ARk MINES.- 31 July 2017 QUARTERLY REPORT FOR Quarter ended 30 June 2017 (ARK: code AHK) OPERAnONAL HIGHLIGHTS FOR THE QUARTER • Ark suspends plans to Mine Mt Porter in 2017 • Ark Continues Mine Plan for Mt Porter central and South & North for 2018 • Ark plans for further Drilling at Mt Porter South • Arkassa excellent Methole results from Mt Porter Central EZO/2000 -1 BE:LI Ial LIOZ LO/IE For personal use only
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FOR Quarter ended 30 June 2017 (ARK: code AHK) · ARk MINES.-31 July 2017 QUARTERLY REPORT FOR Quarter ended 30 June 2017 (ARK: code AHK) OPERAnONAL HIGHLIGHTS FOR THE QUARTER •
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ARkMINES.-
31 July 2017
QUARTERLY REPORT
FOR Quarter ended 30 June 2017
(ARK: code AHK)
OPERAnONAL HIGHLIGHTS FOR THE QUARTER
• Ark suspends plans to Mine Mt Porter in 2017• Ark Continues Mine Plan for Mt Porter central and South &
North for 2018• Ark plans for further Drilling at Mt Porter South• Arkassa excellent Methole results from Mt Porter Central
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- MINES.Mt Port,r Mni:Im pen,lon
The reason forsuspending MTP isthe inability to conclude an extension of the current toll treatagreement with NTM0 on terms and conditions satisfactory to AHIC As a consequence of AHK'sdecision to postpone, the airrent agreement will automatically terminate on 14442017.
The AHK board Is very disappointed to not procure an extension of the NTMO toll treat agreementdespite Its best efforts and bell Ina position tocommence mining. In particular, AHIC
an approval to mine Asued bythi Minister for Primary Industly and RKAurces in theNorthern Territoryhed drawn do,wn a fUrther US$135M tranche of Its gold loan facilty to fund p•yment of the MTPseairlty bond and other start-up costs- which sum It w11 now hold pending further discussionswithPanasia ltd;had ¥eed equipment hire contract terms with Titan MinN Equipment Hire;
/ put in place requhd tlchnical personnel;4 had flnallsed metallurgical recoverles and opumbations for MIP ore-see further belove and4 had completed two thirds of reiource drilir for MTP South with planning to complite MTP South
and commence MTP North in 2017 - see further below.
AHK will now focus on concluding terms for Austrai n gold mining acquisition projects on which theboard has been world over the last few months Funding for these acquisttion projects will beprovided through Panasla Lid in Hong Kong. A key focus for AHK in decidiqto condude acquisitionsIs to ensure such proJects are not reliant on third party m111Ing or toll treating.
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IVINES-
Mount Porter Opt nisadon M.tallully
The latist round of metallurgical testing wasspedflcally designed by Independem MetallurgicalOperations (IMO) In conjunction with IGrkland Lake Gold's processing engineers, to simulate theprocessing systems In place at the Union Reefs (UR) mill; InducHng gravity, Acada and leach drcultsusing UR process water. Gold ores for testing were sourced from four purpose drilled holescompleted by AHK in April 2017, designed to provide a distribution of ore grades and ore typesrepresentative of the MTP mInable envelope, Including sub-ore grade diluting materials (see Agures1,2,3,4, Tableland Appendk A).
IMO's July 17 metallurgical results show that average gold recoveries under processing conditionsachievable at UR are 925% for oxide ores, 85.7% for transitional ores, and 79.™ for fresh oreswithin the run of mine grade bands These results are extremely encouraging as this Is the first timethat the MTP oreshave been tested to indude the full rarp of processing systems In useat URandthe resultant recoveries are well aligned to forecasts by AHIC's technical personnel.
Figure 1: Mt Porter cross section 10375m Nth showing metallurgy drill hole MPRC347. Naturalsurface Is green. Pit shell design Is brown 0.5 g/t Au grade shell Is pink.
Tabl, 1: Mt Portir Mitalk„sy In*i'vals1. All Au results are based on 50gnre assays with ICP-AAS sh conducted by North Australian Laboratories (NAL) Mne Creek,with a detection limlt ofOm g/t1 AM grades are alculated on a 0-50 g/t Au lower cut-off.3. The miximum Internal waste within any given Intercipt is based on no more than 1 continuous metre of waste below the
cut- ff Fade.1 4 Allint,cipt grades are alculated by the length we*hted average of the primary Au assly. Rapeat and duplicate assays of
greater value than the primaiy (first) assay have not been subst!tuted or avemied into the prlmary Au gradei 5. All raw grades are based on non top cut raw primary Au assay data
& All top artgrades are based on primary Au amy data with a glostltisticany valldated top cut of 20 8/t Au appled.7. All Inter,aIs are down hole lengths& All qyingls based ondown hole Inte,vabof 1 metreof RC drilled rock chip =mples spilt bystatic conesplitter.9. All holes drilled using 43 Inch RC face s,mp¢Ing hammer and oriented approodmately perpendicular to minerall:ation stilce
1 and pmrall•Ito miner,Rs@tion dip forthe purpose of mumising returned MET suitable sample.1 10. QAQC regime appled comprises:
a) Aver,ge of l in 5 duplicati mmples sp[!t by static cone spatter and tnupendent processed and assay,d as checksb) Average of 1 In 25 rip[Icate as,ays, plus replicates of all asms of greater thin l g/t ALc) Average of 1 In 25 certified Gannet Au standards selected for approprlate grade and minerabation typed) Duptates of all intervals conserved at Ark Mines storage fadlity agal lst firture QAQC requirements.
10: These metallurgical Intervals of are not Significant Intercepts for the purpose of resource evaluation, estimation and '1 reporting dueto their orlentition beingdown dlto htenmonally ma)dmhe ore recovery.
'Awns 140&176 10,375.315 521-754 260.841 59£0 448
''liwi/ki.p. iI Ilo,Ls//06 10,444* .1,1/1/kE' mall. liki<...S.O-
Todate two thirds of the mlnerallsed zone of the surface expression at Mt Porter South, has beendrilled, with a further 500 to 80Om of RC remaining to complete the programme In Phase 3.
The results, so far, hive been very encouraging with the majority of holes hdudir g interceptsapproximatlng or exceedng the 13 g/t gold grade which Informed the Initial targung of theprogramme (see Table 2, Figure 5 and Appendix A). The oxide zone extends to depths of 25 to 3Smcomparable tothose seen Inthe MTP mine zone. Thedepth to water table Is topographicallydependent but In general sits at 30 to 4Om in the dry season and 25 to 3Om Inthe wetseason.
Background water samples have been obtained and assayed from the Phase land 2 drill holes tosupport the MMP application. Waste rock characterisation samples to support MMP applicationhave also been collected and stored for compositing and assay In parallel with the Phase 3programme.
Phase 3 of the MTP South resource development programme was scheduled to commence In late2017, concurrent with mining at MTP. Phose 3 will now be postponed until commencement of MTPmining planned for 2018. This will allow the MTP mine infrastructure to support the programme andreduce costs
Similarly, preliminary wire frame modelling has been completed for MTP North, with a detailed,targeted drill programme currently Indevelopment to follow on from completion of MTP South.
These resource development programmes are expected to add *1!flcant mine life to MTP.
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AMAMINES.-
APPENDIX B: JORC COMPUANCE TABLE
JORC Code, 2012 Edition - Table 1 - Mount Porter Prospect - ML23839 - Drilling Results - JORC 2012Section l Sampling Techniques and Data
(Criteria In this section apply toall succeeding sections.)
• Nalm Mdlom,ofs=HO#401dwimil Ton<om*IAor**FdiM#,dia#Ind*n»m,allent ma 4,»v# W.mbim* Id,r-*4*=domlhogo,on*lk orWinfla#*m-as1.inlMthe ,In,1-In.Ing.broodm•,dil4
. Ir,po-**60,101,4 i, *40.4t,c gumm*lum,od,Dimiloms Iq cuM*W 41&0* Sm/W*cuH#lodesors .11*Moler,4 Md*),/8 be st@tli
• btl,INqligaill,Uiviplhco or*indhgth4W*,ed,igkIndloogar l ,th4loil,adt1-/4 *Proo-lu,Id#lid I#,190<10,
• Al r-,Its p,rtihI71tothi currwit progrim wifrom ML 23139,h,Id by AHIC
. MI- 23839 I loctid on PL 11* Muy R),ar Walt Station• AHK his cormiltid wah thi Tra,mional (»ners fros} 4 14 23:39,
hJilwin P•001, an GAK hlrilipdIhi TOI hifibin kiAIr,Formed of explor•tion seth*les c=Tled 04£ by Al<
• The Wwk,-rld 10 In this*ns IM,nad 111pr,vlous I®loillil, clr,1,4 out b, Raiulon Goldnilb 001•old,Ilde®lo.Ine.. PtvUd h,ch-UNIholi Fwid-0 .1* 19,8mdI*9*lelMIW In 19 9 Ind 19Ia
• Th.*mlh.t.l, d,hillowtomed,ally-Nqu=tivluiocliud =ddle lodl*m bMheit Ind weR aili4**no#northi#,abidll Mo* Por: Al,idbi# *Ah*elow lidi m,EM»Il= 0thi Koolpl FormilII,nd th, ZnuDol=*71 MIKPonwkldbi bdosi to *chi Ind lis I*ullow nocu,Ily pbmiLYho pliop,utiviDIc 1 0*b forinalonIdo„Alitidb,In¥,Ii,101/ id=rnic-,audandm,tHRMone h ,*NdiOdib,nde hon knin-nho,Imi, lhePIIBIOP,o•ramiC Z,nu Dol=ft, 16 kneto mdicm vah,id FWivicI,17,1,lii =plac,d m r*n Itinili slls#linFe KeoltFarmilign. lhe544*hv„ Thr#I *Pic.*11:Ily2-aloll*btotha,outhaftheAHKMou*Port»rR ourcs.
• Al *li holi *formillon h ret#„ed in thi AHK ditabin Ind Mdal hole dit,1 00„n i, AppiiaxA Tdib 2 Ecoinvi„*N this
1 Ns inati,111 h-,"d= h*48
• b.t.of*0=d *mpts ....h*lan-4n,I,e ,*ihom, bolh #th Ind dal=,B top04 01*„,Ird11*slilld Ill,qllMI**WI* I migall,in Ill/Ill*tion daeras,„4 non- cor,Iia*h, 1& „13,1.fillid **In,lstid,0.5,/t sold
• Thetopga appld Int,ble 2I*ISMdit inD»d at20#t,014 mo #ndih121, i nindioiwthi giolil/c,Mt
• E„1 Poi„Iliellirockd®, lol Ind lii„a=imi,WMido li i.an rp *d.meN#.O*.dm- 1*em Ihipololl=l imidi,141,Wll Iid litivilitig,& Mdo notWo,rnther,p d A rc ptl
• F¥am liqdNU dula*0-,rn-hiesoldm-amlationthedmlh dpidldaddi hal bli 060„wd down to E-lamvi,Ac,1 dep
0 -rtlble/***Mos:,phicha¥*butmt-*in thill,Ii cl406 dFAmhole des* Iln d4 =moi;rlll B 2510ni In wat mon-
• Fi,thw work 11 in pEN,r,N for the Solth Tar, Imud 0,1 digidIll,ndel-*-*dtoma.4.4-n.*modill,tot-h,the,-,tiofthetml *a-
App"WIx 88./. -10,-n,*Ny and oa and gas 0*ploIaUon**ar ly r po,t
Consolldamd s ,ment of cash *wi
2 Procesda from te disposal of.(a) pfoperty, plant Ind equipment(b) Mernents (s IMm 10)(e) Irivestments(d) 00)er nonairrent asests *
C•sh *-Amh.* other •ng.Dividends 1,0*ecl (Ii nole 3)00,er (refund of bond)
Netc,Ih hom/(t-d In) •Iv=14.SIN/l..
93"*Ill./.bor
3.1323.33.4
3.53.63.7
4.1
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4.3
4.4
45
8.83.9
110
Cash aws Mn nandng aclivlt Proceeds Rom Issues of shereeProceeds tom iseue of convertibli notlsProceeds from ®oarcise of share opdoneTransaclion costs related to issues ofIties, Bivert le nolos or op«onsProcieds from borrowingsReplymint of borrow*gsTransaoBon costs related to loans andborro**los
D¢vidends paidOther (proville If m-rial)Netes•h *om/(u In)/.noin,
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Append# 8811 Ing uplom on ent# and ol ind g= uploialloi enev quaitidy r,poit
Fkingmg f.1/blum""al'Add notesas neosssary foranun( er and*g ofthepoe]9on
Tal faci* mioii/ Amimt*Inatat qui'WI'end qua!tsr end
SAWOO $AWOO
Loan fecIBes 7,589 3,289
Credit sts)dby mw gements
Other (please specify)Inolude below a diocripUon of I,oh f,city abon, InckKRAg the 1 nder, 1,#,reet r#I andwhether it : *ecund or unsmand..=ly addIOon,1 fac81805 11:ve been ent,rad Into grarepropoied to be emared hto an,r quarti mid, halde detals or those facmtles as well
The Con¥,any has sectuad a gold #08,1 1*04, »1#1 Chan Inve nen¢s Ltd 980808,8d h Hong Kong).for an amount of US;BM. The facIRy pem,118 the oomp ny to draw*#n osah aurns in supportofapproved purposes. Intial caoh draw*wns up to US$2.6M are repayeble In en agreed numberofgoldounces The bijance ofthe loon whendr n 18 repeyeble wa kimreat In cash between 7 and12-mon#), afts, each Danche ls am,n inte,84 15 dialsd at 17% perannum on #»se tranches.The t,rm ofthi gold loan faclity.greement hen•years after4 August2014 subleotto earlierbam,ine#on
Est nal crash outlloll, for nixt quarS,rExploranon and evakl onDevelopmentProducoonWCOssAanh.U*kn and corpof."costsOther (Nere
Total e.tim-d ca,h olillass
+ See che ir 19 for d*od *rns1 SepHmber 2018
*AP.
Page 4
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Appl""I 88mlng =plomill en«ly md ol =id gas,Kploilition I4*lart,5 Mpoit
Comp""Re I.*WINX
1 This stallment h= been prepared in accordance with accounting standards and poicies whichcomply with Usting Rule 19.11A
2 Thls st=•ment glves a trueandfair view of thernitbers gdoied.
No®•i1. Thequall•rly report provldes a balls for informing *emarket how the entity's *vitlee have been
nnanced for thi past quar r Ind #ie ef#act on lt» cash poiltk,1. An mety *lat wishes to diecloeeaddaion* Iifonnatici is encouraged to dow, in a note or ridge hcluded in orettached b thisreport
2 If Oils qu rly report has been prepared h accordance with Austalan Accounthg Starld ds,the deR,Rlons *1, and provisions of, AASB 6: Exploration for md Evaillation of Min,r,1 Re,O,1,15-and AAS8 107: StatiI,lent of Cash Flows apply ho this r•polt If Thls quaite,ly report has beenprepi,d in accordance v h other accountlig slaixlains agreed by ASX plusuantb LIsting Rule19.114 the correspon ng equ alent standsds apply to this report
3. DMdends recehid may be classified el#ter ss caoh flon from opers*,g =*Itles or c®*h lion*om livelthg actMBes, depildN on Ae accoi,Ing poicy of thienmy
+ See dpf'w 19 for demid lanne1 Sep mb,r2016 Page 6