Gascoyne Resources : June 2016 - Quarterly Activities and Cashflow Report, 3.5 MB

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Following completion of the Dalgaranga Pre-Feasibility study in late March 2016, a Feasibility study has commenced, as well as an aggressive exploration and resource drilling programme.

Three drill rigs were active at Dalgaranga for most of the quarter targeting resource extensions and infilling the Inferred Resources as well as regional exploration. RC and diamond resource drilling intersections include:

• 76m @ 1.1 g/t gold from 230m incl. 13m @ 2.8 g/t gold, 24.91m @ 1.0 g/t gold, and 12m @ 1.5 g/t gold

  o 69.49m @ 1.12 g/t gold from 278.51m incl. 42.49m @ 1.55 g/t gold (incl 12 m @ 3.12g/t gold)

• 30m @ 1.13 g/t gold from 184m, and 6m @ 1.13 g/t gold from 224m o 25m @ 1.24 g/t gold from 256m, and 6m @ 1.15 g/t gold from 239m o 23.88m @ 1.43 g/t gold from 280.12m

• 15m @ 2.49 g/t gold from 72m

  Exploration drilling has highlighted the potential for substantial further growth in resources at Gilbeys South and Hendricks. Shallow aircore drilling has extended the mineralisation at Gilbeys a further 550m to the south, adding 50% to the strike length of the 950,000 ounce Gilbeys mineralised system. Aircore results include:

• 12m @ 2.0 g/t gold from 16m (incl. 4m @ 5.5 g/t gold)

• 4m @ 3.4 g/t gold from 8m

• 8m @ 1.9 g/t gold from 28m

• 16m @ 1.2 g/t gold from 4m (incl. 4m @ 4.2 g/t gold)

• 38m @ 0.9 g/t gold from 12m to EOH (incl. 10m @ 1.5 g/t gold to EOH)

• 16m @ 1.1 g/t gold from 32m

• 15m @ 0.5 g/t gold from 24m to EOH (incl. 3m @ 1.3 g/t gold to EOH)

• 8m @ 1.0 g/t gold from 44m

• 4m @ 1.7 g/t gold from 4m

  Exploration RC drilling at Hendricks also intersected significant mineralisation including;

• 15m @ 1.5 g/t gold from 52m incl. 8m @ 2.3 g/t gold

• 7m @ 1.78 g/t gold from 75m o 6m @ 1.2 g/t gold from 37m o 5m @ 1.2 g/t gold from 10m

The Feasibility study remains on schedule for completion before the end of the year. In addition to the Feasibility study, regulatory approvals are also well advanced, with submission expected in August.

Exploration recommenced on the project after a two year hiatus with a small drill programme completed with assay results expected in mid-August.

CORPORATE:

Early in the quarter, the Company completed a private placement raising $15.0 million before costs. The funds were raised to accelerate exploration and complete the Dalgaranga Feasibility Study.

At the end of the quarter, the Company's cash reserves were $14.9 million.

CORPORATE DETAILS

ASX Code: GCY

Shares: 252M Share Price: 61c

Market Cap: $154 M

ASSETS

Cash: $14.9M

Glenburgh (100%) 1.0M oz Gold Dalgaranga (80%) 1.05M oz Gold Egerton (100%) 24,000oz Gold

BOARD

Non-Executive Chairman Mike Joyce

Managing Director Michael Dunbar

Non-Executive Directors John den Dryver Gordon Dunbar Graham Riley

Stan Macdonald

CONTACT DETAILS

Telephone: +61 8 9481 3434

Facsimile: +61 8 9481 0411

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

REVIEW OF OPERATIONS

Details of the exploration progress during the quarter include:

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

E59/1709, 1904, 1905, 1906, M59/749 & L 59/141 & 142, ELA21/195, LA59/151-153 - 80% Gascoyne &

ELA59/2150 - 100% Gascoyne

Activities at the Dalgaranga gold project have accelerated following the completion of the Pre-Feasibility study in March, which demonstrated a project that is financial and technically robust. During the current quarter the Company commenced a full Feasibility Study which is scheduled for completion by the end of 2016 and will facilitate a decision to mine.

Three drill rigs have been actively drilling at Dalgaranga for most of the quarter with the drilling designed to infill the Inferred Resources, extend the existing Resources, collect metallurgical and geotechnical samples for the Feasibility Study and further regional exploration. As announced on the 6th of April, the 9th and 23rd of June, the RC and diamond resource drilling at Gilbeys and Golden Wings has consistently intersected greater widths of mineralisation at or above the expected grades (see Figure 2 & 3). Intersections include:

• 76m @ 1.1 g/t gold from 230m ; incl. 13m @ 2.8 g/t gold, 24.91m @ 1.0 g/t gold, and 12m @

  1.5 g/t gold

  o 69.49m @ 1.12 g/t gold from 278.51m; incl. 42.49m @ 1.55 g/t gold (incl 12 m @ 3.12g/t gold)

• 30m @ 1.13 g/t gold from 184m and 6m @ 1.13 g/t gold from 224m o 25m @ 1.24 g/t gold from 256m and 6m @ 1.15 g/t gold from 239m o 23.88m @ 1.43 g/t gold from 280.12m

• 12m @ 1.17 g/t gold from 96m o 7m @ 1.48 g/t gold from 80m o 15m @ 2.49 g/t gold from 72m

Figure 2: Dalgaranga Site Layout

Figure 3: Dalgaranga Gold Project, Gilbeys Deposit Recent RC and Diamond Core Drill Intersections

In addition to the resource drilling, as announced on the 6th of July, shallow aircore drilling south of the Gilbeys deposit has intersected significant mineralisation, highlighting the potential for the Gilbeys deposit to extend to over 1650m long, a 50% increase from the current resource length of 1,100m (see Figure 4 & 5). Drilling south of the Gilbeys resource has intersected numerious shallow wide zones of gold mineralisation including:

• 12m @ 2.0 g/t gold from 16m (incl. 4m @ 5.5 g/t gold)

• 4m @ 3.4 g/t gold from 8m

• 8m @ 1.9 g/t gold from 28m

• 16m @ 1.2 g/t gold from 4m (incl. 4m @ 4.2 g/t gold)

• 38m @ 0.9 g/t gold from 12m to EOH (incl. 10m @ 1.5 g/t gold to EOH)

• 16m @ 1.1 g/t gold from 32m

• 15m @ 0.5 g/t gold from 24m to EOH (incl. 3m @ 1.3 g/t gold to EOH)

• 8m @ 1.0 g/t gold from 44m o 4m @ 1.7 g/t gold from 4m o 4m @ 1.1 g/t gold from 16m o 4m @ 1.0 g/t gold from 32m

Follow up RC drilling is underway with two RC rigs currently testing the depth extensions and strike potential of the area. Aircore drilling is currently underway testing the extensions to the resource on the eastern side of the pit, where the resource remains open along strike at very shallow depths.

Figure 4: Gilbeys Deposit Maximum gold in Hole, resource outline and conceptual PFS pit outline highlighting potential for growth to the South West