Heron Resources : Pegs Tenements over Peelwood District High-Grade Zinc-Copper Deposits

Heron Resources Limited

15 November 2017

Level 7, 191 Clarence Street, Sydney NSW 2000

heron@heronresources.com.au

+61 2 9119 8111

ABN: 30 068 263 098

• Heron has applied for two exploration licences over the Peelwood District zinc-copper deposits, 105km north of Woodlawn, NSW
• Volcanongenic Massive Sulphide (VMS) deposits with similar characteristics to Woodlawn have been defined by previous explorers
• Peelwood contains previously reported JORC (2004) Mineral Resources at the John Fardy and Peelwood deposits and Heron is currently compiling the drill data to verify this estimate
• There is excellent potential to define high-grade zones with reported drill results including:
• This is an exciting addition to the Heron project portfolio and represents the most advanced satellite development opportunity for Woodlawn's regional growth
• These additional tenements remain highly prospective for further discoveries along strike of the known deposits Heron Resources Limited (ASX:HRR TSX:HER, "Heron" or the "Company") is pleased to report that the Company has applied for additional tenements in the Peelwood area that cover previously defined high grade zinc-copper deposits, 105 km north of the Company's Woodlawn Zinc-Copper Project in New South Wales, Australia.

  Commenting on the Peelwood Project, Heron's Managing Director, Mr Wayne Taylor said: "The pegging of these tenements at Peelwood is a fantastic and valuable addition to Woodlawn's regional growth plans. We have acquired ground that contains high-grade mineralisation with previous operators having worked through the definition of resources and reserves, undertaken a standalone feasibility study, and progressed development approvals. This provides Heron with an advanced development opportunity that would have taken at-least $5-10M of direct expenditure and two years of exploration work to replicate. Within the existing John Fardy and Peelwood deposits there appears to be excellent potential to extend and define high-grade zones that could be trucked to Woodlawn for processing, with further upside from depth extensions. These tenements also have an abundance of high grade sulphide occurrences to potentially expand the currently defined deposits."

  Peelwood Project1

  The Peelwood Project is located 165km west of Sydney, and 105 kilometres north from the Company's Woodlawn Zinc- Copper Project in New South Wales, Australia. (Figure 1). It lies within undulating, mostly forested country 800m above sea level, and is underlain by Silurian aged rocks consisting of the shales and other fine grained sedimentary rocks of the Cuddyong Formation, and the felsic volcanic rocks of the Kangaloolah Volcanics. VMS style deposits were first mined here in 1890's with three key centres occurring on the tenements newly pegged by Heron, namely the Peelwood, John Fardy and Cordillera deposits (Figure 2). Each of these historical deposits includes a number of massive sulphide lenses located at, or adjacent to, the sheared contact between the Cuddyong Formation and the Kangaloolah Volcanics.

  John Fardy Deposit

  The John Fardy VMS deposit, located 1km northwest of the Peelwood mine, was discovered in the early 1950s. It is hosted by a steeply west-dipping sequence of shales (Cuddyong Formation) at the contact with rhyodacitic crystal tuffs of the Kangaloolah Volcanics.

  The mineralisation at John Fardy comprises disseminated and massive sulphides up to 20m thick within two lenses separated by a 0.5-5m zone of altered shale and a pyritic and cherty exhalate which also occurs above and below the mineralised horizon. The massive sulphides are commonly banded and consist of fine to coarse grained pyrite and sphalerite with minor galena, chalcopyrite and traces arsenopyrite and tetrahedrite. A JORC (2004) Mineral Resource for the John Fardy deposit was released on the ASX by Sultan Corporation Ltd on the 12 November 2008. However, Heron has not, as yet, been able to source and verify the open-file or other data for this estimate and so cannot state resource numbers at this stage.

  At John Fardy there appears to be excellent potential to delineate a high-grade resource and some of the better, higher grade results include2:

  A drilling cross-section with assay results for the John Fardy deposit is shown in Figure 3.

  Peelwood Deposit

  The Peelwood deposit was discovered in 1868 and mined between 1874 to 1895 and has produced in excess of 600t Cu and 4,000t Zn with significant Pb, Ag and Au, principally from the Cornish and Magazine lenses. Some of the mined lenses were reportedly very high grade: 25 % Zn, 2.7% Cu, 14% Pb, 232g/t Ag3 some remnant material is still believed to exist in the historical underground positions. Comprehensive exploration of the area began in the 1950's with the majority of drilling taking place in the mid to late 1970s. As with the John Fardy deposit, a JORC (2004) Mineral Resource for the Peelwood

  1 The geological description for the Peelwood deposits are adapted from the publication: Downes, P.M., 2017.

  2 Results have been taken: Sultan Corp Ltd, ASX release, 5 June 2007: High Grade Zinc Intersections at John Fardy, Sultan Corp Ltd, ASX release, 6 February 2008: Near surface, high grade intersected at John Fardy and Sultan Corp Ltd, ASX release, 19 February 2008: Another significant zinc and copper intersection.

  3 Taken from report: GS1983/395 Australian Pacific Resources Ltd, 1984.

  deposit was released on the ASX by Sultan Corporation Ltd on the 12 November 2008. However, Heron has not, as yet, been able to source and verify the open-file or other data for this estimate and so cannot state the resource numbers at this stage.

  The Peelwood deposit is located adjacent to the contact between a tuffaceous unit of the Kangaloolah Volcanics and a shale unit of the overlying Cuddyong Formation, the sequence being overturned and dipping steeply to the west. Sulphide mineralogy at Peelwood is similar to John Fardy but tends to be fine grained and finely laminated. The Magazine lens is conformable and closely associated with a black shale unit, whereas the Cornish lens is discordant, hosted within volcanic tuff and dips 45°E. A number of other discrete mineralised zones are also present (e.g., Paddy's Lens) and the Company will define a detailed exploration plan to test these prospects.

  Cordillera Deposit

  The Cordillera VMS deposit is located 3km NNW of the main Peelwood mine and hosts four sulphide lenses within a siliceous shale unit enclosed within a coarse-grained fragmental unit of the Kangaloolah Volcanics. The lenses are described as overlapping, discontinuous, up to 5m thick and overlain by a 3m thick yellow-green shale, interpreted to be conformable to bedding and cross-cut by later quartz-scheelite (tungsten) veins. The sulphide lenses occur approximately 20m below the steeply dipping contact with tuffaceous shales of the Cuddyong Formation. Sparse drilling has been undertaken at Cordillera; further work is warranted to better understand the economic potential of the deposit.

  Other Prospects

  A number of other significant base-metal prospects exist on the Heron tenure in the Peelwood area including:

  • Single Tree Hill - historic copper/silver mine 5km SSE of Peelwood where drilling has intersected weak mineralisation down dip from the mine. An historic off-hole EM conductor suggests the possible presence of a massive sulphide lens occurs at depth and warrants further drill testing.

  • Black Springs Prospect - 8km south of Peelwood where historic drilling has intersected potentially economic grade mineralisation including: 4m @ 9.7% Zn, 3.6% Pb and 31g/t Ag.

  • Central Hill and Aurora Prospects - poorly described base-metal prospects such as Central Hill and Aurora occur along the line of the Peelwood lode to the NW of Peelwood. Little exploration has been undertaken on these areas and reconnaissance drilling and DHEM is warranted to assess their potential.

The Company is progressing the tenement applications through the grant process which is expected to be completed in approximately 8 weeks. The drilling database is being compiled and validated. The potential for high-grade zones within the existing Mineral Resources will be assessed as they hold the potential to deliver an extra source of shallow, high-grade ore to the Woodlawn processing plant. If accessible, the existing feasibility study, including environmental and community liaison will be reviewed and, if warranted, used as a starting point for Heron's own further project assessment studies.

Heron's primary focus is the development of its 100% owned, high grade Woodlawn Zinc-Copper Project located 250km southwest of Sydney, New South Wales, Australia. In addition, the Company holds a significant high quality, gold and base metal tenements regional to the Woodlawn Project.

Downes P.M., 2012, Metallic Mineral Systems: In Thomas O & Pogson D.J. (compilers), Goulburn 1:250,000 Geological Sheet SI/55-12, 2rd edition, Explanatory Notes prepared by Geological Survey of New South Wales, Maitland, pp 148-225.

GS1983/395 Australian Pacific Resources Ltd, 1984 Peelwood Six Monthly Report, Prospecting Licences PL331 and PL619, Peelwood NSW. Geological Survey of NSW, DIGS reporting system.

Sultan Corp Ltd, ASX Release, 21 May 2007: Acquisition of Peelwood Zinc/Copper Project. Sultan Corp Ltd, ASX release, 5 June 2007: High Grade Zinc Intersections at John Fardy. Sultan Corp Ltd, ASX Release, 27 August 2007: Presentation.

Sultan Corp Ltd, ASX Release, 12 September 2007: JORC Code Compliant Resource at John Fardy Zinc Deposit. Sultan Corp Ltd, ASX Release, 4 December 2007: Commencement of Drilling at John Fardy Zinc / Copper Deposit. Sultan Corp Ltd, ASX release, 6 February 2008: Near surface, high grade intersected at John Fardy

Sultan Corp Ltd, ASX release, 19 February 2008: Another significant zinc and copper intersection Sultan Corp Ltd, ASX Release, 18 March 2008: Further high grade zinc and copper intersections. Sultan Corp Ltd, ASX Release, 5 June 2008: Investor Presentation.

Sultan Corp Ltd, ASX Release, 11 June 2008: High Grade Copper Discovered at Peelwood. Sultan Corp Ltd, ASX Release, 17 July 2008: Completion of Drilling Program at Peelwood.

Sultan Corp Ltd, ASX Release, 3 September 2008: High Grade Near Surface Resource at Peelwood. Sultan Corp Ltd, ASX Release, 12 November 2008: Feasibility Study - Market update.

Sultan Corp Ltd, ASX Release, 20 August 2009: Sultan Proceeding with Mine Development.

Sultan Corp Ltd, ASX Release, 18 December 2013, Farm-In Deal Signed for Peelwood Project with CEB Resources. Sultan Corp Ltd, ASX Release, 3 January 2014, Amended Announcement - 18/12/2013.