Lefroy Exploration : December 2018 Quarterly Activities Report

ASX Announcement

25 January 2019

LEFROY EXPLORATION LIMITED Western Australian Focused

Gold Explorer

ASX Code: LEX

Shares on Issue: 81.0m

Current Share Price: 16.5c

Lefroy

Market Capitalisation: $13.4M

Board of Directors Chairman

Gordon Galt

Non-Executive Directors Michael Davies Geoffrey Pigott

Managing Director Wade Johnson

Flagship Exploration Project Lefroy Gold Project

Growth Exploration Project Lake Johnston Project

Australian Registered Office Level 2, 11 Ventnor Avenue West Perth, 6005

E:[e-mail]

T: [phone]

F: [phone]

ARBN: 052 123 930

www.lefroyex.com

December 2018 Quarterly

Activities Report

Highlights

• • A ten-hole RC drill program was completed at the Lucky Strike Prospect within the Eastern Lefroy Gold Project

• • At Lucky Strike multiple drill intersections confirm a shallow oxide gold zone in an upper BIF unit and identified a new primary position in the lower BIF

• • Significant gold intersections from Lucky Strike include: -

  • o 8m at 3.46g/t Au from 48m in LEFR087 incl. 2m at 5.08g/t from 49m

  • o 2m at 6.22g/t Au from 32m in LEFR088

  • o 12m at 2.37g/t Au from 96m in LEFR098 incl. 3m at 6.35g/t Au from 101m

• • Aircore drilling at Havelock, south of Lucky Strike, has defined a new gold mineralised trend within BIF that has a 3000m strike length and is open

• • Encouraging gold intersections returned from Havelock include: -

  • o 7m at 0.59g/t Au from 24m in LEFA370

  • o 1m at 0.45g/t Au from 40m in LEFA371

• • At Hang Glider Hill, auger results defined an anomalous gold

  trend over 2000m of strike in the north west region of the

  Eastern Lefroy gold project.

• • Airborne and ground based geophysical surveys were continued at the Western Lefroy project managed by Gold Fields Limited

• • At the Lake Johnston project, a large ovoid-shaped gravity high, interpreted to represent a buried mafic intrusion was outlined at Mt Day

• • The Company entered into Asset Sale Agreement to sell its 100% interest in the Murchison Project.

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INTRODUCTION

The Board of Lefroy Exploration Limited (ASX: LEX) ("Lefroy" or "the Company") is pleased to provide its report on activities and progress made during the December 2018 Quarter. Lefroy is a gold focused exploration company taking a systematic conceptual exploration approach at its flagship Lefroy Gold Project (Lefroy Project or LGP) located approximately 50km to the south east of Kalgoorlie in the Eastern Goldfields Province of Western Australia (Figure 1).

The Lefroy Gold Project is wholly owned by the Company. The commanding, semi-contiguous, granted land package covers 598km2 immediately east of the world class St Ives Gold camp, operated by Gold Fields' and south of the high-grade Mt Monger gold centre operated by Silver Lake Resources Limited (ASX:SLR). Four gold processing operations are strategically located within 50km of the project and provide commercial options for processing any gold discovered.

The LGP is referenced in two packages i.e.

• • Eastern Lefroy covering 226km2 of wholly owned tenements (Figure 1) including Lucky Strike, Red Dale, Hang Glider Hill, Havelock and other sub-projects along the Mt Monger fault, and

• • Western Lefroy JV tenements (Figure 1) covering 372km2 adjoining the Gold Fields tenements that make up the St Ives mining operation. These tenements are included in the Joint Venture agreement with Gold Fields Limited ("Gold Fields"). Gold Fields can earn up to a 70% interest in the LEX tenements by spending up to a total of $25million on exploration activities within 6 years of the commencement date,7June 2018.

Exploration by the Company in Eastern Lefroy during the quarter was focused on the Lucky Strike exploration hub located within 5km of Silver Lake Resources' (ASX: SLR) Randalls processing plant (Figure 1). This involved reverse circulation (RC) drilling at Lucky Strike and evaluation of results from early stage aircore (AC) program evaluating the Capstan, Havelock and Lucky Strike Extended prospects completed in the prior quarter.

Results were also received and evaluated from the Hang Glider Hill prospect where an auger drilling program covering approximately 2000m of strike was completed in the prior quarter.

At Western Lefroy, Gold Fields continued a major ground and airborne geophysical survey to capture additional geophysical data (gravity & magnetics) over tenements specifically covering Lake Lefroy.

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Figure 1 Lefroy Gold Project tenement package highlighting the Farm in & JV package, proximity to Gold Fields St Ives and priority exploration hubs in the Eastern Lefroy project.

EXPLORATION ACTIVITIES

Eastern Lefroy Gold Project (LEX 100%)

The Eastern Lefroy project is a semi contiguous package of wholly owned tenements that cover approximately 30km of strike along and straddling the regional Mt Monger Fault (Figure 1). The Mt Monger Fault is considered to be structurally analogous to other major regional faults in the Kalgoorlie terrain. The Company considers it to be similarly prospective for large gold deposits but the area lacks the same degree of exploration.

The Company has identified three priority centres or hubs along the trend where exploration for gold is being focused (Figure 1). These hubs are ranked according to the level of prior exploration activity, gold anomalies identified and the structural setting.

P1- Lucky Strike Exploration Hub: - Advanced Exploration P2-Hang Glider Hill Exploration Hub: -Reconnaissance Exploration P3-Lake Randall Exploration Hub: -Generative Exploration

During the Quarter the Company completed field activities at the Lucky Strike exploration hub that involved RC drilling and assessed results received from drilling programs from the prior quarter.

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Lucky Strike Exploration Hub

The Lucky Strike Exploration Hub is centered on the high-grade Lucky Strike prospect and envelopes the nearby gold prospects identified by the Company at Capstan, Red Dale, and the Havelock trend (Figure 2). The Hub is a priority target area for drill-based exploration on existing and generative gold prospects located within the Eastern Lefroy project. During the quarter the Lucky Strike prospect was evaluated by RC drilling and results were received for air core drilling completed in the prior quarter at Havelock, Capstan and Lucky Strike Extended.

Lucky Strike

Lucky Strike is approximately 5km to the northwest of the high-grade Lucky Bay open pit, mined by Silver Lake Resources (ASX: SLR) during 2015, and is 5km south west of the Randalls Processing Plant operated by SLR (Figure 2). Gold mineralisation at Lucky Strike is hosted within a Banded Iron Formation (BIF). The recently announced (ASX: LEX 26 November 2018) Havelock Trend, also BIF hosted mineralisation, is 1.2km to the south.

Figure 2. Location of Lucky Strike relative to the new Havelock BIF Trend superimposed on a grey scale geophysical image and proximity to the Randalls Processing Facility (SLR) infrastructure. The key Lucky Strike trend gold intersections are also highlighted (refer to Figure 3 for detailed inset map).

During the quarter the Company completed a ten hole step out RC drilling program (Figure 3) at Lucky Strike to primarily evaluate the along strike and down dip extension of a new oxide upper BIF unit (ASX: LEX 29 October 2018).

The results from the program further support and enhance the oxide upper BIF gold mineralisation that is open along strike and at depth (ASX: LEX 3 December 2018). This upper BIF combined with those intersected in prior drilling programs is interpreted by the Company to be a series of sub-parallel south west dipping units of variable thickness separated by beds of black shale.

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This rock package is interpreted to be cross cut by the Pipe Fault that may have a secondary control on gold mineralisation. The recent results further highlight and enhance a previously unexplored 150m of strike in the north western sector of Lucky Strike, west of the Pipe Fault, where the multiple stacked BIF units have the potential to enhance the system (Figure 3).

Significant shallow results from the upper BIF unit from the program include

• • 8m @3.46g/t Au from 48m in LEFR087

• • 2m @6.22g/t Au from 32m in LEFR088

• • 6m @1.03g/t Au from 36m in LEFR089

• • 4m @2.95g/t Au from 20m in LEFR090

• • 3m @1.38g/t Au from 51m in LEFR090

• • 7m @1.50g/t Au from 20m in LEFR093

In addition to the focus on the shallow oxide BIF position, two holes were extended to evaluate the entire BIF package and ultimately test the lower BIF. Both holes successfully confirmed a new zone of gold mineralisation at depth in the lower BIF unit that is open along strike and down dip. The significant result from this program recorded 12m @2.37g/t Au from 96m in LEFR098, including 3m @6.35g/t from 101m hosted by sulphide altered BIF that is open.

The results from the 10-hole programme continue to enhance and deliver robust, broad gold intersections from the sections drilled, and further support the developing geological model of a semi-coherent plunging high-grade component to the multiple BIF units that forms a broad 140m thick package. Importantly, the recent results further enhance the oxide gold mineralisation in another new hanging wall BIF (refer LEFR090 & LEFR087) unit that is open along strike and at depth.

Figure 3 Lucky Strike geology and drill hole plan view highlighting key recent (oxide and primary) and earlier drill intersections. The opportunity to extend the system is shown by the yellow open symbols

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