PNX Metals : Fountain Head Gold – Drilling Results and Project Update

ASX Announcement	Level 1, 135 Fullarton Road
Rose Park, SA 5067
25 February 2020	Australia
	Telephone [phone]
This announcement has been authorised to	Facsimile [phone]
be lodged with the ASX by the Board of	[e-mail]
Directors of PNX Metals Limited.	www.pnxmetals.com.au

Fountain Head Gold - Drilling Results and Project Update

• Fountain Head heap leach studies and development plans progressing on schedule
• Assay results from approximately 2,500m of RC drilling completed prior to end 2019 now received with further high-grade gold intersections reported, including

• 1. 2m at 14.57 g/t Au from 11m in FHRC127, o 1m at 14.24 g/t Au from 53m in FHRC133, o 3m at 8.54 g/t Au from 34m in FHRC145
• Additional 3,000m of RC drilling completed in 2020 to support metallurgical testwork, increase Mineral Resource confidence and mine development planning
• Diamond drilling for metallurgical testwork and geotechnical studies now underway
• Technical studies ongoing relating to pit dewatering and Project Environmental Impact Statement

PNX Metals Limited (ASX: PNX)i ("PNX", "the Company") is pleased to provide an update on the proposed Fountain Head gold heap leach development, within the Company's Hayes Creek Project, located in the Pine Creek region of the Northern Territory.

Drilling and technical studies at Fountain Head are progressing on schedule and on budget, as the Company assesses the feasibility of a heap leach operation as a low-cost, scalable option for generating early cashflow from existing gold resources.

Assay results have now been received for all RC drilling completed up to the end of 2019 with further high-grade gold intersections being reported (Table 2). 27 of the 30 RC holes drilled intersected gold mineralisation above the anticipated 0.5 g/t Au mining cut-off grade, demonstrating good geological continuity and increasing the Company's confidence in the Mineral Resource model. Importantly a number of holes intersected mineralisation outside of the proposed pit shell, including 3m at 8.54 g/t Au from 34m in FHRC0145 positioned approximately 100m to the northern boundary of the current Mineral Resource (Table 1) providing further opportunity for an increase in the mineralised envelope.

A further 31 RC holes for 3,048 metres were drilled at the Project in January and February, with all Priority 1 and 2 holes now completed and only minor time lost to wet weather. The majority of the Priority 1 holes drilled to date are located on the western side of the deposit and relate to the proposed first year of mining (see Figures 1 and 2), with Priority 2 holes relating to the second year of mining primarily located on the northern flank of the deposit. Numerous structural zones that typically host gold mineralisation were intersected as predicted by the geological model. Assay results are expected during March. Diamond drilling as part of a geotechnical study and open-pit mine design is also underway and expected to be completed in March.

Screen fire assays will also be completed on selected intersections to better understand the characteristics of the coarse, nuggetty gold mineralisation in addition to gold deportment and screen-size analysis.

PNX Metals Limited | ABN 67 127 446 271

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Once all assays have been received, assessed and reported, an update to the Fountain Head Mineral Resource will be completed, this is targeted for April.

Managing Director Comment

PNX Managing Director James Fox said: "The Company's assessment of the Fountain Head heap leach operation has to date not been hindered by the NT wet season, with excellent drilling progress being made. We look forward to proving the viability of the project over the coming months and targeting development from the end of the year. This will pave the way for the generation of early cashflow and should aid the development of the broader Hayes Creek Project."

Engineering and Process Design

Two diamond drill holes have been completed and will provide samples for ongoing metallurgical testwork that includes bottle rolls and column tests. Materials testing including Crusher Work Index and Unconfined Compressive Strength testing have been finalised with the results highlighting moderate strength ore, as expected.

Preliminary results have been used to establish the design criteria for crushing, heap leaching and gold recovery from the leachate. Draft capital and operating costs are expected during March with these to be assessed and incorporated into the economic study.

Government and Environmental Approvals

Studies to inform the EIS are ongoing and planned to be completed by April. The studies include hydrology, geochemistry, archaeology, flora and fauna and noise. The hydrological surface and groundwater modelling in particular will assist with pit dewatering design and a Mine Management Plan for the pit dewatering is expected to be submitted during March 2020.

Figure 1: Planned drilling at Fountain Head in relation to existing pit and resource (red outline shows current resource projected to surface) showing areas of priority and aim of drilling.

PNX Metals Limited | ABN 67 127 446 271

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Figure 2: Fountain Head drill plan showing completed hole traces in 2019 (black) and 2020 (blue), plus planned diamond holes (green) and deferred holes (red). Blue shadow shows existing pit outline with hashed outline showing approximate boundary of current 0.7g/t Au resource cut-off projected to surface.

Competent Person's Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Charles Nesbitt, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy (AusIMM). Mr Nesbitt has sufficient experience relevant to the style of mineralisation and the type of deposits under consideration and to the activity being undertaken to qualify 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 Nesbitt is a full- time contract Exploration Manager with PNX Metals Ltd and consents to the inclusion in this report of the matters based on his information in the form and context in which it appears

For further information please visit the Company's website www.pnxmetals.com.auor contact us:

James Fox

Managing Director & CEO

Telephone: [phone]

PNX Metals Limited | ABN 67 127 446 271

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Fountain Head background

The Fountain Head Project hosts a Mineral Resource estimate in mid-2019 for Fountain Head of 2.58Mt at 1.7g/t Au for 138,000 oz Au (Table 1) (reported in accordance with the JORC Code, 2012, see ASX release 11 July 2019 for full details including JORC tables).

Excellent gold recoveries with low reagent consumption were achieved from metallurgical testwork (see ASX release 7 November 2019) resulting in PNX accelerating studies and the approvals process for the development of a gold heap leach operation at Fountain Head.

Successful gold heap leach as a low-cost gold processing method may also lead to the development of other gold deposits in the region, many of which lie within PNX's project areas. Some of these deposits are currently considered "stranded" due to their modest grades and distance from existing processing infrastructure. PNX's longer-term aim is to evolve Fountain Head into a regional processing hub capable of monetising a pipeline of gold and base metals assets.

Fountain Head Resource Estimate

Independent mining consultants CSA Global Pty Ltd ("CSA Global") have estimated the Mineral Resource in accordance with the JORC Code1, which is summarised in Table 1.

Table 1: Fountain Head and Tally Ho Mineral Resources by JORC Classification as at 11 July 2019 estimated utilising a cutoff grade of >0.7 g/t Au which is consistent with the assumed open cut mining method (see PNX ASX release 11 July 2019).

	JORC Classification			Tonnage (Mt)			Au (g/t)			Ounces (Koz)
					Tally Ho
	Indicated	0.94		2.0		59
	Inferred		-			-		-
	Total	0.94		2.0		59
					Fountain Head
	Indicated	0.50		1.5		23
	Inferred	1.15		1.5		55
	Total	1.64		1.5		79
				Total Fountain Head + Tally Ho*
	Indicated	1.43		1.8		83
	Inferred	1.15		1.5		55
	Total	2.58		1.7		138

* Due to the effects of rounding, the total may not represent the sum of all components

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements referenced in this release continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcements.

1 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The JORC Code, 2012 Edition. Prepared by: The Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

PNX Metals Limited | ABN 67 127 446 271

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Fountain Head Drill Results Table

Table 2: PNX Drill hole assay summary Fountain Head Project. Significant results reported are those assaying at least 0.5 g/t Au over a 1m interval or greater.

	Hole ID			Type			Easting			Northing			RL			Dip			Azi			Total						From			To			Interval			Au (g/t)
															Depth
																											2.00		3.00		1.00		0.74
	FHRC119		RC	770,908.0		8,510,293.0		105.0		-90		0		70			and	30.00		35.00		5.00		0.86
									incl	30.00		31.00		1.00		2.14
																									and	53.00		54.00		1.00		1.39
	FHRC120			RC			770,965.0			8,510,291.0			105.4			-90			0			45									NSI
	FHRC121		RC	770,910.2		8,510,350.2		101.0		-90		0		30					1.00		2.00		1.00		3.98
	FHRC122		RC	770,925.0		8,510,340.0		101.0		-90		0		35					2.00		3.00		1.00		0.64
	FHRC123			RC			770,941.0			8,510,329.0			105.0			-90			0			40						1.00			3.00			2.00			0.81
	FHRC124		RC	770,956.1		8,510,311.5		105.0		-90		0		40					1.00		2.00		1.00		1.04
	FHRC125			RC			770,757.6			8,510,308.8			105.0			-90			0			35						12.00			13.00			1.00			0.92
																												25.00			26.00			1.00			0.55
	FHRC126		RC	770,724.6		8,510,362.8		105.0		-60		220		100					45.00		46.00		1.00		0.95
											48.00		49.00		1.00		0.51
																												11.00			13.00			2.00			14.57
	FHRC127			RC			770,818.4			8,510,300.0			105.0			-60			40			80			incl			11.00			12.00			1.00			26.86
																												21.00			22.00			1.00			4.47
																												26.00			27.00			1.00			3.19
																											16.00		18.00		2.00		0.66
	FHRC128		RC	770,805.5		8,510,288.1		105.0		-60		40		80			incl	16.00		17.00		1.00		0.90
																											23.00		24.00		1.00		0.94
																												44.00			45.00			1.00			3.98
																									and			48.00			49.00			1.00			0.69
	FHRC129			RC			770,762.0			8,510,315.0			105.0			-90			0			157			and			92.00			93.00			1.00			0.99
																									and			127.00			129.00			2.00			1.59
																									and			139.00			140.00			1.00			1.41
																									and			151.00			152.00			1.00			0.52
																											19.00		21.00		1.00		0.73
	FHRC130		RC	770,820.8		8,510,275.2		105.6		-60		40		91			and	40.00		41.00		1.00		0.88
									and	51.00		52.00		1.00		0.77
																									and	80.00		81.00		1.00		0.77
																												8.00			9.00			1.00			0.53
																									and			17.00			18.00			1.00			1.08
	FHRC131			RC			770,807.9			8,510,259.9			105.5			-60			40			90			and			50.00			52.00			2.00			0.86
																									and			55.00			56.00			1.00			0.57
																									and			79.00			80.00			1.00			0.57
																											1.00		2.00		1.00		0.56
	FHRC132		RC	770,849.0		8,510,277.6		105.7		-60		40		85			and	14.00		15.00		1.00		0.50
									and	21.00		24.00		3.00		3.82
																									incl	22.00		23.00		1.00		7.66
PNX Metals Limited | ABN 67 127 446 271																									5

																									and	45.00		46.00		1.00		0.88
																									and	54.00		55.00		1.00		0.96
																												24.00			27.00			3.00			0.59
																									incl			26.00			27.00			1.00			1.00
	FHRC133			RC			770,836.1			8,510,262.3			105.6			-60			40			97			and			42.00			43.00			1.00			1.13
																	and			53.00			54.00			1.00			14.24
																									and			67.00			68.00			1.00			0.99
																									and			77.00			78.00			1.00			0.58
																											6.00		7.00		1.00		1.04
																									and	35.00		36.00		1.00		1.42
																									and	47.00		49.00		2.00		1.28
	FHRC134		RC	770,823.2		8,510,247.0		105.5		-60		40		115			incl	47.00		48.00		1.00		1.90
									and	62.00		63.00		1.00		2.56
																									and	69.00		70.00		1.00		1.79
																									and	98.00		100.00		2.00		0.82
																									and	106.00		107.00		1.00		0.73
																												45.00			48.00			3.00			1.72
	FHRC135			RC			770,879.2			8,510,297.9			105.0			-90			0			55			incl			45.00			46.00			1.00			4.36
																									and			52.00			53.00			1.00			1.00
																											5.00		6.00		1.00		0.87
																									and	38.00		40.00		2.00		1.05
	FHRC136		RC	770,838.5		8,510,234.1		105.5		-60		40		127			and	44.00		47.00		3.00		2.01
									and	50.00		52.00		2.00		0.81
																									and	85.00		87.00		2.00		0.64
																									and	112.00		113.00		1.00		0.84
																												5.00			6.00			1.00			0.77
																									and			48.00			52.00			4.00			5.95
	FHRC137			RC			770,876.3			8,510,247.9			105.8			-60			40			103			incl			48.00			49.00			1.00			20.55
																									and			94.00			96.00			2.00			3.56
																									incl			94.00			95.00			1.00			6.55
																											5.00		6.00		1.00		0.92
																									and	28.00		29.00		1.00		1.38
	FHRC138		RC	770,866.7		8,510,236.5		105.8		-60		40		115			and	64.00		65.00		1.00		0.62
									and	76.00		77.00		1.00		0.54
																									and	89.00		90.00		1.00		0.57
																									and	109.00		111.00		2.00		1.40
																												38.00			39.00			1.00			0.57
																									and			74.00			76.00			2.00			0.85
	FHRC139			RC			770,853.8			8,510,221.2			105.7			-60			40			110			and			83.00			84.00			1.00			0.81
																									and			100.00			101.00			1.00			0.76
																									and			107.00			108.00			1.00			2.83
																											2.00		3.00		1.00		4.03
																									and	45.00		46.00		1.00		1.07
	FHRC140		RC	770,890.8		8,510,203.0		105.9		-60		40		133			and	55.00		56.00		1.00		0.83
																									and	77.00		79.00		2.00		1.43
																									and	88.00		89.00		1.00		4.04
PNX Metals Limited | ABN 67 127 446 271																									6

								and	93.00	94.00	1.00	0.53
								and	96.00	97.00	1.00	0.50
									8.00	11.00	3.00	2.25
								incl	11.00	12.00	1.00	5.29
								and	53.00	55.00	2.00	0.80
FHRC141	RC	770,877.9	8,510,187.8	105.8	-60	40	151	and	89.00	90.00	1.00	2.25
								and	92.00	93.00	1.00	0.97
								and	116.00	120.00	4.00	0.53
								and	131.00	132.00	1.00	0.88
FHRC142	RC	770,924.7	8,510,305.3	104.0	-90	0	45		16.00	17.00	1.00	1.86
									104.00	105.00	1.00	7.60
FHRC143	RC	771,211.0	8,509,826.0	108.3	-80	40	160	and	114.00	121.00	7.00	0.71
								incl	119.00	121.00	2.00	1.60
								and	127.00	128.00	1.00	0.73
									2.00	3.00	1.00	0.69
FHRC144	RC	771,229.0	8,509,860.0	107.3	-60	310	140	and	104.00	105.00	1.00	0.83
								and	108.00	109.00	1.00	1.80
FHRC145	RC	771,027.8	8,510,412.1	97.0	-90	0	70		34.00	37.00	3.00	8.54
								incl	34.00	35.00	1.00	23.72
FHRC146	RC	770,986.7	8,510,285.7	105.0	-90	0	55			NSI
FHRC147	RC	771,008.5	8,510,280.5	106.5	-90	0	45			NSI
FHRC148	RC	770,995.6	8,510,265.2	106.1	-90	0	50		0.00	1.00	1.00	2.06
								and	32.00	33.00	1.00	1.87

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JORC Code, 2012 Edition - Table 1

Section 1 Sampling Techniques and Data

	Criteria			JORC Code explanation		Commentary
	Sampling		• Nature and quality of sampling (e.g. cut channels, random chips, or		• Samples are derived from Reverse Circulation (RC) chips which were
	techniques		specific specialised industry standard measurement tools appropriate		cone-split for sampling
				to the minerals under investigation, such as downhole gamma		• All the RC chips used have been geologically logged by the onsite
				sondes, or handheld XRF instruments, etc). These examples should		geologist
				not be taken as limiting the broad meaning of sampling.		• Sampling intervals are at 1m intervals for RC chips. Samples were
				• Include reference to measures taken to ensure sample representivity		either submitted in 1m intervals
				and the appropriate calibration of any measurement tools or systems		• Sample weights were typically 2-5 kg
				used.		• Magnetic susceptibility measurements were taken using KT-10 meter
				• Aspects of the determination of mineralisation that are Material to the		• Field portable XRF measurements taken for 34 elements (Ca, Ti, V,
				Public Report.		Cr, Mn, Fe, Co, Ni, Cu, Zn, As, Rb, Sr, Zr, Mo, Ag, Cd, Sn, Sb, W, Hg,
				• In cases where 'industry standard' work has been done this would be		Pb, Bi, Th, U, Pd, S, Ba, K, Cs, Sc, Se, Te, and Au) using an Niton
				relatively simple (e.g. 'reverse circulation drilling was used to obtain 1		XL3T 950 device
				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.
	Drilling		• Drill type (eg core, reverse circulation, open-hole hammer, rotary air		• All RC drilling was from surface with 5.25" bit with a face sampling
	techniques		blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple		hammer. Drilling was carried out by United Drilling Services Pty Ltd,
				or standard tube, depth of diamond tails, face-sampling bit or other		Western Australia using a truck mounted Modern Sandvik DE840
				type, whether core is oriented and if so, by what method, etc).		Multipurpose Drill Rig
						• A Relfex downhole survey instrument was used to take single shot
						positional surveys approximately every 30m downhole
	Drill sample		• Method of recording and assessing core and chip sample recoveries		• Sample recovery was estimated visually by inspecting the size of the
	recovery		and results assessed.		sample collected, and recorded in the geological log at 1m intervals.
				• Measures taken to maximise sample recovery and ensure		Recovery of insitu regolith and fresh rock was excellent
				representative nature of the samples.		• No relationship has yet been established between sample recovery
				• Whether a relationship exists between sample recovery and grade		and grade. The vast majority of RC samples were dry, but when
				and whether sample bias may have occurred due to preferential		samples became wet, there was unavoidable loss of fines (typically 5-
				loss/gain of fine/coarse material.		10% of the sample weight). This has the possibility of introducing a
						sample bias. Geological logs include the wet or dry nature of the
						sample
			8

	Criteria			JORC Code explanation		Commentary
	Logging		• Whether core and chip samples have been geologically and		• All RC chips have been geologically logged by the onsite geologist at
				geotechnically logged to a level of detail to support appropriate		1m intervals and chip trays have been retained and photographed
				Mineral Resource estimation, mining studies and metallurgical		• Log fields include lithology, colour, grainsize, texture, veining,
				studies.
					sulphide mineralisation, alteration, strength, recovery and sample
				• Whether logging is qualitative or quantitative in nature. Core (or
					moisture
				costean, channel, etc) photography.
					• Logs have been aided by the use of magnetic susceptibility and
				• The total length and percentage of the relevant intersections logged.
					portable XRF measurements on each metre sample
	Sub-sampling		• If core, whether cut or sawn and whether quarter, half or all core		• All samples were cone split. The splitter was blown with compressor
	techniques		taken.		air and cleaned at the end of each rod (6 m) to reduce sample
	and sample		• If non-core, whether riffled, tube sampled, rotary split, etc and		contamination
	preparation		whether sampled wet or dry.		• Duplicate field samples were taken each 25th sample by using a dual
				• For all sample types, the nature, quality and appropriateness of the		outlet on the cone splitter to check representivity of sample
				sample preparation technique.		• Individual samples are placed in individual sample bags and clearly
				• Quality control procedures adopted for all sub-sampling stages to		identified prior to submission to the laboratory for assay
				maximise representivity of samples.		• The sample sizes are typical for the RC drilling method but caution is
				• Measures taken to ensure that the sampling is representative of the in		warranted given reports of coarse gold during historical mining
				situ material collected, including for instance results for field		operations
				duplicate/second-half sampling.
				• Whether sample sizes are appropriate to the grain size of the material
				being sampled.
	Quality of		• The nature, quality and appropriateness of the assaying and		• Original RC samples were submitted to Intertek NTEL in Alice
	assay data		laboratory procedures used and whether the technique is considered		Springs, Northern Territory for sample preparation before being sent
	and		partial or total.		to Perth for Assay.
	laboratory		• For geophysical tools, spectrometers, handheld XRF instruments, etc,		• After crushing and pulverizing to - 75 microns, each sample is
	tests		the parameters used in determining the analysis including instrument		homogenized within the bowl, and a 200g sub-sample of the
				make and model, reading times, calibrations factors applied and their		pulverized sample is submitted for conventional fire assay for gold
				derivation, etc.		(FA50)
				• Nature of quality control procedures adopted (eg standards, blanks,		• PNX submitted certified reference materials and duplicates samples
				duplicates, external laboratory checks) and whether acceptable levels		every 25th sample and also submitted blank quartz material to check
				of accuracy (ie lack of bias) and precision have been established.		laboratory analytical and sample preparation quality at a rate of 3
						blanks per 100
						• Intertek NTEL have internal QAQC procedures, including certified
						reference materials, duplicates and blanks, results of which are
						reviewed by Intertek NTEL prior to reporting to PNX
						• Visual assessment of the standards, blanks and duplicates shows
						that a high degree of confidence can be placed in the accuracy and
			9

	Criteria	JORC Code explanation	Commentary
			precision of the assay data
	Verification of	• The verification of significant intersections by either independent or	• No specific twinned holes have been carried out as yet
	sampling and	alternative company personnel.	• No external laboratory assays have been carried out
	assaying	• The use of twinned holes.	• All logging has been carried out using standardised logging codes to
		• Documentation of primary data, data entry procedures, data	professional standards. All geological, geotechnical and sampling
		verification, data storage (physical and electronic) protocols.	information has been entered into a digital database which has been
		• Discuss any adjustment to assay data.	validated for sample overlaps and missing data
			• All hard copies of information are stored in a secure compound at
			site. Digital copies are held on site and at PNX's Adelaide office on a
			backed-up server
			• No adjustments to assays have been made. Where gold assay data
			has been repeated by the lab, the average value has been reported in
			the significant intersection calculations

Location of	• Accuracy and quality of surveys used to locate drill holes (collar and
data points		down-hole surveys), trenches, mine workings and other locations
	•	used in Mineral Resource estimation.
	Specification of the grid system used.
	•	Quality and adequacy of topographic control.

• Downhole surveys have been collected by at approximate 30m intervals downhole and manually adjusted where magnetic interference is encountered
• Drill collars have been surveyed using a differential global positioning system (DGPS), to a nominal +/- 20 cm accuracy in the XY direction. Downhole surveys were completed using a Reflex SS single shot camera
• Drill collar coordinates are typically recorded in GDA94 (MGA Zone 52), then transformed to Fountain Head Local Grid via Datamine Discover software, with +1000 m added to the RL value
• A hydrographic survey was conducted in January 2019 to obtain an accurate pit floor surface of the water-filled conjoined Fountain Head and Tally Ho open pits. Measurements were made using a remotely controlled hydrographic craft fitted with an RTK GPS and Ceducer sonar system. The remote craft recorded data over a 5 m grid plan of the pit extents
• A Terra 3D aerial drone was flown over the Project area in July 2014, producing a high quality DTM surface and a composited aerial photograph using a CanonIXUS127HS camera. Some vegetation artefacts can be seen
• The final DTM used in the resource model is a version of the Terra 3D DTM that has been updated with the 2019 hydrographic survey DTM, and then reduced in size to be manageable within the Datamine software

10

Criteria	JORC Code explanation	Commentary

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.

• At Fountain Head, the data spacing is irregular, although much of the drilling is along north-south lines using the Fountain Head Local Grid, dipping at -60°, towards azimuths of either 000° (dipping northward) or 180° (dipping southward). Drill line spacing is typically 20-40 m. On section, holes are spaced 5-30 m apart, with an average of approximately 15 m. There is a rapid decrease in drill data density outside the current resource area, lacking holes north and south, as well as at depth in the east and west.
• At Fountain Head East, line spacing is typically 20 m. Holes are spaced tightly along drill lines at around 5 m apart, in order to define the central mineralised shear. In this area, no drilling has tested rocks more than 125 m from surface.
• At Fountain Head West, drill line spacing is irregular and lines are either 10, 20 or 40 m apart. The areas with 40 m spacing would benefit from infill drilling, particularly in the far west of the resource.
• At Tally Ho, line spacing is typically 20 m, although there are at least 4 lines within the Tally Ho orebody with around 30 m spacing. Around 13 holes have reached depths of over 200 m below ground surface, down to around 350 m, targeting deep extensions to the orebody.
• The sample spacing is sufficient to establish the grade continuity of mineralised zones
• RC samples are collected at routine 1 metre downhole intervals, which is appropriate for RC drilling and for the thickness of the known mineralisation. The 1m samples, for intervals where mineralisation was interpreted to be likely, were submitted for assay.
• Four metre composite samples were taken over intervals where the drill hole was not expected to intersect mineralisation. The composite samples were collected by spear sampling the 1m bulk RC samples and combining the spear samples into composite samples over the four metre interval. Where the assays suggested that significant mineralisation may exist within the four metre composite sample, the 1m samples collected from the drill rig mounted cone splitter were then submitted for assay.

Orientation of	• Whether the orientation of sampling achieves unbiased sampling of	• The drilling has been undertaken on sections orthogonal to the strike
data in	possible structures and the extent to which this is known, considering	of the mineralisation. Given the folded nature of the stratigraphy at
relation to	the deposit type.	Fountain Head, and often conformable mineralisation, an effort has
geological	• If the relationship between the drilling orientation and the orientation	been made to drill orthogonal to the stratigraphy. This means holes
structure	of key mineralised structures is considered to have introduced a	on each section are often drilled at different orientations. For the most
		part, holes are drilled at a high angle to the mineralisation. Some
	11

	Criteria		JORC Code explanation		Commentary
			sampling bias, this should be assessed and reported if material.		holes, however, have been drilled down dip of the stratigraphy, and
					sub-parallel to the mineralisation. Holes at Tally Ho and Fountain
					Head East, where the mineralisation is more shear hosted and linear,
					have been drilled at a high angle to the mineralisation. Most drill holes
					are oriented to intersect mineralisation close to perpendicular to the
					interpreted orientation of the main zone of mineralisation.
					• The relationship between the drilling orientation and the orientation of
					key mineralised structures is not considered to have introduced a
					sampling bias.
	Sample	• The measures taken to ensure sample security.		• Logging, and sampling has been carried out by PNX personnel who
	security			are always on-site during drilling, and samples are submitted to the
					laboratory by the same people
					• No third parties have been allowed access to the samples
	Audits or	• The results of any audits or reviews of sampling techniques and data.		• No audits or reviews have been carried out at this point
	reviews			• Visual comparison of the assay results with the field portable XRF
					shows an acceptable correlation with lab results

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

	Criteria			JORC Code explanation		Commentary
	Mineral		• Type, reference name/number, location and ownership including		• The Project comprises four granted Mineral Leases (MLs) totaling
	tenement and		agreements or material issues with third parties such as joint		879.67 hectares, all 100% owned by PNX. These include MLN4,
	land tenure		ventures, partnerships, overriding royalties, native title interests,		MLN1020, MLN1034 and ML31124
	status		historical sites, wilderness or national park and environmental		• All mineral titles are situated within Perpetual Pastoral Lease 1111,
				settings.		NT Portion 695, known as Ban Ban Springs Station
				• The security of the tenure held at the time of reporting along with any		• PNX has entered into an arrangement with the pastoral lease
				known impediments to obtaining a licence to operate in the area.		owners, which governs land access and other obligations for each
						party. No other landowner access agreements are in place
						• Native Title has been extinguished over the Mineral Leases, and
						hence, Native Title issues will not affect the development and
						operation of these project tenements
						• The Mineral Leases are in good standing and no known impediments
						exist
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Criteria	JORC Code explanation	Commentary

Exploration	• Acknowledgment and appraisal of exploration by other parties.
done by other
parties

• The Fountain Head and Tally Ho deposits have been subject to sporadic exploration over a long period of time. Drilling has taken place when the project has been owned by the following companies:
  o PNX Metals (2018)
  o GBS Gold International (2006 to 2008) o Northern Gold (2004 to 2006)
  o Dominion Mining Limited (DML) (1993 to 1994) o Zapopan (1989 to 1991)
  o NT Gold Mining (NTGM) (1988 to 1989) o Destiny Prospecting (1987 to 1988)
  o Australian Coal and Gold (1982).
• The mineralisation at Fountain Head and Tally Ho occurs within the upper units of the Mount Bonnie Formation, the uppermost division of the South Alligator Group, open folded sequence of mainly pelitic and psammitic Lower Proterozoic sediments with interlayered tuff units. These cyclic siltstone, mudstone and greywacke packages have been metamorphosed to greenschist facies.
• In the area, stratigraphy is folded along northwest-southeast axes that plunge shallowly to the southeast. The southeast-striking anticline has variable limb dips and the axis is faulted by northwest- southeast trending faults. The sequence has been intruded by pre- orogenic dolerite sills of the Zamu Dolerite and several late syn- orogenic to post-orogenic Proterozoic granitoids.
• Mineralisation at Fountain Head occurs in veins as either conformable anticlinal lodes (with flanking mineralisation) or subvertical "ladder vein" styled mineralisation associated with brittle failure sub-parallel to the fold axis, and is found within mudstones, greywackes and phyllite units. Sheeted quartz vein stock-works occur mainly in the axial zone with veins predominantly dipping northeast, and some saddle reefs occur in the axial zone).
• The Tally Ho deposit is located just to the south of Fountain Head deposit and sits on the western limb of the Fountain Head anticline. The Tally Ho deposit strikes sub-parallel to the Fountain Head deposit and consists of a linear zone of mineralisation striking northwest-southeast and plunging to the southeast. The quartz veins are 1-20 cm thick and host gold with a minor pyrite-arsenopyrite association.
• Previous mining at Fountain Head has consisted of small-scale mining of quartz reefs and alluvials from 1886 sporadically up to

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	Criteria			JORC Code explanation		Commentary
						1989. In 1995, Dominion Mining Ltd carried out trial open pit mining at
						Fountain Head. The Tally Ho lodes were discovered in 2006 and the
						deposits were mined to approximately 50m below surface by GBS in
						2007-2008, producing approximately 1.13Mt @ 1.65 g/t for 60,200oz
						• See ASX release 11 July 2019 where PNX published the results of a
						new mineral resource estimate
	Geology		• Deposit type, geological setting and style of mineralisation.		• Mineralisation at Fountain Head occurs as conformable and
						crosscutting lodes within mudstones, greywackes and phyllite units of
						a NW /SE striking anticline that plunges to the SE. The lithological
						units are believed to belong to the Mount Bonnie Formation, within
						the South Alligator Group. Gold mineralisation is hosted by sub
						vertical shear related stock-works, fracture zones in grey-wackes and
						saddle reefs at lithological contacts. Most of the resource is in the
						hinge zone of the anticline with gold grade rapidly tapering off down
						dip on the limbs
	Drill hole		• A summary of all information material to the understanding of the		• Refer to table and diagram in main announcement for drill summary
	Information		exploration results including a tabulation of the following information		details
				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.
	Data		• In reporting Exploration Results, weighting averaging techniques,		• Reported results are interval length weighted
	aggregation		maximum and/or minimum grade truncations (eg cutting of high		• No high cut-off grades have been applied
	methods		grades) and cut-off grades are usually Material and should be stated.		• Reported intersections are classified as significant if they occur at a
				• Where aggregate intercepts incorporate short lengths of high grade
					minimum of 0.5 g/t Au, although mining cut-offs may be significantly
				results and longer lengths of low grade results, the procedure used
					lower or higher, depending on the depth of the intersection
				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.
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	Criteria		JORC Code explanation		Commentary
	Relationship	• These relationships are particularly important in the reporting of		• All significant intersections are quote as downhole widths
	between	Exploration Results.		• Due to the folded nature of some mineralised zones, and unknown
	mineralisation	• If the geometry of the mineralisation with respect to the drill hole		geometry of extensions to mineralisation, there is no clear relationship
	widths and	angle is known, its nature should be reported.		yet between intersected width and true width
	intercept	• If it is not known and only the down hole lengths are reported, there
	lengths	should be a clear statement to this effect (e.g. 'down hole length, true
			width not known').
	Diagrams	• Appropriate maps and sections (with scales) and tabulations of		• Refer to the main body of this announcement
			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.
	Balanced	• Where comprehensive reporting of all Exploration Results is not		• All matters of importance have been included
	reporting	practicable, representative reporting of both low and high grades
			and/or widths should be practiced to avoid misleading reporting of
			Exploration Results.
	Other	• Other exploration data, if meaningful and material, should be reported		• All relevant information has been included
	substantive	including (but not limited to): geological observations; geophysical
	exploration	survey results; geochemical survey results; bulk samples - size and
	data	method of treatment; metallurgical test results; bulk density,
			groundwater, geotechnical and rock characteristics; potential
			deleterious or contaminating substances.
	Further work	• The nature and scale of planned further work (e.g. tests for lateral		• Further drill work will be focused on testing for dip extensions and
			extensions or depth extensions or large-scalestep-out drilling).		strike extensions and to confirm grade and geological continuity
			• Diagrams clearly highlighting the areas of possible extensions,		implied by the current block model
			including the main geological interpretations and future drilling areas,		• Further metallurgical work including materials handling and column
			provided this information is not commercially sensitive.		tests will be conducted and incorporated in the assessment of
					Fountain Head heap leaching

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