13 July 2016

TROY OPERATIONAL UPDATE

Troy Resources Limited (ASX: TRY) provides the following update on activities at its Karouni Gold Operation in Guyana ahead of the release of its next Quarterly Report for the period ending 30 June 2016 later this month.

Operational

Progress advancing the Smarts pit into fresh rock has been slower than anticipated. This is due to the prolonged severity of the wet season and the requirement to cordon off sections of the pit to allow for the commencement of an RC grade control drilling program. This program was commenced to test the continuity of North-South vein structures within the deposit, improve grade control information and formulate ongoing mining sequences.

Disruptions to the mill lubrication system during May and June, as well as ongoing difficulties with the processing characteristics of the Saprolite clay material that will not be fully resolved until the Smarts pit is in fresh rock, reduced the plant throughput rate during the June quarter. New "made to order" pumps and parts for the worn components in the lubrication unit, are currently on track to be delivered in July and preparations have been made by the on-site maintenance team to ensure that the work to refurbish the lubrication system will not result in any significant downtime for the mill.

The impact of these factors on the Karouni operation during the June quarter is reflected in the following performance figures:

Karouni Preliminary Production Data for June 2016 Quarter

Whilst every effort will be made to make up for this situation in the second half of the year, the increase in production that had been expected over the course of the June Quarter, prior to these disruptions, will now only take effect in the September Quarter. This is expected to have an impact on guidance for CY2016, the extent of which is currently being established through the preparation of revised schedules to incorporate the current status of mining and processing activities.

Exploration

Further geological understanding of the orebody from grade control drilling and progressive mining, has identified the presence of additional quantities of lower grade ore that was largely uncaptured in the original drilling programme. These lower grade ore zones occur as disseminated mineralisation up to several metres away from the North-South veins. The inclusion of these new ore zones in the block model will increase the overall ore tonnes mined and therefore ounces per vertical metre, albeit resulting in a reduced overall grade for the tonnes recovered and processed.

During June, a Reverse Circulation (RC) drilling program commenced from the floor of the Smarts Stage 2 Pit. A total of 23 holes (2,081m) of RC drilling were completed to test this area on drill grid of about 30m x 10m spacing.

This drilling targeted the area between the hanging-wall and footwall Shears, where the gold bearing veins are preferentially developed within the mafic units. This program targeted North-South striking vein orientations but also intersected a number of NW-SE striking veins.

The drilling highlighted the fact that one of the key controls is the host lithology. In the andesite unit there is a limited alteration halo whereas in the basalt unit there is a more diffuse pyritic alteration adjacent to the veins which is readily apparent in the drill chips.

The holes pushed beyond the bounding shear have confirmed the fact that the gold mineralisation is entirely confined to the area bounded by the main NW-SE striking Smarts Shear.

The drilling has also confirmed that the N-S Veins are often "cm" scale widths and are widely spaced over the strike length of the pit. Although narrow widths, the N-S veins intercepted have visible gold and high gold grades. To date, partial assay results have been received for 10 of the 23 holes drilled. Significant results include (see Table 1, JORC Section 1 & Section 2 Tables and Figure 1: Geology & Drill Collar Plan):

 1m @ 132.5g/t from 21m

• 2m @ 53.0g/t from 3m

   2m @ 23.1g/t from 30m

   7m @ 18.2g/t from 33m

   3m @ 18.9g/t from 24m

• 1m @ 17.4g/t from 1m

   4m @ 13.9g/t from 20m

   2m @ 11.7g/t from 20m

• 5m @ 7.8g/t from 35m

• 9m @ 6.5g/t from 3m

• 8m @ 4.9 g/t from 28m

• 8m @ 4.8 g/t from 62m

• 3m @ 3.8g/t from 6m

   10m @ 3.5g/t from 69m

• 5m @ 3.2g/t from 16m

The program has confirmed the N-S Veins are continuous at shallow depths below the current planned pit floor. Fourteen of 29 total downhole intercepts were reported below the current design pit. Intersections are reported as downhole widths with true widths about 60% to 70% of the reported width. Once all assays are received, this infill drilling data will allow for a more robust Grade Control model to be constructed to aid in the mine planning for the remaining benches in the pit. An investigation of the potential of the N-S Veins at depth is likely to be warranted which will require a Diamond Core follow-up program.

Figure 1: Smarts Stage #2 Pit Geology & Drill Collar Plan

Following completion of the Smarts Stage 2 drilling program in late June, the rig is currently completing a 40 hole, 1,880m program in the Smarts Stage 4 pit area which is targeted at delineating gold mineralisation associated with the bounding NW-SE striking Smarts Shears as well as three N-S striking veins highlighted in earlier drilling.

An additional RC rig has arrived in Guyana from Brazil to enable dedicated grade control drilling to be scheduled into the mining sequence. The rig will also assist with extensional drilling around the pits.

Investec

Following a scheduled repayment of US$3.75 million to Investec at the end of June, the amount owing under the Investec Facility is now US$39.2 million, with the Company having repaid US$32.4 million (1) in the last 12 months.

(1) The amount outstanding under the Investec Facility at 30 June 2015 was A$100 million or US$71.57 million if converted at the A$/US$ rate of 0.7157 (being the rate used to convert the Facility from A$ to US$ on 20 May 2016).

Personnel

Following the staged divestment of the Company's interest in Casposo in Argentina and the closure of Andorinhas in Brazil, Troy's Chief Operating Officer in South America, Andrew Storrie, has decided to leave the Company. Andrew joined Troy in 2009 and played a key role in achieving reliable and consistent performance at both of these challenging operations and the Board wishes him well in his future endeavours.

ENDS

For further information please contact:

Martin Purvis Stacey Apostolou

CEO Company Secretary

Troy Resources Limited Troy Resources Limited

T: (61 8) 9481 1277 T: (61 8) 9481 1277‌

E: [email protected] E: [email protected]

Competent Person's Statement

The information in this presentation that relates to Exploration Results, Mineral Resources or Ore Reserves for the Karouni project is based on, and fairly represents, information and supporting documentation prepared by Mr Peter J Doyle, Vice President Exploration and Business Development of Troy, a Competent Person who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Doyle has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Doyle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Mr Doyle is a full time employee of Troy.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements relating to drill results, mineral resource estimates or studies and that all material assumptions and technical parameters underpinning the drill results and estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented here have not been materially modified from the original market announcements.