Group Summary

Table 1 - Consolidated production and sales summary

• AISC applies to Carosue Dam production only, Thunderbox costs are capitalised (until commercial production)

  Carosue Dam Operations

  Table 2 - Carosue Dam - Key metrics

  Carosue Dam Units Sep Q 2015 Dec Q 2015 Mar Q 2016 YTD FY16

  Underground Mining

  Ore Mined	t	143,000	248,000	275,000	666,000
  Mine Grade	g/t	4.30	4.54	2.94	3.83
  Contained Gold	oz	19,759	36,229	26,051	82,039

  Mill Production

  Ore Milled	t	577,000	569,000	565,000	1,711,000
  Mill Grade	g/t	2.25	2.62	2.02	2.30
  Contained Gold	oz	41,753	47,854	36,733	126,340
  Recovery	%	91.3%	92.5%	91.9%	91.9%
  Recovered Gold	oz	38,140	44,265	33,749	116,154

  Underground Mining

  Ore mined from underground continues to increase, rising to 275kt in the March quarter. Increased ore from the development of the Deep South mine was offset by lower production from Red October, where exploration drilling is prioritised. Table 2 includes production from:

  • Karari - 11.4koz @ 2.5g/t (v December quarter 15.1koz @ 3.1g/t)

    Ore grade and production was lower than the December quarter due to predominantly development ore only being mined from the Dhoni lode. Stoping is set to increase in the current June quarter and the head grade is expected to revert to ~3.0g/t in line with the Reserve grade.

  • Red October - 11.9koz @ 3.8g/t (v December quarter 21.1koz @ 6.7g/t)

    Gold production was lower than the previous quarter due to the planned development of the Deep South mine, with resources shared between the two mines. This has also enabled exploration drilling to be conducted from the base of the Red October mine (results expected in the current June quarter).

  • Deep South - 2.7koz @ 2.3g/t (v December quarter nil)

99% of ore production was from development, with stoping commencing late in the quarter. Ore grades are set to increase to ~3.5g/t in the current June quarter with stoping ramping up.

Despite the softer quarter from underground mining, Carosue Dam generated operational cash flow of A$26.0 million resulting in A$34.3m cash and equivalents at 31 March 2016. This comfortably exceeded the outlook of "in excess of A$20m", reinforcing Saracen's cash flow credentials.

Combined underground mine production is expected to revert back to +30koz in the current June quarter with the commencement of stoping activities at both Deep South and the Dhoni lode at Karari.

Processing

Milling was impacted by adverse weather during the quarter, with heavy rains in the last two weeks of March restricting road haulage of ore from the Deep South and Red October mines.

The closing ore stockpile at the end of the quarter was 1.3Mt @ 0.9g/t for 37,996oz. These ounces will only incur processing and administration costs, equivalent to ~A$1,097/oz AISC or A$14 million in deferred free cash flow using latest costs and a A$1,518/oz gold price (average hedge price).

Outlook

A stronger June quarter is expected as deferred high grade ore is processed and stoping activities at both Deep South and Karari ramp up.

June quarter to date (to 25 April) Carosue Dam has performed strongly, with mine production of

~9,100oz @ 3.2g/t and mill production of ~12,500oz @ 2.5g/t. This sets the foundations for a strong finish to FY16.

Thunderbox Operations

Table 3 - Thunderbox - Key metrics

Thunderbox Units Sep Q 2015 Dec Q 2015 Mar Q 2016 YTD FY16

Open Pit Mining

Mill Production

Open Pit Mining

3.7 million bcm were excavated from Thunderbox (Zone A) during the quarter, with 345,000 tonnes of ore mined for 10,230oz at an average grade of 0.92g/t. By the end of the quarter, the pit floor of the cutback had reached the same level as the base of the old pit, allowing for ease of access, increased tonnage of higher grade, footwall ore and simplified scheduling of mining going forward.

Total mining expenditure was A$13.9 million (inclusive of load and haul, drill and blast, grade control, supervision and overheads), compared to budgeted costs of A$18.0 million (23% lower).

Material mined was slightly lower than budgeted movement of 3.9 million bcm (10% under performance), primarily due to inclement weather.

Unit mining costs for the quarter were 2% lower than budget and 25% below YTD budget (A$3.30/bcm v A$4.39/bcm).

Figure 1 - Thunderbox Open Pit (looking north) - Consistent and persistent

Figure 1 identifies both the lower grade hanging wall lode in the background and the higher grade, bulk, foot wall lode in the foreground.

Processing

Commercial production is anticipated in the current June quarter, doubling total group production to an annualised rate of ~300,000oz.

The laboratory was commissioned, the pebble crusher installed and the first of the spark ignition gas generators for the powerhouse has arrived on site. Plant throughput has reached nameplate capacity.

The first gold pour at Thunderbox took place during the quarter with a total of 9,310oz produced.

The current June quarter will see the commissioning of the tailings thickener, the electrical commissioning of the scats pebble crusher and the commencement of works on the new gravity circuit to be commissioned in July.

Outlook

A stronger June quarter is expected with increased tonnage of the higher grade foot wall ore becoming available for milling.

June quarter to date (to 25 April) Thunderbox has performed strongly. Mine production of ~6,368oz @ 1.6g/t and mill production of ~6,000oz @ 1.3g/t comfortably exceed the mine and mill head grade for the March quarter of 0.9-1.0g/t.