ASX

ANNOUNCEMENT

30 MAY 2016

CODE: ALY

BOARD OF DIRECTORS

Mr Oscar Aamodt

Non-Executive Chairman

Ms Liza Carpene

Non-Executive Director

Mr Lindsay Dudfield

Non-Executive Director

Mr Anthony Ho

Non-Executive Director

ISSUED CAPITAL

SHARES 228,788,035

OPTIONS 3,000,000 (Unlisted)

PROJECTS

BRYAH BASIN (80-100%)

KARONIE (100%)

Suite 8, 8 Clive Street WEST PERTH WA 6005

Phone: +61 8 9481 4400

Facsimile: +61 8 9481 4404 www.alchemyresources.com.au

Alchemy signs Farm-in Agreement over Gold & Base Metal projects in Lachlan

Drill-ready high-grade targets in major metallogenic province

• Alchemy to explore highly prospective gold and base metal projects in central Lachlan Orogen in New South Wales through Farm-in and Joint Venture with Heron Resources Ltd (ASX: HRR)

• Alchemy can earn up to 80% of the gold and base metal projects

  through expenditure of $2M within 5 years

• Three project areas - Overflow, Eurow & Girilambone - are prospective for Cobar-style and epithermal gold / polymetallic and Tritton-style copper mineralisation

• Overflow - historic Au-Ag producer; drill-ready targets are strongly plunging high-grade shoots with depth potential; historic high-grade gold intercepts with base metal credits1, including:

  BOBRCPC6 4.6m at 8.5g/t Au, 79g/t Ag, 13.5% Zn, 7.1% Pb (from 185.4m)

  TBB001 10m at 4.4g/t Au, 3.0% Zn, 1.3% Pb (from 163m)

  TBB008 7m at 1.67g/t Au (from 198m) & 7m at 6.67g/t Au (from 236m)

  TBB017 6m at 4.69g/t Au (from 121m) & 6m at 7.55g/t Au (from 136m)

• Eurow - historic copper-gold workings; historic high-grade copper intercepts below workings; recent shallow drilling returned anomalous copper north of the workings2

• Girilambone - proximity to copper anomalism at Kurrajong; along interpreted VMS-related trends extending south to Collerina

• Significant upside potential and high-priority, drill-ready targets

  identified in under-explored belts in the Lachlan fold-belt region

• Targeted extensional drilling and new target testing expected to commence in September quarter following regulatory approvals

1 Reported by TriAusMin Ltd (ASX: TRO) in ASX announcement dated 5 May 2014

2 Reported by Heron Resources Ltd (HRR) in ASX announcement dated 28 April 2014

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Alchemy Resources Ltd (ASX: ALY; "Alchemy" or "the Company") is pleased to announce that it has entered into a Farm-in and Joint Venture Agreement with Heron Resources Ltd (ASX: HRR; "Heron") to earn up to an 80% interest in three gold and base metal projects - Overflow, Eurow and Girilambone - in the highly prospective central Lachlan province in New South Wales (Figure 1).

The Lachlan projects represent another strategic exploration project acquisition for Alchemy, with a large 674km2 land package over underexplored central Lachlan province. The projects are proximal to high profile mining centres in the central Lachlan, including Hera/Nymagee (Aurelia Metals Ltd, ASX: AMI), Mallee Bull (Peel Mining Ltd, ASX: PEX), Mineral Hill (KBL Mining Ltd, ASX: KBL; "KBL"), Tritton/Murrawombie (Aeris Resources Ltd, ASX: AIS; "Aeris") and the Parkes mining centre (Figure 1).

Alchemy's Chairman, Oscar Aamodt said, "This opportunity provides key gold and base metal projects for Alchemy and we will immediately seek to advance priority targets through extensional drilling and systematic exploration over the strategic land package. The Lachlan projects are in a well-endowed gold and base metal province with significant upside in both gold and base metals with the potential for multiple discoveries."

A summary of commercial terms of the Farm-in and Joint Venture Agreement are provided on page 5 of this announcement.

Figure 1: Lachlan projects - Overflow, Eurow and Girilambone - subject to the Farm-in / Joint Venture Agreement with Heron Resources Ltd.‌

Overview of the Lachlan Projects

The Lachlan projects consist of the Overflow Gold-Base Metal Project, the Eurow Copper-Gold Project and the Girilambone Copper Project. Each of these projects contains identified gold and / or base metal targets, including drill-ready priority targets.

Overflow Gold-Base Metal Project

The Overflow Gold-Base Metal Project ("Overflow") consists of four exploration licences covering 390km2 located over a 50km long zone from 75km south-east of Cobar to adjacent to KBL's Mineral Hill operation (Figure 1). The project is located along the northern extension of the Gilmore Suture within Ordovician- Devonian metasediments and prospective for epithermal and Cobar-style gold and base-metal mineralisation.

Overflow is centred on the historic Overflow mining centre (Figure 2), a past producer of gold, silver and lead, and has been the focus of previous exploration in the area since mining ceased in 1942. Mineralisation at Overflow is structurally-controlled, high-grade gold-silver with base metal credits, with known zones having relatively short strike lengths but potentially long in the down-plunge direction, typical of Cobar-style mineralisation. Historic drilling has returned a number of significant high-grade intercepts (see TriAusMin Ltd ASX announcement dated 5 May 2014), including:

BOBRCPC6 4.6m at 8.49g/t gold, 79g/t silver, 13.5% zinc, 7.1% lead (from 185.4m) TBB001 10m at 4.44g/t gold, 21g/t silver, 3.0% zinc, 1.3% lead (from 163m) TBB006 16m at 1.13g/t gold, 88g/t silver, 1.15% zinc, 0.43% lead (from 162m) TBB008 7m at 1.67g/t gold, 135g/t silver, 1.3% zinc, 0.5% lead (from 198m) &

7m at 5.46g/t gold, 19g/t silver, 1.9% zinc, 1.4% lead (from 236m)

TBB017 6m at 4.69g/t gold, 39g/t silver, 2.4% zinc, 1.9% lead (from 121m) & 6m at 7.55g/t gold, 29g/t silver, 3.6% zinc, 1.5% lead (from 136m)

Figure 2: Overflow Gold-Base Metal Project showing Overflow mining centre, historic drilling & mineral occurrences, gold

& base metal prospects, over simplified geology (transparent), aeromagnetic image and satellite imagery.

A priority RC-Diamond drilling program targeting up and down-plunge positions of the mineralisation zones at Overflow is planned to commence in the September 2016 Quarter subject to completion of landholder access agreements and statutory approvals.

Outside of the historic mine area a number of regional prospects have been delineated and warrant further exploration. Along strike to the south of the Overflow mine, at the BOZ target (Figure 2), a single drill hole, OFTRC005, targeted an IP chargeability anomaly was terminated at the edge of the anomaly. The drill hole ended in weak mineralisation (12m at 0.42g/t gold to end of the hole) with visible chalcopyrite identified, and it represents a priority target for further drill testing.

At the Parkvale target (Figure 2), narrow high-grade intersections, including 0.7m at 5.7% copper and 1.2% lead in BO-1A drilled in 1977, have not been followed up. Coherent gold-zinc in soil anomalism over an area of 600 x 400 m at Prettyview South (Figure 2) has not been drilled tested. At Black Range Tank and Airport (Figure 2), outcropping gossans and limited shallow drilling has returned base metal anomalism with semi- coincident EM anomalies.

Eurow Copper-Gold Project

The Eurow Copper-Gold Project ("Eurow"), located 30 km southeast of Parkes (Figure 1), covers Ordovician and Devonian-aged meta-sediments intruded by Silurian and Devonian granites and proximal to the intersection of the Narromine-Coolac Fault Zone and the Lachlan Transverse Zone. The Project area contains the historic Eurow-Vychan copper-gold workings where drilling by previous companies below the workings returned high-grade intercepts of 8m at 2.94% copper and 0.85g/t gold from 47m, 3m at 4.0% copper and 1.25g/t gold from 73m, and 4.4 metres at 1.57% copper and 0.63g/t gold from 212m (sourced from open-file reports available from the NSW "DIGS" website).

Copper-gold mineralisation at Eurow appears to be planar and stratiform and is associated with semi- massive and breccia zones of pyrite-pyrrhotite-chalcopyrite. The style of mineralisation is both conductive (i.e., can be targeted with EM) and magnetic with targets identified to the north and south of the historic workings. Heron undertook shallow aircore drilling in late 2013 on targets north and south of the historic workings that returned anomalous copper results (see Heron ASX Announcement dated 28 April 2014). The drilling, which was hampered by thick clay zones, did not reach target depths and warrants further drill testing.

Girilambone Copper Project

The Girilambone Copper Project ("Girilambone") comprises one granted tenement (EL8318), about 25 km northwest of Nyngan, on the eastern edge of the Girilambone Basin. Girilambone is located near Aeris's Tritton copper operation, where Aeris recently announced development of the Murrawombie underground copper mine (see AIS ASX announcement dated 21 March 2016) and along strike from the high-grade Collerina copper prospect (Helix Resources, ASX: HLX; see HLX Corporate Presentation 9 March 2016).

The Project area is prospective for 'Besshi-type' volcanic massive sulfide (VMS) copper-gold mineralisation within mafic units of the Ordovician Girilambone Group. Girilambone is located along interpreted VMS trends extending from Collerina in the south to north of Avoca Tank (Figure 1). The Project area is adjacent to copper anomalism along structural and magnetic trends from the historic Kurrajong copper workings.

Geological mapping, surface geochemistry and targeted RC drilling have been previously undertaken by Heron. Systematic exploration targeting Tritton/Collerina-style copper-gold mineralisation within mafic units is planned.