Gascoyne Resources : Further Results from Gilbeys South RC Drilling at Dalgaranga, 2.4 MB

January 25th 2017

Australian Securities Exchange Limited Via Electronic Lodgement

FURTHER RESULTS RECEIVED FROM GILBEYS SOUTH RC DRILLING AT DALGARANGA

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• New results from late 2016 Gilbeys South resource drill out continue to show broad zones of mineralisation south of the existing Gilbeys open pit and resource, including:
  • 8m @ 11.5 g/t from gold 28m including 1m @ 83.7 g/t gold
  • 1m @ 41.7 g/t from 96m
  • 19m @ 1.2 g/t gold from 19m o 13 @ 1.2 g/t gold from 11m o 11m @ 1.8 g/t gold from 20m o 7m @ 1.5 g/t gold from 52m o 7m @ 1.4 g/t gold from 135m o 8m @ 1.4 g/t gold from 159 o 5m @ 1.3 g/t gold from 52m
• All assays now received from initial Gilbeys South resource drilling
• Update to Resources and Reserves expected in February.
• New gold trend identified between Gilbeys South and Sly Fox, including:
  • 5m @ 2.9 g/t gold from 92m
  • 8m @ 1.1 g/t gold from 46m
• Drilling to follow up the new Sly Fox gold discovery to commence next week
• Significant and regular news flow expected over the coming months

Gascoyne Resources Limited ("Gascoyne" or "Company") is pleased to advise that it has received the final assay results from the late 2016 RC drill programme at Gilbeys South. The 100% owned Dalgaranga Gold Project contains a Measured, Indicated and Inferred Resource of 25.7Mt @ 1.4 g/t gold for 1.12 million ounces of contained gold including Proved and Probable Ore Reserve of 552,000 ounces of gold (see Figures 1 & 2 & Tables 3 & 4 below). The Company expects to report an update to Resources and Reserves later this quarter which will include the Gilbeys South prospect. As announced to the ASX on 23 January 2017, metallurgical testwork results confirm that the Gilbeys South gold mineralisation can be recovered through the proposed Dalgaranga process plant with high recoveries and low reagent consumption.

Gilbeys South 2016 Drilling

Final results from 2016 Gilbeys South resource drilling have been received. (See Table 1 & 2 and Figure 3). Results continue to show broad zones of gold mineralisation south of the existing Gilbeys open pit and resource. A number of high grade zones have been identified with grades up to 83.7 g/t gold intersected. In addition to the receipt of the final results from Gilbeys South, promising results have also been received from a number of RC holes drill testing below mineralised aircore holes between Gilbeys South and the Sly Fox prospect, which suggest the presence of a sub parallel gold bearing trend. Better results from this zone include, 5m @ 2.9g/t gold from 92m in DGRC283, 8m @ 1.1g/t gold from

P.O. Box 1449, West Perth, Western Australia 6872 Level, 41-47 Colin Street, West Perth, Western Australia 6005 Telephone [phone], Facsimile [phone]

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46m in DGRC279 and 11m @ 0.9g/t gold from 69m in DGRC281 (see Figure 3). Additional drilling is being planned around the new trend to confirm the orientation and continuity of the mineralisation. Sly Fox Prospect

The Company expects to commence RC drilling to follow up the new Sly Fox gold discovery within the next week. Sly Fox is located only 600m south of Gilbeys deposit, and 500m south east of the Gilbeys South prospect.

Initial aircore drilling reported by the Company on 15 December 2016 intersected very near surface and significant downhole thicknesses of gold mineralisation, with 4m composite results including:

• 36m@ 2.3 g/t Au from 16m, including 16m @ 4.2g/t
• 39m @ 1.1 g/t gold from 8m to EOH
• 47m @ 0.5 g/t gold from surface to EOH Significant Newsflow over the Coming Months

  As announced to the ASX on the 25th November, 2016 the Gascoyne Board has approved the Feasibility Study and subject to obtaining a suitable financing arrangement, has approved the project to proceed to construction.

  Whilst financing is progressed over the coming months, the Company expects to deliver significant and regular news flow as it continues to make strong progress on early development activities and continues to progress an extensive exploration programme, with key news flow to be reported including:

• Completion of project permitting and securing of long lead time items required for construction of the plant;

• Release of a large number of Aircore drill results that are pending;

• Mineral Resource update at Gilbeys, including a maiden resource in respect of Gilbeys South;

• An update to the Ore Reserve, Open Pit Mine Designs and Mine Schedule;

• Commencement of Sly Fox RC drilling; and

• Additional drilling planned for new trend between Gilbeys South and Sly Fox.

All of these activities as well as a continuing aggressive exploration programme will be completed with the Company's existing funds over the coming months.

For further information please refer to the Company's website or contact the Company directly. On behalf of the board of

Gascoyne Resources Limited Michael Dunbar

Managing Director

Figure One: Gascoyne Resources Project Locations in the Gascoyne and Murchison Regions

Figure Two: Dalgaranga Gold Project Deposit and Prospect Layout

Figure Three: Dalgaranga Gold Project, Gilbeys South - Recent RC Drill Intersections