Paterson Resources : Shallow high-grade gold results returned - Grace Project

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ASX ANNOUNCEMENT

10 February 2022

Shallow high-grade gold results returned from drilling at Grace Project in the Paterson

Province

HIGHLIGHTS

• Final assay results received from first-phase diamond drilling holes at Paterson Resources 100% owned Grace Project - 6 holes for1,694.2m (5 diamond and 1 RC).
• Standout intercepts received in this final batch of assay results include:

• 1. 3.8m @ 2.60g/t gold from 37.2m including 0.7m @ 9.9g/t gold from 38.2m (PDD0005)
  1. 3.8m @ 1.43g/t gold from 31.7m including 0.4m @ 8.15g/t gold from 35.2m (PDD0004)
• Drilling has extended known gold mineralisation nearly 200m south-east for a total strike length of 1,200m with gold mineralisation remaining open along strike and down dip.
• Further exploration drilling along the prospective Grace-Bemms shear has intersected significant gold mineralisation 800m southeast along strike of the Grace deposit.
• Gold mineralisation occurs within quartz-rich hydrothermal breccias forming along the regionally significant Grace-Bemms shear.
• Additional assaying from EIS co-funded diamond drill hole (PDD001) within the newly identified felsic intrusive source of gold mineralisation returned further encouraging high-grade intercepts:
• 1. 1.05m @ 4.4g/t gold from 480.25m (PDD0001)

• 1. 1m @ 7.1g/t gold from 829m including 0.7m @ 10.2g/t gold from 829m (PDD0001)
• An aggressive follow-up RC drilling program of up to 10,000 metres scheduled to commence in the second quarter of the 2022 calendar year.
• The Grace Copper-Gold Project is an exciting exploration opportunity with the Company controlling 337km2 of vastly unexplored terrain within the Paterson Province which hosts Newcrest's world-class Telfer Mine and the evolving Havieron gold deposit.

Paterson Resources Limited ("Paterson" or "the Company") (ASX: PSL) is pleased to announce assay results from a diamond drilling program at its Grace Project in Western Australia's gold-rich Paterson Province have continued to identify shallow high-grade zones of gold mineralisation.

Commenting on the Grace Project, Paterson Resources Managing Director Matt Bull said:

"Our first phase diamond drilling program at the Grace Project has delivered a set of solid near surface gold hits and extended mineralisation nearly 200 metres along strike. We are highly encouraged by the significant gold intercept intersected in PDD0005, a further 800m southeast along

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strike from the main Grace deposit. Minimal shallow historical drilling exists in this area which presents a high priority drilling target for our upcoming RC drilling program. We are looking to infill and extend the shallow high-grade gold mineralisation at Grace in preparation for releasing a maiden JORC-compliant MRE later this year."

The Company has received assay results from the remaining five diamond drill holes and one RC drill hole that were completed October 2021 to test a series of priority targets outlined from geophysics and historical drilling, which has identified similar styles of mineralisation to the world-class Telfer Copper-Gold Mine (25km north-west) and Havieron Gold Deposit (40km north-east).

The assay results from this program are as follows:

PDD0001 (Government co-funded Exploration Incentive Scheme - 'EIS'):

• 5.8m @ 1.52 g/t Au from 203.2m including 1m @ 3.84 g/t from 206m
• 8m @ 4.10 g/t Au from 216m including 3m @ 8.32 g/t Au from 221m
• 1.05m @ 4.40 g/t Au from 480.25
• 2.7m @ 0.75 g/t Au from 762.3m
• 3.06m @ 0.73 g/t Au from 771.94m
• 1m @ 7.29 g/t Au from 829m including 0.7m @ 10.2g/t from 829m

PDD0003:

• 2m @ 0.78 g/t Au from 113.2m
• 1.65m @ 1.73 g/t Au from 123.35m PDD0004:
• 3.6m @ 0.79 g/t Au from 20.5m
• 3.8m @ 1.43 g/t Au fro 31.7m including 0.4m @ 8.15 g/t Au from 35.2m PDD0005:
• 3.8m @ 2.60 g/t Au from 37.2m including 0.7m @ 9.9 g/t Au from 38.2m

Encouragingly, four of the six drill holes intersected significant gold mineralisation.

Mineralisation intersected in PDD0003 has extended known gold mineralization southeast along strike of the Grace-Bemms shear a nearly 200m.

Furthermore, diamond hole PDD0005 was drilled a further 800m southeast along strike of the Grace- Bemms shear from PDD0003. Minimal historical shallow RAB drilling exists between PDD0003 and PDD0005. The company has highlighted the area between PDD0003 and PDD0005 as a high priority drill target warranting further follow up drilling in the upcoming program.

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The presence of grades at a depth of up to 10.2g/t associated with felsic intrusive is highly encouraging and confirms the gold system at grace is part of a large mineralised system and significantly increases the perspectivity of the project where there has been no been drill tested.

Of final significance, PDD0001 was lined with PVC casing enabling future downhole geophysical surveying to be conducted in conjunction with the upcoming RC drilling program. With gold mineralisation being closely associated with logged massive sulphide veining and brecciation it is anticipated downhole geophysical surveying will enable off-hole conductros to be modelled aiding with future diamond drill targeting.

Further Work

A Program of Work (POW) is already in place for a follow up drill program with a heritage survey due to commence in March to clear the area for access. The company is in the process of finalising a drilling contractor in order to undertake an aggressive 8,000-10,000 metre RC infill and extensional drilling program prior to releasing a maiden JORC compliant mineral resource estimate later in the year.

The Company looks forward to updating shareholders on the ongoing exploration at the Grace Project in due course.

	HoleID		HoleType			Depth (m)			Dip			Azimuth			Easting (mE)			Northing (mN)			RL
										(MGA94-51)			(MGA94-51)
	PRC0001	RC	89.4		-60.0		202.0		431865		7573993		297.00
	PDD0001	Diamond	879.9		-70.0		196.0		430800		7574600		297.00
	PDD0002	Diamond	149.6		-60.0		202.0		431693		7574120		297.00
	PDD0003	Diamond	248.6		-60.0		202.0		430966		7574526		297.00
	PDD0004	Diamond	149.3		-60.0		202		430937		7574456		297.00
	PDD0005	Diamond	177.4		-60.0		330		431696		7574120		297.00

Table 1 Drill hole table summary.

	Hole ID			Prospect			Depth From			Depth To			Thickness			Au (g/t)
					(m)			(m)			(m)
	PRC0001		Grace				No significant result
	PDD0001		Grace	203.20		209.00		5.80		1.52
		Including	206.00		207.00		1.00		3.84
	PDD0001		Grace	216.00		224.00		8.00		4.1
		Including	221.00		224.00		3.00		8.32
	PDD0001		Grace	480.25		481.30		1.05		4.396
	PDD0001		Grace	762.30		765.00		2.70		0.75
	PDD0001		Grace	771.94		775.00		3.06		0.73
	PDD0001		Grace	829.00		830.00		1.00		7.10
		including	829.0		829.70		0.7		10.183
	PDD0002		Grace				No significant	results

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PDD0003	Grace	113.20	115.20		2.00	0.78
PDD0003	Grace	123.35	125.00		1.65	1.73
PDD0004	Grace	20.50	24.10		3.60	0.79
PDD0004	Grace	31.70	35.60		3.90	1.43
Including	35.20	35.60		0.40	8.15
PDD0005	Grace	37.20	41.00		3.80	2.6
Including	38.20	38.90		0.70	9.93
Table 2: Significant Assay results for grace 2021 drilling program.

Figure 1: Cross section of the EIS hole location at the Grace Project with the Historic Drilling.

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Figure 2: Map of EIS hole location at the Grace Project with the Historic Drilling.

Paterson Resources Executive Director, Matt Bull commented:

"The drilling campaign was designed to follow up on high-priority geophysical targets and chase known mineralisation along the Grace-Bemm Shear Zone. Historically, this has only been drilled with wide spaced and generally shallow drill-holes in the past. The results of the drilling continue to show highly encouraging mineralisation style and have given the company a better understanding of the geology of the area."

"The Board continues to develop its understanding of the mineralised system apparent at the Grace Copper-Gold Project. Going forward, plans are in motion to progress shaping the next phase of exploration, in this highly prospective part of the Paterson Province."