Growth Strategy

In order to achieve our vision of positioning Alchemy as a successful gold explorer and subsequently profitable gold producer with a portfolio of quality assets that provide opportunity for further exploration growth, we have adopted the following corporate strategy:

• create value through strategic acquisitions and a focused, innovative, de-risked exploration programme
• grow gold reserves initially through acquisitions then via exploration
• deliver fast-track project development
• become a gold producer
• generate cash flow from low cost operations

Strategic acquisitions include the Three Rivers project in the southern Gascoyne. Alchemy’s current exploration focus is on evaluating the tenement positions around the Three Rivers and Murchison Projects near Meekatharra in Western Australia. The Company holds a suite of greenfields to drill stage exploration drill projects.

Alchemy is committed to the total expenditure of A$2M on exploration with the major components being spent at the Three Rivers Project.

Exploration Strategy

Alchemy has developed an innovative strategy to counter the increased costs associated with exploration in complex covered terrain, and thus de-risking the exploration process. It includes developing three-dimensional geological models integrating geology, geophysical and geochemical data to improve target definition and resolution, backed by the adoption of field portable technologies including the application of spectroscopic and x-ray fluorescence samplers. These instruments respectively identify in drill spoil or surface materials, the presence and type of alteration mineralogy (typically associated with ore deposits) and the rock/mineral chemistry of the sample. Through their implementation, Alchemy can quickly vector in to gold mineralisation and arrive at key decision points regarding a projects' viability earlier and without the necessity of expensive, multiple pattern drilling programs being completed over several campaigns.

The economic argument supporting improving exploration target selection is absolute. Integrating geology, geophysical and geochemical data in an effective ore deposit model is likely to be the only means to achieve this result.

AT A GLANCE

Three Rivers

• A JORC-compliant indicated gold resource of 1.7 mt @ 2.4 g/t Au (for 131,000 ounces) with preliminary testwork indicating simple metallurgy and a gold recovery of over 92%.

• Additional RC drilling of projected depth and plunge extensions could provide substantial additional resources and indicate potential zones amenable to underground mining.

• The projects' development will be achieved through several advanced gold prospects, including the Winchester, Trapper West and Blake prospects, which show resource potential and require additional RC and diamond drilling.

Murchison

• District-scale 3D geological integrating geology, geophysical and geochemical data in an effective ore deposit model.

• Advanced understanding of the key controls on gold mineralisation within the district.