Tyranna Resources : Identifies Early Mining Opportunity at Eureka

24 MAY 2019

TYRANNA IDENTIFIES EARLY MINING OPPORTUNITY AT EUREKA

HIGHLIGHTS

• Re-StartStudy completed defining a financially viable early mining opportunity with the following results:
• • Mineralised material accessed via shallow open pit mining and an adit into north pit wall producing an approximate combined total 60,500t of ore at a diluted grade of 2.1g/t for 4,057 ounces of contained gold over a 2-month mine life
  • Ore processing at 96% metallurgical recovery
  • Maximum capital draw down of between $0.6m-$0.7m, after which positive cash flow commences
  • At a gold price of A$1,800/oz, the project generates ~$2.6m in positive cash flow over a period of 2 months
  • Funds generated from mining will enable further exploration on the Eureka Gold Project to test extensions to the south and at depth.
• Study assumes contract mining and haulage with ore milled at a nearby processing facility
• The Board is in the process of reviewing funding options, with a preference for minimal or no shareholder dilution
• Next step in development is to fast track mining approvals, contractor appointment and finalisation of offtake agreement

Tyranna Resources Limited (ASX: TYX) ('Tyranna' or 'the Company'), is pleased to announce that independent mining consultants Entech have completed a review of a restart study at the Company's 100% owned Eureka Gold Project located 50km north of the gold mining centre of Kalgoorlie, Western Australia.

The restart study shows, subject to the cautionary statement below, that a viable cash flow positive early mining opportunity exists at the Eureka project.

Figure 1: Areas of mineralisation extraction. Additional 20m bench and adit development into the north

wall.

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Cautionary Statement

The Re-Start Study referred to in this announcement is based on lower-level technical and economic assessments and is insufficient to support estimation of Ore Reserves, or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Re-Start Study will be realised. Further, the Company cautions that there is no certainty that the forecast financial information derived from production targets will be realised. All material assumptions underpinning the production targets and forecast financial information derived from the production targets are set out in this announcement. The estimated mineral resources underpinning the Re-Start Study production targets have been prepared by Competent Persons in accordance with the current JORC Code 2012 Edition and the current ASX Listing Rules. No Inferred Mineral Resource material is included in the life of mine plan (refer Forward Looking and Cautionary Statements). Tyranna has concluded it has reasonable basis for providing the forward-looking statements included in this announcement. The detailed reasons for that conclusion are outlined throughout this announcement and Material Assumptions on page 4-5.

Tyranna Managing Director Bruno Seneque said: "The results of the mining study as an early mining opportunity demonstrates the potential to generate good free positive cash flow for the business with minimal upfront capital delivering a very good cash margin over a short period.

"We plan to generate cash flow to self-fund exploration to grow our assets at Eureka with minimal shareholder dilution.

"Plans are underway to secure a funding solution that will enable Tyranna to commence mining at Eureka and in the meantime, mining approvals will be fast tracked, mining and haulage contractors appointed, and negotiations with the preferred toll treater will be concluded."

Independent mining consultant Entech has reviewed the study and has identified no fatal flaws. The Board will now consider funding options for the restart, with the objective of either no or minimal dilution for existing shareholders, given the relatively modest capital drawdown required. This will include internal funding, traditional debt/equity, profit share arrangements with strategic partners, sale or partial sale of Company assets.

Overview

The Eureka project comprises the oxide and transition material contained in the updated Mineral Resource announced to the ASX on 13 March 2019. The 100% owned project is located on granted Mining Leases, 50km north of Kalgoorlie-Boulder in Western Australia.

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Figure 2: Eureka Project Location.

Between October 2017 and April 2018, a tribute arrangement under the previous owners of the Eureka project resulted in the mining of 53,000 tonnes at 3.3 g/t for production of 5,400 ounces. Mapping in the Eureka pit revealed that mineralisation was associated with quartz veining with minor sulphides contained within a broader zone of shearing and foliation. Since acquiring the Eureka project in September 2018, Tyranna has undertaken two drilling programs. In February 2019, the Company undertook a close space drilling program targeting mineralised material below the existing floor to validate historical drilling and confirm grade continuity. Significant shallow oxide intercepts included1:

• 5m @ 25.6 g/t Au from 33m inc' 1m @ 89.7 g/t Au from 34m (19ERC12)
• 7m @ 3.0 g/t Au from 39m (19ERC04)
• 12m @ 2.6 g/t Au from 20m inc' 1m @ 15.8 g/t Au from 26m (19ERC17)
• 5m @ 3.7 g/t Au from 23m inc' 1m @ 13.5 g/t Au from 24m (19ERC18)
• 9m @ 2.5 g/t Au from 12m (19ERC20)

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Figure 3: Plan view showing location of in-pit RC drill holes at the Eureka Pit.

Figure 4 and 5: Cross section through Eureka pit.

The Production Target is based on the following key parameters:

• The March 2019 JORC (2012) Eureka Gold Project deposit Mineral Resource update of 762,000t at 1.8g/t Au for 43,100oz (at a 0.5g/t Au cut-off grade)2
• Production Target includes 100% Indicated Mineral Resources
• Production Target Financial assumptions were based on A$1,800/oz
• Open pit mining and adit mining operations to be undertaken by mining contractors
• Ore haulage conducted by local contractors
• Processing through a conventional third-party carbon in conventional leach plant in close proximity
• Assumed metallurgical recovery of 96%, supported by historical processing in 2018 through the Lakewood toll treating facility in Kalgoorlie
• Open pit geotechnical parameters were based the 2018 Tribute mining pit slope angles

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which was mined to similar depth

• Adit geotechnical assumptions based on existing adjacent decline and ore development completed in 1996
• Hydrological assumptions based historical flows during the 2018 Tribute mining
• Open Pit mining assumed to be 100% free dig (as per 2018 Tribute mining)
• A minimum mining width of 15m was used to allow for existing open pit cutbacks and truck turning circles
• Due to the small fleet being utilized and no drill & blast the mineralized zone dilution is estimated around 4%, while open pit mining recovery is estimated around 97%.
• Due to the low powder factor (Lightly blasted) required to be used in mining the north wall total, dilution is estimated at 10% and mine recovery at 85%
• Mine supervision and grade control costs were provided by Tyranna based on similar West Australian mining operations.
• State royalties have been included and applied.
• Refining costs have been allowed for in the toll processing cost

Key outcomes of the Study

The key Study outcomes for the Eureka Project are included in Table 1 below. The Indicated Mineral Resource, which constitutes 100% of the production target, has been prepared by Competent Persons in accordance with JORC Code 2012.

Table 1: Summary of key outcomes (at an A$1,800/oz gold price)

Ore mined will be delivered to the ROM pad for haulage to the processing facility in batches of 5kt parcels. Ore mining, once commenced, will be continuous for a two-month period. The Study assumes that 100% of the open pit ore mined will be free dig with no drill and blast to the final pit

Level 2, 679 Murray Street, WEST PERTH WA 6005 | PO Box 1124, WEST PERTH WA 6872

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