Gascoyne Resources : Extensions to Gilbeys Deposit Confirmed & Exploration Update Dalgaranga and Glenburgh, 3.6 MB

August 17th 2016

Australian Securities Exchange Limited Via Electronic Lodgement

57 139 522 900

• Further wide, near surface gold intersections from RC drilling south of the Gilbeys pit at Dalgaranga including:
  • 12m @ 1.9 g/t gold from 19m, incl. 6m @ 3.1g/t from 25m in DGRC116
  • 10m @ 1.5 g/t gold from 58m in DGRC105
  • 16m @ 1.3 g/t gold from 11m and 5m @ 10.7 g/t gold from 33m in DGRC099
  • 13m @ 1.4 g/t gold from 8m in DGRC097
  • 15m @ 1.3 g/t gold from 149m in DGRC095 o 19m @ 1.1 g/t gold from 87m in DGRC109 o 24m @ 1.0 g/t gold from 26m in DGRC115
  • 6m @ 2.6g/t gold from 21m in DGRC120* (only assays from top 30m received to date).
• Diamond core drilling has commenced testing down dip extensions to Gilbeys South mineralisation which also includes recent intersections up to 28m @ 3.5 g/t gold (inc 16m @ 5.1 g/t) and 17m @ 3.2 g/t gold (inc. 6m @ 7.0 g/t).
• At Caorunn, wide spaced regional Aircore drilling intersected a new shallow zone of gold mineralisation:
  • 13m @ 1.1 g/t gold from 32m to EOH in DGAC634
• At Gilbeys East, immediately adjacent to the 949,000oz Gilbeys deposit, a number of shallow gold zones defined.
• Results are pending for a further 15 recently completed RC holes.
• Feasibility Study progressing on schedule, with completion expected before the end of 2016.
• Environmental Permits to be submitted to the WA DMP within the next few weeks.
• At Glenburgh, RC drilling intersected significant gold mineralisation at Apollo East:
  • 24m @ 0.8 g/t gold from 44m in VRC902 (including 12m @ 1.0 g/t gold)

Gascoyne Resources Limited ("Gascoyne" or "Company") is pleased to report on further assay results received from exploration drilling activities at its 80% owned Dalgaranga Gold Project in the Murchison region of Western Australia and the 100% owned Glenburgh Gold Project in the Gascoyne region of Western Australia.

The Dalgaranga Gold Project contains a Measured, Indicated and Inferred Resource of 23.7Mt @ 1.4 g/t gold for 1.05 million ounces of contained gold including an initial Proved and Probable Ore Reserve of 442,000 ounces of gold (see Figures 1 & 2 & Tables 7 & 8 below). The Dalgaranga Gold Project Resource is currently being updated as part of the ongoing Feasibility Study.

P.O. Box 1449, West Perth, Western Australia 6872 Rust House, Level 2, 33 Ord 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

The Glenburgh Gold Project contains a Measured, Indicated and Inferred Resource of 21.3Mt @ 1.5 g/t gold for 1.0 million ounces of contained gold (see Figures 1 & Table 9 below).

As previously announced, Gascoyne is conducting an ongoing multi-rig programme of RC, diamond core resource drilling, drilling at the Gilbeys and Golden Wings Deposits, and RC and Aircore exploration drilling at various existing prospects and new target areas generated from interpretation of recently flown aeromagnetic data (Figure 2).

The above reported significant RC results come from recently completed holes at the Gilbeys South area where Aircore drilling results (announced to the ASX on 7 July 2016) demonstrated that gold mineralisation extends a further 550 metres along strike. More recently the first RC results reported (announced to the ASX on 1 August 2016) intersected wide gold zones south of the current Gilbeys 949,000 ounce Resource. Importantly many of the intersected gold zones in these latest holes are at shallow depths close to surface in highly weathered oxide zones.

The new RC results include:

• 12m @ 1.9 g/t gold from 19m, incl. 6m @ 3.1g/t from 25m in DGRC116
• 10m @ 1.5 g/t gold from 58m in DGRC105
• 16m @ 1.3 g/t gold from 11m and 5m @ 10.7 g/t gold from 33m in DGRC099
• 13m @ 1.4 g/t gold from 8m in DGRC097
• 15m @ 1.3 g/t gold from 149m in DGRC095 o 19m @ 1.1 g/t gold from 87m in DGRC109 o 24m @ 1.0 g/t gold from 26m in DGRC115
• 6m @ 2.6g/t gold from 21m in DGRC120* (only assays from top 30m received to date).

These results are very encouraging as they occur between 250 and 550 metres South East of the historic Gilbeys open pit, and are well south of the current 949,000 ounce Gilbeys Resource (see Table 1 and Figure 3)

It is clear from these new drill intersections and the previous Gilbeys South RC drilling results (announced on the 1st of August 2016), that further drilling is warranted in the area prior to estimation of an initial Mineral Resource for the Gilbeys South area. This drilling is currently being planned and is expected to be underway in the next week.

Five RC holes have also been completed north of the Gilbeys Pit. Better results include 5m @ 2.8g/t gold from 163m in DGR100 and 7m @ 1.3 g/t gold from 178m in DGRC102. The mineralisation remains open along strike to the north.

Further drilling planned in the area and will be undertaken in conjunction with the Gilbeys South RC infill programme.

Wide spaced 200 x 50m shallow aircore drilling in the Caorunn area some 3km East of the Golden Wings deposit has intersected shallow significant gold mineralisation in Aircore drillhole DGAC634, 13m @ 1.1g/t gold from 32m to the EOH. Mineralisation is associate with sheared and quartz veined mafic rocks (see Figure 5 and Table 2).

Infill Aircore drilling will get underway in the next few days to follow up this discovery.

At Gilbeys East Aircore drilling has focussed on better defining mineralised trends along strike from modelled ore zones along the eastern side of the Gilbeys deposit. A number of zones of very shallow mineralisation were intersected starting from as little as 4m down hole. Additionally a number of the shallow Aircore holes ended in mineralisation including 6m

These new intersections, while relatively low grade, are significant as they fall within the proposed PFS pit design and in areas which had previously been interpreted as waste. The presence of mineralisation in this area of the pit will have a positive impact on the overall resource and pit optimisations for the deposit.

These newly discovered extensions to the mineralisation in the footwall of the Gilbeys deposit will be followed up with deeper RC drilling in the next month.

The Dalgaranga Feasibility Study ("FS") remains on schedule for completion by the end of 2016.

The drilling undertaken to improve the confidence in the Mineral Resource has now been completed (results from the RC and diamond drilling announced to the ASX on the 1st of August) and the new data is currently being incorporated into an updated Mineral Resource estimate. This update is expected to be released in the next two weeks. The updated resource will not include the new significant RC drill results at Gilbeys South reported herein, as a result, a material increase in the overall resource is not expected, however it is anticipated that the confidence in the material inside the PFS pit design will

increase from Inferred to Measured and Indicated Mineral Resource classification.

Also as part of the FS, sterilisation drilling has been undertaken covering the proposed plant site. This drilling has confirmed the area can be used for the plant site as no significant mineralisation was identified. The choosen site is relatively close (~700m) from the proposed Gilbeys pit, which significantly reduces the ore haulage costs from the pit to the ROM pad and processing facility.

As previously mentioned, in parallel with the Feasibility study, the statutory approvals required to develop the project are also being actively progressed with the Clearing Permit, Mining Proposal, Mine Closure Plan and the Works Approvals all expected to be submitted to the Department of Mines and Petroleum in the next few weeks with all approvals anticipated to be received by the end of 2016.

A short RC drill program has been completed at Glenburgh; this is the first drilling for some time at project and was focussed on first pass testing soil anomaly targets NE of the known gold deposits and targets north of the Central Resource area. Of note is the discovery of mineralisation in the Apollo East area some 300m East of the Apollo deposit (149,000 ounces of gold) with the intersection of 24m @ 0.8 g/t gold (including 12m @ 1.0 g/t) in 4 metre composite samples from 44m in VRC902 (See Table 3 and Figure 6).

This intersection has highlighted the potential for a new zone of mineralisation close to the two largest deposits at Glenburgh (the Icon and Apollo deposits) which combined, host 477,000 ounces of gold.

Single metre resampling of the four metre composite samples is expected to be completed in the next few weeks.

An initial review of previous exploration completed over the project has highlighted a number of regional +1.0 g/t gold soil anomalies which require further investgation. Ground truthing and confirmation sampling is planned over a number of these targets in the next few months with a view to undertaking a drilling programme in the current field season (See Figure 7).

In addition to the soil anomalies, a number of stream sediment gold anomalies have been identified which are yet to be followed up. Some of these anomalies are larger than the original stream sediment anomaly that resulted in the discovery of the +1.0 million ounce Glenburgh system. Follow up stream sediment sampling and soil sampling is expected to be ongoing for the next six months. It is anticipated that these exploration activities will lead to identifying drill targets for testing in the 2017 field season.

Commenting on the results Gascoyne's Managing Director said:

"These exploration results highlight the potential of both of our + 1.0 million ounce gold projects. At Dalgaranga, the 2016 regional exploration which has already resulted in new mineralisation being discovered at Gilbeys South and Hendricks and now aircore drilling has identified new gold mineralisation at Caorunn some 3km east of the Golden Wings deposit and new mineralised zones at Gilbeys East. While it is early days defining the potential of these two areas, it is particularly promising that the mineralisation has been intersected not only at shallow depths but also near the base of weathering, which suggests that the primary source of the mineralisation is close by.

The RC results at Gilbeys South are particularly encouraging with the Gilbeys mineralisation clearly extending a further 550 metres to the south of the current resource and it remains open at depth and to the south. This bodes well for the ongoing exploration effort in the area and future resource growth.

While Dalgaranga is rapidly moving towards development, the Company isn't neglecting our other +1.0 million ounce project at Glenburgh. The first drilling at Glenburgh for around two years has been completed and resulted in a number of significant intersections. Not only has a new zone of mineralisation been intersected between the Apollo and Mustang deposits, it is also encouraging that the extent of the mineralisation at Chevelle been extended and remains open along strike and at depth.

With the fully funded ongoing exploration effort at both projects we are looking forward to what we can uncover over the next few months while we also push forward towards a development decision at Dalgaranga."

For further information please refer to the Company's website or contact the Company directly.

On behalf of the board of

Managing Director