Gascoyne Resources : Feasibility Confirms Dalgaranga as a High Margin Project, 4 MB

November 25th, 2016

Australian Securities Exchange Limited Via Electronic Lodgement

57 139 522 900

• Feasibility Study (FS) confirms that Gascoyne's Dalgaranga Gold Project in WA is one of the highest margin undeveloped gold projects in Australia
• FS outlines a technically and financially robust project with an initial 6 year life of mine (LOM) with undiscounted pre-tax operating cash surplus of A$373 million from revenue of A$866 million1
• Development based on two open cut mines, and a new conventional SAG milling circuit, gravity and carbon in leach processing plant with a throughput of 2.5Mtpa
• Estimated LOM Operating Cash Cost (C1) of A$869/oz2
• Estimated LOM all in sustaining cost (AISC) of A$931/oz3
• Pre-production Capital Cost for processing plant and associated Infrastructure of A$86 million (including contingencies of $6.1m) - payback within 18 months of production
• Production of 105,000ozpa in first two years
• 592,500 ounces within the initial mine plan 4 (14.1Mt @ 1.31 g/t gold), with exceptional potential for Resource growth
• Proved and Probable Ore Reserve of 552,000 ounces (13.3Mt @ 1.29 g/t) 5 a 25% increase over PFS
• Initial Mine Life 6 years, not including organic growth from Gilbeys South or other regional prospects
• Pre-tax NPV8 of A$177 million and IRR 65% based on a A$1,600 gold price
• The Gascoyne Board has approved the Feasibility Study and subject to obtaining a suitable financing arrangement, has approved the project to proceed to construction. It is anticipated that construction will commence as soon as financing has been completed with gold production targeted for Q1 CY2018
• Exploration drilling at the project is continuing

Gascoyne Resources Limited ("Gascoyne" or "Company") (ASX:GCY) is pleased to announce the completion of the Feasibility Study for the Company's 80% owned Dalgaranga Gold Project in the Murchison region of Western Australia. The Dalgaranga Gold Project contains a Measured, Indicated and Inferred Resource of 25.7 Mt @ 1.4 g/t gold for 1.12Moz of contained gold (see Figure 1&2).

1 Based on production of 541,000oz at US$1,200 gold price, A$/US$ exchange rate of 75c. All amounts in A$ unless otherwise stated

2 C1 operating costs include all mining and processing costs, site administration, refining and site rehabilitation costs

3 AISC includes C1 costs + royalties, sustaining capital, but excludes head office corporate costs.

4. 93% of the material in the mine plan is classified as an Ore Reserve, the remaining 7% is classified as Inferred Mineral Resource.

5 See Appendix 1 for JORC Table 1 and below for Reserve Details

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

1 See Appendix 1 for JORC Table 1 and below for Reserve Details

2 C1 operating costs include all mining and processing costs, site administration, refining and site rehabilitation costs

3 AISC includes C1 costs + royalties, sustaining capital, but excludes head office corporate costs.

A summary of the Feasibility Study is outlined below.

Cautionary Statement:

The Company advises that while the FS is based on Proved and Probable Ore Reserves (93%), it is partly based on Inferred Mineral Resources (7%). There is a lower level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the Inferred Mineral Resources will add to the economics of the project. Currently the drill spacing in the Inferred portion of the resource is too sparse to allow the material to be classified as Indicated. There has historically been very good conversion of Inferred Resources into Indicated Resources as the structures and geological units that host the mineralisation at Dalgaranga can be traced along strike and at depth. however there is no assurance that the economic evaluation outlined above will be realised.

Commenting on the results of the Dalgaranga FS, Gascoyne's Managing Director Mr Mike Dunbar said;

"The completion of the Feasibility Study and calculation of an updated Ore Reserve for the project is a considerable step forward for the Company. It confirms Dalgaranga will be a low cost and high margin WA gold development with very robust economics. The higher grades from the Golden Wings deposit along with the low all in sustaining costs will allow very rapid payback of the pre-production capital costs and will set the project up to remain competitive at gold prices well below the current levels."

"The compelling technical and economic outcomes of the FS have lead the Gascoyne Board to approve the Feasibility Study and subject to obtaining a suitable financing arrangement, proceed to project construction. It is anticipated that construction will commence as soon as financing has been completed with gold production targeted for Q1 CY2018."

"While the FS outlines a very profitable project that will produce around 100,000ozpa for 6 years, that is just the start for the project. Significant exploration potential still remains outside the resource and current mine plan at the Gilbeys South prospect, where recent RC and aircore drilling has identified an extension to the Gilbeys deposit. Intersections in the area, which include up to 22m @ 5.7 g/t gold, provide confidence that the mine life at Dalgaranga is likely to increase well in excess of the current 6 year mine plan. Exploration continues in the area and other regional prospects and, if exploration proves successful, the mine life will undoubtedly grow adding significantly to the value proposition that the Feasibility Study has clearly demonstrated"

"The Company would like to acknowledge the efforts of all of the independent Consultants who have worked on the FS"

Further opportunities to grow the project exist, in particular from ongoing exploration at the Gilbeys South prospect, where a 550m southern strike extension to the Gilbeys deposit has been discovered, let alone the other regional prospects which the company continues to drill. To date, none of the mineraliation at Gilbeys South has been included in the initial life of mine at Dalgaranga. An aggressive exploration effort will continue at the project to further enhance the already robust project, and there will be further opportunity to optimise the mine plan to reflect growth in Resources from areas such as Gilbeys South

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

Gascoyne Resources Limited

Michael Dunbar Managing Director

Information in this announcement relating to the Dalgaranga project is based on data compiled by Gascoyne's Managing Director Mr Mike Dunbar who is a member of The Australasian Institute of Mining and Metallurgy and Mr Karl van Olden, a full-time employee of CSA Global Pty Ltd, who is a fellow of The Australasian Institute of Mining and Metallurgy. Mr Dunbar and Mr van Olden have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons under the 2012 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Dunbar and Mr van Olden consent to the inclusion of the data in the form and context in which it appears.

The Gilbeys and Golden Wings Mineral Resources at the Dalgaranga and Glenburgh Projects have been estimated by RungePincockMinarco Limited, an external consultancy, and are reported under the 2012 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves (see GCY- ASX announcement 7th September 2016 titled: 40% Increase in Gilbeys Measured and Indicated Mineral Resource at Dalgaranga and ASX announcement 24th July 2014 titled: High Grade Domains Identified Within Updated Glenburgh Gold Mineral Resource). The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimate in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person's findings are presented have not materially modified from the original market announcements

The Glenburgh 2004 JORC resource (released to the ASX on April 29th 2013) which formed the basis for the preliminary Feasibility Study was classified as Indicated

and Inferred and as a result, is not sufficiently defined to allow conversion to an ore reserve; the financial analysis in the preliminary Feasibility Study is conceptual in nature and should not be used as a guide for investment. It is uncertain if additional exploration will allow conversion of the Inferred resource to a higher confidence resource (Indicated or Measured) and hence if a reserve could be determined for the project in the future. Production targets referred to in the preliminary Feasibility Study and in this report are conceptual in nature and include areas where there has been insufficient exploration to define an Indicated mineral resource. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised. This information was prepared and first disclosed under the JORC Code 2004, the resource has now been updated to conform with the JORC 2012 guidelines. This new JORC 2012 resource, reported above, will form the basis for any future studies.

The Egerton Resource estimate and Gaffney's Find prospect historical exploration results have been sourced from Exterra Resources annual reports and other publicly available reports which have undergone a number of peer reviews by qualified consultants, who conclude that the resources comply with the JORC code and are suitable for public reporting. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

Figure 1: Gascoyne Resources Project Locations in the Gascoyne and Murchison Regions