Ann: Exploration update at KGP Burong Prospect, page-3

Hi Increasing,
Results from Borung are very interesting from a geological point of view.
This is a "new" target that has previously never been drilled by another company. The orientation is significantly different from the main deposit - similar to Datatine - and along strike from Datatine (about 8km) which Ausgold holds all the ground between these two areas. There is a lot of noise in the assay results - and the drilling has confirmed that there is economic concentrations of gold (for me anything above 1 g/t is potentially economic).
It is early days yet, but a couple of questions have been asked and answered, these are
1. is the soils results related to bedrock gold - the answer is definitely yes
2. is there a suitable host rock - yes - mafics and ultramafic rocks (and the boundaries between them) are historically associated with more than 50% of Archean lode gold styles of mineralisation
3. is there gold - yes - 1m @ 6.47 g/t (at the end of the hole!) indicate that there is gold in the system and that economic concentrations have been reached.

The next steps for the company will be to discover the sweet spots where the maximum concentrations occur and to build a deposit around this area. Normally most companies have the luxury of a significant history of exploration to help further develop and refine the ideas of where this is, but Burong is totally virgin - so i expect that this will continue to tick along as the company builds up its datasets - such as increasing the soils coverage (note it is open along strike) and aircore testing along strike (again open in both directions), as well as diamond drilling to figure out the best orientation as well as more RC drilling to test all of these new anomalies as they develop. None these steps might set the stock market on fire unless they jag something, but will all help figure out where to drill next.

Another really important point to consider as well is that unless this is a significant deposit in it's own right (say >3 Moz) - all this material will end up as mill feed for the Jinkas Processing plant (where they have > 1.2 Moz already - WITHOUT the company having to build any more capacity - trucking costs are negligible at the moment - in a region where there is excess haulage capacity outside harvest and seeding times - so Ausgold may be able to leverage exceptionally cheap rates of carting as well.

So in summary - potentially a very exciting opportunity to develop a satellite resource that is shallow, and in trucking distance of a major resource.