Kouri Gold Project

Quarterly Activities Report for the Period Ended 31 December 2018

Kouri Gold Project, Burkina Faso (Kouri)

  • Upgraded Indicated and Inferred Mineral Resource of 32 million tonnes at 1.4g/t gold at a cut-off grade of 0.3g/t gold from surface to approximately 115m below surface.
  • Contained gold of 1.4 million ounces represents an increase of ~40% from the contained gold in the maiden Mineral Resource released in May 2018.
  • High grade results from drilling in the immediate Mineral Resource area but outside the existing resource:
    • 4m at 44.7g/t gold from 34m, including 2m at 89.5g/t gold (BARC327); and
    • 3m at 8.4g/t gold from 10m, including 1m at 18.8g/t gold (BARC333).
  • Follow up drilling carried out at Red Hill, 4.5km southwest of the Mineral Resource. New gold intercepts include:
    • 10m at 4.1g/t gold from 46m (NKRC054);
    • 11m at 3.4g/t gold from 16m; including 2m at 11.1g/t gold (NKRC047); and
    • 7m at 1.9 g/t gold from 34m (NKRC046).
  • Trenching has exposed significant new gold mineralisation, immediately outside the current Mineral Resource area. Significant new intercepts include:
    • 23m at 2.5g/t gold, including 1m at 38.8g/t gold in TR01; and
    • 2m at 32.4g/t gold, including 1m at 64.1g/t gold in TR02.
  • Company entered into a Heads of Agreement to acquire two additional gold permits that adjoin Kouri. Mineralisation that comprises the 1.4Moz gold Mineral Resource seems to extend into these permits.

Paguanta Zinc-Silver-Lead Project, Chile (Paguanta)

  • Paguanta continues on care and maintenance while the Company focuses its work programs on Kouri.
  • Chilean company, Kura Minerals engaged to assist with the divestment of Paguanta. Several parties have shown interest and the process is ongoing.

This report relates to the activities of the Company for the quarter commencing 1 October 2018 to 31 December 2018 (Quarter).

Kouri Gold Project, Burkina Faso

Kouri lies on a major mineralised fault zone that extends to the north-east into western Niger, where the 2.5Moz Samira Hill gold deposit is located.

To the south-west, the fault zone is connected to the Markoye Fault system which controls several large gold deposits in Burkina Faso, including Kiaka (5.9Moz gold, B2Gold), Bombore (5.2Moz gold, Orezone) and Essakane (6.2Moz gold, IAMGOLD).

Field work recommenced in early October 2018 following the end of the wet season. Work carried out during the Quarter included a Mineral Resource upgrade, reverse circulation (RC) drilling, infill auger drilling, trenching, completion of a structural study and ongoing metallurgical testwork.

Mineral Resource Upgrade

In early December 2018, RPM Advisory Services Pty Ltd completed a Mineral Resource upgrade for Kouri.

Details of the upgraded Mineral Resource include:

  • Indicated and Inferred Mineral Resource of 32 million tonnes at 1.4g/t gold at a cut-off grade of 0.3g/t gold from surface to approximately 115m below surface.
  • Contained gold of 1.4 million ounces representing an increase of ~40% from the contained gold in the maiden Mineral Resource released in May 2018.
  • Increase of ~54% in the tonnage of the Indicated Mineral Resource to 4.3 million tonnes.
  • Improved continuity of mineralisation and width of the gold lodes by utilising a lower cut-off grade potentially resulting in reduced strip ratio and less mining dilution. Mineral Resource potentially more conducive to larger scale, bulk mining.

RC Drilling

  • An RC drilling program was undertaken at Kouri during the Quarter. The program was designed to test:
  • auger bedrock anomalies at Guitorga West, Guitorga North and Red Hill;
  • the river channel area between Guitorga West and the Mineral Resource; and
  • targets identified by a structural study.

A total of 32 RC drill holes (BARC314 to BARC336 and NKRC046 to NKRC054) were completed during the Quarter for 3,951m. Assay results were received during the Quarter for holes NKRC046 to NKRC050.

Subsequent to the end of the Quarter, the Company reported exceptional RC drill intercepts of 4m at 44.7g/t gold from 34m, including 2m at 89.5g/t gold (BARC327), and 3m at 8.4g/t gold from 10m, including 1m at 18.8g/t gold (BARC333). These high grade intersections are located 300m apart, are open at depth and along strike, and located in the river channel in the immediate Mineral Resource area but outside the existing resource.

The new high grade intersections are associated with a newly identified Footwall Shear that is related to a magnetic high anomaly, which extends for at least 5km within the Kouri licence. At Red Hill, 4.5km south-west of the Mineral Resource, drill testing of coincident gold-in-auger and magnetic anomalies was successful with significant gold mineralisation discovered in and associated with major shear zones.

Results include highly significant intercepts of 10m at 4.1g/t gold from 46m (NKRC054) (reported subsequent to the Quarter) and 11m at 3.4 g/t gold from 16m, including 2m at 11.1g/t gold (NKRC047) in the intersection area of two major magnetic high anomalies.

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