Argent Minerals : 24 Oct 2016 September 2016 Quarter Activities and Cash Flow Report

24 October 2016

SEPTEMBER 2016 QUARTER ACTIVITIES AND CASH FLOW REPORT

Highlights:

• Kempfield drilling results:

  • Major breakthrough - Kempfield VHMS host horizons and lithology defined;

  • Significant potential mineralised extensions identified;

  • High grade gold trend geometry identified - related to the Trunkey-Kings Plain gold system;

  • High grade VHMS precious and base metal discovery enhanced by the findings of the drill program;

  • Massive sulphide intersections in proximity to known intrusive confirm Kempfield North as a high-ranking target area;

  • Proven continuity of mineralisation along strike and at depth;

  • Significant potential for hosted mineralised lenses identified in the untested southern area; and

  • Potential high temperature zone and primary/secondary feeder sources identified.

• Pine Ridge gold mine and Trunkey- Kings Plain goldfields

  • Review and assessment of historic exploration results commenced.

• Heavily oversubscribed private placement raised $1.75 million to expedite drilling.

• Drill programs advancing

  • Update for Kempfield and West Wyalong.

Argent at a glance

ASX-listed mineral resource company focused on the expansion, development, extraction and marketing of its existing base and precious metals discoveries in NSW.

Facts

• ASX Codes: ARD, ARDO

• Share price (21 October 2016): $0.025

• Shares on issue: 360.1 M

• Market capitalisation: $9.00 M

  Directors and Officers

  Stephen Gemell

  Non-Executive Chairman

  David Busch

  Managing Director

  Peter Nightingale

  Non-Executive Director

  Peter Michael

  Non-Executive Director

  Vinod Manikandan

  Company Secretary

  Contact details

  PRINCIPAL OFFICE

  Suite 6, Level 6, 50 Clarence Street

  Sydney NSW 2000

  T: +61 2 9262 2211

  F: +61 2 9475 5346

  REGISTERED OFFICE

  Level 2, 66 Hunter Street

  Sydney NSW 2000

  T: +61 2 9300 3390

  F: +61 2 9221 6333

  E: admin@argentminerals.com.au

  Argent Minerals Limited ABN 89 124 780 276

  Phone +61 2 9262 2211 Facsimile +61 2 9475 5346 www.argentminerals.com.au

  Argent Minerals Limited (ASX: ARD, Argent or the Company) is pleased to report on its performance for the quarter ended 30 September 2016.

  The main focus of the quarter was the completion of data gathering from the diamond drill core produced by the Kempfield drilling program, and the subsequent analysis.

  A private placement was also conducted in preparation for the next round of drilling programs and advancing exploration. The strong support of existing and new investors resulted in a heavily oversubscribed outcome, raising

  $1.75 million before costs, which is being applied by the Company to advance exploration at the historic Pine Ridge gold mine and Trunkey-Kings Plain goldfields, and the Kempfield and West Wyalong drilling programs.

  The 30 September 2016 quarter activities are summarised as follows.

  KEMPFIELD DRILLING RESULTS Summary

  The strategically designed 11 hole diamond drilling program produced 3,167 metres of drill core containing vast amounts of information about Kempfield that is significant to understanding the deposit for further exploration success.

  Detailed physical analyses were first performed on the drill core to record host rock types, thicknesses and angles, and where visible, mineralisation. The physical drill core information was then assessed together with assays as they became available following standard QA/QC. Whole rock assays were performed on more than 50% of the

  drill core1 to yield a further significant level of detail - a 36 element suite for each metre of core sampled.

  In addition to the obvious pursuit of silver, gold, zinc, lead and copper mineral grades, authentic volcanic-hosted massive sulphide (VHMS) exploration that employs the latest techniques requires the remaining 31 elements to be assessed in detail to discover and quantify their associations with the target minerals and the inter-relationships that are unique for the deposit being explored.

  To assess and interpret the complexities of this detailed information in the context of hundreds of millions of years of multiple geological processes, and ultimately be able to reconstruct the intricacies of the current form of the deposit for highly efficient drill targeting, requires specialised VHMS knowledge and experience.

  These processes were performed on the recent drill core, and will continue, with the results to date representing a significant milestone in the exploration of the Kempfield VHMS system.

  The significant advances have taken the understanding of the Kempfield deposit to a new, far more detailed, higher level than that afforded by the minimal information made available by historical RC drilling.

  The key results of the program reported in the 10 October 2016 announcement are summarised as follows:

• Major breakthrough - detailed litho-stratigraphy defined, and four key host VHMS horizons identified, which will lead to highly efficient drill targeting of precious and base metals at Kempfield;

• Significant potential mineralised extensions identified, following the analyses that revealed the strike-slip movements caused by transverse faulting;

• High grade gold trend geometry identified and confirmed as a later stage orogenic overprint related to the Trunkey-Kings Plain gold system - and the potential for structural upgrades and Trunkey-Kings Plain type high grade gold in the main Kempfield deposit area;

• Massive sulphide intersections in proximity to known intrusive confirm Kempfield North as a high-ranking target area

• Proven continuity of mineralisation along strike and at depth in Kempfield North;

• Significant potential for hosted mineralised lenses identified in the untested southern area historically assumed to be closed; and

• Potential high temperature zone and primary/secondary feeder sources identified.

  1. Split core sampling (see 'Sampling Techniques and Data' in Appendix C - JORC 2012 Table 1 of the 10 October 2016 announcement)

  Selected highlights of the 10 October 2016 announcement follow.

  Major breakthrough - lithology and host horizons identified

  Vital to the exploration of VHMS systems is the identification of the specific host rock horizons or geological features that control mineralisation, and their arrangement.

  The litho-stratigraphy has now been defined at the Kempfield deposit and four key host horizons have been identified. Horizons A, B, C and D have been identified within stratigraphy that dips approximately 700-800 to the

  west and youngs to the east.

  The identification of the lithology and host horizons represents a major breakthrough for the project, leading to highly efficient drill targeting of high grade precious and base metals at Kempfield.

  Figure 1 provides a simplified geological plan view illustrating the dominant lithology and identified VHMS host horizons projected to surface, together with outlines of the three mineralisation zones of the known deposit and the drill program holes.

  Figure 1 - Simplified plan view of Kempfield lithology, the identified VHMS host horizons, and diamond drill hole locations

  1. See Appendix B of the 10 October 2016 announcement

  Potential mineralised extensions identified for drill targeting

  An immediate result of this new level of detail was the identification of two potentially significant areas of additional mineralisation (each labelled as 'Potential Extension' in Figure 1):

• Northwest Kempfield - comprising A and B Horizons north of the transverse fault X-X; and

• Southeast Kempfield - comprising C and D Horizons to the south of the fault.

  The discovery and delineation of the host horizons and the identification of the potential mineralised extensions represent significant advances at Kempfield. The mineralisation extension potential is especially significant when considered together with the recent depth extensions to northern portions of the deposit, which were confirmed to be at least twice that afforded by historical shallow drilling.

  High grade gold trend

  The diamond drill core assessment confirmed two main types of gold occurrences at Kempfield:

• VHMS related gold - generally in the range of 0.5-1.5 g/t Au, widespread, and associated with the original VHMS silver and base metal mineralisation event; and

• Orogenic gold overprint related to the Trunkey-Kings Plain gold system - that occurred as a later stage event. Gold occurrences of highly variable grades to as high as 1.0 m @ 1,065 g/t Au from 97 m (AKDD181) have been identified as being related to the Trunkey-Kings Plain orogenic gold system. Diamond drill core analyses and modeling has identified that these occur within a variable trend that generally dips 25° to the west. The interference of the existing VHMS system and the overprinted gold system holds potential for further occurrences of structural upgrading to achieve high gold grades.

Figure 2 provides an example illustration of the orogenic overprint gold trend and the significant new level of detail for VHMS lenses and the lithology identified by the diamond drill core analysis.

Figure 2 - Gold trend and VHMS lens continuity confirmed by analyses of diamond holes AKDD186, 192 and 185 (section view)

Small intervals of massive sulphide mineralisation intersected by hole AKDD191 are a very positive discovery for the northern area of Kempfield. It shows that sulphide mineralisation is increasing in quality, and grade, with depth and there is a high potential for further depth extensions. The coincidence of a rhyolite intrusive and increasing grades with depth strongly indicates there was a growth fault at this location controlling the distribution of sulphide mineralisation.

The next round of Kempfield drilling will include further testing in the region of the rhyolite intrusive in Kempfield North.