Emerald Resources NL : Fourth Quarter Activities and Cashflow Report | 30 June 2017

ASX Announcement & Media Release

26 July 2017

Fast Facts

ASX Code: EMR

Shares on issue: 2,108 million Market Cap: ~$92.7 million

Cash: A$8.5 million (30 June 2017)

Board & Management

Simon Lee AO, Non-Exec Chairman

Morgan Hart, Managing Director Justin Tremain, Executive Director Ross Stanley, Non-Exec Director Ross Williams, Non-Exec Director Mick Evans, Chief Operating Officer Mark Clements, Co. Secretary

Company Highlights

• First mover in an emerging gold province in Cambodia

• Okvau Deposit (100% owned): Indicated and Inferred Mineral Resource Estimate of 1.14Moz at 2.0g/t Au (refer Table One)

• DFS completed and demonstrates high grade, low cost, compelling development economics:

  • Ore Reserve of 14.3Mt @ 2.0g/t Au for 0.9Mozs (refer Table Two) in a single open pit with waste:ore ratio of 5.8:1

  • LOM average annual production of 106,000ozs pa

  • AISC US$731/oz over LOM

  • Using US$1.250/oz Au gold price:

    • NPV(5%)US$223M pre-tax and US$160M post-tax

    • IRR 48% pa pre-tax and 40% post-tax

    • Payback ~2.2 years pre-tax and

      2.5 years post-tax

• Highly credentialed gold project development team

• Significant resource growth potential.

  Registered Office 1110 Hay Street West Perth WA 6005

  T: +61 8 9286 6300

  F: +61 8 9286 6333

  W: www.emeraldresources.com.au

  Cambodian Gold Project Activities Definitive Feasibility Study

• Definitive Feasibility Study ('DFS') completed and announced in May 2017 confirmed the 100% owned Okvau Gold Project in Cambodia as a robust and compelling project

• DFS delivered an initial Ore Reserve of 14.3Mt @ 2.0g/t Au for 907,000oz (refer to Table Two)at an average AISC of US$731/oz over an initial 7 year Life- of-Mine ('LOM') operating period

• The DFS is based on a 2.0Mtpa plant to produce approximately 106,000oz pa on average over the initial operating LOM of over 7 years

• Updated Mineral Resource estimate of 17.7Mt at 2.0g/t gold for 1.14Moz (at 0.7g/t cut-off)with 1.01Moz as Indicated and 0.13Moz as Inferred (refer Table One)

  Corporate

• Indicative debt financing proposals received from a number of International financiers. Proposals provide for a significant portion of the Okvau Gold Project development costs to be debt funded, thereby limiting potential equity dilution

• Emerald expects to mandate preferred financier(s) in the coming weeks

• Emerald remains well funded with cash reserves to continue to de-risk the Okvau Gold Project and undertake exploration drilling in order to add shareholder value and realise the attractive economics of the Okvau Gold Project

• The Company's consolidated cash position at 30 June 2017 was approximately

  $8.5 million

  Subsequent to Quarter end

• Earn-in agreements reached covering five exploration licenses, and the successful granting of a new exploration license application, expands Emerald's exploration ground position in Cambodia from 374km2to 1,500km2

• Earn-in agreement with Australian unlisted company, Mekong Minerals Ltd, over four exploration licences covering 861km2, whereby Emerald may earn up to an 70% interest

• Earn-in agreement reached with TSX listed company Angkor Gold Corp. (TSXV: ANK)over its Koan Nheak exploration licence covering 189km2located 50 kilometres north-east of the Okvau Gold Project, whereby Emerald may earn up to an 80% interest

• Emerald granted a new exploration licence, Svay Chras, covering 75km2of prospective, unexplored ground located 40 kilometres south-west of Okvau Gold Project

Background

The Okvau Deposit is located approximately 275 kilometres north-east of Cambodia's capital city of Phnom Penh in the province of Mondulkiri (refer Figures One and Two). The town of Kratie is located on the Mekong River approximately 90 kilometres to the west and the capital of Mondulkiri, Saen Monorom is located approximately 60 kilometres to the south-east.

Emerald, through its 100% owned Cambodian subsidiary company, Renaissance Minerals (Cambodia) Limited, holds a 100% interest in the Okvau Exploration Licence (and the adjoining O'Chhung Exploration Licence).

Subsequent to end of the Quarter, Emerald reached agreements to earn-in to five additional exploration licences covering a combined area of 1,050km2, prospective for large scale Intrusive Related Gold systems. All five of the licence areas are in close proximity to the Okvau Gold Project, as shown in Figure Two.

In addition, Emerald has been notified by the Cambodian Ministry of Mines & Energy that its application for 75km2of unexplored vacant land located 40 kilometres to the south-west of the Okvau Gold Project, has been successful. The 100% owned new licence area being Svay Chras.

The earn-in agreements, along with the new exploration licence granted, will increase Emerald's ground position in Eastern Cambodia from 374km2to 1,500km2. Further detail can be found on pages 7 through 11 of this activities statement.

Topography of the project areas is relatively flat with low relief of 80 metres to 200 metres above sea level. There are isolated scattered hills rising to around 400 metres. The area is sparsely populated with some limited historical small scale mining activity. An all-weather gravel haulage road servicing logging operations in the area provides good access to within 25 kilometres of the Okvau exploration camp site. The current access over the remaining 25 kilometres is sufficient for exploration activities but is planned to be upgraded to an all-weather road as part of project development.

Okvau Gold Project

In May 2017, Emerald completed a Definitive Feasibility Study ('DFS') (refer ASX announcement dated 1 May 2017)on the development of a 2.0Mtpa operation at the Okvau Gold Project ('Project'). The DFS was completed to +/-15% level of accuracy (refer Table Three)and fulfilled a milestone set by the Company since the acquisition.

The DFS confirms the robust nature of the Project with an initial operating LOM of over 7 years, producing approximately 106,000 ounces of gold per annum on average from a single open pit, with ore processed through a plant utilising a single stage crushing circuit and SAG mill, sulphide flotation, regrind mill followed by conventional cyanide leaching.

The estimated operating costs highlight a financially robust Project with an average LOM AISC of US$731/oz. The estimated Project development costs are US$91M with a further US$7M in mining contractor establishment costs and pre-production mining costs. The development costs include an US$4.4M allowance for spare parts and first fills.

At a gold price of US$1,250/oz, the Project generates a NPV(5%)of US$223M (A$298M) pre-tax and US$160M (A$213M) post-tax with an Internal Rate of Return (IRR) of 48% pa pre-tax and 40% post-tax. The payback of the total capital funding requirement is expected to be 26 months pre-tax and 30 months post-tax, from first gold pour.

An updated independent JORC Indicated and Inferred Mineral Resource estimate for the Okvau Deposit of 17.7Mt grading 2.01g/t gold containing 1.141Moz (at 0.70g/t gold cut-off) was updated by independent resource consultant EGRM Consulting Pty Ltd as part of the DFS (refer Table One).

Table One | Okvau Mineral Resource Estimate - April 2017

Okvau April 2017 Mineral Resource Estimate

Indicated Resource Inferred Resource Total Resource

Cut-off (Au g/t)

Tonnage (Mt)

Grade (g/t Au)

Contained Au (Koz)

Tonnage (Mt)

Grade (g/t Au)

Contained Au (Koz)

Tonnage (Mt)

Grade (g/t Au)

Contained Au (Koz)

0.70 15.11 2.08 1,008 2.57 1.61 133 17.68 2.01 1,141

The updated Mineral Resource estimate was determined using Multiple Indicator Kriging and takes into account additional dilution when compared to the previous Mineral Resource estimate.

The DFS delivered a maiden Ore Reserve (Probable) estimate of 14.26Mt @ 1.98g/t Au for 907,000 ounces gold (refer Table Two).

Table Two| Okvau Ore Reserve Estimate - April 2017

The mineralised vein system of the Okvau Deposit has a current strike extent of 500 metres across a width of 400 metres. The depth and geometry of the resource make it amenable to open pit mining with 73%, or 830,000 ounces of the total resource estimate within the single open pit mine design.

The Okvau Deposit remains open. There is significant potential to define additional ounces from both shallow extensions along strike to the north-east and at depth. The current resource estimate is underpinned by 132 drill holes for 33,351 metres, of which 100 holes or 30,046 metres is diamond core drilling with the remainder being reverse circulation drilling. Emerald completed an additional 7,400 metres of infill drilling to close the drill spacing on the top 120 metres of the deposit to 25 metres by 25 metres which was incorporated into the updated resource estimate.

The Okvau Deposit and other gold occurrences within the exploration licences are directly associated with diorite and granodiorite intrusions and are best classed as Intrusive Related Gold mineralisation. Exploration to date has demonstrated the potential for large scale gold deposits with the geology and geochemistry analogous to other world class Intrusive Related Gold districts, in particular the Tintina Gold Belt in Alaska (Donlin Creek 38Moz, Pogo 6Moz, Fort Knox 10Moz, Livengood 20Moz).

The Okvau Deposit will be mined by conventional open pit mining methods from a single pit at a relatively constant mining rate. Mining will be undertaken by drilling and blasting ore and waste with load and haul using a mining contractor.

The proposed plant has a throughput of 2Mtpa will utilise a single stage crushing circuit and SAG milling circuit, sulphide flotation, regrind mill followed by conventional cyanide leaching. The Project has an initial operating mine life of 7.2 years. The DFS is based entirely on Probable Reserves. Inferred Resources which total approximately 7,000 ounces within the final pit design, have not been included in the DFS. The site layout is shown in Figure Three.

Key operating and financial outcomes of the DFS, prepared in accordance with the requirements of the JORC Code (2012 Edition), are presented below.

Table Three| Study Results1

Figure Three | Okvau Gold Project Site Layout Plan

1 All economics are 100% attributable to Emerald

2 Includes US$4.4M of capital spares and first fills and US$7.0M of mining capital and pre-production mining costs

3 Includes US$14.4M of rehabilitation and closure costs

4 Royalties include Government royalty of 2.5% gross and a third party royalty of 1.5% gross (capped to A$22.5M)

5 Taxation is based on current and draft Cambodian tax law and does not allow for any incentives or tax relief

6 C1 Cash Costs include site based mining, processing and admin operating costs plus transport and refining costs

7 Includes C1 Cash Costs plus royalties, sustaining capital costs, contributions to environmental & community funds and rehabilitation & closure costs