Orion Gold NL : June Quarterly Activities Report (29/07/16)

29 July 2016

ASX Code: ORN Issued Capital:

Ordinary Shares: 475M Options: 91M

Directors: Denis Waddell

Chairman

Errol Smart

Managing Director, CEO

Bill Oliver

Technical Director

Alexander Haller

Non-Executive Director

Management: Martin Bouwmeester

Company Secretary &

Business Development Manager

Suite 2

64 Thomas Street West Perth WA 6005 ABN 76 098 939 274

T: +61 8 9485 2685

E: info@oriongold.com.au

FOR THE QUARTER ENDED 30 JUNE 2016

HIGHLIGHTS

• Drilling in progress at the Areachap Project, South Africa:
  • Drilling has intersected massive sulphides at the +105 Level Exploration Target at the historical Prieska Copper Mine Zinc- Copper (PC) Project, with excellent initial results.
    • 22 metres at 10.8% zinc and 1.38% copper (OCOR016) including 7 metres at 17.8% zinc and 1.41% copper.
    • 12 metres at 4.14% copper and 1.89% zinc (OCOR017) including 3 metres at 7.4% copper and 4.34% zinc.
  • PC is recorded as one of world's 30 largest VMS base metal deposits with recorded historical production of 0.43Mt of copper and 1Mt of zinc from 46.8Mt of sulphide ore milled(1). Unmined dip and strike potential is confirmed by extensive drilling and geophysics.
  • Drilling is also being carried out at the Marydale Gold Project, a virgin epithermal discovery where initial drilling identified wide intersections of gold mineralisation. Drilling to date has intersected zones of similar lithologies and alteration.
• Further exploration opportunities secured to the north of the PC Project prospective for VMS, SEDEX and mafic intrusive hosted base metal mineralisation, as well as lithium and rare earth element bearing pegmatites:
  • Mapped occurrences of VHMS style mineralisation including the previously drilled Kantienpan Zinc-Copper deposit.
  • Recently acquired Jacomynspan Nickel-Copper deposit analogous to Nova-Bollinger Deposit and other magmatic nickel-copper deposits, however no modern era exploration for massive sulphides.
  • Orion now has rights over a total of 1,790km2 of prospective tenure in the Areachap Belt.
• $0.8 million raised via private placements of shares at 1.5c per share during the Quarter.

1. Source: Mine records.

W: www.oriongold.com.au

Exploration

During the Quarter, Orion commenced its maiden drill program at its highly prospective South African projects. Drilling has progressed well with excellent initial drill results and further results anticipated in coming weeks. A substantial program of work is underway in parallel with drilling incorporating field mapping, surface geochemistry and geophysical surveys as well as validation and field checking of historical data.

Areachap Copper-Zinc and Gold-Projects (South Africa)

During the Quarter, the Company commenced its maiden resource delineation drilling programs at the historical Prieska Copper Mine (PC) Zinc-Copper Project, undertook fieldwork including drilling at the Marydale Project and advanced the recent Masiqhame acquisition via data compilation and review, as well as acquiring an option over further prospecting rights within the Areachap Belt (Figure 1).

Figure 1: Regional magnetic map of the Areachap Belt showing prospecting rights currently under option to Orion and noted mineral occurrences as per published data from South African Council for Geoscience.

PC Project

Drilling at the PC Project is focussed on near surface mineralisation and testing the Company's +105 Level Exploration Target (Table 1). To date 15 holes for 983 metres have been completed (Figure 2). Significant intersections received to date include:

• 22 metres at 10.8% zinc, 1.38% copper and 0.3g/t gold from 57 metres incl. 7 metres at 17.8% zinc and 1.41% copper (OCOR016);

• 12 metres at 4.14% copper, 1.89% zinc and 0.29g/t gold from 57 metres incl. 3 metres at 7.4% copper and 4.34% zinc (OCOR017);

• 5 metres at 2.1% copper and 0.34% zinc from 35 metres (OCOR014); and

• 5 metres at 0.92% copper and 1.56% zinc from 15 metres (OCOR013A).

  (Refer ASX Release 25 July 2016)

  Drilling aims to infill and validate historical drilling which returned results including:

• 11.5 metres at 1.2% copper + 7.2% zinc from 109.5 metres (V04);

• 8.1 metres at 4.6% copper + 2.5% zinc from 106.05 metres (V09);

• 33.4 metres at 0.95% copper + 0.80% zinc from 16.4 metres (COC01);

• 8.4 metres at 1.25% copper + 0.72% zinc from 43.8 metres (COC02);

• 6.5 metres at 2.17% copper + 0.38% zinc from 46.8 metres (COC04);

• 6.6 metres at 1.63% copper + 3.76% zinc from 84.7 metres (COC05);

• 5.8 metres at 1.49% copper + 6.93% zinc from 70.6 metres (COC09); and

• 9.6 metres at 4.34% copper + 0.39% zinc from 51.9 metres following 6.0 metres at 0.34% copper + 0.50% zinc from 40.1 metres (COC10).

(Refer ASX Release 18 November 2015)

Figure 2: Plan showing the PC Project with completed, proposed and historical drilling at the

+105 Level Exploration Target.

Table 1: Exploration Targets at the PC Project. Detail and supporting information relating to these Exploration Targets is contained in the ASX Release of 18 November 2015.

Drilling to date has intersected high grade zinc-copper mineralisation principally hosted in massive and semi-massive sulphides (Figure 3). While oxide mineralisation is intersected from 0-40 metres vertical depth, zonation in grade and metal content (refer intersections in ASX Release 25 July 2016) are encountered as expected. Grades of both copper and zinc are most elevated in the supergene and primary sulphides, which have been intersected below 40 metres depth, with some outstanding individual assays such as 21.7%, 21.0% and 18.1% zinc (OCOR016, 64 - 67 metres; refer ASX Release 25 July 2016) and 7.49%, 7.39% and 7.31%

copper (OCOR017, 63 - 66 metres; refer ASX Release 25 July 2016).

Of further interest is the presence of associated gold-silver mineralisation and even elevated lead results in certain samples, with peak results of 1.15g/t gold and 39g/t silver (OCOR016, 70

- 71 metres; refer ASX Release 25 July 2016). These results within broader intersections of 0.3g/t gold and 10g/t silver indicate potential for significant precious metal credits. It is worth noting that the previous operator of the historic Prieska Mine did not routinely assay for precious metals.

Drilling is ongoing at the PC Project with further massive sulphides intersected in recent drilling. A portable XRF analyser is being used to efficiently select intervals for analysis, allowing rapid sample preparation and submission to ALS in Johannesburg for analysis. As a result, the Company anticipates being able to release results regularly over the forthcoming Quarter.

4.45 4.03 4.06 7.49 7.39 7.31

Figure 3: Massive sulphides in OCOR017 between 60 metres and 66 metres (left to right) (each divider shows chips from a 1m interval).

Marydale Project

Drilling has been completed at the Marydale Project, a virgin gold discovery of possible high sulphidation epithermal origin located 60km from the PC Project. Drilling aimed to test the geological model for the Marydale mineralisation by in-filling historic drilling at the project. Results from historic drilling included: