Avanco Resources : CentroGold Resource Base Grows to Over 1.2M Ounces 19 Jan 2017

Avanco Resources (ASX: AVB) 19 January 2017

Suite 3, 257 York Street

Subiaco, WA 6008

PO Box 1726

West Perth, WA 6872

Tel: [phone]

Fax: [phone]

Contacts:

Tony Polglase Managing Director

[e-mail]

Phil Retter Investor Relations

NWR Communications [e-mail] Tel: [phone]

For the latest news:

www.avancoresources.com

Directors:

Colin Jones Tony Polglase Simon Mottram Luis Azevedo Vern Tidy

Luiz Ferraz

Management: Wayne Phillips Scott Funston Otávio Monteiro

CENTROGOLD PROJECT'S RESOURCE BASE GROWS TO OVER 1.2M OUNCES

Further to Avanco Resources Limited's ("Avanco" or the "Company") announcement of 20 December 2016, the Company is pleased to announce a significant Mineral Resource upgrade at the CentroGold Project1 ("Project") in northern Brazil.

HIGHLIGHTS

• Inferred Resource for the Contact Zone reported in accordance with the JORC Code (2012) of: 8.0 million tonnes at 2.3g/t gold, containing 592,300oz of gold
• The Contact Zone is the second of two zones within the Cipoeiro Deposit, that together with the Chega Tudo Deposit make up the previously reported Foreign Estimate of 88.5Mt at 1.14g/t gold at the Project2
• The addition of the Contact Zone Inferred Resource to the previously reported Blanket Zone Inferred Resource for Cipoeiro increases the total Project Mineral Resource to: 20.2 million tonnes at 2.0g/t gold, containing 1,286,300oz of gold
• Scoping Study to commence, determining the potential of the Contact and Blanket Zones to support a scalable, low-capex mining operation
• The positive outcome from the review of the previously reported resource estimates further supports Avanco's decision to acquire the rights to earn up to a 100% interest in the Project
• Good progress continues to be made on resolving past licensing issues at the Project

1

CONTACT ZONE RESOURCE ESTIMATE

The Cipoeira Deposit within the CentroGold Project ("Project") consists of two separate zones; the Blanket Zone for which a maiden Mineral Resource was reported in December 20163, and the adjacent Contact Zone, which is the subject of the current release. Given the Company's desire to re- evaluate the higher-grade portions of these deposits, Mineral Resource estimates were carried out separately.

Figure 1: Blanket and Contact zones - representative cross section locations

Sections "A" and "B" relate to the Blanket Zone MRE, see ASX Release - 20 December 20163

The maiden Mineral Resource for the Contact Zone is:

Contact Zone Mineral Resource Estimate - January 2017 (above a cut-off grade of 1.0g/t Au)
Category	Million Tonnes	Au (g/t)	Gold Metal (Oz)
Contact Zone	Inferred	8.04	2.3	592,300
	TOTAL	8.04	2.3	592,300

The Contact Zone adds significantly to the Blanket Zone Inferred Resource and enhances the potential of the Project for a near-term open pit development opportunity. where the combined Mineral Resource now stands at 20 million tonnes at 2.0g/t gold for more than 1.2M ounces.

CentroGold Total JORC Reported Mineral Resources - January 2017 (above a cut-off grade of 1.0g/t Au)
Cipoeira Deposit	Category	Million Tonnes	Au (g/t)	Gold Metal (Oz)
Contact Zone	Inferred	8.04	2.3	592,300
Blanket Zone	Inferred	12.20	1.8	694,000
TOTAL	20.24	2.0	1,286,300

The size and tenor of this resource underscores the Company's belief that the Project has the potential to support a scalable, low-capex open pit mining operation. Further significant growth potential exists, with the nearby Chega Tudo Deposit, in addition to the exploration potential associated with the large contiguous tenement package.

Significant drill hole results from previous drilling at the Contact Zone are summarised below with a complete listing of results from the following representative sections provided in the appendix to this report:

 59.0m at 2.7g/t gold from 32.0m* [GUPD0113]  43.0m at 2.2g/t gold from 79.0m* [GUPD0109]  17.0m at 5.6g/t gold from 74.0m* [GUPD0101]  18.0m at 5.4g/t gold from 107.0m* [GUPD0070]  18.0m at 10.9g/t gold from 142.0m* [GUPD0089] Including 4.0m at 29.8g/t gold from 153.0m*

*All drilling is historic. Grades are uncut. Widths and depths reported are downhole.

Figure 2: Section "C" Contact Zone.

See appended table for a complete listing of historic drill results for Section "C"

Figure 3: Section "D" Contact Zone.

See appended table for a complete listing of historic drill results for Section "D"

FORWARD PROGRAM

With the more attractive grade returned from the Contact Zone Mineral Resource estimate, Avanco's immediate plan is to evaluate the entire Cipoeiro Deposit with a Scoping Study to be completed during the March 2017 quarter.

Infill drilling is required to improve confidence in the estimate, with the timing of commencement dependent on licensing activities.

LICENSING UPDATE

The Cipoeiro and Chega Tudo deposits are at an advanced regulatory licensing stage, with unimpeded DNPM title on the Mining Lease Applications. Both applications are pending the prerequisite reissue of a valid Environmental License, which was previously issued and subsequently suspended by another regulatory authority.

Good progress continues to be made on resolving past licensing issues at the Project. The Company remains optimistic of a positive outcome during the first half of 2017.

Tony Polglase

Managing Director