Ann: Presentation - Activities Update, page-20

The Greater Fosterville Project has seen exploration conducted by the various owners of the Fosterville Gold Mine that has included Perseverance Exploration Company Ltd, Northgate Minerals, AuRico Gold, Crocodile Gold, Newmarket and Kirkland Lake Gold over the period 1989-2019. Historic exploration has also included work by Planet Mining Company Pty Ltd (1965-70), Lone Star Exploration NL (1973-74), Noranda Australia Ltd (1974-76), Brunswick NL (1989-92), Bendigo Gold Associates (1989-92), BHP Minerals Ltd (1986-90), Western Mining Corporation Limited (1978-89) and Rio Tinto Exploration Pty Ltd (1980-1988).

All historical work has been obtained from open file reporting, the majority which was compiled and reported by Kirkland Lake Gold in the EL3539 Final Relinquishment Report (2019). Data has been reviewed, appraised and integrated into a database. Data is of sufficient quality, relevance and applicability.

Now comes S2R following up all this exploration while making much of nearology to the very profitable Fosterville Mine.

Looking closely at the exploration with Goornong EL3539 as an example (pg 12) Kirklands had some commercial looking medium grade shallow hits here and sank about 40 AC holes to explore the oxide gold deposit. The grade did not improve at intermediate depth and became uneconomic so they moved on. Although a pitable free milling gold resource it’s too small.

The pattern of gold distribution in Block 4 is small low grade oxide gold deposits such as Goornong South 59K0z@ 1.35g.t Au and Hallanans 72Koz @ 1.43 g/t Au

S2 R is hoping that the mediocre historical results will improve by drilling even deeper which makes sense because the very high grade gold at Fosterville is deep and sulphide associated rather than shallow oxide. It’s worth a limited drilling campaign but the chances of finding intercepts at grades similar to the Fosterville Mine or indeed a commercial resource in the heavily regulated area, would have to be very small.

S2R has only committed a couple of million to explore Block 4 over the next 2 years so the drilling in this exploration report is about all they are funded for, unless they make a game changing find.

The market valuation of S2R is nearly $80m which is quite phenomenal for a company that has not yet established a maiden resource, in fact has not yet had encouraging drill intercepts suggestive of one. I can’t find any other ASX mining company without impressive hits at such a high market cap (happy to be corrected here).

The current exploration is very high stakes for the market valuation in my opinion.

This is worth reading to get a balanced view:

https://s21.q4cdn.com/374334112/files/doc_downloads/operations/Fosterville/Fosterville-Gold-Mine-Victoria-Australia-Updated-NI-43-101-Technical-Report-Apr-1-2019.pdf