KALONGWE JOINT VENTURE PROJECT, DIAMOND DRILLING UPDATE NO. 2. Diamond drilling progressing well at the Kalongwe high grade, copper-cobalt project.

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1 MEDIA / ASX RELEASE Tuesday 18 March 2014 KALONGWE JOINT VENTURE PROJECT, DIAMOND DRILLING UPDATE NO. 2 HIGHLIGHTS Diamond drilling progressing well at the Kalongwe high grade, copper-cobalt project. A total of three holes completed so far, for metres and drilling of a fourth hole has commenced. Two further twin holes completed since last update report. o DKAL_010T hole completed at 158.0m Very good evidence of significant Cu mineralisation was observed from 49.20m to m, an interval of over 80 metres. An interval of 19.55m from 62.65m is estimated to average over 10% copper minerals. o DKAL_022T hole completed at 167.0m Good occurrences of Cu mineralisation, was logged from 26.90m to 99.50m. The intersection seen in DKAL_022T has the potential to significantly extend mineralisation beyond the boundaries of the geological model developed by the Company. The mineralised intersections logged in both holes compare well with the down hole position and width of the mineralisation reported for the holes being twinned. First consignment of samples dispatched from site and assay results expected before end of March. The Directors of Regal Resources Limited (ASX:RER) ( Regal or the Company ) are pleased to provide the following progress update report for drilling at the Kalongwe Mining Joint Venture Project. 1

2 MEDIA / ASX RELEASE The Phase I drilling programme is progressing well, with good daily production being recorded by the drilling contractor. Currently one rig is working on double shift and three holes (DKAL_DD010T, DKAL_DD011T and DD022T) have been completed for a total of about approximately metres out of a planned 1,800 metres, 11 hole drill programme (Figure 1). David Young, the Managing Director commented that It is very satisfactory to report that significant levels of copper mineralisation has been observed in all of the holes completed so far. This gives an increasing level of confidence in the quality of historic drill results and in the continuity and robustness of mineralisation in the geological model being developed by the Company. Figure 1. Geological map of the Kalongwe Cu-Co project area and surroundings showing planned drill hole locations to be drilled in the Phase I programme 2

3 MEDIA / ASX RELEASE Table 1: Collar details for drill holes completed for Phase I Programme Hole ID East (UTM) North (UTM) RL Dip Azimuth (magnetic) Hole Type EOH Recovery (%) Comments DKAL_DD011T 306,476 8,781, DD Assays pending DKAL_DD010T 306,351 8,781, DD 158 ~83 Assays pending DKAL_DD022T 306,101 8,781, DD 167 ~80 Assays pending The two new holes that have been completed are: DKAL_010T and DKAL_022T (Figure 1, Table 1). DKAL_DD010T was twinned with the historic hole DKAL_DD010 for which a mineralisation intersection of 3.40% Cu and 0.34% Co from 49.40m was reported (Figure 2). Two strongly coherent intervals of copper oxide mineralisation were observed from core logging. The first intersect extends from a down hole depth of 49.2m through to 119.2m and the second intersect from to 131.8m (Figure 2). Within the second intersect a higher percentage of copper oxide minerals, estimated to represent between 2% and 10% of core volume was logged between ~62m and ~119m. Copper mineralisation intersected in the drill hole is comprised principally of the secondary oxide minerals malachite and chrysocolla. Mineralisation is hosted in highly fractured and highly weathered dolomitic siltstones and occurs as veins, in vughs and along joint surfaces (Figure 3, Figure 4 and Figure 5). Very intense copper mineralisation is observed within highly weathered tectonically brecciate rocks found near the footwall of the mineralized interval (Figure 5). The breccia fragments incorporate various rock types suggesting a strong structural control for parts of the mineralisation. 3

4 MEDIA / ASX RELEASE Figure 2. Geological cross section of the Kalongwe Cu-Co mineralisation showing historic and planned/completed drill hole locations of the Phase I programme 4

5 MEDIA / ASX RELEASE Figure 3. HQ diameter diamond core from hole DKAL_DD010T identifying copper mineralized dolomitic shale intercept at approximately 70.60m to 75.65m down hole. Figure 4. HQ diameter diamond core from hole DKAL_DD010T identifying copper mineralized dolomitic shale intercept at approximately 75.65m to 80.75m down hole. 5

6 MEDIA / ASX RELEASE Figure 5. HQ diameter diamond core from hole DKAL_DD010T identifying copper mineralized breccia intercept at approximately 95.06m to m down hole. Figure 6. Geological cross section of the Kalongwe Cu-Co mineralisation showing historic and planned/completed drill hole locations of the Phase I programme intercept at approximately 75.65m to 80.75m down hole. 6

7 MEDIA / ASX RELEASE DKAL_DD022T was twinned with the historic hole DKAL_DD022, which reported intersections of 0.99% Cu and 0.09% Co from 45.00m and 1.19% Cu and 0.97% Co from 83.00m (Figure 6). Field logging of the core identified two well defined zones of copper oxide mineralisation. The first zone extends from a down hole depth of 30.2m through to 74.90m and a second zone extends from 81.3m to 99.5m. Copper mineralisation (principally malachite with minor chrysocolla), is hosted within a weathered argillaceous and talcous breccia composed of variable rock fragments including stromatolitic dolomites, arenaceous shales and carbonaceous dolomites. The mineralisation seen in DKAL_022T is especially significant as it lies outside of the boundaries of the geological model developed by the Company and suggests that mineralisation extends much further along strike than was predicted in the original model. Core samples for holes DKAL_010T and DKAL_011T have been transported to the ALS Laboratories, Johannesburg, South Africa for four acid digest, ICP analysis. And final assay results are expected to be available for release before the end of March. Background Information Regal, in partnership with the international commodity trading group Traxys SA Europe, have acquired a controlling interest in the Kalongwe Project, an advanced high-grade Copper/Cobalt Project in the Katanga Copperbelt, DRC. The project is located within the World Class Central African Copperbelt, and is situated some 15km from Kamoa, considered to be Africa s largest recent high-grade copper discovery. Previously, the Kalongwe ecaille was explored by a fifty four (54) diamond drilling programme undertaken by Ivanhoe Mines over the period 2006 to The historic exploration results indicate that the project has the potential to support a resource of several hundred thousand tonnes of copper metal. Regal considers the Kalongwe Project has significant exploration and resource potential and has implemented an aggressive exploration programme. The Phase I drilling programme will comprise eleven (11) holes for an estimated 1,800m of diamond drilling. The programme is focused on testing the highly copper mineralised Kalongwe ecaille previously explored by Ivanhoe Mines. 7

8 MEDIA / ASX RELEASE Four of the eleven holes are planned as twin holes, in order to verify the historic drill results. The remaining seven holes will test for continuity of mineralisation between wide-spaced historic drill holes and for extensions to the currently known mineralisation. If the outcome of the programme is successful the historic drill results will be incorporated into the drilling database to be used to support a JORC compliant maiden resource estimate. The Company anticipates being in a position to commit to a resource estimate after the completion of the Phase I programme and is looking to fast track the start of a pre-feasibility study. On behalf of the Board of Directors, David Young Managing Director Information Note Information about the Kalongwe Project referred to above, insofar as it relates to exploration results is based upon information previously contained in the ASX announcement Regal acquires an interest in an advanced high-grade Copper/Cobalt Project in the Katanga Copperbelt, DRC and Regal to Complete Fundraising and Commence Exploration at the Kalongwe Copper Project, DRC which contained information compiled by the Competent Persons: Mr David Young and Dr Simon Dorling, dated and released to ASX as separate announcements on 14 November, 2012 and on 2 December, Further detail can be obtained from the above announcement, which is available from the ASX website, and the Company s website, The Competent Person Mr David Young is a full time employee of the Company. The Company confirms that it is not aware of any new information or data that materially affects information as it relates to exploration results included in the announcements referred to, and that the form and context in which the competent person s (Mr David Young and Dr Simon Dorling s) findings are presented have not been materially modified Competent Persons Statement Scientific or technical information in this release has been prepared by Mr David Young and Dr Simon Dorling and, the Company s Managing and Technical Directors. Mr David Young is a Member of the Australian Institute of Mining and Metallurgy (AusIMM) and Dr Simon Dorling is a member of the Australasian Institute of Geoscientists (MAIG) and both have sufficient experience which is relevant to the style of mineralisation under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Mr David Young and Dr Simon Dorling consent to the inclusion in this report of the Information, in the form and context in which it appears. 8

9 JORC Code, 2012 Edition Table 1 report template Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.) Criteria JORC Code explanation Commentary Sampling techniques Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. Aspects of the determination of mineralisation that are Material to the Public Report. In cases where industry standard work has been done this would be relatively simple (eg reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay ). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information. Drilling techniques Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond Where specified, assayed drilling results reported in this Press Release are extracted from a Drilling Report prepared by African Mining Consultants (AMC), on behalf of African Minerals (Barbados) SPRL a subsidiary of Ivanplats Ltd. The Sampling Techniques for the drilling results are not detailed in the technical report. Drilling results reported by Regal Resources Ltd are visual estimates conducted by suitably qualified field geologists reported on a meter interval basis. The AMC Drilling Report specifies that RC and Diamond drilling techniques were used in the project area.

10 Criteria JORC Code explanation Commentary tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). Drill sample recovery Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. The total length and percentage of the relevant intersections logged. The Regal Resource Ltd current programme comprises PQ, HQ and NQ diamond core drilling. The drill sample recoveries are not detailed in the AMC Drilling Report. Core recoveries are calculated by measuring core recovered in the core trays versus measured drill run. The AMC geological logs were recorded manually on paper logs by the on-site geologists. Selective re-logging of this data was conducted preceding entry onto an Excel spreadsheet. These data include geology, weathering, alteration and information on visible mineralisation identified. Regal Resources Ltd logging is conducted on paper by on-site geologists recording lithology, formation, weathering, alteration, visible mineralisation and geotechnical properties of the drill core. Sub-sampling techniques and sample preparation If core, whether cut or sawn and whether quarter, half or all core taken. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. The Sub-Sampling Techniques and sample preparation are not detailed in the AMC technical report. 10

11 Criteria JORC Code explanation Commentary Quality of assay data and laboratory tests Verification of sampling and assaying Location of data points Data spacing and distribution Whether sample sizes are appropriate to the grain size of the material being sampled. The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established. The verification of significant intersections by either independent or alternative company personnel. The use of twinned holes. Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Discuss any adjustment to assay data. Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Specification of the grid system used. Quality and adequacy of topographic control. Data spacing for reporting of Exploration Results. Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. Whether sample compositing has been applied. The quality of assay and laboratory tests are not detailed in the AMC technical report. The verification of sampling and assaying are not detailed the AMC Drilling Report. The AMC Drilling Report specifies that all holes have UTM (WGS84) and local grid coordinates. The company has not as yet independently verified the collar positions. Data spacing (drill-hole spacing) is almost exclusively 100m and only locally less than 100m. It is sufficient for exploration target and appropriate to the geology. As this is an exploration project, infill drilling is considered necessary to confirm interpretations. Whether sample compositing has taken place has not 11

12 Criteria JORC Code explanation Commentary been detailed in the AMC technical report. Orientation of data in relation to geological structure Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. The supergene style mineralisation is often irregular and drilling is oriented to intersect as perpendicular as possible to the gross strike and dip of the deposits. A small number of 60 degree inclined angled holes are used to test the lateral variability zones and any steeper structural mineralisation. No material sampling bias is considered to have been introduced by the drilling direction. Sample security The measures taken to ensure sample security. The sampling security protocols are not detailed in the AMC Drilling Report. Kalongwe Mining SA maintains a drill core collection register signed off on by the driller and geologist when drill core is collected at the drill site and a core shed register signed off by the geologist when core is received at the core shed. Audits or reviews The results of any audits or reviews of sampling techniques and data. No audits and reviews are detailed in the AMC Drilling Report. 12

13 Section 2 Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section.) Criteria JORC Code explanation Commentary Mineral tenement and land tenure status Exploration done by other parties Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. Acknowledgment and appraisal of exploration by other parties. See text above Between 2005 and 2007 African Minerals (Barbados) sprl (now Ivanplats) conducted 2 diamond and reverse circulation drilling programs totalling 123 holes within the larger Kalongwe area of which about 65 fall within the Kalongwe deposit area and are reported in the Drilling Report. Geology Deposit type, geological setting and style of mineralisation. The mineralisation at Kalongwe is considered a typical example of a deeply weathered sediment-hosted copper deposit typical for the Congolese part of the Central African Copper Belt. Primary sulphide mineralisation is redistributed during weathering from is stomatolitic dolomites host rocks. The host rocks are deformed and occur a fragments within the core of anticlines within the Lufilian Fold Belt. Drill hole Information A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: The Company has verified and documented the location of 9 AMC drill hole collars by handheld GPS (Garmin CS60 model). It was found that the reported coordinates 13

14 Criteria JORC Code explanation Commentary Data aggregation methods Relationship between mineralisation widths and intercept lengths o easting and northing of the drill hole collar o elevation or RL (Reduced Level elevation above sea level in metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length. If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearly stated. These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg down hole length, true width not known ). Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery corresponded well with the results of the re-surveyed collar position. The coordinates are acceptable and within the accuracy margins of the handheld instrument. Drill collars recorded by Regal Resources are collected using a Garmin GPS Map62s. Dip and azimuth are recorded using a down-hole survey camera. The data aggregation procedures, if applied, are not detailed in the AMC Drilling Report. Visual estimates reported by Regal Resources Ltd are an overall estimate for the intervals reported. In general down hole lengths are reported due to the vertical nature of drill holes. This leads locally to reporting of slightly longer intervals of mineralisation. However, for the supergene nature of mineralisation above 150m this has a lesser effect. Plan and section views of the mineralisation are included 14

15 Criteria JORC Code explanation Commentary being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views. Balanced reporting Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. Other substantive Other exploration data, if meaningful and material, should exploration data be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale stepout drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive. in this report. Intersections using a 0.5% Cu cut off are reported in the AMC Drilling Report and are presented in the text and diagrams. Not applicable to this press release. The nature of the is work is to verify existing drilling data received from African Mining Consultants and test lateral continuity of geology and mineralisation. 15