De Grey Mining : Mallina Gold Project Resource Statement - 2022

ASX: DEG

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ASX ANNOUNCEMENT

31 May 2022

Mallina Gold Project Resource Statement - 2022

Hemi Mineral Resource grows 25% to 8.5Moz Global Mallina Gold Project increases to 10.6Moz

Global Measured & Indicated Resources grow 80% to 6.9Moz

Hemi Highlights

• Hemi - Gold Mineral Resource grows 25% to 8.5Moz including 5.8Moz JORC Indicated category

Hemi Mineral Resource Estimate (JORC 2012)	213Mt @ 1.2g/t Au for 8.5Moz
Indicated (68%)	139Mt @ 1.3g/t Au 5.8Moz
Inferred (32%)	74Mt @ 1.1g/t Au 2.7Moz

(0.3g/t Au Cut-off above 370m depth, 1.5g/t Au Cut-off below 370m depth, assays to 5 April 2022, rounding errors may occur)

• All Indicated resources fall within the Open Pit classification to 370m depth, with the main increases: o Diucon to 38Mt @ 1.3g/t for 1.6Moz
  o Eagle to 26Mt @ 1.1g/t for 0.95Moz
  o Indicated category increases from 2.8Moz to 5.8Moz
• Inferred Resource discovery cost of $10/oz and additional conversion cost to Indicated Resource of $7/oz remain below industry average1.

Figure 1 Change in Hemi Mineral Resource Estimate from June 2021 to May 2022.

9.0

For

Total Resource

8.0 Measured + Indicated

	7.0
		6.8Moz	80Koz
	6.0
(Moz)	5.0
Ounces	4.0
	3.0	2.8Moz
		41%
	2.0
	1.0
	0	Maiden	Aquila
		MRE 2021

	513Koz	133Koz	8.5Moz
	621Koz
176Koz	142Koz
			5.8Moz
			68%

Brolga	Crow	Diucon	Eagle	Falcon	MRE
					2022

Ground Floor,	PO Box 84	E [e-mail]	degreymining.com.au
2 Kings Park Road	West Perth WA 6872	P [phone]	ABN: 65 094 206 292
	F [phone]
West Perth WA 6005		FRA Code: WKN 633879

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Mallina Gold Project Highlights

• MGP - Global Gold Mineral Resource increases to 10.6Moz including 6.9Moz M&I

MGP Mineral Resource Estimate (JORC 2012)	251Mt @ 1.3g/t Au for 10.6Moz
Measured (2%)	5Mt @ 1.7g/t Au for 0.3Moz
Indicated (62%)	153Mt @ 1.3g/t Au for 6.6Moz
Inferred (36%)	93Mt @ 1.3g/t Au for 3.8Moz

(0.3g/t Au Cut-off above 370m depth, 1.5g/t Au Cut-off below 370m depth, assays to 5 April 2022, rounding errors may occur, all regional

deposits estimates remain unchanged)

• M&I Resource increase to 6.9Moz, with Hemi contributing 5.8Moz, providing a strong platform for the upcoming PFS and future Ore Reserve.
• All deposits remain open with resource extensional drilling at depth and along strike underway.
• Exploration drilling continues to test for discoveries within the Greater Hemi corridor and regional target areas with 10 rigs operating.

Figure 2 Change in Mallina Gold Project Mineral Resource Estimate to May 2022.

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De Grey Technical Director, Andy Beckwith, commented:

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"Hemi continues to grow and is now Australia's largest undeveloped open pit gold deposit. RC and diamond drilling over the last 12 months has delivered on three key aspects:

1. Extending the open pit mining potential, particularly Diucon and Eagle
2. Infill drilling to convert Inferred to Indicated Resources to approximately 370m depth.
3. Geotechnical and metallurgy drilling to enable the PFS economic study to advance.

The upgrade to 5.8Moz of Indicated Resources from the total of 8.5Moz since Hemi's discovery in early 2020 now provides an increased baseline for the on-going PFS. Further resource upside is expected as drilling continues to show extensions at depth that have not been included in the resource update due to the April cutoff date.

The exploration focus over the next 12 months and beyond will now pivot back to resource growth through along strike and down dip extensions at Hemi and the high priority untested targets within the Greater Hemi region and large regional tenement package."

De Grey Managing Director, Glenn Jardine, commented:

"The MRE update at Hemi provides an improved platform for the upcoming PFS and resultant Reserve and Production Target. The PFS, targeted for completion in the September Quarter 2022, aims to increase overall gold production, mine life and annual gold production rate relative to the October 2021 Scoping Study of 4.3Moz over 10 years.

Project studies, including metallurgy, geotechnical, mining, environmental, infrastructure and hydrogeology have continued in parallel with the resource extension and definition drilling. These studies will be incorporated into the PFS. The increase in Indicated resources and completion of the PFS are expected to provide a strong basis for project development and financing.

The Hemi footprint is approximately 3.5km east-west and 2.0km north-south. There is significant resource extension and discovery potential in areas adjacent to the existing footprint and at depth. Aircore and RC drilling is underway in the Greater Hemi area to test for, near surface mineralised intrusives The Company sees further growth to resources beyond the current 2022 MRE and upcoming PFS Production Target."

An Investor Conference Call with De Grey Management is being held today, Tuesday 31 May at 7:00am WST / 9:00am EST. Participants can register via the following link:

https://s1.c-conf.com/diamondpass/10022409-am3nd4.html

Refer to page 14 and 15 of this announcement for Competent Person disclosures and a disclaimer in relation to forward looking statements contained in this announcement. A summary of estimation techniques and modifying factors in contained in Appendix 2 of this announcement.

All references to the Scoping Study and its outcomes in this announcement relate to ASX announcement Mallina Gold Project Scoping Study dated 5 October 2021. All material assumptions and technical parameters used in the Scoping Study continue to apply and have not materially changed.

All references to the 2021 Mineral Resource Estimate in this announcement relate to ASX announcement 6.8Moz Hemi Maiden Mineral Resource drives MGP to 9.0Moz dated 23 June 2021. Please refer to this announcement for full details and supporting information including JORC and Competent Person information.

1Resource discovery costs exclude regional exploration, study, corporate and administration costs.

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De Grey Mining Limited (ASX: DEG, "De Grey" or the "Company") is pleased to report that the Mallina Gold Project Mineral Resource Estimate (MRE) update has been completed by Cube Consulting Pty Ltd, based on additional drilling and assay results to 5 April 2022 at the Hemi gold deposit. The Regional gold deposit MREs remain unchanged from the April 2020 Mineral Resource statement.

Overall, the MRE increases include:

• Hemi increased by 25% contained gold to 8.5Moz
• • Diucon and Eagle (combined) increased by 78% contained gold to 2.6Moz
  • Hemi JORC Indicated category increases from 2.8Moz contained gold to 5.8Moz
• Mallina Gold Project (MGP) increased 15% to 10.6Moz
• • MGP JORC Measured and Indicated categories increased by 80% to 6.9Moz

The MRE is based on 323 diamond drill holes for a total of 83,933m and 949 reverse circulation (RC) drill holes for 232,012m including pre-collars completed between February 2020 and the 5 April 2022 cut-off date.

The Pre-Feasibility Study (PFS) is well advanced and due in the September Quarter 2022. This PFS will provide an updated assessment of mineable resources, Ore Reserves and economics of the project.

Hemi Mineral Resource Update

The Hemi gold deposit is located centrally within De Grey's 1,500km2 Mallina Gold Project (MGP) and immediately southwest of Port Hedland in the northern Pilbara region of Western Australia. The project benefits from close proximity to Port Hedland's major infrastructure network, including major highways, port facilities, gas pipelines, overhead 220kV electrical powerlines and associated power stations.

Figure 3 Mallina Gold Project showing main gold deposits and the Hemi Discovery.

Hemi was first discovered by aircore drilling conducted in November 2019 and confirmed by RC drilling in February 2020. Extensive RC and diamond drilling continued during 2020 and 2021 leading to the maiden MRE of 6.8Moz for Hemi announced on 23 June 2021.

Additional drilling during 2021 and 2022 has focused on improving the density of drilling within, and resource extensions to, the maiden MRE. This has culminated in this MRE update based on assays to 5

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April 2022. Drilling continues to test for extensions to the known deposits at Hemi and new discoveries within the Greater Hemi region.

Gold mineralisation at Hemi is hosted in a series of intermediate intrusions associated with sulphide (pyrite and arsenopyrite) stringers and disseminations within brecciated and altered quartz diorites that intrude into the surrounding Archaean aged Mallina Basin sediments. The Archaean basement is eroded and truncated by a 25m to 45m thick horizon of recent transported sediments that are barren of gold mineralisation. The Hemi style of mineralisation was previously unknown in the Pilbara region and shows a scale of gold mineralisation not previously seen in the Mallina Basin.

A Scoping Study was completed in October 2021, which highlighted an open pit mining scenario and on- site processing based on a 10Mt annual throughput. The study showed initial potential production of:

• An average ~473,000ozpa at a grade of 1.6g/t Au over the first 5 years
• An average ~427,000ozpa at a grade of 1.4g/t Au over the 10 year study period

The Scoping Study provided strong and robust economics which are expected to be improved upon during the Pre-Feasibility Study (PFS) currently underway. The PFS is expected to be completed during the September Quarter 2022 and is based on this May 2022 MRE.

The May 2022 MRE for Hemi is summarised below by deposit and then by the depth breakdown for Open Pit (above 370m depth) and Underground (below 370m depth). A plan view of the various Hemi deposits is shown in Figure 4 and the relative JORC Indicated and Inferred portions are shown in Figure 5.

Table 1 Hemi - Mineral Resource Estimate (JORC 2012) by Deposit, May 2022.

	Deposit				Indicated						Inferred						Total
		Mt		Au g/t		Koz		Mt		Au g/t		Koz		Mt		Au g/t		Koz
	Aquila	12.9	1.5	610	7.6	1.3	311	20.5	1.4	921
	Brolga	37.3	1.3	1,611	24.2	1.1	821	61.6	1.2	2,432
	Crow	20.3	1.1	700	12.5	1.2	474	32.8	1.1	1,174
	Diucon	29.4	1.4	1,311	8.6	1.2	325	37.9	1.3	1,635
	Eagle	16.6	1.2	636	9.9	1.0	312	26.5	1.1	948
	Falcon	22.7	1.3	937	11.4	1.2	422	34.1	1.2	1,359
	Total Hemi		139.1		1.3		5,804		74.1		1.1		2,666		213.3		1.2		8,470

Note: 0.3g/t Au Cut-off above 370m depth, 1.5g/t Au Cut-off below 370m depth, assays to 5 April 2022, Differences may occur due to rounding

Table 2 Hemi - Mineral Resource Estimate (JORC 2012) by Depth, May 2022.

	Depth						Indicated							Inferred								Total
			Mt			Au g/t			Koz			Mt			Au g/t			Koz			Mt			Au g/t			Koz
	0 - 370m	139.1		1.3			5,804		68.9		1.0		2,251		208.0		1.2		8,053
	Below 370m		-		-	-	5.2		2.5		417		5.2		2.5		417
	Total Hemi			139.1			1.3			5,804			74.1			1.1			2,666			213.3			1.2			8,470

Note: 0.3g/t Au Cut-off above 370m depth, 1.5g/t Au Cut-off below 370m depth, assays to 5 April 2022. Differences may occur due to rounding

The Indicated resources of the Hemi MRE occurs within the Open Pit classification to a depth of 370m from surface. The 12 month infill drilling program concentrated on increasing the density of drilling within the previously defined Scoping Study pit shells. The aim of this infill drilling was to increase the Indicated resources for inclusion within the PFS, for potential conversion to reserves.

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