S2 RESOURCES LTD — Capital/Financing Update 2018

Mar 26, 2018

ASX Announcement

Tuesday 27[th] March 2018

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SWEDEN DRILLING UPDATE

Key points

• 8 diamond holes completed at the Storgroven prospect

• Assays received for first 3 holes – best intercept being 15.7m @ 0.8g/t gold and 6g/t silver from 25m downhole

• Historic drill data received for Aliden prospect (450 metres along strike from Storgroven) includes intercepts of up to 23.4m @ 1.5g/t gold and 41g/t silver

• Mineralization at Storgroven and Aliden associated with lenses of massive and stringer sulphides within broader alteration zones within prospective horizon

• Two new EM conductors identified to the south of and subparallel to drilling at Storgroven – not yet tested

• Drilling underway at Onusberget prospect pending receipt of remaining assays from Storgroven

S2 Resources Ltd (“S2” or the “Company”) advises initial diamond drilling of the Storgroven prospect has identified a VMS-prospective horizon containing lenses of massive and stringer sulphides strongly anomalous in precious metals. Results have been received for three of the eight holes drilled at Storgroven, with the best intercept being 15.7m @ 0.8g/t gold and 6g/t silver. Historical drilling at the nearby Aliden prospect has defined similar mineralization with intercepts of up to 23.4m @ 1.5g/t gold and 41g/t silver. An electromagnetic (EM) survey has also identified two conductors immediately to the south of and subparallel to the recent drilling at Storgroven that have not yet been tested. Assays are pending for a further five holes and the rig is currently drilling two lines of reconnaissance holes at the Onusberget prospect.

Storgroven/Aliden

Results have been received for three of the eight holes drilled as a preliminary test of the Storgroven base of till gold-silver anomaly announced on 6[th] February 2018. Hole SSTG180001 intersected a zone of hydrothermally altered and brecciated felsic volcanics with stringer to massive pyritic sulphide zones beneath the peak of the base of till anomaly. The core of this zone comprises an intercept of 15.7m @ 0.8 g/t gold and 6 g/t silver from 25m downhole.

North Wing, Level 2, 1 Manning Street, Scarborough WA 6019, Australia PO Box 1059 Scarborough WA 6922, Australia ABN 18 606 128 090 T +61 8 6166 0240 F 61 8 6241 4299 E admin@s2resources.com.au W www.s2resources.com.au

The next two holes (SSTG180002 and 3), drilled 40 metres east and 40 metres north of SSTG180001 respectively, did not intersect the same sulphide zone and did not intersect significant mineralization. Results for the remaining five holes are awaited (see Figure 1).

A ground electromagnetic (EM) survey has since identified two conductors just to the south of, and subparallel to, SSTG180001 (see Figure 1). These have yet to be tested.

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Figure 1: Storgroven prospect showing base of till anomaly (gold and silver), location of eight diamond drillholes (including the three holes with assay results received), and the location of two newly identified EM conductors.

Receipt of historical drilling data from the Aliden prospect, located within the same prospective stratigraphy some 450 metres south along strike from Storgroven, has confirmed the presence of similar style mineralization, with several gold-silver mineralized intercepts including 23.4m @ 1.5g/t gold, 41g/t silver and 1.5% zinc from 57.2 metres in hole SKOGH06 drilled in 1969 beneath a VMS lens first identified by trenching in the 1930’s. The historical drilling at Aliden is summarized in Table 1.3 and the location of this drilling is shown in Figure 2.

Holmtjarn/Granbergs

Five holes have been completed on two of the targets at the Holmtjarn and Granbergs prospects (see Figure 3), based on a combination of induced polarization (IP) and base of till anomalies announced on 20[th] December 2017.

These holes confirmed the presence of a strongly altered and sulphide enriched felsic volcanic horizon (probably the same horizon as that at Storgroven and Aliden some 5 kilometres to the southeast) but did not intersect significant intervals of mineralization.

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Figure 2: Location of Storgroven, Aliden and Skogheden prospects. All are interpreted to occupy a similar stratigraphic horizon, which is folded and offset by the Aliden Fault (refer to appendices and tables for drilling information).

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Figure 3: Holmtjarn/Granbergs area showing IP chargeability and base of till gold anomalies, and location of five diamond drillholes.

Onusberget

Initial reconnaissance drilling is underway at the Onusberget prospect (see ASX presentation of 21st November 2017). This comprises two traverses of three holes each with the primary objective of defining the source of gold and copper anomalism identified in surface geochemical sampling completed in summer.

For further information, please contact:

Mark Bennett Anna Neuling Managing Director & CEO Executive Director & Company Secretary +61 8 6166 0240 +61 8 6166 0240

Competent Persons statement

The information in this report that relates to Exploration Results from Sweden and Finland is based on information compiled by Andy Thompson, who is an employee and shareholder of the Company. Mr Thompson is a member of the Australian Institute of Mining and Metallurgy (MAusIMM) and has sufficient experience of relevance to the style of mineralization and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Thompson consents to the inclusion in this report of the matters based on information in the form and context in which it appears.

Annexure 1

The following Tables are provided to ensure compliance with the JORC code (2012) edition requirements for the reporting of exploration results.

Table 1.1 Storgroven prospect

Hole No.	Total Depth						From,	To,	Width,			Au	Ag g/t
		North	East	RL	Dip	Azim	m	m	m	Zn%	Cu%	g/t
SSTG180001	158.2	7223577	716759	282	-60	270	20.0	21.0	1.0	<0.1	<0.1	1.4	4
		and					25.0	40.7	15.7	<0.1	<0.1	0.8	6
		including					38.0	40.0	2.0	<0.1	<0.1	2.4	15
SSTG180002	192.6	7223578	716800	279	-60	270				NSI
SSTG180003	181.75	7223615	716762	278	-60	270				NSI
SSTG180004	196.35	7223615	716796	276	-60	270
SSTG180005	100.95	7223698	716740	272	-60	270
SSTG180006	180.95	7223420	716720	288	-60	270
SSTG180007	127.95	7223420	716760	289	-60	270
SSTG180008	160.1	7223560	716760	289	-60	270

Table 1.2 Holmtjarn/Granbergs prospect

Hole No.	Total Depth						From,	To,	Width,			Au	Ag g/t
		North	East	RL	Dip	Azim	m	m	m	Zn%	Cu%	g/t
SHOL170001	161.2	7227402	717241	227	-60	040				NSI
SHOL170002	90.5	7227341	717190	230	-60	040				NSI
SHOL170003	181.1	7227273	717133	230	-60	040				NSI
SHOL170004	97.8	7227197	717069	230	-60	040				NSI
SHOL170005	167.2	7227049	715898	230	-70	040	16.32	18.00	1.68	<0.1	0.64	0.15	4
							74.82	75.82	1.10	0.2	0.66	0.60	2
SHOL170006	171.6	7227019	715872	229	-60	043				NSI
SHOL170007	251.1	7227227	715392	353	-60	040				NSI
SHOL180008	101.6	7227297	715452	355	-60	220				NSI
SHOL180009	156.55	7227324	715475	352	-65	220	126.85	127.2	0.35	<0.1	0.1	1.2	1
SHOL180010	187.9	7227265	716085	291	-55	220				NSI
SHOL180011	250	7227502	715427	333	-60	220	25.7	26.3	0.6	<0.1	1.1	<0.1	5.5

Table 1.3 Historic drilling at Aliden and Storgroven prospects*

Hole No.	Total Depth						From,	To,	Width,			Au	Ag g/t
		North	East	RL	Dip	Azim	m	m	m	Zn%	Cu%	g/t
SKOGH05	117.23	7223086	716570	260	-50	36	NSI
SKOGH06	108.75	7223063	716602	260	-50	38	57.2	80.6	23.4	1.5	<0.1	1.5	41
SKOGH07	151	7223043	716586	257	-50	38	NSI
SKOGH08	60.26	7223015	716790	271	-50	36	NSI
SKOGH09	60.05	7222954	716843	275	-50	39	NSI
SKOGH10	145.14	7223146	716604	265	-50	172	43.8	78.4	34.6	0.4	<0.1	0.7	10
SKOGH11	156.49	7223168	716603	266	-50	179	119.4	121.2	1.8	0.3	<0.1	0.7	20
SKOGH12	147.55	7223146	716627	266	-50	172	58.8	67.8	9.0	1.5	<0.1	1.6	31
SKOGH13	142.4	7223143	716583	264	-50	172	89.4	98.3	6.1	1.7	<0.1	1.3	81
SKOGH14	140.92	7223147	716649	266	-50	172	NSI

Hole No.	Total Depth						From,	To,	Width,			Au	Ag g/t
		North	East	RL	Dip	Azim	m	m	m	Zn%	Cu%	g/t
SKOGH15	132.43	7223172	716646	268	-50	174	NSI
SKOGH16	162	7223171	716624	267	-50	174	89.5	98.3	8.8	0.4	<0.1	1.2	23
SKOGH17	185.6	7223169	716581	266	-50	175	117.1	125.5	8.4	0.4	<0.1	0.5	15
SKOGH18	150.25	7223143	716594	264	-50	172	85.3	90.4	5.1	1.1	<0.1	0.8	26
SKOGH19	102.72	7223051	716618	260	-50	38	NSI
SKOGH20	79.33	7223069	716632	262	-50	38	60.4	64.0	3.6	1.1	<0.1	0.7	16
SKOGH21	102.35	7223066	716615	261	-50	352	32.5	68.3	35.8	0.5	<0.1	0.9	22
SKOGH22*	135.62	7223681	716788	270	-50	248	61.3	62.0	0.7	<0.1	<0.1	1.0	4
SKOGH23*	200.16	7223578	716726	284	-50	248	32.5	33.6	1.1	<0.1	<0.1	0.6	5
SKOGH24	180.88	7223196	716621	269	-50	172	NSI
SKOGH25	201.4	7223193	716578	267	-50	173	NSI
SKOGH26	100	7223100	716525	259	-50	121	NSI

*Historical drilling data courtesy of Boliden AB. Aliden collar positions are based on field verification of remaining collars.

SECTION 1: SAMPLING TECHNIQUES AND DATA

Criteria	JORC Code explanation	Commentary
Sampling techniques	Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.	Base of Till (BoT) drilling is undertaken by Moreenityo Macklin Oy of Sattanen, Finland. Holes are drilled to bedrock or blade refusal and a 20cm sample is collected at the end of hole for geochemical analysis and lithological logging. Drilling is undertaken using Arctic Drilling of Rovaniemi, Finland or by Oy Kati AB of Kalajoki Finland drilling NQ2 rod size with a DDH size of 75.7mm and core size of 50.7mm. NQ2 core samples are logged and marked up by S2 personnel. Unbiased core sample intervals were cut in half by diamond saw with half core sent for analysis at ALS Laboratories. All rock grab and rock float samples are collected from outcrop by S2 personnel and marked into sample books and a representative portion of the sample retained. All are forwarded for analyses by ALS Laboratories.
	Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used	Sampling and QAQC procedures are carried out using S2 protocols as per industry best practice.
	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 (e.g. ‘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 (e.g. submarine nodules) may warrant disclosure of detailed information	Diamond drilling was used to obtain core samples that have been cut and sampled on intervals that are determined by lithology and mineralisation. The drill core samples are sent to ALS Laboratories for analyses for gold and base metals. Drill core is sampled at S2’s facilities in Mala, Sweden.
Drilling techniques	Drill type (e.g. core, reverse circulation, open-hole	Base of Till drilling is by a percussion flow through sample bit that can collect a 20cm sample of bedrock material at the base of glacial deposits up to 20m thick. Diamond drilling with NQ2 wireline bit producing a 50.7mm diameter core.
	hammer, rotary air blast, auger, Bangka, sonic,
	etc) and details (e.g. core diameter, triple or
	standard tube, depth of diamond tails, face-
	sampling bit or other type, whether core is
	oriented and if so, by what method, etc).

Criteria	JORC Code explanation	Commentary
Drill sample recovery	Method of recording and assessing core and chip sample recoveries and results assessed	BoT samples are visually inspected to assess if they are likely to be a basement sample or whether the hole has failed to reach basement due to boulders or excessive cover thickness. Diamond Drill core recoveries are visually estimated qualitatively on a metre basis and are recorded in the database.
	Measures taken to maximise sample recovery and ensure representative nature of the samples	Sample quality is qualitatively logged on a metre basis, recording sample condition.
	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.	No relationship has been seen to exist
Logging	Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.	The logging uses a standard legend developed by S2 which is suitable for wireframing. Exploration holes are not geotechnically logged but resource holes are.
	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.	All core has been photographed both dry and wet. Geological logging of the diamond drill holes is onto physical log sheets followed by importing into S2’s central database
	The total length and percentage of the relevant intersections logged	All drill holes were logged in full.
Sub-sampling techniques and sample preparation	If core, whether cut or sawn and whether quarter, half or all core taken.	Core sawn in half and half core taken.
	If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.	Bot samples are dried and sieved at 2mm and the fine fraction submitted for assay. The coarse fraction is retained and logged
	For all sample types, the nature, quality and appropriateness of the sample preparation technique.	Samples were delivered by S2 personnel to ALS Minerals laboratory in Mala, Sweden. All samples were forwarded to ALS Minerals Ojebyn, Sweden Laboratory where they are to be crushed with >70% <2mm (code CRU-31), split by riffle splitter (code SPL-21), and pulverised 1000grm to 85% <75 um (code PUL-32). Crushers and pulverizers are washed with QAQC tests undertaken (codes CRU-QC, PUL-QC). The prepared samples are forwarded to ALS Minerals Loughrea, Ireland, for analysis.
	Quality control procedures adopted for all sub- sampling stages to maximise representivity of samples.	Full QAQC system in place to determine accuracy and precision of assays
	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.	For DDH’s non biased core cutting through using an orientation line marked on core and cut to the line
	Whether sample sizes are appropriate to the grain size of the material being sampled.	Samples of appropriate size
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.	All samples were analysed by ALS Minerals Loughrea, Ireland. Samples analysed for gold undergo a 50g fire assay with AA finish (code Au-AA26). Samples analysed for Ag, As, Bi, Ca, Cd, Cu, Fe, Hg, Mg, Mn, Mo, Ni, P, Pb, S, Sb, Tl & Zn undergo an oxidising digestion with ICP-AES Finish (code ME-ICPORE).

Criteria	JORC Code explanation	Commentary
	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.	No geophysical tools were used to determine any element concentrations.
	Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.	Full QAQC system in place including Certified Standards and blanks of appropriate matrix and levels
Verification of sampling and assaying	The verification of significant intersections by either independent or alternative company personnel.	Andy Thompson has personally inspected all drill cores and rock samples.
	The use of twinned holes.	A second BoT hole was drilled within 3m of the initial high value sample that returned 1.1g/t gold at Storgroven to assess the repeatability of the sample. The repeated BoT hole returned 2.2g/t gold in a similar lithology.
	Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.	Primary sampling data is collected in a set of standard Excel templates. The information is managed by S2’s database manager for validation and compilation into S2’s central database.
	Discuss any adjustment to assay data.	No adjustments made
Location of data points	Accuracy and quality of surveys used to locate drillholes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.	BoT collars were located with a handheld GPS with an accuracy of within 3 metres.
	Specification of the grid system used.	The grid system used is the Standard Swedish National Grid – SWEREF 99 TM unless otherwise stated.
	Quality and adequacy of topographic control.	Excellent quality topographic maps produced by the Swedish Authorities - Landmateriat
Data spacing and distribution	Data spacing for reporting of Exploration Results.	Drill holes are BoT geochemical samples at this stage and drilled to define geochemical and geophysical targets. No set spacing of drillholes at this stage.
	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.	Data spacing and distribution is not sufficient at this stage to allow the estimation of mineral resources.
	Whether sample compositing has been applied.	No sample compositing has been applied
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.	Drillhole orientation is designed to test geophysical targets and is not necessarily drilled perpendicular to the orientation of the intersected mineralisation.
	If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	The drilling at this stage is preliminary and exploratory. It is not possible to assess if any sample bias has occurred due to hole orientation at this stage.
Sample security	The measures taken to ensure sample security.	Chain of custody is managed by S2 personnel. Drill samples and core is visually checked at the drill rig and then transported to S2’s logging and cutting facilities by S2 personnel for logging, cutting and sampling. Bagged samples are transferred to ALS Laboratories in Malå, Sweden by S2 personnel.
Audits or reviews	The results of any audits or reviews of sampling techniques and data.	No audits or reviews have been conducted at this stage.

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SECTION 2 REPORTING OF EXPLORATION RESULTS

Criteria	JORC Code explanation	Commentary
Mineral tenement and land tenure status	Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.	The Holmtjarn and Granbergs prospects are located with the Holmtjarn nr 401 licence. The Storgroven prospect is located within the Petitrask 402 Exploration Licence. The exploration licences are 100% owned by S2 Sverige AB, a Swedish registered 100% owned subsidiary of S2.
	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.	All of the Exploration Licences are in good standing and no known impediments exist on the tenements being actively explored.
Exploration done by other parties	Acknowledgment and appraisal of exploration by other parties.	Storgroven is approximately 450m north of an historic VMS prospect named Aliden that was trenched in the 1930’s and drilled by Boliden in 1969 by a total of 20 holes. The drillhole collars at Aliden have been GPS located and are 450m south of the Storgroven anomaly. Assay and collar information of historic drilling with significant intersection is tabulated in the main text. Two historic Boliden holes were drilled close to the Storgroven soil anomaly, these collars have not been field verified. The Boliden historic holes have not been sighted but the data has been assessed and is considered of an excellent standard albeit to standards of a major mining and processing company during the 1960’s rather than contemporary JORC standards. Minor historic trenching has been located 500m south east.
Geology	Deposit type, geological setting and style of mineralisation.	The area occupies the central portion of the Skellefte Belt, a productive base and precious metal mining district dominated by bimodal volcanics, primarily felsic in composition. The mineralisation style is structurally remobilised volcanogenic massive sulphide style mineralisation within greenschist grade metamorphic rocks.
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  dip and azimuth of the hole  down hole length and interception depth  hole length.	Refer to sample plans in text.
Data aggregation methods	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.	All reported intersections of drilling undertaken by S2 have been length weighted and density weighted. A nominal 0.5g/t Au, 1% Zn or 0.5% Cu lower cut-off is used for diamond drill intersections (unless otherwise stated in polymetallic intersections).
	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.	High grade intervals internal to broader zones of mineralisation are reported as included intervals.
	The assumptions used for any reporting of metal equivalent values should be clearly stated.	None used.

Criteria	JORC Code explanation	Commentary
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 (e.g. ‘down hole length, true width not known’).	The trend of mineralisation at the targets/prospects described is not known at present. Planned diamond drilling will determine this. Refer to figures in body of text.
Diagram	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.	Refer to Figures in body of text.
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 results considered significant are reported.
Other substantive exploration data	Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	Geological mapping by Dr Tobias Bauer of Lulea University has been used to help determine the prospective sediment / volcanic contact and cross faults.
Further work	The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive	Drilling at Storgroven is possible in winter and summer. Results from all 8 holes will be assessed and further drilling testing of plunge extensions and EM plates planned if appropriate.