Coppermoly : Updated Inferred Mineral Resource Estimate for Mt Nakru

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ASX Announcement

22 June 2017 ASX Code: COY

UPDATED INFERRED MINERAL RESOURCE ESTIMATE FOR MT NAKRU COPPER GOLD PROJECT CONFIRMS OPEN PIT MINING POTENTIAL

Coppermoly Ltd (Coppermoly or the Company) is pleased to announce an updated JORC Mineral Resource Estimate for its Mt Nakru Copper-Gold Project in Papua New Guinea. The updated Mineral Resource follows the successful drilling program completed by Coppermoly in March 2017. Independent mining consultancy Mining Associates Pty Ltd (Mining Associates) has estimated Inferred Mineral Resources in two deposits (Nakru 1 and Nakru 2) totalling approximately 29 million tonnes @ 0.92% Cu and 0.22 g/t Au using a cut-off grade of 0.3% Cu (Table 1).

Cut Off %Cu	Deposit	Tonnes	Cu (%)	Au (g/t)	Ag (g/t)	Cu (kt)	Au (koz)	Ag (oz)
> 0.2	Nakru 1	40,100,000	0.63	0.21	1.55	253	275	2001
	Nakru 2	9,800,000	0.67	0.04	2.49	66	11	784
Total		49,900,000	0.64	0.18	1.74	319	286	2785
> 0.3	Nakru 1	21,700,000	0.96	0.28	2.05	208	198	1432
	Nakru 2	7,400,000	0.80	0.04	2.82	59	10	672
Total		29,100,000	0.92	0.22	2.25	267	208	2104
> 0.5	Nakru 1	15,100,000	1.23	0.35	2.34	186	169	1138
	Nakru 2	3,100,000	1.39	0.06	4.43	43	6	441
Total		18,200,000	1.26	0.30	2.70	229	175	1579

Table 1. Mt Nakru prospects Nakru 1 and Nakru 2 Inferred Copper resources

The Mt Nakru Cu-Au project (EL 1043) comprises two known deposits, Nakru 1 and Nakru 2, which are 1.5 km apart (Fig. 1).

Fig. 1 Plan of Nakru Project Showing Block Model Grades and Drillhole Locations (Location of long sections A-A' and B-B' also shown)

Modelling by Mining Associates confirmed the presence of higher grade (>0.5% Cu) mineralisation lenses at shallow levels (refer to long sections of Nakru 1 and Nakru 2, Figure 1), which should have a significant impact on the project's economics.

Inferred Mineral Resources are reported from blocks less than 200 m depth from surface topography, approximating the likely depth limit of an open pit.

The Nakru 1 Inferred Mineral Resource is open to the south west down plunge. The Nakru 2 Inferred Mineral Resource is the smaller deposit to date, and is open in all directions.

Due to the fact that in both deposits the higher grades are concentrated in the upper levels, and the shallow depth (over all

Coppermoly Director, Dr Wanfu Huang said:

"Our recent drilling program and this modelling work confirms there is great potential for increasing the Cu-Au Inferred Mineral Resource at the Mt Nakru Project. Importantly, the modelling work indicates that there is 18.2Mt of Inferred Mineral Resources at average 1.26% Cu and 0.30 g/t Au at Nakru 1 and Nakru 2 if the cutoff grade is uplifted to 0.5% Cu, which may greatly improve the economic viability of this project.

We expect further drilling to expand the size and quality of the deposits at Mt Nakru since both prospects are open on multiple sides."

The next phase of exploration activities will focus on seeking to upgrade the resource category while defining the size of Nakru 1 and Nakru 2 in particular.

Details

Inferred Mineral Resources being reported for the Nakru 1 and Nakru 2 prospects on the Mt Nakru Cu-Au project (EL 1043) were estimated by Mining Associates in June 2017.

Geological Interpretation

Local geology at Nakru is dominated by a rhyolitic 'flow-dome' complex that overlies Upper Eocene to Upper Oligocene age andesitic and basaltic volcanics. A thin blanket (2-8 m) of Pleistocene to Recent tephra covers the local area. Copper-gold mineralisation occurs within two main centres, Nakru-01 and Nakru-02, and is marked by surface geochemical anomalies and strong chargeability highs in induced polarisation data. Most mineralisation is veinlet and disseminated style hosted by strongly quartz-sericite altered volcanic breccias, with some thin bands of massive sulphide. Sills of andesitic to dacitic composition cross-cut mineralisation and vary in thickness from less than 1 m to 10 m.

Deposits are interpreted to have formed at relative shallow levels in a submarine sub-volcanic environment. Based on the textural features and geochemistry, the deposits appear to have most affinities with a volcanic-hosted massive sulphide (VHMS) style of mineralisation. Although true massive sulphide intersections are rare (only thin bands found in Nakru 2), the level of emplacement, alteration assemblage and association with volcanic breccias is suggestive of the 'stringer' or stockwork vein zone that typically underlies seafloor massive sulphide deposits.

Sampling and Drilling

Coppermoly have conducted exploration on the property since 2008 and the work completed is summarised in Table 2.

Years	Operator	Tasks	Results
2008	Coppermoly	3D IP survey at Nakru 1 and Nakru 2 5 diamond core holes for 880m (Nakru 1 and Nakru 2)	Delineation of chargeability highs at Nakru 1 and Nakru 2. High grade copper intercepts at Nakru 2.
2010-2012	Barrick JV with Coppermoly (exploration carried out by Barrick (PNG Exploration) Ltd, a wholly owned subsidiary of Barrick Gold Corp (Barrick))	3D IP survey 12 diamond core holes for 4821m Mapping and surface geochemistry LiDAR airborne topographic survey	Continued definition of Nakru 1 and Nakru 2 mineralisation.
2012-2017	Coppermoly	16 diamond core holes for 3338m.	Continued definition of Nakru 1 and Nakru 2 mineralisation.

All drilling on the Mt Nakru Copper-Gold Project has been completed by diamond core methods using HQ diameter equipment, with some near-surface material drilled using PQ. Drill hole collars were located using a handheld GPS with a horizontal accuracy of ±3 m. Collar elevations were corrected by Mining Associates using LiDAR topographic survey data, which was assumed to be more accurate than handheld GPS elevation measurements. Drill hole collars were spaced between 60 m and 100 m apart on sections, with differing orientations for different drill programs.

Downhole surveying of Barrick and Coppermoly drill holes used a Reflex electronic multishot tool.

Drill holes were logged on site at an exploration camp near the drilling locations. RQD and core recovery, lithology, alteration, and mineralisation were recorded.

All core was photographed wet and dry prior to sampling. Angled Barrick drill holes were oriented using the EzyMark core orientation tool and the orientations of contacts, veins and discontinuities were recorded. Core logging was recorded on paper logging sheets and the information transferred into an Excel spreadsheet for each drill hole.

Average core recovery for Barrick and Coppermoly drilling was 93%. Core recovery within mineralisation (>0.2% Cu) averaged 94%.

Drill core was sampled on nominal 1 m intervals for Barrick drill holes and 2 m intervals for Coppermoly drill holes. Sample lengths were adjusted to account for major geological contacts. Sample intervals were marked on the core and recorded in a paper copy sample ledger. All core was cut in half using a diamond-impregnated circular saw blade.

No bulk density measurements were made on site prior to May 2017. 12 samples from Barrick drill holes at Nakru 1 submitted for comminution testing were also measured for density using water immersion and pychnometer. Coppermoly undertook density measurements on drill core stored on site. 168 samples were measured for density, using water displacement and water immersion techniques on small pieces (generally less than 10 cm) of half drill core. Samples were selected from oxide, supergene, intermediate and primary sulphide zones.

Sample Analysis

Samples were analysed at Intertek Laboratories in Lae. Sample preparation procedures were as follows:

• Dry and crush sample to 2 mm

• Split and pulverise 1.5-2.0 kg to 75 micron