ACN 072 692 365

Report for June Quarter 29 July 2016

ASX Code: HEG, HEGOA

CORPORATE

• Several investment opportunities are under review.

• The increase in the gold price over the past six months has spurred a revival in the equity funding of gold companies and HEG is among the better positioned companies with advanced gold projects.

• HEG continues to maintain low project and corporate costs.

  PROJECTS

• The three main HEG gold projects of Hargraves, Red Hill and Reward are at various stages of pre-development and permitting.

• The Hargraves project (100% owned) has a Pre-Feasibility Study completed in 2014 for a 100,000oz open pit and low impact processing project.

• The Red Hill project (minimum 85%) is in preparation for a PFS on an open pit project with an onsite processing plant or as a source of ore for an offsite plant.

• The Reward Gold Mine (minimum 85%) requires drilling of the near-surface Frenchmans wide zone and modification of the mining permits.

Hill End Gold Limited (HEG) is an ASX-listed gold exploration and resource investment company with projects and investments that have advanced development potential as drivers for share price growth.

The HEG growth strategy is to leverage up its extensive experience in exploration, development and the operation of resource projects and in acquiring and enhancing project and corporate opportunities. HEG intends to acquire direct and indirect interests in projects Australia and in selected countries throughout the world to increase its asset and shareholder value.

The HEG advanced projects of Hargraves and Hill End are in the historically gold-rich region of central New South Wales, Australia with existing gold resources totalling 571,000 ounces. Exploration and pre- development activities continue for the open pit development of Hargraves and Red Hill and the underground extensions of the Hill End project.

CORPORATE

Several investment opportunities are under review.

Cost reductions have been made at project and corporate levels to optimise the allocation of working capital funds.

Figure 1. Hill End Gold Project locations

PROJECTS

Hargraves Project - EL 6996 (HEG 100%)

The wholly-owned Hargraves Project is located approximately 30 km south-west of Mudgee in central New South Wales (Figure 1).

HEG proposes to develop the BNH Deposit to recover 1.2 Mt with an average grade of 2.5 g/t gold. The production estimate includes approximately 20% inferred resource blocks and it is proposed to mine two initial open pits, the Central Pit and the South Pit for a combined production of 300,000 tonnes per year. The South Pit is planned to be approximately 70m deep and the Central Pit about 165m deep. There is excellent potential for resource extensions beyond the current pit optimisation design.

During the quarter the monitoring of environmental parameters at Hargraves continued in preparation for a Mining Lease application for the development of the project.

Hargraves Gold Mine Development Proposal Summary Economics (PFS 2014)

• Initial production of ~100,000 ounces over four years at

• Production rate 300,000 tonnes per year at 2.5g/t from two initial open pits

• 11:1 waste to ore stripping ratio at a pit design gold price of A$1,450/oz

• Gold recovery of 95%

• Pre-development cost of A$2m and project capital of A$13m

• Net profit of ~A$40m after full cost recovery / royalty payments at A$1,600/oz

• Potential for Hargraves development extensions at same production rate

• Potential development of Red Hill deposit may add significant net profit

The Project can be developed at a relatively low capital cost, as metallurgical test work has confirmed that the liberation of gold from quartz veins requires only coarse grinding with processing by low cost, simple gravity methods. The proposed gold recovery method is similar to that which was used at Hawkins Hill - Reward during trial mining. Metallurgical test work on samples from Red Hill also indicated similar rates of recovery using gravity processing.

The technical and economic feasibility of building and operating an expanded processing plant at Hargraves to also treat material from Red Hill and Hawkins Hill has been investigated during the quarter.

Hill End Project - EL 5868 (and Mining Leases) (HEG minimum 85%) & EL 8289 (HEG 100%)

The Hill End Project is located approximately 50 km north of Bathurst in central New South Wales (Figure 1).

A proposal to test and develop the upper levels of the Hill End Deposit involves initial drill testing the Frenchmans - Stevens wide-zone to extend the existing resource and develop a nominal target of 250,000 - 400,000 tonnes at 5 - 8 g/t gold.

The project development would include a short decline and three initial levels at 24m spacing. Existing drill intersections indicate the wide zone is 3 - 8 metres wide and carries the target grade where it has been intersected in earlier development and in underground drilling.

Current Tenement Schedule

The DOI R&E have advised the renewal of EL 6996 over 16 units for a further two years. However a correction to the expenditure requirements for only two years, instead of for three years as per the prior application, are underway.

Table 1 contains details of tenements held by HEG at the end of the quarter.

The Company has a 100% beneficial interest in its Hill End tenements, while a portion of the ground now encompassed by EL 5868 which includes resources at Hill End and Red Hill is subject to a reduction to 85% if an 'economic feasibility study' is completed by the Company, and First Tiffany Resource Corporation, if it establishes that it continues to hold a right against the Company to do so, contributes at the 15% level.

Table 1. Details of All Tenements Held by Hill End Gold Limited as at the end of the Quarter

EL - Exploration Licence ML / GL - Mining Lease

Philip Bruce

Managing Director / Executive Chairman

Competent Persons' Statement

The information in this report that relates to Reward Mineral Resources is based on information reviewed by Mr Philip Bruce, for Red Hill and Hargraves Mineral Resources and for Exploration results is based on information reviewed by Dr Stuart Munroe and Philip Bruce. Dr Munroe is a Member of the Australasian Institute of Mining and Metallurgy and Mr Bruce is a Fellow of the Australasian Institute of Mining and Metallurgy and Mr Bruce is a full-time employee of HEG. Dr Munroe and Mr Bruce have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (The JORC Code). Dr Munroe and Mr Bruce consent to the inclusion of the matters based on their information in the form and context in which it appears.

The Mineral Resource information referred to in this document was prepared and first disclosed under the JORC Code 2004.