Kirkalocka Gold Project Mineral Resource Update to Comply with

MOUNT MAGNET SOUTH NL ASX: MUM

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ABN 93 096 635 246

K i rk a lock a Go ld Pro jec tM ine ra l Resou rc e Upda te t o Comp ly w i t h JORC 2012 Gu ide l i nes

and Renego t i a t i on o f Conve r t i b l e No te Te rms

The Mineral Resource for the Kirkalocka Gold Project (“KGP”) has been updated to comply with the

JORC 2012 reporting guidelines.

There has been no change to the resource classification, quantities or grade since the December 2012

Mineral Resource release.

Table 1: September 2013 Mineral Resource Estimate

Category Tonnes (Mt) Grade (g/t Au) Gold (ounces)

Indicated 11.2 1.2 428,000

Inferred 3.8 1.0 119,000

TOTAL 15.0 1.1 548,000

CONVERTIBLE NOTE TERMS

The Company advises that it has renegotiated certain terms with the holder of convertible notes with a

face value of $1.5 million. A total of 10 million notes (convertible to 10 million shares) with a face value of

$1 million were redeemable by 27 August 2013, with the remaining 11.1 million notes (convertible to 11.1

million shares) with a face value of $0.5 million being redeemable on or before 17 January 2014. The

Company has redeemed the January 2014 notes by making a cash payment of $0.5 million. The

remaining $1 million will remain a loan until the Company’s annual general meeting in November 2013, at

which time shareholder approval will be sought for the issue of 66.67 million notes convertible to 66.67

million shares (at 1.5 cents each) on or before 31 July 2015 at an interest rate of 5% per annum in

settlement of the loan.

24 September 2013


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KIRKALOCKA GOLD PROJECT – MINERAL RESOURCE

Mount Magnet South NL (ASX: MUM) (“the “Company”) has re-issued the Kirkalocka Gold Project

(“KGP”) Mineral Resource estimate to comply with the JORC 2012 guidelines.

In December 2012, the Company reported the KGP Mineral Resource in compliance with the JORC

2004 guidelines. This release provides additional information to align the resource with the JORC

2012 guidelines.

A total 5,986 drillholes totaling 183,496 m were used in the preparation of the resource estimate

including 113 diamond drillholes (HQ3 and NQ2 diameter) for 23,085 m, 5,371 Reverse Circulation

drillholes totaling 136,432 m, and 502 aircore holes totaling 23,979 m (used to inform laterite

estimate).

All diamond drillholes completed by the Company were sampled by cutting the core longitudinally in

half using diamond saws. Half core samples were placed in numbered calico bags and submitted to

the laboratory for analysis. The samples were typically taken at 1 m intervals except where the

samples crossed lithological boundaries. In this instance, the samples were terminated at the

lithological contact. All samples taken by the Company were greater than 30 cm in length. Historical

diamond core was also submitted as half core samples for analysis and was sampled using a similar

system to that currently used by the Company. Historical diamond core sample intervals within the

database range from 0.1 m to 4 m in length.

Reverse circulation (RC) drillholes carried out by the Company were typically sampled every metre

using a riffle or cone splitter to obtain a ~3 kg sub sample prior to submission to the laboratory for

assaying. The samples were collected in numbered calico bags and all the sampling information was

entered into a tablet computer and uploaded daily into the central acQuire database. Ninety nine

percent (99%) of reverse circulation samples are based on 1 m intervals. All samples were submitted

to Kalassay Laboratory (Kalassay) in Canning Vale, Western Australia for analysis with some check

analysis carried out at Ultratrace Laboratory in Perth. The main assaying method employed by the

Company is normal fire assay with a 40 g charge and AAS finish for gold. Review of historical records

indicates that a similar methodology was used by CRA and Equigold, however, an ICP OES finish on

a 40 g charge was also used during 2008.

Sampling and assaying quality assurance and quality control (QAQC) procedures were applied

routinely by the Company for all drilling carried out since 2008. They included:

Submittal of independent certified reference material (standards) with all sample batches at a

ratio of around 1 in 20.


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Submittal of field duplicate samples at a ratio of 1 in 20.

Submittal of coarse blank material with all sample dispatches at a ratio of around 1 in 20.

Periodical re-submission of duplicate pulps to both the primary and the secondary laboratories.

Review of internal laboratory quality control standards.

Review of laboratory (analytical) duplicates.

Sieve testing to check grind size.

Sample recovery checks.

Unannounced laboratory inspections.

QC results indicate acceptable levels of precision and accuracy. Given the acceptable results for the

QAQC conducted by the Company and the good correlation between the historical and Company

drilling, the drilling and sampling data is considered acceptable for resource estimation.

The Company migrated historical data into an acQuire database in April 2011. The data collated after

April 2011 was processed from source data files into a separate acQuire database by acQuire

Managed Services (QMS). All historical data was managed by the Company Database Administrator.

The Company conducted an extensive database review, compilation and validation program of all

historical KGP drilling information in 2011. On completion of this review all data was migrated across

to the acQuire Database Model.

The Company carried out detailed validation of the dataset prior to running the December 2012

estimation. Independent reporting expert, Snowden Mining Industry Consultants Pty Ltd (“Snowden”)

carried out an additional basic statistical and visual validation prior to estimation. Two drillholes which

visually appeared erroneous were excluded from the final dataset.

The mineralisation in the KGP lies within a splay of the Mount Magnet Shear which runs parallel to the

eastern margin of the Wydgee–Meekatharra Greenstone Belt. The splay hosting the KGP gold deposit

is a 400 m wide brittle ductile shear zone localised along the contact between the metabasalt and

tonalite intrusive. The predominant orientation is north-northwest, defined in part locally by the

metabasalt-tonalite contact and the felsic intrusive orientation.

The regolith zone is comprised of five units. The topmost unit consists of transported overburden

material comprising quaternary sands, grits, gravel and clay. This unit is of variable thickness

between 0 m and 40 m, with an average thickness of 11 m. The in situ regolith consists of the shallow

supergene, upper saprolite, lower saprolite and saprock units.


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The laterite is situated immediately below the transported overburden and consists of Tertiary age

transported ferruginous nodular gravels to nodular (pisolitic) duricrust of mottled laterite. The

mineralised laterite thickness ranges from 1 m to 4 m thick and has been defined over a 2 km strike

and 0.7 km plan width.

Within the upper portion of the saprolite unit there exists a distinctive white clay zone which is referred

to as the pallid zone. Recent drilling has proved the continuance of an extensive supergene zone that

occurs typically between 15 m and 20 m below the laterite horizon within the upper saprolite. The

supergene zone is extensive and has been interpreted over a north-south strike of 2 km and east-west

width of 100 m to 250 m. The supergene zone is best developed above the zones of continuous high

grade primary mineralisation.

The lower saprolite is distinguished from the upper saprolite by its generally darker appearance, with

fresh to altered green and purple mineral assemblages present within the rock mass, reflecting a

lesser degree of weathering/leaching compared to the upper saprolite.

The transitional zone comprises both lower saprolite and saprock. In most cases saprolite overlies

fresh rock; however, in some areas a saprock is present. Saprock exhibits some weathered

characteristics while retaining most of the fresh rock characteristics. Weathering within the saprock is

in general restricted to areas adjacent to fractures and jointing within the rockmass.

Mineralisation within the primary zone is hosted in tonalite and amphibolite (after basalt) which follow

the local structural trends. The mineralisation typically forms a series of shear hosted zones striking

north-northwest in the immediate vicinity of the existing Curara Well Open Pit with variable dips

ranging from 50° to 70° to the east. Barren, narrow felsic intrusives run parallel to stratigraphy and in

places cross cut in an east-west orientation.

The tonalite is characterised by coarse feldspar laths in a fine grained mafic groundmass. Gold is

commonly associated with quartz veining or strong alteration selvedges characterised by silica,

sericite, chlorite with pyrite and minor pyrrhotite proximal to felsic intrusives. Discrete mineralisation

shoots up to 20 m in width form predominantly along the tonalite contacts and parallel to the felsic

intrusives that converge to the south.

The metamorphosed and altered basalt makes up the bulk of the eastern country rock. Gold

mineralisation occurs with intense biotite, amphibole, quartz and fine disseminated sulphide (primarily

pyrite) alteration. Siliceous selvedges and increasing gold grades are proximal to the felsic intrusives.

Gold mineralisation follows the general dip of the foliation and is also present in late stage, flat lying,

narrow cross-cutting quartz veins dipping at 30° to the east.


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The laterites are typically between 1 m to 4 m thick and have been defined over a 2 km strike and 0.7

km plan width. The supergene mineralisation ranges up to 20 m in thickness and has been defined

over a 1.5 km strike and 0.2 km plan width. The main primary mineralisation (classified portion)

extends around 0.85 km along strike and 0.25 km plan width. The primary mineralisation extends to a

depth of 290 m below surface, which is 90 m below the existing open pit.

Interpretation comprises mineralisation envelopes (wireframes) for the laterite, supergene and primary

mineralisation which have been built based upon cross, long sectional and plan view structural

domaining, as well as indicator variography and leapfrog software at a 0.2 to 0.3 g/t Au nominal cut-off

grade. The surface laterite envelope was created in Leapfrog software using a flat search at a 0.3 g/t

Au cut-off. The laterite was subsequently manually adjusted to remove low grade edges and

incorporate additional hangingwall and footwall samples where the grade was above cut-off. Single

low grade intervals with above cut-off grades on either side were retained and a minimum width of 2 m

was imposed. The manual interpretation below the laterite identified potential supergene style

mineralisation both north and south of the existing pit. A sub-horizontal mineralisation domain persists

between 290 mRL and 305 mRL, typically located above primary mineralisation. The presence of

supergene mineralisation within the historical pit is consistent with the high grade material that was

encountered by Equigold during production between 2002 and 2003.

Grades for gold were estimated using Datamine software. Estimation was by ordinary block kriging

into 10 mE by 10 mN by 2.5 mRL parent cells using 1 m composites, which is the dominant sample

length. Kriging neighbourhood analysis was carried out to optimise the block size and estimation

parameters. Search ellipses and ranges were based on the continuity seen in the variograms. With

initial search pass ranges equivalent to around 90% of the variance for the laterite and supergene

domains and around the range of the variogram for the primary mineralisation domains.

For the northern and central areas of the deposit, the mineralised lodes were treated as hard

boundaries for estimation except for two lodes. These two domains were treated as soft boundaries

for estimation. For the southern area, the mineralised domains with similar orientation and grade

tenor were combined for estimation due to the small quantity of data in the individual lodes. The

estimation domains comprised the combined high grade lodes, the combined low grade lodes and the

combined supergene domains. For the northern and central area excluding the supergene, search

ellipses were orientated as per the variograms for each domain. For the southern area and the

supergene (in all areas), a dynamic anisotropy approach was used, whereby the true dip and azimuth

of the mineralised lodes was estimated into each block in the model and the search and variogram

orientations were locally adjusted to reflect the geological orientation. This method allows the

estimate to better reflect the changing orientation and undulating nature of some of these lodes along

strike. Blocks were estimated using a minimum of 12 with a maximum of 32 samples. A maximum of


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3 composites was allowed per drillhole for the primary and supergene domains and 2 composites per

drillhole for the laterite. This restriction was set to prevent over smoothing in the downhole direction

and help retain the grade trends seen in the data. The restriction also ensures that at least 4 drillholes

are used to inform each block for the primary estimation and 6 drillholes for the laterite estimation.

The data distributions are highly skewed and typically have a high (>1.5) coefficient of variation (CV –

ratio of standard deviation to the mean). As a result, top cuts were applied to some domains to

prevent overestimation and smearing of the comparatively high values into surrounding blocks. Top

cuts were 40 to 60 g/t Au and impact on less than 1% of the grade population.

Final grade estimates were validated visually and statistically. Global mean estimated grades were

compared to the input composite data and sectional grade trend plots were generated. The model

validation indicates that there is a good local reproduction of the input grades in both the horizontal

and vertical directions. The grade estimate was reconciled to historical production information within

the historical pit area. Gold ounces reconciled to within 1%.

The estimate has been classified as an Indicated and Inferred Mineral Resource based on the integrity

of the data, the spatial continuity of the mineralisation as demonstrated by variography, and the quality

of the estimation. The classification for the northern and central area is restricted to within an open pit

optimisation shell to a depth of 290 m below surface. Snowden considers that the classification

applied is appropriate for this style of mineralisation.

Pit optimisation and metallurgical testwork to date indicates that the mineralisation is amenable to

open cut mining and processing through the KGP treatment plant, subject to gold price.

The September 2013 Mineral Resource estimate at the Kirkalocka Gold Project (KGP) is reported in

Table 1. Laterite mineralisation is reported above a 0.3 g/t Au cut-off and primary and supergene

mineralisation reported above a 0.5 g/t Au. The grade cut-offs for reporting are based on a

combination of the historical gold recoveries from the KGP CIP/CIL treatment plant and the

assumption the deposits will be mined using open cut methods.

Table 1: KGP September 2013 Mineral Resource Estimate

Category Tonnes (Mt) Grade (g/t Au) Gold (ounces)

Indicated 11.2 1.2 428,000

Inferred 3.8 1.0 119,000

TOTAL 15.0 1.1 548,000


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For further information contact:

Alec Pismiris

Chairman

P: 08 9213 8900

M: 0402 212 532

E: [email protected]

Graham Howard

General Manager – Projects

P: 08 9213 8900

M: 0418 920 556

E: [email protected]

Mount Magnet South NLABN 93 096 635 246

Level 1, 10 Outram St, West Perth, WA 6005

T + 61 8 9213 8900F + 61 8 9213 [email protected]

Competent Person’s StatementsThe information in this report that relates to estimation, depletion and reporting of Mineral Resources is based on andfairly represents, information and supporting documentation compiled by Lynn Olssen who is a Member of TheAustralasian Institute of Mining and Metallurgy and a full time employee of Snowden Mining Industry Consultants Pty Ltd.Lynn Olssen has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and tothe activity which she is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘AustralasianCode for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Lynn Olssen consents to the inclusion inthe report of the matters based on the information in the form and context in which it appears.

The information in this report that relates to database compilation, geological interpretation and mineralisationwireframing, project parameters and costs and overall supervision and direction of Mineral Resource is based on and fairlyrepresents, information and supporting documentation compiled under the overall supervision and direction of GrahamHoward MAusIMM, who is a full time employee of Mount Magnet South NL. Graham Howard has sufficient experiencethat is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken toqualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration, Results,Mineral Resource and Ore Reserves (JORC, 2012). Graham Howard consents to the inclusion in this report of the mattersbased on the information in the form and context in which it appears.

.


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APPENDIX 1 – ESTIMATION AND REPORTING OF MINERAL RESOURCES

Section 1 Sampling Techniques and Data

Criteria JORC Code explanation Commentary

Sampling

techniques

Nature and quality of sampling (eg 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.

Include reference to measures taken to ensure sample representivity

and the appropriate calibration of any measurement tools or systems

used.

Aspects of the determination of mineralisation that are Material to the

Public Report.

In cases where ‘industry standard’ work has been done this would be

relatively simple (eg ‘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 (eg

submarine nodules) may warrant disclosure of detailed information.

All diamond drillholes completed by the Company were sampled

by cutting the core longitudinally in half using diamond saws. If

an orientation line was present, then the core was cut to ensure

the orientation line was retained in the tray. Otherwise a cutting

line was generally marked by a geologist, taking account of the

dominant fabric of the rocks. Cross-cut marks were made at

sample limits and half core was returned to the trays for storage.

Half core samples were placed in numbered calico bags and

submitted to the laboratory for analysis. The samples were

typically taken at 1 m intervals except where the samples

crossed lithological boundaries. In this instance, the samples

were terminated at the lithological contact. All samples taken by

the Company were greater than 30 cm in length.

All sampling data was entered onto a tablet computer and

downloaded into the central acQuire database daily.

Historical diamond core was also submitted as half core samples

for analysis and has been sampled using a similar system to that

currently used by the Company.

Historical diamond core sample intervals within the database

range from 0.1 m to 4 m in length.


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Reverse circulation (RC) drillholes carried out by the Company

were typically sampled every metre using a riffle or cone splitter

to obtain a ~3 kg sub sample prior to submission to the

laboratory for assaying. The samples were collected in

numbered calico bags and all the sampling information was

entered into a tablet computer and uploaded daily into the

central acQuire database.

Ninety nine percent (99%) of reverse circulation samples are

based on 1 m intervals.

All samples were submitted to Kalassay Laboratory (Kalassay) in

Canning Vale for analysis with some check analysis carried out

at Ultratrace Laboratory in Perth.

The main assaying method employed by the Company is normal

fire assay with a 40 g charge and AAS finish for gold.

Review of historical records indicates that a similar methodology

was used by CRA and Equigold, however, an ICP OES finish on

a 40 g charge was also used during 2008.

Drilling techniques Drill type (eg core, reverse circulation, open-hole hammer, rotary air

blast, auger, Bangka, sonic, etc) and details (eg 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).

5,986 drillholes totaling 183,496 m were used in the preparation

of the resource estimate including:

o 113 diamond drillholes (HQ3 and NQ2 diameter) for

23,085 m.

o 5,371 Reverse Circulation drillholes totaling 136,432 m.

o 502 aircore holes totaling 23,979 (used to inform laterite


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estimate).

Diamond core is not orientated.

Drill sample

recovery

Method of recording and assessing core and chip sample recoveries

and results assessed.

Measures taken to maximise sample recovery and ensure

representative nature of the samples.

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.

Diamond drill core recovery was generally excellent. Historical

diamond drilling stored onsite shows excellent recovery.

Diamond drilling conducted by the Company during 2011,

recorded average core recovery at over 99%.

Reverse circulation sample recoveries were also good. Sample

weights were monitored at the laboratory with average sample

weights exceeding 2.5 kg.

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.

Whether logging is qualitative or quantitative in nature. Core (or

costean, channel, etc) photography.

The total length and percentage of the relevant intersections logged.

Diamond core logging

All geological logging carried out by the Company since 2011

was saved directly into tablet computers using acquire core

logging procedures. The data was then downloaded onto the

main storage facility on the acquire server.

The main steps in the logging sequence were:

o Core was marked in 1 or 2 m intervals and core block

depths were checked.

o Core was geologically logged, over regular 1 or 2 m

intervals, for lithology, alteration, mineralisation and

structure, fracture frequency, orientation and style of

veining.

o Logs were downloaded daily into the main data storage


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facility.

o All core trays were individually photographed.

Reverse circulation logging

Reverse circulation drillhole chips were logged directly into the

acQuire database using a tablet for data entry. The data was

then downloaded onto the main storage facility on the acquire

server.

The main steps in the logging sequence were:

o Chips were sieved on regular 1m intervals and put into

labelled chip trays.

o All of the chips were geologically logged.

o Logs were downloaded daily into the main data storage

facility.

o Chips trays for the 2008 to 2012 reverse circulation

drilling programs are stored on site at the KGP.

Sub-sampling

techniques and

sample preparation

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

taken.

If non-core, whether riffled, tube sampled, rotary split, etc and

whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the

sample preparation technique.

Refer above to sampling techniques.


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Quality control procedures adopted for all sub-sampling stages to

maximise representivity of samples.

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.

Whether sample sizes are appropriate to the grain size of the material

being sampled.

Quality of assay

data and

laboratory tests

The nature, quality and appropriateness of the assaying and

laboratory procedures used and whether the technique is considered

partial or total.

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.

Nature of quality control procedures adopted (eg standards, blanks,

duplicates, external laboratory checks) and whether acceptable levels

of accuracy (ie lack of bias) and precision have been established.

Sampling and assaying quality assurance and quality control

(QAQC) procedures were applied routinely by the Company for

all drilling carried out since 2008. They included:

o Submittal of independent certified reference material

(standards) with all sample batches at a ratio of around

1 in 20.

o Submittal of field duplicate samples at a ratio of 1 in 20.

o Submittal of coarse blank material with all sample

dispatches at a ratio of around 1 in 20.

o Periodical re-submission of duplicate pulps to both the

primary and the secondary laboratories.

o Review of internal laboratory quality control standards

o Review of laboratory (analytical) duplicates.

o Sieve testing to check grind size.

o Sample recovery checks.


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o Unannounced laboratory inspections.

o The QAQC results indicate acceptable levels of

precision and accuracy.

Verification of

sampling and

assaying

The verification of significant intersections by either independent or

alternative company personnel.

The use of twinned holes.

Documentation of primary data, data entry procedures, data

verification, data storage (physical and electronic) protocols.

Discuss any adjustment to assay data.

In March/April 2011 the Company had their historical data

migrated into an acQuire database. The data collated after April

2011 was processed from source data files into a separate

acQuire database by acQuire Managed Services (QMS). All

historical data has been compiled by the Company Database

Administrator.

The Company conducted an extensive database review,

compilation and validation program of all historical KGP drilling

information in 2011. On completion of this review all data was

migrated across to the acQuire Database Model.

The Company carried out detailed validation of the dataset prior

to running the resource estimation. Snowden carried out an

additional basic statistical and visual validation prior to

estimation. Two drillholes which visually appear erroneous were

excluded from the final dataset.

Given the acceptable results for the QAQC conducted by the

Company and the good correlation between the historical and

Company drilling, the drilling and sampling data is considered

acceptable for resource estimation.

Location of data Accuracy and quality of surveys used to locate drill holes (collar and

down-hole surveys), trenches, mine workings and other locations

Survey control.


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points used in Mineral Resource estimation.

Specification of the grid system used.

Quality and adequacy of topographic control.

A network of local control stations was established by contract

surveyors. Stations were established in local grid coordinates

and AHD (Australian Height Datum) levels. The stations were

referenced back to National Mapping Grid System MGA

(GDA94) zone 50.

Drillhole collar surveys

Historically, drillhole collars were marked out with tape and

aligned on compass bearings. More recent drilling positioned the

planned drillhole collars using a GPS on the MGA grid.

Final collar positions were typically picked up by contract

surveyors in batches, after drilling was completed.

Downhole surveying

All drillholes carried out by the Company between 2008 and

2011 were routinely surveyed downhole with Eastman single

shot survey cameras, typically at 30 m intervals downhole.

Historically, downhole survey was conducted only on deep

holes. Of the final database used for resource estimation, 92% of

the drillholes are less than 60 m in depth and 75% of those

drillholes greater than 60 m in depth contain downhole surveys.

Holes drilled during the period from July 2011 to August 2012

were also surveyed by gyroscope as a check of the Eastman

downhole survey method. The two methods were compared,

results showed that Eastman surveys for reverse circulation

drillholes gave accurate inclination measurements; however,


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azimuth data was erratic. Eastman surveys for diamond holes

were very accurate and comparable to those obtained using a

gyroscope. Where gyroscope information was obtained, this was

used in preference of Eastman derived survey data.

Topography and depletion surfaces

A digital terrain model (DTM) of the original topographic surface

was created by the Company based on historical and recent

collar and spot survey information.

Historical mining was depleted using a detailed surveyed DTM

describing the base of the previous open pit, together with three

DTMs for depleting the near surface laterite pits. An update of

the DTMs for depletion of the near surface laterite pits was

produced for the December 2012 estimate. These DTMs

reconstructed the laterite pits as defined by recent (October

2012) detailed survey pickup of the crest of the laterite pits,

together with the batter angle and floor surface where

rehabilitation had not taken place. Where rehabilitation back fill

was present, the base of the laterite depletion DTMs was set to

200 mm below the interpreted footwall of the modelled laterite

horizon. In two locations, where post mining the Company

drilling has intersected laterite mineralisation, the depletion

wireframe was elevated to account for the mineralisation that

has been left in the floor within the laterite pits. This remnant

material appears to be associated with production ramps left


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during the mining of the historical pits.

The depletion surfaces were used to code the mined areas from

the in-situ areas of the resource model. As the depletion

surfaces include surface waste landforms and ROM pad areas,

any material lying above the original topography but below the

depletion surfaces was coded separately to distinguish this

waste material. Similarly, the backfilled material that was used to

rehabilitate the laterite pits has been defined as the material

lying above the depletion surface and below the current

topography as defined by the recent topographic survey within

the vicinity of the historical laterite pits.

Data spacing and

distribution

Data spacing for reporting of Exploration Results.

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.

Whether sample compositing has been applied.

The final dataset used for resource estimation includes grade

control reverse circulation drilling within the mined out pit on a 5

mE by 10 mN spacing. Outside of the grade controlled areas the

drillhole spacing ranges from 25 mE by 25 mN to 50 mE by 50

mN over the majority of the mineralised area.

Samples have been composited to 1 m, which is the dominant

sample length, prior to estimation.

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.

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.

The drilling data was orientated either to the east or west,

resulting in the majority of data being perpendicular to the strike

of the orebody. The orebody dips steeply to the east.


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Sample security The measures taken to ensure sample security. The Company sampling procedures include delivery to an offsite

laboratory on a regular basis. Each sample batch was

accompanied by a dispatch form recording:

o Job number.

o Number of samples.

o Sample numbers (including standards and duplicates).

o Required analytical methods.

o A job priority rating.

o Instructions for storage of residues.

Audits or reviews The results of any audits or reviews of sampling techniques and data. An internal Company audit was completed for the drilling

completed between 2011 to 2012 and found no material issues.

AMC completed a Technical Due diligence in August 2013 which

found no high risk issues.

Section 2 Reporting of Exploration Results


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.

Mount Magnet South NL (the “Company”) is the current owner

and occupier of the Kirkalocka Gold Project (KGP). The KGP is

located on the Kirkalocka Pastoral Station, approximately 510

kilometres (km) northeast of Perth and approximately 70 km

south of Mount Magnet in the Mid-West Region of Western


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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.

Australia (WA). The KGP is located on Mining Leases 59/232,

59/233 and 59/234 (M59/232, M59/233 and M59/234). The KGP

includes Kirkalocka Gold Mine (also known as the Curara Well

Deposit), which is an existing mine site that was operated by

Equigold NL (Equigold) between 2002 and 2008.

Exploration done

by other parties

Acknowledgment and appraisal of exploration by other parties. Drilling has been completed by multiple companies over a period

of 21 years.

CRA Exploration Pty Ltd commenced involvement in the project

in 1989 in joint venture with Austmin Gold NL (subsequently

taken over by Burmine Exploration NL). Burmine subsequently

merged with Sons of Gwalia Limited (SOG), with SOG later

acquiring all of the CRA interests in the project tenements.

CRA completed 63,734 m of drilling up until 1996 including:

o Rotary air blast - 11,088 m

o Aircore - 29,051 m

o Reverse circulation - 2,221 m

o Diamond core - 21,374 m

Sons of Gwalia Limited completed 41,391 m of drilling between

1997-2001 including:

o Rotary air blast - 17,653 m

o Aircore - 14,674 m


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Further surface drilling was carried out by Equigold NL

(Equigold) between 2001 and 2008 during which time Equigold

mined the Curara Well Open Pit and nearby laterite pits. Drilling

during this period included extensive grade control drilling within

the pit area. Equigold completed 31,113.5 m of drilling between

2001-2008 including:

o Rotary air blast - 4,387

o Aircore - 2,935


o Diamond core - 765.8 m

Geology Deposit type, geological setting and style of mineralisation. Local geology and mineralisation

The mineralisation in the KGP lies within a splay of the Mount

Magnet Shear which runs parallel to the eastern margin of the

Wydgee–Meekatharra Greenstone Belt. The splay hosting the

Curara Well Gold Deposit is a 400 m wide brittle ductile shear

zone localised along the contact between the metabasalt and

tonalite intrusive. The predominant orientation is north-

northwest, defined in part locally by the metabasalt-tonalite

contact and the felsic intrusive orientation.

The regolith zone is comprised of five units. The topmost unit

consists of transported overburden material comprising


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quaternary sands, grits, gravel and clay. This unit is of variable

thickness between 0 m and 40 m, with an average thickness of

11 m. The in situ regolith consists of the shallow supergene,

upper saprolite, lower saprolite and saprock units.

The laterite is situated immediately below the transported

overburden and consists of Tertiary age transported ferruginous

nodular gravels to nodular (pisolitic) duricrust of mottled laterite.

The mineralised laterite thickness ranges from 1 m to 4 m thick

and has been defined over a 2 km strike and 0.7 km plan width.

Within the upper portion of the saprolite unit there exists a

distinctive white clay zone which is referred to as the pallid zone.

Recent drilling has proved the continuance of an extensive

supergene zone that occurs typically between 15 m and 20 m

below the laterite horizon within the upper saprolite. The

supergene zone is extensive and has been interpreted over a

north-south strike of 2 km and east-west width of 100 m to 250

m. The supergene zone is best developed above the zones of

continuous high grade primary mineralisation.

The lower saprolite is distinguished from the upper saprolite by

its generally darker appearance, with fresh to altered green and

purple mineral assemblages present within the rock mass,

reflecting a lesser degree of weathering compared to the upper

saprolite.

The transitional zone comprises both lower saprolite and


21


saprock. In most cases saprolite overlies fresh rock; however, in

some areas a saprock is present. Saprock exhibits some

weathered characteristics while retaining most of the fresh rock

characteristics. Weathering within the saprock is in general

restricted to areas adjacent to fractures and jointing within the

rockmass.

Mineralisation within the primary zone is hosted in tonalite and

amphibolite (after basalt) which follow the local structural trends.

The mineralisation typically forms a series of stacked lenses

striking north-northwest in the immediate vicinity of the existing

Curara Well Open Pit with variable dips ranging from 50° to 70°

to the east. Barren, narrow felsic intrusives run parallel to

stratigraphy and in places cross cut in an east-west orientation.

The tonalite is characterised by coarse feldspar laths in a fine

grained mafic groundmass. Gold is commonly associated with

quartz veining or strong alteration selvedges characterised by

silica, sericite, chlorite with pyrite and minor pyrrhotite proximal

to felsic intrusives. Discrete lenses up to 20 m in width form

predominantly along the tonalite contacts and parallel to the

felsic intrusives that converge to the south. The majority of the

mineralization is concentrated toward this southern “keel”

position and is still open at depth.

The metamorphosed and altered basalt makes up the bulk of the

eastern and southern country rock. Gold mineralisation occurs


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with intense biotite, amphibole, quartz and fine disseminated

sulphide (primarily pyrite) alteration. Siliceous selvedges and

increasing gold grades are proximal to the felsic intrusives. Gold

mineralisation follows the general dip of the foliation and is also

present in late stage flat lying narrow cross-cutting quartz veins

dipping at 30° to the east.

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; and

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.

Not applicable as exploration results are not 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.



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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.

The assumptions used for any reporting of metal equivalent values

should be clearly stated.

Relationship

between

mineralisation

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’).

Most drilling is perpendicular to the mineralisation and each

intersection interval is defined by geological domains, thus

reflecting true width of intersections.

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.

Refer to main release.

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.


Other substantive

exploration data

Other exploration data, if meaningful and material, should be reported

including (but not limited to): geological observations; geophysical

Company has completed a feasibility study that has evaluated


24


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.

items as detailed in the Ore Reserve section of this table.

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.

No exploration work planned at this time however there is the

potential for further mineralisation to be defined with step out

drilling.

Section 3 Estimation and Reporting of Mineral Resources


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.

In March/April 2011 the Company had their historical data

(before April 2011) migrated into an acQuire database. The data

collated after April 2011 was processed from source data files

into a separate acQuire database by acQuire Managed Services

(QMS). The Company employs a database administrator to

manage the database.

Snowden carried out basic validation checks on the data

supplied by the Company prior to resource estimation. No

significant errors were identified by the validation.

Site visits Comment on any site visits undertaken by the Competent Person and

the outcome of those visits.

Multiple site visits completed by the Company competent person

between 2011 to 2013.


25


If no site visits have been undertaken indicate why this is the case. Snowden has not carried out a site visit as the Company is

taking responsibility for the database and geological model,

hence a site visit was not warranted.

Geologicalinterpretation

Confidence in (or conversely, the uncertainty of ) the geological

interpretation of the mineral deposit.

Nature of the data used and of any assumptions made.

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

estimation.

The use of geology in guiding and controlling Mineral Resource

estimation.

The factors affecting continuity both of grade and geology.

Interpretation comprises mineralisation envelopes (wireframes)

for the laterite, supergene and primary mineralisation which have

been built based upon cross, long sectional and plan view

structural domaining, as well as indicator variography and

leapfrog software.

The surface laterite envelope was created in Leapfrog software

using a flat search at a 0.3 g/t Au cut-off. The laterite was

subsequently manually adjusted to remove low grade edges and

incorporate additional hangingwall and footwall samples where

the grade was above cut-off. Single low grade intervals with

above cut-off grades on either side were retained and a

minimum width of 2 m was imposed.

The manual interpretation below the laterite identified potential

supergene style mineralisation both north and south of the

existing pit. A sub-horizontal mineralisation domain persists

between 290 mRL and 305 mRL, typically located above primary

mineralisation. The presence of supergene mineralisation within

the historical pit is consistent with the high grade material that

was encountered by Equigold during production between 2002

and 2003.

Dimensions The extent and variability of the Mineral Resource expressed as The laterites are typically between 1 m to 4 m thick and have


26


length (along strike or otherwise), plan width, and depth below

surface to the upper and lower limits of the Mineral Resource.

been defined over a 2 km strike and 0.7 km plan width.

The supergene mineralisation ranges up to 20 m in thickness

and has been defined over a 1.5 km strike and 0.2 km plan

width.

The main primary mineralisation (classified portion) extends

around 0.85 km along strike and 0.25 km plan width. The

primary mineralisation extends to a depth of 290 m below

surface, which is 90 m below the existing open pit.

Estimation andmodellingtechniques

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.

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 assumptions made regarding recovery of by-products.

Estimation of deleterious elements or other non-grade variables of

economic significance (eg sulphur for acid mine drainage

characterisation).

In the case of block model interpolation, the block size in relation to

the average sample spacing and the search employed.

Grades for gold were estimated using Datamine software.

Estimation was by ordinary block kriging into 10 mE by 10 mN by

2.5 mRL parent cells using 1 m composites, which is the

dominant sample length. Kriging neighbourhood analysis was

carried out to optimise the block size and estimation parameters.

Search ellipses and ranges were based on the continuity seen in

the variograms. With initial search pass ranges equivalent to

around 90% of the variance for the laterite and supergene

domains and around the range of the variogram for the primary

mineralisation domains.

For the northern and central areas of the deposit, the

mineralised lodes were treated as hard boundaries for estimation

except where lodes 10NW1 and 10NW2 merge into 10NNE1.

These two contacts were treated as soft boundaries for

estimation.


27


Any assumptions behind modelling of selective mining units.

Any assumptions about correlation between variables.

Description of how the geological interpretation was used to control

the resource estimates.

Discussion of basis for using or not using grade cutting or capping.

The process of validation, the checking process used, the comparison

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

available.

For the southern area, the mineralised domains with similar

orientation and grade tenor were combined for estimation due to

the small quantity of data in the individual lodes. The estimation

domains comprised the combined high grade lodes, the

combined low grade lodes and the combined supergene

domains.

For the northern and central area excluding the supergene,

search ellipses were orientated as per the variograms for each

domain.

For the southern area and the supergene (in all areas), a

dynamic anisotropy approach was used, whereby the true dip

and azimuth of the mineralised lodes was estimated into each

block in the model and the search and variogram orientations

were locally adjusted to reflect the geological orientation. This

method allows the estimate to better reflect the changing

orientation and undulating nature of some of these lodes along

strike.

Blocks were estimated using a minimum of 12 with a maximum

of 32 samples. A maximum of 3 composites was allowed per

drillhole for the primary and supergene domains and 2

composites per drillhole for the laterite. This restriction was set

to prevent over smoothing in the downhole direction and help

retain the grade trends seen in the data. The restriction also

ensures that at least 4 drillholes are used to inform each block


28


for the primary estimation and 6 for the laterite estimation.

The data distributions are highly skewed and typically have a

high (>1.5) coefficient of variation (CV – ratio of standard

deviation to the mean). As a result, top cuts were applied to

some domains to prevent overestimation and smearing of the

comparatively high values into surrounding blocks. Top cuts

were 40 to 60 g/t Au and impact on less than 1% of the grade

population.

Final grade estimates were validated visually and statistically.

Global mean estimated grades were compared to the input

composite data and sectional grade trend plots were generated.

The model validation indicates that there is a good local

reproduction of the input grades in both the horizontal and

vertical directions.

The grade estimate was reconciled to historical production

information within the historical pit area. Gold ounces reconciled

to within 1%.

The November 2012 resource reported here has resulted in an

increase of around 16 koz compared to the previous, August

2012 Mineral Resource. This increase is mainly a result of the

additional drilling and an improvement in understanding of the

local geological controls on mineralisation which resulted in an

improvement in the geological model.

There are no deleterious elements in the orebody; as tested by


29


metalliferous testwork programs.

Moisture Whether the tonnages are estimated on a dry basis or with natural

moisture, and the method of determination of the moisture content.

Not applicable to this estimate – only dry mass considered.

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

applied.

Mineralisation defined at a 0.2 to 0.3 g/t Au nominal cut-off

grade. Laterite mineralisation reported above a 0.3 g/t Au cut-off

and primary mineralisation reported above a 0.5 g/t Au.

The grade cut-offs for reporting are based on a combination of

the historical gold recoveries from the KGP CIP/CIL treatment

plant and the assumption the deposits will be mined using open

cut methods.

Mining factors orassumptions

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 mineralisation is amenable to open cut mining methodology

subject to gold price.

Metallurgicalfactors orassumptions

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

Metallurgical testwork results show that the mineralisation is

amendable to processing through the KGP treatment plant.


30


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.

Environmentalfactors orassumptions

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.

Approvals granted for treatment plant and TSF1 construction

and land clearing.

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.

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.

Discuss assumptions for bulk density estimates used in the

evaluation process of the different materials.

In situ density ranges from 1.7 t/m3

for oxide to 2.85 t/m3

for

fresh basalt. Bulk density values are based on measurements

carried out by Equigold using diamond drilling samples taken in

1995 and verified by recent downhole gamma gamma density

surveys undertaken by the Company.

Historically, the physical measurements were performed on site

using intervals of core selected by the logging geologists as

representative of a particular lithology or alteration/mineralisation

type. A simple water immersion method referred to as the

MARCEY Technique was used for the measurements, where the

samples are dried and weighed in air then weighed in water.


31


Comparison of recent gamma logging values and historic

physical measures conducted by Equigold, show that results are

consistent.

Classification The basis for the classification of the Mineral Resources into varying

confidence categories.

Whether appropriate account has been taken of all relevant factors (ie

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).

Whether the result appropriately reflects the Competent Person’s

view of the deposit.

The estimate has been classified as an Indicated and Inferred

Mineral Resource based on the integrity of the data, the spatial

continuity of the mineralisation as demonstrated by variography,

and the quality of the estimation.

The classification for the northern and central area is restricted

to within an open pit optimisation shell to a depth of 290 m below

surface

Snowden considers that the classification applied is appropriate

for this style of mineralisation.

Audits or reviews The results of any audits or reviews of Mineral Resource estimates. Resource completed by Snowden and internally peer reviewed.

Independently reviewed by the Company competent person.

AMC completed independent due diligence review 2013.

No material issues were found during these reviews.

Discussion ofrelative 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

The Company carried out reconciliation showing the December

2012 Resource Estimate is within 1% gold ounces compared to

historical production.


32


discussion of the factors that 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.

These statements of relative accuracy and confidence of the estimate

should be compared with production data, where available.

Documents

Kirkalocka Gold Project Mineral Resource Update to Comply with