AusQuest Limited advised that results received to date from the recently completed diamond drilling program at the Hamilton Copper Project in North-West Queensland have upgraded the Hamilton North prospect, where a moderate-to-strong off- hole EM response has been identified close to drill-hole HMDDH018 - highlighting the potential for a sulphide body within the mineralised BIF sequence. The Hamilton Project is under the Strategic Alliance Agreement (SAA) with a wholly-owned subsidiary of South32. A total of three diamond drill holes for 2,045m (two at Hamilton North and one at Hamilton South) were completed to test two distinct gravity targets that were closely associated with mineralised banded iron formation (BIF) sequences and iron-calcium alteration (skarns) intersected by earlier drilling.

Assay results for two of the three drill-holes (HMDDH016 & 017) have been received with assays from the third hole expected in early August. At Hamilton North, HMDDH016 intersected a thick zone of anomalous copper (75m @ 490ppm Cu) associated with high iron values (~20% Fe) from 422m, plus several narrower intervals (7m to ~36m) of similar Fe and Cu anomalism further down the hole, increasing the size of the mineralised footprint. Proterozoic basement in HMDDH016 contains metasediments and amphibolites, which become more carbonate altered down hole.

Mafic rocks containing magnetite and BIF units are more common below 422m and are associated with the anomalous copper values. HMDDH018, which is located ~200m to the north of hole HMDDH016, appears to have extended the mineralisation footprint but assay results for this hole are still pending. Variable carbonate alteration occurs throughout much of the drill-hole, extending from just below the Cambrian cover (at 190m) to the bottom-of-hole at 646m.

Several intervals of BIF and/or disseminated magnetite rock are evident within the broader carbonate halo. Preliminary computer modelling of DHEM results from hole HMDDH018 indicate the presence of a conductor(s) ~100m x 50m in size with a conductance of ~2,000 to 4,000 Siemens, reflecting a potential sulphide source within the mineralized BIF sequence. The modelled body(s) appears to be steeply dipping at an angle to the layering that was intersected by the drill-hole, suggesting possible structural complexities in the area south-west of HMDDH018.

Additional drilling will be considered under the SAA to test this target, once all assay results have been received and DHEM modelling is finalised. At Hamilton South, drill-hole HMDDH017, which tested a coincident magnetic-gravity response, failed to intersect the cause of the gravity anomaly. Most of the rocks within the drill-hole were either sodically altered or unaltered metasediments and/or mafics, suggesting that the hole has probably missed the target.

Carbonate and potassic alteration which is evident near the bottom of the hole suggests that mineralisation may occur either lateral to, or beneath the current drill-hole. However, the DHEM survey did not identify a near-miss situation. The mineralised BIF sequence at Hamilton appears to be similar in nature to that hosting the Osborne copper-gold deposit (global resource ~36Mt @ 2% Cu and 1g/t Au), located approximately 70km to the north.

The Hamilton Project covers a belt of magnetic rocks extending over a strike length of approximately 30km under Eromanga Basin cover, which is approximately 200m thick. Numerous magnetic targets within this belt have never been tested by drilling. AusQuest's Managing Director, Graeme Drew, said the off-hole EM response in hole HMDDH018 had increased the Company's interest at Hamilton North, where thick mineralised BIF sequences have been intersected in conjunction with an untested EM response.