Annual Group Report ML 29781, ML 29782, ML 29783, ML 29785, ML 29786, ML 29812 and ML 29814, MLN 1058 and MLN 1083 Mt Bundy, Rustlers Roost and Quest 29 Projects 16 October 2012 to 30 November 2013

Abstract

The Toms Gully, Rustlers Roost and Quest 29 tenement group (ML 29781, ML 29782, ML 29783, ML 29785, ML 29786, ML 29812 and ML 29814 and MLN 1058 and MLN 1083) is located some 110 kilometers south-east of Darwin. These ML tenements represent an historic package of MC and MCN's, consolidated in 2013. Primary Gold has managed these tenements since February 2013 when they were transferred to the company as part of the acquisition of the Mt Bundy Project from Crocodile Gold Australia Operations (CGAO). The tenements are mostly underlain by sediments of the South Alligator Group, namely the Koolpin Formation, Gerowie Tuff and Mt Bonnie Formation. The exception being the Tom's Gully Group which are dominantly underlain by the older Wildman Siltstone of the Mt Partridge Group, exposed in a gently SW plunging antiform. The Mount Bundy Granite intrudes the South Alligator and Mount Partridge Groups and is central tp the mineralisation located at Tom's Gully, Rustlers Roost and Quest 29. The licenses contain significant auriferous quartz vein systems. Exploration undertaken by CGAO in the period 16 October 2012 up to the transfer to Primary Gold in February 2013 was limited, reflecting the impending sale of the licenses. Since acquisition of the Mt Bundy Project, Primary Gold has not undertaken any on-ground work but has moved rapidly to re-evaluate the available drill data and resource models from the historic Tom's Gully Mine, currently on care and maintenance. In July 2013 Primary announced an updated Mineral Resource Estimate based on re-interpretation of the existing drill data and in August 2013 Primary announced the completion of a successful feasibility study for the Tom's Gully Mine, which included an updated Mineral Resource and Ore Reserve Estimate, and is currently seeking project finance for the same. The current focus for Primary Gold is to return Tom's Gully to production and once in production to then re-evaluate both the Rustlers Roost and Quest 29 mines with a view to using these sources to supplement the ore feed to the Tom's Gully plant.