Forrestania Gold Project

Lady Ada

Upon first examination of the dominantly west-dipping orientated drill lines, the mineralisation appears to be diminishing at depth. However, when the high-grade intervals (>5.0 g/t Au) are displayed in plan-view (see appendix 2 of ASX Announcement dated 14 March 2017) a south-easterly plunging trend is readily observable. When cross-sections are created parallel to the high-grade plunge, it is clear the mineralisation is open at depth as shown in the oblique and cross sections provided in Figures 2 & 3.

The mineralisation at Lady Ada is hosted within the Sapphire Shear, which presents as two zones of stacked shallow dipping faults. The grades within the shear are variable (typical of shear hosted systems) and present commonly as intervals of 2-3 m, with average grades frequently ranging up to 5.0-15.0 g/t Au. Figure 1 and Figure 2 show high-grade intercepts that have not been closed off at depth. The main (eastern) high-grade part of the Mineral Resource is 55 m wide with a down-dip length of 230 m; the second (western) high-grade part of the Mineral Resource is approximately 35 m wide with a down-dip length of 170 m (as first reported in the ASX announcement from 9 March 2017).

MARC001 was a standout hole which yielded very impressive, high grade gold mineralisation at a shallow depth (38m) in an area that is outside of the current optimised pit design.

The strong results point to both an increase and an upgrade in Resources at the Forrestania Gold Project. The drilling was designed to target mineralisation outside of the current resource model as well as high-grade extensions below and adjacent to the current pit design, in line with Classic’s strategy to sufficiently grow its Mineral Resources to a size that supports establishment of an on-site processing facility at FGP as contemplated in FGP scoping study (see ASX announcement released 2nd May 2017).  Best results include:

• 34m @ 2.14 from 38m – including 6m @ 9.06 g/t Au and 2m @ 15.74 g/t Au from 38 m
• 12m @ 1.74 g/t Au from 64m – including 3m @ 2.03 g/t Au from 72m
• 2m @ 9.77 g/t Au from 109m
• 9m @ 1.30 g/t Au from 66m – including 2m @ 3.58 g/t Au from 73m
• 9m @ 6.23 g/t Au from 36m – including 6m @ 9.06 g/t Au and 2m @ 15.74 g/t Au from 37m
• 11m @ 1.25 g/t Au from 64m – including 2m @ 3.58 g/t Au from 73m
• 1m @ 3.82 g/t Au from 47m
• 2m @ 3.05 g/t Au from 55m
• 5m @ 1.24 g/t Au from 55m
• 2m @ 3.53 g/t Au from 48m
• 2m @ 1.45 g/t Au from 54m – including 1m @ 2.59 g/t Au from 55m

Lady Magdalene

Gold mineralisation at Lady Magdalene (formerly Red Haze) is hosted within a sheared mafic suite. The mineralisation is over a kilometre long, is generally drilled to a down-dip length of 200-300 m (150 m vertical depth), and is generally 10 m thick (true thickness) with a grade range between 1.0 and 5.0 g/t Au. The area was the subject of RC/Diamond drilling, heap- and dump-leaching metallurgical column test work completed by Forrestania Gold NL (LionOre subsidiary) in mid- to late 1999. The gold mineralisation strikes over 500 m north-south and is hosted within the Wattle Rocks Dolerite unit (like Lady Ada), but differs in having multiple, wide (up to 20 m true width), subparallel low-grade shear zones instead of one major, narrow, high-grade shear (the Sapphire Shear) like Lady Ada.

The total Mineral Resource estimated for Lady Magdalene in August 2000 was 2.45 Mt @ 1.65 g/t Au at a 1.0 g/t Au block cut-off grade. The Resource is based on only 50 m x 25 m drill coverage (at best) and higher-grade (supergene) portions of the orebody may become apparent with closer-spaced drilling programmes. Diamond hole FWRD011 had an intersection of 7.0 m @ 9.07 g/t Au (true width unknown), containing visible Au only 25 m from surface and alludes to other, as yet undefined, high-grade intersections being present in the orebody.

Classic has undertaken drilling at Lady Magdalene throughout 2017 with excellent results. Drilling at Lady Magdalene was designed to target mineralisation outside of the current resource model as well as high-grade extensions below and adjacent to the current pit design. Importantly, results from initial holes have identified an additional zone of high grade mineralisation outside of the current resource which extends at depth and along strike, reaffirming management’s view that the FGP has the potential to host a much larger gold system that can be unlocked through further targeted drilling. Best results include:

• 7m @ 4.95 g/t Au from 138m – including 3m @ 10.0 g/t Au from 141m
• 12m @ 2.08 g/t Au from 139m – including 3m @ 4.6 g/t Au from 142 m
• 4m @ 4.66 g/t Au from 76m
• 17m @ 3.86 g/t Au from 179m – including 9m @ 5.4 g/t Au from 187m
• 2m @ 12.46 g/t Au from 87m – including 1m @ 24.3 g/t Au from 87m
• 2m @ 8.59 g/t Au from 48m – including 1m @ 16.5 g/t Au from 48m
• 6m @ 3.27 g/t au from 74m – including 4m @ 4.6 g/t Au from 76m

Exploration Targets

The Company is planning an aggressive work program with the aim of developing existing gold resources and discovering new high grade gold deposits within its extensive ground holding at the Forrestania Gold Project. Work will include the completion of resource development drilling and resource calculations at Lady Ada and Lady Magdalene, orientated diamond drilling at Lady Magdalene to identify very high grade gold lodes similar to Lady Ada and extensive regional exploration drilling testing high priority exploration targets for new gold deposits.

Initial work will focus on the completion of phase 2 resource drilling at Lady Ada and Lady Magdalene. This will facilitate the calculation of a new resource base for the Forrestania Gold Project to 2012 JORC standard.

The region is highly prospective for primary gold mineralisation having yielded more than 1 million ounces of gold extracted to date. Remaining known in-ground resources in the region exceed 2.5 million ounces of gold. Exploration work will focus on testing high priority targets specifically those over favourable host rocks including gabbro, which host the Lady Ada and Lady Magdalene deposits, and banded iron formation, which host the 1 million ounce Bounty Gold Mine. The highest ranked exploration targets within the project area have little or no previous drill coverage.

Orientated diamond drilling will be undertaken within the existing Lady Magdalene resource in an attempt to locate high grade cross-cutting gold lodes similar to the Lady Ada deposit which yielded 95,865 tonnes @ 8.81g/t for 27,146 oz Au. Currently existing drilling at Lady Magdalene is too broad spaced to identify these potential high-grade cross-cutting lodes.

The Matrix is our highest priority regional target located 9km south along strike from Lady Ada. Its geological and structural framework is almost identical to Lady Ada and Lady Magdalene with a series of highly prospective cross cutting structures.

No historical drilling has occurred at the Matrix. The geochemistry is weaker than Lady Ada and Lady Magdalene and it is the Company’s belief that this is function of the transported cover/overburden being slightly thicker than what is seen over Lady Ada and Lady Magdalene. It wasn’t until a magnetic survey was flown in the early 2000s that it became clear that the prospect has a very similar magnetic signature to Lady Ada and Lady Magdalene (significant north/north eastern cross cutting features).

Classic intends to conduct a first phase Air Core/RAB drill program over discreet magnetic features (focusing on cross cutting dykes/structures) at the Matrix as soon as the drill POW has been approved.

Classic considers the Matrix as having the potential to host gold mineralisation due to its similar structural positions to the small, high-grade (~9g/t Au) Lady Ada deposit (8km to the north), the large low-grade (1.5Mt @ ~3g/t Au) North Ironcap Resource (4km to the south) and the large high-grade (~4.5g/t Au) Lounge Lizard deposit (12km to the south). A 1000m x 150m >20ppb Au auger soil anomaly overlies the dolerite but stops under cover to the north and west.

Scoping Study

In March 2017, Classic completed a Scoping Study based on the Inferred and Indicated Mineral Resource at the Forrestania Gold Project. The Scoping Study referred to the Lady Ada (formerly referred to as Blue Haze) and Lady Magadalene (formerly Red Haze) deposits.

Highlights

The Scoping Study showed a technically and financially viable project, and based on A$1,700 gold price and 8% discount rate:

• Low initial Capex of between $A25M and A$35M (as a part of the total funding requirement of $A40M-A$45M including an additional contingency of A$2M-A$4M and A$8M-A$10M (working capital).
• 1.9Mt at 1.95g/t Au (diluted) for 111koz produce over a Life of Mine of 2.5 years.
• AISC of A$1,080/oz-A$1,160/oz.
• A$60-A$70 million in free cash flow.
• NPV of A$54-A$58 million.
• Payback/cashflow between months of 18 and 24.