Heron Resources : Confirms Significant B Lens Extension at Woodlawn

Heron Resources Limited

28 September 2016

Level 7, 191 Clarence Street, Sydney NSW 2000

heron@heronresources.com.au

+61 2 9119 8111

ABN: 30 068 263 098

• Significant high grade assays received from B Lens step-out drilling: o 5.7m @ 14.3% ZnEq1 from 575m (6.1% Zn, 1.4% Cu, 3.2% Pb, 0.18g/t Au, 35g/t Ag) WNDD0108

  o 2.5m @ 19.5% ZnEq from 552m (7.7% Zn, 1.3% Cu, 3.9% Pb, 1.8g/t Au, 100g/t Ag) WNDD0108

• Down hole electromagnetic (DHEM) survey on WNDD0108 outlines the potential for a significant extension to the B Lens position to the north-west
• An Exploration Target2 in this B Lens extensional area is in the order of 0.6Mt to 1.1Mt at grades between 7.0% and 14% ZnEq
• DHEM at the shallow G2 position has identified a number of conductors that warrant drill testing and which have the potential to materially add to the early mining inventory

Commenting on these latest results, Heron Resources Managing Director and CEO, Mr Wayne Taylor, said:

"These latest results clearly confirm the extension of the B Lens system at Woodlawn with new high grade mineralisation to its north west that has the potential to substantially add to the mining inventory. Underground access to this new zone would utilise the same development infrastructure as the main B Lens, enhancing the economics of Woodlawn mine. Importantly, this area remains open for further resource extensions."

As previously reported, two holes were drilled to test the concept of an extension to the B Lens mineralisation to the north- west. Assay results from the second B Lens extension hole, WNDD0108, have now been received:

o 11m @ 8.43% ZnEq from 569m (3.4% Zn, 0.94% Cu, 1.5% Pb, 0.12g/t Au, 18g/t Ag)

 Including 5.7m @ 14.3% ZnEq from 575m (6.1% Zn, 1.4% Cu, 3.2% Pb, 0.18g/t Au, 35g/t Ag)

o 2.5m @ 19.5% ZnEq from 552m (7.7% Zn, 1.3% Cu, 3.9% Pb, 1.8g/t Au, 100g/t Ag)

The intercept at 569m comes from the B Lens horizon and consists of a copper stringer zone combined with typical polymetallic high-grade massive sulphides. It includes a higher grade zone as described above from 575m to 580.6m. The DHEM data places this intercept on the very edge of the modelled plate conductor and is located 70m to the north of the limits of previous mining at this level.

The intercept at 552m is a relatively narrow, but very high-grade zone of polymetallic massive sulphides located in the hanging wall of the B Lens and represents a new mineralised surface. Access to this zone would utilise the same development infrastructure for the main B Lens. The intercepts are shown in Figure 1 along with the modelled DHEM plates. The DHEM

1 ZnEq % used in this release refers to the calculated Zn equivalent grade based on the Zn, Cu, Pb, Au and Ag grades, the formula for which is provided in Appendix 1 at the end of this report.

2 An Exploration Target is a term used within the JORC2012 Code for an estimate of the exploration potential of a mineral deposit. As used in this release the stated exploration target is based upon the parameters described in the text, however the potential quantity and grade is conceptual in nature and there is insufficient information to estimate a Mineral Resource and it remains uncertain if further exploration will result in the estimation of a Mineral Resource in this area of recent drilling.

plates indicate potential for a mineralised zone of dimensions 250m x 150m and extending out to the limits identified in WNDD0105. Based on these DHEM plates and the existing intercepts an Exploration Target can be defined of approximately 0.6Mt - 1.1Mt with grades of 7.0%ZnEq - 14%ZnEq2

Figure 1: Oblique long-section (looking east) for the northern end of the B Lens position, showing location of WNDD0108, DHEM plates and earlier drilling.

As previously reported, five holes have been completed on the G2 Lens position targeting shallow extensions to known mineralisation (Figures 2 and 3). The strong intercept in WNDD0106 was reported previously (ASX/TSX 6 September 2016: 11m @ 11% ZnEq from 133m (6.3% Zn, 0.5% Cu, 3.3%Pb, 0.1g/t Au, 10g/t Ag)) and assays have been recently received for WNDD0107 where a number of weakly mineralised intervals were returned, with a best result of:

o 3m @ 2.9% ZnEq from 119m (1.7% Zn, 0.18% Cu, 0.11% Pb, 0.28g/t Au, 10.2g/t Ag)

The Company is awaiting assays from WNDD0109, WNDD0110 and WNDD0111, all of which were drilled into the G Lens position.

DHEM surveys were completed on WNDD0109 and WNDD0110 with three conductors of interest being identified and modelled by Heron's consultant geophysicist. Of most interest is an off-hole conductor located below WNDD0110 with dimensions 35m x 55m and a conductance of 50 siemens. The conductance is suggestive of stringer sulphide mineralisation and provides a clear target for future drilling to extend the existing Mineral Resource in this area. The planned decline is located adjacent to this zone and any additional mineralisation delineated here has the potential to impact the early production profile.

Figure 2: G2 Lens long-section showing existing lens shape and recent drilling.

Figure 3: G2 Lens cross-section showing location of DHEM modelled plates.

Heron's primary focus is the development of its 100% owned, high grade Woodlawn Zinc-Copper Project located 250km southwest of Sydney, New South Wales, Australia. In addition, the Company holds a significant high quality, gold and base metal tenement holding in New South Wales and Western Australia.

Mr Wayne Taylor Jon Snowball

Managing Director and Chief Executive Officer FTI Consulting

Tel: +61 2 9119 8111 or +61 8 6500 9200 +61 2 8298 6100

Email: heron@heronresources.com.au jon.snowball@fticonsulting.com

Tel: +1 647-862-1157 (Toronto)