2017 Annual Group Report GR378 MLN 342, MLN 346, MLN 405, MLN 459, MLN 811, MLN 816, MLN 1033, MLN 1039, ML 30512 and ML 30589 Mount Bonnie Year ending 31 December 2017

Abstract

PNX Metals Ltd ('PNX') purchased the Mount Bonnie tenements from Newmarket Gold Inc in late 2014. This is the third of the Group Reports (GR378) pertaining to MLN's 342, 346, 405, 459, 811, 816, 1033, 1039 and ML's 30512 and 30589, collectively referred to as the 'Mount Bonnie leases'. PNX are exploring the Mount Bonnie leases as part of the Hayes Creek Project, which also includes the Iron Blow leases located approximately 2 km to the north. Mount Bonnie is a polymetallic Au, Zn, Ag, Pb and Cu deposit within the Pine Creek Orogen, discovered in the 1870's and mined sporadically up to 1985. It produced approximately 25,000oz of gold and 810,000oz of silver from oxide ore totalling about 110,000t in the open pit, as well as minor historical underground production. During the 2017 reporting period, PNX completed a prefeasibility study, which included metallurgical testwork, process plant design, geotechnical studies, hydrogeological studies, environmental studies, resource estimation, surveying and financial evaluation. Drilling during the period consisted of 1 aircore hole (12m), 59 RC holes (2756m) and 9 diamond holes (736.1m) which were drilled in support of current definitive feasibility studies for a combination of sterilisation, geochemical waste rock characterisation, exploration, resource definition, geotechnical, hydrogeological and metallurgical purposes. Two of the holes had downhole wirelines testing done. In addition, a Skytem helicopter born EM system was flown at 100m spacing for approximately 9.5 line km over Mt Bonnie (and more over surrounding leases) and 150 soil pXRF measurements were taken.