ASIC Response, page-3

10 reasons why I and many others were affected by the ABU director's incompetence.

How was I personally affected? Well when I invest in an ASX listed company I expect certain guarantees; I did not sign up for this roller coaster ride involving apparent deception.

The summary below was cut and pasted from my 7 page report to ASIC

1. ABU planned a staged approach to mining (see the 2013 ann report); stage 1 was trial mining at Old Pirate; head grades sampled at the top of the conveyor to the gravity mill was reported as 17.8g/t then curiously changed to 15.4g/t a few months later; yet stage 2 mining from the same mine & same locations only produced an average of 6g/t This is a staggering anomaly and the only conclusion that could be drawn was that the stage 1 mining methods or results were highly flawed; the results from stage 1 enhanced confidence in the ore resource statement yet stage 2 mining totally discredited the ore resource statement. To date there has been no comment by ABU as to the large discrepancy between stage 1 & stage 2 results from OP.

1. ABU via the ASX on many occasions (circa 2013- Nov 2015) referred to the Old Pirate mine as the “Old Pirate high-grade gold deposit”; this is an apparent false and mis-leading statement as grades as early as June 2015 and as late as Dec 2015 never realised the high grades of 15.4g/t as reported in 2013 stage 1 mining in fact grades from stage 2 mining only realised approx 6g/t average. They also referred to OP as “one of the highest grade gold deposits at surface in Australia” (see ASX 27-6-2014); a false and mis-leading statement.

1. ABU reported their 1^st gold pour in June 2015; head grade was only 5.73g/t which is non-consistent with stage 1 mining grade of 15.4g/t; there was no reporting in June or July 2015 as to the discrepancy between stage 1 grade & stage 2 commissioning grade.

1. In Sept 2015 ABU reported a mine call grade of 10.8g/t yet head grade sampled at the top of the conveyor at the Coyote mill was not reported. Yet head grade sampled from the top of the conveyor in stage 1 mining and the 1^st gold pour from stage 2 in July 2015 were however reported. ABU had the capacity to report mill head grade but failed to do so; non-disclosure.

1. In the Sept 2015 quarterly ABU knew that the mill was only producing 7.6g/t when the mine call factor was suggesting 10.8g/t; ABU proposed in Sept 2015 that the discrepancy was due to “mill lock-up” yet discrepancies between stage 1 mining and mill grade results from Sept 2015 were already alarmingly evident; possibly as early as July 2015. Yet ABU advised the grade discrepancy was caused by mill-lock up; yet if head grade sampled from the top of the conveyor results were presented then how could a conclusion be drawn that the missing gold was due to mill lock-up. This statement appears to fall under the realms of mis-reporting & would therefore likely be in breach of the Aust Corp Act Section 674 for disclosure; I suspect many investors stayed with ABU during the mill lock up saga story and subsequently lost heavily on this apparently mis-leading statement.

1. The 2013 Ann report devoted 10 plus pages for the OP resource development and detailed a mine plan for OP to minimise risks to shareholders; for instance the on-site gravity processing plant was to be used to minimise shareholder risk. The plan was never followed as a result the 2013 ann report can only be considered as 10 plus pages of market deception as the deal with TAM was not announced till after the deal was signed; in fact 2 weeks prior they were still referring to using the on-site gravity plant at OP for stage 2 (see ASX 25/6/2014). The current SP of 3.4c (at time of writing) down from 33c shows the TAM deal likely realised a risk to shareholders of at least a factor of 10.

1. In October 2015 MD Darren Holden stepped down before the AGM meeting was held; he was the geologist who produced the Old Pirate ore resource statements. It now appears as events have unravelled that ABU BOD’s put too much faith into Mr Holden; there was no independent verification of his results & no feasibility studies conducted for the development of OP; in fact ABU states in the 2013 ann report (see page 14) that the need for a feasibility study is not needed as we are committed to a staged approach to mining; yet they did not follow the 2013 ann report staged approach to mining plan; hence they had no feasibility study plus no mine plan. Mr Holden reported to the BOD and as such the BOD as a whole are responsible for Mr Holden’s actions. It is evident that Mr Holden produced ore resource statements which were highly flawed and the ABU directors blindly followed Mr Holden. Not only were the resource statements highly flawed but ABU continually advertised OP as the “Old Pirate high-grade gold deposit” to gain investor support and keep the BOD in jobs.

1. The money from the capital raising from PRC in early 2014 was to be used for an extensive drilling campaign to convert the OP mine resource to a JORC reserve statement but this did not happen (also see point 7 above about face). Shareholders were diluted by the PRC deal yet gained no benefit as the ore resource statement for OP was totally flawed and totally mis-leading to investors.

1. The 2015 ore resource statement for OP quotes at least 225,000 oz (indicated) & 410,000 oz (inferred) yet it is likely that only 30,000 oz will be produced from OP. This is an outrageous anomaly meaning the ore resource statement is completely flawed; yet the JORC code 2012 is designed to minimise such outrageous errors; the competent person who compiled the ore resource statement needs to be investigated before the JORC committee for such incompetence. The other factor that comes into play with the JORC code is a feasibility study; even for a resource statement they cannot announce a resource estimate unless the gold is viable for economic extraction; I doubt any feasibility study was conducted for trucking the ore 70km to the Coyote plant and paying $2M a year for the lease. This is total incompetence and JORC should investigate.

1. On the 19^th Oct 2015 Brett Lambert was appointed interim CEO and was responsible for running the OP mine and processing plant and reporting; he then became MD after a board spill announcement in March 2016. In regards to non-disclosure of the mill head grade at the Coyote plant which was not reported for 4 months from July 2015; it is my opinion that the mill head grade was vital information that would affect the value of the share price yet this information was not disclosed likely as an attempt to stall for time. Brett Lambert has a duty of care to report any such mis-conduct to ASIC as the non-disclosure of mill head grade data likely breached section 674 of the Aust Corp Act 2001.