Ann: Mineral Resource and Ore Reserve Statement June 2019, page-11

Hartley's review
AMI - reserves and resources update

• AMI has released updated reserves and resources for Peak, Hera and Nymagee as at the end of June 2019.

• Peak – maiden resource for Kairos (Peak Deeps) with drilling ongoing to upgrade in FY20, Pb+Zn resources increased by 51%, reserves increased by 259kt after mining depletion, lower gold grade – highlights potential for mine life growth
  • Resources:
    • 14.2Mt grading 1.5g/t Au, 9.0g/t Ag, 1.4% Cu, 0.9% Pb and 1.1% Zn – NSR A$213/t

    • Previous resource was 10.9Mt grading 1.64g/t Au, 10.1g/t Ag, 1.48% Cu, 0.96% Pb and 1.04% Zn – NSR A$218/t

    • Optimised A$120/t NSR cut-off which includes internal dilution, depleted for mining

    • Implied resource mine life +17 years (+11 years on M+Ind), assuming full plant throughput capacity

  • Reserves:
    • 2.8Mt grading 2.0g/t Au, 15.0g/t Ag, 1.1% Cu, 1.8% Pb and 1.9% Zn – NSR A$225/t

    • Compares with previous reserve Cu-Au-Pb of 2.0Mt grading ~3.5g/t Au, ~1.4% Cu, ~0.7% Pb – NSR A$257/t – Chronos gold influence.

    • Optimised A$150/t NSR cut-off

    • Implied reserve mine life +3.5 years (assuming plant upgraded to process Pb/Zn) – largely unchanged after mine depletion

    • Further drilling is expected to convert some of the large resource base into reserves – targeting the Kairos Zone which contains high-grade gold

  • Production Target:
    • 4.99Mt grading 2.4g/t Au, 14.0g/t Ag, 0.9% Cu, 2.0% Pb and 2.2% Zn – NSR A$245/t

    • Contains reserves and some inferred proportion – implies over 6 year mine life – good outcome.

    • Could imply 40-60koz gold production target on 600-800ktpa throughput range, with high base metal credits lowering costs.

• Hera/Nymagee – reserves increased by 460kt after depletion, high confidence in Hera resource
  • Hera Resources:
    • 2.1Mt grading 1.8g/t Au, 34.0g/t Ag, 2.8% Pb and 4.2% Zn – NSR A$227/t

    • Previous resource was 2.52Mt grading 2.44g/t Au, 25.7g/t Ag, 2.65% Pb and 3.93% Zn – NSR A$238/t

    • Optimised A$120/t NSR cut-off

    • Implied resource mine life +4 years (~4.0 years on M+Ind)

    • Near-mine exploration success expected to grow new resources over time

  • Hera Reserves:
    • 1.6Mt grading 1.9g/t Au, 34.0g/t Ag, 3.0% Pb and 4.5% Zn – NSR A$218/t

    • Previous reserve was 12Mt grading 3.05g/t Au, 22.7g/t Ag, 2.84% Pb and 4.36% Zn – NSR A$256/t (used a higher cut-off)

    • Optimised A$130/t NSR cut-off

    • Implied reserve mine life +3.0 years

  • Production Target:
    • 1.7Mt grading 1.9g/t Au, 35.0g/t Ag, 2.9% Pb and 4.4% Zn – NSR A$216/t

    • Contains reserves and some inferred proportion – implies over 3.5 year mine life.

    • Could imply 25-35koz gold production target on 500-600ktpa throughput range, with high base metal credits lowering costs.

  • Nymagee Resources:
    • 1.45Mt grading 2.2% Cu, 18.0g/t Ag, 0.8% Pb and 1.4% Zn – NSR A$205/t

    • Previous resource was 3.78Mt grading 1.31% Cu, 14.3g/t Ag, 0.84% Pb and 1.63% Zn – NSR A$136/t

    • Now uses a A$120/t NSR cut-off, and now expected to be mined via underground methods

    • Improved NSR, but unlikely to be added into the processing mix without more study work and further drilling

• Full JunQ report expected in the coming weeks (potentially late next week), and will include FY20 production guidance.

• We continue to see good value in AMI but maintain our Speculative Buy recommendation.

• Aurelia Metals Ltd (AMI) - 27 June 2019