DRM Annual Resource Reserve Statement - Kitco1 | P a g e ASX: DRM ASX Announcement 28 September 2016...

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ASX: DRM

ASX Announcement28 September 2016

ANNUAL RESOURCE AND RESERVE STATEMENT 17% increase in Group Resource Inventory to 1.38Moz Au and 27,000t Cu1

33% increase in Andy Well Resource Inventory (including Gnaweeda) after mining depletion

o 46% classified as “Measured and Indicated” (1.18Mt @ 9.6g/t Au for 368,000oz)

o Inferred Resource of 5.34Mt @ 2.4g/t (419,000oz) includes maiden Gnaweeda Resource

Group Ore Reserves of 2.51Mt @ 5.8g/t Au (467,000oz) 2

o Andy Well Reserve of 145,000oz @ 6.1g/t Au equates to a further 2 years mine life before potential additions from Gnaweeda

Andy Well gold endowment (Resource plus production to date) reaches 1Moz

Doray Minerals Ltd (ASX: DRM, Doray, the Company), today announced an updated Resource and Reserve estimate as at 30 June 2016, including a 17% increase to the Group Mineral Resource Inventory, which now totals approximately 1.38 million ounces contained gold across the Andy Well and Deflector Projects.

Doray has increased the total Andy Well Resource inventory by 33% over the past 12 months, net of mining depletion. The Andy Well Resource (excluding Gnaweeda) now stands at 1.9Mt @ 8.4g/t Au for 520,000 ounces with approximately 368,000 ounces (46%) classified as “Measured and Indicated” and with an average grade of approximately 9.6g/t Au.

The increase in the total Andy Well Resource to 6.5Mt @ 3.7g/t Au (786,000 ounces) has come through:

• Replacement of Resources within the Wilber, Judy and Suzie Lodes depleted by mining; and

• Addition of the maiden Inferred Resource for the Turnberry deposit at Gnaweeda

The Andy Well Ore Reserve has been maintained at approximately 145,000 ounces @ 6.1g/t Au after production of over 84,000 ounces in the financial year ending 30 June 2016 and approximately 250,000 ounces to date.

Doray’s Managing Director, Mr Allan Kelly, said that the Andy Well Project had exceeded expectations when compared with the original BFS, completed in 2012, prior to the commencement of mining and construction.

“Since commencement of production in August 2013, Andy Well has produced over 250,000 ounces of gold and has at least a further 2 years of Reserves remaining, compared with the BFS estimate of 256,000 ounces and mine life of 3.7 years,” Mr Kelly said.

“If we look at the cumulative production to date, when combined with the current Resource, the total number exceeds 1 million ounces for the first time in the Project’s short history,” he added.

Combined with Deflector, the Group Ore Reserve Inventory totalled 467,000 contained ounces @ 5.8g/t Au at 30 June 2016, before the commencement of production from Deflector.

There has been no change to the Mineral Resource / Reserve at the Deflector Project at 30 June 2016, as the Project had only recently commenced mining and production at that date, however upcoming exploration programs have the potential to add to the mining inventory in the near‐term.

1 See Tables 1 and 2 below 2 See Table 6

Doray Minerals Ltd, 28 September 2016

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Table 1. Doray Minerals Ltd Gold Mineral Resource Inventory – as at 30 June 2016.

Measured Indicated Inferred Total

Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces

Units kt g/t oz kt g/t oz kt g/t oz kt g/t oz

Andy Well 164 13.2 70,000 1,020 9.1 298,000 5,337 2.4 419,000 6,521 3.7 786,000

Deflector 1,164 6.0 223,000 1,043 7.3 246,000 658 5.8 122,000 2,865 6.4 591,000

TOTAL 1,328 6.9 293,000 2,063 8.2 544,000 5,995 2.8 541,000 9,386 4.6 1,377,000

Table 2. Doray Minerals Ltd Copper Mineral Resource Inventory – as at 30 June 2016.


Tonnes Grade Cu Tonnes Grade Cu Tonnes Grade Cu Tonnes Grade Cu

Units kt % t kt % t kt % t kt % t

Deflector 1,164 1.5 17,000 1,043 0.6 7,000 658 0.5 3,000 2,865 0.9 27,000

TOTAL 1,164 1.5 17,000 1,043 0.6 7,000 658 0.5 3,000 2,865 0.9 27,000


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1. Mineral Resources

Andy Well Gold Project

Total Mineral Resources for the Andy Well Gold Project now incorporate Resources at both Andy Well, as well as those at the nearby Gnaweeda Project for the first time.

Total Mineral Resources for the Project are now estimated at 6.52Mt @ 3.7g/t Au for 786,000 contained ounces, a net increase of 197,000oz Au from the 30 June 2015 position, after depletion due to mining during the year.

The breakdown of the Andy Well Mineral Resource inventory is detailed in Table 3 below. Figure 1 illustrates the reconciliation between the Andy Well Gold Project Mineral Resource inventory between 30 June 2015 and 30 June 2016.

Mineral Resources at Andy Well itself include re‐estimation of the Wilber, Judy and Suzie Lodes utilising data generated through the extensive on‐going underground diamond drilling programme at the mine.

Wilber Lode ‐ Drilling has seen the net contained Resources at Wilber essentially remain neutral after mining depletion (317,000ozs Au against 331,000ozs Au as at 30 June 2015). The majority of this Resource added in replacing mine depletion has come from direct extensions to the orebody at depth, as well as extending the known strike of the orebody to the north at depth. Importantly, total Measured and Indicated Resources at Wilber have been slightly increased after mine depletion (227,000ozs Au against 224,00ozs Au as at 30 June 2015). The decrease in Inferred Resource has occurred mainly through the restriction of the Resource estimation into areas of lower drill density. In effect, drilling during FY2016 has been able to convert Inferred Resources into higher confidence categories, but hasn’t been able to significantly extend Inferred Resources beyond previous drill coverage. This has occurred as a direct result of the inability to drill significantly further at depth due to limited suitable underground drill positions. Doray is working to alleviate this issue in FY2017 through the instigation of a deep directional drilling campaign from surface. The details of the Wilber Lode re‐estimation are summarised in the Appendix to this release and the updated JORC Table 1.

Judy Lode ‐ In addition to Wilber, Mineral Resources at the Judy Lode have been increased after mining depletion (141,000ozs Au against 126,000ozs Au as at 30 June 2015). Along with a net increase in total endowment, the overall average Mineral Resource grade has been increased from 6.4g/t Au to 8.5g/t Au. The increase in Mineral Resources, and also the increase in overall average grade, is a result of the identification and drilling of the steep‐northerly plunging high‐grade shoots at Judy South, as well as drilling into the higher grade mineralisation at Judy North below the previously defined porphyry hosted mineralisation. In addition to the identification of the high‐grade controls on mineralisation, underground mining of the Judy Lode through the course of FY2016 has allowed significant refinement in the interpretation of the lode. The details of the Judy Lode re‐estimation are summarised in the Appendix to this release and the updated JORC Table 1.

Suzie Lode ‐ As mentioned in the ASX Release dated 2 June 2016, drilling during the year at the Suzie Lode has resulted in a downgrading of the Mineral Resource after depletion for open pit mining carried out during the year. This drilling essentially failed to convert much of the previously Inferred Resource once drill density was increased. As a result, while the total contained ounces in the Suzie Indicated Resource was essentially doubled (44,000ozs against 22,000ozs as at 30 June 2015), and the overall grade increased (6.5g/t Au against 5.9g/t Au) even once mining depletion had been taken into account, the total Inferred Resource has been reduced significantly. The details of the Suzie Lode re‐estimation are summarised in the Appendix to this release and the updated JORC Table 1.

Gnaweeda ‐ The Andy Well Gold Project now incorporates the Inferred Mineral Resource defined for the Turnberry prospect at Gnaweeda, totalling 4.6Mt @ 1.8g/t Au for 266,000ozs. This Resource is based predominately on a series of RC drilling programmes completed at the Project by Doray since acquisition. As detailed in the ASX Release dated 20 July 2016, the Turnberry interpretation is deliberately based on a broad mineralised envelope, and takes a conservative approach to the treatment of drill intersections due to the current irregularity of drill spacing. A comprehensive RC and diamond drill programme is currently


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underway at Gnaweeda, with the objective of upgrading confidence in the interpretation, as well as allowing for an initial mining evaluation to be undertaken.

Since commencement of mining operations at Andy Well, Doray has continued to add to the Mineral Resource inventory through drill extensions to the Andy Well Lode system, as well as through the addition of a second Resource centre at Gnaweeda. As illustrated in Figure 2, the Andy Well Gold Project now stands at a total gold endowment of over 1 Million ounces Au (current Mineral Resources and cumulative production to date), confirming its status as a significant gold operation in the Murchison Region of WA.

Total Andy Well Mineral Resources are detailed in Table 3 below, with explanatory notes for the Andy Well Lodes estimation included in Appendix A. Details of the Gnaweeda – Turnberry Mineral Resource estimation are included in the ASX Release dated 20 July 2016.

Figure 1. Reconciliation of the Andy Well Resource inventory between 30 June 2015 and 30 June 2016.

Figure 2. Andy Well Project Total Gold Endowment from discovery (March 2010) to 30 June 2016.


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Table 3. Andy Well Gold Project Mineral Resource Inventory – as at 30 June 2016


Tonnes (t)

Au Grade (g/t)

Au Ounces

Tonnes (t)

Au Grade (g/t)

Au Ounces

Tonnes (t)

Au Grade (g/t)

Au Ounces

Tonnes (t)

Au Grade (g/t)

Au Ounces

Andy Well ‐ Wilber

124,000 16.1 64,000 484,000 10.5 163,000 399,000 7.0 90,000 1,007,000 9.8 317,000

Andy Well ‐ Judy

‐ ‐ ‐ 327,000 8.7 91,000 191,000 8.1 50,000 518,000 8.5 141,000

Andy Well ‐ Suzie

‐ ‐ ‐ 209,000 6.5 44,000 147,000 2.7 13,000 356,000 4.9 56,000

Andy Well ‐ Stockpiles

40,000 4.3 6,000 ‐ ‐ ‐ ‐ ‐ ‐ 40,000 4.3 6,000

Sub‐Total Andy Well Lodes

164,000 13.2 70,000 1,020,000 9.1 298,000 737,000 6.4 153,000 1,921,000 8.4 520,000

Gnaweeda – Turnberry

‐ ‐ ‐ ‐ ‐ ‐ 4,600,000 1.8 266,000 4,600,000 1.8 266,000

TOTAL RESOURCE

164,000 13.2 70,000 1,020,000 9.1 298,000 5,337,000 2.4 419,000 6,521,000 3.7 786,000

Note: Andy Well Lodes reported above a 0.1g/t Au, Turnberry Resource above 0.8g/t Au. Rounding errors may occur. All Mineral Resources are inclusive of those used to determine Ore Reserves.


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Figure 3. Wilber Lode long section showing new Resource outlines.


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Figure 4. Judy Lode long section showing new Resource outlines.


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Figure 5. Suzie Lode long section showing new Resource outlines.


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Deflector Gold Project

There has been no change to the Deflector Mineral Resource inventory, previously announced by Doray as at 30 June 2015, as processing of ore had not materially started as at the 30 June 2016. The breakdown of the Deflector Mineral Resource inventory, both in terms of contained Gold and associated contained Copper by‐product, as at 30 June 2016 is detailed below.

Table 4. Deflector Gold Mineral Resource Inventory – as at 30 June 2016


Tonnes (Kt)

Au Grade (g/t)

Au Ounces

Tonnes (Kt)

Au Grade (g/t)

Au Ounces

Tonnes(Kt)

Au Grade (g/t)

Au Ounces

Tonnes (Kt)

Au Grade (g/t)

Au Ounces

Deflector 1,164 6.0 223,000 1,043 7.3 246,000 658 5.8 122,000 2,865 6.4 591,000

TOTAL 1,164 6.0 223,000 1,043 7.3 246,000 658 5.8 122,000 2,865 6.4 591,000

Table 5. Deflector Copper Mineral Resource Inventory – as at 30 June 2016


Tonnes (Kt)

Cu Grade (%)

Cu Tonnes

Tonnes (Kt)

Cu Grade (%)

Cu Tonnes

Tonnes(Kt)

Cu Grade (%)

Cu Tonnes

Tonnes (Kt)

Cu Grade (%)

Cu Tonnes

Deflector 1,164 1.5 17,000 1,043 0.6 7,000 658 0.5 3,000 2,865 0.9 27,000

TOTAL 1,164 1.5 17,000 1,043 0.6 7,000 658 0.5 3,000 2,865 0.9 27,000

Note: Deflector Mineral Resources reported above a 0.5g/t Au. Rounding errors may occur. All Mineral Resources are inclusive of those used to determine Ore Reserves.


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Figure 6. Deflector West Lode long section, showing classification of Mineral Resources.


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2. Ore Reserves

Andy Well Gold Project Reserves are approximately 145,000 ounces, net of mining depletion during the year ending 30 June 2016. With the addition of the Deflector Gold Project, Doray’s combined Ore Reserve totals over 460,000 ounces. Total Ore Reserves are detailed in Tables 6 and 7 below, with explanatory notes for the revised Reserves included in Appendix A. Table 6. Proved & Probable Gold Ore Reserves – as at 30 June 2016 (Classifications in Tables 8‐11 below)

Gold

Tonnes (Kt) Au Grade (g/t)

Au Ounces

Andy Well 734 6.1 145,000

Deflector 1,781 5.6 322,000

TOTAL 2,515 5.8 467,000

Table 7. Proved & Probable Copper Reserves – as at 30 June 2016 (Classifications in Tables 9‐11 below)

Copper

Tonnes (Kt) Cu Grade (%)

Cu Tonnes

Deflector 1,781 0.9% 16,000

TOTAL 1,781 0.9% 16,000

Note: Calculations have been rounded to the nearest 1,000t, 0.1g/t Au grade and 1,000oz metal, 0.1g/t Ag grade and 1,000oz metal and 0.1% Cu grade and 1,000t metal. Differences occur due to rounding Andy Well Gold Project Ore Reserves at Andy Well are estimated at 734,000t at 6.1g/t Au for 145,000 contained ounces, net of mining depletion to 30 June 2016. During FY16, ore mining from the Judy Lode commenced via underground access from the Wilber Lode, and the remaining Wilber Stage 2 and Suzie open pit Reserves were mined to completion. The remaining Suzie Ore Reserve is planned for extraction using underground methods via access developed from the Judy Decline.


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Table 8. Classification of Andy Well Gold Ore Reserves

Proved Probable Total

Tonnes (t)

Au Grade (g/t)

Au Ounces

Tonnes (t)

Au Grade (g/t)

Au Ounces

Tonnes (t)

Au Grade (g/t)

Au Ounces

Andy Well Lodes 51,000 7.6 13,000 683,000 6.0 132,000 734,000 6.1 145,000

Gnaweeda ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

TOTAL RESERVES 51,000 7.6 13,000 683,000 6.0 132,000 734,000 6.1 145,000

Note: Figures have been rounded to the nearest 1,000t, 0.1g/t Au grade and 1,000oz metal, differences occur due to rounding. Underground Reserves are based on a nominal 2.0g/t Au lower cut-off grade.

Figure 7 – Reconciliation of the Andy Well Reserve inventory between 30 June 2015 and 30 June 2016.


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Deflector Gold‐Copper Project There has been no change to the Deflector Mineral Reserves as previously announced by Doray as at 30 June 2015. The breakdown of the Deflector Mineral Reserves of contained Gold and associated contained Copper by‐product, as at 30 June 2016 is detailed below.

Total Gold Ore Reserves 1,781,000t @ 6.0g/t for 5.6g/t for 322,000 contained ounces.

Total Copper Ore Reserves 1,781,000t @ 0.9% containing 16,000t of copper.

Table 9. Deflector Gold & Copper Open Pit Reserves – as at 30 June 2016

DEFLECTOR Gold Copper

Tonnes Au Grade (g/t)

Au Ounces

Cu Grade (%)

Cu Tonnes

Proved 348,000 5.5 61,000 1.6% 6,000

Probable ‐ ‐ ‐ ‐ ‐

TOTAL 348,000 5.5 61,000 1.6% 6,000

Table 10. Deflector Gold & Copper Underground Reserves – as at 30 June 2016



Au Ounces

Cu Grade (%)

Cu Tonnes

Proved 560,000 5.1 92,000 1.0% 6,000

Probable 873,000 6.0 168,000 0.5% 4,000

TOTAL 1,432,000 5.6 260,000 0.7% 10,000

Table 11. Deflector Total Gold & Copper Ore Reserves – as at 30 June 2016



Au Ounces

Cu Grade (%)

Cu Tonnes

Proved 908,000 5.3 153,000 1.3% 11,000

Probable 873,000 6.0 168,000 0.5% 4,000

TOTAL 1,781,000 5.6 322,000 0.9% 16,000

Note: Calculations have been rounded to the nearest 1,000t, 0.1g/t Au grade and 1,000oz metal, 0.1g/t Ag grade and 1,000oz metal and 0.1% Cu grade and 1,000t metal. Differences occur due to rounding


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3. Increased Exploration Budget to drive further Resource and Reserve increases

Doray’s Board has recently approved a budget of $15.5 million for exploration activities at the company’s various projects for the 2017FY with the greatest component of that budget allocated to brownfields and Resource extensional exploration at both the Andy Well ($6.5m) and Deflector ($4.5M) Gold Projects.

These budgets are focussed on the extensions to current active orebodies and delineation of potential new orebodies within trucking distance of existing processing infrastructure. To that end, a number of programmes are either currently underway, or are in the definitive planning stages for execution in the short term.

At the Andy Well Gold Project, RC drilling has recommenced at the Turnberry prospect at Gnaweeda with one rig active at Turnberry at present. A prospect wide Aboriginal heritage survey has just been completed covering the entire proposed Mining Lease area. This will allow a ramp‐up in drilling activities at Turnberry, as well as facilitating any potential mine development. It is planned that diamond drilling at Turnberry will shortly commence in conjunction with the RC drilling, and an aggressive aircore programme will be undertaken to scope out the entire 6km strike of the Turnberry geological structure down to the St Anne’s prospect. While these drill programmes are focussing on both extending coverage of known mineralisation as well as infilling the existing Resource area and upgrading confidence levels, other technical studies including metallurgical, hydro‐geological, geotechnical and environmental baseline surveys are underway to facilitate future mining evaluation and permitting.

Underground extensional diamond drilling is also ongoing at Andy Well, whilst planning for a deep directional drilling programme under the Wilber and Judy lodes is well advanced. These holes will target mineralisation in excess of 200m down‐dip of current drill coverage, and aim to provide longer term targets for mine planning and infill drilling.

At the Deflector Gold Project, RC drilling is well advanced testing the southern extensions to the current open pit, where grade control drilling has suggested strong oxide and transitional mineralisation is continuing out of the current pit design. In addition, a deeper diamond drilling campaign is planned for the December quarter, with the aim of extending the two main orebodies at Deflector (the Western and Central Lodes) beyond the base of drilling, currently approximately 350m below surface. The current Resource estimate and hence life of mine are constrained by the current extents of drilling. Successful drilling results are expected to increase the Resource estimate and life of mine in the future.

‐ENDS‐

For further information, please contact: Cameron Peacock Investor Relations Doray Minerals Ltd +61 (0)439 908 732 [email protected]

Margie Livingston Media Relations AMN Corporate +61 (0)438 661 131 [email protected]


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About Doray Minerals Limited

Doray Minerals Limited is an Australian gold producer, developer and explorer with two new high‐grade Western Australian gold assets: the Andy Well Gold Project, which commenced production in August 2013; and the Deflector Gold Project, which commenced production in May 2016.

Doray has a strategic portfolio of gold exploration properties within Western Australia and South Australia and each presents multiple discovery opportunities. The Company's Board and management team has a proven track record in discovery, development, and production.

Competent Persons Statement

The information in this announcement that relates to Ore Reserves is based on information compiled by Peter Bamford. Mr Bamford is a full‐time employee of Doray Minerals Ltd and is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Bamford has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activities, which he is undertaking. This qualifies Mr Bamford as a “Competent Person” as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Bamford consents to the inclusion of information in this announcement in the form and context in which it appears. Mr Bamford holds shares and performance rights in Doray Minerals Ltd.

The information in this announcement that relates to Mineral Resources is based on information compiled by Mark Cossom. Mr Cossom is a full time employee of Doray Minerals Ltd and is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Cossom has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activities, which he is undertaking. This qualifies Mr Cossom as a “Competent Person” as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Cossom consents to the inclusion of information in this announcement in the form and context in which it appears. Mr Cossom holds shares and performance rights in Doray Minerals Ltd.


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APPENDIX A – Notes on Mineral Resource and Ore Reserve Inventory

Resource Estimation Methodology – Wilber Lode 2016

The 2016 resource update for the Wilber Lode is based on a compilation of 579 Reverse Circulation and 719 diamond drillholes completed to date by Doray Minerals Ltd, inclusive of 5 holes (4 RC and 1 Diamond) previously drilled by WMC Ltd. The data and information incorporated in the estimation project includes all resource definition drilling and assay data available as of 30th of April 2016, provided and validated by Doray. All interpretations of the mineralised domains were undertaken by Brad Ackroyd (Senior Mine Geologist) and reviewed by Karen Wellman (Senior Resource Geologist) prior to commencing the resource estimation.

Drill spacing varies with Resource Definition drilling based on 20m x 25m and 50m x 50m spaced centres within the main mineralization area. Surface grade control drill spacing was 5m x 5m with underground diamond drilling on 12.5m x 20m centres. All Doray drilling has been geologically logged, with samples collected by either cone splitting of RC chips on 1m intervals down hole, half core (HQ, NQ, LTK‐60) and whole core (BQ) samples for diamond drilling, with a minimum sample width of 0.3m and a maximum sample width of 1.3m. Samples were submitted to either Minanalytical or SGS Laboratories in Perth and analysed for Au by either: 25g fire assay digest with an AAS determination (Minanalytical); or a 30g fire assay with AAS determination (SGS). All assays were required to conform to Doray Minerals QA/QC guidelines as well as internal laboratory QA/QC guidelines. All holes have been located by Real Time Kinetic GPS on surface, as well as multi‐shot reflex tool surveys down hole.

The Wilber lode consists of a simple steeply dipping, quartz vein hosted lode within a well‐defined shear zone in the mafic sequence. The mineralisation interpretation is based on the logged and mapped quartz vein and quartz vein percentages. The lode consists of three domains, Wilber Lode North (WLN), Wilber Lode South (WLS) and Wilber Lode Main (WLM), all dipping steeply to the west. WLN and WLM are separated by a north‐south trending fault with reverse dextral movement interpreted. For the purposes of estimation, WLM and WLS were combined as they were deemed to be one continuous lode. A geological domain was also created for the cross‐cutting late stage Proterozoic dolerite dykes, which were used to deplete the model as these dykes are interpreted to post‐date, and thus stope‐out mineralisation. Geological domains were also created for transported material, oxide and transitional weathering domains. All domains were interpreted in 3‐dimensions utilising Surpac Software, and wire‐framed into either solid 3dm’s for grade domains, or dtm surfaces for transported and weathered domains.

Assay data was composited to 1m intervals and evaluated in Snowden Supervisor where statistical analysis indicated the top cut for all Wilber domains could be increased to 400 ppm. Several steep northerly plunging high grade shoots are now evident at Wilber, supported by strong grade continuity of 250m in the variogram model. Quantitative Kriging Neighbourhood Analysis was carried out and used to validate decisions on search and estimation parameters for grade interpolation.

A 3D Ordinary Kriged block model was created for the Wilber Lode, with a block size of 1mE by 20mN by 20mRL with sub‐celling permitted to 0.25mE by 5mN by 5mRL. Bulk density values were assigned to the model based on ore‐zone and weathering domains. Bulk density values were generated by statistical analysis of down‐hole Gamma probe data collected from 6 holes across the Wilber deposit, with values collected every 10cm down hole. These Gamma data were also checked against several values obtained by water displacement method from across the fresh‐rock domain, in order to validate the detailed data.

Several check runs were completed utilising different top‐cuts and estimation parameters as validation checks of the grade estimate. These checks indicated limited sensitivity to the choice of top cut. The model was also validated by visual inspection of both the block model fill against the raw assay data, as well as the generation and inspection of grade‐tonnage curves, and composite vs. block grade data by both elevation and northings through the deposit. As a significant amount of production data is now available, the resource model was evaluated against mined areas and slightly under called the total ounces mined to date. Model classification for Measured, Indicated and Inferred (in accordance with the JORC Code 2012) was based on data density, as well as analysis of slope of regression block statistics throughout the model.


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Resource Estimation Methodology – Judy Lode 2016

The 2016 resource update for the Judy Lode is based on a compilation of 126 Reverse Circulation and 201 diamond drillholes completed to date by Doray Minerals Ltd. The data and information incorporated in the estimation project includes all resource definition drilling and assay data available as of 30th of April 2016, provided and validated by Doray. All interpretations of the mineralised domains were undertaken by Brad Ackroyd (Senior Mine Geologist) and reviewed by Karen Wellman (Senior Resource Geologist) prior to commencing the resource estimation.

Drill spacing varies with Resource Definition drilling based on 20m x 25m and 50m x 50m spaced centres within the main mineralization area. Surface grade control drill spacing was 7.5m x 10m with underground diamond drilling on 12.5m x 20m centres. All Doray drilling has been geologically logged, with samples collected by either cone splitting of RC chips on 1m intervals down hole, half core (HQ, NQ, LTK‐60) and whole core (BQ) samples for diamond drilling, with a minimum sample width of 0.3m and a maximum sample width of 1.3m. Samples were submitted to either Minanalytical or SGS Laboratories in Perth and analysed for Au by either: 25g fire assay digest with an AAS determination (Minanalytical); or a 30g fire assay with AAS determination (SGS). All assays were required to conform to Doray Minerals QA/QC guidelines as well as internal laboratory QA/QC guidelines. All holes have been located by Real Time Kinetic GPS on surface, as well as multi‐shot reflex tool surveys down hole.

Two grade domains (Judy North and Judy South) were interpreted using geological logging where the lode was identified primarily on the presence of the quartz bearing structure irrespective of assay grade. The Judy Lode is split by a late stage Proterozoic dolerite dyke that post‐dates mineralisation which was modelled separately. Additionally, geological domains were created for transported material, as well as oxide and transitional weathering domains. All domains were interpreted in 3‐dimensions utilising Surpac Software, and wire‐framed into either solid 3dm’s for grade domains, or dtm surfaces for transported and weathered domains.

The Judy Lode Mineral Resource was calculated in‐situ using 3D Ordinary Kriged estimation methodology. Raw sample data was composited into one metre intervals using the mineralised domain wireframes to control selection. Grade was interpolated into 1mE by 20mN by 20mRL parent cells, with sub‐celling permitted to 0.25mE by 5mN by 5mRL.

The composite data was evaluated in Snowden Supervisor where statistical analysis indicated that grade tenure at Judy North differed from Judy South and therefore they were treated separately. Geostatistics suggested the top cut for Judy South could be increased to 150 ppm in the South and 70 ppm at Judy North. A steep northerly plunging high grade shoot was identified in variogram modelling and supported by the mine geology team. Quantatative Kriging Neighborhood Analysis was carried out on the domains to guide the choice of other estimation and search parameters.

Bulk density values were assigned to the model based on ore‐zone and weathering domains. Bulk density values were generated by statistical analysis of down‐hole Gamma probe data collected from 6 holes across the Wilber deposit, with values collected every 10cm down hole. These Gamma data were also checked against several values obtained by water displacement method from across the fresh‐rock domain, in order to validate the detailed data.

The resource was estimated in several runs utilising different top‐cuts and estimation parameters as validation checks of the grade estimate. The model was also validated by visual inspection of both the block model fill against the raw assay data, as well as the generation and inspection of grade‐tonnage curves, and composite vs. block grade data by both elevation and northings through the deposit. As some production data is now available in Judy South, the resource model was evaluated against mined areas and slightly under called the total ounces mined to date. Model classification for Indicated and Inferred (in accordance with the JORC Code 2012) was based on data density, as well as analysis of slope of regression block statistics throughout the model.


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Resource Estimation Methodology – Suzie Lode 2016

The 2016 resource update for the Suzie Lode is based on a compilation of 164 Reverse Circulation and 35 diamond drillholes completed to date by Doray Minerals Ltd with the exception of three holes completed by WMC. The data and information incorporated in the estimation project includes all resource definition drilling and assay data available as of 15th of April 2016, provided and validated by Doray. All interpretations of the mineralised domains were undertaken by Brad Ackroyd (Senior Mine Geologist) and reviewed by Karen Wellman (Senior Resource Geologist) prior to commencing the resource estimation.

Drill spacing varies with Resource Definition drilling based on 20m x 25m and 50m x 50m spaced centres within the main mineralization area. Surface grade control drill spacing was 7.5m x 10m. All Doray drilling has been geologically logged, with samples collected by either cone splitting of RC chips on 1m intervals down hole, half core (HQ, NQ, LTK‐60) and whole core (BQ) samples for diamond drilling, with a minimum sample width of 0.3m and a maximum sample width of 1.3m. Samples were submitted to either Minanalytical or SGS Laboratories in Perth and analysed for Au by either: 25g fire assay digest with an AAS determination (Minanalytical); or a 30g fire assay with AAS determination (SGS). All assays were required to conform to Doray Minerals QA/QC guidelines as well as internal laboratory QA/QC guidelines. All holes have been located by Real Time Kinetic GPS on surface, as well as multi‐shot reflex tool surveys down hole.

The Suzie Lode is associated with a single continuous quartz vein developed within a narrow shear zone running sub‐parallel to the Wilber and Judy Lodes. Suzie is located approximately 500m to the east of the Wilber Lode and was mined in 2015 as a small open‐cut. One domain was interpreted from the geological and assay data received. The domain was interpreted based on logged quartz intervals in drill holes, irrespective of assay grade. A minimum downhole length of 1m was interpreted, with a nominal average true width of intercepts estimated to be between 1‐2m. Post‐mineralisation cross cutting Proterozoic dolerite dykes were also modelled and used to deplete the grade model. Additionally, geological domains were created for transported material, as well as oxide and transitional weathering domains. All domains were interpreted in 3‐dimensions utilising Surpac software, and wire‐framed into either solid 3dm’s for grade domains, or dtm surfaces for transported and weathered domains.

Raw assay data was composited to 1m intervals and evaluated in Snowden Supervisor where statistical analysis indicated a top cut of 100 ppm. Variogram modelling indicated grade continuity was greatest in the dip plane moderately plunging to the north. Quantitative Kriging Neighbourhood Analysis was carried out and used to validate decisions on search and estimation parameters for grade interpolation.

A 3D Ordinary Kriged block model was created for the Suzie Lode, with a block size of 1mE by 20mN by 20mRL with sub‐celling permitted to 0.25mE by 5mN by 5mRL. Bulk density values were assigned to the model based on ore‐zone and weathering domains. Bulk density values were generated by statistical analysis of down‐hole Gamma probe data collected from 6 holes across the Wilber deposit, with values collected every 10cm down hole. These Gamma data were also checked against several values obtained by water displacement method from across the fresh‐rock domain, in order to validate the detailed data.

Several check runs were completed utilising different top‐cuts and estimation parameters as validation checks of the grade estimate. The model was also validated by visual inspection of both the block model fill against the raw assay data, as well as the generation and inspection of grade‐tonnage curves, and composite vs. block grade data by both elevation and northings through the deposit. Model classification for Indicated and Inferred (in accordance with the JORC Code 2012) was based on data density, as well as analysis of slope of regression block statistics throughout the model.


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Ore Reserve Methodology – Andy Well

The Andy Well Ore Reserve is based wholly on underground mining, following the completion of the Wilber and Suzie open pits during FY16. Andy Well Mine encompasses several lodes including Wilber, Judy and Suzie.

Reserves were generated on the basis of underground extraction using conventional drill and blast with twin boom jumbo, bogger and truck mobile fleet for mine development and bottom‐up, modified Avoca longhole stoping with cemented rock fill and waste fill for ore production.

Ore development headings are accessed by a 5mW x 5.5mH decline mined at a gradient of 1:7 and a linking level cross‐cut drive. Levels are spaced at 17m vertically in Wilber and Judy, and at 20m in Suzie.

Mine design work was completed using Deswik software with ore development for all areas being split into individual tasks 3m in length and 3mW x 4.7mH. Stope blocks were also created as individual tasks with 10m strike lengths, and widths assigned as 2.5m for Wilber and 2.0m for both Judy and Suzie. Each task was then interrogated against the relevant resource block model to allocate their respective tonnes and grades. Factors for overbreak and recovery were also applied.

Using current mining, processing and site costs, each level was evaluated to determine the economic limits then an overall evaluation of each mining area was completed.

Reserve design extends to 850mRL for Wilber Deeps, 987mRL for Middle, 1101mRL for Judy and 1173mRL for Suzie.

Reserves were evaluated using a gold price of AUD$1600 per ounce.

Ore Reserve Methodology – Deflector

The Deflector Ore reserve is based upon open pit and underground mining. This Reserve has not changed since ASX: MYG announcement 4 August 2014, which details the methodology used to compile estimates.


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Andy Well – 2016 Resource Summary (Table 1) Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.) Criteria JORC Code explanation Commentary Sampling techniques

Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Reverse circulation (RC) percussion drill chips collected through a cyclone and sampled at 1 metre intervals, riffle split, cone split and spear sampled.

Diamond core (HQ, NQ, LTK-60) sampled half core, 0.1m to 1.3m. Diamond core (BQ) sampled whole core, 0.1m to 1.3m.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Riffle and cone splitting; spear sampling.

Aspects of the determination of mineralisation that are Material to the Public Report.

Mineralisation determined qualitatively through: presence of sulphide and visible gold in quartz; internal structure (massive, brecciated, laminated) of quartz.

Mineralisation determined quantitatively via fire assay and aqua regia assay methods.

In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

Diamond core samples crushed to 2mm and pulverized to 75µm. RC samples 1m analysed by 30g Fire Assay and AAS. When visible gold is observed in RC chips or diamond core, this

sample is flagged by the supervising geologist for the benefit of the laboratory.

Drilling techniques

Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

PQ, HQ and NQ sized diamond drill core, oriented by Reflex system. Underground NQ, LTK-60 and BQ sized diamond drill core, not

oriented 150mm reverse circulation drill chips.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Core, assessed during drilling for loss, loss intervals recorded on core blocks, logged by geologist.

Visual estimate of RC drill chip recovery recorded in database. Measures taken to maximise sample recovery and ensure

representative nature of the samples. Core: use of drilling fluid to minimize wash out. RC chips, minimize drill water use.


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Criteria JORC Code explanation Commentary Whether a relationship exists between sample recovery and grade

and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

As sample recoveries are generally very high, there is no known relationship between sample recovery and grade.

Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Holes logged to a level of detail to support mineral resource estimation: lithology; alteration; mineralization; geotechnical; structural.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

Qualitative: lithology, alteration, foliation. Quantitative: vein percentage; mineralization (sulphide) percentage;

RQD measurement; structural orientation angles; assayed for gold, arsenic, copper, iron, nickel; density from downhole gamma ray logging (6 holes), water displacement (11 holes);

Core photographed wet and dry. The total length and percentage of the relevant intersections logged. All holes logged for entire length of hole.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

Core sawn half and quarter core from pre-2014 diamond drilling. All current underground diamond drilling is whole core sampled

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

RC chips cone and riffle split, sampled dry where possible, and wet when excess ground water could not be prevented.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Diamond core is crushed to 10mm by a jaw crusher then the entire sample is pulverized to 75µm by a LM5 (85% passing)

The entire ~3kg RC sample is pulverized to 75µm (85% passing) Gold analysis is determined by either

o 25g charge fire assay with an AAS finish (Minanalytical). o 30g charge fire assay with an AAS finish (SGS).

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Pulp duplicates taken at the pulverising stage and selective repeats conducted at the laboratories discretion.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

RC chips: field duplicates from re-split residual sample. Core: quarter or half core taken as duplicate.

Whether sample sizes are appropriate to the grain size of the material being sampled.

Sample size appropriate for grain size of samples material.

Quality of assay data and

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

Fire assay, total technique, appropriate for gold Aqua regia digest, partial assay, appropriate for gold and trace

elements AAS appropriate for gold.


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Criteria JORC Code explanation Commentary laboratory tests

ICPOES for trace elements.

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

No geophysical data used in estimation.

Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

Certified reference material standards, 1 in 50 samples, 0.334 to 34.18 ppm, 1042 submitted with 2.6% failure rate is considered acceptable.

Blanks: CRM blank, field blank; lab - barren quartz flush; from total of 525 samples 2.2% failed, which is considered acceptable.

Duplicates: o Field: RC – re-split residual sample, core – every 50th

sample quarter cored o Lab: Random pulp duplicates are taken on average 1 in

every 10 samples Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

All sampling is routinely inspected by senior geological staff. Significant intersections are inspected by senior geological staff and DRM corporate staff.

2% of samples returned > 0.1g/t Au are sent to an umpire laboratory on a quarterly basis for verification.

The use of twinned holes. A single diamond hole (MNDD064) was drilled immediately adjacent to a RC hole (MNRC038) but was not sampled as it was for geotechnical purposes. Visual inspection of the diamond hole correlates well with the intersection returned from the RC hole.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Data stored in Datashed database on internal company server, logging performed on LogChief and synchronised to Datashed database, data validated by database administrator, import validate protocols in place. Visual validation in Surpac by company geologists.

Discuss any adjustment to assay data. No adjustments made to assay data. First gold assay is utilized for any resource estimation.

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Collars: surveyed with RTK GPS. Downhole: surveyed with in-rod Reflex tool; conventional or north-

seeking gyro tool, in-rod or open hole. Specification of the grid system used. MGA94 - Zone 50; Wilber Local grid, rotated 45° east, along strike of


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Criteria JORC Code explanation Commentary Wilber deposit.

Quality and adequacy of topographic control. Topographic data generated using high resolution photogrammetric techniques.

Data spacing and distribution

Data spacing for reporting of Exploration Results. Drill hole spacing is nominally 25 x 50m at shallow depths (0-175m) and 50x50m to 50m x 100m at deeper depths (>175m)

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Nominal 20m spacing on 25m section in mineralized area, 50m x 50m along strike and down dip.

Whether sample compositing has been applied. N/A

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

Drill holes oriented at right angles to strike of deposit, dip optimized for drillability and dip of orebody, sampling believed to be unbiased.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

Not Applicable

Sample security

The measures taken to ensure sample security. All samples are selected, cut and bagged in a tied numbered calico bag, grouped into larger polyweave bags and cable tied. Polyweave bags are placed into larger bulky bags with a sample submission sheet and tied shut. Consignment note and delivery address details are written on the side of the bag and delivered to Toll Express in Meekatharra. The bags are delivered directly to MinAnalytical in Canning Vale, WA who are NATA accredited for compliance with ISO/IEC17025:2005.

Audits or reviews

The results of any audits or reviews of sampling techniques and data. Review of sampling and QAQC procedures and data by Cube Consulting in November 2011.


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Section 2 Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section.) Criteria JORC Code explanation Commentary Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

M51/870 is 100% owned by Andy Well Mining Ltd, which is a wholly owned subsidiary of DRM. M51/870 is located within the Yugunga-Nya Native Title Claim.

M51/870 Heritage surveys have been conducted over active mining and exploration areas

M51/870 is valid until 2033

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties. Historic exploration was carried out on Wilber by Dominion Mining, Western Mining Corporation and Australasian Gold Mines, including geophysics, soil mapping and sampling, and drilling.

Geology Deposit type, geological setting and style of mineralisation. Project scale geology consists of Archean aged high Mg Basalt units intruded by north-south striking porphyry intrusives. These are cross cut by east-west striking Proterozoic dolerite dykes. The mineralized quartz vein cross cuts the Archaen units but not the Proterozoic dykes.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level – elevation above sea level in

metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

No new results being reported

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

No top-cuts have been applied when reporting results. Au1 from the interval in question is reported Intercepts are reported on a geological basis (i.e. where quartz

veining is present). Significant grade intervals are often intercepted external to quartz veining but are not included in the released figures, only those that have quartz veining associated.

No metal equivalent values are used for reporting exploration results


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Criteria JORC Code explanation Commentary The assumptions used for any reporting of metal equivalent values

should be clearly stated. Relationship between mineralisa-tion widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

Drill holes oriented at right angles to strike of deposit, dip optimized for drilling purposes and dip of ore body. Mineralised intersections should approximate true widths.

Strike of Wilber and Judy Lodes is 45° dipping to the west at 80°. Strike of Suzie Lode is 45° dipping 70° to the west.

Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

No new results being reported.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

All holes drilled are reported.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

All meaningful and material data is reported.

Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Further drilling is to be conducted down dip of the existing Wilber and Judy Resource once suitable drill positions become available from underground.

Extensional drilling is also planned from surface targeting Wilber and Judy Deeps.


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Section 3 Estimation and Reporting of Mineral Resources (Criteria listed in section 1, and where relevant in section 2, also apply to this section.) Criteria JORC Code explanation Commentary Database integrity

Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

Data validation procedures used.

Data stored in Datashed database on internal company server, logging performed on LogChief and synchronised to Datashed database, data validated by database administrator, import validate protocols in place. Visual validation in Surpac and Micromine by company geologists.

Site visits Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

Numerous site visits have been conducted by the Competent Person. The deposit area, core logging and cutting facility was inspected with no issues identified.

If no site visits have been undertaken indicate why this is the case. Not Applicable

Geological interpreta-tion

Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

Due to the relative simplicity and tabular nature of the deposit, a high degree of confidence is placed in the geological interpretation. Uncertainty increases with depth as drill spacing increases and surveying errors compound.

Nature of the data used and of any assumptions made. All holes used in the estimation were either RC (579) or diamond (719) drilled and sampled by Doray to industry standard, except 4 RC and 1 diamond hole drilled by WMC.

The effect, if any, of alternative interpretations on Mineral Resource estimation.

No alternative interpretations have been considered. The Wilber, Judy and Suzie deposits are planar with mineralization contained with a clearly visible quartz vein defining the mineralized domain. Sufficient data has been collected to confirm this as the mineralized model.

The use of geology in guiding and controlling Mineral Resource estimation.

Mineralized domains were determined for each Lode using logged quartz vein and quartz vein percentages.

Wilber Lode consists of three domains, Judy Lode two domains and Suzie is modelled as one domain.

The factors affecting continuity both of grade and geology. The lodes are hosted within, and discordant to, a wider mineralized shear zone, cross cutting the mafic host rock sequence. High grade is restricted to the quartz veins.

Dimensions The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

The Wilber resource extends for 845m in strike length, from 4m below surface to 780m below surface, and averages 1 meter true thickness, average 80° dip to the west.

The Judy resource strikes 900m and extends from surface down to 520m below surface, averaging 0.5m to 1.0m true thickness and dipping approximately 80° to the west.

The Suzie resource extends for 500m along strike from surface down to 500m below surface, averaging 0.5m to 1.0m true thickness and dips


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Criteria JORC Code explanation Commentary approximately 70° to the west.

Estimation and modelling techniques

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

All domaining based on observed geology and understanding of mineralization as observed in open pit and underground environment.

The Wilber Lode is interpreted into three mineralized domains: Wilber Lode Main, Wilber Lode South and Wilber Lode North.

Judy Lode is interpreted as two mineralized domains, Judy North and Judy South. Suzie is interpreted as one continuous mineralized domain.

Geovia Surpac was used for block modelling and estimation while geostatistical analysis was conducted in Snowden Supervisor.

Domains were extrapolated 25m to the north and south of last drill holes, and down-dip 20 to 30m dependent on surrounding drill density. This is deemed appropriate given the relatively tabular nature of the orebody.

Data was composited to one metre intervals for all surfaces. The 3D OK estimation technique was deemed appropriate as it is carried

out in situ eliminating translation errors, and adequately manages data of mixed drill spacing.

For Wilber domains a nugget of 31% was determined, and 2 structures of 63m and 248m range.

For Judy, the nugget was 60% with two structures of 92m and 161m range.

For Suzie Lode a nugget of 34% was determined with 2 structures of 40m and 120m range.

The table below summarises the estimation parameters used to determine search ellipses:

Lode Wilber Judy Suzie

Domain Wilber Lode North, Main and South

Judy North and Judy South

Suzie Lode

Minimum No Composites

4 4 3

Maximum No. Composites

16 15 12

Search Major Axis 240 80 85

Bearing 120 120 120

Plunge 75 63 65

Dip ‐44 ‐67 ‐52


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Criteria JORC Code explanation Commentary Major/ Semi Major

Ratio 5 2.5 2.5

Major/ Minor Ratio 8 5 5

Max Number of Samples per dh

2 2 2

The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

The estimate was checked against previous estimates completed by external consultants and comparisons against production records also completed.

The assumptions made regarding recovery of by-products. No assumptions made, although silver is a by-product in shipped dore, and is a component of revenue. Estimation made on gold value only.

Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterisation).

No deleterious elements estimated.

In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

1mE x 20mN x 20mRL block size deemed appropriate for the drill spacing and thickness and geometry of the orebody, and search ellipse employed.

Any assumptions behind modeling of selective mining units. No assumptions made regarding mining of selective mining units.

Any assumptions about correlation between variables. No assumptions made regarding correlation of variables, only gold was estimated in model.

Description of how the geological interpretation was used to control the resource estimates.

Grade was estimated within the modelled mineralization lode wire frames. Areas outside the domain were assigned a grade of zero.

Discussion of basis for using or not using grade cutting or capping. Outliers were determined from statistical (log probability) plots, and a top cut of 400ppm Au at the 99th percentile for the Wilber Lode domains.

A top cut of 150 ppm was applied to Judy South, while Judy North is 70 ppm representing the 97th and the 99th percentiles respectively.

A top cut of 100 ppm was applied to Suzie just under the 99th percentile. The process of validation, the checking process used, the comparison

of model data to drill hole data, and use of reconciliation data if available.

Comparison was made between the kriged estimate and the mean grade for each domain. Comparison was also made between the kriged estimate and reconciliation data (both open-pit and underground) for all three orebodies.

Moisture Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

Tonnes were in-situ dry tonnes.

Cut-off parameters

The basis of the adopted cut-off grade(s) or quality parameters applied.

A 0.1 ppm reporting cut-off was applied.


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Criteria JORC Code explanation Commentary Mining factors or assumptions

Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

The interpretation and reporting was based on a geological domain, which is assumed to be mineable in its entirety, using standard open pit and underground development and longhole stoping techniques.

Metallurgical factors or assumptions

The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

Current production data confirms the gold is amenable to extraction via standard gravity and carbon in pulp techniques.

Environmen-tal factors or assumptions

Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

No environmental factors are expected to impact further economic extraction.

Bulk density Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

Bulk density was determined using down hole gamma logging of six holes, at 10cm intervals for 6064 values. Data was classified by oxidation state, and extracted as discrete datasets and sub-classified by ore type. The declustered mean of each domain was assigned as the bulk density of each domain.

The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

Down-hole gamma measurements would account for all variables. Subsequent water-displacement check samples are routinely taken from

underground mining material.


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Criteria JORC Code explanation Commentary Discuss assumptions for bulk density estimates used in the

evaluation process of the different materials. Modelling of weathering horizons (oxide, transitional and fresh) were

taken from geology logs for both RC and diamond drilling. Densities were assigned to each of these weathered zones.

Classifica-tion

The basis for the classification of the Mineral Resources into varying confidence categories.

Classification based on geological continuity, data spacing and estimation properties (number of informing composites, average distance and kriging quality parameters).

Whether appropriate account has been taken of all relevant factors (i.e. relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

Confidence in the relevant factors such as tonnage/grade estimates and confidence in the geological continuity and contained metal is high and supported by several years of mining production on all three orebodies.

Whether the result appropriately reflects the Competent Person’s view of the deposit.

The Mineral Resource estimate appropriately reflects the Competent Person’s view of the deposit.

Audits or reviews

The results of any audits or reviews of Mineral Resource estimates. The Mineral Resource estimate was completed by Doray Minerals, with internal checks completed. The estimate was also validated against past models completed by external consultants.

Discussion of relative accuracy/ confidence

Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

The Mineral Resource is considered robust as reflected in the reporting of the Mineral Resource per the guidelines of the 2012 JORC code. Slope of regression is used to assess quality and confidence in the estimate and as a guide in assigning resource categories.

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

The Mineral Resource is considered robust on a local scale for material classified as Indicated.

These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

The Mineral Resource is within 9% of contained metal when compared to reported production data.


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Section 4 Estimation and Reporting of Ore Reserves – Andy Well Underground (Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.) Criteria JORC Code explanation Commentary Mineral Resource estimate for conversion to Ore Reserves

Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.

Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.

Mineral Resource estimate compiled by Doray Minerals Limited with internal checks as reflected in the reporting of the Mineral Resource per the guidelines of the 2012 JORC code

The Ore Reserves are contained within the Mineral Resources

Site visits Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

If no site visits have been undertaken indicate why this is the case.

Numerous site visits were carried out by the Competent Person when reviewing the Wilber and other adjacent orebodies which are currently being, or planned to be, extracted.

Study status The type and level of study undertaken to enable Mineral Resources to be converted to Ore

Reserves. The Code requires that a study to at least Pre-Feasibility Study level

has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.

Wilber and Judy lodes continue to be mined using the mining methods already employed, using unit costs which have been established when extracting the narrow quartz veins with visible gold. Known established costs of mining development, production drilling and blasting and backfilling with ancillary capital access development and services were used to convert the Wilber Mineral Resource to Ore Reserve. Existing mining of Wilber and Judy lodes has established the technical feasibility of profitable extraction of the Wilber, Judy and Suzie quartz veins.

The Reserves are classified as Probable. Cut-off parameters

The basis of the cut-off grade(s) or quality parameters applied. Cut-off grades used were based upon known economic costs from the current mining of the Wilber and Judy lodes.

Ore Reserve grades were derived from a resource block model. Development ore drive grades were calculated from the model grades diluted to the current mining width of 3 metres.

Similarly, the quartz veins within the proposed stopes were outlined from the block model using an industry accepted software, and diluted to achievable mining widths to calculate Ore Reserve grades. Where the proposed stope outline suggests stope grades are economic, development drives will be mined below a nominal 2.0g/t cut-off if the combined mineralised volume is profitable overall

No changes to the current mining fleet currently used are expected Mining factors or assumptions

The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design).

The assumptions and mining factors were updated to assess and optimise Ore Reserves within Wilber and Judy lodes based on the previous 36 months of mining. These assumptions were also applied for the estimation of the Suzie Ore Reserve.


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Criteria JORC Code explanation Commentary The choice, nature and appropriateness of the selected mining

method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.

The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling.

The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate).

The mining dilution factors used. The mining recovery factors used. Any minimum mining widths used. The manner in which Inferred Mineral Resources are utilised in

mining studies and the sensitivity of the outcome to their inclusion. The infrastructure requirements of the selected mining methods.

A detailed design for Wilber, Judy and Suzie was compiled and scheduled using a similar mining fleet and drive sizes as currently used within Wilber and Judy lodes.

The style of mineralisation, host rock qualities and tenor of the quartz veins containing the gold are similar in style to what has already been mined in production underground.

Various techniques have been employed to mine the narrow veins underground at Andy Well. The most appropriate mining method has been successfully shown to be bottom-up, up hole retreat stoping with cemented rock and waste backfill using underground waste development material (modified Avoca).

Decline access sizes will be 5.0mW x 5.5mH at a gradient of 1:7 with 6m cablebolts installed at each intersection. Sublevel spacing formed by mining 4.7m high by 3m wide development ore drives at 17 vertical metres (or 20m in Suzie) followed by stoping between these sublevels. Rib pillars as well as cemented and waste rock fill will be used to suit local geotechnical ground conditions, planned extraction sequences and to suit estimated stope grades.

Mining dilution was derived from the experience of developing and stoping Wilber and Judy lodes as well as analysis of the comparison of the characteristics of the diamond drill core of from mined regions with upcoming areas. Development drives have an overbreak factor of 5% applied while stope shapes are designed taking into account overbreak. 95% mining recovery of gold ore was assumed for all stopes.

Inferred Mineral Resources will be added to the Ore Reserve in the extraction plan and schedule but is dependent upon grade control drilling. This does not alter the profitability of the Reserves as currently defined and is not included in the JORC Reserve.

Mining infrastructure will comprise ventilation and escape raises, electrical substations and pump stations with appropriate service connections.

Metallurgical factors or assumptions

The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.

Whether the metallurgical process is well-tested technology or novel in nature.

The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the

The geology and mineralogy of the diamond drill core of the Wilber Judy and Suzie lodes is similar to materials already being treated by the process plant.

No bulk samples were taken.


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Criteria JORC Code explanation Commentary corresponding metallurgical recovery factors applied.

Any assumptions or allowances made for deleterious elements. The existence of any bulk sample or pilot scale test work and the

degree to which such samples are considered representative of the orebody as a whole.

For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?

Environmen-tal

The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.

Environmental Approvals have been obtained for the mining of Andy Well lodes from all necessary government authorities along with Mining approval to extract ore using underground mining methods

The environmental impact from mining Andy Well lodes will have no further impact except to increase the height of the existing tailings storage facility and possibly increase the height of the permanent waste rock storage facility. Where appropriate, underground voids resulting from stoping will be filled with waste rock from underground access development.

Infrastruct-ure

The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.

The existing infrastructure on surface comprises the processing plant, tailings storage facility, administration and maintenance workshops. Power station and borefield are all in place and are appropriate to manage and process ore from Andy Well lodes.

An accommodation village was built in 2012 in Meekatharra to house personnel working at Andy Well mine. This will continue to be used for personnel working to mine and treat ore from Andy Well.

Costs The derivation of, or assumptions made, regarding projected capital costs in the study.

The methodology used to estimate operating costs. Allowances made for the content of deleterious elements. The derivation of assumptions made of metal or commodity price(s),

for the principal minerals and co- products. The source of exchange rates used in the study. Derivation of transportation charges. The basis for forecasting or source of treatment and refining charges,

penalties for failure to meet specification, etc. The allowances made for royalties payable, both Government and

private.

Known established operating and capitalised underground access development costs and costs for up-hole (modified Avoca) stoping with ancillary capital development and services were used to convert the Andy Well Mineral Resource to Ore Reserves. Existing mining of Wilber and Judy lodes has established the technical feasibility of profitable extraction of the mineralised quartz veins.

No deleterious elements require an allowance. Sensitivities to gold price and exchange rates were considered prior

to establishing Ore Reserves using Consensus Economics data for a gold price and a forecast of exchange rate. Sensitivities were conducted around a gold price of $1,600/oz

The principal mineral produced is gold with silver as a by-product which is flown by plane from Meekatharra to Perth refinery with known costs from treatment charges of Wilber ore


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Criteria JORC Code explanation Commentary The statutory 2.5% gold royalty was allowed in the financial modelling

of Andy Well Reserves, payable to Western Australian State government and to Native Title holders as agreed contractually in 2011. An additional 1% gold royalty was allowed in the financial modelling, payable to Mr. Scott Wilson, as agreed contractually in 2012.

Revenue factors

The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.

the derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.

The Andy Well Reserve will produce a revenue stream from sale of gold doré

See “Costs” above for notes concerning head grade, gold price, and exchange rates

See “Cut-Off parameters” for notes concerning head grades Transport and treatment charges as well as other administration

charges incurred on site are all based upon actual costs being incurred mining the adjacent Wilber lode

Market assessment

The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.

A customer and competitor analysis along with the identification of likely market windows for the product.

Price and volume forecasts and the basis for these forecasts. For industrial minerals the customer specification, testing and

acceptance requirements prior to a supply contract.

Gold demand is assumed to be steady and rising in the medium to longer term worldwide but the gold price is variable and affected by many factors – as a safe-haven reflecting geopolitical factors, demand for jewellery and as part of many countries’ currency reserves

Economic The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.

NPV ranges and sensitivity to variations in the significant assumptions and inputs.

Economic analysis was carried out using established site costs for mining, geology, processing and administration.

Sensitivities to existing unit costs, principally of underground mining, were carried out to establish the viability of the Andy Well Ore Reserves

Social The status of agreements with key stakeholders and matters leading to social licence to operate.

Legal contractual Agreements are in place with the Pastoralist, Native Title holders, and Meekatharra Council

Other To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:

Any identified material naturally occurring risks. The status of material legal agreements and marketing arrangements. The status of governmental agreements and approvals critical to the

viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or

The principle risk now that the Andy Well project as a whole is producing gold from the Wilber and Judy lodes and the infrastructure and plant are all established successfully, is the orebody lodes proper continuing to contain gold as forecast within the Reserves.

This risk is mitigated by the good reconciliation with Reserve estimates of the Wilber and Judy ore that so far has been mined and treated, and conservative assumptions using real rather than estimated costs given that a mining operation is in production.

Assumptions used for gold price, exchange rates, transportation rates


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Criteria JORC Code explanation Commentary Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.

of gold doré to Perth, processing and administration charges are all based upon existing established charges and unit rates and so the margin for error is minimised.

Wilber, Judy and Suzie lodes will be mined under existing legal agreements with the pastoralist, Native Title Holders and Meekatharra Council and the agreement with Perth Refinery.

Wilber, Judy and Suzie lodes are contained within a granted Mining lease M51/870. All necessary government approvals are currently in place.

Classifica-tion

The basis for the classification of the Ore Reserves into varying confidence categories.

Whether the result appropriately reflects the Competent Person’s view of the deposit.

The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).

Given the nature of narrow vein mining requiring grade control to establish Measured status for a Resource, the entire JORC Resource which has been optimised as profitable is classified as a Probable Ore Reserve.

The Ore Reserves estimate appropriately reflects the Competent Person’s view of the deposit

Additional ore to be mined following further drilling from underground is expected from within Inferred Resources but is not included within the JORC Reserve estimate

Audits or reviews

The results of any audits or reviews of Ore Reserve estimates. The Ore Reserve estimate was completed by Doray Minerals Limited with internal checks completed. No external audit of the model was completed.


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Criteria JORC Code explanation Commentary Discussion of relative accuracy/ confidence

Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate.

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage.

It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

The Ore Reserve is considered robust given the existing mining, plant and equipment currently in use on site, the established unit costs available and the personnel team on site as well as in Perth now familiar with the characteristics of the ore veins, Wilber, Judy and Suzie, which currently comprise the Andy Well gold project

The Ore Reserves are considered robust on a local scale for material classified as Probable.

The Wilber and Judy lodes are currently being mined and is expected that the remaining Wilber and Judy lodes are of similar geological characteristics which lend confidence to the accuracy of vein tenor, mining recovery and treatment plant recoveries and the departmental costs used in the estimation of Ore Reserves

DRM Annual Resource Reserve Statement - Kitco1 | P a g e ASX: DRM ASX Announcement 28 September 2016...

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