QUARTERLY REPORT December 2016 Highlights Devon Gold Mine

  • Low grade ore stock piles processed

  • Rehabilitation work near complete

  • Total profit from operation - $5.94M

    NiWest Nickel - Cobalt Laterite Project

  • Metallurigical test program on flow sheet design re commences

  • Flow sheet design modified to include Ni/Co sulphate production suitable for Lithium ion battery market

  • Resource Update (JORC2012) underway

    Murrin Murrin Gold Project J/V

  • Detailed mining study on Malcolm Challenger Project in progress

Devon Gold Mine

Mining and processing operations at Devon have now concluded and rehabilitation work at the site is scheduled to be completed in February.

The successful development generated $5.94M million profit (including development costs) which commenced with a trial mine mine in June 2015 and followed by the development of a larger open pit mine from February 2016 to August 2016.

During the quarter the Company processed a further 19,700 tonnes of low grade stock piles averaging 1.61 g/t which generated additional profit of $335,000.

The development leaves the Company in a relatively strong financial position to pursue further initiatives on both its Gold and Nickel assets over the next year.

The Company is currently reviewing the potential for the development of underground resources at Devon. As indicated on the following long section, mineralisation extends well below the current pit floor and remains open and untested at depth.

GME Resources Limited Quarterly Report - December 2016

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NiWest Nickel/Cobalt Laterite Project

The NiWest project is at an advanced stage and will be development ready once the flow sheet design has been finalised. The project is unique in that the nickel and cobalt can be extracted efficiently using uncomplicated low capital heap leaching methods as opposed to the conventional capital intensive autoclave processing circuit.

In addition to the extensive metallurigical / geotechnical test programs and studies based on heap leach technology,the Company has also completed a significant body of work in relation to advancing other aspects of the project, including, mine planning, environmental studies, water resource permitting and approval for a trial mine and demonstration heap leach program at the Hepi Project.

Previous studies have determined that defined resources at the NiWest Ni/Co project support a long life heap leaching operation that has the potential to transform the Company into a significant supplier of nickel and cobalt products. (Refer ASX Announcement 11 Dec 2013).

The Company's development strategy is based on establishing a heap leaching operation aligned to the availability of key leaching reagents that can be sourced locally. Current research has identified potential reagent suppliers in the area that have the capacity to support a heap leach operation.

As foreshadowed in previous reports, the Company has now recommenced metallurgical test work on the development of a suitable project flow sheet for the NiWest Nil/Co Laterite Project. The test work program is focused on the production of high quality nickel and cobalt sulphates.

The Company believes that a project development of this nature has the potential to generate significant market interest with Lithium - ion battery manufacturers. Nickel and cobalt in sulphate format is required as pecurser material in the production of many of the cathodes in the rapidly emerging automotive and mobile storeage battery market.

GME Resources Limited Quarterly Report - December 2016

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The metallurgical program will continue to develop process routes for the economic removal of iron, solution neutralisation and solvent extraction steps. Batch testing has recommenced and once optimum parameters have been set the program will move into continuous piloting. The program will also include development of the Company's patented acid regeneration technology which has potential to reduce overall acid consumption by 30%.

During the reporting period the Company commenced work on updating the NiWest Resource estimate to JORC 2012. This work is nearing completion and an update will be provided in due course.

Murrin Murrin Gold Project Joint Venture.

As announced on the 14 July 2016, the Company, through its 100% owned subsidiary Golden Cliffs NL (GCNL) has entered into a binding Terms Sheet with Kumarina Resources Pty Ltd whereby CGNL can earn up to 50% interest in the project.

The Murrin Murrin Gold Project hosts the Malcolm Challenger gold deposits that contain a JORC 2012 indicated resource estimate of 547,000 tonnes at 3.12 grams per tonne for 54,875 ounces. (Refer ZER ASX announcement, 22 Jan 2014) and is considered to be at an advanced stage of exploration. The Malcolm Challenger deposit has the potential to be developed in a similar fashion to the Devon Gold project.

The project area also hosts a number of other gold prospects that have been drill tested and provide walk up targets for future exploration.

Malcolm Challenger Deposit

The Joint Venture completed an RC drilling program in September 2016 designed to test the robustness of critical, moderate to high grade gold mineralisation highlighted by previous optimisation studies. These relatively shallow zones of gold mineralisation lie below and adjacent to two shallow open pits at the historic Malcolm and Challenger gold workings. The program confirmed the robustness for a majority of these zones returning significant economic intersection of gold mineralisation up to 14 m @ 11.7 g/t Au from 37 metres. (Refer to ASX Announcement dated 4 October 2016)

The results from the program have been incorporated into the Company's data base, along with further database validation and corrections, incorporating the determination and utilisation of a more accurate grid transformation. Also during the quarter, as part of the process to update the resource model, the company has refined the digital terrain model (DTM), created 3D model of historical underground workings and updated a constraining ore solid.

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The updated resource will be used for initial mining studies based around the potential development of an open pit with processing of ore undertaken at a third party plant in the region. The study is expected to be completed in the March quarter.

The Company looks forward to providing further updates as these programs are completed.

JAMIE SULLIVAN

MANAGING DIRECTOR

25 January 2017

GME Resources Limited Quarterly Report - December 2016

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GME Resources Limited published this content on 24 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 January 2017 16:22:02 UTC.

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