Gascoyne Resources : Dalgaranga Gold Project Development Update , 1.8 MB

August 7th 2017

Australian Securities Exchange Limited Via Electronic Lodgement

57 139 522 900

• Credit approved commitment letters received from a number of tier one Australian Banks that will see the Dalgaranga Gold Project fully funded, with the Banks expected to be mandated shortly.
• Development and construction work progressing on schedule following the Company's $55M equity raising in March, with first debt draw down expected in November/December;
• Engineering and design of the 2.5Mtpa Process Plant well advanced - 60% complete
• GR Engineering mobilising to site
• Bulk earthworks underway and will be substantially complete by the end of August
• 240 Person Dalgaranga accommodation village construction nearing completion
• Tailings storage facility (TSF) lift and water evaporation pond construction underway
• High speed microwave communications link established
• ROM pad construction complete
• Power supply contract tender has closed and bid, evaluation is underway
• Contract mining tender has been issued, tender closes on the 16th of August
• Experienced gold project builder Mr Peter Sperring has been employed as the Dalgaranga Registered Manager
• First gold production scheduled for Q2 2018, currently on budget and on time

Gascoyne Resources Limited ("Gascoyne" or "Company")(ASX:GCY) is pleased to provide an update on development activities on 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 an updated Proved and Probable Ore Reserve of 14.3Mt @ 1.27 g/t for 581,000 ounces of gold (see Figures 3 & 4 and Tables 1 & 2 below).

Project Financing:

The Company has received Credit approved approved commitment letters from a number of tier one Australian Banks for the debt which would see the Dalgaranga Gold Project funded. The letters, and terms for the debt (which are considered industry standard for a facility of this type) are currently being evaluated, with the sucessful banks expected to be mandated shortly. Construction work funded by the Company's equity contribution to development has been progressing to schedule since the $55M placement and SPP completed earlier this year. Debt drawdown is not expected until November/December 2017 ahead of scheduled first gold production in Q2 2018.

Project Staffing:

The Company is pleased to announce the appointment of Mr Peter Sperring as the Registered Manager for the Dalgaranga Gold Mine. Mr Sperring is a qualified Metalurgist and experience manager who has been involved in the successful development of a number of gold mines in Australia over the last 35 years. Mr Sperring brings a

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

wealth of experence, having recently been involved with the development of of Doray Minerals Ltd's , Andy Well and Deflector gold mines in the Murchison of Western Australia. Prior to his involvement in the development of Doray's operations, Mr Sperring managed the Challenger Gold Mine in South Australia for Kingsgate Consolidated and Dominion Mining, and was involved in the development of the 8Mtpa Prominent Hill Copper Gold Project for Oxiana Limited.

Mr Sperrings' duties will include liaising with the Engineering Contractor during construction of the processing plant, recruitment of the mines management team and establishment of site systems.

EPC Construction Update:

GR Engineering (GRES) has progressed significantly with the design and engineering of the 2.5Mtpa Dalgaranga Processing Plant, with design and engineering 60% complete (see Figure 1 & 2).

Warehouse

& Stores

Gravity Gold

Circuit

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

Power

Station

Process and Raw

Water Ponds

Transfer

Bin

Leach

Tanks

Single

SAG

Mill

Crushed

Ore Stockpile

Jaw

Crusher

ROM Pad

Figure One: Isometric Layout of the Dalgaranga Processing Plant

Sly Fox

Gilbeys

South

Gilbeys

Pit

TSF

ROM

Pad

Mining

Contractor Laydown

Crusher

Transfer

Bin

CIL

Tanks

Water

Ponds

Power

Station Office

Complex

Workshop

SAG

Mill

Laboratory

Photo 1: Dalgaranga Plant Site: Clearing complete with bulk earthworks well advanced

Figure Two: Dalgaranga Processing Plant - SAG Mill and CIL Tank Layout

Bulk Earthworks:

The Bulk Earthworks required for the plant site are well advanced, with the area cleared of vegitation and topsoil. The foundation layer is nearing completion and the water pond construction is progressing well (see Photo 1 above). The Bulk Earthworks is on schedule for completion at the end of August, allowing GRES access to site for the plant construction.

Camp Installation:

The 240 person Dalgaranga Village installation is nearing completion, with all of the accomodation units installed (see Photo 2). The Kitchen has been commissioned and the wetmess, gymnasium, office and recreation facilities have been installed, with commissioning underway.

The camp is expected to be completed in the coming weeks, well in advance of the increase in personnel numbers required for construction.

In addition to the camp, the high speed microwave communications link has been established, linking Dalgaranga to Telstra infrastructure (see Photo 3)

Photo 2: Dalgaranga Village Nearing Completion

Photo 3: Dalgaranga Mid-Point Communications Tower

For further information please refer to the Company's website or contact the Company directly. On behalf of the board of

Managing Director