Pacgold : Step-Out Drilling Intersects Target Zone

For personal use only

Step-Out Drilling Intersects Target Zone

Alice River Gold Project, North Queensland

• Pacgold's 2022 drilling programme underway, with two rigs (RC and diamond) initially focused on the Central Target
• Two step-out holes completed to date (assays pending) have intersected zones of quartz veining and alteration corresponding with extension of the high-grade F1a zone discovery
• ARDH040 has intersected a 30m zone of veining and alteration (assays pending) ~165m below previous drill intersection of 6m @ 17.5g/t Au (ARDH027)
• Significant advance in the structural model for the gold system and identification of additional priority gold targets along the F1a zone
• Screen fire assay test work shows excellent correlation and repeatability to fire assay, highlighting negligible 'nuggety gold' effects

Pacgold Managing Director Tony Schreck said: "Pacgold has achieved significant advances in understanding of the high-grade gold mineralisation controls, including the completion of a collaborative study by geological and structural geology consultants. This represents an important step forward on the Project and will enable our targeting on both detailed and regional scales to be far more predictive.

Two drilling rigs have recommenced on-site and we are excited to continue step-out drilling to determine the extent of the high-grade gold mineralisation defining the F1a zone on the Central Target. Early visual indications are very encouraging; with drilling intercepting veining and alteration associated with the F1a zone up to 400m below surface and showing excellent continuity of the system extending to depth."

For personal use only

Central Target Drilling Update - F1a Zone

Significant advances have been made on the Pacgold team's understanding of the structural controls and geological setting of the high-grade gold mineralisation, through detailed structural interpretation of drill core combined with alteration and mineralisation modelling. This has provided an excellent platform for the current drilling programme, targeting the extensions of the high-grade gold system.

Pacgold's wide-spaced drilling of the F1a gold zone in 2021 provided strong indications that the gold grades within the system are increasing with depth. Recent structural modelling and updated geological interpretation supports a continuation of the drilling programme at depth vertically below the open pit, along with an expansion of the drilling to test structural targets on the F1a zone to the north and south. Two of the highest-grade intersections, 6m @ 17.5g/t Au1 (ARDH027) and 17m @ 9.3g/t Au2 (ARDH026), are both open at depth approximately 200m below surface and highlight outstanding potential for the system to continue at depth.

The current drilling programme recommenced in May and two diamond holes (ARDH040 and ARDH041) have been completed. Both drillholes have intersected several zones of quartz veining and alteration corresponding with the planned target zones. Of note, ARDH040 intersected a 30m (downhole width) zone of veining and alteration approximately 400m below surface and 165m below previous drill intersection of 6m @ 17.5g/t Au1 (ARDH027). This zone represents the deepest intersection of the mineral system to date (Figure 1).

Also, ARD041 successfully intersected several zones of veining to the south of previous hole ARDH007 (26m @ 3.6g/t Au from 104m incl. 3m @ 21.0g/t Au from 126m)3.

Structural Model and Geology Update

Gold mineralisation within the Project is hosted by the >30km long, NW-trending, Alice River Shear Zone ('ARSZ') encompassing the historical Alice River goldfield. IP geophysics completed by Pacgold along 7km of the ARSZ clearly defines this important structure as a resistivity low which corresponds to zones of intense alteration and veining.

A thorough review of the Project by the Pacgold technical team and specialist structural geology, economic geology, and petrology consultants has resulted in a significantly improved understanding of the alteration, mineralisation characteristics and structural controls on the Central Target F1a zone. This new model has already resulted in the identification of new priority targets along the ARSZ.

For personal use only

Figure 1: Long Section of the F1a zone showing the significant drill intersections from 2021 and the bonanza-grade gold target zone within the overall F1a target zone. The 2022 drillholes are shown as black dots and circles with assays pending. Plan location of the long section is shown in Figure 2.

The geological/technical review established several key features of the F1a zone summarised as follows:

• Gold mineralisation is hosted by several phases of overprinting quartz veining and hydrothermal breccia within structural zones in two major orientations.
• The main F1a vein zone is hosted in a N - NNW trending dilatant structure along the eastern margin of the ARSZ and forms the eastern boundary of the IP resistivity low corridor. The F1a zone accommodates early-stage lower grade Au mineralisation hosted in dark grey, sulphidic chalcedonic silica, either as matrix in hydrothermal breccia or veining. This early vein phase is often overprinted by creamy white, green to orange-pink chalcedonic quartz veins, which are sulphide poor and display moderate levels of gold mineralisation.
• The higher-grade gold mineralisation on the Central Target is localised in hanging wall splay structures in the western section of the F1a zone. These splays are host to dilatant sheeted and stockwork quartz veins that are WNW to NNW trending with moderate to steep SW through vertical to NW dips and are formed as a result of pull-apart and dilation. These veins overprint the early-stage veins described above in the vicinity of the historical AQ open pit, and are characterised as sub- epithermal, white comb-crystalline and drusy quartz veins with weakly developed crustiform textures. The hanging wall dilatant zones are interpreted to have channelled and focussed the later mineralised hydrothermal fluid which has resulted in the emplacement of the highest-grade gold. Bonanza style gold mineralisation is interpreted to be focussed at the structural intersection of the hanging wall splay veins and the N - NNW structure on the eastern margin of the F1a zone.

For personal use only

Figure 2: Plan of Central Target displaying 2021 and 2022 drillholes (to date) along with interpreted target zones on IP resistivity

Central Target - Screen Fire Assay Test Work

Pacgold conducted screen fire assay on 128 samples of varying grade and from varying quartz vein types from the 2021 drilling programme. By comparing screen fire assay results to the standard fire assay method used for all gold assaying in 2021, understanding of the possible role of nuggety or coarse gold associated with the gold mineralisation would be increased.

Gold results from the screen fire assay compared with the fire assay show no significant variation in gold grades between the two methods. The screen fire assay highlights that while the highest gold grade samples contain coarse gold, they do not appear to be nuggety (or highly variable). This comparative analysis was completed for Pacgold to determine appropriate gold analysis methods to utilise in future resource modelling, as well as understanding the internal domains and level of gold variability in the drilling to date.

For personal use only

Southern Target - Update

Pacgold completed a first-pass shallow RC drilling programme on the Southern Target in 2021, representing the first drill programme in more than 30 years on this prospect. The programme comprised 10 holes which intersected very encouraging initial gold and multi-element results4, to be viewed alongside historical drilling intersecting high-grade gold including 8m @ 55.9g/t Au5 (Figure 3).

The Southern Target represents the largest area containing widespread gold mineralisation intersected in shallow drilling (historical and PGO) to date on the Project. The gold mineralisation intersected in this programme also confirms that the mineralisation in the Alice River shear zone is closely associated with IP resistivity lows, and importantly the mineralisation is defined over 2km of strike (over the Southern Target) and up to 400m wide.

Deeper drilling is planned (Q3, 2022) for the Southern target using PGO's improved understanding of the mineralisation model from the F1a zone (Central Target).

Figure 3: Southern Target drill plan showing resistivity IP geophysics, with resistivity lows (blue-purple colour) defining the Alice

River shear zone