Ann: Response to Media Article, page-35

Esh,

Thanks for your help with the Gilbeys Resource Update [ASX 28Nov2018].

I would be grateful if you could comment on my reasoning below.

In Nov2018, GCY undertook grade control drilling (the 'Sample') and used this to update the Gilbeys Resource Estimate (the 'Whole').

The 'Sample' results are compared in Table 2:

• the 'Oxide' was reduced from 61000 oz to 50000 oz (-11000 oz or -18.0%);
• the 'Transition' was reduced from 48000 oz to 39000 oz (-9000 oz or -18.8%); and
• the 'Fresh' was reduced from 11000 oz to 9000 oz (-2000 oz or -18.2%).

So how was this 'Sample' data used to update the 'Whole' data?

The 'Sample' data for:

• the 'Oxide' was close to 100% and therefore, for the 'Oxide', the 'Sample' data (-11000 oz) simply transfers to the 'Whole'.
• the 'Transition' was around 70% and therefore, for the 'Transition', the 'Sample' data (-9000 oz) transfers (more or less) to the 'Whole'.
• the 'Fresh' was minimal and therefore, for the 'Fresh', the 'Sample' data (-2000 oz) transfers to the 'Whole'.  The reason for the limited sampling is that the grade control drilling only extended to RL 360 rather than to  RL 200 (as Esh has noted).

The adjustments to the 'Whole' are shown in Table 3.

Overall, the Gilbeys resource estimate has reduced from 563000 oz to 542000 oz, with the bulk of the reduction in the 'Oxide' (fully sampled) and 'Transition' (around 70% sampled).

The 'Fresh',which now comprises 80% of the Gilbeys resource. has hardly been reduced at all (438000 to 436000 oz) due to the minimal grade drilling.  Let us hope that the 'Fresh' 'Sample' reduction of 18.2% (Table 2) does not apply to the 'Whole'!

So what does all this mean?

• in the short term, the high mill throughput of the 'Oxide' and 'Transition' could offset the lower grades and maintain guidance; but
• once the 'Fresh' is reached (ie the 'Oxide' and 'Transition' are depleted) then it is 'Game On'!  And as Esh says, we don't hardly know any more than we knew before.