Resources

The Mineral Resource at Mt Carrington stands at 341,000oz gold and 23,247,000oz silver. The Resources are contained in eight near surface deposits, with four gold-dominant deposits (Strauss, Kylo, Guy Bell and Red Rock) and four silver dominant deposits (White Rock, White Rock North, Silver King and Lady Hampden, the latter also containing significant gold too, figure 1)

Exploration has significantly increased the Resource base with maiden Mineral Resources being defined at Red Rock, Silver King and White Rock North and incremental additional gold and silver being added at Strauss, Kylo, Lady Hampden and Silver King. In addition, drilling to de-risk Resources contained in pit-shells used in development scoping studies has upgraded the four key deposits of Strauss, Kylo, Lady Hampden and White Rock with the majority of ore in pit-shells being classified as Indicated Resource. Significantly, the conversion of ore from Inferred to Indicated is close to 100%, lending confidence to the entire Resource base.

The Strauss and Kylo Mineral Resource was prepared and reported in accordance with the JORC Code (2012) at a 0.5g/t Au cut-off (refer ASX Announcement 9 October 2017). All material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

Gold dominant Mineral Resources have been estimated using a cut-off of 0.5g/t Au except Red Rock, which uses a cut-off of 0.7g/t Au. All silver dominant Mineral Resources have been estimated using a cut-off of 25g/t Ag. The Red Rock, Guy Bell, Lady Hampden, White Rock, White Rock North and Silver King Mineral Resource was prepared and reported in accordance with the JORC Code (2004) as per ASX Announcements by White Rock Minerals Ltd on 13 February 2012, 11 July 2013 and 20 November 2013, and the ASX Announcement by Rex Minerals Ltd on 10 December 2008. The Resources figures have not been updated since to comply with the JORC Code (2012) on the basis that the information has not materially changed since it was last reported.

Summary of the Mt Carrington Indicated and Inferred Mineral Resource estimate September 2017.

Strauss, Kylo and Guy Bell

The Strauss, Kylo and Guy Bell gold deposits are located on the central Mining Leases at Mt Carrington. The deposits are low sulphidation epithermal vein type mineralisation. At Strauss and Kylo mineralisation manifests as a zone of stockwork fissure veins and vein breccia associated with extensive phyllic to silicic alteration. Veining is localised along the margins of an andesite dome/plug and lava flow within a sequence of andesitic volcaniclastics (tuffaceous sandstone and lapilli tuff). Economically mineralisation is gold-dominant with minor silver and significant levels of zinc, copper & lead.

At Strauss, the Indicated and Inferred Resource (using a cut-off of 0.5g/t Au) totals 2.45Mt @ 1.6g/t Au (124,000oz Au), with the Indicated Resource totalling 2.07Mt @ 1.5g/t Au (103,000oz Au) from surface.

At Kylo, the Indicated and Inferred Resource (using a cut-off of 0. 5g/t Au) totals 2.05Mt @ 1.3g/t Au (86,000oz Au). The Mineral Resource at Kylo is concentrated in two zones: Kylo North and Kylo West. At Kylo North the Indicated Resource is 1.54Mt @ 1.2g/t Au (62,000oz Au) from surface. At Kylo West the Indicated Resource is 0.48Mt @ 1.5g/t Au (23,000oz Au) from surface.

No drilling or updated Mineral Resource work has been completed at Guy Bell since the 2008 Mineral Resource statement, which relied on historic and minor validation drilling.

Red Rock

Red Rock is located 8km north west of the main Mt Carrington Mining Leases. The maiden Inferred Resource of 54,000oz Au is contained in the Deadman’s Zone which remains open along strike and at depth. The MineralsResource is based on 47 exploration holes, 20 of which were diamond holes completed by White Rock in 2012-13.

The 2012-13 drilling programs defined a consistent and predictable zone of near surface gold and silver mineralisation over an area of 300m by 100m at surface, and down to 150m vertical depth. Mineralisation is open to the north, south and at depth.

Initial exploration drilling of the Deadman’s zone by White Rock targeted a combination of historical surface geochemistry and recent electrical geophysics centred on the historical late 1800’s and early 1900’s mine workings. A number of exploration drill holes completed in the 1970’s and early 1980’s had identified a low grade Au and Ag halo without defining the central higher grade corridor now identified immediately to the south of the mine workings.

Mineralisation occurs as a broad quartz vein stockwork within a sequence of volcaniclastics intruded by high-level rhyolite and andesite bodies. Vein density and associated silicification varies with the local host rock lithology and is centred on a steep north-northeast structural core with an apparent plunge to the north.

There is potential to expand the Inferred Resource along strike to the south where recent intercepts are open (15m @ 1.4g/t Au from surface in RRDD015 and 17m @ 2.8g/t Au from 45m in RRDD011).

The Inferred Resource at Red Rock also includes minor silver totalling 182,000oz at a grade of 3.4g/t. Zinc, copper and lead are also present in the Mineral Resource, but are of minor significance. A higher cut-off (0.7g/t Au) than that used for the Kylo and Strauss gold deposits (0.5g/t Au) on the central leases at Mt Carrington has been conservatively adopted since any exploitation of the Mineral Resource will likely require transport of the ore about 15km to a processing facility located on the central leases.

Lady Hampden

The Lady Hampden silver-gold deposit is located on the central Mining Leases. The oxide portion of the deposit was mined in a small open pit in the late 1980’s. The Indicated Resource of 1.84Mt @ 69g/t Ag and 0.6g/t Au (4.1Moz Ag and 37,000oz Au) extends from the pit floor surface to 75m below. The remaining Inferred Resource of 2.5Mt @ 51g/t Ag and 0.3g/t Au (4.0Moz Ag and 27,000oz Au) extends further to 250m below surface. The Mineral Resource was estimated using a cut off of 25g/t Ag.

The updated Mineral Resource estimate for Lady Hampden released in 2012 resulted in a quadrupling of the contained silver, more than double the contained gold and with 50% classified as Indicated Resource. The Indicated Resource is double the size of the previous Inferred Resource in contained silver ounces, and the increased size of the total Mineral Resource greatly exceeded White Rock’s expectations for Resource growth. This is a result of a marked increase in the understanding of the geological controls on mineralisation at Lady Hampden, which has direct application to other prospects on the central Mining Leases that may lead to similar expansions.

The 2011 drilling at Lady Hampden led to the recognition that the silver-gold mineralisation is strongly controlled by bedding parallel structures that dip shallowly to the east, in contrast to previous interpretations which considered that the shallow mineralisation was bound to the east by the Cheviot Hills Fault. The new interpretation recognised that mineralisation continues further east across the Cheviot Hills Fault and is often upgraded where the Cheviot Hills fault intersects the flat structures.

The recognition that mineralisation was controlled by continuous gently east dipping structures enabled a systematic drilling program to expand the Mineral Resource at relatively shallow depths. The Inferred Resource envelope extends over an area of 600 metres by 300 metres. The mineralisation remains open outside this envelope to the north, east and south with considerable potential for continued Resource expansion given the high grade and thick intersections along the eastern margin of the Mineral Resource (e.g. 45.5m @ 94g/t Ag from 169.4m in LHDD024).

Silver King

The Silver King silver deposit is located 700m along strike to the south of Lady Hampden. Following the successful targeted drilling at Lady Hampden through 2011, it was recognised that Silver King demonstrated similar geological controls on mineralisation to those observed at Lady Hampden. A geological re-interpretation of previous drilling was completed which included re-assaying of 3 previous diamond drillholes, and on this basis a maiden Inferred Resource of 0.6Mt @ 59g/t Ag (1.2Moz Ag) was estimated. The Mineral Resource begins at surface and extends to a depth of 40m with mineralisation open to the north, south and down dip to the east.

Exploration drilling at Silver King was successful in confirming that silver mineralisation extends down dip along continuous gently east-dipping structures (refer ASX release 19 January 2012). Drillhole SKDD004 intersected mineralisation (6.7m @ 64g/t Ag & 0.2g/t Au from 146m) 100m to the east of the Silver King Inferred Resource. The discovery of silver mineralisation in this position bodes well for the definition of continuous zones of mineralisation in a similar geological setting to that observed at Lady Hampden, and illustrates that the Silver King Mineral Resource has the potential to grow in a similar manner to the expansion realised at Lady Hampden.

White Rock

The White Rock silver deposit is located 4km southwest of the main Mt Carrington Mining Leases, within highly altered rhyolitic to andesitic volcanics, breccias and volcaniclastics. Mineralisation is low sulphidation epithermal style and occurs within a broad tabular phyllic alteration zone with stockwork quartz veining, breccia fill and minor massive silicified zones. The bulk of mineralisation is hosted within felsic intrusive units. The system shows a weak geochemical zonation towards enriched gold and copper in the southwest in conjunction with stronger alteration. The recognition of this zonation is considered very encouraging in an exploration sense, as the White Rock deposit environs have previously been considered relatively un-prospective for gold.

Diamond drilling was completed at White Rock in mid-2013 to upgrade the classification of the previous Inferred Resource estimate completed in 2008. Drilling was targeted at the Inferred Resource within the optimised pit shell based on the Scoping Study completed in 2012. The drilling provided a successful outcome with the new global Inferred and Indicated Resource approximately equivalent to the earlier Inferred Resource in terms of contained metal.

The upgraded global Mineral Resource has slightly more tonnes at an overall slightly lower grade than the previous estimate (4.4Mt @ 58g/t Ag for 8,192,000oz Ag versus 4.1Mt @ 62g/t Ag for 8,194,000oz Ag). The new Indicated Resource stands at 1.7Mt @ 77g/t Ag for 4,214,000oz Ag, which presents a significantly higher grade compared to the overall Mineral Resource and represents over 50% of the original Inferred Resource. Importantly more than 60% of the contained silver reports above the 50g/t Ag cut-off, with more than 60% classified as Indicated Resource. The distribution of higher grade ore provides confidence that the White Rock deposit will form an important part of the development plans for the Mt Carrington Project.

Drilling completed to upgrade the Mineral Resource has resulted in a much more robust interpretation of the geology, alteration and mineralisation of the White Rock deposit. In addition, the core samples will provide sufficient material to finalise the metallurgical testwork optimisation process during the feasibility study, as well as enable a precious metal concentrate to be generated for marketing purposes, an important part of the final feasibility assessment.

White Rock North

The White Rock North deposit lies 500m northwest of the White Rock deposit. The maiden Inferred Resource (at a cut-off of 25g/t Ag) is 3.2Mt @ 52g/t Ag (5.3Moz Ag). Mineralisation remains open along strike to the north and at depth.

The silver mineralisation at White Rock North is closely associated with complex high-level rhyolite intrusions that intrude the flat-lying volcanics and are preserved close to surface. Silver mineralisation is distributed throughout the intrusions and extends to surface above the rhyolite bodies in zones of stockwork quartz veining. Higher grades of silver are concentrated on the margins and in the roof of the intrusive bodies and form a definable coherent core to the deposit.