ST GEORGE MINING LIMITED — Capital/Financing Update 2015

Aug 16, 2015

17 August 2015

ASSAYS CONFIRM WIDE CONTINUOUS NICKEL SULPHIDE ZONE AT DESERT DRAGON CENTRAL

HIGHLIGHTS:

• Assay results confirm a wide zone of laterally continuous nickel sulphide mineralisation at Desert Dragon Central, within a large and highly prospective komatiite channel that is open along strike
• Nickel sulphide intersections are within the ultramafic unit first identified by hole DRAC35 at 100m downhole, providing the opportunity for shallow nickel sulphide deposits
• Nickel sulphide zone extends over 300 metres down dip and remains open in both directions
• Strong off‐hole electromagnetic (EM) conductor from DDRDD0004 provides a drill ready target for massive nickel sulphides
• More assay results and downhole EM surveys are pending
• Follow‐up drilling of priority targets planned for September 2015

WIDE ZONE OF NICKEL SULPHIDES AT DESERT DRAGON CENTRAL

St George Mining Limited (ASX: SGQ) ('St George' or 'the Company') is pleased to announce very positive results from the initial assays received for the drill holes completed at Desert Dragon Central, one of the highest priority nickel sulphide prospects at the Company's 100% owned East Laverton Property in Western Australia.

The current drilling campaign has returned numerous intersections of nickel sulphide mineralisation at Desert Dragon Central, including several nickel sulphide stringers (see Figure 1), providing increased confidence for a significant discovery of massive nickel sulphides at this prospect.

The initial assay results for the drill holes at Desert Dragon Central demonstrate a wide and continuous zone of disseminated nickel sulphide mineralisation, which is present from a shallow depth and importantly within the same ultramafic unit. This mineralised unit is the fertile ultramafic initially identified by drill hole DRAC35 (18m @ 0.40% Ni from 100m including 4m @ 0.57% Ni from 100m), which was completed by BHP Billiton Nickel West in 2012.

St George Mining Executive Chairman, John Prineas said:

"The drilling at Desert Dragon Central has successfully extended the nickel sulphide mineralisation that was discovered by DRAC35. The mineralised zone is open to the north and south along strike, and has provided us with several massive nickel sulphide targets that we will schedule for priority follow‐up.

"This kind of geologically driven and systematic exploration is the foundation for most major discoveries, so the important progress we have achieved at Desert Dragon Central is very pleasing."

Four new drill holes were completed at Desert Dragon Central ‐ DDRDD0003, DDRDD0004 and DDRDD0005 were completed on the DRAC35 section and DDRDD0007 immediately to the south (see Table 1 for drill hole details). Assays have been received for the diamond core portion of DDRDD0003, for DDRDD0005 from 102m to 250m and for the first 72m of DDRDD0004. Assays for DDRDD0007 and for the remainder of DDRDD0004 and DDRDD0005 are expected shortly.

Significant nickel sulphide intersections from these holes are:

• DDRDD0004 ‐ 7m @ 0.39% Ni from 43m with 90ppb Pt+Pd
• DDRDD0004 ‐ 1m @ 0.51% Ni from 56m with 50ppb Pt+Pd
• DDRDD0005 ‐ 2m @ 0.44% Ni from 215m with 267ppb Pt+Pd
• DDRDD0005 ‐ 4m @ 0.34% Ni from 220m with 172ppb Pt+Pd
• DDRDD0005 ‐ 5.6m @ 0.44% Ni from 231m with 308ppb Pt+Pd

Further details on assay results received to date are in Tables 2 and 3 below.

Figure 1 – a photograph of the drill core from DDRDD0005 showing a nickel sulphide stringer (3cm in length) at 237m within the sheared basal contact of the prospective ultramafic. Spot XRF analysis of the stringer sulphide recorded 1.6% Ni. The core is NQ2 size, 5cm in diameter.

Figure 2 is a geological cross‐section interpreted from the completed drill holes at Desert Dragon Central, which illustrates the wide zone of disseminated nickel sulphides in an orthocumulate ultramafic unit, which we refer to as the "DRAC35 Ultramafic".

This wide mineralised zone is open laterally and represents a high value target horizon for massive nickel sulphide mineralisation. Only a very small portion of the prospective surface of this unit has been tested by drilling so far, with significant potential remaining for a major discovery.

Importantly, all nickel sulphide intersections in the DRAC35 Ultramafic have elevated values for Platinum Group Elements (PGEs, including Pt+Pd) which is indicative of magmatic sulphides.

Elevated PGEs in ultramafics without nickel sulphide mineralisation are also important, as PGE anomalism can form a halo to nickel sulphide mineralisation. The elevated PGEs in the ultramafic unit intersected in DDRDD0003 from 380m to 405m are an example of this.

The western‐most hole on the DRAC35 section is DDRDD0003, which is located some 400m down dip of the original DRAC35 nickel sulphide intersection. Although the hole did not intersect significant nickel sulphide mineralisation, it did intersect significant PGE and Cu anomalism within the DRAC35 Ultramafic.

This is interpreted to be remobilised from adjacent nickel sulphide mineralisation and is an important indicator of the continuity of the wide mineralised zone.

Figure 2 – Interpreted geological cross section from drilling at Desert Dragon Central. The wide zone of nickel sulphides and significant intersections in the DRAC35 Ultramafic are shown in red.

INCREASED PROSPECTIVITY WITH NEW DRILL TARGETS

The Significance of Widespread Disseminated Nickel Sulphides

Massive nickel sulphides are typically deposited at the base and immediate flanks of ultramafic lava channels. Disseminated nickel sulphides can occur as a halo above and lateral to the massive sulphides, providing a good vector for the targeting of massive sulphide bodies.

The wide zone of disseminated nickel sulphides in the DRAC35 Ultramafic confirms the fertility of this ultramafic channel for nickel sulphide mineralisation, and supports the potential for massive nickel sulphide mineralisation in or proximal to this unit. In structurally complex environments such as Desert Dragon Central, it is also possible for the target massive body to be somewhat dislocated from the host ultramafic by later deformation.

The latest interpretation of the stratigraphy and geology at Desert Dragon Central suggests the lower contact of the prospective DRAC35 Ultramafic is defined by a significant shear zone, possibly the result of a thrust fault (see Figure 2). Thrusting can cause remobilisation of nickel sulphide mineralisation and create discrete high grade massive sulphide deposits, such as Spotted Quoll (+125,000t contained Ni) at Forrestania and Emily Ann (+80,000t contained Ni) at Lake Johnston.

The DRAC35 Ultramafic is facing upwards and occurs within a broader sequence of ortho‐mesocumulate ultramafics, mafic schists and interflow shales, cherts and sulphidic sediments. The investigation for the potential of additional prospective ultramafic units, similar to the DRAC35 Ultramafic, is ongoing. Further sophisticated geochemical analysis and petrographic studies of the various ultramafic units will assist in establishing the prospectivity of those units.

The complex structural deformation observed at Desert Dragon Central is also characteristic of a number of major nickel sulphide deposits such as Cosmos (+500,000t contained Ni at the Cosmos camp) and Rocky's Reward (+200,000t contained Ni) in the Agnew‐Wiluna belt.

EM Conductors Ready for Drilling

A DHEM survey of DDRDD0004 has identified a strong off‐hole EM anomaly. This conductor has a strong response in the late‐time data and is interpreted by Newexco to be below and directly south of the hole.

The steeply dipping conductor is modelled to intersect the prospective DRAC35 Ultramafic, and is a target for any remobilised massive nickel sulphides. The conductor may also be related to a significant structure that forms the eastern contact of the greenstone sequence as defined by the magnetics, and which could be a control on the potential deposition of mineralisation.

The DHEM conductor from DDRDD0004 is modelled as a discrete EM plate that is permissive of a massive nickel sulphide body. Drill testing of this high priority target will be scheduled for the reverse circulation (RC) drilling programme due to commence in September 2015.

DHEM surveys for all other drill holes at Desert Dragon Central will be completed this week. Preliminary results from the DHEM survey at DDRDD0005 indicate a strong off‐hole EM anomaly which is currently being evaluated.

Newly Recognised Nickel Sulphides in Historical Drill Core

Diamond core drill holes DDD001, DDD002 and DDD003 were completed at Desert Dragon Central by St George in December 2013. The holes intersected sequences of ultramafic rocks with anomalous PGE values and sequences of metal‐rich sulphidic sediments, supporting the broader prospectivity of the Desert Dragon Central area for nickel sulphide mineralisation.

The new stratigraphic and geological model for Desert Dragon Central being developed by our technical team, including nickel experts Dr Jon Hronsky, Dr Martin Gole and Matthew McCarthy, has included a review of these earlier holes. Relogging of the drill core from DDD001, which intersected the DRAC35 Ultramafic, has identified additional nickel sulphide mineralisation. This further supports the continuity of the wide and unconstrained nickel sulphide zone in the DRAC35 Ultramafic.

The mineralised interval from DDD001 is currently being sampled for assaying and further relogging of the drill core for all of these three historical holes will be completed.

Figure 3 is a plan view of Desert Dragon Central that illustrates the recent drill holes as well as important historical holes, and highlights the wide nickel sulphide zone that has been confirmed by drilling results.

Figure 3 – a plan view of Desert Dragon Central with important drill holes. Holes completed in 2015 that intersected the DRAC35 Ultramafic were drilled to the east. The surface position of the DRAC35 Ultramafic is highlighted and remains open along strike to the north and south.

STRONG BASE METAL ANOMALISM

The geological logging and XRF analysis of the drill core from the completed holes at Desert Dragon Central noted multiple occurrences of copper and zinc, suggesting a broad zone of anomalous base metal mineralisation in this area. Chalcopyrite (copper sulphide) and sphalerite (zinc sulphide) were visually identified in the drill core of holes DDRDD0003 and DDRDD0005.

The interim assay results confirm a strongly anomalous and broad base metal horizon at Desert Dragon Central with numerous intervals of elevated copper and zinc values; see Table 3. Significantly, the current stratigraphic model at Desert Dragon Central indicates this base metal horizon lies above the ultramafic units.

These thick units of metal‐rich exhalative sediments are predictably located near to volcanic rift vents, which are typically the source of komatiite lavas and are favourable for nickel sulphide deposition.

ONGOING DRILLING PROGRAMME

Diamond Drilling Programme

Drill hole DDRDD0008, the final hole for the current diamond drilling programme, has been completed to a depth of 375m. The hole was designed to test the Dragon 5 EM conductor at Desert Dragon Central.

The hole has intersected 40m of moderate‐MgO ultramafics and sulphidic sediments within a broader sequence of mafic rocks. Massive pyrrhotite was intersected at 262m with some minor sphalerite observed (0.21% Zn from the XRF analysis). This unit likely explains the Dragon 5 EM conductor. A siliceous sulphide breccia was also intersected at 299m on contact with sulphidic sediments and with anomalous copper (up to 0.13% Cu from XRF analysis).

The geological logging and XRF analysis of the drill core from DDRDD0008 is ongoing. The drill hole has been cased in PVC‐piping and a DHEM survey will be completed to investigate for conductive bodies either laterally or at depth to the hole.

RC Drilling Programme

A reverse circulation (RC) drilling programme is planned to commence in September 2015. This programme will follow‐up targets for massive nickel sulphides generated by the current diamond drilling programme including the high priority DHEM conductors identified by Newexco at Desert Dragon North and at Desert Dragon Central.

Additionally, drill holes will be designed to further test the lateral extents of the nickel sulphide zone now well‐defined within the fertile DRAC35 Ultramafic at Desert Dragon Central.

The RC drilling programme will also test targets at the Windsor nickel sulphide prospect where drilling in 2014 successfully intersected high tenor nickel sulphides, and confirmed a broad zone of disseminated nickel sulphide mineralisation over 200m strike which is open to both the north and south.

Figure 4 illustrates the high priority section of the Stella Range belt that hosts the Desert Dragon North, Desert Dragon Central, Windsor North and Windsor prospects. This priority section covers 18km of prospective ultramafics within a +40km strike length of the Stella Range belt.

Only a small fraction of this belt, less than 20%, has been drill tested with significant exploration potential continuing for the discovery of multiple nickel sulphide deposits.

A further announcement regarding the upcoming RC drilling programme will be made soon.

Figure 4 – the Desert Dragon‐Windsor prospects are within a priority 18km section of the Stella Range belt where multiple occurrences of nickel sulphide mineralisation have already been confirmed. With only limited drilling at the belt to date, substantial exploration upside exists for the potential discovery of multiple nickel sulphide deposits.

XRF ANALYSIS

References to XRF results relate to analysis using a hand‐held Olympus Innov‐X Spectrum Analyser. This portable device provides immediate analysis of modal mineralogy of drill samples. The device is unable to reliably detect precious metals in samples but is considered to be more reliable for base metal assessment.

Unless otherwise stated, values determined by XRF analysis are based on one spot reading per one metre of drill core. As such, results from XRF analysis are stated as indicative only and are preliminary to subsequent confirmation by geochemical analysis at Intertek Genalysis Laboratories.

The XRF data is useful in assisting in the interpretation of the geological character of the rocks being encountered during drilling. The data may not be representative of the actual metal content in that sample.

HOLE ID	EASTING	NORTHING	RL	DIP(deg)	AZM(deg)	DEPTH(m)
DDRDD0001	527610	6738950	403	‐60	30	436
DDRDD0002	525931	6740395	395	‐60	30	550
DDRDD0003	526575	6739215	403	‐60	65	497.7
DDRDD0004	527155	6739400	400	‐60	60	379
DDRDD0005	526950	6739230	403	‐60	60	441.8
DDRDD0007	527000	6739175	408	‐90	0	490
DDRDD0008	527570	6738200	382	‐75	0	387.9

Table 1 – Drill hole details for holes completed in 2015 at Desert Dragon Central. Drill holes DDRDD0003, DDRDD0004, DDRDD0005 and DDRDD0007 intersected the DRAC35 Ultramafic.

HOLE ID	FROM(m)	TO(m)	Significant NiS Intersection
DDRDD0004	43	50	7m @ 0.39%Ni (88ppb Pt+Pd)
	56	57	1m @ 0.51%Ni (50ppb Pt+Pd)
DDRDD0005	215	217	2m @ 0.44% Ni (267ppb Pt+Pd)
	220	224	4m @ 0.34% Ni (172ppb Pt+Pd)
			5.6m @ 0.44 Ni (208ppb Pt+Pd) incl. 1m @
		231236.6	0.59% Ni from 235m)

Table 2 ‐ Details of significant nickel sulphide intersections for completed holes at Desert Dragon Central based on interim assays received to date. Intersections are length weighted.

HOLE ID	FROM(m)	TO(m)	WIDTH(m)	Ni %	Cu(ppm)	Zn(ppm)	Pt+Pd(ppb)	Au(ppb)
DDRDD0005	42	50	8			1316
	107.92	109.15	1.23					643
	215	217	2	0.44	604		267
	220	224	4	0.34	390		172
	231	236.6	5.6	0.44	390		208
DDRDD0004	43	50	7	0.39	229		88
	56	57	1	0.51	64		50
DDRDD0003	92.88	93.74	0.86			1598
	124.4	125.25	0.85		2373
incl.	125.14	125.25	0.11		8868
	127.43	128.7	1.27		992
	136.03	136.37	0.34			1308
	139	139.67	0.67		764	2237
	161.65	162.42	0.77			1109		122
	185.11	188.06	2.95		522	1494
	201	202.67	1.67			2264
	210	210.56	0.56			1144
	245.12	245.84	0.72		620	4032
	342	344.19	2.19		1355
	364.27	375	10.73		1108
	389.28	395	5.72		1224		17
	399	400	1			1532
	409	411.36	2.36			3232
	457.45	458.17	0.72			2788

Table 3 – Assay results received to date for 2015 drill holes at Desert Dragon Central, with significant intersections highlighted in bold print. Intersections are length weighted.

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 Timothy Hronsky, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hronsky is employed by Essential Risk Solutions Ltd which has been retained by St George Mining Limited to provide technical advice on mineral projects.

Mr Hronsky 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 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hronsky 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 section is 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 specialisedindustrystandardmeasurementtools	ThisASXReleasedated17August2015reportsoninterimexploration results from the Company's 2015 nickel sulphide drillingcampaign.
	appropriatetothemineralsunderinvestigation,suchasdownholegammasondes, or handheld XRF instruments, etc).These examples should not be taken as limiting	Drilling is being undertaken by DDH1 Drilling Pty Ltd using a Sandvik1200 Multipurpose truck mounted drill rig. This rig has capability fordiamond core, reverse circulation (RC) and mud rotary drilling.
the broad meaning of sampling.	The initial drilling program is planned to include diamond core holeswith RC pre‐collars. The actual holes to be completed will be subjectto ongoing management of the drilling program based on groundconditions and exploration results.
	Diamond Core Sampling: The core is removed from the drill rig andlaid out for initial analysis in the field. The core is measured andmarked up at 1m intervals against the drillers blocks, which arethemselves checked against the drillers log books where required.The visible structural features on the core are measured against thecore‐orientation lines.
	Onsite XRF analysis is conducted using a hand‐held Olympus Innov‐XSpectrum Analyser. The XRF analysis is used to systematically reviewdiamond drill core, with a single reading taken every metre, exceptin the case of core loss. These results are only used for onsiteinterpretation and preliminary base metal assessment subject tofinal geochemical analysis by laboratory assays.
	The sections of the core that are selected for assaying are markedup and recorded on a "cut‐sheet" which provides a control on theintervals that will be cut and sampled at a duly certified assaylaboratory, Intertek Genalysis. Core is prepared for analysis at 1mintervals or at lesser intervals of geological significance. Core is cutin half lengthways and then numbered samples are taken as per the"cut‐sheet".
	Diamond core provides high quality samples that are logged forlithological, structural, geotechnical, density and other attributes.Sampling is carried out under QAQC procedures as per industry bestpractice.
		RC Sampling: All samples from the RC drilling are taken as 1msamples. Samples are sent to Intertek Genalysis for assaying.
		Appropriate QAQC samples (standards, blanks and duplicates) wereinserted into the sequences as per industry best practice.
	In this program the multi‐purpose diamond and RC drill rig did nothave an industry standard splitter attached to facilitate collection ofsamples.RCsamplesweretakenmanuallyinthemostrepresentative way. Should any sample return any values that areanomalous, then a portable riffle splitter will be utilised to selectanother representative sample for assaying from the bulk sample ofRC chips retained by the Company.
		Onsite XRF analysis is conducted on the fines from RC chips using ahand‐held Olympus Innov‐X Spectrum Analyser. These results areonly used for onsite interpretation and preliminary base metalassessment subject to final geochemical analysis by laboratoryassays.
		Down‐hole electromagnetic (DHEM) survey: A DHEM survey isplanned for each diamond hole. The DHEM survey is designed and

Criteria	JORC Code explanation	Commentary
		managed by Newexco Services Pty Ltd, with field work contracted toBushgum Holdings Pty Ltd.
		Key specifications of the DHEM survey are:
		System: DigiAtlantis probe and a SMARTem24 receiver
		Components:A, U, V
		Component direction:
		Ba – Parallel to hole axis, positive up hole.Bu – Perpendicular to hole axis: toward 12 o' clock whenlooking down hole.Bv – Perpendicular to hole axis: toward 9 o' clock whenlooking down hole.
	Include reference to measures taken to ensuresamplerepresentivityandtheappropriatecalibrationofanymeasurementtoolsorsystems used.	DiamondCoreSampling:Fordiamondcoresamples,certifiedsample standards were added as every 25th sample. Core recoverycalculations are made through a reconciliation of the actual coreand the driller's records. Downhole surveys of dip and azimuthwere conducted using a single shot camera every 30m to detectdeviations of the hole from the planned dip and azimuth. The drill‐hole collar locations were recorded using a hand held GPS, whichhas an accuracy of +/‐ 5m. At a later date the drill‐hole collar will besurveyed to a greater degree of accuracy.
		RC Sampling: For RC drill samples, geological logging of RC chips iscompleted at site with representative chips being stored in drill chiptrays. Downhole surveys of dip and azimuth follow the sameprotocol as for diamond core holes.
		DHEM Survey: For the DHEM survey, the polarity of each componentis checked to ensure the system was set up using the correctcomponentorientations.Theholepositioniscorrectedfortrajectory using orientation survey data.
	Aspects of the determination of mineralisationthat are Material to the Public Report.In cases where 'industry standard' work has	Diamond Core Sampling: Core is drilled with HQ and NQ2 size andsampled as half core to produce a bulk sample for analysis. Intervalsvary from 0.3 – 1m maximum and are selected with an emphasis ongeological control.
been 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.	Assays are completed at Intertek Genalysis Laboratories in Perth.Samples are sent to Intertek where they are crushed to 6 mm andthen pulverised to 75 microns. A 30 g charge of the sample is fireassayed for gold, platinum and palladium. The detection range forgold is 1 – 2000 ppbAu, and 0.5 – 2000 ppb for platinum andpalladium. This is believed to be an appropriate detection level forthese elements within this specific mineral environment. However,should Au, Pt or Pd levels reported exceed these levels an additionalassay method will be used to re‐test samples.
		All other metals will be analysed using an acid digest and an ICPfinish. The sample is digested with nitric, hydrochloric, hydrofluoricand perchloric acids to effect as near to total solubility of the sampleas possible. The solution containing samples of interest, includingthose that need further review, will then be presented to an ICP‐OESfor the further quantification of the selected elements.
		RC Sampling: A 1m composite sample is taken from the bulk sampleof RC chips that may weigh in excess of 40 kg. Assay preparation byIntetrtekfollows the same protocol as for diamond core sampling.
Drillingtechniques	Drill type (eg core, reverse circulation, open‐hole hammer, rotary air blast, auger, Bangka,	Diamond Core Sampling: The collars of the diamond holes weredrilled using RC drilling down through the regolith to the point of

Criteria	JORC Code explanation	Commentary
	sonic, etc) and details (eg core diameter, tripleor standard tube, depth of diamond tails, face‐sampling bit or other type, whether core is	refusal or to a level considered geologically significant to change tocore. The hole was then continued using HQ diamond core until thedrillers determined that a change to NQ2 coring was required.
	oriented and if so, by what method, etc).	The core is oriented and marked by the drillers. The core is orientedusing ACT Mk II electric core orientation.
		RC Sampling: The RC drilling uses a 140 mm diameter face hammertool. High capacity air compressors on the drill rig are used toensure a continuously sealed and high pressure system duringdrilling to maximise the recovery of the drill cuttings, and to ensurechips remain dry to the maximum extent possible.
Drill samplerecovery	Method of recording and assessing core andchip sample recoveries and results assessed.	Diamond Core Sampling: Diamond core recoveries/core loss arerecorded during drilling and reconciled during the core processingand geological logging. No significant sample recovery problems arethought to have occurred in any holes drilled to date. There hasbeen a notable and consistent competency encountered in the rocksduring drilling.
		RC Sampling: RC samples are visually checked for recovery, moistureand contamination. Geological logging is completed at site withrepresentative RC chips stored in chip trays.
	Measures taken to maximise sample recoveryand ensure representative nature of thesamples.	Diamond Core Sampling: Depths are checked against the depth onthe core blocks and rod counts are routinely carried out by thedrillers. Core loss was recorded by St George geologists andsampling intervals were not carried through core loss.
		RC Sampling: Samples are normally collected using a cone and rifflesplitter. However, in this program, the multi‐purpose diamond andRC drill rig did not have an industry standard splitter attached. RCsamples were taken manually in the most representative way. If anysample returns any values that are anomalous, then a portable rifflesplitter will be utilised to select another representative sample forassaying from the bulk sample of RC chips retained by the Company.
	Whether a relationship exists between samplerecovery and grade and whether sample biasmayhaveoccurredduetopreferentialloss/gain of fine/coarse material.	To date, no detailed analysis to determine the relationship betweensample recovery and grade has been undertaken for this drillprogram. This analysis will be conducted following any economicdiscovery.
		The use of diamond drilling capturing whole rock cores reduceserrors associated with varying size fraction loss of the sample. Verycompetent rocks have been recovered to date.
		Thenatureofmagmaticsulphidedistributionhostedbythecompetent and consistent rocks hosting any mineralised intervalsare considered to significantly reduce any possible issue of samplebias due to material loss or gain.
Logging	Whether core and chip samples have beengeologically and geotechnically logged to alevel of detail to support appropriate MineralResourceestimation,miningstudiesandmetallurgical studies.	Geological logging is carried out on all diamond core and RC drillholes with lithology, alteration, mineralisation, structure and veiningrecorded.
	Whether logging is qualitative or quantitativeinnature.Core(orcostean,channel,etc)photography.	Logging of diamond core and RC samples recorded lithology,mineralogy,mineralisation,structures(coreonly),weathering,colour and other noticeable features. Core was photographed inboth dry and wet form.
	The total length and percentage of the relevantintersections logged.	All drill holes were geologically logged in full and detailed litho‐geochemical information was collected by the field XRF unit. Thedata relating to the elements analysed is used to determine furtherinformation regarding the detailed rock composition.

Criteria	JORC Code explanation	Commentary
Sub‐samplingtechniques andsamplepreparation	If core, whether cut or sawn and whetherquarter, half or all core taken.	The HQ and NQ2 core will be cut in half length ways at site using anautomatic core saw. All samples will be collected from the same sideof the core. The half‐core samples will be submitted to Intertek foranalysis.
	If non‐core, whether riffled, tube sampled,rotary split, etc and whether sampled wet ordry.	RC samples were taken manually in the most representative way asthe multipurpose drill rig did not have a riffle splitter to facilitatecollection of samples. If any sample returns any values that aredeemed anomalous, then a portable riffle splitter will be utilised toselect another representative sample for assaying from the bulksample of RC chips retained by the Company. RC samples arecollected in dry form.
	For all sample types, the nature, quality andappropriateness of the sample preparationtechnique.	Diamond Core Sampling: Diamond core was drilled with HQ andNQ2 size and sampled as complete half core to produce a bulksamplefor analysis. Intervals selected varied from 0.3 – 1m(maximum) with a strong geological control (as is possible indiamond core) to ensure grades are representative, i.e. remove anybias through projecting assay grades beyond appropriate geologicalboundaries.
		Assay preparation procedures ensure the entire sample is pulverisedto 75 microns before the sub‐sample is taken. This removes thepotentialforthesignificantsub‐samplingbiasthatcanbeintroduced at this stage.
		RC Sampling: Sample preparation for RC chips is the same as fordiamond core.
	Quality control procedures adopted for all sub‐sampling stages to maximise representivity ofsamples.	Diamond Core Sampling: Drill core is cut in half lengthways and thetotalhalf‐coresubmittedasthesample. Thismeetsindustrystandards where 50% of the total sample taken from the diamondcore is submitted.
		RC Sampling: Field QC procedures maximise representivity of RCsamples and involve the use of certified reference material as assaystandards, along with blanks, duplicates and barren washes.
	Measures taken to ensure that the sampling isrepresentative of the in situ material collected,including for instance results for fieldduplicate/second‐half sampling.	Diamond Core Sampling: The retention of the remaining half‐core isan important control as it allows assay values to be determinedagainst the actual geology; and where required a quarter coresample may be submitted for assurance. No resampling of quartercore or duplicates has been done at this stage of the project.
		RC Sampling: Field duplicates were taken on 1m composites for RCsamples.
	Whether sample sizes are appropriate to thegrain size of the material being sampled.	The sample sizes are considered to be appropriate to correctlyrepresent the sulphide mineralisation at the East Laverton Propertybased on: the style of mineralisation (massive and disseminatedsulphides), the thickness and consistency of the intersections andthe sampling methodology.
Quality ofassay data andlaboratorytests	The nature, quality and appropriateness of theassaying and laboratory procedures used andwhether the technique is considered partial ortotal.	For both diamond core and RC sampling, a 30 gram sample will befire assayed for gold, platinum and palladium. The detection rangefor gold is 1 – 2000 ppbAu, and 0.5 – 2000 ppb for platinum andpalladium. This is believed to be an appropriate detection level forthelevelsoftheseelementswithinthisspecificmineralenvironment. However, should Au, Pt or Pd levels reported exceedthese levels; an alternative assay method will be selected.
		All other metals will be analysed using an acid digest and an ICPfinish. The sample is digested with nitric, hydrochloric, hydrofluoricand perchloric acids to effect as near to total solubility of the sampleas possible. The solution containing samples of interest, includingthose that need further review, will then be presented to an ICP‐OESfor the further quantification of the selected elements.

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.	A handheld XRF instrument (Olympus Innov‐X Spectrum Analyser) isused to systematically analyse the drill core and RC chips onsite.Reading time was 60 seconds. The instruments are serviced andcalibratedatleastoncea year.FieldcalibrationoftheXRFinstrument using standards is undertaken each day.
		For the DHEM survey, specifications and quality control measuresare noted above.
	Nature of quality control procedures adopted(egstandards,blanks,duplicates,externallaboratorychecks)andwhetheracceptablelevels of accuracy (ie lack of bias) and precisionhave been established.	Laboratory QAQC involves the use of internal lab standards usingcertified reference material, blanks, splits and replicates as part of inhouse procedures. The Company will also submit an independentsuite of CRMs, blanks and field duplicates (see above).
Verification ofsampling andassaying	The verification of significant intersections byeitherindependentoralternativecompanypersonnel.	Significant intersections in diamond core are verified by theCompany's Technical Director and Consulting Field Geologist.
	The use of twinned holes.	No twinned holes have been completed in this drilling programme.
	Documentation of primary data, data entryprocedures, data verification, data storage(physical and electronic) protocols.	Geological data was collected using handwritten log sheets andimported in the field onto a laptop detailing geology (weathering,structure, alteration, mineralisation), sampling quality and intervals,sample numbers, QA/QC and survey data. This data, together withthe assay data received from the laboratory and subsequent surveydata was entered into the Company's database.
	Discuss any adjustment to assay data.	No adjustments or calibrations will be made to any primary assaydata collected for the purpose of reporting assay grades andmineralised intervals. For the geological analysis, standards andrecognised factors may be used to calculate the oxide form assayedelements, or to calculate volatile free mineral levels in rocks.
Location ofdata points	Accuracy and quality of surveys used to locatedrillholes(collaranddown‐holesurveys),trenches, mine workings and other locations	Drill hole collar locations are determined using a handheld GPS withan accuracy of +/‐ 5m. Drill hole collars will be preserved andsurveyed to a greater of accuracy after the drilling programme.
	used in Mineral Resource estimation.	Down hole surveys of dip and azimuth were conducted using asingle shot camera every 30m to detect deviations of the hole fromthe planned dip and azimuths.
	Specification of the grid system used.	The grid system used is GDA94, MGA Zone 51.
	Quality and adequacy of topographic control.	Best estimated RLs were assigned during drilling and are to becorrected at a later stage.
Data spacinganddistribution	Data spacing for reporting of ExplorationResults.	The drill programme is targeting EM conductors and other highquality targets for massive nickel sulphide mineralisation. Thespacing and distribution of holes is not relevant to this programme.
	Whether the data spacing and distribution issufficient to establish the degree of geologicalandgradecontinuityappropriatefortheMineral Resource and Ore Reserve estimationprocedure(s) and classifications applied.	Drilling is at the exploration stage. Mineralisation at the EastLaverton Property has not yet demonstrated to be sufficient in bothgeologicalandgradecontinuityappropriatefortheMineralResourceandOreReserveestimationprocedure(s)andclassifications to be applied.
	Whether sample compositing has been applied.	Samples are taken at one metre lengths (diamond core), andadjusted where necessary to reflect local variations in geology orwhere visible mineralised zones are encountered, in order topreserve the samples are representative.
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.	The diamond core holes are drilled towards 060 at an angle of ‐60degrees to intersect the modelled mineralised zones at a nearperpendicular orientation unless otherwise stated. However, theorientation of key structures may be locally variable and anyrelationship to mineralisation at has yet to be identified.

Criteria	JORC Code explanation	Commentary
	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.	No orientation based sampling bias has been identified in the datato date.
Samplesecurity	The measures taken to ensure sample security.	Chain of Custody is managed by the Company until samples pass toa duly certified assay laboratory for subsampling and assaying. Thecut‐core trays and RC sample bags are stored on secure sites anddelivered to the assay laboratory by the Company or a competentagent. When in transit, they are kept in locked premises. Transportlogs have been set up to track the progress of samples. The chain ofcustody passes upon delivery of the samples to the assay laboratory.For diamond core, a predetermined "cut sheet" serves as a trackingtool and provides a further control for any subsequent checks.
Audits orreviews	The results of any audits or reviews of samplingtechniques and data.	Sampling techniques and procedures are regularly reviewedinternally, as is data. To date, no external audits have beencompleted on the drilling programme.

Section 2 Reporting of Exploration Results

(Criteria listed in section 1 will also apply to this section where relevant)

Criteria	JORC Code explanation	Commentary
MineralTenement andLand Status	Type, name/reference number, location andownership including agreements or materialissueswiththirdpartiesincludingjoint	Phase 1 of the 2015 nickel sulphide drilling programme will testprospects located on several of the 27 Exploration Licences thatcomprise the East Laverton Property.
	ventures,partnerships,overridingroyalties,native title interests, historical sites, wildernessor national park and environmental settings.	Each tenement is 100% owned by Desert Fox Resources Pty Ltd, awholly owned subsidiary of St George Mining. Certain tenementsare subject to a 2% Net Smelter Royalty in favour of a third party.
	The security of the tenure held at the time ofreporting along with any known impediments	None of the tenements are the subject of a native title claim. Noenvironmentally sensitive sites have been identified at any of thetenements.
	to obtaining a licence to operate in the area.	The tenements are in good standing and no known impedimentsexist.
ExplorationAcknowledgment and appraisal of explorationDone by Otherby other parties.Parties	In 2012, BHP Billiton Nickel West Pty Ltd (Nickel West) completed areconnaissance RC (reverse circulation) drilling program at the EastLavertonPropertyaspartoftheProjectDragonfarm‐inarrangement between Nickel West and the Company. That farm‐inarrangement has been terminated. The drilling program comprised35 RC holes for 8,560m drilled.
		The results from the Nickel West drilling program were reported bythe Company in its ASX Release dated 25 October 2012 "Drill Resultsat Project Dragon". Drilling intersected primary nickel sulphidemineralisation and established the presence of fertile, high MgOultramafic sequences at the East Laverton Property.
		PriortotheProjectDragondrillingprogram,therewasnosystematic exploration for nickel sulphides at the East LavertonProperty. Historical exploration in the region was dominated byshallowRABandaircoredrilling,muchofwhichhadbeenincompletely sampled, assayed, and logged. This early work wasfocused on gold rather than nickel sulphide exploration.
Geology	Deposit type, geological setting and style ofmineralisation	The Company's East Laverton Property located in the NE corner ofthe Eastern Goldfields Province of the Archean Yilgarn Craton ofWestern Australia.

Criteria	JORC Code explanation	Commentary
		The project area is proximally located to the Burtville‐Yarmanaterraneboundaryandthepaleo‐cratonicmarginalsettingisconsistentwiththeextensivekomatiitesandcarbonatitemagmatism found on the property.
		The area is largely covered by Permian glaciogene sediments(Patterson Formation), which area is subsequently overlain by athinner veneer of more recent sediments and aeolian sands. As aresult the geological knowledge of the belt has previously beenlargely inferred from gravity and magnetic data and locally verifiedbydrill‐holeinformationandmulti‐elementsoilgeochemicalsurveys.
		The drilling at the East Laverton Property has confirmed extensivestrike lengths of high‐MgO olivine‐rich rocks across three majorultramafic belts. Ultramafic rocks of this composition are known tohost high grade nickel sulphides.
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	Information regarding exploration results from Project Dragon canbe found in the Company's ASX Release dated 25 October 2012"Drill Results at Project Dragon" which is available to view onwww.stgm.com.au.
Dataaggregationmethods	InreportingExplorationResults,weightingaveragingtechniques,maximumand/orminimum grade truncations (e.g. cutting ofhigh grades) and cut‐off grades are usuallyMaterial and should be stated.	No top‐cuts have been applied. A nominal 0.15% Ni lower cut‐off isapplied unless otherwise indicated.
	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.	High grade massive sulphide intervals internal to broader zones ofsulphide mineralisation are reported as included intervals.
	The assumptions used for any reporting ofmetal equivalent values should be clearlystated.	No metal equivalent values are used for reporting explorationresults.
Relationshipbetween	These relationships are particularly importantin the reporting of exploration results.	The geometry of the mineralisation is not yet known due toinsufficient deep drilling in the targeted area.
mineralisationwidths andinterceptlengths	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.'downholelength,truewidthnotknown').
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.	Maps will be included with any announcement of any significantdiscovery, following review of assay results from the drillingprogramme.

Criteria	JORC Code explanation	Commentary
BalancedReporting	WherecomprehensivereportingofallExplorationResultsisnotpractical,	A balanced report on the interim exploration results is contained inthe body of the ASX Release.
	representative reporting of both low and highgrades and/or widths should be practiced toavoidmisleadingreportingofExplorationResults.	A comprehensive report on recent drilling at the East LavertonProperty can be found in the following ASX Releases that areavailable on our website at www.stgm.com.au:
		3 September 2014 'Nickel Sulphide Drilling – Update on Phase 1'
		11 February 2015 'St George Extends Nickel Sulphide Zone'.
Othersubstantiveexplorationdata	Otherexplorationdata,ifmeaningfulandmaterial, should be reported including (but notlimited to): geological observation; geophysicalsurvey results; geochemical survey results; bulksamples–sizeandmethodoftreatment;metallurgicaltestresults;bulkdensity,groundwater,geotechnicalandrockcharacteristics;potentialdeleteriousorcontaminating substances.	All meaningful and material information has been included in thebody of the text. No metallurgical or mineralogical assessmentshave been completed.
Further Work	The nature and scale of planned further work(e.g.testsforlateralextensionsordepthextensions or large – scale step – out drilling).	A discussion of further exploration work is contained in the body ofthe ASX Release.
	Diagramsclearlyhighlightingtheareasofpossibleextensions,includingthemaingeological interpretations and future drillingareas,providedthisinformationisnotcommercially sensitive.

HOLE ID	NORTHING(m)	EASTING(m)	DIP(deg)	AZM(deg)	DEPTH(m)	FROM(m)	TO(m)	WIDTH(m)	Ni(%)	Cu(ppm)	Pt+Pd(ppb)
DRAC35	6739401	527150	‐60	250	244	100	118	18	0.40	342	197
						100	104	4	0.57	366	294
						112	114	2	0.51	584	281
DRAC38	6733696	530786	‐60	250	298	108	138	30	0.31	10	31
						132	138	6	0.48	40	48
						132	134	2	0.62	92	53
DDNRC002	6742718	523717	‐60	59	246	53	60	7	0.54
						53	55	2	1.08

Table 1 to 2012 JORC Section – Significant intersections in DRAC35, DRAC38 and DDNRC002.

These historical holes are the first identification of nickel sulphides at the East Laverton Property. For further details on DRAC35 and DRAC38, see the ASX Release dated 25 October 2012 "Drill Results at Project Dragon". For further details on DDNRC002, see the ASX Release dated 11 April 2013 "St George Provides Exploration Update". These ASX Releases are available to view on the Company's website at www.stgm.om.au