TARUGA MINERALS LIMITED — M&A Activity 2017

May 23, 2017

ASX RELEASE

24 May 2017

ACQUISITION OF COPPER-COBALT PROJECT IN THE DEMOCRATIC REPUBLIC OF CONGO

• Taruga to acquire, subject to due diligence, up to a 75% interest in PEPM 4019 in the Kolwezi Mining District in the south-east of the Democratic Republic of Congo (Project).

• The Project covers 7.5 square kilometres and preliminary work has identified coincident Copper-Cobalt geochemical anomalies from a systematic soil sampling programme on the Project.

• Consideration payable of 12 million shares and US$30,000 and the appointment of Medidoc and its consultants (Vendor) as the strategic consultant for the Company for 12 months for the review, assessment and acquisition of further copper-cobalt projects in the DRC.

Taruga Gold Limited ( TAR, Taruga or the Company ) is pleased to announce the acquisition, subject to completion of due diligence, of up to a 75% interest in the Project. The Project is considered prospective for copper and cobalt.

PEPM 4019 Technical Summary

PEPM4019 (Permis d' Exploitation de Petite Mine) covers 7.5 square kilometres within the prolific Central African Copperbelt, a 700km long x 400km wide arcuate fold belt which hosts a large number of sediment hosted, world-class copper-cobalt deposits both in Katanga, south-eastern DRC and Zambia. Copper-cobalt mineralization was initially thought to be constrained to the lower sedimentary sequences within the Lower Roan sub-group of rocks known as the Mines Group (R2). Recent exploration, however, has led to the discovery of several deposits in the overlying Mwashya (R-4) and Nguba Groups with the most significant being Ivanhoe’s Kamoa deposits hosted in the “Grand Conglomerate Formation” at the base of the Nguba Group (also referred to as the Lower Kundulungu) which highlights the potential for new copper-cobalt discoveries.

Locally, the project consists predominantly of carbonaceous shales and siltstones from the Kundulungu Group which have been transgressed by west-east trending Roan breccias. The project is divided by a north-west trending river system which potentially follows an underlying fault zone.

Work to date has been limited to systematic soil sampling on a 50m x 50m grid by the current licence holder, La Société Geoscience Congo Services (GCS) where a number of highly significant copper (up to 4,970ppm Cu) and cobalt (up to 1,985ppm Co) anomalies were defined as shown in Figures 2 and 3. A total of 2,319 samples

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were collected in 1m deep pits and screened through a -80 mesh sieve. Samples were then analysed using a Niton XRF analyser. QAQC was limited to repeat and blank samples. No certified reference materials (CRM’s) were analysed.

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Figure 1: Location of PEPM4019 on the regional geology showing current Cu-Co mining operations in the Kolwezi mining district.

As part of the ongoing due diligence, the Company will conduct a short soil sampling programme on selected grid lines used previously to verify the strong copper and cobalt anomalism identified by GCS. All samples will be sent to a reputable laboratory in Johannesburg for multiple element analysis as a further check against Niton XRF results reported by GCS.

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Figure 2: Cobalt in soil anomaly on the regional geology comprised mostly of Kundulungu sediments which have been cross-cut by Roan breccias.

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Figure 3: Copper in soil anomaly on the regional geology comprised mostly of Kundulungu sediments which have been cross-cut by Roan breccias.

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Acquisition Agreement

The principal terms of the agreement for TAR to acquire up to a 75% interest in the Project from Medidoc FZE ( Medidoc ) are as follows:

1. TAR to issue to Medidoc or its nominees 12,000,000 fully paid ordinary shares in the Company and pay Medidoc US$30,000 in cash as a reimbursement for direct

expenses.

1. Medidoc, Klaus Eckhof and Mark Gasson to act as TAR’s strategic consultant to identify Copper and Cobalt opportunities in the DRC for a period of 12 months.

2. Medicoc, under the Acquisition Agreement, assigns all of its rights and interests in the memorandum of understanding with GCS who owns the legal and

beneficial interest in 100% of the Project.

1. The Company has received warranties that are generally expected in a transaction of this nature.

2. Agreement is subject to TAR completing a due diligence review to its satisfaction within 60 days, or such period as extended by the parties.

Medidoc is not a related party of TAR.

Competent person’s statement

The information in this Announcement that relates to exploration results is based on information compiled by Mr Bernard Aylward. Mr Aylward is a Non-Executive Director of Taruga Gold Limited. Mr Aylward is a member of The Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking 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 Aylward consents to the inclusion in the announcement of matters based on his information in the form and context it appears.

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ASX RELEASE

JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

JORC Code, 2012 Edition – Table 1 Section 1 Sampling Techniques and Data	JORC Code, 2012 Edition – Table 1 Section 1 Sampling Techniques and Data
(Criteriainthis sectionapply to allsucceeding sections.)
Criteria	JORC Code explanation	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or	Sampling completed is geochemical sampling
techniques	specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should	Samples were collected from a 1m pit, screened through a -80mesh sieve and analysed by a Niton XRF analyser.
	not be taken as limiting the broad meaning of sampling.	A total of 2,319 samples were analysed, with duplicate and blank
	• Include reference to measures taken to ensure sample representivity	samples for QAQC
	and the appropriate calibration of any measurement tools or systems used. • Aspects of the determination of mineralisation that are Material to the Public Report.	Sample locations were located using a GPS, and sampling has been completed on a 50m x 50m grid covering the majority of the permit area except for river areas.
	• 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-hole hammer, rotary air	No drilling completed
techniques	blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-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 chip sample recoveries	No drilling completed
recovery	and results asses • Measures taken to maximise sample recovery and ensure
	representative nature of the samples.

Criteria	JORC Code explanation	Commentary
	• Whether a relationship exists between sample recovery and grade
	and whether sample bias may have occurred due to preferential
	loss/gain of fine/coarse material.
Logging	• Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate	Samples are geochemical samples. Information pertaining to the geology, sample grain size, degree of weathering and local topographical
	Mineral Resource estimation, mining studies and metallurgical	conditions were recorded.
	studies.
	• Whether logging is qualitative or quantitative in nature. Core (or
	costean, channel, etc) photography.
	• The total length and percentage of the relevant intersections logged.
Sub-	• If core, whether cut or sawn and whether quarter, half or all core	No sub-sampling.
sampling techniques and sample preparation	taken. • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. • For all sample types, the nature, quality and appropriateness of the sample preparation technique.
	• Quality control procedures adopted for all sub-sampling stages to
	maximise representivity of samples.
	• Measures taken to ensure that the sampling is representative of the in
	situ material collected, including for instance results for field
	duplicate/second-half sampling.
	• Whether sample sizes are appropriate to the grain size of the material
	being sampled.
Quality of	• The nature, quality and appropriateness of the assaying and	Samples were collected from pits excavated by hand to 1m depth
assay data and laboratory tests	laboratory procedures used and whether the technique is considered partial or total. • For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. • Nature ofquality controlprocedures adopted(eg standards, blanks,	Samples were screened through a -80 mesh sieve and analysed by a Niton XRF analyser. QAQC samples consist of duplicate samples and blanks samples. Analysis of the duplicate samples indicates good correlation and is acceptable for this stage and style of exploration

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Criteria	JORC Code explanation	Commentary
	duplicates, external laboratory checks) and whether acceptable levels	Due Diligence geochemical sampling will be undertaken with samples
	of accuracy (ie lack of bias) and precision have been established.	sent to a commercial laboratory for preparation and analysis. A series of
		QAQC samples will also be included in the Due Diligence process.
Verification	• The verification of significant intersections by either independent or	The data is geochemical sampling. No verification has been undertaken
of sampling and assaying	alternative company personnel. • The use of twinned holes. • Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.	at this stage. The data is maintained in an electronic format containing assay and logging information.
	• Discuss any adjustment to assay data.	No adjustment to the assay data has occurred
Location of	• Accuracy and quality of surveys used to locate drill holes (collar and	Geochemical sample points were located by GPS.
data points	down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.
	• Specification of the grid system used.
	• Quality and adequacy of topographic control.
Data	• Data spacing for reporting of Exploration Results.	Geochemical sampling has been completed on a nominal 50m x 50m
spacing and distribution	• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.	grid. Samples were collected at all sites where access permitted. No samples were collected in areas of active river drainage.
	• Whether sample compositing has been applied.
Orientation	• Whether the orientation of sampling achieves unbiased sampling of	Samples were collected in a regular grid covering the entire permit and
of data in	possible structures and the extent to which this is known, considering	did not attempt orientation relative to geology.
relation to geological structure	the deposit type. • If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.
Sample security	• The measures taken to ensure sample security.	The data reviewed has been collected by the current permit holder, La Societe Geoscience Congo Services (GCS).
		Samples were collected by employees of GCS

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Criteria	JORC Code explanation	Commentary
		Samples were analysed on site by Niton XRF by employees of GCS
Audits or	• The results of any audits or reviews of sampling techniques and data.	No audits completed
reviews

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral	• Type, reference name/number, location and ownership including	This announcement relates to an agreement to acquire a 75% interest in
tenement and land tenure status	agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. • The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	PEPM4019, located in the Democratic of Congo (DRC). The permit covers an area of 7.5km2 PEPM 4019 (Permis d’Exploitation de Petite Mine) is 100% owned by La Societe Geoscience Congo Services (GCS), a company registered and operating in the DRC.
		The validity of the title has been reviewed on Government databases,
		however will be legally reviewed as part of the Due Diligence process.
		The licence is currently in good standing, with a renewal due in October
		2017. There is no known impediment for the renewal process.
		The agreement is subject to a period of Due Diligence. The agreement
		is between Taruga Gold Limited and Medidoc FZE (Medidoc).
		Subject to the agreement, Medidoc will assign all of its rights in the
		Memorandum of Understanding between Medidoc and GCS that detail
		the terms to acquire a 75% interest in the permit PEPM4019.
Exploration done by	• Acknowledgment and appraisal of exploration by other parties.	All exploration completed on the permit has been undertaken by employees of GCS.
other		Exploration consists of geochemical sampling.
parties		No other exploration is known to have been completed within the permit
		area.

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Criteria	JORC Code explanation	Commentary
Geology	• Deposit type, geological setting and style of mineralisation.	PEPM4019 is located within the Central African Copper Belt. The Copper Belt extends over an area of 700km x 400km, from southeastern
		DRC into Zambia.
		Mineralisation style is sediment hosted Copper-Cobalt mineralisation.
		Previous geological exploration within the Copper belt targeted the lower
		sedimentary sequences (known as the “Mines Group”), however recent
		work has highlighted mineralisation in the overlying Mwashya and Nguba
		groups. Significant discoveries include the Kamoa deposit (Ivanhoe
		Mines) where mineralisation is hosted in the “Grand Conglomerate
		Formation” at the base of Nguba group (also referred to as the Lower
		Kundulungu).
		Locally the geology within the permit area consists of carbonaceous
		shales and siltstones of the Kundulungo group, with areas of west-east
		trending Roan breccias. A fault zone is interpreted in a north-west
		orientation.
Drill hole	• A summary of all information material to the understanding of the	No drilling completed
Information	exploration results including a tabulation of the following information
	for all Material drill holes:
	o easting and northing of the drill hole collar
	o elevation or RL (Reduced Level – elevation above sea level in
	metres) of the drill hole collar
	o dip and azimuth of the hole
	o down hole length and interception depth
	o hole length.
	• If the exclusion of this information is justified on the basis that the
	information is not Material and this exclusion does not detract from
	the understanding of the report, the Competent Person should clearly
	explain why this is the case.
Data	• In reporting Exploration Results, weighting averaging techniques,	No data aggregation
aggregation	maximum and/or minimum grade truncations (eg cutting of high
	_grades) and cut-offgrades are usually Material and should be stated. _

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Criteria	JORC Code explanation	Commentary
methods	• Where aggregate intercepts incorporate short lengths of high grade
	results and longer 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 metal equivalent values
	should be clearly stated.
Relationship	• These relationships are particularly important in the reporting of	Samples are geochemical samples. No assumption is made as to the
between	Exploration Results.	surface geochemical anomalies and underlying geology or potential
mineralisation	• If the geometry of the mineralisation with respect to the drill hole	mineralisation
widths and	angle is known, its nature should be reported.
intercept lengths	• If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true
	width not known’).
Diagrams	• Appropriate maps and sections (with scales) and tabulations of	ASX announcement contains relevant diagrams to indicate location and
	intercepts should be included for any significant discovery being	exploration information
	reported These should include, but not be limited to a plan view of
	drill hole collar locations and appropriate sectional views.
Balanced	• Where comprehensive reporting of all Exploration Results is not	This ASX announcement provides a summary of all known exploration
reporting	practicable, representative reporting of both low and high grades	activity completed within the permit area. No information has been
	and/or widths should be practiced to avoid misleading reporting of	excluded
	Exploration Results.
Other	• Other exploration data, if meaningful and material, should be reported	No other relevant data
substantive	including (but not limited to): geological observations; geophysical
exploration	survey results; geochemical survey results; bulk samples – size and
data	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 (eg tests for lateral	This announcement relates to the potential acquisition of a Copper-
	extensions or depth extensions or large-scale step-out drilling).	Cobalt project. The historic exploration consists of geochemical
	• Diagrams clearly highlighting the areas ofpossible extensions,	samplingcoveringthe entirepermit, and has defined anomalous zones.

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Criteria	JORC Code explanation	Commentary
	including the main geological interpretations and future drilling areas,	The immediate future work is a process of Due Diligence geochemical
	provided this information is not commercially sensitive.	sampling with samples dispatched to a commercial laboratory for
		analysis and verification of the surface anomalies.
		Following completion of Due Diligence, a further program of exploration
		may consist of surface trenching to expose the geology of the anomalous
		zones, a programme of drilling to target the geochemical anomalies and
		geophysical techniques will be investigated to determine potential
		geophysical surveys for the permit.

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