Mineral Resources & Ore Reserves

The technical studies and five-year outlook are underpinned by the updated JORC 2012 compliant Mineral Resources at Carosue Dam of 79.6 million tonnes at 1.6g/t for 4.1Moz and Ore Reserves of

Figure 4 - Carosue Dam 5 year production profile

SOUTHERN REGION

Karari

The Karari underground is a rapidly emerging underground mine, located approximately 500m from the Carosue Dam mill. Although drilling only commenced in the March Quarter 2015, Karari is fast becoming a key driver of future growth at CDO.

Multiple lodes, impressive gram-metre intercepts and productive mining characteristics support a shallow, potentially long life, high margin operation which underpins the Carosue Dam 5 year plan.

The current mining method is conventional longhole open stoping. Ore Reserves have been determined based on this method. The next 18 months of production from the northern mining areas (Resurrection, A1 and Hangingwall Lodes) is de-risked from a planning point of view (Ore Reserve status). This provides positive cash flow generation whilst allowing for the establishment of the southern mining area (Dhoni Lode). The Dhoni Lode is highly amenable to low cost, bulk mining methods, which will be assessed over the coming months.

Drilling will continue on the southern areas to facilitate further resource growth, in conjunction with mining and geotechnical studies to evaluate potential bulk mining methods within the Dhoni Lode. A review of bulk mining methods is advanced, given existing in-house expertise and the work completed for the Thunderbox underground feasibility study (including visits to several sites employing bulk mining methods).

Resource Drilling

Drilling over the past 3 months has been predominately focused on infill grade control drilling in the upper portion of the project. The purpose was to improve the resource estimate confidence from inferred to indicated and enable a maiden underground Ore Reserves to be stated for Karari.

Drilling highlights include:

 KRRC350 - 12m @ 6.3g/t from 272.0m

 KRRD068 - 16m @ 4.3g/t from 285.0m

 KRGC217 - 26m @ 3.5g/t from 73.0m

 KRGC218 - 13m @ 4.1g/t from 56.0m

 KRGC221 - 27m @ 5.2g/t from 49.4m

 KRGC223 - 19m @ 3.7g/t from 64.3m

 KRGC224 - 34m @ 3.7g/t from 64.0m

 KRSD026 - 12m @ 6.7g/t from 58.0m

 KRSD028 - 7m @ 5.3g/t from 50.0m

 KRSD029 - 9m @ 9.1g/t from 21.0m

The next phase of drilling at Karari will consist of a combination of resource infill drilling (into the inferred portion of the resource for ore reserve conversion purposes) and a surface exploration drilling program (south of the existing resource). The surface work will target extensions to the high grade mineralisation including previous results of 23m @ 7.5g/t, 21m @ 4.8g/t, 19m @ 5.1g/t and 12m @ 6.3g/t, some of the southern-most holes drilled to date.

Figure 5 highlights past and planned drilling.

Figure 5 - Karari Long Section

Mineral Resources

Total Mineral Resources at Karari have doubled from 311koz @ 1.6g/t to 633koz @ 2.7g/t following the completion of the stage 1 underground exploration drilling program (28,000m). Importantly, the underground portion of the Mineral Resource has increased by in excess of 0.5Moz @ 2.8g/t.

Table 1 - Karari Total Mineral Resource

There is a noticeable increase in the grade of the Inferred Mineral Resource (295koz @ 3.3g/t) relative to the Indicated Resource (336koz @ 2.4g/t). This is due to the presence of some of the best drill intercepts to date occurring in the lower portions of the Mineral Resource, which can be clearly seen in Figure 9.

The total Mineral Resource of 633koz at Karari extends vertically over ~250m (refer to Figure 5). Therefore the total endowment runs at ~2,500 ounces per vertical metre.

Conversion of the current inferred resource to indicated, and then to ore reserves, will occur over the next 6-9 months. Given drilling only commenced during the March Quarter 2015, over 320koz of Mineral Resources have been added in just 9 months. The bottom of the Inferred Resource is currently only 450m below surface and remains open at depth and along strike to the south.

The grade/tonnage curve for the Karari Mineral Resources is shown in Figure 6 below.

Figure 6 - Karari Grade / Tonnage Curve

The higher grade material persists predominately in the Dhoni and A1 Lodes and in most cases is encapsulated by a halo of +2g/t material (refer Figure 7) that has better geological and grade continuity along strike and down dip.

Figure 7 - Karari Plan View

The mining method adopted extracts the high grade core and the +2g/t halo (refer Figure 8) on the basis that:

• The stope shapes honour the geology and not the modelled grade boundaries

• This strategy de-risks the high grade core variability and interpretation

• It reduces the mining costs unit rate ($/t)

• The +2g/t economically viable halo material displaces low grade stockpile ore grading 1.1g/t in FY16 & FY17

• Cash flow from the project is maximised by taking advantage of the prevailing A$/oz gold price and low mining cost environment

• All additional halo ore mined remains above the economic cut-off grade

It's important to note that the deposit exhibits selectivity characteristics. This enables the cut-off grade to be elevated should the gold price fall and/or costs increase to the extent that extracting the

+2g/t halo material is no longer economically viable.

Figure 8 - Karari Plan View illustrating Reserve Stopes with internal selectivity options

Underground Ore Reserves

Table 2 - Karari Ore Reserves

The maiden underground Ore Reserves for Karari of 1.0mt @ 3.0g/t for 98koz are shown in Table 2 and depicted in Figure 9 (yellow stope shapes). Ore Reserves can only be extracted from Measured and Indicated Mineral Resources, therefore the blue stope shapes in Figure 8 represent an additional non-JORC compliant 'Mining Inventory' of approximately 1.2mt @ 4.0g/t for 152koz derived from Inferred Mineral Resources (Table 1). This will be the subject of an infill drilling program over the next 6-9 months aiming to convert this portion of the resource into Ore Reserves. It should be noted that, in general, there is a lower level of geological confidence associated with Inferred Mineral Resources (in this case due to limited current density of drilling). There is no certainty that further exploration work will result in the determination of Measured or Indicated Mineral Resources or that the production target will be realised.

Figure 9 - Karari Long Section highlighting the Ore Reserve and Mining Inventory

Table 3 - Karari Total Mining Inventory (Ore Reserves + Mining Inventory)

The total mining inventory of 250koz @ 3.5g/t (refer Table 3) at Karari extends vertically over ~250m (refer Figure 9) therefore the total mining inventory endowment runs at ~1,000 ounces per vertical metre (opvm).

It is anticipated that production from Karari in FY16 will be ~50-55kozpa (~550ktpa @ 3.0g/t, based on Ore Reserves). Annual production for FYs 2017-2020 is planned to increase to ~60-70kozpa based on a combination of higher tonnage and higher grades.

Further exploration will be conducted in the short to medium term targeting mine life extensions beyond 5 years. Key goals will be to extend the resource envelope along strike to the south (via a surface exploration drilling program in FY16) and down dip of the Dhoni, Resurrection, A1 and Hangingwall Lodes below the deepest existing drilling (only ~450m below surface), that will target extending mine life to in excess of 5 years.

Financial Analysis

Economic analysis has been completed on the Karari mineral inventory and is shown in Table 4. The pre-production capital cost of $9.2m has already been incurred during the period to September 2015. Karari has now attained steady state production and will be cash flow positive from October 2015 and is now classified as being in 'commercial production'.

This financial analysis is based on longhole open stoping. The total mining cost per tonne is an all in mining cost and includes direct mining costs, sustaining development, grade control and extensional resource drilling.

Table 4 - Karari Financial Analysis

Table 5 - Karari Total Mining Inventory Physicals

Mine Physicals

Underground Mining

Stoping commenced in September, with the first production blast in the 2190 Hangingwall north (refer Figure 10). Production activities are progressing rapidly, with stopes opened up on the 2190, 2165 and production drilling on the 2140 level. All stoping activities to date have been on the Hangingwall and A1 lodes. The first intersection of ore in the Dhoni Lode on the 2140 level is anticipated in October.

Key infrastructure including secondary means of egress ladder ways, extension of the high voltage electrical power reticulation and a primary ventilation network were established in the September Quarter.

Whilst the northern mining areas (A1, Hangingwall and Resurrection Lodes) are expected to be mined utilising longhole open stoping, the southern mining area (Dhoni Lode) lends itself to a high productivity, bulk mining method. Technical investigations will continue over the next six months to optimise the mining method for the Dhoni Lode. Potential methods include sublevel open stoping or sublevel shrinkage. Both have been successfully employed in WA for many years, and Saracen has extensive in-house expertise with such methods.

Longhole open stoping has been assumed as the base case for economic analysis to date. Bulk mining methods will only improve the overall economics of the project. Adoption of a bulk method in the Dhoni Lode could facilitate a step change in production from 700ktpa to in excess of 1mtpa (subject to detailed feasibility work). This has the added benefit of deferring the capital expenditure associated with the commencement of the Whirling Dervish underground, as the additional production from Karari would compensate for the volume that would otherwise be mined from Whirling Dervish.

Figure 10 - Stope Charging Karari Underground 2190 Hangingwall lode