Red 5Limited

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AnnuAl RepoRt

Corporate Profile

Our Vision

"Our vision is to be a successful multi-operational mineral resource company, providing benefits to all stakeholders, through the consistent application of responsible and sustainable industry practices."

Red 5 Limited (ABN 73 068 647 610) is listed on the Australian Securities Exchange (Ticker: RED) and OTCQX International (Ticker: RDFLY) with around 4,100 shareholders and a strong institutional shareholder base, including a significant number of domestic and international institutions.

The Group's principal asset is the Siana Gold Project located on the island of Mindanao in the Philippines. The project is held under a Mineral Production Sharing Agreement (MPSA) by Greenstone Resources Corporation (a Red 5 Philippine affiliate company).

The Siana deposit is currently mined by open pit methods, transitioning to long-term underground mining following completion of the open pit. Ore is treated through a conventional modern gravity and carbon-in-leach plant to produce gold doré, which is then shipped for refining.

The Group's second principal asset is the Mapawa MPSA, located

20 kilometres north of Siana, which has the potential to be developed as a satellite source of ore feed for the Siana processing plant. Mapawa hosts a known gold porphyry system with a number of significant gold occurrences throughout the project area. The area has had little exploration activity in the past and is considered to have significant potential.

Red 5 Limited 2016 Annual Report

Contents

2016 highlights

Year in review

OperatiOns -

siana GOld prOject, philippines

• Gold production for the 12 months to 30 June 2016 of 59,663 ounces of gold, recovered from a total of 692,384 tonnes of ore processed.

• Revised open pit mining strategy successfully implemented with a strong mining performance for the year and reconciliation of ore tonnes and grade exceeding expectations during the year.

• Reducing cost profile for the open pit operation over the latter part of the reporting period, reflecting a significant reduction in the waste-to-ore ratio in the open pit. The ongoing reduction in all-in sustaining costs (AISC) is expected to result in strong cash-flow generation for the remainder of the open pit life.

• No Lost Time Incidents and above industry average performance on Total Recordable Injury Frequency Rate of

  1.2 for almost 3.5 million hours worked.

• Accreditation for ISO 14001: Environmental Management System obtained in December 2015, in compliance with the Philippines Department of Environment and Natural Resources requirement for all mining contractors.

• Formal accreditation for ISO 9001: Quality Management Systems and OHSAS 18001: Occupational Health and Safety Management Systems also obtained.

  siana UnderGrOUnd deVelOpMent

• Updated Feasibility Study for the Siana underground development completed by independent consultants, indicating a financially and technically viable underground project based on a maiden JORC 2012 compliant Underground Ore Reserve of 3.01 million tonnes at 4.1 g/t Au for 396,000oz of contained gold.

• The Feasibility Study also considered a long-term mine plan based on the whole underground resource (Measured, Indicated and Inferred material). Key Feasibility Study outcomes for the long-term mine plan include:

  • Average annual forecast recovered gold production of

    ~60,000oz pa over an 8-year mine life;

  • Forecast life-of-mine all-in cash costs of US$930- US$980 per ounce.

• Based on the positive outcomes of the updated Feasibility Study, the Siana underground mine was approved for development, with underground development commencing in the second half of 2016.

  eXplOratiOn and GrOWth

• Inaugural JORC 2012 Indicated and Inferred Mineral Resource totalling 8.8 million tonnes at 1.0 g/t Au for 289,000oz estimated for the Mapawa LSY copper-gold deposit, located 20 kms north of the Siana Gold Project.

• Scoping Study completed to assess the Mapawa project's potential to provide a source of satellite ore feed for the Siana Gold Project processing plant, with a Feasibility Study now underway.

• Further exploration activities are also planned at Mapawa with the aim of increasing the current Mineral Resource base.

• Preparations underway for a new exploration drilling program planned for the second half of 2016 targeting the area at the south of the Siana open pit, where previous soil sampling identified copper-gold anomalies (up to 1km in diameter) in the Alegria-Madja area.

  Financial resUlts

• Total gold sales of 60,354 ounces for $97.3 million for FY16, with EBITDA from operations of $56.1 million.

• Net profit after tax of $21.6 million for the 12 months to 30 June 2016.

• $18.2 million cash balance as at 30 June 2016 with no gold or currency hedging.

Red 5 Limited 2016 Annual Report 1

Message to shareholders

from the Chairman

Dear Shareholders,

I am pleased to report on what has been a positive and productive year for Red 5, with a strong gold production performance from our flagship Siana Project in the Philippines and the establishment of a clearly defined pathway to extend the project's life by transitioning to long-term underground mining operations.

A strong operational performance at the Siana Project resulted in total gold production of 59,663 ounces for the 12 months to 30 June 2016, reflecting the successful implementation of the revised open pit mining strategy outlined last year.

The combination of increased production volumes and lower operating costs in the second half of the year - reflecting the reducing cost profile of the open pit as we move into the final stages of the open pit mine plan - allowed the Company to post a net profit after tax for the year of $21.6 million. The Company ended the financial year with cash of $18.2 million and no gold or currency hedging in place.

The significant reduction in all-in sustaining costs seen in the last quarter of FY16 is a trend we expect to continue over the remainder of the open pit phase of operations. This should result in strong cash-flow generation which will underpin our planned transition to underground mining, which is now underway.

The Siana Underground development was approved in June 2016 following the completion of a positive independent Feasibility Study which confirmed a technically and economically viable project. This now provides a clear pathway to establish a

long-term mining operation which will deliver returns for our shareholders and secure our position in the region for many years to come.

The Feasibility Study defined an underground operation producing approximately 60,000 ounces per annum over an

8-year life at a projected all-in cash cost of between US$930-980 per ounce, underpinning ongoing operations at Siana until at least 2026 following the completion of the open pit at the end

of 2017

In last year's report it was noted that Mindanao offers world- class opportunities and that our longer term strategy is to leverage off our existing production and cash-flow base by targeting prospects that can deliver incremental sources of ore feed to the Siana processing plant, supplementing the base-load ore supply coming from the underground mine.

In light of the strong and consistent production performance achieved at Siana, we reactivated our regional exploration, growth and expansion programs at a number of levels during the year.

Key achievements included the definition of a maiden resource for the Mapawa Copper-Gold Project, located 20 kms north of Siana and commencement of a Feasibility Study to assess the potential to establish this deposit as a satellite source of ore feed for the Siana processing plant.

Outside of Mapawa, our exploration team has been hard at work conducting a detailed assessment of the Group's regional tenements to identify priority targets for drill testing. Highly prospective targets have been identified in the Alegria-Madja region, an emerging region located to the south of the Siana pit, with drilling scheduled to commence in the second half of 2016.

The combination of a strong operational and financial performance, a positive gold market environment and our clear long-term growth plan for the Siana Gold Project have put in place the key foundations for the Company's continued growth.

I am confident that we are well placed to maintain this positive momentum as we continue to work hard to achieve our corporate objectives, delivering against the open pit mining plan and commencing development of the Siana Underground Mine.

The strong results outlined in this report would not have been achieved without the hard work of the Red 5 Group's staff and contractors, led by our Managing Director Mark Williams, and I would like to sincerely thank the entire team for their dedication and commitment.

I would also like to thank our valued shareholders for their continued support and look forward to this next phase in the Company's growth.

Kevin Dundo

Chairman

2 Red5 Limited2016 Annual Report