RESOURCE DEVELOPMENT DRILLING TO COMMENCE AT THE KATANNING GOLD PROJECT

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ASX CODE AUC DIRECTORS Mr Robert Pett Chairman / Non-Executive Director Mr Stephen Thomas Executive Technical Director Mr Richard Lockwood Non-Executive Director 5 th March 2015 RESOURCE DEVELOPMENT

1 ASX CODE AUC DIRECTORS Mr Robert Pett Chairman / Non-Executive Director Mr Stephen Thomas Executive Technical Director Mr Richard Lockwood Non-Executive Director 5 th March 2015 RESOURCE DEVELOPMENT DRILLING TO COMMENCE AT THE KATANNING GOLD PROJECT OVERVIEW Ausgold are pleased to announce that drilling is scheduled to commence at the Katanning Gold Project (KGP), Dingo and Jinkas Projects during late March. HIGHLIGHTS Mr Denis Rakich Executive Director/Company Secretary REGISTERED OFFICE Level 16, AMP Building 140 St Georges Terrace Perth WA 6000 SHARE REGISTRY Security Transfer Registrars 770 Canning Highway Applecross WA 6153 ISSUED CAPITAL ( ) Ordinary shares: 230.9m Listed options: 76.9m Unlisted options: 16.6m Execution of a Compensation/Access Agreement with the landowner covering the Mining Lease (ML) 70/211 (Jinkas Resource) Program of Works (PoW) lodged with the Department of Mines and Petroleum (DMP) for drilling on ML70/211 (Jinkas Resource) PoW approved for drilling on ML70/210 (Dingo Resource) Drilling scheduled to commence late March at the Dingo Project Reverse Circulation (RC) drilling designed to pursue a strategy of growth of Ausgold Limited s resource base through the optimisation of current indicated and inferred mineral resources Appointment of Miss Melanie Sutterby as Geology Manager, to oversee resource development and exploration Review of extensive drilling database to evaluate and refine mineralisation analogues to enhance targeting and exploration. INVESTOR RELATIONS Denis Rakich T: E: drakich@ausgoldlimited.com Plate: Oblique view looking south of the existing Jinkas Pits. ABN: Level 16, AMP Building, 140 St Georges Terrace, Perth WA 6000 T: F: E: info@ausgoldlimited.com W:

2 KATANNING GOLD PROJECT, WESTERN AUSTRALIA (AUC 100%) Introduction The Katanning Gold Project ( KGP ) is located 275 kilometres southeast of Perth. Ausgold holds over 2,440 square kilometres and a dominant ground position in this relatively under-explored greenstone belt (Figure 1). Figure 1. Regional location map showing KGP, mineralised greenstone belts and major structures. Ausgold has delineated a JORC resource of approximately 0.9Moz of gold mostly within ML70/211 at the KGP. The project includes two main deposit areas, Jinkas and Dingo; with the Jinkas area divided into subsets of mineralised zones known as White Dam, Lone Tree, Fraser and Jackson. Ausgold intends to focus on the development of the KGP through targeted resource development RC drilling. The objectives of the drilling are: 1. Provide the basis for a thorough review and update of all existing resources to establish potential and requirements to convert resources to reserves; 2. Increase confidence in existing drillhole data and provide timely and accurate data for an updated resource calculation; 3. Delineate high grade domains within in the Jinkas and Dingo models 4. Convert and upgrade indicated and inferred resources Ausgold is encouraged by the Australian gold price at A$1,551.71/oz (03/03/15). In light of this improved gold price and increase in sentiment for Australian gold projects Ausgold plans to actively focus on the KGP. 2

3 Execution of Compensation/Access Agreement The commencement of the proposed drilling program was delayed during 2014 due to Ausgold being unable to agree compensation terms with the landowner of land the subject of ML70/211 (Jinkas Resource) Following negotiations with the landowner, Ausgold is pleased to announce that a compensation agreement has been agreed by both parties and has been executed. The compensation/access agreement covers ML 70/211 and Exploration Licenses 70/2928, 70/3952, 70/4047 and 70/4566 where those EL s encroach on parts of the owners land. This now provides Ausgold with drilling access and as a result the KGP project will be promptly advanced. Proposed drilling programs Ausgold proposes a program of approximately 6,000m of RC at the Jinkas and Dingo deposits, located within ML70/211 and ML 70/210 respectively. The program comprises approximately 4,000m of infill RC drilling at Jinkas on traverses through higher grade mineralisation to the north-east of the historic Jinkas North open cut (Figure 2), and 2,000m of drilling around the Dingo open pit (Figure 3). The Dingo PoW for RC drilling was approved by the DMP on the 03/03/15. An additional PoW has been submitted to the DMP, to attain approvals to commence drilling at Jinkas in mid April Ausgold intends to commence drilling at Dingo in late March. This drilling is designed to upgrade existing inferred and indicated resources to measure and indicated status respectively and to increase confidence in the measured resource. Appointment of Geology Manager Following a hiatus in Ausgold s activity, Ausgold is pleased to advise that Miss Melanie Sutterby has been engaged to manage exploration, resource development and quality control systems. Melanie is a Geologist with a Bachelor of Science (Honours 1 st Class), who graduated from Monash University in Melanie has a Diploma of Management and an MBA from the Curtin Graduate School of Business (with Distinctions). Melanie started her career with Agnew Gold Mine (Gold Fields province in the Yilgarn, WA) as an Exploration Geologist and after a variety of roles there, moved to Minjar Gold (Murchison province in the Yilgarn, WA) as a Senior Geologist in November Melanie is accustomed to managing all aspects of resource development and exploration programs, with an emphasis on Archean gold, and a broad range of open pit and underground mine geology functions. Melanie commenced with Ausgold Limited in February. Management of Quality Control Systems Prior to the commencement of drilling an emphasis has been placed on the engagement of key stakeholders who will provide safe, reliable and proven services. Optimal JORC compliant sampling and assaying protocols have been established, which will provide a reliable data set as Ausgold moves towards a mine development decision. Ongoing audit and monitoring of systems, including supervised drilling by a senior geologist, will ensure that Ausgold s processes reflect evolving regulatory and professional practices and adhere to the JORC Code. It is vital to ensure that geographical, analytical, and geological data captured from all drill holes and stored in the database is accurate and error free. Ausgold is committed to validating, and maintaining a standardised data management system. Ausgold owns a significant dataset, which will enable the development of a better understanding of the key geological controls on mineralization. A detailed technical review will be instrumental in determining primary controls on mineralisation and the development of predictive models containing features typical to mineralised systems in the region and application of this knowledge to making new discoveries. 3

4 Resource Development As discussed above the drilling has been designed to increase confidence in the existing resource and provide a basis for a thorough review of existing resources to realize the economic potential of the KGP and requirements to convert resources to reserve. Drill hole spacing is generally 20x20m spaced in the central mineralised domains, providing for a predominantly measured resource status. Carefully planned drilling in realised gaps in the existing models in addition to high quality twin-hole drilling will greatly improve confidence in grade continuity and distribution. Subsequent to the drilling, mineralisation and lithological models will be re-evaluated to improve the interpretation, allowing for more realistic grade and resource model parameters. Ausgold aims to delineate high grade domains within a wider low grade mineralized halo within the Jinkas and Dingo deposits. Ausgold expects that the new models will include a high tonnage, low grade position and a higher grade, low tonnage position. Understanding grade distribution and continuity will contribute to the development of reliable resource models. Robust models are of vital importance in the development of valid resource definition techniques. Geological logging of diamond drill holes BDD002 (18.6m grading 2.87g/t Au) and BDD005 (20.95m grading 3.44g/t Au) indicates higher grade gold mineralisation is associated with banded pyrrhotite units (believed to be metamorphosed cherts and banded iron formations (BIF)) and semi-massive sulphides. The geological association of higher grades with BIF units within a broader halo of mineralisation (with an envelope defined by a nominal cut-off grade of 0.3g/t Au) support the use of geological attributes to delineate a higher grade sub-set within the existing JORC resource. The BIF units have been identified in earlier studies by Blackburn et al (1), and the potential for remobilisation of mineralisation has been highlighted in a study by geological consultants SRK (2) and Greentree et al (3). In addition, recent studies on the Boddington gold mine indicate a number of controls on mineralisation (comprising an alteration mineral assemblage of pyrrhotite, pyrite, chalcopyrite, magnetite and lesser molybdenum), which include lithology (contacts) and structure (along regional lineaments)(4). At the KGP, the same alteration assemblage is observed, and Ausgold believe similar factors control the distribution of higher grades. Current Global JORC Gold Resource Ausgold has highlighted an initial JORC resource estimate of 10.4mt grading 1.21g/t Au (containing 403,000oz Au, using a 0.7g/t Au cut-off grade). This resource has been estimated down to approximately 150m below surface, with a view to delineating shallower resources potentially amenable to open cut mining (Table 1). The initial resource (at 0.7g/t Au cut-off) represent a subset with the global resource at KGP of 41.7Mt grading 0.66g/t Au (containing 878,000oz Au), where a lower cut-off grade of 0.3g/t Au is used. The KGP (global) resource estimate comprises the Jinkas, Dingo, White Dam, Lone Tree, Fraser and Jackson mineralisation. 4

5 Cut off Measured Indicated Inferred Total Au g/t Mt Au g/t Mt Au g/t Mt Au g/t Mt Au g/t Au koz Table 1 - Katanning Gold Project gold resource estimate, completed by MPR Geological Consultants Pty Ltd ( MPR ).MPR provided estimates at a range of cut-off grades from 0.3g/t to 1.0g/t Au. 1 Blackburn, G.V., Fradd, J.F., Mazzucchelli, R.H., and Schupp, J.W., Badgebup [Katanning] Gold Deposits, in Geology of the Mineral Deposits of Australia and Papua New Guinea (Editor F.H. Hughes), pp (AusIMM. The Minerals Institute. Monograph ). 2 Greentree, M. Exploration Targeting and Review of the Katanning Gold Project, in Internal Report to Ausgold Ltd September 2013 (Reviewed B.D. Waele)( SRK Consulting (Australasia) Pty Ltd 2013). 3 Greentree, M., and Cairns, D. The Katanning Gold Project New Insights into the Controls on High-Grade Gold Mineralisation in the Southwest Terrain, Western Australia, in Gold14@Kalgoorlie International Symposium, pp (Australian Institute of Geoscientists and Geoscientists Symposia. Proceedings 2014). 4 Esplin, T., Cutts, T., Labuschagne, J., et al, in Newmont Boddington Gold, Newmont, in Australasian Mining and Metallurgical Operating Practices (The Maurice Mawby Memorial Volume. Editor J.R.Rankin, Project Leader R.Burns), pp (AusIMM. The Minerals Institute. Monograph ). 5

6 Figure 2. Planned Resource Development Drilling at the Jinkas Project 6

7 Figure 3. Planned Resource Development Drilling at the Dingo Project 7

LATEST DRILL RESULTS REVEALS MINERALISATION OPEN AT STRIKE AND DEPTH AT KATANNING GOLD DEPOSIT

ASX ANNOUNCEMENT 8 March 2011 LATEST DRILL RESULTS REVEALS MINERALISATION OPEN AT STRIKE AND DEPTH AT KATANNING GOLD DEPOSIT New true-width intercepts along strike from Katanning Deposit include: o BSRC0050-10m