ELAs 2401, 2419, 2431 & 2444 Papua New Guinea

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1 Mr John Heugh Executive Chairman Gryphon Mining & Energy Melanesia Pty Ltd & El Dorado Mining & Energy Limited 3 Stagg Court, Kardinya Perth, Western Australia March, 2016 Dear Mr Heugh, ELAs 2401, 2419, 2431 & 2444 Papua New Guinea Geotech understands that you seek a way of reducing the normal several year lead time between commencement of exploration and drilling targets to 12 months or less. Your c.7,500 km 2 areas of interest are shown overlaid in the excerpts below from The Mineral deposits of Papua New Guinea, courtesy of the PNG MRA and in an excerpt from the MRA s Geological framework and mineralization of Papua New Guinea The New Guinea Thrust Belt geological province is considered to be highly prospective by many geoscientists and hosts inter alia, the Frieda, Horse, Ivaal, Trukai, North Debom, Yandera, Nena and Kainantu deposits. (See notes below). The (Known) Mineral Deposits of Papua New Guinea The (Known) Gold Deposits of Papua New New Guinea

2 The main geological elements of Papua New Guinea According to the 2012 MRA publication from which the following excerpts are taken- the New Guinea Thrust Belt is a major foreland thrust belt (Rogerson et al., 1987b) bounded by the Papuan Fold Belt to the south, the Torricelli and Finisterre terranes to the north, and the Aure Fold Belt to the east (Rogerson et al., 1987a,b). Many of the major structures (Lagaip, Fiak Leonard Schultz and Bundi Faults) represent crustal-scale thrust faults and host fragments of obducted oceanic crust. Igneous activity within the New Guinea Thrust Belt comprises subaqueous and sub-aerial volcanism, and associated intrusions, that vary from batholiths to stocks and dykes. The New Guinea Thrust Belt hosts intrusion-related gold and copper mineralization, the Ramu Ni Co deposit, alluvial gold, and (so far!) sub-economic volcanichosted massive sulfide (VHMS) mineralization. Notable prospects in the New Guinea Thrust Belt associated with the Maramuni Event include Frieda, Horse Ivaal, Trukai, North Debom (porphyry Cu Au), Yandera (porphyry Cu Mo Au), Nena (high-sulfidation epithermal Cu Au) and Kainantu (low-sulfidation epithermal Au) (Page

3 and McDougall, 1972; Titley et al., 1978; Watmuff,1978; Britten, 1981; Whalen et al., 1982; Rogerson and Williamson, 1986; Hawkins, 2001; Hawkins and Akiro, 2001; Espi et al., 2002). Whilst Geotech can take no responsibility for, nor make interpretations based on this and other data, clearly your Company s areas of interest would appear to be highly prospective for a wide variety of mineral assemblages and styles, gold in particular. Geotech has conducted a number of airborne projects within PNG and our business continues to grow in that country. We are familiar with operational management, the government regulations and dealing with local community groups, and as such would have no hesitation in preparing a fully costed detailed proposal for you at an appropriate time following the grant of your extensive acreage positions. The overall terrain in Papua New Guinea generally does not lend itself to ground exploration being often very steep and covered in thick forest and jungle growth. Therefore you have postulated that in order to arrive quickly at major targets for drilling that the Geotech ZTEM method may be useful. We agree with this approach. The ZTEM method, is useful for delineating a number of different mineralisation style targets inclusive of large porphyries, Sedex, VMS, graphitic bodies and structurally controlled gold, silver and uranium, as well as magmatic nickel and Platinum Group Mineral orebodies. As a passive, natural field EM system, ZTEM is the airborne equivalent of the ground magnetotelluric sounding survey, capable of penetrating thick conductive clay cover or up to km thick caprock. Accordingly, ZTEM offers a powerful combination of deep depth-of-investigation capability along with a rapid reconnaissance mapping capability. Therefore using ZTEM cuts down not only on the amount of time in regional exploration but can also more effectively screen out areas with little or no prospectivity that might otherwise be mistakenly targeted for more expensive ground follow-up. It offers a way to dramatically reduce the time taken from the onset of exploration to gaining drilled intercepts of ore bodies, eg the blind Balboa Cu-Au porphyry at Cobre Panama which demonstrated a significant discovery based on drilled intercepts of mineralisation within 4 months of the initiation of the airborne ZTEM survey work. (First Quantum Minerals PDAC Toronto March 2014) Geotech is a global leader in technological innovation for airborne geophysical survey mapping, interpretation and analysis. The clarity of our data lets you see with accuracy and detail what s beneath the earth, from near the surface to great depths. We work closely with clients in many industries to identify and implement solutions that meet specific project goals.

4 ZTEM Natural Field airborne EM System The ZTEM system uses worldwide sferic thunderstorm activity as its primary EM source field and, like other ground natural source EM methods, such as AMT, is capable of depths of investigation ranging from tens to thousands of meters. Coupling this with its sensitivity to weak lateral resistivity contrasts and the benefits of rapid 2D-3D inversion make it a powerful subsurface rapid reconnaissance geologic mapping tool. ZTEM (z-axis tipper electromagnetic) natural field airborne EM system (Figure 3), the only commercially available airborne AFMAG (audio frequency magneto-variational) system of its kind worldwide and features a unique resistivity mapping capability that rivals ground electrical surveys. Figure 3 The ZTEM natural field AFMAG EM system: a) Showing ZTEM helicopter system in flight, b) ZTEM airborne receiver (H Z), and b) ZTEM base-station receivers (H X & H Y). ZTEM TM was specifically designed to map large base metals deposits, such as porphyry copper and sedimentary exhalative (SEDEX) massive sulphide orebodies, and unconformity uranium which are often deeply buried and, except for their alteration zones, are poorly contrasted, geophysically, with the surrounding geology and has historically made them difficult to detect with airborne EM methods. But ZTEM TM has also been successfully used over for larger VMS deposits and large magmatic nickel deposits, and structurally-controlled epithermal gold deposits.

5 Porphyry Copper: Zang and Lo (2008) were the first to demonstrate the ZTEM TM ability to map the alteration halos surrounding of Dos Pobres, San Juan and Lone Star porphyry copper orebodies in the Safford mining district of Arizona (Fig. 4). ZTEM TM was the first airborne EM method to define the conductive phyllic alteration halo surrounding the resistive, mineralized potassic-altered core of the blind Lone Star ( % Cu) porphyry copper deposit (Fig. 4bc) that is entirely covered by Tertiary volcanics (Fig. 4a). Figure 4 First published exploration success of ZTEM at Dos Pobres-San Juan-Lone Star porphyries, in Safford porphyry copper district of Arizona: a) Simplified geology, showing location of major porphyry copper deposits and ZTEM survey lines, b) 3D view of ZTEM Karous-Hjelt (KH) conductivity shells and porphyry copper deposit outlines; and c) 3D view of ZTEM KH conductivity shells that surround drill holes into the Lone Star deposit (all images from Zang and Lo, 2008). ZTEM TM was next successfully applied over the Mt Milligan Cu-Mo porphyry (Fig. 5), where Holtham and Oldenburg (2009) showed that 3D ZTEM TM inversion could be used to accurately image the potassic and phyllic alteration at depth (Fig. 5b). ZTEM TM define both the Pebble West and Pebble East porphyry Cu-Au deposits (Fig. 6) to below 1.5km based on favourable resistivity contrasts with the surrounding country rocks (Paré et al., 2012). In 2012 ZTEM was successfully used to target drilling into the Maoba zone (Fig. 7) in the Liamu porphyry project in Papua New Guinea for Goldminex Resources in joint venture with Vale ( Most recently, ZTEM TM has been credited for the blind Balboa porphyry copper discovery at Cobre Panama (Fig. 8) by Burge (2014). These examples highlight the deep porphyry copper mapping capability of the Z-axis tipper electromagnetic (ZTEM ) system.

6 Figure 5 ZTEM results over Mt Milligan Cu-Mo porphyry, British Columbia: a) Vertical geologic cross-section over MBX stock, b) ZTEM section over MBX from 3D ZTEM inversion by Holtham and Oldenburg (2009), and c) 3D voxel view from ZTEM 3D inversion by Holtham and Oldenburg (2009). Figure 6 ZTEM results over Pebble Cu-Au porphyry, Alaska: a) Ore grade cross-section over Pebble deposit (after Rebagliati et al., 2009) b) ZTEM resistivity section from 3D ZTEM inversion by Paré et al. (2012), and c) Resistivity depth-slice from ZTEM 3D inversion by Holtham and Oldenburg (2012). Figure 7 Goldminex-Vale JV press release (2012) showing: a) Soil geochemistry over Liamu project, PNG, b) ZTEM 3D conductivity model and MABDH002 discovery hole, and c) Drilling of Maoba prospect.

7 Figure 8 ZTEM results over Balboa Cu-Au porphyry at Cobre Panama: a) Deposit outlines in mine plan at Cobre Panama (Fiscor, 2014), b) ZTEM 360Hz In-phase TPR anomalies, showing deposit outlines and drill holes (Burge, 2014), and c) ZTEM 2D resistivity section over Balboa deposit, showing orebody outline (Legault and Wijns, 2016). Sedimentary Exhalative: The first major regional survey using ZTEM TM was in 2008 over the Selwyn Basin, in Yukon Territory, Canada, where a 25,000 km 2 region was systematically surveyed for SEDEX Pb-Zn, including the world-class, 250 Mt Howard s Pass Pb-Zn SEDEX deposits (Fig. 10), where ZTEM TM defined the >70km long zinc corridor that hosts the known mineralization (Legault et al., 2016). In 2012, as part of a larger regional airborne geophysical mapping program, the historic Nuqrah Cu-Pb-Zn-Ag SEDEX deposits in west-central Saudi- Arabia were successfully mapped (Fig. 10b), and a potential possible deep (>1km) downdip extension (Fig. 10c) was identified (Legault et al, 2015). Figure 10 ZTEM surveys applied to SEDEX exploration: a) ZTEM total divergence image over world class SEDEX deposits (20Mt) at Howard s Pass, Yukon (Legault et al., 2016), b) ZTEM 2D resistivity depth-slice and c) 3D resistivity voxel for 2D inversions over Nuqrah SEDEX deposits, Saudi-Arabia (Legault et al., 2014).

8 Unconformity Uranium: Following the successful initial trials of ZTEM TM for porphyry copper exploration in Arizona, the first surveys in Canada were over the deeply buried unconformity uranium deposits in northern Saskatchewan, Canada. At Riou Lake, along the northern edge of Athabasca Basin, complexly folded, deeply buried graphitic argillites were mapped along the Black Lake Shear Zone below >500m-700m thick sandstones (Fig. 11a) at Riou Lake (Legault et al., 2009). ZTEM TM successfully mapped the Saskatoon Lake Graphite that hosts the 2.1Mt (1.5% U 3 O 8 ) Colette, Kianna and Anne zone unconformity uranium deposits at >700m depth at Shea Creek near Cluff Lake, Saskatchewan ( Figure 11 ZTEM surveys applied to unconformity uranium exploration: a) ZTEM total divergence image along graphitic Black Lake Shear Zone, at Riou Lake, Saskatchewan (Legault et al., 2009), b) ZTEM total phase rotated tipper and c) 2D resistivity section from 2D inversions over Kianna Zone at Shea Creek, Saskatchewan (courtesy Areva Resources CAN and UEX Corp, 2009). VMS deposits: Although, due to ZTEM s large EM footprint, it s sensitivity to smaller (<1 Mt), ore deposits is superseded by VTEM TM, which is the preferred EM survey platform for volcanogenic massive sulphide (VMS) exploration. However, ZTEM TM was successfully applied over the 501 Zone VMS (Fig. 12a) in the Ring of Fire District on Ontario to determine its potential extension to depth (Orta et al., 2013). In 2009, ZTEM was famously the first airborne EM system to successfully resolve the 14.4 Mt Lalor Lake Cu-Zn-Au VMS deposit near Snow Lake, Manitoba (Fig. 12bc) to 1200m depths, below 550m of volcanic cover (Legault et al, 2015). Figure 12 ZTEM surveys applied to VMS exploration: a) ZTEM 2D resistivity-depth sections over 501 Zone VMS deposit, Ontario (Orta et al., 2013); b) ZTEM 2D resistivity depth-slice and c) ZTEM 3D resistivity and Magnetic 3D inversion cross-sections over Lalor VMS deposit, near Snow Lake, Manitoba (Legault et al., 2015).

9 Magmatic Ni-PGE: ZTEM TM has been successfully applied as follow-up to VTEM TM over Magmatic Ni-Cu MS (massive sulphide) deposits to determine their potential extensions to depth. These include the 3.6 Mt (0.66% Ni, 0.6% Cu) Axis Lake MMS deposit in northern Saskatchewan (Legault et al., 2009), and the 9.2 Mt (0.61% Cu, 0.23% Ni) Mayville MMS deposit. In fact, a ZTEM TM survey predicted the >1km extension (Fig. 12B) of the 3.6 Mt (3.6% Ni0.95% Cu, 1.3g/t PT) of the Eagle s Nest MMS deposit in Ring of Fire district, northern Ontario (Legault et al. 2010). Figure 13 ZTEM surveys applied to MMS exploration: a) ZTEM 360Hz In-phase DT, VTEM dbz/dt time-constant (Tau), and aeromagnetic TMI images over Axis Lake and Rae Lake Ni-Cu-PGE deposits, northern Saskatchewan (Legault et al., 2009); b) ZTEM 360Hz In-phase DT image and c) ZTEM 2D resistivity inversion cross-section over Eagle s Nest Ni-Cu-PGE MMS deposit, in Ring of Fire district, northern Ontario (Legault et al., 2015). Epithermal Gold: In addition to mapping alteration associated with porphyry copper, ZTEM TM has also been successfully used for mapping structural controls and alteration in Epithermal gold systems including low sulphidation (LS), intermediate (IS) and high sulphidation (HS) systems. Over the Gold Springs LS gold-silver deposit (22.2 Mt at 0.5 g/t Au, 9.8 g/t Ag) in Nevada, ZTEM TM showed that the known gold occurrences were all associated with larger silica alteration features and structures (Fig. 13a), buried below ground cover, and later helped better direct the resource definition drilling (Legault et al., 2012). Over the Aurea Norte project in Guerrero, Mexico, ZTEM TM established the strike extent of the known ore trends (Fig. 13b) related to the Ana Paula HS gold-silver deposit (44.8 Mt resources at 2.2M oz. Au, 11M oz. Ag) and the nearby San Luis gold skarn deposit (Legault et al., 2015). Over the Romero IS polymetallic gold-copper-zinc-silver project (19.4 Mt at 2.63 g/t Au, 0.63% Cu, 0.9% Zn, 3.7 g/t Ag) in Dominican Republic, ZTEM TM helped map the map the main structural control and clay-silica alteration of the main ore trend (Fig. 13c), as well as establishing the previously unknown deep (>500m) continuity between the Romero North and Romero South deposits (Legault et al., 2016).

10 Figure 13 ZTEM surveys applied to Epithermal gold exploration: a) ZTEM 90Hz In-phase over Gold Springs Au-Ag deposit, Nevada (Legault et al., 2012); b) ZTEM 2D resistivity inversion depth-slice (300m) image over Aurea Norte Au-Ag project, Guerrero, Mexico (Legault et al., 2015); and c) ZTEM 3D resistivity depth-slice (500m) over Romero Au-Cu-Zn-Ag project, Dominican Republic (Legault et al., 2016). Based on the success achieved with these and other projects, we recommend that your Companies utilise the ZTEM system in your large acreage positions in PNG. The use of this system will dramatically reduce the time taken to delineate and prioritise very large targets which can be further investigated using more detailed airborne geophysical techniques. Further follow up using ground methods including geochemistry, surface rock chip sampling and drilling can then be undertaken. Such an approach in our opinion may be capable of delivering a result to your investors in a fraction of the time taken by a more conventional ground based approach. We understand that you are seeking to find only elephant sized company making targets within your areas of interest. We would suggest an initial 500m line spacing survey followed by more detailed 100m line spacing over prioritised targets. Please do not hesitate to contact me directly if you would like more information about Geotech, ZTEM or require further details on this proposal. Rod Fowler General Manager