29 March 2016

Drilling confirms extensive sulphidic corridor at Dixon

- Gold assays pending

• Sulphidic corridor - interpreted host of Australian Mines' discovery drill hole (MMRC016: 10m @ 8.79 g/t gold1) - extends for more than 400 metres in length and remains open in both directions and at depth

  
  

• Width of sulphidic corridor at Dixon appears to exceed 120 metres

  
  

• Visible gold observed within Diamond core

  
  

• Assays results expected mid-April

  
  

• Follow-up RC and Diamond drilling program with complementing geophysical surveys scheduled to commence in May

Australian Mines Limited ("Australian Mines" or "the Company") is pleased to advise shareholders that the Company's recently completed reverse circulation (RC) and Diamond core drill program has successfully intersected a thick corridor of disseminated iron sulphides (pyrite +/- pyrrhotite) within the targeted dolerite geology at its Dixon gold prospect - part of its joint venture with Riedel Resources (ASX: RIE)2.

Iron sulphides are often intimately associated with gold mineralisation across the Eastern Goldfields of Western Australia, including at KCGM's Super Pit Gold Mine in Kalgoorlie, which like Australian Mines' Dixon mineralisation, is similarly hosted within a dolerite unit3,4.

Geological logging of the Diamond drill core and RC chips from the Company's latest drill program indicates that this sulphidic corridor at Dixon is at least 120 metres thick and is continuous for more than 400 metres in length.

1 Australian Mines Limited, High-grade gold zone extended at Dixon prospect, released 6 November 2015

2 Australian Mines Limited, Australian Mines secures majority ownership of Marymia Project, released 29 May 2015

3 Clout, J.M.F., Cleghorn, J.H. and Easton, P.C., 1990, Geology of the Kalgoorlie gold field, in Geology of Mineral Deposits of Australia and Papua New Guinea, pp. 411-431 (The Australasian Institute of Mining and Metallurgy, Melbourne)

4 KCGM, http://superpit.com.au/, 27 March 2016

The actual width of this sulphidic corridor, however, is currently unknown as the Company's drill holes, including the Diamond core hole, all ended in disseminated iron sulphides.

Likewise, the sulphidic corridor at Dixon presently remains open along strike in both directions as well as at depth, suggesting that its size is likely to further expand as Australian Mines completes additional drill programs in the coming months.

Australian Mines' exploration team noted that within the broader disseminated sulphide corridor at Dixon are periodic zones of semi-massive sulphides (>15%), which are often accompanied by quartz veining. These sulphidic-quartz zones appear to have a downhole thickness of approximately 15 metres and appear relatively consistent across all drill holes.

Small flecks of visible gold were observed by the Company's geologists within the Diamond drill core within one such sulphidic-quartz zone in drill hole DXDD001 (at 146.30 metres downhole).

Whilst Australian Mines is naturally encouraged by the presence of minor amounts of visible gold within the Diamond core, the Company stresses that there is no guarantee that assay results from the Dixon RC and Diamond core drill program will necessarily return anomalous or economic-grade gold values.

Presently, Australian Mines anticipates receiving the assay results from the recent RC drill program in the second week of April.

As cutting and sampling of the Diamond core is currently in progress, the Company would not envisage receiving the assay results from Diamond drill hole DXDD001 until the end of April at which time Australian Mines will provide a more comprehensive report on the Company's Dixon gold prospect to shareholders.

Given the proven effectiveness of induced polarisation (IP) to accurately map the sulphidic corridor in the immediate area of the Dixon discovery hole MMRC016, Australian Mines has commenced planning a detailed IP survey covering the remainder of its 6 kilometre long prospective dolerite unit at Dixon. This extended geophysical survey is designed to ascertain the potential strike length of the entire sulphidic corridor at Dixon.

Following completion of this extended IP survey, Australian Mines will move quickly to undertake its follow-up RC and Diamond core drill program at Dixon, which is currently scheduled to commence in early May.

Managing Director, Benjamin Bell commented, "Australian Mines' discovery of a wide and laterally continuous sulphidic corridor at Dixon is highly significant as it confirms that a large-scale fluid flow, and potentially gold mineralising event has occurred within the Company's prospect area.

The fact that visible gold was observed within the Diamond drill core from Dixon together with the high- grade gold zone, which was previously intersected within hole MMRC016, indicates that at least some of this incoming fluid is gold-bearing.

In light of these positive results, Australian Mines remains confident that its Dixon prospect represents an emerging greenfields gold discovery in a proven gold province of Western Australia.

The Company has therefore committed to undertaking the next phase of drilling as soon as practicable and we look forward to providing details of this drill program to shareholders as well as the assay results from the recently completed drill program as soon as this information becomes available".

***ENDS***

For further information, shareholders and media please contact:

Benjamin Bell Managing Director Ph: +61 8 9481 5811

E: [email protected]

Figure 1: Schematic image showing the surface trace of the sulphidic corridor at Dixon. Australian Mines' recent reverse circulation (RC) and Diamond core drill program has defined a 400 metre long and 120 metre wide sulphidic corridor at its Dixon gold prospect. This corridor remains open along strike in both directions, as well as at depth. Visible gold was observed in core from Diamond hole DXDD001 and the Company is presently awaiting the assay results from its 2016 drill program.