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Microsoft Word - 30 June 2017 Beacon Minerals Annual Report 4827-3827-2847 v.1 RECTORY/CONTE NTSONTENTS PAGE DIRECTORY/CONTENTS PAGE 2017 ANNUAL REPORT 2012 ANNUAL REPORT F or p er so na l u se o nl y CORPORATE DIRECTORY/CONTENTS PAGE BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 2 CORPORATE DIRECTORY BOARD OF DIRECTORS Geoffrey Greenhill – Executive Chairman Graham McGarry – Managing Director Sarah Shipway – Non‐Executive Director COMPANY SECRETARY Sarah Shipway KALGOORLIE OFFICE 144 Vivian Street BOULDER WA 6432 REGISTERED OFFICE Level 1, 115 Cambridge Street WEST LEEDERVILLE WA 6007 T: 08 9322 6600 F: 08 9322 6610 E: admin@beaconminerals.com.au W: www.beaconminerals.com.au SECURITIES EXCHANGE CODES BCN – Ordinary Shares BCNOB – Listed Options SHARE REGISTRY Security Transfer Registrars 770 Canning Highway APPLECROSS WA 6153 P: 08 9315 2333 F: 08 9315 2233 AUDITORS William Buck Audit (WA) Pty Ltd CONTENTS PAGE Review of Operations 3 Directors’ Report 22 Statement of Profit or Loss and Other Comprehensive Income 29 Statement of Financial Position 30 Statement of Changes in Equity 31 Statement of Cashflows 32 Notes to the Financial Statements 33 Directors’ Declaration 55 Auditor’s Independence Declaration 56 Independent Auditor’s Report 57 Mineral Resources and Ore Reserves Statement 63 Shareholder Information 64 Mineral Tenement Information 66 F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 3 Beacon Minerals Limited (ASX:BCN) (Beacon or Company) is pleased to present its review of operations for the year ended 30 June 2017. Highlights JAURDI GOLD PROJECT Beacon Executed Option to Purchase Jaurdi Gold Project Tenements Acquired Adjacent to Jaurdi Gold Project Lost Dog Mineral Resource o June Mineral Resource update totalling 2.9M tonnes @ 1.76 g/t for 163.1 K Oz o Mineral Resource tonnage has increased by 12% with a 9% increase in ounces o Majority of Mineral Resource is classified as Measured and Indicated (96% of the tonnes and 98% of the ounces) Classification (‘000) Tonnes Au g/t (‘000) Ounces Measured 30 1.56 1.5 Indicated 2,752 1.79 158.4 Inferred 101 0.96 3.2 Total 2,883 1.76 163.1 North East Extensional Drilling Completed at Lost Dog Extension of Eastern Arm Mineralisation into E15/469 Black Cat Mineral Resource Update HALLEYS EAST Beacon Completed Sale of High Grade Refractory Ore CORPORATE Payment of Inaugural Dividend Appointment of Project Manager Subsequent to year end the Company completed a $7.5 million underwritten Non‐Renounceable Entitlement Issue JAURDI GOLD PROJECT Beacon Executed Option to Purchase Jaurdi Gold Project On 3 January 2017, the Company announced that it had executed an exclusive option to purchase the Jaurdi Gold Project comprising Mining Lease M16/529 (ML) from Fenton and Martin Mining Developments Pty Ltd (Fenton and Martin) (Option to Purchase Agreement). The Jaurdi Gold Project is located 35 kilometres north west of Coolgardie and is close to infrastructure, including public and private road access to Coolgardie and Kalgoorlie. Under the Option to Purchase Agreement, Beacon had 110 days to undertake due diligence on the Jaurdi Gold Project. The following summarises the work completed by Beacon during the 110‐day option period: Drilled 186 reverse circulation holes totalling 5,337 metres in two drilling campaigns; o Included in this was a close spaced grade control program in the Western Arm. Surveyed and collated all drill holes including relevant historical holes drilled by previous explorers. Drilled 6 PQ diamond core holes for density, moisture and metallurgical compositing. Undertaken a ground gravity survey over an area including the known mineralisation. Completed conventional bottle rolls on a selected suite of samples from the RC drilling. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 4 Observed the trial mining by Fenton and Martin of a parcel of 9,400 tonnes from the Western Arm of the Lost Dog Mineral Resource. Observed the processing of part of the 9,400 tonnes parcel through the FMR owned Greenfields conventional processing plant at Coolgardie. Reviewed prospective areas in the general vicinity and applied for an exploration licence of approximately 10,000 Hectares east of M16/529. The exploration work done during the option period indicates that there are no major impediments to Beacon establishing a mining operation at the Lost Dog at current gold prices either by: a. Processing ore through a conventional gold treatment plant when the physical characteristics of the ore are suitable; and/or b. Establishing a site processing route designed to handle the clay portion of the ore and blending of the more competent crushed siltstone for subsequent CIL extraction of the gold. Figure 1: Locality diagram detailing Beacon Minerals tenement holding The key terms of the Option to Purchase Agreement with Fenton and Martin include the following: a) Beacon paid $100,000 to purchase the ML; and b) Beacon paid an initial royalty of $90 per refined ounce of gold for the first 10,000 ounces produced from the tenement and $80 per refined ounce of gold produced thereafter. The pre‐paid royalty of $900,000 was paid to Fenton and Martin upon the transfer of the tenement. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 5 Milling Campaign Results Under the terms of the option agreement with Fenton and Martin a parcel of 9,400 wet metric tonnes was mined and carted to the FMR owned Greenfields Mill. A total of 4,265 dry metric tonnes of the ore was processed until milling was halted due to moisture in the ore causing handling issues in the crushing process. The milling and CIP processing of the ore has provided Beacon with valuable processing information in terms of future treatment requirements. The assayed ore grades of the parcel and the recovery achieved (91.8%) was in line with Beacon’s expectations. A total of 15.897 kg’s of fine gold was recovered during the processing of the ore. A joint mining campaign between Beacon and the Vendors over the close spaced drilled area in the Western Arm of the deposit is being assessed for the completion of the balance of the Vendors ore entitlement. Gravity Programme The trial gravity survey was completed in March 2017 and the data collected has been evaluated by Southern Geoscience. The orientation survey consisted of 50 metre spaced N‐S lines; with stations positioned on 25 metre centres along these lines. The survey has produced three “walk up” drill targets to test for palaeochannel style gold mineralisation. The diagram below is a Bouguer Anomaly BA1VD (i.e. BA of one vertical derivative) where the “cooler” colours represent a lower density response and the hotter colours represent a higher denser response. The palaeochannel is a lower density feature than the surrounding bedrock. It can be clearly seen there are three “lower density”, undrilled areas defined by the BA1VD image which potentially represents the continuation of the palaeochannel along strike. These three zones represent “walk up” drill targets for Beacon. The Company engaged Ausdrill Kalgoorlie to mobilise to Jaurdi on 10 April 2017 to commence drilling of the three targets identified. Figure 2: First derivative Bouguer Anomaly images showing the lower density zones which represent potential mineralised extensions to the Lost Dog ore system F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 6 Figure 3: Locality diagram of M16/529 showing outline of trial gravity survey Diamond Drilling A six hole PQ3 diamond drill core programme was completed at the Lost Dog prospect for the purpose of undertaking geo‐metallurgical test work. A suite of whole core samples was submitted to Bureau Veritas in Kalgoorlie for SG analysis and moisture determination. The set of samples consisted of 20 core samples of the four basic rock types within the palaeochannel; siltstone unit, siltstone‐clay unit, clay‐siltstone unit and a clay unit. The previous estimate of the insitu dry density from open pit samples averaged 2.2 g/cm3. The results from this round of test work downgraded this estimate significantly due to the high inherent moisture content measured during the laboratory testwork. Table 1 below shows the extent of the variability in each of the four identified rock types. These new insitu dry SG determinations have been used to update the Mineral Resource. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 7 Figure 4: A vuggy and breccia‐textured siltstone of JDD004 (JDSG37: 14.73 – 15.00 metres). The sample had a wet SG of 2.18 g/cm3. Tenements Acquired Adjacent to Jaurdi Gold Project Beacon advised that the Company had entered into an agreement with Flinders Exploration Limited and JH Mining Pty Ltd (the Vendors) to acquire 100% of two mining leases, ML 16/34 and ML 16/115, within 4 kms of the Jaurdi Gold Project. The acquisition of the mining leases enhances Beacon’s tenement portfolio and infrastructure requirements at the Company’s Jaurdi Gold Project. For details in relation to acquisition terms and previous mining and exploration at ML 16/34 and ML 16/115 please see ASX announcement 5 May 2017 “Tenements Acquired Adjacent to Jaurdi Gold Project”. On 10 May 2017 Beacon executed an Option to Purchase Agreement with Mr Steven Argus and Zephyr Mining Pty Ltd, the holders of exploration licence E16/469. E16/469 is located immediately to the east of Beacon’s Mining Lease M16/529. Subsequent to the year end Beacon signed an Option to Purchase Agreement with Australian Live‐Stock Suppliers Pty Ltd to acquire P16/2925 and P16/2926. Lost Dog Mineral Resource Update Beacon provided an update of the Lost Dog Mineral Resource following the completion of the May‐June 2017 infill and extensional drilling campaigns. The updated June 2017 Mineral Resource increases the gold inventory at the Jaurdi Gold Project to 163,100 ounces (see Tables 1 and 2). The resource is based on 348 reverse circulation (RC), air core (AC) and diamond core drill holes completed by Beacon and historical explorers for a total of 9,847 metres. The Lost Dog orebody is now defined to have an overall strike length of 1,450 metres in an East‐West orientation, has an average thickness of 8 metres and an average width of 180 metres. It remains open to the North East. The deposit consists of three main areas; the Western Arm, the Eastern Arm and the North East Extension. The latter has narrowed to 120 metres wide; the average width remains at 180 metres; however, it attains a maximum width of 260 metres on the “elbow” as its orientation rotates to the North‐East at a bearing of 040 degrees after striking predominantly East‐West. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 8 The Jaurdi Gold Project overlies a portion of the Bali Monzogranite immediately adjacent to the Jaurdi Hills‐ Dunnsville greenstone sequence. The Lost Dog gold mineralisation is hosted in either a bleached, siliceous siltstone or an interbedded clay and siltstone unit. Table 1: Lost Dog June 2017 Mineral Resource estimate by classification and lithology (Au> 0.5 g/t) Res Cat Rock Unit ('000) Volume ('000) Tonnes Au ('000)Ounces Density Siltstone 1 3 1.11 0.1 2.40 Silt/Clay 2 3 1.35 0.1 1.40 Clay/Silt 10 12 1.29 0.5 1.20 Clay 10 11 2.08 0.7 1.10 24 30 1.56 1.5 1.25 Siltstone 496 1,191 1.50 57.6 2.40 Silt/Clay 637 891 1.95 55.7 1.40 Clay/Silt 473 567 2.14 39.1 1.20 Clay 94 103 1.81 6.0 1.10 1,699 2,752 1.79 158.4 1.62 Siltstone 30 72 0.88 2.0 2.40 Silt/Clay 19 27 1.18 1.0 1.40 Clay/Silt 2 3 1.20 0.1 1.20 Clay ‐ ‐ ‐ ‐ ‐ 51 101 0.96 3.2 1.98 1,774 2,883 1.76 163.1 1.66Total MEAS Sub Total INDI Sub Total INFE Sub Total *All figures in Table 1 have been rounded Table 2: Grade tonnage curve for the Lost Dog deposit The Mineral Resource has been drilled out using reverse circulation, air core drilling and diamond core techniques. Sampling was collected through a cyclone and split through a rig mounted riffle splitter. A cone splitter was utilised for the latter of the recent Stage 5 program. All sample components were taken as a 12.5% split of the original. One metre samples were collected to obtain a 3 to 4 Kg sample. All samples were pulverised to typically 95% passing ‐75µm to produce a 50g charge for Fire Assay with an AAS finish. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 9 The drilling has been completed on a 25m x 50m pattern for the majority of the deposit (see Figures 5 to 10). A significant area of the Eastern Arm was in‐filled to a 25m x 25m spacing during the Stage 4 program. In addition, a close space drilling programme was completed in the Western Arm on a 10m x 10m pattern during Stage 2. The purpose of this drilling was to understand the short scale continuity of the mineralisation with the aim to use this in the resource modelling process. The density of drilling for this style of deposit has given sufficient confidence to categorise the Mineral Resource predominantly as Measured and Indicated (96% of the tonnes and 98% of the ounces). Grade estimation was completed using ordinary Kriging. A nested spherical variogram with two structures was derived for each domain using Snowden Supervisor software. The variogram was created as normal scores and was back transformed for use with 3DS Surpac. Inverse Distance Squared was utilised to estimate a small low‐grade domain. A 0.5g/t Au was selected as the optimal cut‐off grade from both a statistical and an economical stand‐point. The mining method considered at this early stage is conventional drill and blast and load and haul with an excavator and articulated dump trucks. The current defined Mineral Resource estimate is situated on both the granted Mining Lease M16/529 (92%) and the adjoining E16/469 (8%); the latter being under an option agreement whereby Beacon can acquire a 100% interest. Figure 5: Plan of the Jaurdi palaeochannel showing the drilling which has defined the Western Arm, the Eastern Arm and the North East Extension. Figure 6: 3D image of the Lost Dog deposit showing confidence categories of June 2017 Mineral Resource and overall strike length of 1,450 metres F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 10 Figure 7: Long section A – A’ – A’’ of the Eastern Arm and North East Extension of the Lost Dog deposit Figure 8: Cross section B – B’ through the North East Extension of the Lost Dog deposit Figure 9: Cross section C – C’ through the North East Extension of the Lost Dog deposit F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 11 Figure 10: Location of the Lost Dog Mineral Resource North East Extension on E16/469 North East Extensional Drilling During April 2017, Beacon completed an RC campaign targeting a gravity‐low anomaly. The anomaly was identified by the recent gravity survey over the Lost Dog prospect and is located 200 metres to the North‐ East of the previous drilling. A total of 21 RC drill holes was completed for 751 metres, with most drill holes intersecting significant mineralisation in a North‐East trend. Mineralisation in this region remains open in all directions. An increased proportion of clays were identified within this mineralised horizon, with the insitu bulk densities modelled to reflect the increased clay component. Figure 11 shows the spatial relationship between the early Lost Dog drilling and the NE extensional drilling targeting the gravity anomaly and Figure 12 shows the individual intercepts of mineralisation. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 12 Figure 11: NE extensional drilling at the Lost Dog prospect showing the trend of mineralisation is open to the NE Figure 12: Drill results from the NE extension drilling showing mineralisation open in all directions Two N‐NW targets defined by the gravity survey were drilled during the April 2017 campaign. No significant intervals of mineralisation were intersected. Infill Drilling of Lost Dog In addition to the extensional drilling completed NE of the Lost Dog deposit, Beacon completed an RC infill program reducing the 50 metres North‐South spacing down to 25 metres within the North Central area of the Eastern Arm. Previous drilling in this region had identified significant gold intercepts along strike on this East‐ West axis. The infill program was aimed at further defining the width and continuity of the high‐grade zone across strike. The infill program resulted in exceptional grades and intercept thicknesses; defining high grade continuity across strike in both the North and South directions. As a result of the infill program a 10.9% increase in ounces (Table 3) was observed within this area of the Eastern Arm of the Lost Dog Deposit (pink area in Figure 13). F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 13 Figure 13: Infill drilling in the North Central area of the Eastern Arm of the Lost Dog deposit Table 3: May 2017 Lost Dog Mineral Resource comparison within the North Central Area of the Eastern Arm Volume Tonnes Grade Ounces m³ t Au g/t Oz Apr‐17 582,013 988,918 2.06 65,497 May‐17 622,961 1,051,942 2.15 72,612 Variance 7.0% 6.4% 4.4% 10.9% Eastern Arm Extensional Drilling During the year Beacon completed 101 RC holes for 2,520 metres in the recent RC drilling programme at the Lost Dog prospect. A total of 66 holes for 1,647 metres was drilled to the North East of the M16/529 lease boundary on the adjoining tenement E16/469, which is under option to Beacon (see Figure 14). All holes were drilled to a depth of 25 metres (please see ASX announcement 30 June 2017 “Jaurdi Gold Project – June Drilling Highlights” for Table of Results). This has resulted in extending the Lost Dog deposit a further 250 metres to the North East. The deposit has narrowed in this area and is now 120 metres wide opposed to the average width of 180 metres. However, it attains a maximum width of 260 metres on the “elbow” as it’s orientation rotates to the North‐East at a bearing of 040 degrees after striking predominantly East‐West. This variation in orientation correlates well with significant auger derived Au in soil sample anomalies located approximately 240 metres to the North‐ East of the current extent of mineralisation (see Figures 15 to 21). It should be noted the initial discovery hole (JA13; 1m @ 5.18 g/t Au) drilled into the Lost Dog system in 2002 targeted a geochemical anomaly with a peak value of 34.2 ppb Au. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 14 Figure 14: Lost Dog drilling plan showing plan view of mineralised system open to the North West The overall strike length of the Eastern Arm mineralisation is now 1,450 metres and has an average width of 180 metres and average thickness of 8 metres. The Lost Dog mineralization remains open to the North West. Figure 15: North East Extensional (blue) and Infill RC Drilling (red) Programmes completed in June 2017 F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 15 Figure 16: North Eastern extent of the Lost Dog deposit relative to the highly anomalous gold‐in‐auger soil results Figure 17: Rotated view of the North East extension of the Lost Dog prospect showing drill results Figure 18: Long section view A – A’ – A’’ through the Eastern Arm and North Eastern Arm of the Lost Dog F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 16 Figure 19: Cross sectional view B – B’ through the Lost Dog Figure 20: Cross sectional view C – C’ through the Lost Dog An area immediately to the west of the M16/529 tenement boundary required infill drilling to improve the continuity of mineralisation within this portion of the Lost Dog prospect. A total of 35 RC holes for 873 metres was drilled in this area which had been previously been classified as Inferred in the May 2017 Mineral Resource. Results received from this drilling were highly successful and demonstrated the strong continuity of mineralisation observed in the Eastern Arm of the Lost Dog prospect (see Figure 21). Figure 21: Results from the Infill drilling programme completed in June 2017 F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 17 Black Cat Mineral Resource Update Subsequent to the year end Beacon completed 14 RC drill holes which were primarily drilled to test the veracity of the historical drilling at Black Cat. This drilling has enabled the Black Cat Mineral Resource to be determined using the JORC 2012 guidelines (Table 4). Table 4: September 2017 Black Cat Mineral Resource by classification (Au> 1.0 g/t) Resource Category Volume (‘000) Tonnes (‘000) Grade (g/t Au) Ounces Indicated 96 164 1.9 9,860 Inferred 144 244 1.5 12,020 Total 240 408 1.7 21,880 The Mineral Resource has been drilled out using both reverse circulation and air core drilling techniques; the two techniques were required to drill through the host lithology’s. The Mineral Resource estimate was carried out using 12 holes drilled by Beacon (798 metres) and 165 historical RC and AC drill holes (10,223 metres) were also used (Figure 22). A total of 9 Beacon drill holes were designed to twin historical drill holes and were successfully able to confirm the veracity of the historical dataset. Figure 23 shows the successful twinning of an historical hole. The mineralisation observed dips moderately to the west and is associated with shear zone structures within a highly weathered/altered porphyry unit hosted in a basalt/gabbro. Sampling was collected through a cyclone and split through a rig mounted cone splitter. One metre samples were collected to obtain a 3 to 4 Kg sample. All samples were pulverised to typically 95% passing ‐75µm to produce a 50g charge for Fire Assay with an AAS finish. Figure 22: Oblique view of the Black Cat and Black Cat South lodes (red) with historical pit (orange) Grade estimation was completed using Ordinary Kriging and Inverse‐Distance‐Squared techniques. Snowden Supervisor was utilised to develop a nested spherical variogram with two structures for each domain hosting a suitable sample population. The dataset underwent a normal scores transformation for variogram modelling, before being back‐transformed for grade estimation with 3DS Surpac. Domains lacking a suitable sample population for variogram modelling were estimated using Inverse‐Distance‐Squared techniques. Resource classification was assigned based on sample density and slope of regression values (Figure 24). A range of cut‐off grades was reviewed (Figure 25); however, 1.0 g/t Au was selected as the cut‐off grade for reporting. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 18 Figure 23: Cross section A – A’ showing the Black Cat mineralisation and one of the Beacon twin holes Figure 24: Oblique view of Black Cat Mineral Resource classification showing the Indicated (red) and Inferred (green) Mineral Resource F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 19 Figure 25: Grade tonnage curve for the September 2017 Black Cat Mineral Resource The mining method considered at this early stage is conventional drill and blast and load and haul using an excavator and articulated dump trucks. Preliminary metallurgical work indicates recoveries within the 90% to 94% range can be expected. The current defined Mineral Resource estimate is situated entirely on granted Mining Lease M16/34. HALLEYS EAST Sale of Refractory Ore On 4 February 2016 the Company announced that it had entered into a letter of intent (LoI) with Northern Star Resources Limited (Northern Star) to process the Company’s high grade refractory ore under an ore purchase agreement. A lengthy, but necessary, metallurgical testing program followed. The Company advised on 13 July 2016 that it had entered into an agreement with Northern Star to purchase Beacon’s high grade refractory ore under an Ore Purchase Agreement. A total of 12,199 tonnes of ore was sold to Northern Star at $611.87 per tonne, nett of all costs. The average grade of the parcel was 15.53g/t with a metallurgical recovery of 87.5%. A total of 18,349.13 oz has been sold for an average price per ounce of AUD$1,438.49 from the Halleys East Project. CORPORATE Inaugural Dividend Payment The Board of Beacon announced on 29 September 2016 that a dividend of $0.0025 per share would be paid to shareholders. F or p er so na l u se o nl y REVIEW OF OPERATIONS BEACON MINERALS LIMITED – 2017 ANNUAL REPORT 20 The unfranked dividend for Australian taxation purposes was paid to shareholders on 3 November 2016. The payment of the dividend is in line with the previously stated objectives of the Directors. Appointment of Project Manager The Board of Directors advised that Mr Alex McCulloch had been appointed Project Manager of the Jaurdi Project for the due diligence period and, if the option is exercised, to Manage the project through to production. Mr McCulloch is a mining engineer who graduated from the School of Mines in WA in 1997. He has over 37 years experience in the mining industry. Mr McCulloch has previously worked at a number of open pit operations in Australia and overseas, including the start‐up and ongoing production of an open pit copper/gold mine in NSW and has more recently been involved in the evaluation, planning and operation of mineral projects in the WA Goldfields. Mr McCulloch has been providing technical assistance to the Executive Management of Beacon since September 2015. Mr McCulloch has assisted Beacon in the evaluation of more than 40 projects, which have included desk top studies and where required, local and overseas site visits. For more information in relation to Mr McCulloch’s appointment please see Beacon’s ASX announcement dated 3 January 2017 “Beacon Executes Option to Purchase Jaurdi Gold Project”. $7.5 Million Underwritten Non‐Renounceable Entitlement Issue Beacon Minerals announced on 10 July 2017, a 1 for 3 non‐renounceable entitlement issue at $0.015 to raise approximately $7.5 million before costs. Eligible shareholders who subscribe to the offer will also receive 1 free attaching option for every new share subscribed for, exercisable at $0.025 expiring 17 August 2022. The Offer was fully underwritten by Patersons Securities Limited who is acting as Lead Manager and Underwriter to the Issue. The Entitlement Issue was made pursuant to a prospectus dated 10 July 2017 (the “Entitlement Prospectus”). The Board of Beacon have taken up their full entitlements totaling approximately $785,000 and Directors Graham McGarry and Geoff Greenhill are also sub‐underwriting the issue for a total of $1.948m. On the 18 August 2017 the Company announced that the Non‐Renounceable Entitlement issue was completed. COMPETENT PERSON STATEMENT: The information in this report that relates to the Jaurdi Gold Project Mineral Resource estimation is based on information complied by Mr Richard Finch and Mr Darryl Mapleson, both full