LUKE RIVER PROJECT

Pela Resources Pty Ltd has rights to an 80% downstream interest in a European high grade precious and base metal advanced exploration project, “Luke River”.

Luke River is an advanced exploration project located in northeast Macedonia. Extensive historical exploration and limited exploration has delineated numerous hydrothermal vein structures reporting high grade precious and base metal mineralisation. The Luke River Project consists of the Luke River Tenement. The project area of 29.33 km2 in the Kriva Palanka district is well serviced with sealed roads, reticulated power from the national grid and an abundant water supply. The border with Serbia defines the northern margin of the concession and the border crossing into Bulgaria is within 20 kilometres of the project area to the south east.

Historical resource estimates and feasibility studies completed over the Luke River project area were completed predominantly by the Yugoslav government in compliance with the Russian classification systems. The mineralisation is not JORC compliant and cannot be reported here, however, rock chip samples taken from mullock dumps and outcrop, carried out as part of the due diligence, support the stated grades. The highest assay values returned for the elements of interest are tabulated below:

Some 12 hydrothermal vein structures have been delineated within the project area, interpreted to be related to a sub volcanic (dacite) intrusive to the north. The area is characterized by very good outcrop and the structures have a mapped strike length of up to 3 kilometres. Limited drilling and underground development has confirmed the down dip extension of mineralisation and the structures remain open at depth.

The primary focus of future exploration will be to delineate and define vein hosted, high grade gold mineralisation. To this end a two stage electromagnetic ground survey has commenced on the project aiming to better define the mineralised structures. It is envisaged that the survey will provide control on the 3D geometry of the structures, facilitating better drill targeting.

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