Gascoyne Resources : Dalgaranga Gold Project Construction Update, 2.2 MB

September 7th 2017

Australian Securities Exchange Limited Via Electronic Lodgement

57 139 522 900

• Construction work at Gascoyne's 100% Dalgaranga Gold Project advancing well on all fronts, with first gold production scheduled for Q2 2018, currently on budget and on time
• Harmonised term sheet and mandate letter received from 2 tier one Australian banks. Final negotiations on the terms underway and expected to be finalised this week with mandate to be awarded shortly thereafter.
• 240 Person Dalgaranga accommodation village completed
• Engineering and design of the 2.5Mtpa Process Plant well advanced - 75% complete
• Bulk earthworks completed
• GR Engineering has mobilised to site, and concrete work has commenced including;
  • SAG mill foundations
  • CIL tank foundations and bunding
  • Workshop and warehouse foundations
• Installation of the CIL tanks has commenced
• Administration and maintenance office complex installation underway
• Tailings storage facility (TSF) lift and water evaporation pond construction well advanced
• Water bore construction well advanced and dewatering pipeline construction underway
• Access road construction and clearing for the airstrip nearing completion

P.O. Box 1449, West Perth, Western Australia 6872 Level 1, 41-47 Colin Street, West Perth, Western Australia 6005 Telephone +61 8 9481 3434, Facsimile +61 8 9481 0411

Email: admin@gascoyneresources.com.au, Web: www.gascoyneresources.com.au

Gascoyne Resources Limited ("Gascoyne" or "Company")(ASX:GCY) is pleased to provide an update on construction activities at the Company's 100% owned Dalgaranga Gold Project, which contains a Measured, Indicated and Inferred Resource of 31.1Mt @ 1.3 g/t for 1,320,000 ounces of contained gold, which is inclusive of Proved and Probable Ore Reserves of 14.3Mt @ 1.27 g/t for 581,000 ounces of gold (see Figures 2 & 3 and Tables 1 & 2 below).

Project Financing:

The Company has received a harmonised term sheet and mandate letter from two tier one Australian banks and is close to finalising negotiations. The terms and conditions are standard for facilities of this nature. As the Company has previously raised $55m (before costs) in equity funding, the Project Finance is not anticipated to be drawn until November.

Process Plant Construction Update:

GR Engineering (GRES) has progressed significantly with the design and engineering of the 2.5Mtpa Dalgaranga Processing Plant, with design and engineering 75% complete (see Figure 1).

GRES has mobilised to site for the construction phase of the build, with civil concrete works having recently commenced on site.

Workshop

Power Station

CIL

Tanks

Office Complex

SAG

Mill

Water Ponds

Transfer Bin

Plant Site Bulk Earthworks:

The Bulk earthworks required for the plant site have been completed (see Photo 1 above).

Plant Construction Progress:

GR Engineering has mobilised to site and construction activities have significantly increased over the last few weeks. Progress includes concrete installation for the SAG mill foundation, CIL tank foundations and workshop foundations (See Photo 2 below). In addition to the concrete work, construction of the CIL tanks has commenced on site, with the welding of the first of six tanks underway (see Photo 3 below)

Tailings Storage Facility and Evaporation Pond:

The tailings storage facility (TSF) construction has commenced (see Photo 4 below). The initial TSF lift comprises construction of a 3.5m embankment. This will be completed in October. In addtion to the TSF, an evaporation pond is being built to allow efficient management of the site dewatering requirements. The construction is approximately 70% complete (see Photo 5 below), with completion expected by the end of September, ahead of dewatering which is scheduled to commence in October.