S2 RESOURCES LTD — Regulatory Filings 2018

Oct 23, 2018

ASX Announcement

Wednesday 24th October 2018

FINLAND EXPLORATION UPDATE

Key points

• More gold anomalous trends and anomalies identified in regional ionic leach geochemical survey on several licences
• Coincident nickel-copper-cobalt-palladium anomalies identified in regional ionic leach geochemical survey on Ruopas licence
• Electromagnetic (EM) conductors also identified in large VTEM survey over Ruopas licence

S2 Resources Ltd ("S2" or the "Company") advises that its summer exploration campaign in northern Finland has successfully identified more gold and base metal anomalies in its regional ionic leach geochemical program, and a number of electromagnetic (EM) anomalies in its recent large VTEM survey of its magmatic nickel-coppersulphide prospective Ruopaslicence area. These results will guide a winter program comprising base of till (BOT) drilling and ground-based EM, to provide more focused gold and nickel-copper targets for diamond drilling later in 2019.

The regional geochemicalsoilsurvey has now been completed with a total of 15,325 first pass and infill samples collected and results received for all but 800 of these. This has highlighted a number of anomalous trends and discrete anomalies.

In addition to the robust gold anomalies initially identified on the Paana licence to the northwest of Agnico Eagle's 8 million ounce Kittila gold mine (refer to S2's previous ASX announcement of 3 rd August 2018), subsequent results have identified additional gold anomalies on its Home, Putaanpera, Kerjonen and Ruopas licences, as well as several coincident nickel-copper-cobalt-palladium anomalies on its Ruopas licence.

First pass and subsequent infill sampling at the Home licence to follow up one of the strongest gold anomaliesin the Finnish Geological Survey's nationaltill geochemistry database has defined a coherent 3 kilometre long linear gold anomaly that appears to follow an ENE trending structural contact zone (see Figure 1). BOT drilling will be used to test this further and also define any strike extensions of this anomaly where soil sampling was not possible due to swampy ground.

Sampling of the Putaanpera and Kerjonen licences located on the Sirkka shear zone has defined a 4.5km long linear gold anomaly that is open to the east where the ground conditions becomesswampy and hence not suitable for soil sampling (see Figure 2). The anomaly is broadly coincident with the interpreted location of the shear zone that can be traced in magnetics to the east.

Figure 1. Gold anomaly in the northeastern part of the Home licence, which may trend beneath the transported cover of boglands along strike to the west where the anomalism reappears.

Figure 2. Gold anomaly on the Putaanpera and Kerjonen licences. This linear anomaly follows the trend of the Sirkka shear zone and may continue to the east beneath transported cover of boglands.

First pass sampling on the Nuttio licence has defined a broad north-south trending zone of gold anomalism (see Figure 3). This area now requires BOT drilling to better define the anomaly.

Figure 3. Broad cluster of gold anomalism in the southwestern part of the Nuttio licence. This requires infill soil sampling and/or BOT sampling.

At the large Ruopas licence, first pass and infill soil sampling has defined both gold and base metal anomalies. The base metal anomalies generally comprise discrete clusters of coincident elevated nickel, copper, cobalt and palladium (see Figures 4 to 6) and a number of these also coincide with ultramafic rocksidentified in concurrent geological mapping. These soil anomalies are considered good indicators for the presence of magmatic nickel-copper sulphides on ground considered prospective for this style of mineralization.

Figure 4. Gold anomalies on the Ruopas licence. Several trends are evident.

A large airborne VTEM survey over the same area at Ruopas has also identified a number of discrete late-time electromagnetic (EM) conductors within broader conductive zones that may also represent magmatic massive sulphide targets (see Figure 7).

The combined gold and base metal geochemical results together with the VTEM results will guide the selective fast tracking of granting of specific areas to enable BOT drilling of gold anomalies and ground EM over selected base metal geochemical and VTEM anomalies during the coming winter. The objective of the BOT drilling is to "tighten up" the ionic leach geochemical anomalies to the point of being more focused targetssuitable for the planning ofsubsequent diamond drilling, and the objective of the ground EM is to verify, spatially constrain and model the VTEM conductors to guide future diamond drilling.

Figure 5. Nickel and copper soil anomalies (coloured dots) over nickel anomalism (colour background) in ionic leach soil sampling on the Ruopas licence. Several clusters of copper anomalism coincide with zones of nickel anomalism, with some trending beneath bogs not amenable to soil sampling.

Figure 6. Cobalt and palladium soil anomalies (coloured dots) over nickel anomalism (colour background) in ionic leach soil sampling on the Ruopas licence. Several clusters of cobalt and palladium anomalism coincide with zones of nickel and copper anomalism, with some trending beneath bogs not amenable to soil sampling.

Figure 7. Channels 20 (mid-time) and 40 (late-time) of the Ruopas VTEM survey,showing broaderzones of higher conductance and discrete late time EM anomalies within them. Selected anomalies will be followed up with ground based EM during the Finnish winter. The linear features on the right hand side are spurious anomalies caused by cultural features (powerlines, substations etc).

About the Central Lapland Greenstone Belt

The Central Lapland Greenstone Belt is a Proterozoic belt of volcanics and sediments that contains Agnico Eagle's 8 million ounce Kittila gold mine and Anglo American's 44 million tonne Sakatti nickelcopper deposit. Both are world class examples of their respective commodity and deposit style, with Kittila being lode gold and Sakatti being magmatic sulphide. Despite the presence of these two significant deposits, there has been relatively little effective exploration – particularly drilling - in comparison to regions such as Western Australia, so the potential mineral endowment and the potential for additional discoveries is considered very high.

S2 has a large and strategic ground position in this belt and is systematically undertaking greenfields exploration with the aim of discovering another significant gold or base metal deposit. This staged approach involvesinitialreconnaissance techniquessuch asregional geochemicalsurveys and airborne geophysics as a necessary prerequisite to managing the cost of its ground holdings and defining more focused drill targets, and is therefore a long term strategy.

For further information, please contact:

Mark Bennett Anna Neuling +61 8 6166 0240 +61 8 6166 0240

Managing Director & CEO Executive Director & Company Secretary

Competent Persons statements

The information in this report that relates to Exploration Results from 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.

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 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.	Soil sampling is undertaken by S2 employees and contractorsusing handheld mattocks. Samples are collected from 20-25cmbeneath the base of organic ground cover.Samples are double bagged in zip lock bags.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.

Criteria	JORC Code explanation	Commentary
	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	Geochemical samples only were collected for inclusion in thisreport.
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).	Soil sampling was the only technique used for data inclusion inthis report and technique is described elsewhere in this table.
Drill samplerecovery	Method of recording and assessing core and chipsample recoveries and results assessed	Soil sampling was the only technique used for data inclusion inthis report and technique is described elsewhere in this table.
	Measures taken to maximise sample recovery andensure representative nature of the samples	Soil sampling was the only technique used for data inclusion inthis report and technique is described elsewhere in this table.
	Whether a relationship exists between samplerecovery and grade and whether sample bias mayhave occurred due to preferential loss/gain offine/coarse material.	Soil sampling was the only technique used for data inclusion inthis report and technique is described elsewhere in this table.
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 of soil samples uses a standard legend developed byS2 which is suitable for domaining different soil type domains.This is suitable to provide data to assess quality control andstatistical analysis of geochemical anomalism
	Whether logging is qualitative or quantitative innature. Core (or costean, channel, etc)photography.	Logging is qualitative, based on a logging system developedduring orientation surveys in 2017.
	The total length and percentage of the relevantintersections logged	All samples are logged.
Sub-samplingtechniques andsample preparation	If core, whether cut or sawn and whether quarter,half or all core taken.	Geochemical sampling only.
	If non-core, whether riffled, tube sampled, rotarysplit, etc and whether sampled wet or dry.	No sieving of samples. Obvious coarse organics are removed
	For all sample types, the nature, quality andappropriateness of the sample preparationtechnique.	Samples were delivered by S2 personnel to ALS Mineralslaboratory in Sodankyla, Finland. Samples are only weighed inFinland and then sent to ALS, Loughrea Ireland for Ionic Leach.
	Quality control procedures adopted for all subsampling stages to maximise representivity ofsamples.	No sub-sampling takes place.
	Measures taken to ensure that the sampling isrepresentative of the in situ material collected,including for instance results for fieldduplicate/second-half sampling.	No sub-sampling takes place.
	Whether sample sizes are appropriate to the grainsize of the material being sampled.	Samples are of appropriate size at 150-250g.

Criteria	JORC Code explanation	Commentary
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.Using Ionic leach (code ME-MS22)Ionic Leach is a static sodium cyanide leach using chelatingagents ammonium chloride, citric acid and EDTA with theleachant buffered at pH 8.5. Analytes are measured usingInductively Coupled Plasma - Mass Spectrometry (ICP-MS).Elements analysed are:Ag,As,Au,Ba,Be,Bi,Br,Ca,Cd,Ce,Co,Cr,Cs,Cu,Dy,Er,Eu,Fe,GaGd,Ge,Hf,Hg,Ho,I,In,La,Li,Lu,Mg,Mn,Mo,Nb,Nd,Ni,Pb,Pd,Pr,Rb,Re,Sb,Sc,Se,Sm,Sn,Sr,Ta,Tb,Te,Th,Ti,Tl,Tm,U,W,Y,Yb,Zn,andZr
	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.	Field duplicates are taken to assess laboratory repeat quality.
Verification ofsampling andassaying	The verification of significant intersections byeither independent or alternative companypersonnel.	Andy Thompson has worked with all the soil sampling teammembers to verify field sampling procedures are adhered to.
	The use of twinned holes.	Soil sampling only.
	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.	Sample are located with a handheld GPS with an accuracy ofwithin 3 metres.
	Specification of the grid system used.	The grid system used is the ETRS-TM35FIN National Grid.
	Quality and adequacy of topographic control.	Excellent quality topographic maps (2m or 8m gridded Lidar)produced by the Finnish Authorities.
Data spacing anddistribution	Data spacing for reporting of Exploration Results.	Data is geochemical sampling at this stage and drilled to definegeochemical and geophysical targets. A nominal 400m x 40mspacing is used.
	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 type is not appropriate at this stage to allow the estimationof 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.	Soil samples only.
	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.	Soil samples only.

Criteria	JORC Code explanation	Commentary
Sample security	The measures taken to ensure sample security.	Chain of custody is managed by S2 personnel. Soil samples aresorted and checked every day for bag sequence and integrityand then bagged samples are transferred to ALS Laboratories inSodankyla, Finland 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.	S2R has title of its Finland tenements and applications throughits wholly owned subsidiary Sakumpu Oy.
	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 and applications are in goodstanding and no known impediments exist on the tenementsbeing actively explored.
Exploration done byother parties	Acknowledgment and appraisal of exploration byother parties.	The areas have been explored by government regionalprograms over the last 40 years with wide spaced till sampling.Assay suites were often limited to base metal and detectionlimits are variable.
Geology	Deposit type, geological setting and style ofmineralisation.	Orogenic lode gold and magmatic intrusion related nickelcopper.
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.	No drilling conducted. Geochemical sampling only.
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.	No drilling conducted. Geochemical sampling only
	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.	No drilling conducted. Geochemical sampling only
	The assumptions used for any reporting of metalequivalent values should be clearly stated.	No drilling conducted. Geochemical sampling only

Criteria	JORC Code explanation	Commentary
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').	No drilling conducted. Geochemical sampling only
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.	A 902line kilometre Helicopter-borne VTEM (Versatile TimeDomain Electromagnetic) survey was completed in lateSeptember 2018 over Ruopas, Pikkulaki and Nuttio tenementapplications.
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	BoT drill program planned at Paana and Lisma for winter 2018-2019. Ground EM follow-up of VTEM anomalies.