Dacian Gold : Quarterly Activities Report - March 2021

March 2021

ASX RELEASE

29 April 2021

Issued Capital as at

31 March 2021

811.4M shares outstanding

Market Capitalisation as at 31 March 2021

$268M @$0.33

BOARD

Ian Cochrane Non-Executive Chairman

Leigh Junk

Managing Director

Robert Reynolds

Non-Executive Director

Eduard Eshuys

Non-Executive Director

SUBSTANTIAL SHAREHOLDERS

as at 31 March 2021

DGO Gold (6.3%)

Franklin Templeton (5.3%)

REGISTERED OFFICE

Level 2, 1 Preston Street

Como WA 6152

Australia

Mt Morgans positioned for strong finish to FY2021 ahead of updated Life-of-Mine plan for the Laverton operations

Operations

• March quarter production of 21,400oz at an AISC of $1,874/oz
• YTD FY2021 production of 81,361oz at an AISC of $1,492/oz
• Full year guidance of 110,000-120,000oz at an AISC of $1,400-$1,550/oz maintained
• Total development capital for the quarter of $14.1M

Corporate & Finance

• Cash and gold on hand at 31 March 2021 of $28.3M
• Repaid $2.0M in debt during the quarter with total debt now standing at $21.4M
• Total forward hedge position reduced to 41,406oz at an average gold price of $2,173/oz
• Merger with NTM Gold implemented on 15 March 2021

Exploration & Growth

• +30,000m of exploration and resource definition drilling completed during the quarter
• Mineral Resource estimation underway across the Jupiter, Westralia, Mt Marven and Redcliffe mining areas
• Geophysical survey completed over the southern tenement package targeting potential base load opportunities
• Greater Westralia mining area preliminary technical study update due early May
• Ore Reserve estimation activities underway ahead of an updated Life-of- Mine plan due in the September quarter

Dacian Gold Limited (Dacian Gold or the Company) (ASX: DCN) is pleased to provide its operating and financial results for the quarter ending 31 March 2021.

Managing Director, Leigh Junk, commented: "While we were anticipating that production for the March quarter would be our lowest for the financial year, the result was below expectations. The short-term challenges encountered have been addressed with a plan for the June quarter to end the year strongly. Additionally, the growth platform that we have established at Mt Morgans has been bolstered during the quarter with the addition of the Redcliffe project, which leverages our significant infrastructure in the region to increase and extend our production with an updated Life-of-Mine plan due for completion later this year."

OPERATIONS

OVERVIEW

The Company's rolling Total Recordable Injury Frequency Rate (TRIFR) was 20.3 at the end of the quarter (31 December 2020: 23.1). Recordable injuries include any injury that requires medical treatment or those that result in any days lost from work or where an employee or contractor can only perform part of their normal work.

The Mt Morgans Gold Operation (MMGO) recovered 21,400oz during the March quarter at an AISC of $1,874/oz. Year to date total production for FY2021 is 81,361oz at an AISC of $1,492/oz, with the Company maintaining FY2021 guidance of 110,000-120,000oz at an AISC of between $1,400-$1,550/oz.

While the Company was anticipating production for the March quarter would be the lowest for the financial year, the result was lower than planned as material movement productivities were below expectations, primarily due to operator shortages as a result of a tightening labour market in Western Australia.

During the quarter, measures were implemented to better attract and retain operator personnel and by late March, these measures had stabilised the workforce. Furthermore, towards the end of the quarter an additional excavator, haulage trucks and blast-hole drill rig were mobilised and as a result, material movement has since returned to targeted levels.

The additional equipment and personnel will underpin an increase in production rates from Heffernans and Doublejay during the June quarter to meet annual guidance for FY2021.

The processing plant performed strongly during the quarter with throughput of 755,970t (~3.0Mt annualised), however, delays in accessing high-grade ore resulted in increased supplemental mill feed from lower grade material, which contributed to an overall lower than planned grade for the quarter.

OPEN PIT

A total of 863,099 tonnes @ 0.8 g/t gold containing 23,516oz was mined from the Heffernans, Doublejay and Mt Marven open pits during the March quarter, with 597,705 tonnes @ 1.0 g/t gold containing 18,983oz delivered to the processing plant ROM pad for treatment (see Table 1).

Heffernans and Mt Marven were the main sources of high-grade ore feed to the processing plant during the quarter, while pre-stripping activities at Doublejay continued.

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Key Open Pit Statistics	Unit	March Q	Year-to-Date
Ore Mined - to ROM	t	597,705	2,048,997
Mined Grade	g/t	1.0	1.2
Contained Gold Mined	oz	18,983	80,881
Ore Mined - to Stockpile	t	265,394	823,265
Mined Grade	g/t	0.5	0.6
Contained Gold Mined	oz	4,533	15,101
Ore Mined - Total	t	863,099	2,872,262
Mined Grade	g/t	0.8	1.0
Contained Gold Mined	oz	23,516	95,983
Waste Mined	t	5,812,812	18,071,658
Total Material Mined	t	6,675,911	20,943,921
Total Material Mined	bcm	2,495,071	7,971,862
Open Pit Mining Cost	$/t	4.38	4.06

Table 1: Key MMGO open pit statistics

A total of 2.50M bcm of material was mined from all pits during the quarter, of which 1.48M bcm was attributed to pre-stripping of Doublejay.

Mining activities at Mt Marven will be completed and Heffernans substantially completed in the June quarter as planned, with mining to transition to Doublejay, Ganymede and Saddle beginning FY2022, providing the predominant ore feed at Mt Morgans. Ore mining at Doublejay will increase during the quarter and into FY2022 as pre-stripping starts to expose high-grade ore blocks.

A total of 19,281m of RC grade control drilling was completed during the quarter across the Heffernans, Doublejay, Ganymede and Mt Marven open pits.

PROCESSING

A total of 755,970 ore tonnes was processed during the quarter at an average feed grade of 1.0 g/t gold containing 23,761oz (see Table 2).

Delays in accessing high-grade ore resulted in increased supplemental mill feed from lower grade material, which contributed to an overall lower than planned grade for the quarter. A planned processing plant shutdown was carried out in March to reline both the SAG and ball mills contributing to the higher unit costs for the quarter.

A total of 21,400oz was recovered for the quarter, representing a plant recovery of 90.1%. Recovery was lower than the year-to-date average due to the lower feed grade.

Key Processing Statistics	Unit	March Q	Year-to-Date
Ore Milled	t	755,970	2,182,743
Processed Grade	g/t	1.0	1.3
Contained Gold	oz	23,761	88,745
Gold Recovery	%	90.1	91.7
Processing Cost	$/t	19.56	18.50
G&A Cost	$/t	3.59	3.35
Gold Recovered	oz	21,400	81,361
Gold Sold	oz	24,542	83,728
Gold-on-Hand	oz	1,798	1,798
Average Sale Price	A$/oz	2,197	2,241

Table 2: Key MMGO processing statistics

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EXPLORATION & GROWTH

On 15 March 2021, the merger with NTM Gold Limited was implemented and the Redcliffe Gold Project has been integrated into Dacian.

Mineral Resource and Ore Reserve estimate activities are underway for an updated Life-of-Mine plan that encompasses both Mt Morgans and Redcliffe ("Laverton Operations"). Initial work activities for Redcliffe are focused on the shallow, high-grade Hub, GTS and Nambi deposits.

In addition, the Company plans to provide preliminary results from its technical studies for the Greater Westralia Mining Area (GWMA) in early May.

Twelve deposits form the GWMA, including the large Beresford and Allanson deposits, with the area undergoing an extensive reassessment for potential inclusion in the upcoming Laverton operations Life-of- Mine plan.

The Company is targeting an updated Life-of-Mine plan for the Laverton Operations that delivers base case annual production rates of circa 110,000ozpa for an initial 5 years, and anticipates the work stream to be completed during the September quarter.

The Company's current operating outlook does not incorporate production from the Redcliffe Gold Project or the GWMA.

Figure 1: Greater Westralia Mining Area

During the quarter, the Company invested $4.9M in exploration, growth and resource definition activities, including total drilling of 24,302m across its key exploration and growth targets. In addition, 6,285m in resource definition drilling at Doublejay, Ganymede and Saddle was conducted ahead of an increase in mining at these deposits.

Numerous activities were advanced during the quarter across multiple areas with a focus on Mineral Resource estimation and Ore Reserve studies ahead of an upcoming Life-of-Mine update, including:

Greater Westralia Mining Area

• Greater Westralia mining area technical study update to be provided in early May, including updated Mineral Resource estimates for Beresford, Allanson, Morgans North and Phoenix Ridge.

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• Resource definition drilling was completed at the Transvaal deposit, aimed at improving confidence in the down plunge mineralisation, in preparation for mining studies with a Mineral Resource update underway.
• Extension drilling was initiated testing the 1,200m strike of the Ramornie Transvaal Shear Zone (RTSZ) to follow up on anomalous air core drilling results, with phase 1 of this program to be completed in the June quarter, followed by evaluation and additional extensional and infill drilling.
• An infill drilling program was completed at the Craic underground with a Mineral Resource update underway.

Jupiter Mining Area

• Following completion of Resource definition drilling at Ganymede, work programs included the completion of Mineral Resource estimation activities and commencement of mining studies.
• Targeted drilling was initiated south of the Ganymede deposit to follow up on anomalous gold intersections from an earlier drilling campaign.
• Resource definition drilling program at Doublejay was completed with a Mineral Resource update underway.
• Resource definition and extensional drilling of the Saddle pit commenced during the quarter, with results and follow up drilling expected during the June quarter.

Mt Marven Mining Area

• Extensional drilling program to expand the Mt Marven open pit was completed with a Mineral Resource update initiated during the quarter.
• Additional extensional drilling program targeting the northern extension at Mt Marven has commenced.

Cameron Well Project Area

• Resource definition drilling at Maxwell Bore, as part of the greater Cameron Well project area, was completed with a Mineral Resource update to commence during the June quarter
• Exploration drilling testing 1,500m of strike of the Maxwell Bore Banded Iron Formation was completed with assay results pending.

Redcliffe Project

• Resource definition diamond drilling programs advancing at Hub to target mineralisation at depth with a Mineral Resource update commenced.
• Auger drilling program initiated over the Wells tenements, north of Redcliffe, to define prospective areas. The Wells tenements cover over 500km2 and are under-explored for gold mineralisation.
• Resource Potential Pty Ltd were engaged to provide a comprehensive geological review and interpretation based on geophysical imagery and data for the entire Leonora project area (Redcliffe and Wells projects).

BASE LOAD TARGETING

A new airborne magnetic and radiometric survey covering 4,252 line-kms was flown at 50m line spacings over the southern tenements (see ASX announcement 14 April 2021). This new geophysical data covering 178km2 will inform the identification and ranking of new base load targets for Dacian to add to its pipeline of exploration targets being advanced through to drill testing.

The Mineral Systems approach is being applied to base load targeting, underpinned by higher resolution aeromagnetic surveys, geomechanical modelling, UltraFine soil surveys and geochronological age dating.

Geomechanical modelling over all of Dacian's Mt Morgans tenements was commenced by GMEX Services Pty Ltd in January 2021. In addition, orientation soil surveys using the UltraFine technique were completed

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