For the three months ended 30 June 2016‌‌‌

HIGHLIGHTS

Commenting on the quarter, Troy CEO Martin Purvis said:

"After a strong start at Karouni, the June Quarter presented a number of significant impediments at the operational level.

In many respects, the June Quarter reflects a period during which the team on site had to come to terms with a number of disruptive challenges, including debilitating weather conditions, a more complex ore body than anticipated and "teething" problems in the mill operation.‌‌‌

Whilst the impact of these conditions on the quarterly performance is disappointing, it is evident that the experience gained at this early stage, will lead to a more sustainable operating platform going forward.

On a positive note, the restructured debt facility with Investec will enhance exposure to the spot gold price as production increases and the ability of Karouni to maintain a relatively low cash cost despite all the setbacks in the operation, is a positive sign for future margins."

GROUP RESULTS (2)(3)

(1) Co-Product costing converts silver to an equivalent value of gold ounces. For actual production we use sales prices realised.

(2) Represents gold and silver production from Casposo up until 4 March 2016, being the date of sale to Austral Gold Limited.

(3) The Group Results include Karouni gold production and costs from 1 January 2016 only. Karouni produced 4,984oz. of gold in the

December quarter.

OPERATIONS

KAROUNI, GUYANA (Troy 100% through Troy Resources Guyana Inc.)

(1) Production information and costs for Karouni prior to commercial production being achieved are not included in the operating data before 1 January 2016. Karouni produced 4,984oz. of gold in the December quarter.

(2) Before impact of hedging.

The cost information and expenditure detail provided within this report are based on unaudited numbers. All references to $ are Australian dollars unless otherwise stated.

Open Pit Mining

Full scale mining continued in the Smarts 3 and Hicks 3 pits during the quarter whilst early stage operations commenced in Hicks 2 and Smarts 4. Notwithstanding a range of counter measures introduced before-hand, production activities across the site were still severely disrupted by the onset of the wet season towards the end of May, as significant time and resources were taken out of the mining cycle by dewatering activities and safety procedures.

With access to deeper parts of Smarts 3 and Hicks 3 limited due to continuous heavy rainfall, it was necessary to revise the mining plan, resulting in ore being mined from the shallower Hicks Stage 2 pit and the Smarts Stage 4 cutback ahead of schedule, in order to enable continuous ore supply to the processing plant. Preliminary waste removal was also carried out in Hicks Stage 1. Figures 1 and 2 depict the various pits for each of the Deposits.

Figure 1 - Hicks Pits

Figure 2 - Smarts Pits

As a consequence of the short term change in the mining schedule, there was a predicted, but notable reduction in the average grade from the level previously forecast. Furthermore, the restrictive mining conditions resulted in much higher ore dilution and ore loss factors than planned, particularly within the Smarts 3 pit. The combination of these factors had an adverse impact on the mining reconciliation for the Quarter.

Grade control drilling and normal sampling quality control protocols were made more difficult by the peak seasonal rainfall. Overall, approximately 55% more "ore tonnes" were mined from the Smarts pits than scheduled from the block model during the quarter.

Mining in the high grade, Smarts 2 pit was curtailed early in the quarter so that a Reverse Circulation ("RC") grade control program could commence on the pit floor. This program was designed to delineate additional mineralisation contained in previously un- modelled N-S veins. At the conclusion of this program, which served to provide encouraging results for increasing our understanding of mineralisation, the rig was moved to Smarts Stage 4 for a similar program of close spaced RC grade control holes.

The total material movement for the quarter was 1,598,000 tonnes, an increase of 14% over the previous quarter of 1,400,000 tonnes. This was achieved despite the difficult operating conditions, following a further increase in the mining fleet to 21 dump trucks and 5 excavators from 12 dump trucks and 3 excavators. Total ore mined for the quarter was 173,858t @ 2.97g/t.

Processing

As announced previously to the market, processing rates were reduced by several issues during the quarter, including disruptions to the mill lubrication system and ongoing difficulties with the processing characteristics of the "sodden", Saprolite clay material.

Treatment of the Saprolite clay material during the wet season has resulted in excessive blockages to ore chutes and screens, resulting in unscheduled down- time whilst the blockages are cleared. The clay rich ore also has a tendency to be problematic in the leaching circuit with viscosity issues impacting on leaching kinetics. Viscosity modifiers are currently being tested on site in order to alleviate this issue.

A total of 161,764 tonnes @ 3.04g/t was processed with an average recovery of 92%, resulting in 14,545oz. being recovered.

Production Results and Summary

Notwithstanding the adverse operating conditions and problems, Karouni produced 14,545oz. of gold at a cash cost of US$658/oz. and an AISC of US$1,064/oz. Whilst unit costs for the quarter were higher due to lower gold production, total operating costs remained in line with the previous quarter, reinforcing the margin potential of the operation once throughput is increased back to planned levels.

Outlook

The Karouni operations had to deal with a range of disruptive challenges during the quarter. Looking ahead, conditions are set to improve with most of the pits scheduled to be in fresh rock well before the next wet season at the end of the year. Together with a larger mining fleet, and improved mill throughput, the Company is expecting continuous improvement in operating performance in all aspects of the operation.

Commensurate with the range of changes in operational activity and performance over the past three months, we continue to work through the mine scheduling process for the remainder of CY16 and FY17 and expect to provide updated guidance during August.

ANDORINHAS, BRAZIL (Troy 100% through Reinarda Mineração Ltda)

Processing of remaining stockpiles ceased during April and plant cleaning finished at the end of May, ahead of the handover to Anfield Gold in early June.

No environmental incidents were recorded for the quarter.

Following Court approval for the acquisition by Anfield Gold of all the shares in Magellan Minerals, Troy received US$1.99 million representing the main component of the payment towards the initial purchase price of US$3.5 million for the sale of the Andorinhas plant.

Further consideration of US$1 million is to be paid to Troy following either production of 20,000oz of gold or 26 February 2017, whichever comes earliest.

Production Results and Summary

Gold production was 1,522oz at a cash cost of US$1,057/oz.

Outlook

The environmental rehabilitation program, including ongoing air and water monitoring is ongoing.

The plant is expected to have been removed from site within the next five months, after which time the plant footprint will also be rehabilitated.

CASPOSO, Argentina (Troy 49%)

As announced on 7 March 2016, Austral Gold Limited (ASX: AGD) acquired a majority interest in Casposo and was appointed manager with immediate effect.

During the quarter, significant progress was made in several aspects of the operation. The proposed capital investment plan to develop and implement a re-engineering program for Casposo is on-going, with Austral having invested more than US$1.5 million to date.

A reputable Canadian engineering firm has been engaged to perform a pre-feasibility study to update the Mineral Resource and Ore Reserves in accordance with JORC and NI 43-101 requirements. Technical studies are ongoing and a new mine operational model is being developed in preparation for the recommencement of commercial operations at Casposo.