Kalgoorlie North Drilling Update No 3

MILESTONE

DATE

Paddington processing agreement

Complete - October 2014

Open pit infill and geotechnical drilling

Stage 1 Complete - December 2014

Resource update (Zoroastrian and Bulletin)

January 2015

Paddington mill upgrade feasibility study

(upgrade capital and unit processing costs)

February 2015

Open pit design and Ore Reserve update

March 2015

Project funding

March /April 2015

Haul road design and approval

March /April 2015

Mining approval

May/June 2015

Mining contract award

May 2015

Haul road construction

June 2015

Mining fleet mobilisation

August 2015

Commencement of open pit mining

October 2015

Paddington upgrade completion

December 2015

Commencement of ore processing

January 2016

HOLE NUMBER

EAST

MGA94 Z51

NORTH

MGA94 Z51

AHD

RL (m)

FINAL

DEPTH (m)

DIP

AZIM

FROM (m)

TO (m)

LENGTH (m)

GRADE ( g/t Au)

Zoroastrian

NC140073

335105

6642720

438

80

-60

90

43

44

1

4.23

52

67

15

2.56

KNC140074

335085

6642720

439

105

-60

90

0

6

6

3.54

78

79

1

5.43

100

101

1

1.82

KNC140075

335085

6642780

439

95

-60

90

48

50

2

2.96

60

61

1

1.23

KNC140076

335060

6642800

439

96

-60

90

20

21

1

1.09

71

80

9

1.44

KNC140077

335114

6642800

439

60

-60

90

0

1

1

1.54

22

23

1

2.10

50

51

1

1.69

KNC140078

335090

6642820

441

68

-60

90

30

39

9

1.36

64

65

1

6.06

KNC140079

335100

6642840

441

54

-60

90

18

19

1

2.86

KNC140080

335080

6642840

441

58

-60

90

39

45

6

1.42

KNC140081

335060

6642840

440

90

-60

90

6

7

1

1.10

59

69

10

1.78

80

82

2

1.43

KNC140082

335040

6642840

440

105

-60

90

80

95

15

1.69

KNC140083

335000

6642840

438

200

-60

90

54

55

1

2.05

KNC140084

335045

6642860

441

85

-60

90

10

12

2

stope

78

80

2

3.45

KNC140085

335020

6642880

441

132

-60

90

90

91

1

1.25

101

108

7

1.13

KNC140086

335085

6642900

440

40

-60

90

NSI

KNC140087

335045

6642900

440

100

-60

90

8

15

7

0.97

KNC140088

335020

6642940

439

126

-60

90

109

113

4

2.69

KNC140089

335100

6643020

442

120

-60

90

NSI

KNC140090

335060

6643020

441

144

-60

90

56

57

1

2.27

111

113

2

1.60

KNC140091

335080

6643060

441

85

-60

90

NSI

KNC140092

335057

6643100

440

84

-60

90

49

50

1

1.33

KNC140093

335040

6643060

440

126

-60

90

39

40

1

1.48

HOLE NUMBER

EAST

MGA94 Z51

NORTH

MGA94 Z51

AHD RL (m)

FINAL DEPTH (m)

DIP

AZIM

FROM (m)

TO (m)

LENGTH (m)

GRADE ( g/t Au)

KNC140099

335390

6641860

428

30

-60

90

NSI

KNC140100

335370

6641860

429

38

-60

90

15

17

2

8.98

KNC140101

335325

6641940

429

120

-60

90

10

12

2

2.30

KNC140102

335330

6641980

429

35

-60

90

28

29

1

1.15

KNC140103

335320

6642160

436

48

-60

90

31

40

9

5.37

KNC140104

335330

6642140

435

42

-60

90

25

33

8

1.40

KNC140105

335350

6642180

433

30

-60

90

0

5

5

0.51

KNC140106

335330

6642180

434

45

-60

90

26

30

4

2.76

KNC140107

335310

6642180

435

42

-60

90

28

33

5

1.34

KNC140108

335321

6642200

434

42

-60

90

25

35

10

3.01

KNC141001

335130

6642700

438

36

-60

90

26

28

2

1.37

KNC141002

335130

6642760

439

31

-60

90

10

11

1

5.88

19

27

8

0.88

KNC141003

335110

6642760

441

65

-60

90

33

34

1

1.56

40

41

1

2.74

KNC141004

335325

6642340

434

48

-60

90

29

36

7

1.26

KNC141005

335333

6642320

433

35

-60

90

21

30

9

0.93

KNC141006

335338

6642300

432

30

-60

90

18

19

1

1.33

KNC141007

335333

6642280

433

40

-60

90

24

28

4

1.84

38

39

1

1.53

KNC141008

335338

6642260

433

30

-60

90

23

27

4

1.58

KNC141009

335318

6642260

434

50

-60

90

33

36

3

1.36

KNC141010

335350

6642240

433

30

-60

90

NSI

KNC141011

335308

6642240

435

60

-60

90

59

60

1

1.09

KNC141012

335325

6642220

434

40

-60

90

19

29

10

0.76

KNC141013

335305

6642220

435

50

-60

90

33

34

1

2.25

Navan

KNC140094

334140

6643100

429

24

-90

0

0

8

8

0.98

KNC140095

334130

6643100

429

36

-90

0

0

9

9

1.24

24

26

2

2.30

KNC140096

334123

6643100

429

52

-90

0

0

5

5

1.21

KNC140097

334140

6643085

429

24

-90

0

0

15

15

1.44

KNC140098

334130

6643085

429

36

-90

0

0

8

8

1.23

29

31

2

1.91

Criteria

JORC Code explanation

Commentary

Sampling techniques

 Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

 Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

 Aspects of the determination of mineralisation that are Material to the Public Report. In cases where 'industry standard' work has been done this would be relatively simple (e.g. 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

 The mineralization was sampled by Reverse Circulation (RC) on nominal 20m x 20m grid spacing. The holes were generally drilled towards grid east at -60 degrees to optimally intersect the mineralized zones.

 The drill hole locations were designed to allow for spatial spread of samples across multiple mineralized zones and different rock types. All RC recovered samples were collected and passed through a cone splitter. Prior to drilling the drill hole locations were pegged using either contract surveyors or hand held GPS units. After drilling, all drill hole locations are picked up by contract surveyors using a RTK system. All drill holes greater than 80m drilled by EXG used in the Ore Resource calculations were down hole surveyed by contractors using specific non-magnetic tools.

 All RC drilling was sampled on one metre down hole intervals. The recovered samples were passed through a cone splitter and a nominal 2.5kg - 3.5kg sample was taken to a Kalgoorlie contract laboratory. Samples were oven dried, reduced by riffle splitting to

3kg as required and pulverized in a single stage process to 85%

passing 75 µm. The sample is then prepared by standard fire assay

techniques with a 50g charge. Approximately 200g of pulp material is returned to Excelsior for storage and potential assay at a later date. Samples were oven dried, crushed to a nominal 10mm by a jaw crusher, reduced by riffle splitting to 3kg as required and pulverized in a single stage process to 85% passing 75 µm. The sample is then prepared by standard fire assay techniques with a 50g charge. Approximately 200g of pulp material is returned to Excelsior for storage and potential assay at a later date.

Drilling techniques

 Drill type (e.g. core reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

 All assays reported in this announcement have come from RC drilling using a drilling contractor. The RC drilling system employed the use of a face sampling hammer and a nominal 146mm diameter drill bit.

Drill sample recovery

 Method of recording and assessing core and chip sample recoveries and results assessed

 Measures taken to maximise sample recovery and ensure representative nature of the samples

 All RC 1m samples are logged for drilling recovery by a visual estimate and this information is recorded and stored in the drilling database. At least every 10th metre is collected in a plastic bag and these are weighed when they are utilized for the collection of field

duplicate samples. The weight of the sample in the plastic bag is recorded and the total sample recovery can be calculated. All samples received by the laboratory are weighed with the data collected and stored in the database. Sample loss or gain is reviewed on an ongoing basis and feedback given to the drillers to enable the best representative sample to always be obtained.

 RC samples are visually logged for moisture content, sample recovery and contamination. This is information is stored in the database. The RC drill system utilizes a face sampling hammer

which is industry best practice and the contractor aims to maximize recovery at all times. RC holes are drilled dry whenever practicable

to maximize recovery of sample.

 Whether a relationship exists between  Study of sample recovery vs gold grade does not show any bias sample recovery and grade and whether towards differing sample recoveries or gold grade. The drilling sample bias may have occurred due to contractor uses standard industry drilling techniques to ensure preferential loss/gain of fine/coarse minimal loss of any size fraction. The sample recovery vs gold grade material. is assessed on an ongoing basis throughout the drilling program.

Logging

 Whether core and chip samples have  All RC samples are geologically logged. Specifically, each interval is been geologically and geotechnically visually inspected with a hand lens and the following parameters are logged to a level of detail to support recorded where observed: weathering, regolith, rock type, alteration, appropriate Mineral Resource estimation, mineralization, shearing/foliation and any other features that are mining studies and metallurgical studies. present. This information is transferred electronically from the

geologist to the database.

 Whether logging is qualitative or  Where required the logging records the abundance of specific quantitative in nature. Core (or costean, minerals or the amount of alteration (including weathering) using channel, etc) photography. defined ranges.

 The total length and percentage of the  The entire lengths of RC holes are logged on a 1m interval basis, i.e. relevant intersections logged. 100% of the drilling is logged, and where no sample is returned due to voids (or potentially lost sample) it is logged and recorded as

such.

Sub-sampling techniques and sample preparation

 If core, whether cut or sawn and whether  n/a

quarter, half or all core taken.

 If non-core, whether riffled, tube sampled,  All RC samples are put through a cone splitter and the sample is rotary split, etc and whether sampled wet collected in a unique pre-numbered calico sample bag. The moisture or dry. content of each sample is recorded in the database. The drilling method is designed to maximize sample recovery and representative

splitting of samples. The drilling methods also maximize dry samples as they are designed to keep water out of the hole when possible.

 For all sample types, the nature, quality  The sample preparation technique for all samples follows industry and appropriateness of the sample best practice, by an accredited laboratory. The techniques and preparation technique. practices are appropriate for the type and style of mineralization. The RC samples are sorted, oven dried, the entire sample is pulverized

in a one stage process to 85% passing 75 µm. The bulk pulverized sample is then bagged and approximately 200g extracted by spatula to a numbered paper bag that is used for the 50g fire assay charge.

 Quality control procedures adopted for all  RC samples submitted to the laboratory are sorted and reconciled sub-sampling stages to maximise against the submission documents. Excelsior inserts blanks and representivity of samples. standards with blanks submitted in sample number sequence at 1 in

50 and standards submitted in sample number sequence at 1 in 20.

The laboratory uses their own internal standards of 2 duplicates, 2 replicates, 2 standards, and 1 blank per 50 fire assays. The laboratory also uses barren flushes on the pulveriser.

 Measures taken to ensure that the  In the field every 10th metre from the bulk sample port on the cone sampling is representative of the in situ splitter is bagged and placed in order on the ground with other material collected, including for instance samples. This sample is then used for collection of field duplicates results for field duplicate/second-half via riffle splitting. RC field duplicate samples are collected after sampling. results are received from the original sample assay. Generally, field duplicates are only collected where the original assay result is equal

to or greater than 0.1g/t Au. The field duplicates are submitted to the laboratory for the standard assay process. The laboratory is blind to

the original sample number.

 Whether sample sizes are appropriate to  The sample sizes are considered to be appropriate for the type, the grain size of the material being style, thickness and consistency of mineralization located at this sampled. project. The sample size is also appropriate for the sampling

methodology employed and the gold grade ranges returned.

Quality of assay data and laboratory tests

 The nature, quality and appropriateness  The assay method is designed to measure total gold in the sample. of the assaying and laboratory The laboratory procedures are appropriate for the testing of gold at procedures used and whether the this project given its mineralization style. The technique involves technique is considered partial or total. using a 50g sample charge with a lead flux which is decomposed in a furnace with the prill being totally digested by 2 acids (HCl and

HNO3) before measurement of the gold content by an AA machine.

 For geophysical tools, spectrometers,  Not used for reporting or interpretation of gold mineralization.

handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and

model, reading times, calibrations factors

applied and their derivation, etc.

 Nature of quality control procedures  The QC procedures are industry best practice. The laboratory is adopted (e.g. standards, blanks, accredited and uses its own certified reference material. The duplicates, external laboratory checks) laboratory has 2 duplicates, 2 replicates, 1 standard and 1 blank per and whether acceptable levels of 50 fire assays. At the same time Excelsior submits blanks at the rate accuracy (i.e. lack of bias) and precision of 1 in 50 samples and certified reference material standards at the have been established. rate of 1 in 20 samples in the normal run of sample submission numbers. As part of normal procedures Excelsior examines all

standards and blanks to ensure that they are within tolerances. Additionally, sample size, grind size and field duplicates are

examined to ensure no bias to gold grade exists.

Verification of sampling and assaying

 The verification of significant  Exploration Manager, Bradley Toms and Technical Director, David intersections by either independent or Potter, have inspected drill core and RC chips in the field to verify alternative company personnel. the correlation of mineralized zones between assay results and

lithology/alteration/mineralization.

 The use of twinned holes.  A number of diamond core and RC holes have been drilled throughout the deposit to twin RC holes. These twinned holes returned results comparable to the original holes and were also used to collect geological information and material for metallurgical assessment. A number of RC holes have also been drilled that confirmed results obtained from historical drillholes.

 Documentation of primary data, data  Primary data is sent digitally every 2-3 days from the field to entry procedures, data verification, data Excelsior's Database Administrator (DBA). The DBA imports the storage (physical and electronic) data into the commercially available and industry accepted protocols. DataShed database software. Assay results are merged when received electronically from the laboratory. The responsible geologist

reviews the data in the database to ensure that it is correct and has

merged properly and that all data has been received and entered. Any variations that are required are recorded permanently in the database.

 Discuss any adjustment to assay data.  No adjustments or calibrations were made to any assay data used in this report.

Location of data points

 Accuracy and quality of surveys used to  All drill holes have their collar location recorded from a hand held locate drill holes (collar and down-hole GPS unit. Holes that may be in a future resource estimate area have surveys), trenches, mine workings and their collar position picked up by licensed contract surveyors using a other locations used in Mineral Resource RTK system. Downhole surveys are completed every 30m estimation downhole.

 Specification of the grid system used  All drill holes and resource estimation use the MGA94, Zone 51 grid system.

 Quality and adequacy of topographic  The topographic data used was obtained from consultant surveyors control. and is based on a LiDAR survey flown in 2012. It is adequate for the reporting of Exploration Results and subsequent Mineral Resource

estimates.

Data spacing and distribution

 Data spacing for reporting of Exploration  At Zoroastrian the nominal drill spacing is 20m x 20m with some Results. cross-sections in-filled to 10m across strike. At Navan the nominal drill spacing is 20m x 10m with some cross-sections in-filled to 5m

across strike.This spacing includes data that has been verified from

 Whether the data spacing and distribution previous exploration activities on the project.

is sufficient to establish the degree of

geological and grade continuity  This report is for the reporting of exploration results. The drill appropriate for the Mineral Resource and spacing, spatial distribution and quality of assay results is sufficient Ore Reserve estimation procedure(s) and to support the current JORC classification of material contained

classifications applied. within this report and is appropriate for the nature and style of mineralisation being reported.

 Whether sample compositing has been applied.

 Compositing has not been applied to reporting of exploration results.

Orientation of data in relation to geological structure

 Whether the orientation of sampling  The majority of drilling is to grid east. The bulk of the mineralized achieves unbiased sampling of possible zones are perpendicular to the drilling direction. Structural logging of structures and the extent to which this is orientated drill core supports the drilling direction and sampling known, considering the deposit type. method.

 If the relationship between the drilling  No drilling orientation and sampling bias has been recognized at this

orientation and the orientation of key time.

mineralised structures is considered to have introduced a sampling bias, this

should be assessed and reported if

material.

Sample security

 The measures taken to ensure sample  Sample security is part of Excelsior's QAQC and sampling security. procedures. RC samples are delivered directly from the field to the Kalgoorlie laboratory by Excelsior personnel on a daily basis with no

detours, the laboratory then checks the physically received samples against an Excelsior generated sample submission list and reports back any discrepancies

 Drill core is transported daily directly from the drill site to Excelsior's secure core processing facility by Excelsior personnel with no detours. The core is then placed on racks within a secure shed and processed until it requires cutting. Core is then transported directly by Excelsior's staff to the Kalgoorlie laboratory where it is cut in half by laboratory staff and then sampled by Excelsior staff. The core is then prepared for assay in Kalgoorlie to the pulverizing stage whereupon the laboratory transports it using a contractor directly to their Perth based assay facility.

Audits or reviews

The results of any audits or reviews of  An internal review of sampling techniques and procedures was

sampling techniques and data. completed in March 2014. No external or third party audits or

reviews have been completed.

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

 Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

 The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

 The results reported in this Announcement are on granted Mining Leases held by GPM Resources Pty Ltd, a wholly owned subsidiary of Excelsior Gold Limited.

 At this time the tenements are believed to be in good standing.

There are no known impediments to obtaining a license to operate,

other than those set out by statutory requirements which have not yet been applied for.

Exploration done by other parties

 Acknowledgment and appraisal of exploration by other parties.

 Exploration by other parties has been reviewed and is used as a guide to Excelsior's exploration activities. Previous parties have completed both open pit and underground mining, geophysic al data collection and interpretation, soil sampling and drilling. This report comments on only exploration results collected by Excelsior.

Geology

 Deposit type, geological setting and style of mineralisation.

 The mineralisation in the Zoroastrian area is predominately associated with a complex array of multiple dimensional and variable orientated quartz veins and stock works within the differentiated Zoroastrian Dolerite. In places a surficial 1-2m thick calcrete/lateritic gold bearing horizon and small near surface supergene pods exist. Recent open pits, historical workings and shafts exist within this unit throughout the Company's tenements and beyond. Detailed mapping and sampling of these workings and structural measurements from orientated diamond core drilling forms the basis of the geological interpretation.

 The mineralisation in the Navan area, as tested by the December

2014 drilling program is concentrated in near surface laterite gravels

and clays.

Drill hole

Information

 A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

 The drill holes reported in this Announcement have the following parameters applied. All drill holes completed, including holes with no significant gold intersections are reported in this announcement.

 Easting and northing are in MGA94 Zone 51

 RL is AHD

 Dip is the inclination of the hole from the horizontal (i.e. a vertically down drilled hole from the surface is -90°). Azimuth is reported in magnetic degrees as the direction toward which the hole is drilled. MGA94 and magnetic degrees vary by approximately 1° in this project area

 Down hole length of the hole is the distance from the surface to the end of the hole, as measured along the drill trace. Interception depth

is the distance down the hole as measured along the drill trace. Intersection width is the downhole distance of an intersection as

measured along the drill trace

o hole length.  Hole length is the distance from the surface to the end of the hole, as measured along the drill trace.

 If the exclusion of this information is  No results from previous exploration are the subject of this

justified on the basis that the information Announcement.

is not Material and this exclusion does

not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

Data aggregation methods

 In reporting Exploration Results,  No high grade cuts have been applied to assay results. RC assay

weighting averaging techniques, results are distance weighted using 1m for each assay.

maximum and/or minimum grade

truncations (e.g. cutting of high grades)

and cut-off grades are usually Material and should be stated.

 Intersections are reported if the interval is at least 1m wide at 1g/t Au

 Where aggregate intercepts incorporate grade. Intersections greater than 1m in downhole distance can

short lengths of high grade results and contain up to 2m of low grade or barren material.

longer lengths of low grade results, the

procedure used for such aggregation should be stated and some typical

examples of such aggregations should be shown in detail.

 The assumptions used for any reporting  No metal equivalent reporting is used or applied.

of metal equivalent values should be

clearly stated.

Relationship between mineralisation widths and intercept

lengths

 These relationships are particularly  The intersection width is measured down the hole trace, it is not important in the reporting of Exploration usually the true width. Cross sections in previous Announcements Results. allow the relationship between true and down hole width to be viewed. At Navan the holes were drilled vertically into the horizontal

mineralisation and therefore represent true widths.

 If the geometry of the mineralisation with

respect to the drill hole angle is known,  Data collected from orientated drill core and from the open pit,

its nature should be reported. confirm that the drilling direction is optimal for the mineralized zones at Zoroastrian. The multiple mineralized zones have a northerly strike and dip steeply to the west with some minor local overturning of lodes.

 If it is not known and only the down hole

lengths are reported, there should be a  All drill results within this announcement are downhole intervals only

clear statement to this effect (e.g. 'down and due to variable mineralisation and style true widths are not able

hole length, true width not known'). to be calculated until modelling of the mineralisation.

Diagrams

 Appropriate maps and sections (with  A plan view is contained within this announcement. Numerous cross scales) and tabulations of intercepts sections for Zoroastrian have been included in past announcements. should be included for any significant

discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Balanced reporting

 Where comprehensive reporting of all  All drill holes completed are included in the results Table in the

Exploration Results is not practicable, Announcement.

representative reporting of both low and

high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

Other substantive exploration data

 Other exploration data, if meaningful and  No other exploration data is considered meaningful and material to

material, should be reported including this announcement.

(but not limited to): geological

observations; geophysical survey results;

geochemical survey results; bulk samples

- size and method of treatment;

metallurgical test results; bulk density,

groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

Further work

 The nature and scale of planned further  Geological interpretation and resource modelling to facilitate mining

work (e.g. tests for lateral extensions or feasibility studies and open pit mine design.

depth extensions or large-scale step-out

drilling).  Following a review of these results, potential drilling to delineate