PNX Metals : High-grade Zinc, Gold, Silver at Iron Blow

	Level 1, 135 Fullarton Road
	Rose Park, SA 5067
	Australia
ASX Announcement	Telephone [phone]
Facsimile [phone]
27 June 2019	[e-mail]
	www.pnxmetals.com.au

High-grade zinc, gold, silver assays continue at Iron Blow - Hayes Creek project

• Iron Blow assays received, with thick zones of massive sulphide mineralisation intersected within the eastern and western lodes, including:

1. 85.22m at 11.87 % zinc, 4.19 g/t gold, 309 g/t silver, 1.94 % lead, 0.49 % copper from 115.9 m in IBDH061 (eastern lode)

• 1. 48.07m at 5.67 % zinc, 2.45 g/t gold, and 90.6 g/t silver from 230.3m in IBDH063 (western lode)
• Near-surfaceoxide gold and silver mineralisation intersected higher up-dip than previously tested, and outside of the current mining optimisation:
• 1. 21.42m at 1.98 g/t gold and 161 g/t silver from 2.3m in IBDH062 (western lode)
• Definitive Feasibility Study (DFS) on schedule, with final metallurgical flotation test work for offtake and marketing purposes now underway
• Positive environmental referral decision received for Hayes Creek Project

PNX Metals Limited (ASX: PNX) ("PNX") is pleased to announce that all assay results have been received from diamond drilling at the Iron Blow VMS deposit. The Iron Blow and Mt Bonnie VMS deposits, along with the Fountain Head gold prospect collectively form the Company's Hayes Creek zinc-gold-silver project ("Hayes Creek") in the Pine Creek region of the Northern Territory.

Three diamond drill holes were drilled down-dip to the mineralisation for approximately 650 metres at Iron Blow (Figure 1) with thick intervals of massive sulphide mineralisation intersected in both the eastern and western lodes further confirming the geological model.

The purpose of the drilling was to obtain:

• Representative samples of the eastern and western massive sulphide lodes to finalise DFS level metallurgical flotation test work for offtake and marketing purposes; and
• Additional geotechnical information and assay data for stope design and scheduling of the underground development.

Managing Director Comment

PNX Managing Director James Fox said: "We are very pleased to have commenced (locked-cycle) metallurgical test work on Iron Blow core. This is critical path work for the company at present as it supports marketing and offtake discussions and sets the final design parameters for the proposed process plant. We are also encouraged to see high-grade gold contained within predominantly oxide mineralisation at surface and the thick, massive sulphide intervals intersected by drilling are consistent with the geological model adding confidence to the Mineral Resource. The DFS is on schedule and continuing to demonstrate that Hayes Creek is a technically,

environmentally and financially viable project."

PNX Metals Limited | ABN 67 127 446 271

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Figure 1: Iron Blow drill collar plan on aerial photograph with eastern lode (blue) and western lode (green) representing the outline of the existing resource projected to surface. Holes reported in this announcement are shown as yellow drill traces.

Discussion

Drill hole IBHD061 intersected the eastern hanging-wall lode which is defined by its high grade zinc-gold-silver mineralisation, including 85.22m at 11.87 % zinc, 4.19 g/t gold, 309 g/t silver, 1.94 % lead, 0.49 % copper from 64.2m, with holes IBHD062 and IBDH063 intersecting the broader western footwall lode with its multiple parallel zones of massive sulphide mineralisation.

IBDH062 intersected the western lode higher up-dipthan previously tested, and returned a thick interval of gold and silver rich oxide mineralisation within a few metres of the surface; 21.42m at 1.98 g/t gold and 161 g/t silver from 2.3m. The full implications of these results are yet to be considered.

Grades from drilling within the massive sulphides are excellent and include spectacular silver mineralisation assaying as high as 1,005 g/t silver (>32 ounces/tonne) over a five-metreinterval from 195.5m in IBDH061. Individual gold and zinc assays are also impressive with gold grading 7.43 g/t and zinc 21.3 % over that same interval in IBHD061.

Locked-cycle metallurgical test work has re-commenced, with representative samples from 12 of 88 individual planned stopes obtained during this phase of drilling (Figures 2 and 3). Of the 88 individually modelled stopes 42 are located in the Eastern lode and represent 43 % of the tonnes for 55 % of the contained zinc, 78 % of the silver and 52 % of the gold. This phase of the test work program is expected to take up to four months to complete.

PNX Metals Limited | ABN 67 127 446 271

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Figure 2: Recent Iron Blow drill holes with underground stope design and average zinc grades

PNX Metals Limited | ABN 67 127 446 271

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Figure 3: Recent Iron Blow drill holes with underground stope design and average gold grades

Hayes Creek DFS update

The Company is well-funded to continue the Hayes Creek development having recently completed a fully- underwritten rights issue to raise $5.48 million before costs (ASX release 15 May 2019).

The DFS on the Hayes Creek Project continues on schedule, following the successful completion of a Pre- Feasibility Study (PFS) in July 2017 which confirmed Hayes Creek to be a promising future low-cost, high margin zinc and precious metal mine that could create significant value for the Company's shareholders. The DFS is expected to provide increased confidence in all aspects of the Hayes Creek Project as well as investigate opportunities to improve mine life and overall project economics thereby increasing the prospect of favourable development finance terms and structure.

The "future low-cost" potential of the project is greatly influenced by near-surface mineralisation at Mt Bonnie which is planned to accessed via an open-pit and be extracted before the commencement of underground mining at Iron Blow - with Mt Bonnie funding underground development and thus reducing the up-front capital required. New near-surface gold/silver mineralisation intersected at Iron Blow has the potential to augment this strategy and will be assessed.

The Project comprises the Mt Bonnie (open-cut) and Iron Blow (underground) zinc-gold-silver deposits, and the Fountain Head gold prospect, located less than 3km apart on wholly owned granted Mineral Leases within the Pine Creek region of the Northern Territory, 170km south of Darwin (Figure 4). The leases are located in a favourable mining jurisdiction where the development scenario considers utilising existing infrastructure that

PNX Metals Limited | ABN 67 127 446 271

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includes rail, road, high voltage power lines and water, further enhancing project fundamentals and lowering development risks.

Environmental Approvals

In February 2019, the Company submitted a referral regarding the Hayes Creek development under the Australian Government Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). The Company has received notice from a delegate of the Australian Government Minister for Environment and Energy determining that the Hayes Creek development is not considered a controlled action and does not require further assessment and approval under the EPBC Act. This is excellent news as the Project environmental approvals will now be handled solely by the NT Environmental Protection Authority.

Figure 4: NT Project locations

Competent Person's Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Bradley Ermel, a Competent Person who is a Member of the Australian Institute of geoscientists (AIG)). Mr Ermel 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 Ermel is a full-time employee of 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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