De Grey Mining : Li anomaly extended to 2km and remains open for 5 kms to east

ASX Announcement

16 January 2017

Lithium anomaly extended to 2km - remains open for 5 kms to east

ASX Code DEG

ABN 65 094 206 292

COMPANY DIRECTORS

Simon Lill

Executive Chairman

Davide Bosio

Non-executive Director

Steve Morris

Non-executive Director

Craig Nelmes

Company Secretary/CFO

CONTACT DETAILS

Principal & Registered Office Level 2, Suite 9

389 Oxford Street

Mt Hawthorn WA 6016

PO Box 281

Mt Hawthorn WA 6016 www.degreymining.com.au [e-mail]

T [phone]

F [phone]

King Col Pegmatite Trend

• King Col lithium anomaly now extended to over 2km strike length (>108ppm Li2O)

• Anomaly remains extensively open for 5 kms to the east on greenstone. Additional sampling planned to test pegmatite subcrop and quartz float across this anomaly.

• Three internal higher grade anomalies (>200ppm Li2O) evident.

  Southern Zone 1200m long peak 943ppm Li2O Central Zone 1200m long peak 344ppm Li2O Eastern Zone 800m long peak 409ppm Li2O

• The King Col Pegmatite Trend is considered highly prospective for Lithium-Caesium-Tantalum (LCT) style pegmatite hosted mineralization similar to the Pilgangoora Lithium deposits located only 40km to the south and hosted in similar aged greenstone rocks.

• No historical sampling or drilling for lithium mineralisation is known to have been undertaken along this newly discovered pegmatite trend.

Comment by Geology Manager, Andy Beckwith

"De Grey's gold and lithium potential continues to unfold.

Further detailed sampling will now be undertaken to test the remaining 5km of subcropping pegmatite. This sampling is anticipated to be completed during February to define specific priority drill targets which will be followed by subsequent heritage surveys and drill testing."

Turner River - Unlocking Shareholder Value

De Grey Mining Ltd (ASX: DEG, "De Grey", "Company") is pleased to advise that a program of detailed infill and extensional soil sampling has recently been completed over 2km of the 7km long newly discovered King Col Pegmatite Trend.

Results are very encouraging and have confirmed the previous anomalous zones with robust infill data defining a large and open 2km long anomaly based on >108ppm Li2O threshold. Three discrete higher grade priority zones occur within this broad anomaly.

Southern Zone 1200m long peak 943ppm Li2O Central Zone 1200m long peak 344ppm Li2O Eastern Zone 800m long peak 409ppm Li2O

Importantly, a further 5km of sub-cropping pegmatite and quartz float from weathered pegmatite remains to be sampled immediately to the east. This additional soil sampling is now planned to be completed during February.

The King Col Pegmatite Trend is located on De Grey's 100% owned exploration licence E45/2533 within the Turner River Project, located only 40km from the world class Pilgangoora Lithium-Tantalum Project, 20km from the Tabba Tabba Tantalum Mine and 50km south of Port Hedland in the Pilbara, Western Australia (Figure 1).

Figure 1 Turner River Project location plan

Soil Sampling Program

This recent sampling program has focused on detailed infill sampling to 200m x 25m spacing within the previously announced 400m x 25m sampling area. An additional two lines, on a 200m x 25m basis, were also completed on the eastern end of the original discovery rock chip samples and subsequent soil anomaly.

A total of 153 additional samples were collected in this program with results presented in Figure 2 and Table 1. Overall, a broad and coherent 2km x 500m anomaly (green contour) and the three internal and more discrete higher grade zones (red contours) have now been defined.

Figure 2 King Col Pegmatite Trend - 2km long lithium rich anomaly (green) showing discrete higher priority zones (red)

Legend

Sample Point

Li2Oppm Ta2O5ppm

0.54, 0.64% Li2O rock chips

E45/2533

172 46

Eastern

108ppmLi2O contour

215ppmLi2O contour

OPEN Central OPEN OPEN

4.22, 1.90% Li2O rock chips

Southern

Overall the King Col Pegmatite Trend is over 7km long based on previous mapping and limited rock chip sampling. This recent soil sampling program completes the western- most 2km of the overall pegmatite trend with a further 5km remaining open to the east, where large zones of sub-cropping weathered pegmatite and quartz rich float are evident. The anomaly is also bound to the south by a sand filled creek system where the surface soil sampling is restricted.

The soil anomaly is also supported by the previous coincident rock chip samples along the south-western end of the King Col Pegmatite Trend which returned best results of 4.22% Li2O associated with a small outcrop of the lithium bearing mineral - lepidolite, and an additional 8 samples ranging from 2.5% to 0.15% Li2O along the zone (refer to De Grey Mining Limited ASX release, dated 11 October 2016).

Table 1 King Col Pegmatite Trend - infill soil results

SampleID	E_GDA94	N_GDA94	Li2O (ppm)	Cs (ppm)	Nb (ppm)	Rb (ppm)	Ta2O5 (ppm)
KL124	682400	7699800	215	11	30	89	20
KL125	682400	7699825	301	10	20	102	15
KL126	682400	7699850	344	19	35	244	26
KL127	682400	7699875	237	21	180	415	56
KL128	682400	7699900	474	27	5	376	5
KL129	682400	7699925	151	9	10	89	6
KL131	682400	7699975	194	33	15	452	9
KL132	682400	7700000	301	213	25	882	22
KL133	682400	7700025	86	29	10	447	6
KL134	682400	7700050	129	22	10	325	9
KL135	682400	7700075	108	15	10	338	9
KL136	682400	7700100	43	14	5	319	5
KL137	682400	7700125	22	9	10	171	6
KL138	682400	7700150	43	4	10	82	6
KL140	682400	7700175	11	7	10	164	6
KL141	682400	7700200	22	7	10	256	6
KL142	682400	7700225	11	4	10	159	9
KL143	682400	7700250	11	6	5	224	5
KL144	682400	7700275	11	4	10	86	5
KL146	682800	7699700	215	44	5	112	5
KL147	682800	7699725	129	6		48	4
KL148	682800	7699750	108	6	10	35	12
KL149	682800	7699775	86	9	10	123	7
KL150	682800	7699800	258	8	20	58	27
KL151	682800	7699825	366	8		35	2
KL152	682800	7699850	237	12	10	60	7
KL153	682800	7699875	215	13	5	97	5
KL154	682800	7699900	129	14	5	103	5
KL155	682800	7699925	108	17	10	161	4
KL156	682800	7699950	129	4		29	2
KL157	682800	7699975	65	18		227	2
KL158	682800	7700000	65	9	10	196	5
KL159	682800	7700025	22	12	5	288	5
KL160	682800	7700050	11	8		275	2
KL161	682800	7700075	65	8		281	2
KL162	682800	7700100	22	6		274	2
KL163	682800	7700125	11	6		241	1
KL164	682800	7700150	86	7		288	1
KL165	682800	7700175	11	6		241	1
KL166	682800	7700200	22	7		277	4
KL167	682800	7700225	43	8	5	266	6
KL168	682800	7700250	22	6		224	2
KL170	682800	7700275	22	6		247	1
KL171	682800	7700300	22	7		254	1
KL176	683200	7699825	22	5		151	1
KL177	683200	7699850	11	6		155	1