ST GEORGE MINING LIMITED — Capital/Financing Update 2015

Dec 16, 2015

17 December 2015

ST GEORGE ACQUIRES MAJORITY INTEREST IN HIGH GRADE NICKEL‐COPPER SULPHIDE PROJECT

HIGHLIGHTS:

• St George acquires 75% interest in the Mt Alexander Project from BHP Billiton
• High grade nickel‐copper sulphides already discovered including 4m @ 4.9%Ni, 1.7%Cu and 3.9g/t total PGEs from 91.4m
• Outstanding low‐risk exploration project in a world class nickel region of Western Australia
• An additional core asset in St George's burgeoning WA project portfolio
• Project to continue as a Joint Venture between Western Areas (25% interest) and St George (75% interest) as Manager
• Western Areas Limited to become a shareholder in St George following an agreement with St George not to exercise its pre‐emptive rights over Mt Alexander
• Drilling programme planned by St George in 2016

ACQUISITION OF HIGH GRADE NICKEL‐COPPER SULPHIDE PROJECT

St George Mining Limited (ASX: SGQ) ('St George' or 'the Company') is pleased to announce it has entered into a binding agreement with BHP Billiton Nickel West Pty Ltd ("Nickel West") to acquire the whole of Nickel West's 75% interest in the Mt Alexander Project in Western Australia.

The Mt Alexander Project is located 120km south‐southwest of the Agnew‐Wiluna belt which hosts numerous world class nickel deposits (see Figure 1). St George will be the Manager of the Project with Western Areas retaining a 25% interest.

High grade nickel‐copper sulphides were discovered at the Mt Alexander Project in 2008. Initial drilling was completed at the Cathedrals Prospect to test co‐incident electromagnetic (EM) and magnetic anomalies associated with nickel‐PGE enriched gossans. Significant intersections from this drilling included:

• 4m @ 4.9%Ni, 1.7%Cu and 3.9g/t total PGEs from 91.4m in drill hole MAD012
• 3m @ 3.8%Ni, 1.6%Cu and 2.7g/t total PGEs from 56.3m in drill hole MAD013

St George believes the project is under‐explored and that there is significant potential for additional nickel‐ copper mineralisation at Cathedrals and in the Mt Alexander greenstone belt.

St George Mining Executive Chairman, John Prineas said:

"In October, we acquired 100% of the Hawaii and Mt Alexander North Projects from BHP Billiton. Today we can announce that we have the final piece in the puzzle – the core Mt Alexander tenement with its high‐ grade nickel‐copper sulphide discovery.

"St George now has an unprecedented opportunity to unlock the potential of this Project and to realise its tremendous value.

"Mt Alexander is a compelling addition to our portfolio of projects and very complementary to our 100% owned East Laverton Project where we are continuing to explore priority nickel sulphide and gold targets.

"This milestone acquisition has re‐enforced St George's credentials as a high quality explorer with an enviable portfolio of projects that provide multiple opportunities for a significant discovery."

Figure 1 – a map showing the location of the Hawaii and Mt Alexander Projects over TMI magnetics. The projects are in a world class address for major nickel and gold deposits

THE MT ALEXANDER PROJECT

The Mt Alexander Project is located on the western margin of the Eastern Goldfields Superterrane (see Figure 2). The project straddles the Ida Fault, a significant Craton‐scale structure that marks the boundary between the Kalgoorlie Terrane (and Eastern Goldfields Superterrane) to the east and the Youanmi Terrane to the west.

Figure 2 – a map of the tectonostratigraphic terranes of the Yilgarn Craton. The Hawaii and Mt Alexander Projects are located on the boundary of the Kalgoorlie and Youanmi Terranes adjacent to the Ida Fault.

The Mt Alexander Project is located approximately 120km south‐southwest of Leinster, the centre of Nickel West's operations in the Agnew‐Wiluna belt. The core tenement for the Project, and in which St George has now acquired a 75% interest, is exploration licence 29/638 which covers 78.65sq km.

In October 2015, St George completed the 100% acquisition of exploration licence E29/548 from Nickel West which covers 45.12 sq km. In addition, St George has lodged an application for exploration licence E29/954 which covers 41.72 sq km. All these three tenements are contiguous and provide St George with approximately 165 sq km of highly prospective ground in this under‐explored area that includes the majority of the Mt Alexander greenstone belt.

St George is planning a multi‐phase field exploration programme at Mt Alexander in 2016, including a drilling programme to test nickel sulphide targets. Further details regarding exploration in 2016 will be announced early in the New Year.

Figure 3 – a map of the Mt Alexander tenements over TMI magnetics. The Cathedrals Fault that hosts the high grade Ni‐Cu‐PGE discovery on E29/638 is interpreted to extend into E29/548 owned 100% by St George.

TRANSACTION TERMS

The consideration payable to Nickel West by St George for the acquisition of the 75% interest in the Mt Alexander Project is $300,000. Completion of the transaction is scheduled for 28 January 2016.

Other key commercial terms of the acquisition are:

• 1. Nickel West has off‐take rights to St George's share of any nickel produced from the Project;
• 1. Nickel West may charge a base royalty of 1% of the proceeds from St George's share of any mineral production at the Project; and
• 1. Nickel West may charge an additional royalty of 1% of the proceeds from St George's share of any nickel produced from the Project provided that the additional royalty is only payable if a minimum measured and indicated JORC resource of at least 25,000 tonnes of contained nickel is defined at the Project and payments of the additional royalty start 12 months after commercial production from the Project.

Under the Mt Alexander joint venture agreement, Western Areas had a right of pre‐emption over the sale by Nickel West of its interest in the joint venture. Western Areas agreed to not exercise its right of pre‐emption and will in turn receive an allotment of 3,500,000 ordinary shares in St George following an Extraordinary General Meeting being planned for early in 2016. Western Areas will continue with a 25% non‐contributing interest in Mt Alexander until there is a decision to mine.

For further information, please contact:

John Prineas Executive Chairman St George Mining Limited (+61) 411 421 253 John.prineas@stgm.com.au Colin Hay Professional Public Relations (+61) 08 9388 0944 mob 0404 683 355 colin.hay@ppr.com.au

Competent Person Statement:

The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Matthew McCarthy, a Competent Person who is a Member of The Australasian Institute of Geoscientists. Mr McCarthy is employed by St George Mining Limited.

Mr McCarthy has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being 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 McCarthy consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The following sections are provided for compliance with requirements for the reporting of exploration results under the JORC Code, 2012 Edition.

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections)
Criteria	JORC Code explanation	Commentary
Samplingtechniques	Natureandqualityofsampling(egcutchannels, random chips, or specific specialisedindustrystandardmeasurementtoolsappropriatetothemineralsunderinvestigation,suchasdownholegammasondes, or handheld XRF instruments, etc.).These examples should not be taken as limitingthe broad meaning of sampling.	ThisASXReleasedated17December2015reportsontheacquisition by St George Mining Limited ("St George") of a majority75% interest in the Mt Alexander Project which is encompassed inE29/638.This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Include reference to measures taken to ensuresamplerepresentivityandtheappropriatecalibrationofanymeasurementtoolsorsystems used.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Aspects of the determination of mineralisationthat are Material to the Public Report.In cases where 'industry standard' work hasbeen done this would be relatively simple (eg'reverse circulation drilling was used to obtain1 m samples from which 3 kg was pulverised toproduce a 30 g charge for fire assay'). In othercases more explanation may be required, suchas where there is coarse gold that has inherentsampling problems. Unusual commodities ormineralisation types (eg submarine nodules)maywarrantdisclosureofdetailedinformation.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Drillingtechniques	Drill type (eg core, reverse circulation, open‐hole hammer, rotary air blast, auger, Bangka,sonic, etc) and details (eg core diameter, tripleor standard tube, depth of diamond tails, face‐sampling bit or other type, whether core isoriented and if so, by what method, etc).	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.References to reverse circulation and diamond drilling on E29/638are to drilling conducted by BHP Billiton Nickel West Pty Ltd ("NickelWest"), the party from which St George has acquired its 75%majority interest in the tenement (see Section: Exploration Done byOther Parties)
Drill sampleMethod of recording and assessing core andrecoverychip sample recoveries and results assessed.		This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Measures taken to maximise sample recoveryand ensure representative nature of thesamples.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.

Criteria	JORC Code explanation	Commentary
	Whether a relationship exists between samplerecovery and grade and whether sample biasmayhaveoccurredduetopreferentialloss/gain of fine/coarse material.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Logging	Whether core and chip samples have beengeologically and geotechnically logged to alevel of detail to support appropriate MineralResourceestimation,miningstudiesandmetallurgical studies.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Whether logging is qualitative or quantitativeinnature.Core(orcostean,channel,etc)photography.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	The total length and percentage of the relevantintersections logged.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Sub‐samplingtechniques andsamplepreparation	If core, whether cut or sawn and whetherquarter, half or all core taken.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	If non‐core, whether riffled, tube sampled,rotary split, etc and whether sampled wet ordry.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	For all sample types, the nature, quality andappropriateness of the sample preparationtechnique.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Quality control procedures adopted for all sub‐sampling stages to maximise representivity ofsamples.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Measures taken to ensure that the sampling isrepresentative of the in situ material collected,including for instance results for fieldduplicate/second‐half sampling.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Whether sample sizes are appropriate to thegrain size of the material being sampled.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Quality ofassay data andlaboratorytests	The nature, quality and appropriateness of theassaying and laboratory procedures used andwhether the technique is considered partial ortotal.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.

Criteria	JORC Code explanation	Commentary
	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.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Nature of quality control procedures adopted(egstandards,blanks,duplicates,externallaboratorychecks)andwhetheracceptablelevelsofaccuracy(i.e.lackofbias)andprecision have been established.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Verification ofsampling andassaying	The verification of significant intersections byeitherindependentoralternativecompanypersonnel.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
		Significant intersections discussed in this ASX release were checkedby St George personnel using assay data supplied by Nickel West.
	The use of twinned holes.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Documentation of primary data, data entryprocedures, data verification, data storage(physical and electronic) protocols.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Discuss any adjustment to assay data.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Location ofdata points	Accuracy and quality of surveys used to locatedrillholes(collaranddown‐holesurveys),trenches, mine workings and other locationsused in Mineral Resource estimation.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Specification of the grid system used.		The grid system used at the Mt Alexander project is GDA94 (MGA),zone 51.
	Quality and adequacy of topographic control.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Data spacinganddistribution	Data spacing for reporting of ExplorationResults.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Whether the data spacing and distribution issufficient to establish the degree of geologicalandgradecontinuityappropriatefortheMineral Resource and Ore Reserve estimationprocedure(s) and classifications applied.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Whether sample compositing has been applied.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.

Criteria	JORC Code explanation	Commentary
Orientation ofdata in relationto geologicalstructure	Whether the orientation of sampling achievesunbiased sampling of possible structures andthe extent to which this is known, consideringthe deposit type.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	If the relationship between the drillingorientation and the orientation of keymineralised structures is considered to haveintroduced a sampling bias, this should beassessed and reported if material.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Samplesecurity	The measures taken to ensure sample security.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Audits orreviews	The results of any audits or reviews of samplingtechniques and data.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.

Section 2 Reporting of Exploration Results

Criteria	JORC Code explanation	Commentary
MineralTenement andLand Status	Type, name/reference number, location andownership including agreements or materialissueswiththirdpartiesincludingjointventures,partnerships,overridingroyalties,native title interests, historical sites, wildernessor national park and environmental settings.	The Mt Alexander Project is comprised of two granted ExplorationLicences (E29/638 and E29/548). Tenement E29/638 will be a JointVenture between St George (75% interest) and Western Areas (25%interest). Both tenements are subject to a royalty in favour of a thirdparty that is outlined in this ASX Release (as regards E29/638) andthe ASX release dated 18 September 2015 (as regards E29/548).
	The security of the tenure held at the time ofreporting along with any known impediments	No environmentally sensitive sites have been identified on thetenements. A registered Heritage site known as Willsmore 1 (DAAidentification 3087) straddles tenements E29/548 and E29/638.
	to obtaining a licence to operate in the area.	The newly acquired tenement E29/638, as well as E29/548, are ingood standing and no known impediments exist.
ExplorationDone by OtherParties	Acknowledgment and appraisal of explorationby other parties.	Exploration on tenement E29/638 has been largely for komatiite‐hosted nickel sulphides both in the Mt Alexander Greenstone Belt,and at the Cathedrals Prospect in the northern section of thetenement.
		The target lithological unit in the Mt Alexander Greenstone belt hasbeen the Central Ultramafic Unit, which has been explored by anumber of parties, most recently by Nickel West.
		High grade nickel‐copper sulphides were discovered at the MtAlexander Project in 2008. Drilling was completed to test co‐incidentelectromagnetic (EM) and magnetic anomalies associated withnickel‐PGE enriched gossans. The drilling identified high grade Ni‐CumineralisationandthediscoverywasnamedtheCathedralsProspect. The tenement remains underexplored.
Geology	Deposit type, geological setting and style ofmineralisation	The Mt Alexander Project is at the northern end of a westernbifurcation of the Mt Ida Greenstones. The greenstones are boundto the west by the Ida Fault, a significant Craton‐scale structure thatmarks the boundary between the Kalgoorlie Terrane (and EasternGoldfields Superterrane) to the east and the Youanmi Terrane to thewest.The Mt Alexander Project is prospective for further high‐gradekomatiite‐hostednickel‐copper‐PGEmineralisationandalsoprecious metal mineralisation (i.e. orogenic gold) that is typifiedelsewhere in the Yilgarn Craton.

Criteria	JORC Code explanation	Commentary
Drill holeinformation	A summary of all information material to theunderstandingoftheexplorationresultsincludingtabulationofthefollowinginformation for all Material drill holes:• Easting and northing of the drill hole collar•Elevation or RL (Reduced Level – elevationabove sea level in meters) of the drill hole collar• Dip and azimuth of the hole• Down hole length and interception depth• Hole length	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.Table 1 to this JORC Section contains drill hole information on thehistoric drilling that is discussed in this ASX Release. This historicdrilling was reported by Western Areas Limited in its ASX Releasedated 2 April 2008 'Assays Confirm High Grade Nickel/Copper/PGEDiscovery at Mt Alexander Joint Venture'.
Dataaggregationmethods	InreportingExplorationResults,weightingaveragingtechniques,maximumand/orminimum grade truncations (e.g. cutting ofhigh grades) and cut‐off grades are usuallyMaterial and should be stated.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	Where aggregated intercepts incorporate shortlengthsofhighgraderesultsandlongerlengths of low grade results, the procedureused for such aggregation should be stated andsome typical examples of such aggregationsshould be shown in detail.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
	The assumptions used for any reporting ofmetal equivalent values should be clearlystated.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.
Relationshipbetweenmineralisationwidths andinterceptlengths	These relationships are particularly importantin the reporting of exploration results.If the geometry of the mineralisation withrespect to the drill hole angle is known, itsnature should be reported. If it is not knownand 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).	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work. Historical assay intersections are reported asdown hole lengths. The relationship of down hole width to truewidth will be reviewed by St George upon assessment of the newlyacquired technical data.
Diagrams	Appropriate maps and sections (with scales)andtabulationsofinterceptsshouldbeincluded for any significant discovery beingreported. These should include, but not belimited to a plane view of drill hole collarlocations and appropriate sectional views.	Relevant scaled and oriented maps are included in the body of theASX Release.
BalancedReporting	WherecomprehensivereportingofallExplorationResultsisnotpractical,representative reporting of both low and highgrades and/or widths should be practiced toavoid misleading reporting Exploration Results.	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work. Comprehensive reporting of all exploration resultsis not required for the scope of this ASX release and will betabulated upon detailed evaluation of the newly acquired projectdatabase.
Othersubstantiveexplorationdata	Otherexplorationdata,ifmeaningfulandmaterial, should be reported including (but notlimited to): geological observation; geophysicalsurvey results; geochemical survey results; bulksamples–sizeandmethodoftreatment;metallurgicaltestresults;bulkdensity,groundwater,geotechnicalandrockcharacteristics;potentialdeleteriousor	This ASX Release refers only to historic exploration drilling and doesnotreportanynewdrillingresults,assayorothersamplingexploration work.

Criteria	JORC Code explanation	Commentary
	contaminating substances.
Further Work	The nature and scale of planned further work(e.g.testsforlateralextensionsordepthextensions or large – scale step – out drilling).Diagramsclearlyhighlightingtheareasofpossibleextensions,includingthemaingeological interpretations and future drillingareas,providedthisinformationisnotcommercially sensitive.	Further exploration on E29/638 will be planned once all newlyacquired technical data has been reviewed. Details of further workatthetenementwillbeannouncedaftercompletionoftheacquisition, scheduled for 28 January 2016, occurs.

HOLE ID	EASTING	NORTHING	DIP	AZM	DEPTH	FROM	TO	WIDTH	Ni	Cu	TotalPGEs
	(m)	(m)	(deg)	(deg)	(m)	(m)	(m)	(m)	(%)	(%)	(g/t)
MAD012	233885	6806995	‐70	170	111.5	81.5	95.5	14	1.9	0.8	1.8
incl.						91.4	95.4	4	4.9	1.7	3.9
MAD013	233805	6806955	‐70	170	93.3	56.3	59.3	3	3.8	1.6	2.7
incl.						57.6	59	1.4	7.1	3.0	2.9

Table 1 to 2012 JORC Section – Significant intersections at the Cathedrals Prospect within E29/638