Level 7, 600 Murray Street West Perth WA 6005

PO Box 273

West Perth WA 6872

P 08 9486 9455

F 08 6210 1578

www.enrl.com.au

20 October 2016

ASX : ENR

Company Announcements Office Australian Securities Exchange 4th Floor, 20 Bridge Street Sydney NSW 2000

High grade gold surface sampling at Telfer West

• Surface rock chip program at the Egg Prospect has confirmed historical geochemistry returning up to 61.4g/t gold.

• Historical drilling at the Egg Prospect identified several areas of high grade gold mineralisation within a substantial volume of stockwork style gold mineralisation (see ASX release 25 August 2016).

• Heritage survey completed in October 2016.

• IP survey scheduled to commence in early November 2016.

• Drilling scheduled to commence in November 2016.

• A new gold project has been acquired at East Thomson's Dome. The project contains historical near surface gold occurrences in a favourable geological setting located 10km from the Telfer gold-copper mine

  The directors of Encounter Resources Ltd ("Encounter" or "the Company") are pleased to provide an update on activity at the Telfer West gold project ("Telfer West") and report the acquisition of an additional gold project in the Telfer region at East Thomson's Dome.

  Background - Telfer West

  Telfer West is located 25km north-west of Newcrest's major gold-copper operation at Telfer (Figure 1). Historical drilling completed by WMC and Newmont in the 1980s to early 1990s focused mostly on the outcropping, north-eastern limb of the Telfer West dome. This limb of upper Malu Formation forms a predominant north-west trending ridge within the project area (Figure 3). This historical drilling was primarily shallow surface geochemical drilling with only 4 holes drilled deeper than 150m over the 8 km long trend of the dome.

  At the Egg Prospect, located on the north-eastern limb of the dome at Telfer West, four Diamond holes were drilled in the period 1986 to 1989 with three of these Diamond holes drilled on a single section (Figure 4). Two of the three drill holes are of particular interest:

• Drill hole LHS86-9 was drilled in a south-west direction, perpendicular to interpreted stratigraphy. This hole was abandoned at 78.3m due to mechanical failure but ended in 5.3m at 1.44g/t gold from 73m to EOH.

• A follow up hole (LHS88-1) was drilled in a north-east direction and as such is interpreted to be drilled down the stratigraphy. However, this hole intersected a broad zone of low grade stockwork mineralisation of 117.7m @ 0.25g/t gold from 156m to EOH and included several narrow zones of high grade gold mineralisation:

   0.7m @ 4.92g/t gold from 61.5m

   0.13m @ 12.5g/t gold from 95.07m

   0.3m @ 10.7g/t gold from 156.6m

  • 0.8m @ 7.91g/t gold from 163.7m incl. 0.2m @ 21.7g/t gold from 163.7m and

 0.2m @ 7.23g/t gold from 183.8m

The fourth hole (LHS86-8) was drilled approximately 100m to the north-west and parallel to LHS 86-9. This 140m deep hole was not extensively sampled but did return an intersection of 5m @ 1.57g/t gold from 81m including 1m @ 5.63g/t from 81m (refer ASX release 25 August 2016).

It is interpreted that the historical drilling at the Egg Prospect identified a substantial volume of stockwork style gold mineralisation within the Malu Formation. This mineralisation remains open and untested in all directions and at depth.

Activity - Telfer West

A rock chipping program has been completed in the area adjacent to historical drilling at the Egg Prospect. A total of 11 samples were collected.

Table 1: Rock chip assay results from the Egg Prospect, Telfer West

These surface rock chip samples confirm historical geochemical results that focused the prior drilling at the Egg Prospect. Importantly, the surface which was sampled appears to be heavily weathered and potentially may have been leached of mineralisation. The variability of the results also indicates that the potential for multiple lenses of high grade gold quartz veining within a broader stockwork system.

A heritage survey was recently completed to facilitate upcoming on-ground activity. An IP (induced polarisation) survey is scheduled to commence in November 2016. Diamond drilling is also scheduled to commence at Telfer West during November 2016. This Diamond drilling will initially focus on continuing the prior drill testing at the Egg Prospect and the north-west magnetic anomaly adjacent to LHS89-6 (see Figure 3).

East Thomson's Dome Project

Encounter has recently acquired an additional gold project in the Telfer region at East Thompson's Dome. Consideration for the acquisition was 250,000 ordinary shares in Encounter and $15,000 in cash. East Thomson's Dome is located approximately 10km north west of the Telfer gold-copper mine and contains historical, near surface gold occurrences identified in shallow drilling at the fold closure of the dome.

The most recent substantive exploration at East Thomson's Dome was completed by Barrick Gold of Australia during 2004-2005. Historical exploration results from the project are currently being compiled, verified and interpreted.

On ground exploration activity at East Thomson's Dome, that may include IP surveying, aircore/RC/Diamond drilling, is scheduled to commence in early 2017.

Figure 1: Telfer West location map - Google Earth background

Figure 2: Telfer West historical drilling and interpreted geology. Historical Diamond holes (yellow diamonds), all other holes (black dots). Detailed aeromagnetic background (TMI 1VD pseudo colour image)

Figure 5

Figure 3: Telfer West airphoto - Historical Diamond holes (yellow diamonds), all other holes (black dots)