Gascoyne Resources : New Gold Discovery at the Dalgaranga Project , 837 KB

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January 14th, 2016

Australian Securities Exchange Limited Via Electronic Lodgement

57 139 522 900

NEW GOLD DISCOVERY AT DALGARANGA SIGNIFICANT DRILL INTERSECTIONS FROM THE HENDRICKS PROSPECT

• A new gold discovery ("Hendricks") is indicated from initial Dalgaranga Aircore drilling results.
• Significant gold intersections from first pass aircore drilling at the Hendricks prospect include;
  • 11m @ 2.2 g/t gold from 36m to the end of hole (EOH), and
  • 16m @ 0.53 g/t incl. 4m @ 1.48 g/t gold from 4m.
• The new Hendricks gold discovery is located only 3km east of the Gilbeys pit and remains open along strike and down dip, highlighting the significant resource growth potential at the Dalgaranga Project from new discoveries.
• The Dalgaranga Pre-Feasibility Study is continuing on schedule for completion in Q1 2016.

Gascoyne Resources Limited ("Gascoyne" or "Company") is pleased to advise that it has received the first assay results from the 10,000 metre aircore exploration drilling programme at the Company's 80% owned Dalgaranga Gold Project in the Murchison region of Western Australia. The Dalgaranga Gold Project contains a recently upgraded (ASX announcement November 4th, 2015) Measured, Indicated and Inferred Resource of 23.0Mt @ 1.4 g/t gold for 1.02 million ounces of contained gold (see Figure 1).

The drilling programme has been designed to test multiple high priority targets in the vicinity of the 1Moz Resource base at Dalgaranga which have the potential, with further exploration, to lead to additional discoveries and future Mineral Resource growth at Dalgaranga. To date approximately 50% of the assay results from the 10,000m of airore drilling have been reieved, with the remainder expected within the next two weeks.

Other than this recent exploration drilling by Gascoyne, there has virtually been no drilling conducted outside the known deposits at Dalgaranga since the mid 1990s. The details of these high priority targets (announced to the ASX on October 19th, 2015).

Hendricks Gold Discovery

The significant discovery intersection of 11m @ 2.2g/t gold from 36m to EOH in DGAC303 occurs at the Hendricks prospect, only 3km east of the Gilbeys deposit, and is the result of follow up testing around an isolated historic shallow RAB hole which contains an anomalous gold zone of 8m @ 0.3 g/t gold located in a NE "magnetic low" trend similar to the Gilbeys shear trend and magnetic signature.

Three aircore lines of drilling have been completed at Hendricks, with the exciting new Aircore intersection from 4m composite sampling in drillhole DGAC303 occurring on on the southern most line completed to date (Figure 2) - there is no drilling south of this line along the magnetic trend to the southwest for over 800m and at depth below this shallow drillhole.

The gold mineralisation is associated with saprolitic sheared and quartz veined mafic rocks to the EOH. Within the same hole an upper gold mineralised zone of 16m @ 0.53 g/t from 4m occurs hosted in laterites. Adjacent drill lines to the north contain anomalous gold zones in a number of aircore holes. One metre resampling of the 4m composites has been completed and samples have been submitted to the laboratory for check analyses.

P.O. Box 1449, West Perth, Western Australia 6872 Rust House, Level 2, 33 Ord Street, West Perth, Western Australia 6005 Telephone [phone], Facsimile [phone]

Email: [e-mail], Web: www.gascoyneresources.com.au

This exploration drill intersection confirms the ongoing potential for the Dalgaranga Project to provide significant resource growth.

Further drilling is planned to follow up the intersection along strike to the north and south and at depth.

Table 1 Significant Hendricks Aircore Drilling Results (0.5g/t gold cutoff)

Hole ID	From (m)	To (m)	Interval (m)	Au Grade g/t
DGAC303	4	20	16	0.53
8	12	4	1.48
36	47 EOH	11	2.2
DGAC315	20	24	4	0.56

Tanqueray Prospect

Anomalous gold results were also received from the Tanqueray area where Aircore drilling was focussed on infill drilling existing gold anomalous drill holes. Better results include DGAC250 8m @ 0.88 g/t gold from 68m including 4m @ 1.4g/t gold.

Several lines of Aircore drilling were also completed west of the Golden Wings deposit, with a best result to date of 12m

@ 0.44 g/t gold from 4m. See Table 2 for the list of significant Aircore results received to date and Table 3 for the drill collar details.

Additional Results

A significant number of assay results remain to be received from areas drill tested last month; drilling was also undertaken at the Beefeater, Vickers and Gilbeys North areas. To date approximately 50% of the assay results from the 10,000m of airore drilling have been reieved, with the remainder expected within the next two weeks.

RC drilling

RC resource drilling was also completed in December at the Golden Wings deposit, to confirm the continuity of the higher grade mineralisation previously identified. Results are expected in the next week. This new drilling will be incorporated into an updated Mineral Resource for Golden Wings in early 2016.

Pre-Feasibility Study

Work continues on the Dalgaranga Pre-Feasibility Study ("PFS") to build on the prior Scoping Study, which demonstrated compelling project economics based on a 60,000 ozpa production profile (See the Detailed Scoping Study ASX announcement 23rd June 2015), underpinned by:

• Open pit mining with considerable "free dig"

• Excellent metallurgical recoveries using standard CIL flow sheet (+95%)

• Very low power requirement, very low reagents consumption, plentiful water, very soft ore

• Low capital requirement for start-up

• Excellent location, less than 70km by road from Mt Magnet

In light of the recently increased Resource to over 1Moz, and the strong potential for further resource growth within the expansive Dalgaranga tenment position, the PFS is assessing the potential for an expanded production case of 80,000 - 100,000oz pa. Work on the PFS is making good progress, and the Company anticipates it will report the results of the PFS on schedule, in Q1 2016.

Gascoyne's Managing Director, Michael Dunbar commented:

"We are extremely pleased that our early drilling has already resulted in the discovery of Hendricks, and demonstrates the strong ability for our Dalgaranga Project Resources to grow further as we continue drilling other high priority targets in the area".

For further information please refer to the Company's website or contact the Company directly. On behalf of the board of

Gascoyne Resources Limited

Michael Dunbar Managing Director

Figure One: Gascoyne Resources Project Locations in the Gascoyne and Murchison Regions

Figure Two: Dalgaranga Project Aeromagnetic Image with Contours of Maximum Gold in Hole, Highlighting the Hendricks Discovery and Recent Significant Drill Intersections