Austpac Resources N L : Shareholder Update – Nhill drilling results – 29 August 2017

Tuesday 29th August 2017 SHAREHOLDER UPDATE

AUSTPAC RESOURCES N.L.

ACN 002 264 057

Level 3

62 Pitt Street

SYDNEY NSW 2000

GPO Box 5297

SYDNEY NSW 2001

Telephone: [phone]

Facsimile: ([phone] Email: [e-mail] www.austpacresources.com

Results confirm the strong alteration and significant zinc mineralisation intersected at Nhill requires follow-up drilling

Austpac (ASX code: APG) is encouraged by the additional results from Nhill and is pleased to advise that:

The analyses of the second batch of samples confirm and extend the zinc plus accessory copper- gold mineralised zone intersected in GG-01, the company's first diamond drillhole within EL 5291 Nhill.

The strong pervasive alteration of the basement volcanics and the highly anomalous zinc mineralisation (up to 3.6% Zn and 0.44g/t Au) are typical of the outer halo of a nearby porphyry- style hydrothermal system.

Step out drilling is required to locate the source in this unexplored region of western Victoria.

In May 2017, Austpac completed one exploration drill hole to test the basement rocks for copper-lead-zinc mineralisation under a thick cover of much younger Murray Basin sediments. The program is being co- funded by the Victorian Government under the TARGET Minerals Exploration Initiative. The drill target was developed using recently acquired magnetic and gravity data and the innovative geological concepts developed by the Geological Survey of Victoria. The vertical hole, DH GG-01, passed through the cover sediments using mud rotary equipment and encountered competent basement at 248.9m. Diamond core drilling was then used to continue the hole for a further 75.6m and the hole was terminated at 324.5m.

The basement consists primarily of basaltic volcanics which, apart from two very narrow sections in the hole, have been strongly to intensely altered by hydrothermal fluids. The alteration is accompanied by sulphide mineralisation, which was deposited primarily as pyrite (iron sulphide) in fractures, along breccia boundaries and in vughs/amygdales (voids). The pyrite is often accompanied by significant amounts of sphalerite (zinc sulphide) and minor amounts of finely disseminated chalcopyrite (copper sulphide) and anomalous gold.

The results from initial 38 core samples submitted for analysis were very encouraging, as described in the Company's recent Quarterly Report to the ASX dated 30 July 2017.

Two intervals contain abundant visible sphalerite and pyrite mineralisation:

0.5m at 3.6% Zn with 0.44 g/t Au (intercept downhole from 308.0m to 308.5m). This included an 8cm section containing 15% sphalerite and 8% pyrite together with silica flooding (see photo).

0.5m at 1.2% Zn with 0.20 g/t Au (intercept downhole from 324.0m to 324.5m; end of the hole).

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In July 2017, an additional 31 drill core samples were analysed to fill in the gaps in the initial batch of samples. The results show that the zone of strongly anomalous base metals and gold extends over a broader interval within hole GG-01 than previously known. The additional results are highlighted in light grey in the table below, and anomalous results are marked in bold and an asterisk*.

The basaltic volcanics encountered at the base of drill hole GG-01 at Nhill are considered analogous to parts of the Cambrian Mount Stavely Volcanic Complex, ~170km to the southeast, where results of recent drilling intersected porphyry-style copper-gold mineralisation. Exploration in the Mallee region of western Victoria has been hampered by the thick cover of Murray Basin sediments. The mineralisation encountered in GG-01 is highly encouraging considering it is the first hole drilled in this previously untested terrain.

The strong alteration and mineralisation encountered in GG-01 is the result of the introduction of mineral- rich fluids into permeable fractures and breccia zones. The mineral assemblage observed is typical of the outer halo of a hydrothermal system, the source of which is offset from present drill hole. However, the distance and direction of its source cannot be assessed with a single drill hole and step-out drilling is required to fully test this hitherto unexplored region.

Below is a photograph of a 6cm section of core from 308.0m from the upper breccia zone:

Core sample showing altered basalt fragments (greenish) enclosed by a hydrothermal matrix of ~15% brown sphalerite (zinc sulphide), ~8% yellowish pyrite and subordinate pale grey quartz. Scale bar in centimetres.

ANALYSES FOR DRILLHOLE GG-01 - EL 5291 NHILL, VICTORIA Note: Technical details regarding the sampling and analytical procedures used are attached to Austpac's Quarterly Report to the ASX for the Quarter dated 30 July 2017. Batch 1 - 38 core samples plus 2 standards (no highlight) Batch 2 - 31 core samples plus 2 standards (light grey highlight) * indicates anomalous values (bold)

SAMPLE	FROM	TO	Interval	Au Au-TL43	Ag ME-ICP43	Cu ME-ICP43	Pb ME-ICP43	Zn ME-ICP43	Zn Zn-OG46
ID	m	m	m	ppm	ppm	ppm	ppm	ppm	%
GGS001	234.0	243.0	9.0	0.00	0.4	159	28	408
GGS002	243.0	248.9	5.9	0.00	0.3	78	19	233
GGS003	250.2	251.1	0.9	0.00		6	21	91
GGS004	251.1	251.6	0.5	0.00	0.2	286	13	185
GGS041	251.6	252.6	1.0	0.00		62	1.3	94
GGS042	252.6	253.6	1.0	0.00		76	2.3	95
GGS044	259.0	260.0	1.0	*	0.00	0.3	552	3.9	103
GGS045	260.0	261.0	1.0	0.00		26	2.6	119
GGS005	276.8	277.5	0.7	0.01	0.2	106	12	119
GGS046	277.5	278.0	0.5	0.01	0.1	159	3.5	158
GGS006	278.0	278.3	0.3	0.01	0.1	143	10	106
GGS007	278.3	278.5	0.2	0.00	0.1	117	11	159
GGS008	278.5	279.2	0.7	0.10	0.4	174	38	178
GGS047	279.2	280.1	0.9	0.01		35	3.5	99
GGS048	280.1	281.1	1.0	*	0.27	0.2	108	6.0	198
GGS009	281.1	281.6	0.5	0.10	0.4	155	22	140
GGS010	281.6	282.2	0.6	0.09	0.6	144	25	285
GGS011	282.2	282.5	0.3	0.06	0.4	244	19	277
GGS012	282.5	283.0	0.5	0.02	0.3	214	11	149
GGS013	283.0	283.5	0.5	0.03	0.2	127	11	107
GGS014	283.5	284.0	0.5	*	0.57	0.3	198	7	117
GGS016	284.0	284.5	0.5	0.05	0.2	178	8	137
GGS017	284.5	285.0	0.5	0.03	0.4	320	11	143
GGS018	285.0	285.5	0.5	*	0.03	0.8	716	19	156
GGS019	285.5	286.0	0.5	0.02	0.2	179	6	103
GGS020	286.0	286.5	0.5	0.03	0.1	70	5	103
GGS021	286.5	287.0	0.5	0.03	0.4	284	5	167
GGS022	287.0	287.5	0.5	0.03	0.3	181	9	107
GGS023	287.5	288.0	0.5	0.04	0.2	209	4	140
GGS049	288.0	289.0	1.0	*	0.36	0.1	108	1.7	83
GGS050	289.0	290.0	1.0	0.11	0.1	113	2.9	77
GGS051	292.5	293.5	1.0	0.02	0.1	207	3.8	135
GGS052	293.5	294.5	1.0	0.01		124	4.2	137
GGS053	294.5	295.5	1.0	0.01		119	3.2	115
GGS054	295.5	296.5	1.0	0.01		90	3.0	84
GGS055	296.5	297.5	1.0	0.01		85	3.1	92

SAMPLE	FROM	TO	Interval	Au Au-TL43	Ag ME-ICP43	Cu ME-ICP43	Pb ME-ICP43	Zn ME-ICP43	Zn Zn-OG46
ID	m	m	m	ppm	ppm	ppm	ppm	ppm	%
GGS024	297.5	298.0	0.5	*	0.08	0.4	747	5	200
GGS025	298.0	298.5	0.5	*	0.07	0.4	544	10	384
GGS056	298.50	299.25	0.8	0.02	0.1	183	17.2	388
GGS057	299.25	300.25	1.0	0.02	0.1	226	3.0	154
GGS058	300.25	301.25	1.0	0.08	0.1	215	3.2	148
GGS059	301.25	302.25	1.0	0.04	0.1	99	4.4	142
GGS060	302.25	303.25	1.0	*	0.02	0.2	326	15.1	453
GGS026	305.0	305.5	0.5	*	0.07	0.5	307	56	783
GGS027	305.5	306.0	0.5	*	0.02	0.2	223	43	1,380
GGS028	306.0	306.5	0.5	*	0.20	0.3	257	47	2,280
GGS029	306.5	307.0	0.5	0.01	0.2	280	6	287
GGS031	307.0	307.5	0.5	*	0.59	0.3	273	7	544
GGS032	307.5	308.0	0.5	*	0.23	0.2	199	6	332
GGS033	308.0	308.5	0.5	*	0.44	0.4	269	13	>10000	3.60
GGS061	308.5	309.2	0.7	0.01		135	9.7	282
GGS062	309.2	309.9	0.7	0.01	0.1	216	11.1	180
GGS063	309.9	310.7	0.8	0.02	0.1	200	4.4	135
GGS064	310.7	311.5	0.8	*	0.51	0.1	171	3.1	94
GGS034	311.5	312.0	0.5	0.02	0.2	257	8	255
GGS035	312.0	312.5	0.5	0.04	0.2	266	22	365
GGS036	312.5	313.0	0.5	0.02	0.1	165	8	170
GGS037	313.0	313.5	0.5	0.09	0.2	219	5	192
GGS038	313.5	314.0	0.5	*	0.22	0.2	205	12	311
GGS039	314.0	314.5	0.5	0.01	0.1	157	3	150
GGS065	317.5	318.2	0.7	*	0.21	0.3	1,230	3.8	1,400
GGS066	318.2	319.0	0.8	*	0.00	0.1	558	2.6	201
GGS067	319.0	319.8	0.8	0.00	0.1	227	2.4	146
GGS068	319.8	320.6	0.8	0.00		276	1.5	133
GGS069	320.6	321.4	0.8	*	0.02	0.1	354	2.4	1,410
GGS070	321.4	322.2	0.8	*	0.07		169	2.9	887
GGS071	322.2	323.1	0.9	*	0.01	0.1	336	1.6	564
GGS072	323.1	324.0	0.9	*	0.01	0.2	214	3.2	498
GGS040	324.0	324.5 EOH	0.5	*	0.20	0.8	619	5	>10000	1.20

For further information please contact: Mike Turbott

Managing Director Austpac Resources N.L. Tel [phone]

About Austpac Resources N.L. (ASX code: APG)

Austpac Resources N.L. [www.austpacresources.com] is a minerals technology company currently focused on recycling waste chloride solutions and iron oxides produced by steelmaking to recover hydrochloric acid and iron metal. Austpac's technologies also transform ilmenite into high-grade synthetic rutile, a preferred feedstock for titanium metal and titanium dioxide pigment production. The Company has been listed on the Australian Stock Exchange since 1986.