Announcement

Cannon Gold Mine - Final Open-Pit Processing Campaign

12 July 2017

Cannon Gold Mine – Final Open-Pit Processing Campaign

  • 4,379oz. gold produced from WA’s Cannon mine in June 2017
  • Recovery from 9th and final campaign a very good 91.0%
  • RC drilling for potential underground scenario currently in progress

June 2017 Gold Processing Campaign

Gold producer, Southern Gold Ltd (‘Southern Gold’) is pleased to report the results of the ninth processing campaign of ore treated during June 2017 (Table 1) from the Company’s Cannon Gold Mine southeast of Kalgoorlie in WA. The mining and processing is being managed by Westgold Resources Ltd (‘Westgold’).

Table 1: June Cannon Processing Campaign (M25/333 Only)

When the results of this campaign are added to the eight previous campaigns, total gold produced at Cannon now stands at 52,605oz Au with a life-of-mine recovery rate averaging 91.1%.This is the approximate midpoint of open pit life-of-mine production guidance (52,000-53,000oz.) provided in April 2017.

Mining Update and Underground Potential

Mining of the open pit, including the small adit, is now complete.The majority of the rehabilitation and decommissioning works will be completed by the end of July.

A 2,170m Reverse Circulation (RC) drilling campaign to infill and extend the Cannon mineralisation below the open pit limit has commenced. (See 28 June ASX Release)

An update on the residual Cannon JORC Resource below the open pit will follow once this drilling is completed and assay results returned.Subject to this new resource outcome, there is the potential for an underground operation at Cannon that focuses on the plunging high grade lodes mined in the adit.

The RC drilling will also determine the potential to exploit adjacent parallel lodes within the Cannon shear over several levels and help refine the mine design.

Southern Gold Managing Director, Mr Simon Mitchell: “This is an excellent result for the last phase of open pit mining at Cannon.Credit is due to the Westgold Resources’ technical team, both in terms of the mining and processing outcomes at Cannon which were handled very professionally by Westgold.Overall, I have to say this has been a successful joint outcome for both companies and has helped to transform the Southern Gold business in the process.We look forward to the next stage of our evolution and anticipated move to maiden underground mining at Cannon in due course.”