PREDICTIVE DISCOVERY LIMITED — Capital/Financing Update 2014

Mar 31, 2014

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1[st] April 2014

Predictive Discovery Finds Widespread Gold Mineralisation near Bongou

ASX

Announcement

Predictive Discovery (ASX: PDI) is pleased to announce new gold results from drilling on and near its Bongou Prospect in Burkina Faso:

Predictive Discovery Limited is a gold exploration company with strong technical capabilities focused on its advanced gold exploration projects in West Africa.

• Bongou W1

• 13m at 3.7g/Au in a trench 250m west of Bongou, with 5.3m @ 1.5g/t (5.3g/t Au peak) in a shallow diamond drill hole beneath the trench.

• Bongou W2

• 12m at 1.4/t Au from 14m, including 2m at 4.3g/t Au in a single RC hole 600m north-west of Bongou.

ASX: PDI

• Bongou E1

• Anomalous gold values including 3m at 1.6g/t Au in initial RC drilling 700m east of Bongou.

Issued Capital: 388M shares Share Price: 1.3 cents

• All results from the recent drilling program at Bongou have been received.

• PDI will now examine Bongou’s open-pit potential and accelerate exploration at nearby targets.

Market Capitalisation: $5M

Cash (at 1 March 2014): $2M

Mr Paul Roberts, the Company’s Managing Director said:

“These results show that the Bongou high-grade discovery is far from an isolated occurrence.

Directors

Average true widths intersected from 13 holes drilled in the core mineralised zone at Bongou are 31.6m with average grades of 2.9 g/t Au*, most with a significant high-grade component. We will now assess whether to proceed with a resource estimation that may support open-pit mining.

Phillip Harman Non-Exec Chairman

Paul Roberts Managing Director

Occurrences of granite and sheared gabbro/granite within 1km of the Bongou Fault are highly prospective. We have already identified multiple targets with these characteristics and we expect to find more as we drill under the thin cover over the next few months. First results from this bedrock drilling will be released in April."

Phil Henty Non-Executive Director

Tim Markwell Non-Executive Director c

* See Figure 3 for the intercepts from which these figures were obtained (within the darker red nearvertical band). Other than the two drill holes reported in this release, the relevant drill results were reported to the ASX on 2nd December 2013, 16[th] December 2013 and 20[th] March, 2014.

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Figure 1: Interpreted geological map of the area surrounding Bongou, highlighting multiple unexplored granite bodies, and showing the outline of existing and planned power auger drilling and trenching. Note that most of this area is under thin cover and that more prospective granite bodies may be discovered by drilling through cover. The plus 40ppb Au anomalies outlined on the map will all be followed up with trenching in the coming months.

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2a
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2b
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Figure 2: Diamond core photos showing the similarities of the mineralisation and alteration in the new Bongou W1 discovery (2a: BNGRD013R - 5.3g/t Au over 0.9m) and the high-grade Bongou deposit (2b: BNGRD012 - 8.3g/t Au over 1m), which are located only 250m apart. The bronze coloured mineral is coarse-grained pyrite, which is closely associated with high grade gold values in the main Bongou deposit.

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Drilling and Trenching Program near Bongou

PDI carried out a small program of trenching and drilling in the area surrounding the Bongou Prospect in February-March 2014 (Figure 6). This was completed in conjunction with the combined reverse circulation (RC) and diamond drilling (DD) program which tested extensions to the Bongou Prospect, reported on 20[th] March, 2014[1] .

The aim of the trenching and drilling was to obtain an initial test of several bedrock gold anomalies discovered in 2013.

Drill hole collar along with trench locations are shown in Figure 1. Samples were analysed at the SGS laboratory in Ouagadougou. Assay results are provided in Table 1. Details of the drilling, trenching, sampling and quality control methods used are provided in the notes which follow Table 1.

Trench Results – Bongou W1 Prospect

A 30m-long trench was completed 250m west of the Bongou Prospect[2] (Figure 1) beneath a power auger anomaly that had a peak value of 833ppb Au. The trench encountered sheared gabbro and minor quartz veining with minor pyrite. Channel sampling of the trench wall yielded 13m of 3.7g/t Au , with a peak value of 13.1g/t Au over 1.5m .

All of the best gold grades in the main Bongou mineralised zone have been found in altered granite. The presence of such strong gold grades in sheared gabbro is therefore a highly significant new result in the exploration of the Bongou area, opening up the potential for both gabbro- and granite-hosted gold deposits.

Drill Results

Bongou Prospect W1 Drilling

Two drill holes, totalling 169.5m, were completed beneath the Bongou W1 Prospect trench. The first hole, BNGRC017, intersected gold anomalous values over a 19m interval of weathered, sheared gabbro, averaging 0.1g/t Au. The contrast between the high gold grades at surface and these low grade values just 20m below suggests that there could be gold depletion in the weathered gabbro.

A combined RC/DD hole was subsequently drilled beneath BNGRC017 to test primary mineralisation. This hole, BNGRD013R, intersected sheared gabbro along with thin zones of siliceous alteration and coarse pyrite similar to mineralisation seen at the main Bongou Prospect

1 See PDI release to the ASX entitled “Predictive Discovery extends Bongou Prospect with wide gold intercepts” dated 20[th] March 2014.

2 See PDI release to the ASX entitled “Gold Target Expanded at Bongou Prospect” dated 26th July, 2013.

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but quite unlike any alteration seen in drill hole BNGRC017 or the overlying trench. Gold intercepts included:

• 5.3m at 1.45g/t Au from 65.9m, including a peak value of 5.3g/t Au over 0.9m (see Figure 2)

• 2.9m at 1.21g/t Au from 81.1m

This repetition of Bongou-style mineralisation with no surface expression directly along strike from Bongou itself shows that blind zones of similar style mineralisation are present in the area.

Bongou W2 Prospect RC drilling

A single RC hole, BNGRC018, 72m deep, was drilled beneath a trench completed in the December Quarter. This trench, which was largely in altered granite containing minor disseminated pyrite, included a 13m zone with an average grade of 0.5g/t Au[3] . BNGRC018 tested below that zone and intersected strongly altered granite including 12m at 1.44g/t Au from 14m including 2m at 4.3g/t Au

This very encouraging single hole tested a bedrock gold anomaly which is approximately 300m long and just 600m from Bongou and clearly requires a follow-up program.

This drill result also showed that surface sample gold values obtained from weathered granite can be deceptively low relative to gold grades at shallow depths below surface. The same observation has been made at Bongou. The 2013 drilling showed that modest channel sample gold values, averaging only 1g/t Au, in the artisanal open pit were underlain at shallow depths by much higher gold grades.

Bongou E1 Prospect

Two RC holes, totalling 168m, were completed to test across a 65m wide power auger anomaly with a peak value of 196ppb Au. They were located along strike from and 700m east of the Bongou Prospect[4] (Figure 1). The drilling obtained two gold intercepts in sheared gabbro:

• BNGRC019: 7m at 0.64g/t Au from 58m

• BNGRC020: 3m at 1.64g/t Au from 80m

These results are further evidence of widespread gold mineralisation at Bongou which is now known to extend over at least 1.5km of strike.

RC/DD Drilling at Bongou

The remaining results from the February-March drilling program into the main prospect at Bongou have now been received. The two holes reported here, BNGRD011 and BNGRD014, were

3 See PDI December 2013 Quarterly Report to the ASX, dated 31st January 2014

4 See PDI release to the ASX entitled “Gold Target Expanded at Bongou Prospect” dated 26th July, 2013.

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designed to help define the geological interpretation of the eastern and western edges of the high grade gold mineralisation in order to assist with a possible future resource calculation.

Locations of the two principal intercepts reported here are shown in long section on Figure 3. Drill hole collar positions are provided in Figure 4. Samples were analysed at the SGS laboratory in Ouagadougou. Assay results are provided in Table 1. Details of the drilling and quality control methods used are provided in the notes which follow Table 1.

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Figure 3: Long Section through the mineralised body oriented at 065 degrees, showing true width drill intercepts of both the total gold mineralised body at a 0.5g/t Au cut-off and true widths of the higher grade hanging wall mineralisation calculated at a cut-off grade of 3g/t Au. Results of the low grade gold mineralisation were calculated at an approximate 0.2g/t Au cut-off grade. Data for these results are provided in Table 1 and PDI’s ASX releases of 2[nd] December 2013 (“Thick, high-grade gold intercepts at Bongou Prospect”), 16[th] December 2013 (“68m at 3.2g/t Au incl. 8m at 10g/t Au at Bongou”) and 20[th] March 2014 (“Predictive Discovery extends Bongou Prospect with wide gold intercepts”).

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The western hole, BNGRD011, intersected 8m (5.4m true width) at 2.44g/t Au from 179m.

The eastern hole, BNGRD014, intersected a series of mineralised positions in granite interleaved with sheared gabbro, including the following:

• 2.1m (1.9m true width) at 1.26g/t Au from 206m

• 4m (3.8m true width) at 0.84g/t Au from 215m

• 19.6m (18.4m true width) at 1.14g/t Au from 235m, including:

• 3m (2.8m true width) at 1.74g/t Au from 235m, and

• 2.9m (2.8m true width) at 5.68g/t Au from 251.7m

The proportion of gabbro within the granite in BNGRD014 was greater than in adjacent holes but was broadly in keeping with the “inter-fingering” between granite and gabbro interpreted in this part of the deposit, and seen also in hole BNGRD012 (see also ASX release entitled “Predictive Discovery extends Bongou Prospect with wide gold intercepts” dated 20[th] March, 2014).

Follow-Up Program

The February-March RC/DD drill program on the main Bongou mineralised zone was aimed at identifying potential open pittable high grade resources. With the completion of this drilling, PDI’s attention has now turned to the series of gold anomalies shown on Figure 1, close to the Bongou discovery.

PDI’s recent work has also shown us that a combination of granite and sheared gabbro/granite within 1km of the Bongou Fault is highly prospective. The Company has already recognised multiple targets containing these characteristics near Bongou and expects to find more as bedrock drilling through the thin cover continues in the months ahead.

The next phase of exploration at Bongou will consist of:

• Trenching of the all gold geochemical anomalies near Bongou (Figure 1) in April-May

• Power auger bedrock drilling aimed at discovering additional Bongou-style prospects in a 2km radius of the main Bongou mineralised zone (Figures 1 and 5) in April.

First assay results from the trenching and bedrock drilling are expected in late April.

PDI’s Directors are extremely pleased with the success of the open pit-focused drill programs at Bongou. Since commencement in late 2012, this targeted campaign has consistently delivered high grade, broad width intercepts at low cost. The February-March RC/DD program draws to a close our immediate Bongou deposit drill program and the company will now assess all the Bongou deposit drill results to determine whether we have enough data at this stage to complete a resource calculation.

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Figure 4: Drill hole locality plan, Bongou Prospect. Gold intercepts are all shown as estimated true widths. “Total” intercepts were calculated across the width of the gold mineralisation, irrespective of the width of internal waste zones, at a cut-off grade of 0.5g/t Au. Data for this diagram are provided in Table 1 and PDI’s ASX releases dated 2[nd] December, 2013 (“Thick, high-grade gold intercepts at Bongou Prospect”) and 16 December 2013 (“68m at 3.2g/t Au incl. 8m at 10g/t Au at Bongou”).

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Figure 5: Regional geological map of the area near Bongou, showing location of Bongou itself (and Figure 1) along with two target zones (red dashed line ellipses) 4km and 10km north-east of Bongou as well as the large Dave Prospect.

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Figure 6: Locality map of PDI permits in eastern Burkina Faso, showing location of Bongou Prospect.

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Predictive Discovery Limited (PDI) was established in late 2007 and listed on the ASX in December 2010. The Company is focused on exploration for gold in West Africa. The Company’s major focus is in Burkina Faso, West Africa where it has assembled a substantial regional ground position totalling 1,605km[2] and is exploring for large openpittable gold deposits. Exploration in eastern Burkina Faso has yielded a large portfolio of exciting gold prospects, including the Bongou trend where a series of high-grade gold drill intercepts have been obtained recently. PDI also has interests in a strategic portfolio of tenements in Cote D’Ivoire covering a total area of 1534 km[2] .

Competent Persons Statement

The exploration results reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr Paul Roberts (Fellow of the Australian Institute of Geoscientists). Mr Roberts is a full time employee of the company and has sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Roberts consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

For further details please contact:

Paul Roberts Nathan Ryan Managing Director NWR Communications Tel: +61 8 9216 1020 Tel: +61 420 582 887 Email: Email: paul.roberts@predictivediscovery.com nathan.ryan@nwrcommunications.com.au

TABLE 1 – DRILL AND TRENCH RESULTS

	Details of drill hole collars or centre point of trench intercept	Details of drill hole collars or centre point of trench intercept	Details of drill hole collars or centre point of trench intercept	Details of drill hole collars or centre point of trench intercept	Details of drill hole collars or centre point of trench intercept		0.5 g/t cut-off	0.5 g/t cut-off	0.5 g/t cut-off	3.0 g/t cut-off	3.0 g/t cut-off	3.0 g/t cut-off	Comments
Hole No. or Trench No.	UTM East	UTM North	RL	UTM Azimuth (°)	Hole dip (°)	Hole or trench depth (m)	From (m)	Interval (estimated true width in brackets)	Au g/t	From (m)	Interval (estimated true width in brackets)	Au g/t
BNGTr05	207184	1422069	274	167.5	n/a	2	n/a	13 (11.1)	3.71	n/a	3 (2.6)	9.01	TRENCHsamples
BNGRD011	207404	1422242	278	151	-64	220.3	179	8 (5.4)	2.44	183	2.3	3.44	All DD samples
BNGRD013R	207181	1422118	276	167.5	-60	103.5	65.9	5.3 (4.0)	1.45
BNGRD013R	207181	1422118	276	167.5	-60	103.5	81.1	2.9 (2.2)	1.21				All DD samples
BNGRD014	207402	1422340	286	133	-60	280	215	4 (3.8)	0.84				DD samples

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BNGRD014	207402	1422340	286	133	-60	280	235	3 (2.8)	1.74				"Total" intercept: 1.14
	207402	1422340	286	133	-60	280	251.7	2.9 (2.8)	5.68	251.7	2.9 (2.8)	5.68	g/t Au average from
													235m to 254.6m (19.6m
BNGRD014													down-hole or 18.4m
													true width). All DD
													samples.
	207186	1422075	274	167.5	-60	66	NSR			NSR			RC samples. Anomalous
													gold values from 17 to
													35m average 0.14g/t Au.
BNGRC017													Possible depletion of
													gold values in weathered
													gabbro relative to high
													goldgrades at surface.
BNGRC018	206909	1422477	276	167.5	-60	72	14	12 (8)	1.44	14	2 (1.5)	4.32	RC samples
	208264	1422298	272	168	-60	78	58	7 (5.3)	0.65
BNGRC019
													RC samples
	208253	1422342	272	168	-60	90	80	3 (2.3)	1.64	3 (2.3)	1.64
BNGRC020
													RC samples

Section 1: Sampling Techniques and Data

Section 1: Sampling Techniques and Data	Section 1: Sampling Techniques and Data	Section 1: Sampling Techniques and Data
Criteria	JORC Code Explanation	Commentary
Sampling Technique	Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as downhole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.	The sampling described in this report refers to reverse circulation (RC) drill samples, diamond drill core samples and trench channel samples. RC drilling was used to obtain 1 m samples from which 2 kg was pulverised to produce a 50 g charge for fire assay. Core sample intervals were selected to minimise geological variability within each sample (i.e. seeking to maximise the uniformity in lithology, alteration or sulphide mineralisation in each interval). The RC samples were reduced to a 2kg sample by riffle splitting on site. The diamond core samples were cut in half longitudinally using a diamond saw. Measures were taken to avoid wet RC drilling and the drilling method was changed from RC to diamond coring at or before the point when the air pressure from the RC rig was incapable of keeping the samples dry. Trench samples were collected from channel samples obtained from weathered rock at the base of one of the trench walls. Sampling intervals were selected to minimise geological variability within each sample (i.e. seeking to maximise the uniformity in lithology, alteration or sulphide mineralisation for each interval). Re-sampling of trench samples indicated significant variability in the same location, leading to an inference of coarse gold. Check assays using a screen fire method showed that higher grades are found in the +106 micron fraction, indicating that coarse gold is indeed present. The drill and trench samples are judged to be representative of the rock being drilled because representative sub-sampling of both the RC and diamond core samples was achieved and follow up check assaying using an appropriate method was used when evidence of coarse gold was found. The trench mineralisation is hosted by weathered, sheared gabbro. Elsewhere, almost all of the gold is hosted in fresh altered granite where detailed petrological work has failed to find any coarse gold.
Drilling	Drill type (eg core, reverse circulation, open- hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube,depth of diamond tails,	RC drilling was carried out using a 4.5 inch or 5.5 inch face sampling hammer. RC precollars varied from 20 to 200m long and the diamond drill tails were up to 221.5m long. The diamond core size was NQ apart from up to 3m of HQ core which was drilled immediately after the changeover from RC to diamond coring. The diamond core was oriented using a core orientation device.

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	face- sampling bit or other type, whether core is oriented and if so,bywhat method,etc).
Drill Sample Recovery	Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	Sample recovery was estimated for all samples. RC recoveries were estimated by measuring the volume of material in each bag relative to the known volume of the drill hole. Core samples were measured from core block to core block once core had been placed in the core trays. Sample recovery was maximised in the RC drilling by use of a face sampling hammer and by converting to diamond coring when it was no longer possible to drill dry samples. A petrological study of the mineralisation and the absence of any high-grade gold value above 32.9g/t Au in the altered mineralised granite throughout the database both point to the gold grainsize typically being below 50 microns which would also mitigate against sampling not being representative.
Logging	Whether core and chip samples have been geologically and geotechnical logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean/Trench, channel, etc) photography. The total length and percentage of the relevant intersections logged.	Detailed geological logging has been carried out on all drill samples, recording lithology, weathering, structure, (including orientation where the core is oriented), veining and/or mineralisation, grainsize and colour. Logging of sulphide mineralization and veining is quantitative. RQDs are recorded routinely. Photography of the cut core is not yet complete but will be carried out during the field season. No judgement has yet been made by independent qualified consultants on whether the geological and geotechnical logging has been sufficient to support Mineral Resource estimation, mining and metallurgical studies. A geological map of the trench reported here has been prepared.
Sub-Sampling Technique and Sample Preparation	If core, whether cut or sawn and whether quarter, half or all core taken. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. Whether sample sizes are appropriate to the grain size of the material beingsampled.	Core samples were cut in half longitudinally with a diamond core saw with one half submitted for assay and the remaining half retained in core trays which are stored at PDI's field camp in Gayeri. Core sampling intervals were defined by variations in lithology and mineralogy but are typically 0.5-1.0m. An on-site riffle splitter was employed to produce a 2kg assay sample for submission to SGS. Either one or two reference riffle-split 2kg samples are retained from the RC samples for future re-assay or metallurgical testwork. The sampling (and analytical) methods were appropriate for the style of mineralisation, especially as no visible gold has been observed and previous petrological studies indicate that the typical gold grain size is less than 50 microns. Trench channel samples were submitted in their entirety to the analytical lab, where they were dried, crushed and riffle split to produce representative samples.

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Quality of Assay Data and Laboratory Tests	The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	All samples were assayed for gold by 50g fire assay at the SGS laboratory in Ouagadougou, Burkina Faso. The technique is considered a total analysis. Check screen fire assays were employed on selected, higher grade trench samples where coarse gold was suspected. No geophysical tools, spectrometers or handheld XRF instruments have yet been employed although XRF scanning of some of the core using a hand held XRF instrument is planned. Unlabelled standards were submitted with all assay batches, generally at the rate of one standard every 15thsample, whether from RC or diamond drilling. Blanks were also submitted with RC sample batches. Where any problems with bias or accuracy, especially outside of a +/- 10% envelope is observed, samples are re-assayed. External laboratory checks are planned but have not yet been carried out.
Verification of Sampling and Assaying	The verification of significant intersections by either independent or alternative company personnel. The use of twinned holes The verification of significant intersections by either independent or alternative company personnel. Discuss any adjustment to assay data	No holes have yet been twinned. Field data collection is undertaken by the company’s Burkina Faso-based geologists. All results are checked by Mr Paul Roberts, the company’s Managing Director.
Location of Data points	Accuracy and quality of surveysused tolocate drill holes (collar and down- hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Specification of the grid system used Quality and adequacy of topographic control	Collar and trench locations were located using a hand held GPS with a location error of +/-3m. Collar RLs were established by interpolation between surveyed points established for an earlier geophysical survey with an estimated elevation error of less than 2m. Collar coordinates listed in the table are for Universal Transverse Mercator (UTM), Datum WGS 84, Zone 31 - Northern Hemisphere.
Data Spacing and Distribution	Data spacing for reporting of Exploration Results Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. Whether sample compositing has beenapplied	The drill intercepts in the main Bongou mineralised zone are irregularly spaced but approximately 40 x 40m. No judgement has yet been made by an independent qualified consultant on whether the drill density is sufficient to calculate a Mineral Resource. RC holes in prospects near Bongou have only been tested by one or two RC or RC/DD holes each. Sample compositing was applied only to samples thought to be un- mineralised. Sample composites were mostly 8m.
Orientation of Data in Relation to Geological Structure	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	All drill holes and trenches reported here were drilled approximately at right angles to the strike of the target mineralization. The mineralisation appears to be a disseminated type with no evidence yet identified for ore distribution being in any orientation other than parallel to strike of the mineralised body.

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Sample Security	The measures taken to ensure sample security	The large RC sample bags are stored at a sample farm on PDI’s exploration permits. These are guarded at all times by local individuals hired for this purpose. 2kg reference samples are stored at the company’s field camp in the town of Gayeri, which is guarded 24 hours per day. Pulp samples are retained at company premises in Ouagadougou which are also guarded24 hours perday.
	Section 2 Reporting of Exploration Results
Mineral Tenement and Land Tenure Status	Type, reference name/number, location and ownership including agreements or material issues with third partiessuch asjoint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	The Bongou Prospect lies entirely within the Madyabari Permit (Arrêté N°2011 /11/352/MCE/SG/DGMGC) which covers an area of 172 sq km. There are no overriding reserves or national parks over this permit. In a future mining operation, the Government of Burkina Faso is entitled to a 10% share of any mine along with a 3-5% ad valorem royalty, the percentage of which is determined by the gold price prevailing at the time. The company believes that (a) the permit is securely held as it has complied with all the necessary government requirements and (b) the permit can be replaced in due course by a mining licence as long as a feasibility study shows that a future mine would be viable and that company completes meets the Government’s legal requirements, which it fully intends to do. The Madyabari permit was initially acquired, along with three other nearby permits (Sirba, Fouli and Tantiabongou), by Birrimian Pty Ltd (Birrimian), which is a British Virgin Islands-registered company now 100% owned by PDI. The original owners of Birrimian subsequently entered into an agreement with Eldore Mining Corporation Limited (Eldore) through which Eldore could acquire the Birrimian permits through a series of payments and a commitment to issue US$2 million worth of Eldore stock on completion of a Bankable Feasibility Study on one or more ore deposits within the Birrimian permits. PDI initially acquired an interest in Madyabari along with the three other Birrimian permits via a joint venture with Eldore which commenced in January 2010. In 2012, Eldore changed its name to Stratos Resources Limited (ASX: SAT) after which PDI bought out SAT’s residual interest (in late 2012). In acquiring Birrimian, PDI also inherited the one unfulfilled commitment in the original Eldore agreement with the original Birrimian shareholders. This commitment has now been agreed to mean that PDI will issue US$2 million worth of PDI shares after PDI accepts an offer of finance for development of a mine on the Birrimian permits at its sole discretion) following completionofaBankableFeasibility Study.
Exploration Done by Other Parties	Acknowledgment and appraisal of exploration by other parties.	Past exploration over the Bongou prospect consisted of wide spaced soil sampling and an aeromagnetic survey. Previous explorers did not recognise the significance of the Bongou mineralisation, which appears to have been discovered by artisanal miners.
Geology	Deposit type, geological setting and style of mineralisation.	Mineralisation in the main Bongou deposit and the nearby Bongou W2 prospect consists of an intensely altered (silica-albite) and quartz veined granite body which lies sandwiched between a sheared gabbro on the mineralisation’s northern margin and a basalt body (partly sheared) on its southern margin. The gabbro and basalt contacts are approximately parallel to one another. Pyrite is disseminated throughout the mineralisation with higher gold grades apparently associated with coarse grained pyrite. The quartz veins contain some carbonate and the mineralisation contains minor magnetite and some sericite in fractures. The main Bongou mineralised zone lies within a large structure which is approximately 43km long within three contiguous permits owned 100% by the company (Madyabari, Bassieri and Tamfoagou). The mineralisation is interpreted as a variant of the orogenic gold mineralisation style, which is known throughout the Birimian Belt of West Africa. Mineralisation in the Bongou W1 and Bongou E1 prospects is hosted in sheared gabbro.
Drill Hole Information	A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: • easting and northing of the drill hole collar • elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar	Intercepts that form the basis of this announcement are tabulated in Table 1 within the body of the announcement and incorporate Hole Number, Easting, Northing, Dip, Azimuth, Depth and Assay data for mineralised intervals. An appropriate locality map also accompanies this announcement.

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	• dip and azimuth of the hole • down hole length and interception depth • hole length • If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.
Data Aggregation Methods	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearlystated.	Over 95% of the gold mineralised material (with grades exceeding 0.5g/t Au) was sampled in intervals of one meter or less. No top cuts have been applied to exploration results as the maximum value in the entire assay database is 32.9g/t Au and only 4 samples contain more than 20g/t Au. For the 0.5g/t Au cut-off calculations, up to 3m (down-hole) of internal waste is included. For the 3g/t Au cut-off calculations, up to 2m (down-hole) of internal waste is included. For the “total intercept” average grade recorded for hole BNGRD014 in the Comments column, the average grade is calculated with a cut- off grade of 0.5 g/t Au and up to 13.7m of internal waste (down-hole). Mineralised intervals are reported on a weighted average basis.
Relationship Between Mineralisation Widths and Intercept Lengths	These relationships are particularly important in the reporting of Exploration Results If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width notknown’).	True widths have been estimated for all intercepts based on the assumption that the gold mineralisation is oriented parallel to the hanging wall and foot wall contacts. True widths in the RC holes are less reliably estimated because of the lack of oriented core and paucity of outcrop in the vicinity.
Diagrams	Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.	An appropriate plan and long section has been included in the text of this document.
Balanced Reporting	Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	All intercepts containing average gold grades exceeding 2g-m (e.g. 1 g/t Au over a down-hole width of 2m) are reported. Values for the lower grade intercept in hole BNGRC017 are also recorded. Holes in which no significant result has been obtained are also routinely reported by PDI.
Other Substantive Exploration Data	Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations;geophysical	Preliminary metallurgical test work has been completed on one composite sample of RC chips and reported previously (ASX release entitled “Excellent Gold Recoveries from Metallurgical Test Work” on 14thMay 2013); a gold recovery of 94% was recovered by CIL testwork using a standard 75 micron grind. Additional metallurgicaltestwork is plannedin 2014.

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survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. Further Work The nature and scale of Further drilling is planned to test for more Bongou-style mineralised bodies. planned further work (eg tests The first phase of that drilling will be carried out with a power auger rig, for lateral extensions or large followed by trenching and then by RC drilling. scale step out drilling. Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

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