S2 RESOURCES LTD — Regulatory Filings 2017

Dec 19, 2017

ASX Announcement

EXPLORATION UPDATE - SWEDEN

Key points

• First drilling of winter campaign intersects narrow zone of high grade zinc mineralization 170 metres down plunge from last intercept at Bjurtraskgruvan VMS deposit
• XRF readings indicate massive sulphides grade 10-44% zinc
• Rig moved to new prospect at Granbergs (Holmtjarn area) while assays awaited

S2 Resources Ltd ("S2" or the "Company") provides the following update regarding its winter drilling program at its 100% owned Skellefte project in Sweden, where it is systematically reconnaissance drilling a number of targets identified and prioritized during the summer field season.

Bjurtraskgruvan VMS deposit

In the first drilling of S2's Swedish winter drilling campaign, diamond core hole SBJK170008 confirmed the continuation of VMS mineralization 170 metres down plunge from its previous drilling at the Bjurtraskgruvan deposit, undertaken at end of last winter's drilling program.

Hole SBJK170008 intersected a narrow (1 metre) zone of sphalerite (zinc sulphide) dominant massive sulphide mineralization (see Figure 1). Assay results will not be available until late January, but spot XRF readings taken across the massive sulphides in this zone range from 10.7% to 44.6% zinc. It is not yet known if this is accompanied by any precious metals.

This was the second hole of this program, with the first (hole SBJK170007) having lifted and missed the EM conductor.

The new intercept confirms the presence of VMS style mineralization over a plunge extent of 600 metres at Bjurtraskgruvan (see Figure 2).

Although the deposit remains open down plunge and is not fully delineated, the thickness of the mineralization is not considered sufficient to warrant diversion of the rig at this time from the many other targets scheduled for reconnaissance drilling over the next few months. Consequently, the rig has moved and begun drilling the new Granbergs target at Holmtjarn.

Figure 1. Photograph of massive sulphide zone in hole SBJK170008.

Figure 2. Status of drilling at the Bjurtraskgruvan VMS deposit.

Granbergs target

The first of three reconnaissance diamond core holes planned as an initial test of the Granbergs target is underway.

The Granbergs target was identified as a result of induced polarization (IP) geophysics and base of till (BOT) sampling undertaken in the Holmtjarn area over the summer. It is located to the south of the main Holmtjarn trend (refer to ASX presentations of 17th October and 21st November 2017) which is along strike from a gold-rich VMS deposit mined by Boliden in the 1950's.

The target comprises a 500 metre long IP chargeability anomaly coinciding with strong lead-silvercopper-gold-arsenic-antimony anomalism in BOT sampling (see Figure 3).

Figure 3. Summary plan of the Granbergs prospect, Holmtjarn.

The BOT anomaly comprises a coherent cluster of strongly anomalous samples over a 350 x 100 metre area, with peak samples being 1.25% lead, 88g/t silver, 946ppm copper, 89ppb gold and >10000ppm arsenic (see Figure 4).

The coincident IP and BOT anomaly at Granbergs is located approximately 400 metres northwest of two diamond core holes drilled by S2 in early 2017 (holes SHOL170005 and SHOL170006). These holes were drilled before the IP and BOT data was collected, but nonetheless intersected substantial widths ofsulphide-bearing rhyolite breccias with broad zones of anomalous copper and gold with peak values of 0.6g/t gold and 0.66% copper (refer to ASX announcement of 8 th May 2017), located 400 metres along strike of the new Granbergs target.

Holes GRB91008 and GRB91009 are old holes drilled in a southeasterly direction by Boliden approximately 200 metres south of the new Granbergs target.

Figure 4. Granbergs prospect BOT sampling, showing gold, silver, copper, lead, arsenic and antimony values.

For further information, please contact:

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

Drilling at the Granbergs prospect, Sweden.

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. Co-ordinates in this table are given in the Swedish National Grid SWEREF 99TM.

Bjurtraskgruvan S2 drilling

Hole No.	TotalDepth	North	East	RL	Dip	Azim	From,m	To, m	Width,m	Zn%	Cu%	Agg/t
SBJK170001	231	7215800	722580	227	-60	000	185.10	188.35	3.25	0.5	1.2	5.4
SBJK170002	120.5	7215950	722550	230	-60	000	21.30	24.36	3.06	1.3	<0.1	9.7
SBJK170003	216.8	7215800	722540	230	-60	000	176.00	190.71	14.71	2.2	1.0	5.4
		including					177.00	179.13	2.13	8.2	1.7	8.5
SBJK170004	246.9	7215760	722540	230	-60	000	142.50	142.9	0.4	2.21	0.24	6.0
and					144.50	145.50	1.0	2.08	<0.1	1.0
and						221.12	227.40	6.28	<0.1	1.40	5.7
SBJK170005	168.0	7215840	722540	230	-60	000	40.0	41.0	1.0	1.08	<0.1	3.0
and						90.4	91.9	1.5	<0.1	1.09	8.2
and						143.71	145.45	1.74	3.05	0.68	3.7
SBJK170006	289.4	7215751	722440	229	-70	000	220.7	245.1	24.4	<0.1	1.11	5.1
including						221.5	222.55	1.05	0.65	4.11	19
and including							224.3	227.9	3.6	0.17	2.44	11.5
and including						235.0	236.0	1.0	<0.1	3.11	14
SBJK170007	443.6	7215673	722242	233	-65	000	Results pending
SBJK170008	343	7215680	722285	233	-72	000	Results pending

Holmtjarn Prospect

Hole No.	TotalDepth	North	East	RL	Dip	Azim	From,m	To,m	Width,m	Zn%	Cu%	Agg/t	Aug/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	4	0.15
							74.82	75.82	1.10	0.2	0.66	2	0.6
SHOL170006171.67227019715872229-60043								NSI

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

Criteria	JORC Code explanation	Commentary
Sampling techniques	Nature and quality of sampling (e.g. cut channels,random chips, or specific specialised industrystandard measurement tools appropriate to theminerals under investigation, such as down holegamma sondes, or handheld XRF instruments, etc).These examples should not be taken as limiting thebroad meaning of sampling.	Drilling is undertaken by Arctic Drilling or Oy Kati AB of KalajokiFinland drilling NQ2 rod size with a DDH size of 75.7mm andcore size of 50.7mm. NQ2 core samples are logged and markedup by S2 personnel. Unbiased core sample intervals were cut inhalf by diamond saw with half core sent for analysis at ALSLaboratories.All rock grab and rock float samples are collected from outcropby S2 personnel and marked into sample books and arepresentative portion of the sample retained. All areforwarded for analyses by ALS Laboratories.
	Include reference to measures taken to ensuresample representivity and the appropriatecalibration of any measurement tools or systemsused	Sampling and QAQC procedures are carried out using S2protocols as per industry best practice.
	Aspects of the determination of mineralisationthat are Material to the Public Report. In caseswhere 'industry standard' work has been done thiswould be relatively simple (e.g. 'reverse circulationdrilling was used to obtain 1 m samples fromwhich 3 kg was pulverised to produce a 30 gcharge for fire assay'). In other cases moreexplanation may be required, such as where thereis coarse gold that has inherent samplingproblems. Unusual commodities or mineralisationtypes (e.g. submarine nodules) may warrantdisclosure of detailed information	Diamond drilling was used to obtain core samples that havebeen cut and sampled on intervals that are determined bylithology and mineralisation.The drill core samples are sent to ALS Laboratories for analysesfor gold and base metals. Drill core is sampled at S2's facilitiesin Mala, Sweden.
Drilling techniques	Drill type (e.g. core, reverse circulation, open-holehammer, rotary air blast, auger, Bangka, sonic,etc) and details (e.g. core diameter, triple orstandard tube, depth of diamond tails, facesampling bit or other type, whether core isoriented and if so, by what method, etc).	Diamond drilling with NQ2 wireline bit producing a 50.7mmdiameter core.
Drill samplerecovery	Method of recording and assessing core and chipsample recoveries and results assessed	DiamondDrillcorerecoveriesarevisuallyestimatedqualitatively on a metre basis and are recorded in the database.
	Measures taken to maximise sample recovery andensure representative nature of the samples	Sample quality is qualitatively logged on a metre basis,recording sample condition.
	Whether a relationship exists between samplerecovery and grade and whether sample bias mayhave occurred due to preferential loss/gain offine/coarse material.	No relationship has been seen to exist
Logging	Whether core and chip samples have beengeologically and geotechnically logged to a level ofdetail to support appropriate Mineral Resourceestimation, mining studies and metallurgicalstudies.	The logging uses a standard legend developed by S2 which issuitable for wireframing. Exploration holes are notgeotechnically logged but resource holes are.
	Whether logging is qualitative or quantitative innature. Core (or costean, channel, etc)photography.	All core has been photographed both dry and wet. Geologicallogging of the diamond drill holes is onto physical log sheetsfollowed by importing into S2's central database

SECTION 1 SAMPLING TECHNIQUES AND DATA

Criteria	JORC Code explanation	Commentary
	The total length and percentage of the relevantintersections logged	All drill holes were logged in full.
Sub-samplingtechniques andsample 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, rotarysplit, etc and whether sampled wet or dry.	All samples are core.
	For all sample types, the nature, quality andappropriateness of the sample preparationtechnique.	Samples were delivered by S2 personnel to ALS Mineralslaboratory in Mala, Sweden. All samples were forwarded to ALSMinerals Ojebyn, Sweden Laboratory where they are to becrushed with >70% <2mm (code CRU-31), split by riffle splitter(code SPL-21), and pulverised 1000grm to 85% <75 um (codePUL-32). Crushers and pulverizers are washed with QAQC testsundertaken (codes CRU-QC, PUL-QC). The prepared samples areforwarded to ALS Minerals Loughrea, Ireland, for analysis.
	Quality control procedures adopted for all subsampling stages to maximise representivity ofsamples.	Full QAQC system in place to determine accuracy and precisionof assays
	Measures taken to ensure that the sampling isrepresentative of the in situ material collected,including for instance results for fieldduplicate/second-half sampling.	For DDH's non biased core cutting through using an orientationline marked on core and cut to the line
	Whether sample sizes are appropriate to the grainsize of the material being sampled.	Samples of appropriate size
Quality of assay dataand laboratory tests	The nature, quality and appropriateness of theassaying and laboratory procedures used andwhether the technique is considered partial ortotal.	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 oxidisingdigestion with ICP-AES Finish (code ME-ICPORE).
	For geophysical tools, spectrometers, handheldXRF instruments, etc, the parameters used indetermining the analysis including instrumentmake and model, reading times, calibrationsfactors applied and their derivation, etc.	No geophysical tools were used to determine any elementconcentrations.
	Nature of quality control procedures adopted (e.g.standards, blanks, duplicates, external laboratorychecks) and whether acceptable levels of accuracy(i.e. lack of bias) and precision have beenestablished.	Full QAQC system in place including Certified Standards andblanks of appropriate matrix and levels
Verification ofsampling andassaying	The verification of significant intersections byeither independent or alternative companypersonnel.	Andy Thompson, GM Fenno-Scandia has personally inspected alldrill cores and rock samples.
	The use of twinned holes.	No twin holes have been drilled on the project to date.
	Documentation of primary data, data entryprocedures, data verification, data storage(physical and electronic) protocols.	Primary sampling data is collected in a set of standard Exceltemplates. The information is managed by S2's databasemanager for validation and compilation into S2's centraldatabase.
	Discuss any adjustment to assay data.	No adjustments made
Location of datapoints	Accuracy and quality of surveys used to locatedrillholes (collar and down-hole surveys), trenches,mine workings and other locations used in MineralResource estimation.	Drill hole collars were located with a differential GPS with anaccuracy of within 1 metre.
	Specification of the grid system used.	The grid system used is the Standard Swedish National Grid –SWEREF 99 TM unless otherwise stated.

Criteria	JORC Code explanation	Commentary
	Quality and adequacy of topographic control.	Excellent quality topographic maps produced by the SwedishAuthorities - Landmateriat
Data spacing anddistribution	Data spacing for reporting of Exploration Results.	Drill holes are exploratory at this stage and drilled to testgeochemical and geophysical target. No set spacing of drillholesat this stage.
	Whether the data spacing and distribution issufficient to establish the degree of geological andgrade continuity appropriate for the MineralResource and Ore Reserve estimation procedure(s)and classifications applied.	Data spacing and distribution is not sufficient at this stage toallow the estimation of mineral resources.
	Whether sample compositing has been applied.	No sample compositing has been applied
Orientation of datain relation togeological structure	Whether the orientation of sampling achievesunbiased sampling of possible structures and theextent to which this is known, considering thedeposit type.	Drillhole orientation is designed to test geophysical targets andis not necessarily drilled perpendicular to the orientation of theintersected mineralisation.
	If the relationship between the drilling orientationand the orientation of key mineralised structures isconsidered 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 notpossible to assess if any sample bias has occurred due to holeorientation at this stage.
Sample security	The measures taken to ensure sample security.	Chain of custody is managed by S2 personnel. Drill core isvisually checked at the drill rig and then transported to S2'slogging and cutting facilities by S2 personnel for logging, cuttingand sampling. Bagged samplesaretransferred to ALSLaboratories in Malå, Sweden by S2 personnel.
Audits or reviews	The results of any audits or reviews of samplingtechniques and data.	No audits or reviews have been conducted at this stage.

SECTION 2 REPORTING OF EXPLORATION RESULTS

Criteria	JORC Code explanation	Commentary
Mineral tenementand land tenurestatus	Type, reference name/number, location andownership including agreements or material issueswith third parties such as joint ventures,partnerships, overriding royalties, native titleinterests, historical sites, wilderness or nationalpark and environmental settings.	The Bjurtraskgruvan prospect is located within the Vargfors 401Exploration Licence.The Holmtjarn targets are located on the Holmtjarn 401 Licence.The exploration licences are 100% owned by S2 Sverige AB, aSwedish registered 100% owned subsidiary of S2
	The security of the tenure held at the time ofreporting along with any known impediments toobtaining a licence to operate in the area.	All of the Exploration Licences are in good standing and noknown impediments exist on the tenements being activelyexplored.
Exploration done byother parties	Acknowledgment and appraisal of exploration byother parties.	The Bjurtraskgruvan prospect was drilled, trenched andmapped in 1944 and 1979-80. Drilling was undertaken by theSwedish Geological Survey (SGU) for a total of 481m in 1944and 1250m in 1979-80. The 1944 data was largely twinned bythe later drilling and also more comprehensively sampled.The historical geological mapping has been georeferenced inrelation to the drillhole collars and also correlates well with themodelled moving loop ground TEM plate. Drillhole collars havebeen located and surveyed by S2 personnel. All available publicdomain historic reports and logs at the SGU in Mala have beenreviewed and collated.
Geology	Deposit type, geological setting and style ofmineralisation.	The area occupies the central portion of the Skellefte Belt, aproductive base and precious metal mining district dominatedby bimodal volcanics, primarily felsic in composition.The mineralisation style is structurally remobilised volcanogenicmassive sulphide style mineralisation within greenschist grademetamorphic rocks.

Criteria	JORC Code explanation	Commentary
Drill holeInformation	A summary of all information material to theunderstanding of the exploration results includinga tabulation of the following information for allMaterial drill holes:easting and northing of the drill holecollarelevation or RL (Reduced Level –elevation above sea level in metres) ofthe drill hole collardip and azimuth of the holedown hole length and interceptiondepthhole length.	Refer to Annexure 1 above
Data aggregationmethods	In reporting Exploration Results, weightingaveraging techniques, maximum and/or minimumgrade truncations (e.g. cutting of high grades) andcut-off grades are usually Material and should bestated.	All reported intersections of drilling undertaken by S2 have beenlength weighted and density weighted.A nominal 1% Zn or 0.5% Cu lower cut-off is used for diamonddrill intersections (unless otherwise stated in polymetallicintersections).
	Where aggregate intercepts incorporate shortlengths of high grade results and longer lengths oflow grade results, the procedure used for suchaggregation should be stated and some typicalexamples of such aggregations should be shown indetail.	High grade intervals internal to broader zones of mineralisationare reported as included intervals.
	The assumptions used for any reporting of metalequivalent values should be clearly stated.	None used.
Relationshipbetweenmineralisationwidths and interceptlengths	These relationships are particularly important inthe reporting of Exploration Results.If the geometry of the mineralisation with respectto the drill hole angle is known, its nature shouldbe reported.If it is not known and only the down hole lengthsare reported, there should be a clear statement tothis effect (e.g. 'down hole length, true width notknown').	The trend of mineralisation at the targets/prospects described isnot known at present but core angles indicate thatmineralisation is approximately true width.Refer to Annexure 1 and Figures in body of text.
Diagram	Appropriate maps and sections (with scales) andtabulations of intercepts should be included forany significant discovery being reported Theseshould include, but not be limited to a plan view ofdrill hole collar locations and appropriate sectionalviews.	Refer to Figures in body of text.
Balanced reporting	Where comprehensive reporting of all ExplorationResults is not practicable, representative reportingof both low and high grades and/or widths shouldbe practiced to avoid misleading reporting ofExploration Results.	All results considered significant are reported.
Other substantiveexploration data	Other exploration data, if meaningful andmaterial, should be reported including (but notlimited to): geological observations; geophysicalsurvey results; geochemical survey results; bulksamples – size and method of treatment;metallurgical test results; bulk density,groundwater, geotechnical and rockcharacteristics; potential deleterious orcontaminating substances.	The area has numerous VTEM anomalies generated from a 2015VTEM survey. Most anomalies being drilled have been groundchecked using moving loop EM to confirm anomalism andenable modelling of specific drill targets. Base of till sampling isalso undertaken for interface geochemical information. At theBjurtraskgruvan prospect, rock chips have been taken fromoutcropping gossans. Historic data from the SGU has beencompiled and modelled in 3D. Moving loop EM has confirmedthe VTEM anomaly as shown in the body of the text.

Criteria	JORC Code explanation	Commentary
Further work	The nature and scale of planned further work (e.g.tests for lateral extensions or depth extensions orlarge-scale step-out drilling).Diagrams clearly highlighting the areas of possibleextensions, including the main geologicalinterpretations and future drilling areas, providedthis information is not commercially sensitive	Drilling at Holmtjarn will continue through 2018 to testgeochemical and geophysical anomalism. Downhole geophysicswill be used as required to further refine drilling targets.