Doray Minerals : Underground Drilling at Deflector Reveals Additional High Grade Mineralised Structures

13 DECEMBER 2018

UNDERGROUND DRILLING AT DEFLECTOR REVEALS ADDITIONAL HIGH

GRADE MINERALISED STRUCTURES

Doray Minerals Limited ("Doray" or "the Company") (ASX: DRM) is pleased to announce the results from recent underground diamond drilling focussed on infilling Inferred Mineral Resources and In-Mine exploration at the Deflector Gold Copper Mine.

HIGHLIGHTS

• o Drilling in the northern end of Deflector was successful in extending the Western Splays approximately 150m north to the Shredder Fault. Significant results include:

  • o DFUG0048 - 1.3m @ 59.2g/t Au and 0.4% Cu from 4.0mdh (New 2103 lode)

  • o DFUG0049 - 1.5m @ 39.8g/t Au and NSA Cu from 5.0mdh (New 2103 lode)

  • o DFUG0051 - 0.3m @ 61.2g/t Au and NSA* Cu from 136.9mdh (newly identified Western Splay 1218 lode), and 2.0m @ 26.3g/t Au and NSA Cu from 204.0mdh (previously unmodelled lode)

  • o DFUG0053 - 1.9m @ 29.9g/t Au and 0.1% Cu from 155.0mdh (newly identified Western Splay 1218 lode)

  • o DFUG0055 - 2.4m @ 19.0g/t Au and NSA Cu from 296.0mdh (new lode west)

• o Drilling in the southern end of Deflector returned several high grade infill results, including:

  • o DFUG0059 - 0.4m @ 77.1g/t Au and 1.0% Cu from 137.1mdh (unmodelled extension to Western Zone)

  • o DFUG0060 - 0.5m @ 724g/t Au and 18.8% Cu from 86.1mdh (modelled domain 1209)

• o Several exciting new intersections east of the current Contact lodes, completely within the eastern sedimentary unit, including DFUG0042 - 1.8m @ 8.9g/t Au and NSA Cu from 252.9mdh

Commenting on the discovery of these new high-grade mineralised structures at Deflector, Doray Minerals Managing Director Leigh Junk said, "These results continue to show the level of high grade mineralisation present within the Deflector system. The more we drill, the more mineralised surfaces we uncover. Some of these grades are exceptional, and bode well for inclusion in next years Mineral Resource estimate.

The presence of these numerous high grade structures are contributing to our strong mining performance on site. We are also gaining significant benefit from additional ore being mined outside of our planned areas as we delineate new structures."

*NSA - No Significant Assay

Deflector In-Mine Exploration - Drilling Update

Underground diamond drilling within the Deflector mine during Q1 FY19 has focussed on both infilling areas of lower data density, as well as exploration for new Mineral Resource material within the underground mine footprint. The discovery during the last financial year of significant new orebodies within this footprint has proven the strategy of incrementally increasing the Mineral Resource accessible by existing (or planned) underground mine infrastructure.

A total of three programmes were drilled, comprising 24 holes for 7,297m. In addition, two stratigraphic holes for 1,748m were drilled to collect an unbroken geological profile to the east and west of the Deflector mine. The three In-Mine exploration programmes were focussed on extensions to the Western Splay lodes north and south of the current Mineral Resource interpretation, as well as on a gap in data evident in the Contact Lode coverage (see Figure 1).

Figure 1. Location diagram of recent underground diamond drilling programmes at the Deflector Gold Copper Mine.

Drilling of the Western Splay extension target to the north of the current interpretation was successful. The area targeted was proximal to the Shredder Fault in the northern end of Deflector. Drilling intersected strong visible mineralisation consistent with that seen in the Western Splays further south, being structurally controlled quartz veining with massive sulphides developed (pyrite+chalcopyrite). Hole DFUG0055 also returned an isolated quartz-sulphide lode intersection further to the west, which is completely untested by drilling in the surrounding area. This position will be investigated as a potential new parallel Western Splay lode. In addition, drill holes intersected what appears to be a new, narrow high grade lode interpreted to be a splay off the Central lode, immediately adjacent to the drill collar position (2103 lode). A plan of the new intersections, with reference to the existing modelled Mineral Resource interpretation, is included below as Figure 2. Several significant intersections were returned, including:

•  DFUG0048 - 1.3m @ 59.2g/t Au and 0.4% Cu from 4.0mdh (New 2103 lode)

  0.4m @ 10.7g/t Au and NSA Cu from 124.1mdh (Western Splay)

•  DFUG0049 - 1.5m @ 39.8g/t Au and NSA Cu from 5.0mdh (New 2103 lode)

•  DFUG0051 - 0.3m @ 61.2g/t Au and NSA Cu from 136.9mdh (newly identified Western Splay 1218 lode), and 2.0m @ 26.3g/t Au and NSA Cu from 204.0mdh (previously unmodelled lode)

•  DFUG0052 - 1.1m @ 15.5g/t Au and 0.2% Cu from 9.0mdh (New 2103 lode)

•  DFUG0053 - 1.9m @ 29.9g/t Au and 0.1% Cu from 155.0mdh (newly identified Western Splay 1218 lode)

•  DFUG0055 - 2.4m @ 19.0g/t Au and NSA Cu from 296.0mdh (new intersection west of existing Deflector sequence)

  Figure 2. Plan view of the northern end of the Deflector deposit, near the Shredder Fault area, with new drill intersections and the existing Mineral Resource interpretation wireframes. View is at approximately the 920m RL. Note local grid.

The second drill programme targeted mineralisation extensions to the Western Splay lodes at the southern end of the Deflector system. This programme returned mixed results. While southern continuations of the Western Splay lodes were not identified in the drilling, a high grade extension to one of the main Western Zone structures was defined. This is noteworthy because it is immediately adjacent to planned underground development and stoping in the southern end of the deposit. In addition, numerous positive infill intersections on currently modelled Mineral Resource lodes were also returned. Significant results returned from the drilling include:

•  DFUG0058 - 0.3m @ 35.2g/t Au and 0.1% Cu from 148.7mdh (unmodelled extension to Western Zone)

•  DFUG0059 - 0.4m @ 77.1g/t Au and 1.0% Cu from 137.1mdh (unmodelled extension to Western Zone)

•  DFUG0060 - 0.5m @ 724g/t Au and 18.8% Cu from 86.1mdh (modelled domain 1209)

•  DFUG0061 - 0.4m @ 28.9g/t Au and 3.8% Cu from 74.2mdh (modelled domain 1209), and 1.2m @ 41.1g/t Au and 0.1% Cu from 109.3mdh (modelled Western Splay lode)

•  DFUG0062 - 2.0m @ 30.3g/t Au and 3.3% Cu from 118.0mdh (modelled domain 1203)

  Figure 3. Plan view of the southern end of the Deflector deposit, with new drill intersections and the existing Mineral Resource interpretation wireframes. View is at approximately the 1000m RL. Note local grid.

The third drilling programme targeted an area of the basalt-sediment contact, which hosts the Contact lode mineralisation, where a gap in the data coverage was recognised. This programme was designed to test the northern and depth extensions to the Contact lode 3 discovered during FY18, which is hosted entirely within the sedimentary rock units. Drilling failed to extend Contact lode 3 north of the current interpretation, however several intersections were returned from the Contact lode 2 position. These intersections have confirmed and slightly extended the Contact lode 2 interpretation in this area of the deposit. Significant results include:

•  DFUG0044 - 0.8m @ 8.6g/t Au and 0.1% Cu from 123.2mdh (Contact lode 2)

•  DFUG0045 - 0.7m @ 3.1g/t Au and 0.1% Cu from 128.3mdh (Contact lode 2)

In addition to testing the Contact lode positions, one hole (DFUG0042) was extended to test beneath an isolated intersection from a Deflector surface diamond drillhole (DEDD0059 - 2m @ 5.0g/t Au and 0.1% Cu). This intersection is located entirely within the sedimentary package, approximately 70m further east of Contact lode 3. The extension of DFUG0042 was successful in confirming this mineralisation, returning 1.8m @ 8.9g/t Au and NSA Cu from 252.9mdh. In addition, the stratigraphic hole DFUG0047 returned an intersection of 5.4m @ 1.9g/t Au and 0.3% Cu from 214.0mdh, which is proximal to an historic aircore intersection of 2m @ 26.6g/t Au and NSA Cu from 45mdh (GWC005) from drilling by Sons of Gwalia in 1991.

As illustrated in Figure 4, these intersections are open in all directions. The sedimentary and intermediate volcanic rock units east of the main Deflector basalt have been largely ignored by previous exploration campaigns. These recent intersections, when compiled with available historic data, clearly point to the potential for mineralisation within these units, which are immediately proximal to the Deflector mine. Historic diamond drilling that covers these units is largely unsampled and is currently being re-logged and sampled by Doray staff. In addition, future exploration programmes will be planned to scope the mineralisation potential of these units.

The results from these three programmes will be incorporated into the FY19 Mineral Resource update for the Deflector deposit. In addition, follow-up drilling is planned to commence on testing the extent of mineralisation identified in the Central lode splay (2103 lode) as well as the potential existence of a new Western Splay lode, suggested in holes DFUG0049 and DFUG0055.

A full table of drill hole details and intersections is included as an Appendix to this release, in addition to the relevant sections of the JORC (2012) Table 1.