PREDICTIVE DISCOVERY LIMITED — Interim / Quarterly Report 2014

Jan 29, 2015

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30[th] January 2015

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Quarterly Report for the Period Ending 31[st] December 2014

ASX

Announcement

EXPLORATION

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

Bonsiega Project, Burkina Faso

• Exploration program near Bongou underway.

• Renewals, for three years, of Madyabari, Sirba and Fouli permits received.

Côte d’Ivoire

ASX: PDI

• Field visit and work program planning with new Joint Venture partner, Toro Gold Limited.

Issued Capital: 651M shares

Planned March Quarter Exploration Program

Share Price: 0.6 cents

Burkina Faso

Market Capitalisation: $3.9M

• Staged programs of ground geophysics and geochemical drilling of new and existing targets in and around Bongou.

• Commencement of RAB and/or RC drilling to follow up best results.

Directors

Phillip Jackson Non-Exec Chairman

Côte d’Ivoire

Paul Roberts Managing Director

• Commencement of Toro Gold exploration program.

Phil Henty Non-Executive Director

CORPORATE

• Fully underwritten Rights Issue and Placement totalling $1.86M completed.

Tim Markwell Non-Executive Director

• $1.5M cash at 31[st] December 2014 and no debt.

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INTRODUCTION

PDI’s major country focus is Burkina Faso, West Africa where it has established an effective Burkina-based team and a large regional tenement package mainly in the north-east of the country covering 1,605km[2] (Figure 1). The Company also holds four granted exploration permits in Cote D’Ivoire totalling 1,533km[2] (Figure 6) and an Exploration Licence in Victoria (Figure 7). PDI is now focused on exploration near the Bongou deposit in Burkina Faso to expand the resource inventory there. All other tenements have either been farmed out or are on offer to potential joint venture partners.

The Company’s tenement holding covers approximately 100km 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 deposit across the border in Niger and contains numerous active artisanal gold mine sites along its length. PDI now owns 100%, or has the rights to earn 95% to 100% of all its permits in Burkina Faso. PDI has discovered gold mineralisation on multiple prospects in Eastern Burkina Faso area during the past three years (e.g. Bongou, Dave, Laterite Hill, Solna and Tambiri, Figure 1).

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Figure 1: Locality map of PDI permits in eastern Burkina Faso, showing location of Bongou Prospect and other gold mineralised prospects (yellow dots).

PROJECTS

Burkina Faso

Bonsiega Project

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PDI’s focus in Burkina Faso is on the high-grade Bongou gold discovery (100% PDI, see Figure 1) and the surrounding area. The Company completed a formal Mineral Resource Estimate on Bongou during the September Quarter which resulted in 184,000oz of gold in the Inferred and Indicated Mineral Resource categories with an average grade of 2.6g/t Au, including 136,000oz at 3.8g/t Au (ASX release dated 4 September, 2014). This work demonstrated that:

• The Bongou deposit is intrinsically high grade, because:

• There is very little difference in contained ounces between the 0.4g/t Au cut-off and the 0.8g/t Au cut-off grades, and

• Over 70% of the resource ounces are retained when the cut-off grade is raised from 0.8g/t Au to 2.0g/t Au, with a high average grade of 3.75g/t Au.

• The bulk of the estimated resources are contained in one mineralised granite body, which is thick in the near surface and appears to taper to the east.

• The shape of the mineralisation lends itself to a simple open pit mining operation, with highgrade mineralisation in the near surface position, which would suggest the possibility of early strong cash flow in a future mining operation.

• Gold grades are associated with pyrite-bearing altered granite, which is very visibly distinct from the adjacent low grade gabbro, suggesting that dilution can be minimised quite easily by standard grade control practice.

• Previously reported metallurgical work on a composite sample of primary gold mineralisation from Bongou gave a 94% gold recovery from a standard 75 micron grind, 72 hour cyanidation test (ASX release dated 14th May 2013[1] ) suggesting that gold recoveries from mining this deposit would be very high.

Bongou-Focused Exploration

PDI reviewed its exploration strategy in Burkina Faso during September and October, 2014 and decided to focus all its efforts on finding sufficient high grade gold resources near Bongou to support a profitable gold mine development.

Nearly 100 exploration targets near Bongou (Figure 2) have been identified through a rigorous ranking process focused on prospects with Bongou-like geological and geophysical characteristics. Of these, 12 have been prioritised for follow-up activities in the current field season (Figure 2). Most of the prioritised targets are prospects traversed by strong east-west magnetic linear features, which also characterise both Bongou and known Bongou-style mineralisation within several kilometres of Bongou. Some targets have pre-existing drill intercepts (e.g. 24m at 2.1 g/t Au[2] at Prospect 71) but most are untested by previous drilling of any kind. An undrilled example is

1 This information 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.

2 This drill result was reported to the ASX in the March 2012 Quarterly Report. This information 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.

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target 92 (Figures 2 and 3) which contains a 3km long zone of surficial gold workings associated with a large east-west structure .

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Figure 2: Target location map – SW Bonsiega permit group, Eastern Burkina Faso. Planned work programs between January and June 2015 will assess the targets shown as red and magenta dots. Some work may also be carried out later in the field season on some of the yellow dot targets. More detail for Target 92 is shown in Figure 3.

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Figure 3: Target 92: a high priority target on a large east-west structure with surficial artisanal gold workings extending over more than 3km. PDI’s interest in this target was greatly increased by the recent recognition of the association between Bongou-style mineralisation and east-west oriented structures interpreted from magnetic data. No drilling of any kind has yet tested this large target.

Field work near Bongou began in November 2014. Two magnetic surveys and one small soil sampling program completed during the Quarter. The magnetic survey on target 58 (Figures 2 and

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• 4) identified a strong structural intersection, which will be tested by power auger in the March Quarter.

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Figure 4: Geophysical image of the target 58 locality derived from wavelet analysis processing of close spaced ground magnetic data collected during the December Quarter. The image shows an interpreted dolerite dyke offset by the Bongou Fault, which passes through the Bongou gold deposit 12km to the southwest. This target location also coincides with a large east-west linear in aeromagnetic imagery, which is similar in size to the east-west magnetic linear through the Bongou deposit.

Permit Renewals

Renewals, for three years, of the Madyabari, Sirba and Fouli exploration permits (Figure 5) were granted late in the December Quarter. The current power auger drilling program was contracted out immediately after the permit grant documents were received.

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Figure 5: Locality of renewed permits on geology background

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Planned Exploration Activities March 2015 Quarter – Burkina Faso

The planned March Quarter field program is as follows:

• Ongoing detailed ground magnetics surveys on selected targets.

• A staged program of power auger (ongoing) drilling.

• Follow-up of the highest priority targets with either RAB or RC drilling either late in the March Quarter or early in the June Quarter.

Côte d’Ivoire

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Figure 6: Locality map of PDI’s interests in Cote D’Ivoire.

Cote D’Ivoire Background

PDI holds four highly prospective exploration permits in Cote D’Ivoire: Kokumbo, Ferkessedougou, Boundiali and Kounahiri, covering a total area of 1,533km[2] (Figure 6). These permits were selected by a country-wide analysis of geophysical and geological data using the same Predictore® methods which were used to select the Company’s ground in Burkina Faso.

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PDI’s exploration to date has included geological mapping, ground magnetics surveying and bulk leach extractable gold (BLEG) stream sediment sampling. High priority exploration targets have been identified on all four exploration permits.

Joint Venture with Toro Gold Limited

PDI announced to the ASX that it had signed a Heads of Agreement (HOA) with Toro Gold Limited (Toro) on the Company’s entire Cote D’Ivoire ground holding on 22[nd] September 2014. Under the terms of this agreement, Toro can earn a 51% interest in Predictive Discovery Cote D’Ivoire SARL (PDCI), which holds the Company’s interest in the four permits, by spending US$1 million.

Toro performed due diligence on PDCI’s assets during the December Quarter. Finalisation of a full joint venture agreement commenced early in the March Quarter and is expected to be completed in February 2015.

Planned Exploration Activities March 2015 Quarter – Côte d’Ivoire

Field work is planned to commence in February 2015. The initial work program is expected to consist mainly of geological mapping and soil sampling on high priority targets.

Australia

Cape Clear EL 5434, Victoria

Exploration Licence 5434 is located west of Ballarat in Victoria (Figure 7). It was granted to PDI in August 2013. The area is highly prospective for shallowly concealed Stawell-style gold mineralisation. PDI has previously carried out geological mapping and a gravity survey over part of the EL area.

Execution of a binding joint venture agreement with Cape Clear Minerals Pty Ltd (CCM) on PDI’s Cape Clear Exploration Licence in Victoria was announced to the ASX on 22[nd] September 2014. CCM can earn 65% equity in the licence by spending $500,000 on exploration including at least 1,000m of drilling in the first 12 months.

CCM plans to undertake a geophysical survey on the Exploration Licence during the March Quarter.

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Figure 7: Cape Clear Exploration Licence Locality Plan

CORPORATE

Cash Position

PDI held $1,513,000 in cash at the end of the December Quarter with no debt.

Rights Issue and Placement

On 1[st] October, PDI announced it would undertake a fully underwritten pro-rate nonrenounceable rights issue with eligible shareholders able to subscribe for three new fully paid ordinary shares for every five shares held at 0.7 cents per share. PDI’s largest shareholder, Aurora Minerals Limited (ASX: ARM) fully underwrote the Rights Issue, which raised $1,708,000. The Company also completed a placement to sophisticated and professional investors to raise $150,000 via issue of 18.75 million fully paid ordinary shares at 0.8 cents per share. The net amount raised, excluding share issue costs, was $1.68 million.

Following these two capital raisings, ARM’s holding in PDI has risen to 43.9%.

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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 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 in Côte D’Ivoire covering a total area of 1,533 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 Ian Hobson Managing Director Company Secretary Tel: +61 8 9216 1020 Tel: +61 8 9388 8290 Email: Email: paul.roberts@predictivediscovery.com ian.hobson@bigpond.com

TENEMENT STATUS – DECEMBER QUARTER, 2014

Name	Number	Location	Area (sq. km)	PDI equity	Changes in holding during December Quarter, 2014
Fouli	arrêté 2011- 11- 351/MCE/SG/DGMGC	Burkina Faso	186.2	100%	Three year renewal granted
Tantiabongou	arrêté 2007- 019/MCE/SG/DGMGC	Burkina Faso	93.9	100%	None
Sirba	arrêté 2011-11 - 353 /MCE/SG/DGMGC	Burkina Faso	136.9	100%	Three year renewal granted
Madyabari	arrêté 2011- 11 - 352/MCE/SG/DGMGC	Burkina Faso	171.9	100%	Three year renewal granted
Tyekanyebi	Arrêté 2010- 202/MCE/SG/DGMGC	Burkina Faso	242	100%	None
Tamfoagou	353 (arrêté 2005- 061/MCE/SG/DGMGC)	Burkina Faso	238	100%	None

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Tangagari	arrêté 2009- 068/MCE/SG/DGMGC	Burkina Faso	127.5	Earning 95%; current equity 0% (until final cash payment is made)	None
Aoura	arrêté 2008- 023/MCE/SG/DGMGC	Burkina Faso	25	Earning 95%; current equity 0% (until final cash payment is made)	None
Boussouma	Arrete 2011- 059/MCE/SG/DGMGC	Burkina Faso	116	Earning 95%; current equity 0% (until final cash payment is made)	None
Bangaba	Arrete 2009- 100/MCE/SG/DGMGC	Burkina Faso	128	Earning 95%; current equity 84%	Application for 3 year renewal in progress
Kogodou South	2011- 299/MCE/SG/DGMGC	Burkina Faso	44.6	Earning 100%; current equity 0% (until final cash payment is made)	None
Bira	2013- 33/MCE/SG/DGMGC	Burkina Faso	21	100%	None
Basieri	2013- 16/MCE/SG/DGMGC	Burkina Faso	73.5	100%	None
Kokumbo	Mining exploration permit No. 307	Cote D'Ivoire	400	Earning 90%	Agreement signed with Toro Gold Limited (Toro) of the UK on 21stOctober 2014 whereby Toro can earn a 51% interest in the company which has a right to earn a 90% interest in this permit, Predictive Discovery Cote D’Ivoire SARL, by spending US$1 million
Ferkessedoug ou	Mining exploration permit No. 310	Cote D'Ivoire	387	100%	Agreement signed with Toro Gold Limited (Toro) of the UK on 21stOctober 2014 whereby Toro can earn a 51% interest in the company which owns this permit, Predictive Discovery Cote D’Ivoire SARL, byspendingUS$1 million

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Boundiali	Mining exploration permit No. 414	Cote D'Ivoire	399	100%	Agreement signed with Toro Gold Limited (Toro) of the UK on 21stOctober 2014 whereby Toro can earn a 51% interest in the company which owns this permit, Predictive Discovery Cote D’Ivoire SARL, by spending US$1 million
Kounahiri	Mining exploration permit No. 317	Cote D'Ivoire	347	100%	Agreement signed with Toro Gold Limited (Toro) of the UK on 21stOctober 2014 whereby Toro can earn a 51% interest in the company which owns this permit, Predictive Discovery Cote D’Ivoire SARL, by spending US$1 million
Cape Clear	EL 5434	Victoria, Australia	160	100% (Cape Clear Minerals Pty Ltd JV partner and earning in to 51% by expenditure of $250,000)	None

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