure 4 shows the Grace tenements and the significant regional discoveries and mines.

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

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.

This announcement was authorised for release to ASX by the Board of Paterson Resources Limited

Section 1 – Sampling Techniques and Data

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

Criteria	JORC Code explanation	Commentary
Sampling techniques	• Nature and quality of sampling (eg cut channels, random chips, or specific 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.	• Diamond drilling core samples were collected in HQ and NQ sized core trays with run lengths of either 3m or 6m.
Drilling techniques	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, 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).	• Diamond Drilling was conducted using triple tube in HQ from surface decreasing to as the required by hole conditions. • Core from the drill hole was oriented on the 3m or 6m run 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 recovery	• Method of recording and assessing core and chip sample recoveries and results assessed. • 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.	• Drill core recovery is regularly recorded for each run of drilling as the hole advances. These recoveries are reconciled against the driller's depth blocks in each core tray and the data captured for database recording. The drillers depth blocks provided the information associated with current hole depth; interval of core drilled; interval of core recovered; and the understood core loss. • Greater than 95% of the core was recovered.
Logging	• Whether core and chip samples have been 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	• Logging was conducted on site for the entirety of the hole by a suitably trained geologist for geological and structural information. • This included lithology, alteration, mineralisation, veining and structures. • Geotechnical measurements were recorded by way of Rock Quality Designation (RQD), core recovery and qualitative rock strengths. • Structures were assigned quality based on orientation

Criteria	JORC Code explanation	Commentary
	relevant intersections logged.	confidence. • Magnetic Susceptibility measurements were recorded every metre. • All core was photographed prior to dispatch from the site.
Sub-sampling techniques and sample preparation	• If core, whether cut or sawn and whether quarter, half or all core taken. • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. • 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.	• The core has been sent to Perth for cutting sampling and assaying • Results of the sampling and assaying will be released in subsequent announcements
Quality of assay data and laboratory tests	• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is 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) and precision have been established.	• Not Applicable
Verification of sampling and assaying	• The verification of significant intersections by either independent or alternative 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.	• Not Applicable
Location of data points	• Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. • Specification of the grid system used. • Quality and adequacy of topographic control.	• Drill collar location was surveyed by handheld GPS to a stated accuracy of +/-3m. • Rig was initially aligned on surface and direction of drilling was collected and checked on regular 30m intervals using a single shot Axis North Seeking Gyro. • Datum GDA94 and projected MGA Zone 51 • Topographic data was also achieved using the North Seeking Gyro.
Data spacing and distribution	• Data spacing for reporting of Exploration Results. • Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity	• Drilling was designed to intersect targets within the modelled geophysical anomalies. • The drilling is part of a first pass program, in this area not previously explored part of the projet • The data obtained has not yet been used for any resource

Criteria	JORC Code explanation	Commentary
	appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. • Whether sample compositing has been applied.	calculations
Orientation of data in relation to geological structure	• Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is 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.	• The drill hole were mostly orientated approximately 90 degrees to the Grace-Bemm shear zones as defined by both the VTEM and the IP survey's
Sample security	• The measures taken to ensure sample security.	• Not Applicable
Audits or reviews	• The results of any audits or reviews of sampling techniques and data.	• The data has not been audited as it is not required at this stage.

Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	Commentary
Mineral tenement and land tenure status	• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. • 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.	• P45/2905-2909, E45/4524 & E45/5310 are held directly or by entities controlled by Paterson Resources. • All tenements are contained completely within land where the Martu People have been determined to hold native title rights. To the Company's knowledge no historical or environmentally sensitive sites • have been identified in the area of work. • The tenements are in good standing and no known impediments exist.
Exploration done by other parties	• Acknowledgment and appraisal of exploration by other parties.	• Previous exploration was completed by Newcrest Mining Limited (Newcrest), including its predecessor Newmont 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, 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 of mineralisation.	• The geological setting is the Paterson Province Proterozoic 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

Criteria	JORC Code explanation	Commentary
		•			intruding the sedimentary sequence.	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
Drill hole Information	• A summary of all information material to the understanding of the exploration results including a tabulation of the					A Summary of the hole details is provided below.
	following information for all Material drill	Hole ID	Type	Zone	Easting	Northing	Azi	Dip	Depth
	holes:	PDD0001	DD	Bemm	430800	7574600	196	-70	879
	easting and northing of the drill hole o	PDD0002	DD	Bemm	431693	7574120	202	-60	149.6
	collar elevation or RL (Reduced Level –	PDD0003	DD	Bemm	430966	7574526	202	-60	248.6
	o elevation above sea level in metres) of	PDD0004	DD	Bemm	430937	7574456	202	-60	149.3
	the drill hole collar	PDD0005	DD	Bemm	431696	7574120	330	-60	177.4
	dip and azimuth of the hole o		RC						89.4
	down hole length and interception o depth	PRC0001	DD	Bemm	431865	7573993	202	-60	150.5
	hole length. o • 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 aggregation methods	• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. • Where aggregate intercepts incorporate 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.	•				Not Applicable– Data was not aggregated
Relationship between mineralisation widths and intercept lengths	• These relationships are particularly important in the reporting of Exploration Results. • If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.	•			mineralisation is shown in figure 3	The relationship between the drill hole and the

Criteria	JORC Code explanation	Commentary
	• 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 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.	• Included in announcement as figure 3
Balanced reporting	• Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	• Results of the drilling are preliminary in nature and the core has been sent to Perth for analysis
Other substantive exploration data	• Other exploration data, if meaningful and material, should be reported including (but not limited to): geological 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.	• Not Applicable
Further work	• The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out 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.	• Further work is planned to include assaying of the core and further RC drilling of other targets in the project area