WPG Resources : 2017-05-22 exploration target for M3 and SEZ shoots

ASX and Media Release Exploration target for M3 and SEZ shoots

WPG Resources Ltd (ASX:WPG) is pleased to announce a combined exploration target for the M3 and SEZ shoots, above the 215 shear, at the Challenger Gold Mine.

The combined exploration target for the M3 and SEZ lodes range from a lower limit of 1.09Mt@ 3.40g/t for 120koz to an upper limit of 1.27Mt @ 3.93g/t for 162koz. The potential tonnage and grade of the new combined M3 and SEZ Exploration Target is conceptual in nature as there has been insufficient exploration to estimate a Mineral Resource, and it remains uncertain if further exploration will result in the estimation of a Mineral Resource.

Underground diamond drilling completed at Challenger on the M3 and SEZ shoots in the December 2016 and March 2017 quarters returned encouraging drill results, particularly at the 1025 level, which led to an assessment of the exploration potential of the M3 and SEZ shoots.

As a result of these highly encouraging drill results an exploration and production drive has now been developed on the M3 structure on the 1055 level with stoping operations expected to commence within the next week. This 1055 level is situated within 150 metres of surface. Sludge drilling results indicate this first stope could be high grade. We anticipate development on the 1055 level SEZ structure will commence in the near future.

Further underground exploration diamond drilling into the M3 and SEZ shoots will commence in May 2017, with a significant drill program of approximately 28,000 metres planned to be drilled over the next 12 months. The purpose of this drilling will be to increase the confidence on the M3 and SEZ lodes with the purpose of eventually defining a Mineral Resource in these areas.

The M3 and SEZ lodes will also be targeted below the 215 shear in our separate Challenger Deeps drilling program.

22 May 2017

ASX Announcement - 22 May 2017

Figure 1. Plan view of all diamond drill holes at Challenger and M3 and SEZ shoots

Ownership

The Challenger Gold Mine is 100% owned by Challenger Gold Operations, a wholly owned subsidiary of WPG. The M3 and SEZ exploration target is located entirely within ML6103 and is located on the Mobella pastoral lease in north western South Australia.

Discovery History

The M3/SEZ shoots at Challenger have been sporadically mined since the commencement of mining operations in 2002. The primary focus of mining activities historically was the M1 and M2 lodes until 2012, when production commenced on Challenger West.

The M3 deposit has been mined in five distinct pods: 1193 (surface to 1135), 1115- 1080, 1020-940, 780-680 and 380-280 levels. The SEZ deposit has been mined from 1193 (surface) to 1135 in open pit and underground on the 1020 and 980 levels. Historical production from the M3 and SEZ shoots was 31,024 and 886 ounces respectively.

The M3 and SEZ shoots have previously been reported in the 2014 Challenger gold resource estimate, but were then removed from the 2015 resource estimate, due to lack of drill hole data.

ASX Announcement - 22 May 2017

Drill hole information

The exploration target for the M3/SEZ shoots considers all diamond drill holes that intersect the interpreted shoots between the top of the underground workings at 1115mRL and 280RL.

There are 173 diamond drill holes which intersected the M3 shoot for a total of 27,426.26m. There are 129 diamond drill holes which intersected the SEZ shoot for a total of 20,084.45m.

Although some previous drill hole results used for the calculation of the exploration target have been reported, it was determined for consistency to include all relevant diamond drill hole information pertaining to M3 and SEZ shoots in Appendix 1 of this report.

Deposit modelling and determination of exploration target

The M3 and SEZ geology wireframes have been created onsite by Challenger Gold geologists and use lithological and assay information to define the shoot boundaries.

Diamond drill intercepts have been grouped into 20m vertical panels that replicate the production level spacing at Challenger. Each drill hole is then length weighted averaged to produce an averaged width and grade for each shoot for the 20m vertical block.

The strike extent of the shoot for the 20m vertical panels is taken from the flitch slice of the modelled shoot at the base RL. Where historical stoping has occurred on a particular level, the strike length of the mined zone has been removed from the length of the total shoot. The calculated tonnes for each level uses the average diamond drill intercept length multiplied by the available strike length, panel height

of twenty metres and the Challenger rock density of 2.72g/cm3.

Further Information

For further information please contact WPG's Executive Chairman, Bob Duffin or CEO Wayne Rossiter on [phone].

Forward-Looking Statements

This document may include forward-looking statements. Forward-looking statements include, but are not limited to statements concerning WPG's planned activities, including but not limited to mining and exploration programs, and other statements that are not historical facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should" and similar expressions are forward-looking statements. In addition, summaries of Exploration Results and estimates of Mineral Resources and Ore Reserves could also be forward looking statements. Although WPG believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.

ASX Announcement - 22 May 2017

Competent Person Statement

The Challenger exploration target and results contained in this report are based on information compiled by Mr Kurt Crameri.

Kurt Crameri is a Member of the Australasian Institute of Mining and Metallurgy. He is a Senior Project Geologist and Mining Engineer and a full time employee of WPG Resources Ltd. He has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he

is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code & Guidelines). Kurt Crameri has consented in writing to the inclusion in this report of the matters based on his information in the form and context in which it appears.