De Grey Mining Ltd

ASX Announcement

12 September 2016

ASX Code DEG

ABN 65 094 206 292

COMPANY DIRECTORS

Simon Lill

Executive Chairman

Davide Bosio

Non-executive Director

Steve Morris

Non-executive Director

Craig Nelmes

Company Secretary/CFO

CONTACT DETAILS

Principal & Registered Office Level 2, Suite 9

389 Oxford Street

Mt Hawthorn WA 6016

PO Box 281

Mt Hawthorn WA 6016 www.degreymining.com.au [email protected]

T +61 8 9381 4108

F +61 8 9381 6761

High Grade Zinc mineralisation defined at Tabba Tabba

Highlights

• High grade zinc-lead-silver rich VMS mineralisation defined at Tabba Tabba prospect.

• Mineralisation occurs from surface and remains open at depth.

• Mineralisation coincident with IP anomaly which remains inadequately drill tested, with further parallel anomalies untested.

• Significant results from the 12-hole program include:

  HoleID	From (m)	Interval (m)	Au g/t	Ag g/t	Cu %	Pb %	Zn %	In Situ Grade ZnEq %**
  TTRC027 including	24	9	0.27	58.7	0.22	1.08	2.68	6.78
  	24	2	0.71	158.5	0.27	3.60	8.06	18.90
  TTRC028 including	56	9	0.34	90.1	0.17	1.57	5.56	11.16
  	56	3	0.91	216.7	0.31	3.94	13.62	27.22
  TTRC029 including	29	7	0.13	60.1	0.10	1.03	4.55	8.01
  	31	4	0.18	95.6	0.13	1.60	6.96	12.28

• Results from the Wingina Deeps Diamond drilling are currently being analysed and expected shortly.

De Grey Executive Chairman Simon Lill said:

"Tabba Tabba is yet another example of the VMS potential along the 25km of prospective Tabba Tabba Greenstone Belt. These deposits are known to cluster. With respect to the Discovery and Orchard Tank prospects, the company has commissioned resource upgrades. Our recent time on the ground has also highlighted several priority targets also requiring assessment along this extensive corridor."

Turner River - Unlocking Shareholder Value

Tabba Tabba

De Grey Mining Ltd (ASX: DEG, "De Grey", "Company") is pleased to advise that the final 1m sample results for Tabba Tabba (Au-Ag-Zn-Pb) prospect have now been received and assessed.

The Tabba Tabba VMS prospect is located along the Tabba Tabba Greenstone Belt in the eastern portion of the Turner River Project (Fig 1), approximately 40km northeast of the Wingina Gold Deposit. The prospect lies approximately 15km along strike from De Grey's two 100% owned VMS deposits Orchard Tank (1.7Mt @ 0.5g/t Au, 78.6g/t Ag, 0.99% Pb, 2.38% Zn - JORC 2012) and Discovery (1.2Mt @ 0.8g/t Au, 87.0g/t Ag, 0.94% Pb, 2.34% Zn - JORC 2012) plus other encouraging VMS prospects Hakea and Cassia.

The RC drilling program at Tabba Tabba targeted infill drilling of the known VMS style mineralisation associated with a 1st priority IP anomaly (Figure 2) to a depth of approximately 50m depth on 40m spaced sections. Testing of this IP anomaly approximately 500m along strike to the southeast. A total of 12 holes were completed for an advance of 772m. Deeper previous drilling partial tests the mineralisation to 100m depth. Initial 4m composite samples were submitted to the laboratory and detailed 1m infill sampling subsequently completed over the anomalous 4m composite zones with significant results listed in Table 1.

The infill drilling programme has been successful in defining continuity of the Zn-Ag dominant VMS style mineralisation at depth. At surface, this mineralisation occurs as a series of small thin rubbly outcrops of gossan over approximately 200m strike length. In drilling, the mineralisation dips sub-vertical and is variably weathered to approximately 20m depth. Sections are provided in Figure 3

The strongest zone of VMS style mineralisation occurs as a northeast trending zone over approximately 200m strike length with thin extensions to the northeast. Mineralisation is defined at surface by limited outcropping gossan and by drilling to approximately 100m depth.

The defined bedrock mineralisation is also coincident with a 1.3km long moderate to strong northeast trending 1st priority chargeability IP anomaly and potentially a demagnetised zone (Figure 2). Modelling of this IP target suggests the target is sub-vertical with a steep potential plunge direction over approximately 300m strike length, which correlates well with the strongest mineralisation defined in drilling.

Two additional holes (Drill holes TTRC024 and 025) were drilled approximately 500m to the south west of the known gossan area where the IP target continues. No significant results were defined in this location.

Further assessment of the IP modelling will now be undertaken to better target mineralisation in the immediate vicinity along the prospective Tabba Tabba Greenstone Belt.

Page | 2

Figure 1 Turner River Project tenement plan showing main prospects over magnetic image

Page | 3

Table 1 Tabba Tabba Prospect - Significant Zn dominant lodes (Lodes defined >0.5% Zn with internal higher grade intercepts >3.0% Zn with max 2m internal dilution)

Page | 4