Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

PATRONUS RESOURCES LIMITED Capital/Financing Update 2014

Jun 3, 2014

65620_rns_2014-06-03_bf43e914-3728-4a58-81c8-c1aab2862ff9.pdf

Capital/Financing Update

Open in viewer

Opens in your device viewer

==> picture [207 x 192] intentionally omitted <==

----- Start of picture text -----

ASX Code: KIN
Kin Advances WA Gold
Strategy
4 June 2014
----- End of picture text -----

Highlights

Board of Directors

Terry Grammer Chairman

Trevor Dixon

Managing Director

Fritz Fitton

Technical Director

Joe Graziano

Non-Executive Director & Company Secretary

Contact Details

Office

342 Scarborough Beach Road Osborne Park Western Australia 6017

Phone

08 9242 2227

Fax

08 9242 1277

Email

[email protected]

Website

www.kinmining.com.au

Shares on Issue: 38,653,003 (KIN)

Options on Issue: 19,362,512 at $0.30 Expiring 31 January 2015

ASX: KIN

  • Shareholder meeting convened for 04 July 2014 to approve a change in the scale of the Company’s activities as a result of the proposed $2.7M acquisition of the Leonora Gold Project in WA.

  • Independent valuation of the Leonora Gold Project by Optiro Pty Ltd ascribes a value of $3.8M – 14.5M, with a preferred value of $8.4M.

  • Discussions well advanced with potential financiers and strategic cornerstone investors. The Company is currently finalising the structure for the planned $5M capital raising to complete the Leonora Project acquisition and provide working capital.

Further to its announcement of 7 May 2014, Kin Mining NL (ASX: KIN) is pleased to advise that its $2.7 million acquisition of the advanced Leonora Gold Project in WA has advanced to the next stage with an independent valuation of the project received and completion of the transformational deal on track for early July 2014.

The Company has convened a shareholder meeting for 04 July 2014 to approve a change in scale of its activities as a result of the acquisition, which will fast-track its planned transition to gold producer. This approval is required under ASX Listing Rule 11.1.2.

Kin, which listed on the ASX in October last year as a junior gold explorer, has reached agreement to acquire all of the issued capital of Navigator Mining Pty Ltd from the Administrator of Navigator Resources, Mr Bryan Hughes of Pitcher Partners, for $2.7 million, with a $200,000 deposit already paid.

This represents an acquisition cost of approximately $3.60 per resource ounce.

Completion of the transaction, which is now targeted for early July, is conditional on Kin obtaining shareholder approval, successfully raising $5 million to fund the acquisition and provide working capital and no material adverse event occurring. All other conditions precedent have been satisfied.

The Company has received an independent valuation of the Leonora Gold Project from independent consultants Optiro Pty Ltd. Optiro’s opinion of the fair market value of the Mineral Resources and exploration potential of the Leonora Project is that it lies within the range of $3.8 million to $14.5 million, with a preferred value of $8.5 million.

This equates to a valuation of $11.30 per resource ounce.

The Leonora Project, located 35km north-east of the mining centre of Leonora in WA’s North-eastern Goldfields comprises the Mertondale, Cardinia, Raeside and Gambier Lass project areas, complementing KIN’s current asset holding in the area.

KIN Mining NL ACN 150 597 541

342 Scarborough Beach Road, Osborne Park WA 6017 www.kinmining.com.au

Page 1 of 2

==> picture [143 x 64] intentionally omitted <==

----- Start of picture text -----

ASX Code: KIN
----- End of picture text -----

As previously announced, Kin has initiated technical studies aimed at upgrading the Project’s existing Indicated and Inferred Resource of 12.29Mt grading 1.9g/t gold for 745,000oz (over 70% of which is classified in the higher confidence Indicated category) to JORC 2012 compliant status.

This updated resource estimate will provide the basis of the Bankable Feasibility Study, which is scheduled to begin in early 2015. A decision to mine is targeted by October 2015.

Kin Managing Director Trevor Dixon said discussions with potential financiers and cornerstone investors were progressing well, with the Company aiming to announce the final structure of the capital raising in the near future.

“The independent valuation from Optiro supports the conclusions of our due diligence and confirms that the Leonora Project is a valuable asset with an established gold inventory to be acquired at an extremely attractive price,” he said.

“We are looking forward to completing the acquisition and executing the next key steps of our strategy to become a significant WA gold producer.”

Background on the Leonora Gold Project

Kin’s proposed acquisition of the Leonora Project from the Administrator of Navigator Resources, which produced 7,233oz at an average grade of 2.33g/t Au from trial mining of two pits at Leonora in 2010 before turning its attention to the Bronzewing Project.

Total historical production from the Project area amounts to nearly 2Mt at an exceptional average grade of 4.92g/t gold for over 316,000oz.

Substantial planning and development work has already been completed at Leonora, with pit optimisation studies completed for each of the key deposits. Metallurgical test work has also returned strong results, including recoveries of 95% plus. A CIP gold plant designed to treat 500kt/pa from the project has been the subject of a previous feasibility study to determine potential capital and operating costs.

At the same time, Kin has initiated technical studies aimed at upgrading the Project’s existing Indicated and Inferred Resource of 12.29Mt grading 1.9g/t gold for 745,000oz (over 70% of which is classified in the higher confidence Indicated category) to JORC 2012 compliant status.

A Pre-Feasibility Study completed by Navigator in 2009 for 97% of the total Mineral Resource demonstrated an economically viable project with considerable upside.

These studies also demonstrated that 282,000oz are contained outside the main resource areas, highlighting the substantial exploration potential within the broader 308 km[2] tenement package.

As well as upgrading the resource estimate to JORC 2012 compliance, Kin plans to launch a significant drilling program to expand and grow the inventory in these areas.

Competent Persons Statement

The information in this report relates to Exploration Results based on information compiled by Paul Maher who is a member of the AusIMM and an employee of the company and fairly represents this information. Mr Maher has sufficient experience of relevance to the styles of mineralisation and the types of deposit under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 edition of the JORC Australian code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Maher consents to the inclusion in the report of the matters based on information in the form and context in which it appears. The information in this report that relates to the JORC resources was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

KIN Mining NL ACN 150 597 541 342 Scarborough Beach Road, Osborne Park WA 6017 www.kinmining.com.au

Page 2 of 2

==> picture [144 x 62] intentionally omitted <==

==> picture [239 x 182] intentionally omitted <==

Kin Mining NL Independent Valuation on the Leonora Gold Project

J_1731

Principal Author: Jason Froud BSc Hons, MAusIMM

Principal Reviewer: Christine Standing BSc Hons, MAusIMM, MAIG

May 2014

Independent Valuation on the Leonora Gold Project

==> picture [77 x 34] intentionally omitted <==

Perth Office

Level 4, 50 Colin Street West Perth WA 6005

PO Box 1646 West Perth WA 6872 Australia

Doc Ref:

1 20140505 J_1731 Leonora Valuation.docx

Tel: +61 8 9215 0000 Fax: +61 8 9215 0011 Optiro Pty Limited ABN: 63 131 922 739 www.optiro.com

Print Date: 30 May 2014

Number of copies:

Optiro: 1

Kin Mining NL: 1

Principal Author: Jason Froud
BSc Hons, MAusIMM		 Signature:
Date: 9 May 2014
Contributors:
Principal Reviewer: Christine Standing
BSc Hons, MAusIMM, MAIG		 Signature:
Date: 9 May 2014
Reviewers:
Important Information:
This Report is provided in accordance with the proposal by Optiro Pty Ltd (“Optiro”) to Kin Mining NL and the terms of
Optiro’s Consulting Services Agreement (“the Agreement”). Optiro has consented to the use and publication of this Report
by Kin Mining NL for the purposes set out in Optiro’s proposal and in accordance with the Agreement. Kin Mining NL may
reproduce copies of this entire Report only for those purposes but may not and must not allow any other person to publish,
copy or reproduce this Report in whole or in part without Optiro’s prior written consent.
Optiro has used its reasonable endeavours to verify the accuracy and completeness of information provided to it by Kin
Mining NL which it has relied in compiling the Report. We have no reason to believe that any of the information or
explanations so supplied are false or that material information has been withheld. It is not the role of Optiro acting as an
independent valuer to perform any due diligence procedures on behalf of the Company. The Directors of the Kin Mining
NL Limited are responsible for conducting appropriate due diligence in relation to the Leonora Gold project. Optiro provides
no warranty as to the adequacy, effectiveness or completeness of the due diligence process.
The opinion of Optiro is based on the market, economic and other conditions prevailing at the date of this report. Such
conditions can change significantly over short periods of time.
The statements and opinions included in this report are given in good faith and in the belief that they are not false,
misleading or incomplete.
The terms of engagement are such that Optiro has no obligation to update this report for events occurring subsequent to
the date of this report.

P a g e | ii

Independent Valuation on the Leonora Gold Project

==> picture [77 x 34] intentionally omitted <==

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ............................................................................................... 1 1. EXECUTIVE SUMMARY ............................................................................................... 1
2. INTRODUCTION AND TERMS OF REFERENCE ............................................................... 2
2.1. TERMS OF REFERENCE AND PURPOSE OF REPORT ................................................................................. 2
2.1. RESPONSIBILITY FOR THE REPORT AND DATA SOURCES ........................................................................ 2
2.2. LIMITATIONS AND EXCLUSIONS ............................................................................................................ 3
3. LEONORA GOLD PROJECT ........................................................................................... 4
3.1. LOCATION AND ACCESS ......................................................................................................................... 4
3.2. TENURE AND OWNERSHIP ..................................................................................................................... 4
3.3. PROJECT HISTORY ................................................................................................................................ 10
3.4. GEOLOGY AND MINERALISATION ........................................................................................................ 10
3.4.1. REGIONAL GEOLOGY ............................................................................................................................... 10
3.4.2. PROJECT GEOLOGY ................................................................................................................................. 11
3.5. MINERAL RESOURCES .......................................................................................................................... 16
3.6. STUDY RESULTS ................................................................................................................................... 18
3.6.1. MINING 18
3.6.2. PROCESSING............................................................................................................................................ 19
3.6.3. METALLURGY .......................................................................................................................................... 19
3.6.4. INFRASTRUCTURE ................................................................................................................................... 20
3.7. TRIAL MINING ..................................................................................................................................... 20
4. VALUATION CONSIDERATIONS ................................................................................. 21
5. VALUATION APPROACH AND METHODOLOGY.......................................................... 22
5.1. GEOSCIENTIFIC RATING METHOD ........................................................................................................ 22
5.2. COMPARABLE TRANSACTION METHOD ............................................................................................... 23
5.3. JOINT VENTURE TERMS METHOD ........................................................................................................ 24
5.4. APPRAISED VALUE METHOD................................................................................................................ 24
6. VALUATION ............................................................................................................. 25
6.1. MINERAL RESOURCE VALUATION ........................................................................................................ 25
6.2. EXPLORATION POTENTIAL VALUATION ............................................................................................... 25
6.3. SUMMARY VALUATION ....................................................................................................................... 26
7. DECLARATIONS BY OPTIRO ...................................................................................... 26
7.1. INDEPENDENCE ................................................................................................................................... 26
7.2. QUALIFICATIONS ................................................................................................................................. 27
8. REFERENCES ............................................................................................................ 27
9. GLOSSARY OF ABBREVIATIONS AND TECHNICAL TERMS ........................................... 28

P a g e | iii

Independent Valuation on the Leonora Gold Project

==> picture [77 x 34] intentionally omitted <==

TABLES

Table 1.1 Valuation summary ............................................................................................................................. 1
Table 3.1 Leonora gold project – tenement schedule ....................................................................................... 5
Table 3.2 Leonora gold project Mineral Resources (reported in accordance with the 2004 JORC
Code) ................................................................................................................................................. 17
Table 3.3 Leonora trial mining statistics ........................................................................................................... 21
Table 5.1 Geoscientific rating criteria (modified by Optiro) ............................................................................. 23
Table 6.5 Valuation based on Leonora Mineral Resources .............................................................................. 25
Table 6.6 Valuation summary of Navigator’s Leonora gold project mineral assets based on relevant
equity interests ................................................................................................................................. 26

FIGURES

Figure 2.1 Location of Navigator’s mineral projects including the Leonora gold project ................................... 3 Figure 3.1 Leonora gold project area showing resource locations ..................................................................... 9

APPENDICES

Appendix A Western Australian Gold Mineral Resource Transactions Appendix B Western Australian (Yilgarn) Gold Exploration Transactions

P a g e | iv

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

1. EXECUTIVE SUMMARY

At the request of Kin Mining NL (Kin Mining), Optiro Pty Ltd (Optiro) has prepared an Independent Valuation of the Leonora gold project. On 8 April 2014, Kin Mining announced that it had executed a binding term sheet with the Administrator of Navigator Resources Limited (Administrator Appointed) (Navigator) to acquire the Leonora gold project. Optiro understands that under the terms of the agreement Kin Mining will acquire the Leonora gold project by payment of A$2.7 M in cash, subject to certain conditions.

Optiro understands that this report may be used as a public document in relation to Kin Mining’s proposed of the Leonora gold project. As such, this report has been prepared in accordance with the requirements of the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code, 2005). A site inspection of the Leonora project was previously carried out by Optiro between 7 August and 10 August 2012. Optiro understands there have been no material changes to the project since that time.

The Leonora gold project is located 30 km northeast of the mining town of Leonora in an area of favourable infrastructure, including a road network, airstrip with regular services to Perth and proximity to an established mining supply network. Navigator completed a Pre-Feasibility Study in March 2009 and carried out a trial mining and milling program at Leonora between February and June 2010, producing over 7,000 ounces of gold.

Optiro has determined the fair market value of the Leonora gold project at an effective valuation date of 9 May 2014. Optiro has used comparable transactions as the preferred method of valuation of the exploration potential within these properties and to determine the valuation for the Mineral Resources. Optiro’s opinion of the fair market value of the Mineral Resources and exploration potential is that it lies within the range A$3.8 M to A$14.5 M, with a preferred value of A$8.4 M (Table 1.1). The values assigned to the mineral assets are in Australian dollars (A$) and were prepared at the effective valuation date.

Table 1.1 Valuation summary

Mineral asset Equity Value(A$M)
Low High Preferred
Leonora Mineral Resources
Leonora Exploration Potential		 100%
100%		 3.0
0.8		 13.4
1.1		 7.5
0.9
Total 3.8 14.5 8.4

The opinions expressed and conclusions drawn with respect to this valuation of the mineral assets are appropriate at the valuation date of 9 May 2014. The valuation is only valid for this date and may change with time in response to variations in economic, market, legal or political conditions, in addition to future exploration results.

P a g e |1

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

2. INTRODUCTION AND TERMS OF REFERENCE

2.1. TERMS OF REFERENCE AND PURPOSE OF REPORT

Optiro understands that on 18 February 2013, Navigator Resources Limited (Navigator), the owner of the Leonora gold project, announced to the Australian Securities Exchange that it expected to make an announcement in relation to its funding requirements and then on 28 March 2013, that it had appointed Pitcher Partners as Administrator pursuant to Section 436A of the Corporations Act.

On 8 April 2014, Kin Mining NL (Kin Mining) announced that it had executed a binding term sheet with the Administrator of Navigator Resources Limited (Administrator Appointed) to acquire the Leonora gold project. The acquisition is by way of Kin Mining acquiring all the issued securities in Navigator Mining Pty Ltd (Navigator Mining), a subsidiary of Navigator and registered holder of the Leonora gold project. Optiro understands that under the terms of the agreement Kin Mining will acquire the Leonora gold project by payment of A$2.7 M in cash subject to the completion of the following conditions:

  • Kin Mining completing financial, technical and legal due diligence

  • Kin Mining obtaining shareholder approval

  • Navigator settling objections to the Applications for Exemption and forfeiture applications in relation to certain mining leases held by Navigator Mining

  • execution of a formal share purchase agreement

  • no event occurring which is materially adverse to Navigator Mining or the tenements comprising the Leonora gold project

  • Kin Mining completing a fund raising to a minimum of A$5 M

  • creditor approval of the transaction and any variation to the Navigator and Navigator Mining Deeds of Company Arrangement.

On 29 April 2014, Kin Mining announced it had completed its technical due diligence and accordingly paid a non-refundable deposit of A$200,000 to the Administrator of Navigator. Furthermore, Kin Mining announced the creditors to Navigator and Navigator Mining had approved the proposed transaction.

As such and at the request of Kin Mining, Optiro has prepared an Independent Valuation of the Leonora gold project. Optiro understands that this report may be used as a public document in relating to the acquisition of the Leonora gold project.

2.1. RESPONSIBILITY FOR THE REPORT AND DATA SOURCES

This report was prepared by Mr Jason Froud (Principal) and was reviewed by Mrs Christine Standing (Principal) of Optiro. The report has been prepared in accordance with the requirements of the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code, 2005). The authors of this report are Members of the Australasian Institute of Mining and Metallurgy (AusIMM), and therefore are obliged to prepare mineral asset valuations in accordance with the Australian reporting guidelines as set out in the VALMIN Code. All values have been compiled in Australian dollar (A$) terms.

In developing its technical assumptions for the valuation, Optiro has relied upon information provided by Kin Mining, Navigator and their consultants, as well as information obtained from other public sources. The material on which this report is based includes internal and open-file project documentation, technical reports, drillhole databases and Mineral Resource models.

Optiro has reviewed all relevant technical and corporate information made available by the management of Kin Mining. Prior to this report, Optiro had previously valued the Leonora gold project

P a g e |2

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

for Navigator and reviewed all relevant technical and corporate information made available by them. Optiro has accepted this information in good faith as being true, accurate and complete, having made due enquiry of both Kin Mining and Navigator. Furthermore, Optiro has sourced publically available information on the Leonora gold project area and recent transactions involving gold as well as discussions with Navigator and Kin Mining staff.

Optiro previously visited the Leonora gold project between 7 and 10 August 2012. Optiro understands there have been no material developments since this time and considered that a further site visit would not reveal information or data material to the outcomes of this report. Optiro is satisfied that sufficient current information was available for these projects to allow an informed appraisal to be made without carrying out a further site inspection.

Figure 2.1 Location of Navigator’s mineral projects including the Leonora gold project

==> picture [330 x 441] intentionally omitted <==

2.2. LIMITATIONS AND EXCLUSIONS

This report is based predominantly on information provided by Kin Mining and Navigator, either directly from discussions and data provided, or from reports and correspondence with other organisations whose work is the property of Kin Mining or Navigator.

P a g e |3

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

This report is based on information made available to Optiro up to 9 May 2014. Kin Mining has not advised Optiro of any material change, or event likely to cause material change, to the technical assessment of the mineral assets contained within the Leonora gold project. This report specifically excludes any aspects relating to legal issues, commercial and financing matters, land titles and agreements, excepting such aspects as may directly influence the technical assessment of the asset.

The conclusions expressed in this report are valid as at 9 May 2014. The valuation is only appropriate for this date, and may change with time and response to variations to economic, market, legal or political factors, in addition to ongoing exploration results.

3. LEONORA GOLD PROJECT

In 2004, Navigator, through its 100% owned subsidiary Mazzelli Holdings Pty Ltd, acquired the tenements associated with the original Mertondale property from the Sons of Gwalia Ltd Administrators. Subsequently, in 2009, Navigator changed the name of the operating company from Mazzelli Holdings Pty Ltd to Navigator Mining Pty Ltd.

The tenements collectively referred to by Navigator as the Leonora gold project, comprise the Mertondale, Cardinia, Gambier Lass and Raeside project areas. Navigator’s original proposed operational focus was the re-establishment of mining around the previously mined Mertondale open pits and underground workings, the Raeside Forgotten Four Pit and the Bruno-Lewis prospect of the Cardinia deposit, which was the subject of a Pre-Feasibility study (PFS) finalised in March 2009. The location for the main administration centre, processing plant and tailings storage facility is to be sited adjacent to the Mertondale 3-4 Pit.

Subsequent to the successful completion of the Leonora acquisition, Kin Mining plans to assess the project area with a view to update and improve the Mineral Resources and JORC classification with the intention of establishing an economic mining operation. Importantly, the Leonora gold project is within close proximity to Kin Mining’s existing projects.

3.1. LOCATION AND ACCESS

The Leonora gold project is located in the centre of the Eastern Goldfields, approximately 35 km northeast of Leonora and 700 km northeast of Perth in Western Australia (Figure 2.1).

Road access to the Leonora gold project from Perth is 600 km via the Great Eastern Highway to Kalgoorlie, then a further 235 km north through Menzies to the Leonora township. From Leonora access is gained to the Mertondale/Cardinia minesite by travelling northeast along the Leonora to Nambi Road for approximately 35 km. The well-maintained but unsealed road may become impassable for a limited period following heavy rain events. Alternative access to the project area can be achieved via the Leonora to Laverton Road and entering the southern end of the property via station roads.

Access to the Raeside deposits is either from the west via the Leonora to Kalgoorlie Road or from the north via the Leonora to Laverton Road. The operations can also be serviced by air using an allweather sealed airstrip, suitable for propeller aircraft, located in Leonora. This service is approximately 1.5 hours flying time from Perth.

3.2. TENURE AND OWNERSHIP

The Leonora gold project comprises 162 granted tenements and one mining lease application covering a total area of 322 km[2] (32,236 ha). This tenement portfolio includes two granted exploration licences, 135 granted prospecting licences and 25 granted mining leases (Table 3.1).

P a g e |4

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Optiro understands that E37/866 has expired but remains a live tenement as it and E37/868 are currently in the process of being converted to mining licence application M37/1298. A further eight granted miscellaneous licences are also present, but as these exclude mineral rights Optiro has considered them only in general terms in its valuation.

Tenement rentals due to the Western Australian Department of Mines and Petroleum total A$171,809.10, shire rates a further A$109,000 and minimum expenditure commitments on all granted project tenements total A$1,691,080 for the current year.

Table 3.1 details Navigator’s current Leonora tenement schedule as at 7 May 2014, and a plan of the tenement areas is included as Figure 3.1. All tenements are currently 100% held by Navigator, with the exception of M37/646, P37/7274, P37/7275 and P37/7276 which are 80% held by Navigator.

Table 3.1 Leonora gold project – tenement schedule

Licence Number Name Area (ha) Grant date Expiry date
E37/866
E37/868
E37/1103
M37/81
M37/82
M37/86
M37/88
M37/223
M37/227
M37/231
M37/232
M37/233
M37/256
M37/277
M37/299
M37/300
M37/316
M37/317
M37/369
M37/377
M37/379
M37/422
M37/428
M37/487
M37/594
M37/646†
M37/720
M37/1284
M37/1298
P37/6923
P37/6924
P37/6925		 Raeside
Raeside
Raeside
Mertondale
Mertondale
Cardinia
Cardinia
Cardinia
Cardinia
Mertondale
Mertondale
Mertondale
Raeside
Cardinia
Cardinia
Cardinia
Cardinia Pacmin
Cardinia Pacmin
Raeside
Raeside
Raeside
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia JV
Cardinia
Mertondale
Mertondale
Mertondale
Mertondale		 30
158.1
1518.9
327
384.3
271.1
17.8
183.6
7.6
886.2
670
997
7.3
454.7
69.2
60
777.5
659.8
177.2
21.6
465.8
199.1
31.8
80.7
0.1
122.9
1.9
19.4
1116.2
200
200
200		 21 Nov 2007
22 Nov 2007
19 Oct 2011
10 Oct 1986
25 Jul 1986
22 Dec 1986
19 Nov 1986
13 Jul 1989
18 Jul 1989
6 Nov 1989
6 Nov 1989
6 Nov 1989
31 Jan 1990
11 Apr 1990
22 Oct 1990
22 Oct 1990
28 Dec 1990
17 Dec 1990
8 Jul 1992
13 Oct 1992
15 Jan 1993
4 Feb 1994
4 Feb 1994
14 Jun 1995
9 Aug 2006
28 Jun 2006
19 Mar 2010
17 Apr 2009
Pending
3 Nov 2006
3 Nov 2006
3 Nov 2006		 20 Nov 2012
21 Nov 2017
18 Oct 2016
9 Oct 2028
24 Jul 2028
21 Dec 2028
18 Nov 2028
12 Jul 2031
17 Jul 2031
5 Nov 2031
5 Nov 2031
5 Nov 2031
30 Jan 2032
10 Apr 2032
21 Oct 2032
21 Oct 2032
27 Dec 2032
16 Dec 2032
7 Jul 2034
12 Oct 2034
14 Jan 2035
3 Feb 2015
3 Feb 2015
13 Jun 2016
8 Aug 2027
27 Jun 2027
18 Mar 2031
16 Apr 2030
2 Nov 2014
2 Nov 2014
2 Nov 2014

P a g e |5

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Licence Number Name Area (ha) Grant date Expiry date
P37/6926
P37/6927
P37/6928
P37/6929
P37/6930
P37/7241
P37/7242
P37/7243
P37/7244
P37/7245
P37/7246
P37/7247
P37/7248
P37/7249
P37/7250
P37/7251
P37/7252
P37/7253
P37/7254
P37/7255
P37/7256
P37/7257
P37/7258
P37/7259
P37/7260
P37/7261
P37/7262
P37/7263
P37/7264
P37/7265
P37/7266
P37/7267
P37/7268
P37/7269
P37/7270
P37/7271
P37/7272
P37/7273
P37/7274†
P37/7275†
P37/7276†
P37/7277
P37/7655
P37/7656
P37/7657		 Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia Pacmin
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia Pacmin
Cardinia Pacmin
Cardinia Pacmin
Cardinia Pacmin
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia JV
Cardinia JV
Cardinia JV
Cardinia
Mertondale
Mertondale
Mertondale		 200
200
200
200
192
191
163
174
194
196
200
200
200
200
200
200
192
196
199
158
195
200
198
198
139
124
172
183
143
174
200
200
188
114
184
168
200
115
93
102
120
28
29
127
189		 3 Nov 2006
3 Nov 2006
3 Nov 2006
3 Nov 2006
3 Nov 2006
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
30 Dec 2008
30 Dec 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
16 Oct 2008
20 Mar 2008
16 Oct 2008
18 Nov 2008
18 Nov 2008
18 Nov 2008
18 Nov 2008
18 Nov 2008
18 Nov 2008
18 Nov 2008
16 Oct 2008
20 Mar 2008
18 Nov 2008
18 Nov 2008
16 Oct 2008
29 May 2009
29 May 2009
29 May 2009		 2 Nov 2014
2 Nov 2014
2 Nov 2014
2 Nov 2014
2 Nov 2014
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
29 Dec 2016
29 Dec 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
15 Oct 2016
19 Mar 2016
15 Oct 2016
17 Nov 2016
17 Nov 2016
17 Nov 2016
17 Nov 2016
17 Nov 2016
17 Nov 2016
17 Nov 2016
15 Oct 2016
19 Mar 2016
17 Nov 2016
17 Nov 2016
15 Oct 2016
28 May 2017
28 May 2017
28 May 2017

P a g e |6

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Licence Number Name Area (ha) Grant date Expiry date
P37/7658
P37/7659
P37/7660
P37/7661
P37/7662
P37/7663
P37/7664
P37/7665
P37/7666
P37/7667
P37/7668
P37/7669
P37/7670
P37/7671
P37/7672
P37/7673
P37/7674
P37/7675
P37/7697
P37/7698
P37/7699
P37/7700
P37/7701
P37/7702
P37/7703
P37/7704
P37/7705
P37/7706
P37/7707
P37/7708
P37/7711
P37/7712
P37/7713
P37/7714
P37/7715
P37/7716
P37/7736
P37/7737
P37/7738
P37/7756
P37/7757
P37/7758
P37/7759
P37/7760
P37/7761		 Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Leonora
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Leonora
Leonora
Leonora
Leonora
Cardinia
Cardinia
Cardinia
Cardinia
Leonora
Leonora
Leonora
Leonora
Leonora
Leonora		 200
200
200
200
200
198
131
193
200
187
171
187
181
157
171
60
177
193
172
165
200
146
200
200
200
200
200
195
200
200
179.6
165.5
171.7
190.7
194.9
196.9
176
179
177
98
105
194
200
197
198		 29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
29 May 2009
23 Jul 2009
23 Jul 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
25 Nov 2009
25 Nov 2009
25 Nov 2009
25 Nov 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
11 Sep 2009
18 Dec 2009
18 Dec 2009
18 Dec 2009
18 Dec 2009
18 Dec 2009
18 Dec 2009		 28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
28 May 2017
22 Jul 2017
22 Jul 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
24 Nov 2017
24 Nov 2017
24 Nov 2017
24 Nov 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
10 Sep 2017
17 Dec 2017
17 Dec 2017
17 Dec 2017
17 Dec 2017
17 Dec 2017
17 Dec 2017

P a g e |7

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Licence Number Name Area (ha) Grant date Expiry date
P37/7776
P37/7777
P37/7779
P37/7780
P37/7805
P37/7891
P37/7892
P37/7893
P37/7941
P37/7953
P37/7954
P37/7969
P37/7970
P37/7971
P37/7972
P37/7973
P37/7974
P37/7975
P37/7976
P37/7977
P37/7978
P37/7979
P37/7980
P37/7981
P37/7982
P37/7983
P37/7984
P37/7985
P37/7986
P37/7987
P37/7988
P37/7990
P37/8007
P37/8043
P37/8044
P37/8045
P37/8057
P37/8196
P37/8199
P37/8209
P37/8210
P39/5172		 Leonora
Leonora
Leonora
Leonora
Leonora
Cardinia
Cardinia
Cardinia
Mertondale
Cardinia
Cardinia
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Mertondale
Cardinia
Cardinia
Cardinia
Cardinia
Cardinia
Perserverance
Mertondale
Mertondale
Mertondale/Gambier Lass
Mertondale/Gambier Lass
Cardinia		 198
96
200
184
9.7
40
50
6
5.6
199.9
199.9
188.3
165.9
191.4
191.5
191.3
200
120.3
165.1
188.8
183
184.6
75.1
200
199.8
200
199.5
200
176.3
198.6
200
23.9
29.5
179
35
181
140
123.4
67.6
195.6
200
190		 12 May 2010
12 May 2010
12 May 2010
12 May 2010
23 Oct 2009
2 Dec 2010
2 Dec 2010
2 Dec 2010
12 Apr 2011
12 May 2011
12 May 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
28 Jun 2011
1 Jul 2011
16 Aug 2011
16 Aug 2011
16 Aug 2011
16 Aug 2011
30 Mar 2012
14 Sep 2012
24 Oct 2012
31 Oct 2012
31 Oct 2012
16 Aug 2011		 11 May 2014
11 May 2014
11 May 2014
11 May 2014
22 Oct 2017
1 Dec 2014
1 Dec 2014
1 Dec 2014
11 Apr 2015
11 May 2015
11 May 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
27 Jun 2015
30 Jun 2015
15 Aug 2015
15 Aug 2015
15 Aug 2015
15 Aug 2015
29 Mar 2016
13 Sep 2016
23 Oct 2016
30 Oct 2016
30 Oct 2016
15 Aug 2015
Total 32,235.5

† 80% equity in joint venture

  • Pending conversion to M37/1298

P a g e |8

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Figure 3.1 Leonora gold project area showing resource locations

==> picture [417 x 590] intentionally omitted <==

P a g e |9

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

3.3. PROJECT HISTORY

The current project is owned and operated by Navigator Mining Pty Ltd, a fully owned subsidiary of Navigator Resources Limited. Numerous parties have held the project ground since it was first discovered in 1899, with each assessing the financial efficacy of resource extraction to varying degrees of detail and confidence. A brief chronology of significant events relating to Mertondale is as follows:

  • Gold was first discovered in the Mertondale area in 1899 by Fred Merton. The town of Mertondale and the Merton’s Reward underground were a direct result of this discovery.

  • 1899 to 1911 was the main phase of underground mining

  • 1911 to 1915 and 1941 to 1942 saw limited mining, with Western Australian Mines Department records indicating a total of 88,991 t of ore mined from Merton’s Reward for a total of 60,524 ounces at an average grade of 20.8 g/t gold

  • 1981 to 1984, Telluride Mining NL, Nickel Ore NL, International Nickel (Australia) Ltd and Petroleum Securities Mining Co. Pty Ltd all conducted exploration programs in the immediate area

  • 1984, Hunter Resources Ltd began exploration in the Mertondale region

  • 1986, an initial NOI was submitted by Hunter Resources Ltd and a joint venture agreement with the then Harbour Lights JV was established to treat the ore

  • 1986 to 1988, Mertondale 4 Pit was mined

  • 1989, Harbour Lights Mining Ltd acquired the tenements from Hunter Resources Ltd

  • 1991, mining was concluded with the completion of the Mertondale 5 Pit

  • Sons of Gwalia Ltd acquired the tenements in the intervening period

  • In 2004, Navigator, through its 100% owned subsidiary Mazzelli Holdings Pty Ltd (now Navigator Mining Pty Ltd), acquired the tenements associated with the original Mertondale property from the Administrators of Sons of Gwalia Ltd.

Historical gold production is over 270,000 ounces from three areas:

  • Mertondale 3-4 Pit (1.3 Mt at 4.3 g/t gold)

  • Mertondale 5 Pit (385,000 t at 2.56 g/t gold)

  • Merton’s Reward (90,000 t at 21 g/t gold from underground production 1899 to 1911)

3.4. GEOLOGY AND MINERALISATION

3.4.1. REGIONAL GEOLOGY

The project area is situated within the Eastern Goldfields Province, the easternmost subdivision of the Archaean Yilgarn Block. The Eastern Goldfields Province comprises volcanic and sedimentary rocks (greenstones) that were deposited around 2,700 Ma ago, multiply folded, metamorphosed to low or medium grade, extensively intruded by granitoids at about 2,680 to 2,660 Ma, and subjected to major faulting along northerly to north-north westerly trends. The greenstones can be further subdivided into terranes generally separated by major faults or granitoids. For Leonora, the terranes, from west to east are the Malcolm, Murrin, Laverton and Cosmo Newbery greenstones.

The Malcolm greenstones occupy a small area southwest of the Yilgangi Fault (Keith-Kilkenny Lineament) and mainly consist of basalt, gabbro-dolerite, mafic schist and sediments. The Raeside project area is located within the Malcolm greenstones.

The Murrin greenstones are located between the Yilgangi Fault (Keith-Kilkenny Lineament) and the Celia Lineament, and host the Cardinia and Mertondale project areas. The area is typified by basalt, sandstone, siltstone, felsic volcanic rocks, dolerite, peridotite and volcaniclastic rocks that have been

P a g e |10

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

deformed by large scale D1 and D2 folds and D3 faults and intruded by several small to large, ovoid to elongate granitoid plutons.

In the central part of the Murrin terrane, the stratigraphically lowest rocks are extensive felsic volcanics that form large volcanic edifices (Kauri Well and Manger Bore areas - east of Mertondale and Cardinia). They are overlain and flanked by volcaniclastic rocks (the Welcome Well Complex) derived from the felsic volcanic rocks. The volcaniclastic rocks interfinger with, and are overlain by, a thick sequence of basalt interbedded with sandstone and siltstone. Numerous thick, extensive units of dolerite and peridotite formed within the sequence and there is a peridotite body in the upper part of the andesite volcanic pile; part of the Welcome Well Complex. D1 and D2 folds form interference structures in the Welcome Well-Cardinia Hill area. The metamorphic facies is mainly prehnitepumpellyite. In the southeast (Mt Kowtah), the sequence comprises mainly basalt and dolerite, and is metamorphosed to greenschist facies.

In the northwest (north of Mertondale), basalt and sandstone outcrop between granitoid bodies, and are metamorphosed to amphibolite facies. In the southwest, the Pig Well Graben is filled with conglomerate and feldspathic sandstone.

Proterozoic mafic dykes cut greenstone sequences and granitoids, and are members of a widespread swarm of mafic, ultramafic and intermediate dykes that intruded the Yilgarn Craton. The dykes are poorly exposed, but readily identified as pronounced east-northeast linear anomalies on aeromagnetic images. In the project area, they are known to occur immediately north of Mertondale 5, at the north end of the Mertondale 3-4 Pit, and to the north of Bruno and south of Lewis at Cardinia.

Major faults and lineaments occurring in the general project area belong to a group of north-north westerly striking, regional scale faults and shear zones that cut the Yilgarn Craton for hundreds of kilometres. Activity on these faults may have begun early in the tectonic history of the Eastern Goldfields, as they appear to have controlled greenstone basin size, shape and location from their inception through felsic and mafic volcanism and intrusion, sedimentation, deformation and dismemberment, to mineralisation. They are possibly strongly modified successors to initial extensional faults that controlled the original greenstone basins. The major north-northwest faults in the project area are the Keith-Kilkenny Lineament (made up of the Yilgangi Fault and the faults bounding the Pig Well Graben) located between the Malcolm and Murrin terranes and the Celia Lineament on the eastern side of the Murrin terrane.

Deformation within the region is related to vertical granitoid emplacement and dominantly strike slip movement along the major structures. The north-striking Mertondale Shear Zone is largely covered by the Mertondale tenement package and is a major, multiphase brittle-ductile shear zone of up to 500 m width and which contains all of the known mineralisation in the Mertondale area.

3.4.2. PROJECT GEOLOGY

MERTONDALE

The Mertondale prospects extend over a total of 12 km strike length from Merton’s Reward (Mertondale 1) in the south to Mertondale 5 in the north. Merton’s Reward, Mertondale 2 and Mertondale 3-4 are contained within the eastern branch of the Mertondale Shear Zone and extend over approximately 3 km of strike, whilst Quicksilver, Tonto, Eclipse and Mertondale 5 are all contained within the western branch of the shear zone and extend over approximately 9 km of strike.

The Mertondale area consists of a central felsic volcanic sequence bounded on either side by a tholeiitic basalt-dolerite-carbonaceous shale +/- felsic porphyry sequence. The western and eastern

P a g e |11

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

shear zone branches are generally located near the felsic volcanics/mafic contacts. Outcrop within the area is generally poor.

Oxidation at Mertondale is variable, being quite shallow (less than 5 m) at Merton’s Reward whilst being quite deep (approximately 80 m) at Eclipse, with a combination of depletion and the presence of Permian sediments masking the bedrock geochemistry.

MERTON’S REWARD

At the historic Merton’s Reward underground mine, two types of lode were mined – shear lodes and intershear lodes.

Shear lodes consist of steeply dipping bodies, usually less than 1 m thick and confined to shear zones. They are continuous for 50 m to 100 m along strike and down dip, and often average greater than 30 g/t gold. The lodes are highly cleaved parallel to their dip and strike, with abundant quartzcarbonate veinlets parallel to cleavage. Gold mineralisation is usually associated with 5% to 10% finely disseminated pyrite-arsenopyrite in a sheared and sericitised, carbonated basalt.

Intershear lodes consist of narrow, flat (0ᵒ to 30ᵒ) to moderately (40ᵒ to 60ᵒ) east to northeast dipping quartz veins, from which most of the gold at Merton’s Reward was mined. The veins attain a maximum thickness of 40 cm and are contained within a highly carbonated, pyritic alteration selvage of up to 12 m thick. The vein selvages contain up to 20% pyrite, 5% arsenopyrite and 90% ankerite and/or siderite, with gold typically concentrated in the central quartz veinlet which usually assays greater than 30 g/t gold. The selvage may grade up to 8 g/t gold.

Intershear lodes may persist for up to 40 m along strike, and are usually truncated on their eastern and western sides by shears and/or shear lodes. Conversely, in some cases intershear lodes overprint shear lodes and it is probable that the two lode types developed contemporaneously. Structural features in the intershear lodes suggest they formed in zones of dilation during deformation in the area.

The Mertondale 2 Pit is located between Merton’s Reward and Mertondale 3-4, and is more closely associated with the Merton’s Reward style of mineralisation.

Diamond drillhole NMDD024 intersected 9 m at 3.65 g/t gold from 61 m and is outside the A$1,250/oz optimised pit shell. This hole requires follow-up drilling on the same and adjacent sections to determine the extent of this mineralisation, which may be the easterly down dip extension of one of the intershear lodes, or even possibly an intersection on one of the steeply dipping shear lodes.

MERTONDALE 3-4

The Mertondale 3-4 deposits are located in the Mertondale Shear Zone within the basalt unit. In the shear zone a number of units can be recognised, including the porphyry and others which represent varying degrees of carbonation, sericitisation and shearing of a basalt parent. It is difficult to correlate units other than the porphyry between drillholes and sections.

At Mertondale 3-4, a series of steep east dipping, locally folded lenses of gold mineralisation have been delineated over strike lengths of at least 900 m. Mineralised lenses are up to 35 m thick and generally straddle the hangingwall porphyry-basalt contact. The strongest mineralisation is generally at this contact in highly foliated and altered porphyry and basalt. The porphyry unit occurs as a series of flattened, cigar-shaped bodies with dimensions of 200 m to 300 m along strike, up to 30 m thick, and 75 m down the foliation. Long axes of the ‘cigars’ are flat and parallel to the plunge of stretching lineations mapped in the open cut. The mineralised lenses have similar shapes to the porphyry units, although they tend to be more extensive in the foliation plane. In general, the thickest mineralisation lies adjacent to the thickest porphyry.

P a g e |12

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

All mineralised zones contain pyrite and arsenopyrite, which are generally present as fine grained crystals up to 2 mm in diameter in elongate clusters parallel to the foliation. Locally the sulphide content is up to 30% by volume, although most lenses average between 5% and 10% sulphides.

Gold is fine, generally less than 10 μm (rarely up to 45 μm) and is usually located in the silicates as individual grains (specks) or clusters of grains. There is a tendency for the gold to occur along the cleavages of micaceous minerals, although it also occurs rarely as grains marginal to pyrite and arsenopyrite or as irregular aggregates within these sulphides.

Drilling that has intersected the Mertondale 3-4 mineralised zone beneath the A$1,250/oz pit shell generally suggests that the potential for high grade underground shoots is fairly restricted. Most of the better grade intersections at Mertondale 3-4 are within the pit shell.

QUICKSILVER

The Quicksilver prospect extends over a strike length of about 5 km on the western branch of the Mertondale Shear Zone, immediately south of Tonto.

The western branch of the fault zone typically contains black mafic mylonite, a black shale, shale, quartz-dolerite, basalt, basaltic andesite and to the east, a felsic volcanic derived from a rhyolite. Felsic porphyritic intrusives occur irregularly along the shear zone. Generally, the black sulphidegraphite-rich mafic mylonite has reasonably high background gold anomalism, in the order of 0.1 to 0.5 g/t gold.

When developed, mineralisation is generally located near the sub-vertical mafic-felsic contact. Sulphidic black shales are commonly present near the mineralisation.

Deeper drilling (holes greater than 100 m deep) at Quicksilver has not been particularly successful. Over the 5 km strike length of the prospect, some 44 deeper holes have been drilled, and only three gave narrow +3 g/t gold intersections.

TONTO

The Tonto prospect extends over a strike length of about 1 km on the western branch of the Mertondale Shear Zone, between the Quicksilver and Eclipse prospects. Lithologies at Tonto are similar to Quicksilver – black mafic mylonite, a black shale, shale, quartz-dolerite, basalt, basaltic andesite and felsic volcanics. The steeply dipping high-grade lode at Tonto is likely to be structurally controlled, and appears to potentially have a shallow southerly plunge. Visually the gold mineralisation remains very difficult to pick, with no obvious association with sulphide content, quartz veining or alteration of either graphite or sericite.

Changes in lithology within the Tonto area tend to coincide with apparent northeasterly/southwesterly striking cross-faults which are evident on both the gravity and magnetic geophysical images. The changes in lithology also appear to be related to a substantial cut-off in gold mineralisation. The changes in lithology include the mylonitic unit becoming much more broken up, a shaly unit appearing and the bottom quartz-dolerite contact not being intersected along a very consistent contact.

The footwall consists of the massive quartz dolerite. This dolerite has a noticeable bleached or carbonated halo on its immediate contact with the mylonite, but grades into a strongly chloritic massive quartz-dolerite. The quartz-dolerite is devoid of gold and often assays below detection. The bleached quartz-dolerite can be difficult to pick but typically contains distinguishable bright green fuchsitic ‘spots’ of alteration. In some places the bleaching is not overly intense but the fuchsite is very intense. Some epidote alteration and veining has also been noted. The bottom contact is generally quite sharp.

P a g e |13

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

The Tonto prospect has a number of deeper high grade intersections that may have some continuity. This area requires further analysis of the results to date before planning any further drilling.

ECLIPSE

The Eclipse prospect extends over a strike length of about 2 km on the western branch of the Mertondale Shear Zone, immediately north of Tonto and south of Mertondale 5.

At Eclipse, the geology appears to have changed in comparison to Tonto. The mafic mylonite is present, but is much more discontinuous, whereas the quartz-dolerite is not restricted to the footwall and appears within the central mafic unit quite regularly. A shale unit is also commonplace throughout Eclipse.

A shallow, flat-dipping to horizontal sulphidic quartz vein has been traced over approximately 150 m in the southern to central portions of Eclipse. This vein contains fresh arsenopyrite and pyrite within the quartz, and typically assays with very high gold values.

Toward the northern end of Eclipse, a felsic volcanic is common and is typically found alternating with the mafics. An unclassified granite/porphyry intrusive has also been noted in this area, along with a relatively unsheared chloritic basalt that is slightly talcose and is possibly representative of a highmagnesium basalt. This talcose basalt has been traced up the western margin of the shear, where it is intimately associated with a basaltic andesite and a dolerite.

At the northern end of Eclipse, epithermal-like alteration has been identified. This system of alteration was traceable over several hundred metres in a strong north-south direction. Alteration includes massive fresh sulphides at depth, with a distinctive gossan forming higher up in the oxide profile. The gossan typically contains light blue sugary quartz; black quartz and iridescent haematite/goethite are also present throughout the gossan.

Within the general A$1,250/oz optimised pit shell area at Eclipse, a total of 32 drillholes have tested the mineralisation beneath 400 mRL (the surface is at about 475 mRL). The grades are generally insufficient to drive an open pit deeper into the fresh rock.

MERTONDALE 5

The Mertondale 5 prospect extends over a strike length of about 1.5 km on the western branch of the Mertondale Shear Zone, immediately north of Eclipse.

The Mertondale 5 mineralisation is hosted in a north-south striking sequence of carbonate/sericite schists, graphitic schists and quartz-feldspar porphyries. The unit is relatively narrow, at 5 m to 15 m wide, is bounded to the west by chloritised/carbonated basalts, and to the east by quartz feldspar porphyries containing up to 50% by volume of pyrite and some graphitic schists with high percentages of pyrite.

The footwall contact is well-defined by green chlorite/carbonate basalts, which are moderately to strongly sheared and which strike at 2ᵒ to 3ᵒ west of grid north. The sericite content is less intense in the footwall sequence than in the adjacent mylonite zone. The hangingwall contact is less well defined, as mixing with mafics has occurred along its contact. The hangingwall lithology is predominantly intensely-altered quartz feldspar porphyry. The mineralised package is strongly weathered to about 100 m, with intense weathering to 75 m.

CARDINIA

The Cardinia tenements overlie a sequence of intermediate-mafic and felsic volcanic lithologies and locally derived epiclastic sediments. These lithologies are on the western limb of the regionally faulted

P a g e |14

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

south-plunging Benalla anticline. Minor felsic porphyries and lamprophyre lithologies have been recognised within and adjacent to the Lewis and Bruno areas. At Lewis these intrusive rocks are often associated with mafic-felsic contacts. The eastern edge of the Bruno-Lewis system has been intruded by a dolerite sill. The regional lithological strike is 345° and lithological contacts dip between 30ᵒ and 40ᵒ to the west while foliation trends dip moderately to the east.

Interpretation of sections, in conjunction with detailed mapping, has shown a series of mineralised structures evident as quartz-ironstone veining and float in outcrop. At Lewis, the primary mineralisation is interpreted to dip from 40° to 70° to the east and lenses vary in width from 1 m to around 7 m true thickness.

Primary gold mineralisation is associated with zones of increased shearing in association with lithological contacts between the mafic and felsic rocks. Disseminated carbonate-sericite-quartzpyrite alteration zones are present adjacent to the gold mineralisation characterised by increased quartz veining, silicification and shearing.

The deeply weathered nature of the subcropping zones of mineralisation has resulted in variable zones of depletion, ranging from 0 m to 20 m deep, with subsequent supergene enrichment occurring beneath the depleted zone and extending in places to at least 50 m deep. Surface silicification is apparent in the top 4 m.

In the Bruno-Lewis-Kyte resource area, virtually all of the known Mineral Resources are associated with flat-lying to shallowly-dipping zones of mineralisation, thought to be related to supergene gold. These zones have an east-west extent of up to 400 m and they extend over a strike length of about 2 km from the southern end of Lewis to the northern end of Bruno. Vertical thicknesses vary from 0 m to 30 m, with an average of about 5 m to 10 m. Grades can be highly variable in adjacent drillholes; however, continuity appears to be generally quite good, at even a 0.5 g/t gold lower cut-off grade. This supergene mineralisation cuts across all weathered lithologies without any obvious effects.

Mineralised zones at the Helen’s and Rangoon areas, located in the northeast of the Cardinia region, are more subvertical in nature and are associated with narrow (1 m to 5 m) steeply dipping zones of shearing and quartz development.

Mineralisation trends are either north-northwest or north-south. At the various Helen’s deposits, the mineralised shear zones are generally in mafics, but close to a felsic volcanic/sediment contact, whilst at Rangoon the shear zones are in felsic volcanics/sediments but close to a mafic contact. At Helen’s North Lode, good visual correlation has been observed between gold grades and bleaching of the oxidised basalt host rock.

RAESIDE

Mineralisation within the Raeside prospect is hosted by a mixed package of fine-grained sediments and a quartz dolerite unit. The dolerite is sill-like in nature, and roughly conforms to observed bedding trends. The dolerite is fine to medium grained with extensive chlorite alteration. Discontinuities and breaks in diamond core are predominantly oriented along foliation planes, and slickensides are prominent throughout.

Gold mineralisation is hosted in a series of stacked, irregular, sub-parallel structures which dip shallowly to the east. Higher gold grades are generally associated with increased quartz/carbonate veining and varying levels of iron alteration. Veins are predominately stockwork in nature and widths of massive veining are generally less than 1 m.

P a g e |15

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

GAMBIER LASS

The Gambier Lass prospect area lies over granitoid faulted against a deformed granitoid pebble conglomerate on the eastern limb of the Malcolm Anticline, near the eastern margin of the KeithKilkenny Tectonic Zone. This conglomerate is interpreted to be a fault scarp conglomerate derived from the erosion of the granitoid to the east.

Gold mineralisation is associated with moderately west dipping (40° to 50°) quartz veins in a major northwest-trending shear zone within the granitoid conglomerate. Similarly-orientated mineralised quartz vein systems occur at North and South Gambier. The quartz veins are hosted within pervasively-foliated granitoid and related fault scarp material (quartz-sericite schists), and show intense though narrow sericite-carbonate alteration at the vein margins. Minor pyrite alteration is associated with the gold mineralisation.

3.5. MINERAL RESOURCES

Navigator estimated open pit Mineral Resources for the Mertondale, Cardinia, Raeside and Gambier Lass areas. The Mineral Resources have primarily been generated and reported by independent external consultants in accordance with the guidelines of the 2004 JORC Code, with input from Navigator staff. The Mineral Resources have not been updated since the advent of the 2012 JORC Code.

The Mertondale and Raeside Mineral Resources were estimated by McDonald Speijers Pty Ltd in January 2009 and March 2009 respectively. The estimation was completed using a ‘recovered fraction’ technique. Recovered fraction is a probabilistic technique that estimates the volumetric proportion of each block likely to be above a particular cut-off grade.

The Cardinia Mineral Resources were estimated by Runge Limited in January 2009, using ordinary kriging interpolation constrained within mineralisation envelopes prepared at a nominal 0.2 g/t gold cut-off grade.

The Mineral Resources at the Leonora gold project are summarised in Table 3.2.

P a g e |16

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Table 3.2 Leonora gold project Mineral Resources (reported in accordance with the 2004 JORC Code)

Category Deposit Equity Cut-off
(g/t)		 Tonnes
(Mt)		 Gold grade
(g/t)		 Gold
(koz)
Indicated Mertondale
Mertondale 3-4
Merton's Reward
Tonto
Eclipse
Mertondale 5
Quicksilver		 100%
100%
100%
100%
100%
100%		 0.7
0.7
0.7
0.7
0.7
0.7		 0.87
1.01
0.97
0.62
0.32
0.55		 2.3
2.7
1.9
1.8
3.2
1.8		 65
87
60
35
33
31
Subtotal 4.34 2.2 311
Cardinia
Bruno-Lewis exploration
Helen's North
Rangoon
Lewis grade control
Bruno grade control
Helen's South		 100%
100%
100%
100%
100%
100%		 0.7
0.7
0.7
0.7
0.7
0.7		 1.04
0.63
0.09
0.29
0.11
0.19		 1.1
1.2
1.7
1.4
1.4
1.8		 37
24
5
13
5
11
Subtotal 2.35 1.3 95
Raeside
Michelangelo-Leonardo
Forgotten Four
Krang		 100%
100%
100%		 0.7
0.7
0.7		 1.28
0.07
0.11		 2.7
3.0
2.6		 111
7
9
Subtotal 1.47 2.7 127
Total Indicated 8.16 2.0 533
Inferred Mertondale
Mertondale 3/4
Merton's Reward
Eclipse
Mertondale 5
Quicksilver		 100%
100%
100%
100%
100%		 0.7
0.7
0.7
0.7
0.7		 0.66
0.07
0.25
0.16
0.11		 2.1
1.8
1.7
2.7
2.1		 45
4
14
13
8
Subtotal 1.25 2.1 84
Cardinia
Bruno-Lewis exploration
Helen's North
Kyte
Rangoon
Bruno grade control
Helen's South
Lewis South
Black Chief		 100%
100%
100%
100%
100%
100%
100%
100%		 0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7		 1.52
0.13
0.31
0.23
0.03
0.01
0.10
0.12		 1.3
1.2
1.6
1.3
1.0
1.3
1.3
1.6		 63
5
16
9
1
0
4
6
Subtotal 2.44 1.3 104
Raeside
Forgotten Four		 100% 0.7 0.10 2.1 7
Subtotal 0.10 2.1 7
Gambier Lass 100% 0.7 0.34 1.6 17
Total Inferred 4.13 1.6 212

P a g e |17

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Table 3.2 (cont)

Category Deposit Equity Cut-off
(g/t)		 Tonne
s
(Mt)		 Gold grade
(g/t)		 Gold
(koz)
Total Mertondale
Mertondale 3/4
Merton's Reward
Tonto
Eclipse
Mertondale 5
Quicksilver		 100%
100%
100%
100%
100%
100%
0.7
0.7
0.7
0.7
0.7
0.7
1.5
1.1
1.0
0.9
0.5
0.7
2.2
2.6
1.9
1.8
3.0
1.8
110
91
60
49
46
39
Subtotal 5.6 2.2 395
Cardinia
Bruno-Lewis exploration
Helen's North
Kyte		 100%
100%
100%
0.7
0.7
0.7		 2.6
0.8
0.3		 1.2
1.2
1.6
100
29
16
Rangoon
Lewis grade control
Bruno grade control
Helen's South
Lewis South
Black Chief		 100%
100%
100%
100%
100%
100%		 0.7
0.7
0.7
0.7
0.7
0.7		 0.3
0.3
0.1
0.2
0.1
0.1		 1.4
1.4
1.3
1.7
1.3
1.6		 14
13
6
11
4
6
Subtotal 4.8 1.3 199
Raeside
Michelangelo-Leonardo
Forgotten Four
Krang		 100%
100%
100%
0.7
0.7
0.7		 1.3
0.2
0.1		 2.7
2.5
2.6
111
14
9
Subtotal 1.6 2.6 134
Gambier Lass 100% 0.7 0.3 1.6 17
Total 12.3 1.9 745

3.6. STUDY RESULTS

3.6.1. MINING

The PFS investigated open pit mining at Mertondale, Cardinia, Tonto-Eclipse and Raeside to deliver 1 Mtpa of ore to a centrally located treatment facility at Merton’s Reward. Estimated plant feed within the base case A$1,250 pit shell was 6 Mt at 1.8g/t gold, with average production of 53,000 oz of gold per annum recovered over a 6 year mine life.

The open pits are planned to be mined via conventional benching using a hydraulic excavator and 100 t dump trucks. A 180 t excavator is planned for mining in the Mertondale area, and will operate in tandem with a 100 t excavator at Cardinia and later at Raeside.

The PFS assumes all waste will be tipped on surface waste dumps, but potential was identified to develop an in‐pit backfilling mining sequence to minimise truck overhaul, the size of the truck fleet and reduce tyre exposure to excessive tyre heat loadings.

The Cardinia pits are characterised by their extended strike lengths and opportunity was identified to develop ramps within the optimum pit shell and along the strike of mineralisation. Designing for starter ramps and final ramps on in‐pit fill will allow final designs that reduce the strip ratio below the currently planned maximum of 7.1 to 1.

Mining costs were based on independent mining contractor estimates that are in line with contract mining benchmark figures. Average mining costs equate to A$18.00 per/tonne of ore treated.

P a g e |18

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

No allowance for underground mining was made in the PFS.

3.6.2. PROCESSING

Three processing alternatives were considered in the PFS: 1) a standalone carbon-in-leach (CIL) processing facility; 2) a heap leach option; and 3) a toll treatment option. Selection of the base case processing option included consideration of capital and operating costs, as well as operability, maintainability, technology and process risk.

A standalone CIL treatment plant was considered to have the advantage of maximising gold recovery from the resource, and will produce the optimum return in an escalating gold price environment. The main disadvantage is a higher start-up capital expenditure.

The standalone 1 Mtpa CIL option adopted for the PFS base case model assumed a centrally located facility at Merton’s Reward, adjacent to the well-formed gravel road and 30 km from Leonora. The proposed plant incorporates a conventional two-stage crushing circuit that feeds a ball mill with an in‐ circuit MMD (Mining Machinery Developments Ltd) sizer to provide for long term flexibility to process a full range of high clay and harder ores.

Capital and operating costs used for the PFS were based on the purchase and re-location of an unspecified second-hand treatment plant. The capital cost of the treatment plant was estimated on the basis that it will require additional equipment in order to ensure that the metallurgical recovery from the plant is maximised. This equipment included a Falcon gravity concentrator and Gekko intensive leach reactor to maximise gold extraction prior to the CIL process. In addition, the residence time within the CIL circuit will be optimised (as required) by the inclusion of additional leach capacity to ensure sufficient leach residence time to achieve target gold recovery.

The proposed Merton’s Reward plant site is located 15 km north of the Cardinia gold system, and 6 km south of the Tonto-Eclipse gold system. Ore mined from the Cardinia and Tonto gold systems will be trucked to the Merton’s Reward treatment facility. The location of the proposed plant at Merton’s Reward is also relatively close to longer term resource growth targets identified along the Mertondale Shear Zone.

The PFS design assumed conventional wet tailings deposition into completed pits, with pit wall spigots and liquor recovery from in-pit pontoons.

3.6.3. METALLURGY

A number of metallurgical test programs were conducted for Navigator on all the larger deposits by AMMTEC under the supervision of Metallurgical Design. The ores were predominantly oxide (62%) and generally soft as defined by the Bond ball mill work index (BWi), with the exception of some primary ores in the Mertondale area. Metallurgical testwork indicated that process throughput rates are optimised if the clay-rich oxide ores are blended with harder ores from Mertondale and other areas. The plant design will allow for flexibility in this approach, with separate clay and competent ore circuits included in the comminution circuit design.

The PFS assumed a 90% metallurgical recovery, which Navigator considers conservative given that the metallurgical testwork in the oxide zones at Mertondale, Cardinia and Raeside indicates high (plus 95%) metallurgical recoveries, as well as a significant gravity gold fraction (up to 30%).

Metallurgical recoveries of approximately 80% from deeper transition and primary ores in the Mertondale areas are attributed to the presence of high levels of sulphides. In some cases the mineralogical evaluation found that the fine gold was associated with pyrite and arsenopyrite.

P a g e |19

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

3.6.4. INFRASTRUCTURE

POWER SUPPLY

Navigator estimated that the project will require an installed power capacity to 5 MW, with the plant requirement expected to be 3 MW.

WATER SUPPLY

The PFS is based on sourcing all water required for the project from known underground aquifers and from the current storage contained within the existing open pits, until such time as onsite (in-pit) tails dams are created and harvesting can occur to supplement bore water.

Capital and operating costs for a reverse osmosis plant were included in the plant costs. The capital cost estimate has taken into consideration the necessity to pump water from the furthest pit at Mertondale 5 to the proposed mine site.

ROADS

The national road between Kalgoorlie and Leonora is the main transport corridor in the area. Access to the project from the town of Leonora is by an existing well-formed gravel road (Nambi Road). Capital has been allocated for the construction of new gravel roads for ore haulage within the project site.

ACCOMMODATION

The PFS allows for accommodation of the work force either by the establishment of a separate accommodation village on the mine site or by the use of existing facilities in the town of Leonora.

3.7. TRIAL MINING

In July 2010, Navigator completed a trial mining and processing test from the Leonora gold project. A total of 74,200 tonnes of material was milled at St Barbara Limited’s Leonora processing facility, comprising 60,200 tonnes of Bruno supergene ore and 14,000 tonnes of Mertondale 2 hard rock blending ore. Gold recovered was 4,876 ounces at an average recovery of 97.9% (Table 3.3). Following the favourable results at St Barbara Limited facility, Navigator mined and trucked a further 39,800 tonnes of material to the Bronzewing project for treatment, recovering 2,773 ounces of gold at a recovery of 94.2% (Table 3.3).

P a g e |20

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Table 3.3 Leonora trial mining statistics

Resource Item
St Barbara Limited – Leonoraprocessing
Bruno Ore (tonnes)
Goldgrade(g/t)		 60,200
2.35
Mertondale 2 Ore (tonnes)
Goldgrade(g/t)		 14,000
1.03
Total Ore (tonnes)
Gold grade (g/t)
Recovery (%)
Gold recovery (ounces)		 74,200
1.91
97.9
4,450
Bronzewing processing
Bruno Ore (tonnes)
Gold grade (g/t)
Recovery (%)
Gold recovery (ounces)		 39,800
2.30
94.2
2,773

4. VALUATION CONSIDERATIONS

There are a number of recognised methods used in valuing mineral assets. The most appropriate application of these various methods depends on several factors, including the level of maturity of the mineral asset and the extent and reliability of information available in relation to the asset. The VALMIN Code classifies mineral assets according to the maturity of the asset:

  • Exploration areas - properties where mineralisation may or may not have been identified, but where a Mineral Resource has not been declared.

  • Advanced exploration areas - properties where considerable exploration has been undertaken and specific targets have been identified that warrant further detailed evaluation, usually by drill testing, trenching or some form of detailed geological sampling. A Mineral Resource may or may not have been estimated, but sufficient work will have been undertaken on at least one prospect to provide both a good understanding of the type of mineralisation present and encouragement that further work will elevate one or more prospects to the resource category.

  • Pre-development projects - properties where Mineral Resources have been identified and their extent estimated, but where a decision to proceed with development has not been made. This includes projects at an early assessment stage, on care and maintenance or where a decision has been made not to proceed with immediate development.

  • Development projects - properties for which a decision has been made to proceed with development, but which are not commissioned or are not operating at design levels.

  • Operating mines - mineral properties that have been fully commissioned and are in production.

The VALMIN Code defines value as the fair market value of a mineral asset. The fair market value is the amount of money (or the cash equivalent of some other consideration) for which the mineral asset should change hands on the valuation date in an open and unrestricted market between a willing buyer and a willing seller in an “arm’s length” transaction, with each party acting knowledgeably, prudently and without compulsion. In times of high commodity prices and/or buoyant share market conditions the fair market value ascribed to mineral assets may be higher than their technical value. The fair market value of the mineral asset comprises

P a g e |21

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

  • The underlying or technical value, which is an assessment of a mineral asset’s future economic benefit under a set of assumptions, excluding any premium or discount for market, strategic or other considerations

  • the market component, which is a premium or discount relating to market, strategic or other considerations.

In assessing the value of Kin Mining’s mineral assets, Optiro has considered both the technical value and the fair market value of the assets.

5. VALUATION APPROACH AND METHODOLOGY

In determining the appropriate valuation method(s) to be used for the Leonora gold project, Optiro has taken into consideration the classification of these assets according to the categories defined in the VALMIN Code and the different methodologies that are generally accepted as industry practice for each classification. Generally there are three broad methods of valuation that are used for valuing mineral assets: these are the market approach, cost approach and income approach. The market and cost approaches are used for the grass-roots through to advanced exploration stages, and the income approach is used for advanced projects with defined reserves to operating mines.

In relation to the classification of the Leonora gold project, it is considered to be an advanced exploration to pre-development project.

Whilst there are capital and operating cost estimates in place for the Leonora gold project, along with generalised production estimates, there are no Ore Reserves in place and Optiro considers that the cost and schedule are insufficiently robust to allow a DCF style valuation to determine fair market value and, furthermore, that they do not adequately account for the risk profile of the project. As such, the valuation approaches that Optiro has elected to use are defined as inferential methods, and rely on comparative or subjective inputs, such as a “rule of thumb” or appraised value method. Such a method values the property in dollars per unit area or dollars per resource tonne.

The methodologies considered by Optiro to determine a value for the mineral projects and the exploration potential are summarised below.

5.1. GEOSCIENTIFIC RATING METHOD

The most well-known method of the Geoscientific ratings type is the modified Kilburn Geological Engineering/Geoscientific method, which was developed by a Canadian geologist who wished to introduce a more systematic and objective way of valuing exploration properties. The Kilburn and similar rating approaches are acknowledged as industry-standard valuation tools. This method is Optiro’s preferred valuation tool for early stage exploration projects.

The Kilburn method uses a Geoscientific rating which has as its fundamental value a base acquisition cost (BAC) of the tenement. The BAC is the average cost to acquire a unit of exploration tenement (generally a graticular block, square kilometre or hectare) and maintain it for one year, including statutory fees and minimum expenditure commitments.

The determination of the BAC for exploration licences in Western Australia considered the application and retention costs as set by the Government of Western Australia, Department of Mines and Petroleum, and the average identification, administration and expenditure costs. Based on Optiro’s assessment, the BAC applied to the exploration licences is A$1,114 per graticular block or A$344/km[2] .

Four technical factors are then applied serially to the BAC of each tenement which enhance, downgrade or have no impact on the value of the property, and which allow a value per tenement to be determined. The four technical factors are:

P a g e |22

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

  • Off-property factor – relates to physical indications of favourable evidence for mineralisation, such as workings and mining on the nearby properties, which may or may not be owned by the company being valued. Such indications are mineralised outcrops, old workings through to world-class mines.

  • On-property factor – this is similar to the off property factor but relates to favourable indications on the property itself, such as mines with significant production.

  • Anomaly factor – the anomaly factor relates to the degree of exploration which has been carried out and the level and/or number of the targets which have been generated as a consequence of that exploration. Properties which have been subject to extensive exploration without the generation of sufficient or quality anomalies are marked down under the Kilburn approach.

  • Geological factor – this refers to the amount and exposure of favourable lithology and/or structure (if this is related to the mineralisation being valued) on the property. Thus properties which have a high coverage of favourable lithology and through-going structures will score most highly.

The ratings applied by Optiro are listed in Table 5.1.

This methodology is used to determine the technical value, and a fifth factor, reflecting the current state of the market, is applied to determine the market value. This market value determined from the Geoscientific rating method has been verified by consideration of the current market for gold exploration properties in Australia.

Table 5.1 Geoscientific rating criteria (modified by Optiro)

Rating Off-property factor On-property factor Anomaly factor Geological factor
0.1 Generally unfavourable
geological setting
0.5 Extensive previous
exploration with poor
results		 Poor geological setting
0.9 Poor results to date Generally favourable
geological setting, under
cover
1.0 No known mineralisation
in district		 No known mineralisation
within tenement		 No targets defined Generally favourable
geological setting
1.5 Mineralisation identified Mineralisation identified Target identified, initial
indications positive
2.0 Resource targets
identified		 Exploration targets
identified		 Favourable geological
setting
2.5 Significant
intersections - not
correlated on section
3.0 Along strike or adjacent
to known mineralisation		 Mine or abundant
workings with significant
previous production		 Mineralised zones
exposed in prospective
host rocks
3.5 Several significant ore
grade intersections
that can be correlated
4.0 Along strike from a
major mine(s)		 Major mine with
significant historical
production
5.0 Along strike from world
class mine

5.2. COMPARABLE TRANSACTION METHOD

The comparable market value approach is a market-based approach, and is an adaptation of the common real estate approach to valuation. For the purposes of mineral asset valuation, a valuer

P a g e |23

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

compiles and analyses transactions, converted to a 100% equity basis, of projects of similar nature, time and circumstance, with a view to establishing a range of values that the market is likely to pay for a project. The comparable market approach

  • is intuitive, easily understood and readily applied

  • implies a market premium/discount for the prevailing sovereign risk

  • captures market sentiment for specific commodities or locations

  • accounts for intangible aspects of a transaction (i.e. intellectual property).

The transactions deemed to be analogous to the mineral asset being valued are used to determine a unit price (e.g. $/km[2] or $/tonne metal, etc.) for the asset being valued. However, there is an intricate value dynamic between the quantity (size) and quality (grade or prospectivity) that may result in the exclusion of a large number of comparable transactions, which in turn may undermine the accuracy of this method.

The comparable market value approach is widely used throughout the minerals industry; however, the valuer must take into account that this approach is largely retrospective, and therefore cannot take into account anticipated or recent commodity or other market price movements.

5.3. JOINT VENTURE TERMS METHOD

The joint venture terms method is a variation of the comparable market value method. This technique involves transactions where only partial ownership of a project is acquired. The joint venture terms method provides the valuer with a larger acquisitions dataset than the comparable market value method, and consequently these approaches are often used simultaneously in mineral asset valuations.

It is recognised that the market will attribute a sliding-scale premium in accordance with the level of ownership acquired (e.g. a joint venture agreement for a 51% interest in a project may attract a market value significantly above that for an identical project in which a 49% interest is acquired). The valuer therefore needs to account for any potential associated with ownership premiums.

5.4. APPRAISED VALUE METHOD

The cost approach or Appraised Value method is founded on the assumption that the intrinsic value of the exploration tenement is based on the exploration expenditure, and that a highly prospective tenement will generally encourage a higher level of exploration expenditure.

This valuation methodology relies upon the premise that a project is at least worth what the owner has previously spent and/or committed to spending in the future. It considers historical and/or planned future expenditure on the mineral asset and includes the amount of expenditure that has been meaningfully used in the past to define a target or resource and the future costs in advancing the exploration.

The value of the property may be determined from the sum of past effective exploration expenditure (usually limited to the past three years), plus any committed exploration expenditure in the current year and the application of a prospectivity enhancement multiplier (PEM). The PEM is determined by the level of sophistication of the exploration for which positive exploration results have been obtained, and usually ranges between 0.5 and 3.0.

The principal shortcomings of this method are that there is no consistent base from which to derive the valuation and there is no systematic approach taken in determining the PEM. Optiro places less reliance on values determined this method than those determined from the Geoscientific ratings and comparable transaction methods.

P a g e |24

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

6. VALUATION

Optiro’s approach has been to use the following valuation methodologies for the Mineral Resources and exploration potential for mineralisation within the Leonora exploration tenements:

  • comparable transactions

  • joint venture terms.

Optiro considered using the appraised value method but the data was inadequate to provide a meaningful valuation. Optiro considered the use of the Geoscientific rating method for the valuation of exploration potential at Leonora, but given the large number of small prospecting licences and mining leases in place, it is unlikely that this method would yield reliable results.

6.1. MINERAL RESOURCE VALUATION

Optiro reviewed recent transactions involving Yilgarn Craton gold deposits similar to the Leonora Mineral Resources. To obtain a dataset that is relevant under the current time and circumstance, Optiro reviewed transactions that occurred since the beginning of 2012 and in particular since May 2013 when the gold price has typically been averaging below US$1,400 per ounce. From these, Optiro selected transactions that involved gold deposits with Indicated and Inferred Mineral Resources at a similar gold grade to that estimated at the Leonora deposits. The selected transactions are summarised in Appendix A.

Optiro has established from its search of publically available information on recent market transactions of similar gold projects with Inferred and Indicated Mineral Resources that the market has generally been paying in the range of A$4 to A$60 per resource ounce of gold metal in the ground for gold resource projects. When considering projects of similar grade and development stage to the Leonora gold project, the value per ounce is typically with the range of A$4 to A$18 per resource ounce of gold metal.

Optiro notes that the Leonora gold project Mineral Resources are predominantly unencumbered by third party royalties and that the ounces are largely nearer surface, thus resultant mining costs would likely be relatively low.

Based on its review and the current market volatility, Optiro has applied a range of A$4 to A$18 and a preferred value of A$10 per resource ounce of gold metal to determine the value of the gold resources within the Leonora gold project.

Optiro’s estimate of the current market value of the gold Mineral Resources within the Leonora gold project lies in the range A$3.0 M to A$13.4 M, with a preferred value of A$7.5 M. Optiro’s estimate of the current market value of these gold resources and based on the equity held by Navigator is included as Table 6.1.

Table 6.1 Valuation based on Leonora Mineral Resources

Deposit Value (A$M) Value (A$M)
Low High Preferred
Leonora gold project 3.0 13.4 7.5

6.2. EXPLORATION POTENTIAL VALUATION

In determining the value of the exploration potential of the Leonora gold project, Optiro considered:

  • the large, semi-contiguous, ~322 km[2] licence package located in the prospective Eastern Goldfields Province

  • the positive outcome of the PFS completed in March 2009 based upon A$1,250 pit shells

P a g e |25

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

  • untested potential along strike and structure from existing resources

  • positive results from the 2012 soil sampling program

  • that historic production is relatively minor

  • the existence of only wide spaced and shallow drilling in numerous prospective areas

  • a number of mining leases already in place in many prospective areas

  • that in recent years exploration has not been well funded and numerous targets remain untested.

Optiro considered the use of the Geoscientific rating method, but given the large number of small prospecting licences and mining leases in place, it is likely that this method would yield unreliable results. Optiro’s analysis of comparable transactions suggests that Yilgarn gold exploration projects similar to the Leonora gold project would typically attract market values in the range A$700/km[2] to A$30,000/km[2] , with a strong negative correlation between tenement size and unit value.

When considering the size, exploration stage and potential, the comparable transactions identified by Optiro imply that the Leonora gold project exploration potential would trade within a valuation range of A$2,500/km[2] to A$3,500/km[2] . The valuation of exploration potential at the Leonora gold project is considered to be between A$0.80 M and A$1.1 M, with a preferred value of A$0.9 M.

6.3. SUMMARY VALUATION

Optiro’s opinion of the fair market value of the Mineral Resources and exploration potential is summarised in Table 6.2.

Table 6.2 Valuation summary of Navigator’s Leonora gold project mineral assets based on relevant equity interests

Mineral asset Value(A$M)
Low High Preferred
Leonora Mineral Resources
Leonora Exploration Potential		 3.0
0.8		 13.4
1.1		 7.5
0.9
Total 3.8 14.5 8.4

In this report, Optiro has determined the current fair market value of the mineral assets within the Leonora gold project as at 9 May 2014. Optiro’s opinion of the fair market value of these assets is that it is within the range A$3.8 M to A$14.5 M, with a preferred value of A$8.4 M. The values assigned to these mineral assets are in nominal Australian dollars (A$) and were prepared with an effective valuation date of 9 May 2014.

7. DECLARATIONS BY OPTIRO

7.1. INDEPENDENCE

Optiro is an independent consulting and advisory organisation which provides a range of services related to the minerals industry including, in this case, independent geological services, but also resource evaluation, corporate advisory, mining engineering, mine design, scheduling, audit, due diligence and risk assessment assistance. The principal office of Optiro is at 50 Colin Street, West Perth, Western Australia, and Optiro’s staff work on a variety of projects in a range of commodities worldwide.

This report has been prepared independently and in accordance with the VALMIN and JORC Codes. The authors do not hold any interest in Kin Mining, Navigator, its associated parties, or in any of the mineral properties which are the subject of this report. Fees for the preparation of this report are

P a g e |26

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

being charged at Optiro’s standard rates, whilst expenses are reimbursed at cost. Payment of fees and expenses is in no way contingent upon the conclusions drawn in this report.

7.2. QUALIFICATIONS

The principal person responsible for the preparation of this report is Mr Jason Froud (Principal) of Optiro. Peer review was carried out by Mrs Christine Standing.

Mr Jason Froud [BSc (Hons), Grad Dip (Fin Mkts), MAusIMM] is a geologist with over 18 years experience in mining geology, exploration, resource definition, mining feasibility studies, reconciliation, consulting and corporate roles in gold, iron ore, base metal and uranium deposits principally in Australia and Africa. Jason has previously acted as a Competent Person and Independent Expert across a range of commodities with expertise in mineral exploration, grade control, financial analysis, reconciliation and quality assurance and quality control.

Mrs Christine Standing [BSc (Hons) Geology, Grad Dip (Min Econs), MAusIMM, MAIG] is a geologist with 30 years extensive experience in the exploration and mining industry. She has been consulting in resource estimation and generating independent experts’ reports since 1988, and her skills include resource evaluation studies, grade control and reconciliation work. Christine is a Principal for Optiro in Perth and is involved in independent technical reviews, audits and valuations of exploration assets.

8. REFERENCES

JORC Code, 2004. Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserve, prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists and Minerals Council of Australia (JORC), 2004 Edition.

McDonald Speijers, 2009. Mertondale Project Resource Models.

McDonald Speijers, 2009. Raeside Project Resource Models.

Navigator Resources Limited, 2009 to 2012. Various internal reports and ASX announcements.

  • Optiro, 2012. Valuation of the mineral assets of Navigator Resources Limited. Report prepared for Navigator Resources Limited. August 2012.

Runge Limited, 2009. Mineral Resource Estimate. Cardinia Gold Project, Western Australia.

  • Runge Limited, 2009. Mineral Resource Estimate. Helen’s and Rangoon Gold Deposits, Western Australia.

  • VALMIN, 2005. Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports, prepared by the VALMIN Committee, a joint committee of the Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists and Mineral Industry Consultants Association with the participation of the Australian Securities and Investment Commission, the Australian Stock Exchange Limited, the Minerals Council of Australia the Petroleum Exploration Society of Australia, the Securities Association of Australia and representatives of the Australian financial section, 2005 Edition.

P a g e |27

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

9. GLOSSARY OF ABBREVIATIONS AND TECHNICAL TERMS

Term Explanation
Abbreviations A$ – Australian dollars, BAC - Base Acquisition Cost, DCF - Discounted cashflow, °C - degrees Celsius, EL -
Exploration Licence, EV - Enterprise Value, g/t –grams per tonne, ha – hectare, JVA - joint venture
agreement, km – kilometre, km2– square kilometre, m – metre, m3– cubic metres, MA – million years,
mm – millimetre, M – million, ML – Mining Licence, Mt – million tonnes, NPV - Net Present Value, % -
percentage,RC - Reverse Circulation drilling,SG - specificgravity ,t – tonnes,US$– United States dollars
Chemical
elements		 Au – gold
airborne magnetic
survey		 A measurement of the magnetic susceptibility of rocks, measured from a plane in flight.
alteration A change in mineralogical composition of a rock through reactions with hydrothermal fluids, temperature or
pressure changes.
apatite Agroupofphosphate minerals,usuallyreferringto hydroxylapatite,fluorapatite,and chlorapatite.
Archaean Era of thegeological time scale containingrocksgreater than 2,500 millionyears old.
bedrock The solid rock lyingbeneath superficial material such asgravel or soil.
bulk density A property of particulate materials. It is the mass of many particles of the material divided by the volume
they occupy. The volume includes the space between particles as well as the space inside the pores of
individualparticles.
carbonate A class of sedimentary rocks composed primarily of carbonate minerals. The two major types are limestone
and dolomite.
classification A system for reportingMineral Resources and Ore Reserves accordingto a number of accepted Codes.
composite A sample comprised of a number of smaller samples.
concentrate Endproduct of the flotationprocess.
cut-off grade The grade that differentiates between mineralised material that is economic to mine and material that is
not.
diatreme A breccia-filled volcanic pipe that was formed by a gaseous explosion. Diatremes often breach the surface
andproduce a tuff cone,a filled relativelyshallow crater known as a maar,or other volcanicpipes.
diamond drilling Drillingmethod whichproduces a cylindrical core of rock bydrillingwith a diamond tipped bit.
dolomite A carbonate rock consistingof calcium magnesium carbonate.
electromagnetic
(EM) geophysical
surveys		 Survey over an area involving the measurement of alternating magnetic fields associated with currents
artificially or naturally maintained in the ground.
exploration
licence		 Rights to explore for minerals in an area, granted by a government to an individual/company.
fault A fracture in rock alongwhich displacement has occurred.
fold(folded) A flexure in rocks.
formation A defined interval of strata,often comprisingsimilar rock types.
gabbro A coarse-grained,intrusive mafic igneous rock chemicallyequivalent to basalt.
geological
domains		 Spatial domains created to represent areas with similar geological characteristics.
geophysical
survey		 A survey that measures the physical properties of rock formations, commonly magnetism, specific gravity,
electrical conductivityand radioactivity.
granite A coarsegrained intrusive felsic igneous rock.
granitoid A common and widely-occurringtype of intrusive,felsic,igneous rock.
greywacke A variety of sandstone generally characterized by its hardness, dark colour, and poorly-sorted, angular grains
ofquartz,feldspar,and small rock fragments set in a compact,clay-fine matrix.
hydrothermal The actions of hot water or theproductsproduced bythe action of hot water.
Indicated Mineral
Resource		 ‘An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which tonnage, densities, shape,
physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence.
It is based on exploration, sampling and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drillholes. The locations are too widely or
inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for
continuityto be assumed.’(JORC 2004)
Inferred Mineral
Resource		 ‘An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which tonnage, grade and mineral
content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed
but not verifiedgeological and/orgrade continuity. It is based on informationgathered through appropriate

P a g e |28

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Term Explanation
techniques from locations such as outcrops, trenches, pits, workings and drillholes which may be limited or
of uncertainqualityand reliability.’(JORC 2004)
intercept Mineralised intersection in a borehole.
intrusion The emplacement of magma intopre-existingrock.
iron oxides Minerals composed of iron and oxygen,e.g.,hematite,magnetite.
isoclinal A fold in which the limbs areparallel or near-parallel.
JORC Code The JORC Code provides minimum standards for public reporting to ensure that investors and their advisers
have all the information they would reasonably require for forming a reliable opinion on the results and
estimates beingreported. The current version is dated 2004.
laterite A soil residue composed of secondaryoxides of iron,aluminium or both.
mafic Silicate minerals, magmas, and volcanic and intrusive igneous rocks that have relatively high concentrations
of the heavier and darker minerals.
magnetic anomaly
(high/low)		 Magnetic signatures different from the background, made up of a high and a low (dipole) compared to the
average field.
Mesoproterozoic Ageological era that occurred between 1,600 Ma and 1,000 Ma ago.
metallurgy Study of the physical properties of metals as affected by composition, mechanical working and heat
treatment.
metamorphics Rocks that have undergone metamorphism.
Mineral Resource ‘A ‘Mineral Resource’ is a concentration or occurrence of material of intrinsic economic interest in or on the
Earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic
extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are
known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are
sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.’
JORC 2004.
mineralisation Theprocess bywhich a mineral or minerals are introduced into a rock,resultingin a valuable deposit.
mineralogical The studyof minerals: formation,occurrence, properties,composition and classification.
mining
lease/licence		 A right to operate a mine.
mudstone A detrital sedimentary rock composed of clay minerals similar to shale but lacking the well developed
bedding planes.
ordinarykriging Ageostatistical estimation method which relies upon a model of spatial continuityas defined in a variogram.
ore Mineralised material which is economicallymineable at the time of extraction andprocessing.
orogeny The process of mountain building, and may be studied as a tectonic structural event, as a geographical event
and a chronological event, in that orogenic events cause distinctive structural phenomena and related
tectonic activity,affect certain regions of rocks and crust and happen within a time frame.
oxidation,
oxidised		 The addition of oxygen to the metal ion, generally as a result of weathering.
Palaeoproterozoic The first of the three sub-divisions (eras) of the Proterozoic occurring between 2500 Ma and 1600 Ma (million
years ago).
pit optimisation A mathematicalprocess wherebyan open cut volume is optimised accordingto certain financial criteria.
pre-feasibility
study		 Preliminary assessment of a project to determine mining and processing methods, capital costs, logistics etc.
Prospecting
Licence		 Authorization granted by a government to an individual permitting the person to prospect for minerals.
Proterozoic Era of the geological time scale within the Precambrian eon containing rocks of approximately 1000 – 2500
millionyears old.
quartz Crystalline silica(SiO2).
radiometric
survey
(radiometrics)		 A survey pertaining to the measurement of geologic time by the study of parent and/or daughter isotopic
abundances and known disintegration rates of the radioactive parent isotopes.
recovery Metallurgical: The percentage of metal that can be recovered given the limitations of the processing
equipment.
reverse
circulation drilling
(RC)		 Drilling method that uses compressed air and a hammer bit to produce rock chips.
sediments Loose,unconsolidated deposit of debris that accumulates on the Earth’s surface.
shear Fault.
siltstone A type of sedimentaryrock where the individualparticles arepredominantlybetween <0.05 mm in size.

P a g e |29

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Term Explanation
sinistral Refers to the horizontal component of movement of blocks on either side of a fault or the sense of movement
within a shear zone.
stockwork A network of veins.
stream sediment
sampling		 Soil sampling of sediments from stream beds.
stripping Open pit mining term relating to the removal of uneconomic waste material to expose ore. Metallurgical
term relatingto the removal of copper from the organicphase in the solvent extractionprocess.
supergene A mineral deposit or enrichment formed near the surface.
top cut A process that reduces the effect of isolated (and possible unrepresentative) outlier assay values on the
estimation.
transitional Thepartiallyoxidised zone between oxidized and fresh material.
turbititic
greywackes		 A type of sandstone deposited by submarine currents.
ultramafic Igneous rocks with very low silica content (less than 45%), generally >18% MgO, high FeO, low potassium
and are composed of usually greater than 90% mafic minerals.
vein A tabular or sheet like bodyof one or more minerals deposited in openings of fissures, joints,or faults.
volcaniclastics Sedimentaryrocks derived from erosion of volcanic rocks.
volcanics Sequence of strata formed from an eruptingvolcano.

P a g e |30

Independent Valuation on the Leonora Gold Project

==> picture [108 x 47] intentionally omitted <==

Appendix A

Western Australian Gold Mineral Resource Transactions

P a g e |31

Valuation of the mineral assets of Navigator Resources Limited

==> picture [108 x 47] intentionally omitted <==

Project Date Buyer Seller Interest Consideration Gold (contained
ounces)		 Implied value
(A$/oz)
Vivien 9/02/2012 Ramelius Resources Ltd Agnew Gold Mining Company 100% $10,000,000 154,000 $64.90
Sandstone 14/08/2012 Southern Cross Goldfields Limited Troy Resources Limited 100% $5,000,000 720,000 $6.90
Andy Well 21/08/2012 Doray Minerals Ltd Murchison Resources Pty Ltd 20% $70,000,000 338,000 $207.10
Beavis 27/08/2012 Wiltshire Asset Management GBM Gold Ltd 100% $5,000,000 34,000 $148.40
Turner River 24/09/2012 Polymetals Mining Ltd Lansdowne Resources Pty Ltd 75% $2,330,000 298,000 $7.80
Peak Hill 27/09/2012 Resources and Investment NL Montezuma Mining Company Ltd 100% $2,900,000 547,000 $5.30
Goodenough 16/11/2012 Stratum Metals Ltd Resource Assets Pty. Ltd 100% $3,150,000 36,000 $87.50
Spargoville 20/12/2012 Mithril Resources Ltd KalNorth Gold Mines Limited 80% $2,500,000 87,000 $28.80
Goodenough 27/12/2012 Mountain Gold International Ltd Stratum Metals Ltd 40% $3,380,000 36,000 $93.80
Southern Cross 9/01/2013 St Barbara Hanking Gold Mining Pty Ltd 100% $22,500,000 2,405,000 $9.40
Frogs Leg 10/02/2013 La Mancha Resources Australia Pty Ltd Alacer Gold Corporation 49% $287,760,000 1,110,000 $259.20
Youanmi 12/02/2013 Infinity Fame Limited Apex Minerals NL 100% $15,500,000 953,000 $16.30
Wiluna 12/03/2013 Everprosperity Investment Co Ltd Apex Minerals NL 100% $4,600,000 2,800,000 $1.60
Comet Vale 20/03/2013 Crest Minerals Ltd Reed Resources Ltd 100% $6,000,000 211,000 $28.50
Drew Hill 28/05/2013 Exco Resources Ltd Polymetals Mining Ltd 50% $2,880,000 161,000 $17.90
Egerton gold 29/05/2013 Gascoyne Resources Limited Exterra Resources Ltd 100% $1,000,000 24,000 $41.70
Halleys East 9/07/2013 Beacon Minerals Ltd Duketon ConsolidatedPty Ltd 20% $3,250,000 69,000 $47.20
Adelaide Hills 19/07/2013 Terramin Australia Ltd Maximus Resources Ltd 100% $1,950,000 237,000 $8.20
Gympie 2/08/2013 Private company Fe Limited 100% $2,450,000 49,000 $50.10
Dohertys 5/08/2013 Classic Minerals Ltd Golden West Resources Ltd 100% $220,000 20,000 $10.90
Yilgarn South 22/08/2013 Gold Fields Ltd Barrick Gold Corporation 100% $300,000,000 1,800,000 $166.70
Birthday Gift 23/08/2013 Blue Tiger Mines Pty Ltd Barra Resources Ltd 100% $2,000,000 31,000 $65.40
Melrose and Darlot East 11/10/2013 Unspecified Korab Resources Ltd 100% $1,500,000 340,000 $4.40
Sabbath 25/10/2013 Unspecified Dourado Resources Ltd 100% $100,000 14,000 $7.20
Plutonic Dome 19/11/2013 Ord River Resources Dampier Gold Ltd 75% $8,000,000 683,000 $11.70
Norton 11/12/2013 Mantle Mining Corporation Ltd Norton Gold Fields Ltd 100% $330,000 108,000 $3.10

P a g e |32

Valuation of the mineral assets of Navigator Resources Limited

==> picture [108 x 47] intentionally omitted <==

Project Date Buyer Seller Interest Consideration Gold (contained
ounces)		 Implied value
(A$/oz)
Plutonic 23/12/2013 Northern Star Resources Barrick Gold Corporation 100% $25,000,000 1,750,000 $14.30
Comet Vale 6/02/2014 Private company Reed Resources Ltd 100% $2,000,000 211,000 $9.50
Wiluna 20/02/2014 Blackham Resources Ltd Apex Minerals NL (Receivers &
Managers Appointed)		 100% $50,000,000 2,800,000 $17.90
Lake Carey 13/03/2014 Fortitude Gold Pty Ltd Midas Resources Ltd 100% $330,000 405,000 $0.80
Bullabulling 17/04/2014 Norton Gold Fields Ltd Bullabulling Gold Limited 100% $23,960,000 3,753,000 $6.40

P a g e |33

Valuation of the mineral assets of Navigator Resources Limited

==> picture [109 x 47] intentionally omitted <==

Appendix B

Western Australian (Yilgarn) Gold Exploration Transactions

P a g e |34

Independent Valuation on the Leonora gold project

==> picture [78 x 34] intentionally omitted <==

Project Date Buyer Seller Interest Consideration **Area (km2) ** Implied value
**(A$/ km2) **
Cue 24/02/2012 Western Mining Pty Ltd Canyon Resources Ltd 100% $400,000 16 25,418
Kintore 14/05/2012 Phoenix Gold Ltd Private vendor 100% $800,000 7 119,766
McPhees 7/06/2012 Epic Resources Ltd (now Asct Resources Ltd) Red Field Pty Ltd 100% $31,000 6 4,799
Horse Well Extension 19/09/2012 Alloy Resources Limited Phosphate Australia Ltd 80% $115,000 56 2,068
Fraser Range 20/09/2012 AAQ Holdings (changing name to Fraser Range
Metals Group)		 Fraser Range Resources Pty Ltd 100% $1,800,000 1,296 1,389
Plumridge 20/09/2012 AAQ Holdings (changing name to Fraser Range
Metals Group)		 International Goldfields Limited 100% $2,300,000 831 2,768
Lucky Bay South 16/11/2012 Octagonal Resources Ltd Gold Attire Pty Ltd 20% $1,275,000 38 33,410
Hogans 16/11/2012 Octagonal Resources Ltd Gladiator Resources Ltd 30% $850,000 126 6,749
West River 16/11/2012 Octagonal Resources Ltd West River Pty Ltd 30% $850,000 97 8,781
Velvet Strike 16/11/2012 Octagonal Resources Ltd Velvet Strike Pty Ltd 30% $850,000 74 11,469
Lake Darlot 10/12/2012 Leopard Resources NL Interglobal Investments Ltd 100% $390,000 102 3,816
Juglah Rocks 16/01/2013 Ironstone Resources Ltd Classic Minerals Ltd 100% $750,000 135 5,556
Fortescue 22/01/2013 Northern Star Resources Limited Fortescue Metals Group Ltd 25% $8,000,000 6,635 1,206
Aurora Tank 15/02/2013 Apollo Minerals Ltd Marmota Energy 75% $1,200,000 48 25,000
East Yilgarn 15/03/2013 MRG Metals Ltd Sasak Resources Australia Pty Ltd 100% $11,220,000 2,000 5,610
Horseshoe Range 3/04/2013 Resource and Investment NL Naracoota Resources 100% $300,000 46 6,593
Lake Grace and Griffins
Find		 19/04/2013 Auzex Exploration Limited Panoramic Resources Ltd 60% $4,000,000 10,500 381
Mt Egerton and Gordon
fields		 30/04/2013 3D Resources Ltd Tech-Sol Pty Ltd 85% $529,412 19 27,348
Long Horse 1/05/2013 Carnavale Resources Limited Barrambie Minerals Limited 51% $490,196 255 1,923
Lynas Find 7/05/2013 Alloy Resources Limited Trafford Resources 51% $1,274,510 28 46,239
Mt Barrett and Roe Hills
Nickel		 14/05/2013 Mining Projects Group Limited Oroya Mining Limited 100% $200,000 509 393
Tick Hill 17/06/2013 Superior Resources Ltd Diatreme Resources Ltd 50% $1,700,000 4 435,897
Plumridge 21/06/2013 Fraser Range Resources Pty Ltd International Goldfields Limited 60% $1,666,667 831 2,005
Spargoville 1/07/2013 Ero Mining Ltd
(changed name to Tychean Resources Ltd)		 Ramelius Resources 100% $400,000 114 3,497

P a g e |35

Independent Valuation on the Leonora gold project

==> picture [78 x 34] intentionally omitted <==

Project Date Buyer Seller Interest Consideration **Area (km2) ** Implied value
**(A$/ km2) **
Spargoville (Wattle Dam
Mine)		 1/07/2013 ERO Mining Ltd
(now called Tychean Resources)		 Ramelius Resources Ltd 100% $400,000 114 3,497
Valley Floor Prospect 4/07/2013 Ero Mining Ltd
(changed name to Tychean Resources Ltd)		 Valley Floor Resources Pty Ltd 100% $150,000 6 27,273
Yundamindera 9/07/2013 Legacy Iron Ore Ltd Ling prospecting syndicate 60% $383,333 51 7,516
Gidgee Prospect 12/08/2013 Gateway Miniing Ltd Panoramic Resources Ltd 70% $1,714,286 87 19,597
Cuddingwarra 12/08/2013 Gleneagle Gold Ltd Plasia Pty Ltd 100% $20,000 115 174
Mt Jewell, Wills Creek,
Royal Tasman and Nickel
First		 13/08/2013 InterMet Resources Ltd Lancaster Resources Pty Ltd 100% $250,000 82 3,058
Grafters area 17/10/2013 Excelsior Gold Limited Fe Limited and Cazaly Resources
Limited		 100% $250,000 18 13,889
Cue 28/11/2013 Parker Resources NL Unspecified 60% $100,000 40 2,508
Miclere 19/12/2013 Plenty Gold Pty Ltd Rift Valley Resources 100% $395,000 111 3,559
Viking 3/03/2014 Genesis Minerals Ltd AngloGold Ashanti Australia Ltd 100% $50,000 970 52
Mystique 7/03/2014 Parmelia Resources Ltd Black Fire Minerals Ltd and Entrée
Gold Inc		 100% $312,957 205 1,529
Turner River 25/03/2014 Rugby Mining Ltd De Grey Mining Ltd 80% $2,625,000 701 3,745
Tandarra 31/03/2014 Catalyst Metals Ltd Navarre Minerals Ltd 51% $5,882,353 69 85,318
Yellow Jack and Devils
Mountain		 14/04/2014 Laura Exploration Pty Ltd Eclipse Metals Ltd 100% $125,000 167 750
Mystique 22/04/2014 Black Fire Minerals Ltd Entrée Gold Inc 40% $75,000 205 366

P a g e |36

More from PATRONUS RESOURCES LIMITED

Interim / Quarterly Report 2026
Apr 28
Interim / Quarterly Report 2026
Apr 28
M&A Activity 2026
Apr 21
Interim / Quarterly Report 2026
Mar 11
Regulatory Filings 2026
Feb 26
Regulatory Filings 2026
Feb 26
Regulatory Filings 2026
Feb 26
Regulatory Filings 2026
Feb 26
Interim / Quarterly Report 2026
Jan 28
Interim / Quarterly Report 2026
Jan 28
View all filings →