Beacon Minerals : Jaurdi Gold Project - Update

ASX ANNOUNCEMENT

5 April 2017

JAURDI GOLD PROJECT: UPDATE

• Beacon have executed the option to purchase the Jaurdi Gold Project from Fenton and Martin Mining Developments Pty Ltd (the Vendor) on the 30 March 2017

• The Vendor completed an initial toll milling campaign of the Lost Dog ore achieving high gold recovery

• Interpretation of gravity survey data suggests three "walk up" drill targets to extend the Jaurdi palaeochannel system

• Six‐hole diamond drilling programme completed at Lost Dog

• Mineral Resource downgrade

  Jaurdi Mining Lease Option and Acquisition

  On 30 March 2017 Beacon Minerals Limited ("Beacon" or the "Company") and the Vendor executed the documentation for the purchase of the mining lease ML16/529 and will now apply to the Minister of Mines for the tenement transfer approval.

  The following summarises the work completed by Beacon during the 110‐day option period:

  • Drilled 186 reverse circulation holes totalling 5,337 metres in two drilling campaigns;

    o Included in this was a close spaced grade control program in the Western Arm

  • Surveyed and collated all drill holes including relevant historical holes drilled by previous explorers.

  • Drilled 6 PQ diamond core holes for density, moisture and metallurgical compositing.

  • Undertaken a ground gravity survey over an area including the known mineralisation.

  • Completed conventional bottle rolls on a selected suite of samples from the RC drilling.

  • Observed the trial mining by the Vendor of a parcel of 9,400 tonnes from the Western Arm of the Lost Dog Mineral Resource.

  • Observed the processing of part of the 9,400 tonne parcel through the FMR owned Greenfields conventional processing plant at Coolgardie.

  • Reviewed prospective areas in the general vicinity and applied for an exploration licence of approximately 10,000 Hectares east of the M16/529.

The exploration work done during the option period indicates that there are no major impediments to Beacon establishing a mining operation at the Lost Dog at current gold prices either by:

1. Processing ore through a conventional gold treatment plant when the physical characteristics of the ore are suitable; and/or

2. Establishing a site processing route designed to handle the clay portion of the ore and blending of the more competent crushed siltstone for subsequent CIL extraction of the gold

Milling Campaign Results

Under the terms of the option agreement with the Vendor a parcel of 9,400 metric wet tonnes was mined and carted to the FMR owned Greenfields Mill. A total of 4,265 dry metric tonnes of the ore was processed until milling was halted due to moisture in the ore causing handling issues in the crushing process. The milling and CIP processing of the ore has provided Beacon with valuable processing information in terms of future treatment requirements. The assayed ore grades of the parcel and the recovery achieved (91.8%) was in line with Beacon's expectations. A total of 15.897 kg's of fine gold was recovered during the processing of the ore. A joint mining campaign between Beacon and the Vendors over the close spaced drilled area in the Western Arm of the deposit is being assessed for the completion of the balance of the Vendors ore entitlement.

Gravity Programme

The trial gravity survey was completed in March 2017 and the data collected has been evaluated by Southern Geoscience. The orientation survey consisted of 50 metre spaced N‐S lines; with stations positioned on 25 metre centres along these lines. The survey has produced three "walk up" drill targets to test for palaeochannel style gold mineralisation. The diagram below is a Bouguer Anomaly BA1VD (i.e. BA of one vertical derivative) where the "cooler" colours represent a lower density response and the hotter colours represent a higher denser response. The palaeochannel is a lower density feature than the surrounding bedrock.

It can be clearly seen there are three "lower density", undrilled areas defined by the BA1VD image which potentially represents the continuation of the palaeochannel along strike. These three zones represent "walk up" drill targets for Beacon. The Company has engaged Ausdrill Kalgoorlie to mobilise to Jaurdi this Monday, 10 April 2017 to commence drilling the three targets identified.

Figure 1: First derivative Bouguer Anomaly images showing the lower density zones which represent potential mineralised extensions to the Lost Dog ore system

Figure 2: Locality diagram of M16/529 showing outline of trial gravity survey

Diamond Drilling

A six hole PQ3 diamond drill core programme was completed at the Lost Dog prospect for the purpose of undertaking geo‐metallurgical test work. A suite of whole core samples was submitted to Bureau Veritas in Kalgoorlie for SG analysis and moisture determination. The set of samples consisted of 20 core samples of the four basic rock types within the palaeochannel; siltstone unit, siltstone‐clay unit, clay‐siltstone unit and a clay unit.

The previous estimate of the insitu dry density from open pit samples averaged 2.2 g/cm3. The results from this round of test work downgraded this estimate significantly due to the high inherent moisture content measured during the laboratory testwork. Table 1 below shows the extent of the variability in each of the four identified rock types. These new insitu dry SG determinations have been used to update the Mineral Resource.

Figure 3 A vuggy and breccia‐textured siltstone of JDD004 (JDSG37: 14.73 - 15.00 metres).

The sample had a wet SG of 2.18 g/cm3.

Mineral Resource Update

Following completion of the diamond core drilling program, Beacon wishes to update shareholders with a Mineral Resource update of the previously released JORC 2012 Lost Dog Maiden Mineral Resource. Upon completion of a specific‐gravity (SG) and moisture analysis of the diamond core, extremely high moisture content within several mineralised lithological units have resulted in the downgrade of the dry SG value used to calculate insitu ore tonnages.

Table 1: Lost Dog Mineral Resource estimate by classification (Au> 0.5 g/t)

Classification	Rock Type	Volume	Tonnes	Grade	Ounces	Moisture	Insitu Density‐Dry
		m³	t	g/t Au	Oz	%	t/m³
MEASURED	Siltstone	1,361	3,267	1.19	125	2%	2.4
	Silt/Clay	2,539	3,555	1.43	163	25%	1.4
	Clay/Silt	10,822	12,986	1.45	605	31%	1.2
	Claystone	9,314	10,245	2.91	959	35%	1.1
Sub Total		24,036	30,053	1.92	1,852	29%	1.3
INDICATED	Siltstone	460,522	1,105,254	1.53	54,368	2%	2.4
	Silt/Clay	421,332	589,865	2.02	38,308	25%	1.4
	Clay/Silt	244,537	293,445	1.91	18,020	31%	1.2
	Claystone	48,755	53,630	1.98	3,414	35%	1.1
Sub Total		1,175,146	2,042,194	1.74	114,110	14%	1.7
INFERRED	Siltstone	29,395	70,547	0.9	2,041	2%	2.4
	Silt/Clay	21,069	29,497	1.06	1,005	25%	1.4
	Clay/Silt	714	857	1.31	36	31%	1.2
	Claystone	0	0	0	0	35%	1.1
Sub Total		51,178	100,901	0.95	3,082	9%	2.0
Grand Total		1,250,360	2,173,148	1.70	119,044	14%	1.7