PREDICTIVE DISCOVERY LIMITED — Interim / Quarterly Report 2013

Jul 30, 2013

31[st] July 2013

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ASX Announcement

Quarterly Report for the Period Ended 30[th] June 2013

Highlights:

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

EXPLORATION

□ Eastern Burkina Faso Project:

• Power auger drilling near the high grade Bongou gold discovery identified new bedrock anomalies peaking at 4.8g/t Au . The biggest anomaly is larger than Bongou itself.

• Preliminary metallurgical testwork on composite samples from four prospects yielded excellent gold recoveries :

ASX: PDI

• Cyanide leaching of ground RC chips to assess CIL potential gave recoveries of:

Issued Capital: 234M shares Share Price: 2.1 cents

• Bongou Prospect – 94%

• Solna Prospect – 96%

• Tambiri Prospect - 92%

Market Capitalisation: $5M Cash (at 30 June 2013): $1.3M

• Dave Prospect – potential for heap leach ore treatment indicated in test work that generated a relatively high gold recovery of 89%

• Power auger drilling on the Tyekanyebi and Boussouma permits revealed new bedrock gold anomalies . The Tyekanyebi anomaly is 1km long, open to the NE and along strike from encouraging competitor RC drill results on an adjacent permit.

Directors

• Cote D’Ivoire new Projects:

Phillip Harman Non-Exec Chairman

• Agreement to earn 90% signed on highly prospective 400 km[2] Kokumbo permit

Paul Roberts Managing Director

• PDI owned 390 km[2] Ferkessedougou permit granted

• Three more permits, totalling 920 km[2] under application

Phil Henty Non-Executive Director

• Planned September Quarter Exploration Program:

c

• Burkina Faso data analysis during wet season including Dave Prospect geological study

• Commencement of separately funded, reconnaissance field programs on new ground in Cote D’Ivoire

CORPORATE

• $1.3M in cash at 30[th] June 2013 and no debt.

• Board reduced to three and ongoing focus on costs

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INTRODUCTION

PDI’s major country focus is Burkina Faso, West Africa where it has established a well-qualified Burkina-based exploration team and a large regional tenement package mainly in the north east of the country (Figure 1) covering 1,605km[2] .

PDI’s tenement holding covers approximately 100 km of strike length in the Samira Hill greenstone belt in eastern Burkina Faso (the Bonsiega permit group, Figure 1). This belt hosts the 2.5 million ounce Samira Hill gold mine across the border in Niger and contains numerous active artisanal gold mine sites along its length. The Bangaba permit covers 10km of strike of the nearby Sebba Belt, including the largest known artisanal workings in that belt. PDI now owns 100% or rights to earn 95 to 100% of all its permits in Burkina Faso.

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Figure 1: Locality of PDI permits, showing location of principal prospects explored by PDI in the March Quarter. Smaller yellow dots are drilled prospects which have yielded ore grade and width gold intercepts.

PDI has discovered gold mineralisation on multiple prospects in its Eastern Burkina Faso project area during the past two years (e.g. Bongou, Dave, Laterite Hill, Solna, Tambiri and Fouli), all of which may contribute to a potential future major gold mining operation. In particular, PDI’s discovery of high grade gold mineralisation at Bongou has opened up a significant new exploration opportunity for the Company, both at Bongou itself and along an additional 43km of unexplored Bongou fault zone within PDI’s permits.

In the past nine months, PDI has been focusing its attention on Prospects which offer the best combination of grade, continuity, size potential and width. Bongou itself and targets along strike

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from there meet all these criteria. In addition, the Company has continued to carry out low cost assessments of other project areas in order to continue to build the prospect pipeline.

PROJECTS

Burkina Faso

Bonsiega Permit Group

Bongou Prospect

Background

The high grade Bongou gold discovery is located within the Laterite Hill Gold Field in Eastern Burkina Faso (Figure 1). It underlies artisanal workings forming an irregular open pit approximately 150m long and 50m wide. Exploration by PDI has included rock chip sampling, trenching and completion of 14 RC holes in 2012 and 2013 which obtained very encouraging drill intersections including:

• 48m at 4.3g/t Au from 34m

• 26m at 6.9g/t Au from 111m

• 20m at 4.8g/t Au from 70m

• 10m at 7.4g/t Au from 47m

Gold mineralisation is contained within an intensely silicified and quartz veined, pyrite-bearing microgranite intrusion. The higher grades are located in a single steeply dipping zone located against the granite’s contact with a gabbro.

RC drilling was planned to follow up these encouraging drill intersections plus the new bedrock gold geochemical anomalies (see below) but was deferred until after the current wet season owing to the early onset of heavy rains in the area.

Power Auger Geochemical Drilling

This drilling program was designed to follow up ground magnetic and induced polarisation survey results obtained during the March Quarter and April.

358 power auger drill holes, totalling 1,210m were drilled in the immediate Bongou Prospect area during the June Quarter. Samples were collected at the interface between the overlying cover and the weathered bedrock and analysed by for gold by AAS at SGS in Ouagadougou. This drilling identified two new, significant gold anomalous areas , one west of the Bongou artisanal workings and a second larger anomaly 400m north-west of the workings (Figure 2). The latter is 300m long and up to 100m wide with a peak value of 4.8g/t Au . Sericite-altered granite containing disseminated pyrite was observed in some of the samples which penetrated through to weathered bedrock within this anomaly, including the highest grade sample, indicating that the target Bongou-style

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mineralisation may be present. Limited trenching was carried out on the larger anomaly but was terminated before the target zones could be tested effectively owing to heavy rains.

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Figure 2: Power auger gold geochemistry contour plan. Note size of Bongou gold mineralised zone for comparison with size of the discovered gold anomalies.

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Figure 3: Regional geological map of the area near Bongou showing location of the two Bassieri target zones (red dashed line ellipses) 4km and 10km north-east of the Bongou artisanal workings.

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Power auger drilling was also carried out on the new Bassieri permit on targets located approximately 4km and 10km north-east of the Bongou Prospect (Figure 3). A total of 170 holes were drilled, totalling 1,267m. Samples were collected at the interface between the overlying cover and the weathered bedrock and analysed by for gold by AAS at SGS in Ouagadougou. The program was designed to test a series of structures observed in magnetic data. Unfortunately, the highest priority structures could not be tested owing to thick, wet alluvial cover and/or difficult access. The power auger will return after the wet season once the ground has dried out to complete this program.

Dave Prospect Geological Study

Re-logging of the Dave Prospect RC drill chips by an MSc student from the Camborne School of Mines in the United Kingdom commenced in June 2013. This work forms part of a larger geological study designed to integrate all of the past work on this large gold mineralised system. Apart from the extensive past drilling programs, the past work has included geological mapping, airborne magnetics, bedrock geochemical drilling, whole rock analysis using a hand-held XRF machine, trenching and inhole photographic imaging. The result of this study will be a 3D interpretation of the geology and mineralisation of this complex but very extensive zone which might then be used for the calculation of a JORC Resource estimate.

Bira Permit

The Bira permit covers an area of 21km[2] in the northern part of the Bonsiega block of tenements (Figure 1). This permit was granted during the March Quarter.

The area was explored by Anglo American through its subsidiary Anmercosa in the late 1990’s. PDI holds a database of Anmercosa information including soil geochemistry and RC drill data from the Bira permit. The reported RC drill data includes a series of very encouraging gold intersections from a series of holes extending over more than 1km of strike. Better intercepts included 14.5m at 3.1g/t from 1m, 13m at 2.5g/t Au from 3m, 10m at 2.7g/t Au from 14m. 23m at 1.2 g/t Au from 30m and 21m at 1.7g/t Au from 22m.

Power Auger Drill Program

77 holes, totalling 936m, were drilled during the June Quarter. Samples were collected at the interface between the overlying cover and the weathered bedrock and analysed by for gold by AAS at SGS in Ouagadougou. As at Bassieri, unseasonal early rains prevented completion of the majority this program because of the prevalence of thick, wet alluvium in the target areas. The highest priority interpreted structure was only intersected by two lines, one of which encountered a 50m wide anomalous zone peaking at 104ppb Au . The planned program will be completed in the next field season after the ground dries out.

Tyekanyebi Permit

A modest power auger program was completed on this permit during the June Quarter. The sampling was carried out north-east of and along strike from the Tyena Prospect on the Gandhi permit owned

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by Golden Rim Resources (ASX: GMR). In April, 2013, GMR reported a series of RC drill intersections, including:

• GRC001 – 6m at 6.9g/t Au from 59m

108 power auger holes were drilled, totalling 301m. Samples were collected at the interface between the overlying cover and the weathered bedrock and analysed by for gold by AAS at SGS in Ouagadougou. This work identified a 1km long gold anomaly with a peak value of 210ppb Au , which is open to the north-east (Figure 4).

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Figure 4: Contoured Tyekanyebi power auger bedrock geochemistry results shown on satellite imagery background. Reported locations of Golden Rim Resources’ recent RC drill collars are south of the boundary (thick black line) between PDI’s Tyekanyebi Permit and GMR’s Gandi Permit.

Boussouma Permit

A modest power auger program was also completed on Boussouma in June. The sampling was designed to follow up anomalous results obtained in the 2011-12 field season. 97 power auger holes were drilled, totalling 674m. Samples were collected at the interface between the overlying cover and the weathered bedrock and analysed by for gold by AAS at SGS in Ouagadougou. This work obtained encouraging results, peaking at 519 ppb Au , on two lines 700m apart . Additional power auger drilling is required to determine whether the anomalous results form part of the same gold mineralised zone.

Metallurgical Test Work

A program of preliminary metallurgical test work was carried out with the aims of:

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• providing an initial indication of gold recoveries by standard CIL treatment of ore from PDI’s higher grade prospects - Bongou, Solna and Tambiri , and

• gaining a preliminary understanding of the potential for gold recovery by heap leaching of the moderate grade Dave Prospect mineralisation.

Four samples were submitted for metallurgical test work, each weighing 20kg. Each sample was made up of seven two kilogram samples. All samples were obtained from RC drill holes.

The test work was carried out at SGS’s Perth laboratories under the supervision of Coffey Mining. A mineralogical study was also carried out by Roger Townend and Associates.

Bongou Prospect

The composite sample was obtained from seven RC drill holes. All of the sampled intervals were of primary (not oxidised) mineralisation. A 500g screen fire assay of the composite sample at SGS in Perth gave a head grade of 2.92g/t Au and a multi-element ICP analysis indicated low levels of potentially deleterious elements (e.g. arsenic and antimony).

The sample was ground to 75 microns and subjected to a standard cyanide leach test over 72 hours. Gold recovery was 94% at the end of the test with 90% recovered in the first four hours (Figure 5). Cyanide and lime consumption were 2.0kg/t[1] and 0.3kg/t respectively. Cyanide consumption was not optimised and is expected to decrease considerably in future testing when oxygen levels are increased to the levels expected in a commercial CIP plant.

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Figure 5: Graph of gold recovery vs. time – Bongou Prospect composite sample.

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1 kilograms per tonne of ore

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Solna Prospect

RC and diamond drilling at Solna has produced a number of high grade intercepts including:

• 7m at 12.8g/t Au from 117m

• 2m at 55.8g/t Au from 65m

• 6m at 20.0g/t Au from 40m

• 2m at 20.3g/t Au from 70m

• 5.6m at 15.6g/t Au from 205.4m

Gold mineralisation consists of siliceous and sericitic quartz veined sheared granodiorite with minor pyrite.

The composite sample was obtained from seven RC drill holes. All samples consisted of primary mineralisation. A 500g screen fire assay of the composite sample at SGS in Perth gave a head grade of 7.65g/t Au and a multi-element ICP analysis indicated low levels of potentially deleterious elements. The sample was ground to 75 microns and subjected to a standard cyanide leach test over 72 hours. Gold recovery was 96% at the end of the test with 91% recovered in the first four hours. Cyanide and lime consumption were 1.9kg/t and 0.3kg/t respectively. Again, cyanide consumption was not optimised and is expected to decrease considerably in future test work.

Tambiri Prospect

RC and diamond drilling at Tambiri has produced a number of broad gold intercepts containing high grade intervals, including:

• 5m at 17g/t Au from 96m including 1m at 71.7g/t Au

• 8m at 7.3g/t Au from 58m including 1m at 51.0g/t Au

• 9.3m at 4.9g/t Au from 62.7m including 1.7m at 21.6g/t Au

• 19m at 2.6g/t Au from 55m including 1m at 22.4g/t Au

Gold mineralisation consists of quartz veined and metamorphosed mafic volcanics with minor pyrite and pyrrhotite. The highest grade mineralisation contains minor amounts of sphalerite (zinc sulphide), galena (lead sulphide) and traces of chalcopyrite (copper iron sulphide).

The composite sample was obtained from six RC drill holes. All sampled intervals were of primary mineralisation. A 500g screen fire assay of the composite sample at SGS in Perth gave a head grade of 3.55g/t Au and a multi-element ICP analysis indicated low levels of potentially deleterious elements. The sample was ground to 75 microns and subjected to a standard cyanide leach test over 72 hours. Gold recovery was 93% at the end of the test with 85% recovered in the first four hours. Cyanide and lime consumption were 2.0kg/t and 0.3kg/t respectively. Again, cyanide consumption was not optimised and is expected to decrease in future test work.

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Dave Prospect

Drilling at Dave Prospect in 2011 and 2012 revealed widespread gold mineralisation in multiple lodes over a strike length of approximately 5km. The mineralisation has been tested to depths of 60 to 70m with the majority of intercepts being in weathered volcanic rocks. The Dave mineralisation is lower grade than the above three Prospects with average grades expected to be in the range of 1 to 2g/t Au. Consequently, the preliminary metallurgical test work on Dave was designed to assess the possibility of using the low unit operating cost heap leach gold recovery method.

A composite sample was obtained from seven RC drill holes. All of the samples consisted of strongly weathered and oxidised volcanic rocks. A 500g screen fire assay of the composite sample at SGS in Perth gave a head grade of 1.45g/t Au and a multi-element ICP analysis indicated low levels of potentially deleterious elements apart from minor arsenic (580ppm).

The sample was composed largely of fine material, having been converted to powder by the RC drilling process. It was therefore taken without any further grinding and subjected to an intermittent bottle roll in a weak cyanide solution for a period of ten days. As with the other three samples, most gold was extracted very quickly with 70% gold recovery achieved after just 4 hours and 81% gold recovery after one day. At the end of the test 89% of the gold had been recovered which is relatively high for the heap leach gold extraction method . Had the material been ground to 75 microns, a slightly higher recovery may well have been achieved. The rapid early gold extraction and the high final percentage recovery figure suggests that heap leach gold extraction might be possible on this mineralisation . Cyanide consumption was low at just 0.3kg/t with lime consumption at 2.9kg/t. Addition of lime is not expected in any future heap leach operation, however, because the use of cement in the agglomeration process will serve the same purpose as lime (i.e. maintenance of an elevated pH).

The Dave oxidised gold mineralisation contains clay which means that agglomeration will be required for any successful future heap leach operation. Agglomeration is a process by which dried ground ore is mixed with cement and water to produce small permeable balls. Use of agglomeration ensures that an entire heap is permeable, thereby maximising gold extraction. To assess the likely cement consumption in agglomeration of the Dave ore, a series of percolation tests were carried out using different quantities of cement in the agglomerated balls. These tests suggested that acceptable percolation rates would be achieved with approximately 20kg of cement per tonne of ore. While this is probably too high, the cement consumption in a future heap leach operation can reasonably expected to be significantly lower than 20kg/t because the weathered rock will not be ground as finely as the powdered RC chips were used in this test work. In general, the coarser the ore is, the lower the amount of cement which is required.

Metallurgy - Discussion

While not being definitive, this metallurgical test work suggests that the primary gold mineralisation from four of PDI’s important Prospects in eastern Burkina Faso can be treated successfully with standard CIP processing methods. In addition, further assessment of the potential for recovering gold by heap leach from oxidised ore from the Dave Prospect is warranted.

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25-30% of the gold in the Bongou, Solna and Tambiri samples reported in the +75 micron fraction. This coarser gold fraction may be recoverable by gravity pre-treatment.

Planned Exploration Activities September 2013 Quarter – Burkina Faso

Only limited field work will be possible during the wet season. Some geological mapping may be carried out within the Bonsiega Permit Group in accessible areas.

The Dave Prospect geological study will be completed. In addition, interpretative work and reporting will be carried out using data acquired during 2012-13 throughout the Burkina Faso tenement package in order to plan the field program for the next field season, which will commence in the December Quarter.

Cote D’Ivoire

Background

Detailed work on Cote D’Ivoire data sets over the past two to three years has led PDI to identify a portfolio of high priority prospects and targets in Cote D’Ivoire. As a result, the Company has been working on securing of up to five exploration permits in the country, covering a total area of 1,700 km[2] . Of these two permits, Kokumbo and Ferkessedougou, have been approved by the Council of Ministers and a further three are under application (Figure 6). Grant of the three applications to PDI is not guaranteed.

Kokumbo (PDI earning 90%)

The permit is held by local company Ivoir Negoce and covers an area of 400 km[2] in southern Cote D’Ivoire (Figures 6 and 7). Located 30km south of the country’s administrative capital, Yamoussoukro, and about 40km north of Newcrest’s operating Bonikro Gold Mine, it is serviced by a bitumen road and a power line. The area is covered by forested rolling hills and extensive lateritic cover.

The town of Kokumbo, near the centre of the permit, services a substantial population of artisanal miners who are working on numerous prospects throughout the area. These prospects consist of both quartz vein mine operations and processing of gold mineralised laterite.

The permit lies within the volcano-sedimentary Oume-Fetekro belt in an area of complex geology (Figure 7). The three principal gold prospects on the permit are known as Kokumbo, Aouadia (Figure 7) and Kpolessou. All three sites contain quartz vein-hosted gold mineralisation in multiple vein orientations. Host rocks include mafic volcanics, black shale and granite. Currently, the most active area of artisanal workings is at Aouadia.

Kokumbo has a long history of artisanal mining dating back to before colonial times in the late 19[th] century. Commercial scale mining was carried out by various parties in from early in the twentieth century until 1953. Since then all mining in the area has been by artisanal miners.

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Figure 6: Locality map of PDI’s interests in Cote D’Ivoire. Notes: (1) Green areas signify volcanic and sedimentary rocks, (2) PDI permits that have been approved by the Council of Ministers are in brown and the permit applications are in blue, (3) Red squares are operating gold mines and magenta dots are plus 1 million ounce gold deposits (e.g. Agbaou and Sissingue) of which one, Agbaou, is currently under construction, (4) Boundiali is along strike from Resolute’s Syama operating mine and Perseus’s proposed Sissingue operation.

In the 1980’s Cote D’Ivoire’s government geological agency, SODEMI, carried out sampling, pitting, ground geophysics and drilling. A resource estimate was made on alluvial and colluvial gold deposits at Kokumbo with average grades reported to exceed 3g/t Au.

Between 2002 and 2007 Equigold NL carried out soil sampling, aeromagnetic surveys, and RAB and RC drilling over parts of the current permit. Published Equigold quarterly reports indicate that gold soil geochemical anomalies and some gold drill intercepts were obtained including one of 12m at 2.5g/t Au from surface. At the time, most of the Aouadia Prospect area was held separately and was only covered with limited soil sampling and a ground magnetic survey.

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Figure 7: Geology and location of reported and/or observed gold artisanal mining sites. Note: geology obtained from a Government geological map.

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Figure 8: Surface artisanal workings on the Aouadia Prospect, Kokumbo Permit.

In June 2013 PDI reached agreement with the local owner of the permit application, Ivoir Negoce. Key terms of the agreement were as follows:

• PDI can earn 90% through expenditure of US$2 million within 4 years.

• Minimum expenditure commitment before withdrawal US$300,000.

• PDI to make cash payments over three years totalling US$375,000 as follows:

• US$25,000 on receipt of the signed Presidential Decree awarding the permit.

• US$50,000 on the first anniversary

• US$100,000 on the second anniversary

• US$200,000 on the third anniversary

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In addition, PDI will issue to Ivoir Negoce US$25,000 worth of PDI shares on receipt of the Presidential Decree.

• PDI to carry Ivoir Negoce’s 10% share of expenditure until the decision to mine at which timer Ivoir Negoce must decide whether it will pay back its 10% share of expenditure after earn-in or convert to a 3.5% NSR. PDI can purchase up to 2% of the above NSR (leaving Ivoir Negoce with 1.5%), at any time at a price of US$1 million for each 1%.

The permit was approved for grant by the Cote D’Ivoire Council of Ministers in June 2013 and issue of a Presidential Decree granting the permit is expected shortly.

Ferkessedougou Permit (PDI 100%)

The Ferkessedougou permit is located in northern Cote D’Ivoire (Figure 6) and covers approximately 390km[2] . It was among the highest priority areas highlighted by PDI’s Predictore® analysis of the country and is reported to contain a series of gold occurrences.

This permit was also approved for grant by the Cote D’Ivoire Council of Ministers in June 2013 and the Presidential Decree granting the permit was received in July 2013.

Other Permit Applications

Three other applications covering approximately 920km[2 ] are currently being considered by the Cote d’Ivoire Ministry of Mines. Of these, two - Boundiali and Kounahiri – are PDI applications. The third, Komboro, is an application made by a third party with which PDI negotiated an agreement in 2012. Should all these permits be granted the Company would then hold 1,710 km[2] of highly prospective gold exploration ground in Cote D’Ivoire.

Planned Exploration Activities September 2013 Quarter – Cote D’Ivoire

Work will commence with data compilation and reconnaissance exploration activities. The wet season in Cote D’Ivoire over the September Quarter will limit ground exploration. During this time PDI will acquire and compile historical exploration and mine data on all prospects with its principal focus on the Kokumbo ground. When field work becomes possible, geological mapping, surface geochemical and ground magnetic surveys are planned.

Funding

PDI plans to fund its work in Cote D’Ivoire through a separate subsidiary company which will have beneficial ownership of the Company’s Ivorian subsidiary. PDI is investigating various options to fund this vehicle at a modest level and has had positive preliminary discussions with various parties.

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Australia

Victoria - Gold (PDI 100%)

No activity was carried out on the one small, granted exploration licence held currently by PDI in Victoria during the Quarter. A decision was made to surrender that EL in July 2013.

CORPORATE

At 30[th ] June 2013, PDI held cash and term deposits of $1.3 million and no debt.

Two of PDI’s five Directors, Dr Bobby Danchin and Dr Tom Whiting resigned from the Board during the June Quarter as part of a substantial cost-reduction initiative. The Board thanks Dr Danchin and Dr Whiting for their considerable efforts and valuable input since the inception of PDI.

Predictive Discovery Limited (PDI) was established in late 2007. The Company is focused on exploration for gold in West Africa. PDI has a distinctive technological capability, known as Predictore [TM] , which is designed to increase drill targeting efficiency thereby reducing ore discovery cost. 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 open-pittable 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 and tenement applications in Cote D’Ivoire.

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 2004 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 Managing Director Tel: +61 8 9216 1020 Email: paul.roberts@predictivediscovery.com

Ian Hobson Company Secretary Tel: +61 8 9216 1020 Email: ianhobson@bigpond.com

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