Ann: Quarterly Activities and Cashflow Report, page-2

DECEMBER 2016 QUARTERLY ACTIVITIES AND CASH FLOW REPORT  Beacon  Minerals  Limited  (ASX:BCN)  (Beacon  or  Company)  is  pleased  to  present  its  Quarterly  Activities  Report for the period ended 31 December 2016.  Highlights    Beacon Executes Option to Purchase Jaurdi Gold Project   Appointment of Project Manager   Beacon Pays Inaugural Dividend  Beacon Executes 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 will have 110 days to undertake due diligence on the  Jaurdi Gold Project, which will include the following:   o A detailed survey of all previous work on the ML, which includes 114 RAB/RC drill holes by the  current and former tenement holders;  o Collation and audit of the data within the BM Geological Services Pty Ltd (BMGS) database. BMGS  have already undertaken work on the project for current and previous tenement holders; and  o Design and implement a drill program on the ML to:    Drill check holes against existing holes;   Delineate the extent of the gold mineralised system within the ML; and   Compile a resource inventory.  o During the option period Fenton and Martin can continue to mine ore on the tenement up to a  maximum of 20,000 tonnes. The mining of this ore will not materially affect the resource tonnes  or ounces and will provide valuable information for Beacon’s decision to exercise the option.   The key terms of the Option to Purchase Agreement with Fenton and Martin include the following:   a) Beacon will pay $100,000 to purchase the ML; and  b) Beacon will pay 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.  BEACON MINERALS LIMITED ACN 119 611 559  Kalgoorlie Office 144 Vivian Street, Boulder, WA 6432  Registered Office Level 1, 115 Cambridge Street, PO Box 1305, West Leederville, WA 6007   Website www.beaconminerals.com Phone 08 9322 6600 Facsimile 08 9322 6610    2  A pre‐paid royalty of $900,000 will be paid to Fenton and Martin upon the transfer of the tenement  and this amount will satisfy the royalty payments up to this amount.  Subsequent to the end the quarter a survey of previous drill collars has been undertaken, a drill program  designed and drilling has commenced.   Phase 1 of the drilling campaign on the ML, consisting of 2,100 metres of shallow reverse circulation drilling,  using both air‐core and hammer techniques, was completed on 23 January 2017. The Company is waiting  on the receipt of all the results from the Phase 1 drilling campaign, including bottle rolls at an independent  laboratory.  Phase 1 Drilling at Jaurdi Project ‐ January 2017  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   BEACON MINERALS LIMITED ACN 119 611 559  Kalgoorlie Office 144 Vivian Street, Boulder, WA 6432  Registered Office Level 1, 115 Cambridge Street, PO Box 1305, West Leederville, WA 6007   Website www.beaconminerals.com Phone 08 9322 6600 Facsimile 08 9322 6610  3  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”.  Dividend Payment  The Board of Beacon announced on 29 September 2016 that a dividend of $0.0025 per share would be paid  to shareholders.  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.   CASH RESERVES   As at 31 December 2016 the Company had approximately $3.208 million in cash reserves.  CAPITAL STRUCTURE  As at the date of this report the Company has the following capital structure:  Fully Paid Ordinary Shares (BCN)  1,495,470,963  OTHER OPPORTUNITIES  Senior  management  and  external  consultants  have  undertaken  desk  top  reviews,  and  where  justified,  field  inspections  of  more  than  40 exploration/mining  properties  since  the  beginning  of  the  year.  The  Company had made an unconditional cash offer for one property but this was subsequently rejected.  Discussions continue and shareholders will be advised immediately of any material outcomes.  Should shareholders have any questions regarding Beacon, please feel free to contact Executive Chairman  Geoff Greenhill or Managing Director Graham McGarry