Ausgold : Drilling continues to confirm extensive high grade shoot Drilling continues to confirm extensive high grade shoot

12th December 2017

ASX CODE

AUC

DIRECTORS & MANAGEMENT

Mr Richard Lockwood

Non-Executive Chairman

Mr Denis Rakich Executive Director & Company Secretary

Mr Neil Fearis

Independent

Non-Executive Director

Mr Geoff Jones

Non-Executive Director

Miss Melanie Sutterby

Geology Manager

Ms Elsie Lee

Financial Controller

REGISTERED OFFICE

Level 16, AMP Building 140 St Georges Terrace Perth WA 6000

SHARE REGISTRY

Security Transfer Registrars 770 Canning Highway

Applecross WA 6153

ISSUED CAPITAL (12.12.16)

Ordinary shares: 350.3m Unlisted options: 44.9m

INVESTOR RELATIONS

Denis Rakich

T: [phone]

M: [phone]

E: [e-mail]

DRILLING AT KATANNING GOLD PROJECT CONFIRMS EXTENSIVE HIGH GRADE SHOOT

• Northern extension of White Dam high-grade shoot has been intersected underneath the Jinkas orebody. Results include:
  • 10m @ 3.55g/t Au from 193m in BSRC0729 including:
    • 2m @ 5.03/t Au from 193m; and

       1m @ 15.15g/t Au from 197m

  • 10m @ 1.22g/t Au from 193m in BSRC0730 including:
    • 1m @ 5.62/t Au from 193m; and
    • 3m @ 1.41g/t Au from 200m
• Southern extension of Jinkas high-grade lode intersected. Results include:
  • 15m @ 2.03g/t Au from 16m in BSRC0720 including:
    • 1m @ 9.24g/t Au from 25m; and
    • 2m @ 7.57g/t Au from 29m
• Follow-up drilling has commenced, further assay results will be released when available
• Mineral resources for White Dam and Jinkas expected to increase with further drilling and geological modelling.

  Ausgold Limited (ASX: AUC) ("Ausgold" or "the Company") is pleased to announce that all assay results have been received from the recent RC drilling undertaken at its 100% owned Katanning Gold Project ("KGP") prior to the programs temporary suspension over the Christmas holiday period. The assay results demonstrated the down-plunge continuity of the White Dam high-grade shoot, which was a key objective of the program.

  Two holes for 424m were drilled targeting the down-plunge extents of the White Dam high-grade shoot and seven holes for 625m were drilled targeting the shallow or "up-plunge" extents of White Dam (Figure 1, Table 1, Appendix 1).

  Miss Melanie Sutterby, Ausgold's Geology Manager, commented on the results:

  "The new results demonstrate that the high grade shoot at White Dam continues at depth. BSRC0729 and 730 intersected the shoot 80m north of the last confirmed section. We are excited by the success of the modelling and results to date, and the drill rig is currently on site testing the White Dam shoot further along its projected extension.

  ABN 67 140 164 496

  Level 16, AMP Building, 140 St Georges Terrace, Perth WA 6000

  T: 08 9220 9890 F: 08 9220 9820 E: [e-mail] W: www.ausgoldlimited.com

  Figure 1. Katanning Gold Project resource and prospect locations (Mineral Resources developed in accordance with JORC 2012 Code; refer "Updated JORC Resource" ASX announcement 21 October 2015)

  WHITE DAM AND JINKAS ASSAY RESULTS

  Significant results for the RC drilling at White Dam and Jinkas lodes are shown in Table 1, including:

  • 10m @ 3.55g/t Au from 193m in BSRC0729, including:

    • 2m @ 5.03/t Au from 193m; and

       1m @ 15.15g/t Au from 197m.

  • 10m @ 1.22g/t Au from 193m in BSRC0730, including:

    • 1m @ 5.62/t Au from 193m; and

       3m @ 1.41g/t Au from 200m.

  • 15m @ 2.03g/t Au from 16m in BSRC0720, including:

    • 1m @ 9.24g/t Au from 25m; and

    • 2m @ 7.57g/t Au from 29m.

Hole IDNorthing MGA 50		Easting MGA 50	AHD RL	Magnetic Azimuth	Dip	Total Depth (m)	From (m)	To (m)	Interval (m)	AuLode (ppm)
WHITE DAM and JINKAS LODES
BSRC0716	6287605	584404	373	244°	-61°	76	59	60	1	1.29	White Dam
BSRC0717	6287627	584436	372	244°	-85°	100	80	81	1	2.00	White Dam
BSRC0718	6287626	584435	372	244°	-60°	96	79	80	1	2.27	White Dam

BSRC0719 6287588 584379 373 244° -61° 59 No significant intersections White Dam

BSRC0720 6287700	584533	369	242°	-55°	132	16	31	15	2.03
Including	25					26	1	9.24	Jinkas
Including	29					31	2	7.57

BSRC0721 6287452 584449 383 244° -61° 72 No significant intersections White Dam

BSRC0722 6287465 584489 383 244° -60° 90 87 88 1 5.15 White Dam

BSRC0728 6288276 584433 384

244°

-70°

163

No significant intersections

Hole

Abandoned

BSRC0729 6288275	584432	384	244°	-65°	214	97 193	98 203	1 10	5.66 3.35	Jinkas
Including	193					195	2	5.03	White Dam
Including	197					198	1	15.15

BSRC0730	6288275	584431	384	244°	-60°	210	98	100	2	1.15
Jinkas
116	117	1	1.14
193	203	10	1.22
Including	193	194	1	5.62	White Dam
Including	200	203	3	1.41

Table 1. Anomalous gold values received from RC drilling at White Dam and Jinkas South (*GDA 1994 MGA Zone 50).

Notes to Table 1.

For RC assay results the intervals reported are thickness-weighted averages (ie. XXm grading XX grams per tonne gold content). Reported intervals are calculated using ≥ 0.5g/t Au cut-off grade and using a ≤ 2m minimum Internal Dilution (unless otherwise stated).

Figure 2 shows a cross-section view and Figure 3 shows a long-section view of White Dam highlighting gold grade distribution and the apparent shoot-like geometry of the high-grade mineralisation.

The new results demonstrate the down-plunge continuity of the White Dam high-grade shoot, with BSRC0729 and BSRC0730 (section 18410mN) intersecting the shoot 80m north of its previously confirmed extent on section 18340mN (refer ASX announcement 4th May 2016). The strike length of the White Dam high-grade shoot has now been modelled in excess of 550m and remains open at depth.

The current RC drilling (refer to ASX release 10th January 2017), which commenced on Tuesday and consists of approximately 1200m, is designed to test the down plunge continuity at White Dam a further 180m beyond these latest results.

A zone of shallow mineralisation was intersected by BSRC0720 approximately 50m south of the historical pit, which appears to be the southern extension of the Jinkas orebody. There are historical drill holes in this location. However, they were drilled on a sub-optimal azimuth, rendering the logging and assay results unsuitable for inclusion in mineral resource modelling and estimation. As such, this southern mineralised extension of approximately 300m has not been effectively drill-tested and will be assessed at a later date.

The up-plunge drilling at White Dam successfully intersected the interpreted shoot position. However, the results were of a low tenor. Interpretation of the results is ongoing. It is possible that the shoot pinches out towards the surface or that the lode is structurally complicated.

Follow-up drilling has commenced in anticipation of a global mineral resource update later in the year.

Figure 2. White Dam project cross-section 18410mN