ST GEORGE MINING LIMITED — Capital/Financing Update 2015

Sep 17, 2015

ASX / MEDIA RELEASE

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18 September 2015

ST GEORGE ACQUIRES NICKEL SULPHIDE PROJECTS

HIGHLIGHTS:

• St George acquires 100% of the Hawaii and Mt Alexander North nickel sulphide exploration projects from BHP Billiton

• The Projects are adjacent to the Ida Fault, a fundamental structure that links with the Mt Goode Rift which hosts the high grade Cosmos nickel sulphide deposits

• Significant opportunity for a nickel sulphide discovery on underexplored tenements in a world class nickel address

• Acquisition enhanced with additional tenement applications by St George over contiguous geological and strategically important areas

• High impact drilling programme planned by St George for October 2015

ACQUISITION OF HIGHLY PROSPECTIVE PROJECTS

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 100% of the Hawaii Project and the Mt Alexander North Project located south‐west of the Agnew‐Wiluna belt in Western Australia which hosts numerous world class nickel and gold deposits.

These new Projects increase the already substantial exploration upside offered by St George and will sit alongside the Company’s flagship and 100% owned East Laverton Nickel Sulphide Project in Western Australia.

St George Mining Executive Chairman, John Prineas said:

“The Hawaii and Mt Alexander North projects are underexplored but located within an area that has an excellent history of major nickel sulphide discoveries.

“This acquisition is consistent with our strategy of identifying early stage projects, like at East Laverton, and creating substantial value through systematic and technically driven exploration.

“We will ramp up exploration activity at these new Projects while continuing our extensive exploration programme at the East Laverton Project.

“St George has substantially increased its already attractive exploration portfolio with multiple high quality opportunities for a significant discovery.”

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Figure 1 – a map showing the location of the Hawaii and Mt Alexander North Projects in a world class address for major nickel and gold deposits

THE HAWAII AND MT ALEXANDER NORTH PROJECTS

The Hawaii and Mt Alexander North Projects are located along the Ida Fault, a significant Craton‐scale structure that marks the boundary between the Eastern Goldfields Superterrane to the east and the Youanmi Terrane to the west.

The Mt Goode Rift that hosts the Cosmos nickel complex (“Cosmos”) to the north is interpreted to be a splay off the Ida Fault (see Figure 2). The geology at Hawaii and Mt Alexander North could be contiguous with the stratigraphy that hosts Cosmos.

Cosmos, with a resource of over 500,000 tonnes of contained nickel, includes one of the highest grade nickel mines ever discovered. Cosmos, which is not currently in production, was recently acquired by Western Areas Ltd for $24.5 million.

Hawaii Project

This Project is located approximately 70km southwest of Leinster, the centre of Nickel West’s nickel activities in the Agnew‐Wiluna belt.

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St George has acquired exploration licence E36/741 from Nickel West, which covers 211.34 sq km. In addition, St George has lodged an application for exploration licence E36/851 which covers 86.42 sq km, and takes the total Project area to 297.76 sq km.

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Figure 2 – a regional map of the Projects showing the position of the important Ida Fault and Mt Goode Rift, and the location of major nickel and gold sulphide deposits

Reconnaissance shallow aircore drilling at the Hawaii Project in 2012 discovered over 5km of moderate to high MgO ultramafics adjacent to the Ida Fault (see Figure 3), in an area long considered to be barren granitoids. St George is planning a deep RC (reverse circulation) drilling programme at Hawaii next month, which will be the first bedrock test of the ultramafic rocks and other targets.

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Figure 3 – a map (against 1VD magnetics) of the Hawaii project area illustrating the extensive ultramafics identified by drilling

Mt Alexander North Project

This Project is located approximately 120km southwest of Leinster. St George has acquired 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, which will increase the total Project area to 86.84 sq km.

Tenement E29/548 is immediately north of the Mt Alexander Project in E29/638 which is currently held in joint venture by Nickel West (75%) and Western Areas (25%). High grade nickel‐copper sulphides were discovered at the Cathedrals prospect at the Mt Alexander Project in 2008 with intersections including 4m @ 4.9%Ni, 1.7%Cu and 3.9g/t total PGEs from 91.4m and 3m @ 3.8%Ni, 1.6%Cu and 2.7g/t total PGEs from 56.3m (see ASX Release dated 2 April 2008 by Western Areas Ltd).

Further details of the exploration programme planned by St George for these new Projects will be announced soon.

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Figure 4 – a map of the Mt Alexander North tenements. The Cathedrals Fault that hosts the high grade Ni‐ Cu‐PGE discovery on E29/638 is interpreted to extend into the new tenement application (E29/954) of St George.

TRANSACTION TERMS

The consideration payable by St George for the acquisition of the new Projects is $40,000.

In addition, other key commercial terms of the transaction are:

• 1) Nickel West has off‐take rights to any nickel produced from the acquired tenements;

• 2) Nickel West may charge a base royalty of 1% of the proceeds from any mineral production at a tenement; and

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• 3) Nickel West may charge an additional royalty of 1% of the proceeds of any nickel produced from a tenement 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 relevant tenement and payments of the additional royalty start 12 months after commercial production from the relevant tenement.

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.

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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
Sampling	Nature and quality of sampling (eg cut	This ASX Release dated 18 September 2015 reports on the
techniques	channels, random chips, or specific specialised	acquisition by St George Mining Limited (“St George”) of tenements
	industry standard measurement tools	comprised in the Hawaii Project and Mt Alexander North Project.
	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	St George has not conducted any exploration activities at these tenements and this ASX Release does not report any new drilling, assay or other sampling exploration work.
	the broad meaning of sampling.
	Include reference to measures taken to ensure	The ASX Release does not report any drilling, assay or other
	sample representivity and the appropriate	sampling exploration.
	calibration of any measurement tools or
	systems used.
	Aspects of the determination of mineralisation	The ASX Release does not report any drilling, assay or other
	that are Material to the Public Report.	sampling exploration.
	In cases where ‘industry standard’ work has
	been done this would be relatively simple (eg
	‘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 (eg submarine nodules)
	may warrant disclosure of detailed
	information.
Drilling	Drill type (eg core, reverse circulation, open‐	The ASX Release does not report any drilling, assay or other
techniques	hole hammer, rotary air blast, auger, Bangka,	sampling exploration. References to aircore drilling on E36/741 are
	sonic, etc) and details (eg core diameter, triple	to drilling conducted by the previous owner of the tenement (see
	or standard tube, depth of diamond tails, face‐	Section:Exploration Done by Other Parties)
	sampling bit or other type, whether core is
	oriented and if so, by what method, etc).
Drill sample	Method of recording and assessing core and	The ASX Release does not report any drilling, assay or other
recovery	chip sample recoveries and results assessed.	sampling exploration.
	Measures taken to maximise sample recovery	The ASX Release does not report any drilling, assay or other
	and ensure representative nature of the	sampling exploration.
	samples.
	Whether a relationship exists between sample	The ASX Release does not report any drilling, assay or other
	recovery and grade and whether sample bias	sampling exploration.
	may have occurred due to preferential
	loss/gain of fine/coarse material.

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Criteria	JORC Code explanation	Commentary
Logging	Whether core and chip samples have been	The ASX Release does not report any drilling, assay or other
	geologically and geotechnically logged to a	sampling exploration.
	level of detail to support appropriate Mineral
	Resource estimation, mining studies and
	metallurgical studies.
	Whether logging is qualitative or quantitative	The ASX Release does not report any drilling, assay or other
	in nature. Core (or costean, channel, etc)	sampling exploration.
	photography.
	The total length and percentage of the relevant	The ASX Release does not report any drilling, assay or other
	intersections logged.	sampling exploration.
Sub‐sampling	If core, whether cut or sawn and whether	The ASX Release does not report any drilling, assay or other
techniques and	quarter, half or all core taken.	sampling exploration.
sample
preparation
	If non‐core, whether riffled, tube sampled,	The ASX Release does not report any drilling, assay or other
	rotary split, etc and whether sampled wet or	sampling exploration.
	dry.
	For all sample types, the nature, quality and	The ASX Release does not report any drilling, assay or other
	appropriateness of the sample preparation	sampling exploration.
	technique.
	Quality control procedures adopted for all sub‐	The ASX Release does not report any drilling, assay or other
	sampling stages to maximise representivity of	sampling exploration.
	samples.
	Measures taken to ensure that the sampling is	The ASX Release does not report any drilling, assay or other
	representative of the in situ material collected,	sampling exploration.
	including for instance results for field
	duplicate/second‐half sampling.
	Whether sample sizes are appropriate to the	The ASX Release does not report any drilling, assay or other
	grain size of the material being sampled.	sampling exploration.
Quality of	The nature, quality and appropriateness of the	The ASX Release does not report any drilling, assay or other
assay data and	assaying and laboratory procedures used and	sampling exploration.
laboratory	whether the technique is considered partial or
tests	total.
	For geophysical tools, spectrometers, handheld	The ASX Release does not report any drilling, assay or other
	XRF instruments, etc, the parameters used in	sampling exploration.
	determining the analysis including instrument
	make and model, reading times, calibrations
	factors applied and their derivation, etc.
	Nature of quality control procedures adopted	The ASX Release does not report any drilling, assay or other
	(eg standards, blanks, duplicates, external	sampling exploration.
	laboratory checks) and whether acceptable
	levels of accuracy (ie lack of bias) and precision
	have been established.

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Criteria	JORC Code explanation	Commentary
Verification of	The verification of significant intersections by	The ASX Release does not any drilling, assay or other sampling
sampling and	either independent or alternative company	exploration.
assaying	personnel.
	The use of twinned holes.	The ASX Release does not report any drilling, assay or other
		sampling exploration.
	Documentation of primary data, data entry	The ASX Release does not report any drilling, assay or other
	procedures, data verification, data storage	sampling exploration.
	(physical and electronic) protocols.
	Discuss any adjustment to assay data.	The ASX Release does not report any drilling, assay or other
		sampling exploration.
Location of	Accuracy and quality of surveys used to locate	The ASX Release does not report any drilling, assay or other
data points	drill holes (collar and down‐hole surveys),	sampling exploration.
	trenches, mine workings and other locations
	used in Mineral Resource estimation.
	Specification of the grid system used.	The ASX Release does not report any drilling, assay or other
		sampling exploration.
	Quality and adequacy of topographic control.	The ASX Release does not report any drilling, assay or other
		sampling exploration.
Data spacing	Data spacing for reporting of Exploration	The ASX Release does not report any drilling, assay or other
and	Results.	sampling exploration.
distribution
	Whether the data spacing and distribution is	The ASX Release does not report any drilling, assay or other
	sufficient to establish the degree of geological	sampling exploration.
	and grade continuity appropriate for the
	Mineral Resource and Ore Reserve estimation
	procedure(s) and classifications applied.
	Whether sample compositing has been applied.	The ASX Release does not report any drilling, assay or other
		sampling exploration.
Orientation of	Whether the orientation of sampling achieves	The ASX Release does not report any drilling, assay or other
data in relation	unbiased sampling of possible structures and	sampling exploration.
to geological	the extent to which this is known, considering
structure	the deposit type.
	If the relationship between the drilling	The ASX Release does not report any drilling, assay or other
	orientation and the orientation of key	sampling exploration.
	mineralised structures is considered to have
	introduced a sampling bias, this should be
	assessed and reported if material.
Sample	The measures taken to ensure sample security.	The ASX Release does not report any drilling, assay or other
security		sampling exploration.
Audits or	The results of any audits or reviews of sampling	No detailed audits or reviews have been conducted at this stage.
reviews	techniques and data.

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Section 2 Reporting of Exploration Results

Criteria	JORC Code explanation			Commentary
Mineral	Type, name/reference	number, location and		The Hawaii Project is comprised of one granted Exploration Licence
Tenement and	ownership including agreements or		material	(E36/741) and one Exploration Licence Application (E36/851). The
Land Status	issues with third parties including joint			Mt Alexander North Project is comprised of one granted Exploration
	ventures, partnerships, overriding		royalties,	Licence (E29/548) and one Exploration Licence Application
	native title interests, historical sites, wilderness			(E29/954).
	or national park and environmental settings.			Each tenement is 100% owned by Blue Thunder Resources Pty Ltd, a
				wholly owned subsidiary of St George Mining. E36/741 and E29/548
	The security of the tenure held at the time of reporting along with any known impediments			are subject to a royalty in favour of a third party that is outlined in the ASX Release.
	to obtaining a licence to	operate in the area.		The tenements at the Mt Alexander North Project are subject to the
				Wutha Land Access Deed. No environmentally sensitive sites have
				been identified at any of the tenements.
				The tenements are in good standing and no known impediments
				exist.
Exploration	Acknowledgment and appraisal of exploration			E36/741 and E29/548 have been acquired by St George Mining from
Done by Other	by other parties.			BHP Billiton Nickel West Pty Ltd (Nickel West). Limited on‐ground
Parties				exploration was completed at these tenements by Nickel West.
				At E36/741, an aircore drilling programme comprising 20 holes for
				944m was completed in 2012 by Nickel West. The drilling identified
				a 5.5km strike length of ultramafic rocks. This was a major
				exploration breakthrough as the area was previously considered to
				be barren granitoids. A follow‐up small fixed loop EM program was
				completed over ~10% of the ultramafic in 2013, with no bedrock
				conductors identified however EM effectiveness may be restricted
				by conductive cover. Eight of the aircore drill holes did not
				penetrate to the lower saprolite/saprock.
				At E29/548, 1 RC hole for 250m was completed in 2012 in the
				southeast of the tenement. Other work completed includes Hoistem
				and Sub‐audio magnetic geophysical surveys over the southern
				central portion of the tenement to assist interpretation of bedrock
				geology and for targeting purposes.
				The tenements remain underexplored.
Geology	Deposit type, geological	setting and style of		The Hawaii and Mt Alexander North Projects are located along the
	mineralisation			Ida Fault, a significant Craton‐scale structure that marks the
				boundary between the Eastern Goldfields Superterrane to the east
				and the Youanmi Terrane to the west.
				No mineralisation has been discovered at the Projects at this stage.
				The Hawaii and Mt Alexander projects are prospective for komatiite‐
				hosted nickel sulphide deposits and precious metal deposits (i.e.
				Orogenic gold) that are typified elsewhere in the Yilgarn Craton.
Drill hole	A summary of all information material to the			The ASX Release does not report any drilling or assay sampling
information	understanding of the exploration results			exploration.
	including 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 meters) of the drill hole collar
	• Dip and azimuth of the hole
	• Down hole length and	interception depth
	• Hole length

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Criteria	JORC Code explanation	Commentary
Data	In reporting Exploration Results, weighting	The ASX Release does not report any drilling or assay sampling
aggregation	averaging techniques, maximum and/or	exploration.
methods	minimum grade truncations (e.g. cutting of
	high grades) and cut‐off grades are usually
	Material and should be stated.
	Where aggregated intercepts incorporate short	The ASX Release does not report any drilling or assay sampling
	lengths of high grade results and longer	exploration.
	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.
	The assumptions used for any reporting of	The ASX Release does not report any drilling or assay sampling
	metal equivalent values should be clearly	exploration.
	stated.
Relationship	These relationships are particularly important	The ASX Release does not report any drilling or assay sampling
between	in the reporting of exploration results.	exploration.
mineralisation widths and intercept lengths	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).
Diagrams	Appropriate maps and sections (with scales)	Relevant maps are included in the body of the ASX Release.
	and tabulations of intercepts should be
	included for any significant discovery being
	reported. These should include, but not be
	limited to a plane view of drill hole collar
	locations and appropriate sectional views.
Balanced	Where comprehensive reporting of all	The ASX Release does not report any drilling or assay sampling
Reporting	Exploration Results is not practical,	exploration.
	representative reporting of both low and high
	grades and/or widths should be practiced to
	avoid misleading reporting Exploration Results.
Other	Other exploration data, if meaningful and	The ASX Release does not report any drilling or assay sampling
substantive	material, should be reported including (but not	exploration.
exploration	limited to): geological observation; geophysical
data	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.
Further Work	The nature and scale of planned further work	St George is currently planning further exploration programmes for
	(e.g. tests for lateral extensions or depth	the Hawaii and Mt Alexander North Projects, and further
	extensions or large – scale step – out drilling).	announcements will be made in due course.
	Diagrams clearly highlighting the areas of
	possible extensions, including the main
	geological interpretations and future drilling
	areas, provided this information is not
	commercially sensitive.

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