Heron Resources Limited 2015

Level 1, 37 Ord Street, West Perth WA 6005
heron@heronresources.com.au
Heron Resources Limited +61 8 6500 9200 / +61 2 9119 8111
ASX/TSX Release ABN: 30 068 263 098
22 April 2015
Preliminary Economic Assessment Delivers Strong

For personal use only
ASX:HRR / TSX:HER
Business Case for the Woodlawn Zinc-Copper Project Issued Shares 361M
Share Price $0.125
Heron Resources Limited (Heron or the Company) is pleased to report the completion of the
Preliminary Economic Assessment 1 (PEA) on the Company’s 100%-owned and fully Market Cap $45.1M
permitted Woodlawn Zinc-Copper Project located in New South Wales, Australia. Highlights Cash (31 Mar 15) $25.6M
include: Investments $ 2.8M
Total C+I $28.4M
 Strong base case NPV / IRR results:
Combined Post-tax NPV8.3* A$300 million

Underground plus
Post-tax IRR 46%
Tailings
Initial Capital A$140 million
“UG Starter Case”
Payback Period 2.0 years from commissioning
Net Cash Flow After Tax A$594 million
*Results reported using an 8.3% post tax real discount rate (approx. 10% post-tax nominal), with AUD/USD FX
trending from 0.80 to 0.73 by 2021, and with flat real commodity prices of US$1.09/lb Zn, US$0.95/lb Pb,
US$3.00/lb Cu, US$18.5/oz Ag and US$1,200/oz Au. Other assumptions are detailed later in this release.
 Attractive project characteristics:

o Initial 11 year mine life based on underground and tailings resources, and including 1.0Mt Indicated and 2.8Mt
Inferred Mineral Resource contribution from underground
o Total life-of-mine (LOM) Production Target of 353Kt of zinc, 77Kt of copper, 112Kt of lead, 8.9Moz of silver and
59Koz of gold
o Processing rate of 1.5Mtpa through standard sequential flotation, with steady state (2020-2023) annual
Production Target of 51Kt of zinc, 10Kt of copper, 16Kt of lead, 1.1Moz of silver and 8.7Koz of gold contained
within zinc, lead, and copper concentrates
o Utilises existing infrastructure to achieve significant reductions in development costs, with a revised portal
location on the west side of the pit enabling first production from the second quarter after underground works
commence
 Quality resource and mine plan:

o “UG Starter Case” focused on the shallower areas of the deposit reflecting the success of the recent drilling
programme – high level of confidence for extensions to the mineralisation at depth and along strike
o Based upon 36% Measured, 35% Indicated and 29% Inferred Mineral Resources, comprising:
1 IMPORTANT NOTE: A Preliminary Economic Assessment (PEA) is a formal study in standard form prescribed by Canadian National
Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) which includes an economic analysis of the potential
viability of Mineral Resources, but which is not a pre-feasibility study or feasibility study. In accordance with Canadian requirements in
relation to preliminary economic assessments, the Company advises that the preliminary economic assessment is preliminary in nature,
that it includes some Inferred Mineral Resources considered too speculative geologically to have the economic considerations applied
to them that would enable them to be categorised as Mineral Reserves, and that there is no certainty that the economics set out in the
preliminary economic assessment will be realised. Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability.
ASX/TSX Release Heron Resources Limited 1 of 34

Heron Resources Limited
ASX/TSX Release 22 April 2015
 Woodlawn Underground Project (WUP): 32% Indicated and 68% Inferred
 Woodlawn Tailings Retreatment Project (WRP): 47% Measured, 37% Indicated and 16% Inferred
o Conservative approach taken to re-modelling of the underground Mineral Resource, with exclusion of all
moderate to higher risk areas – to be reconsidered post mine access and re-assessment from underground
o Highly successful Phase I exploration drilling programme over the last 8 months – of the total underground plant
feed of 1.0Mt Indicated and 2.8Mt Inferred Mineral Resources, recent exploration has contributed approximately
2.8 million new Inferred tonnes
o Low-risk underground resource base: 80% of underground tonnes in the production schedule are from areas
away from previous mining
 Robust economics:
o C1 costs of US$(0.01)/lb zinc and C3 of US$0.44/lb expected to place the Project firmly in the lower half of the
cost curve (refer to page 10 for definitions)
o Economics remain robust using current commodity prices (forward curve adjusted), achieving a post-tax NPV8.3
of A$192 million and IRR of 34%
o Significant leverage to zinc, which comprises approximately 47% of total payable metal value
 Excellent exploration potential:
o Significant exploration potential remains within the underground including additional shallow, near-surface
targets that will be tested in the next stage of drilling with scope to materially increase the Production Target
o Deeper underground extensions to be targeted with underground drilling post-commissioning – management
anticipates that any such depth extensions discovered have the potential to add significant project value
 Expedited development path:
o Heron’s Board has committed to commence the Feasibility Study (FS) to progress the development of the
Project with the objective of completing this study by mid-2016
o New drill programme to commence comprising in-fill drilling and follow up on high priority exploration targets
o Early start up potential, based on a staged development of the tailings (Front-end Engineering & Design “FEED”
completed 2012) followed by the integration of underground hard rock components
The completed PEA study document will be published on Heron’s web site, the ASX (ASX:HRR) and SEDAR www.sedar.com
(TSX:HER) within 45 days of this news release.
Heron’s Chairman, Mr. Craig Readhead, said “This PEA study confirms not only the economic viability of the Woodlawn
Project, which has the potential to deliver a long term supply of zinc into a supply constrained market, but also the quality of
this asset with a very competitive cost of production within the current market. The project is underpinned by a revised, high
quality Mineral Resource, including the discovery of 2.8 million tonnes from recent drilling and has achieved its aim of
establishing a robust resource base on which to build a new operation. The PEA study demonstrates that the approach of
co-treating the low risk tailings resource with the high-grade underground resource can deliver a robust outcome and a low
cost, long life, mining operation. We are now committed to advancing this project rapidly through to feasibility study stage.”
Please refer to page 12 for important Cautionary and Forward Looking Statements that are to be read in conjunction
with this release.

SUMMARY OF THE PEA
Project Overview
Woodlawn is a high-grade, volcanogenic massive-sulphide (VMS) deposit situated in New South Wales, Australia, located
approximately 50 km northeast of Canberra, and 250 km southwest of Sydney (refer Figure 1).
The Woodlawn Project benefits from a mining lease (SML 20) that has recently been renewed for a further 15 years, and
major project approvals (statutory approval) that allows for mining operations at the Woodlawn site until 31 December 2034.
The mineral rights and production are 100%-owned by Heron. Figure 2 shows the Woodlawn site layout including location
of the proposed plant site.
The Woodlawn site (SML 20) is surrounded by a larger exploration license (EL 7257) which is held 100% by Heron. This
exploration license, of 179 square km, includes the previous Currawang Mine located 9km to the north of Woodlawn. The
Currawang Mine provided satellite feed to the previous Woodlawn operations.
Figure 1: Woodlawn location map with relative population sizes

Figure 2: Woodlawn Site Layout
Underground (WUP) Mineral Resource

Heron is pleased to announce an updated Mineral Resource estimate, as detailed in Table 1 below, for the Woodlawn
Underground Project compiled under JORC 2012 and NI 43-101 guidelines and incorporating the results of the Phase 1
drilling programme and an extensive review of historic data. As announced on 6 March 2015, during the Phase 1 drill
programme a total of 20 diamond core holes (DDH) for 7,613m and 11 reverse circulation (RC) holes for 1,201m were
completed. Figure 3 provides an oblique view through the Mineral Resource block model.
Drilling focused initially on the Kate Lens before drilling key positions within the near-surface portions of other lenses. The
deepest hole (WNDD0006) was drilled to a depth of 940m and intersected multiple massive sulphides in the I and D lens
positions. It became apparent during the course of the program that there was scope to expand the resource base within the
upper 500m of the system, deferring the need to drill deeper targets. While considerable resource potential exists in deeper
parts of the system, the PEA focus has been only on the shallower, up-dip lens positions, with the result that the underground
Mineral Resource used in the production schedule for the PEA extends the depth of the mine only 80m below previous
workings.
Heron has taken a deliberately cautious approach to areas that would be considered remnant, which has reduced the
underground Mineral Resource compared with the previously published estimate. There are numerous areas adjacent to
historical mining which have been excluded from the new resource estimate, and there is considerable potential to re-
incorporate these zones into the mine plan once operations are under way and underground access facilitates closer and
more detailed assessment.
The Mineral Resource has been reported undiluted to a lower cut-off grade of 7% ZnEq, a value that approximates the
estimated lower cut-off grade for the mining methods considered by the PEA study.
For further information please refer to the item entitled “Compliance with ASX Listing Rule 5.8.1 for updated Underground
Mineral Resources” on page 13 for technical details associated with the Resource estimation process.

Figure 3: Woodlawn underground Mineral Resource. Oblique sectional view looking north-east – block model coloured by ZnEq grades
Table 1: Mineral Resource Estimate - Woodlawn Underground Project (WUP)

Reported at a 7% ZnEq lower cut-off grade Grades
Type Resource Category Quantity ZnEq(%) Zn(%) Cu(%) Pb(%) Au(g/t) Ag(g/t)
(Mt)
Polymetallic Indicated 1.6 21 10.7 1.5 4.0 0.46 78

Polymetallic Inferred 3.0 19 8.1 1.6 3.2 0.88 70
Copper Indicated 0.8 10 1.0 2.8 0.3 0.07 16

Copper Inferred 1.1 11 1.1 2.8 0.2 0.14 15
Notes to accompany Mineral Resource Table: 1) Please refer to the page 33 of this release for Qualified Persons statements; 2) ZnEq% refers to a calculated Zn equivalent
grade the formula for which is stated in Appendix 1; Polymetallic Type refers to polymetallic massive sulphide mineralisation with high-grade Zn and Pb; Copper Type refers
to Cu dominated massive and stringer sulphide mineralisation; Values are rounded to two significant numbers and some rounding related discrepancies may occur in the
totals; the Mineral Resource is reported in accordance with the guidelines set out in the JORC (2012) and NI 43-101 Codes; further details of the Mineral Resources
estimation can be found in Appendix 1 and in the JORC Code (2012) Table 1 Appendix 2.

Tailings (WRP) Mineral Resource
A Mineral Reserve was previously stated for the Woodlawn Tailings Retreatment Project (WRP) as part of the Bankable
Feasibility Study which was completed in 2008. This PEA does not replace the WRP Feasibility Study, and the previously
published tailings Mineral Reserves remain unchanged. For the purposes of the PEA, the plant design is based primarily on
the 2012 FEED study design for the WRP, and adopts the processing of this tailings material in combination with underground
material.
The tailings are reported here as a Mineral Resource as part of this PEA study with Table 2, below, detailing the previously
disclosed estimate. This Mineral Resource contributes some 11.2Mt (9.4Mt of Measured and Indicated and 1.8Mt of Inferred)
to the total PEA plant feed as detailed in the following sections.
Table 2: Mineral Resource Estimate - Woodlawn Retreatment Project (WRP)

Grades
Resource Category
Quantity ZnEq (%) Zn Cu Pb Au Ag
(Mt) (%) (%) (%) (g/t) (g/t)
Measured + Indicated Mineral Resources

North Dam
Measured 0.83 6.2 2.35 0.43 1.43 0.29 35
Indicated 1.38 6.7 2.68 0.45 1.44 0.29 40
Sub-Total 2.21 6.5 2.56 0.44 1.44 0.29 38
South Dam
Measured 2.43 6.0 2.60 0.48 1.19 0.22 25
Indicated 1.17 5.8 2.44 0.48 1.19 0.22 23
Sub-Total 3.60 5.9 2.55 0.48 1.19 0.22 24
West Dam
Measured 2.05 6.5 2.00 0.60 1.46 0.39 36
Indicated 1.54 6.5 1.93 0.60 1.51 0.39 37
Sub-Total 3.59 6.5 1.97 0.60 1.48 0.39 36
All Dams
Measured 5.31 6.2 2.33 0.52 1.33 0.30 31
Indicated 4.09 6.4 2.33 0.52 1.40 0.31 34
Total Measured + 9.40 6.3 2.33 0.52 1.36 0.30 32
Indicated
Inferred Mineral Resources
North Dam 0.87 5.5 2.03 0.33 1.33 0.25 37
South Dam 0.90 5.7 2.32 0.47 1.19 0.23 24
West Dam 0.48 6.3 1.83 0.61 1.47 0.38 34
Total Inferred 2.25 5.7 2.10 0.44 1.30 0.27 31
Notes to accompany Mineral Resource Table: 1) Please refer to the page 33 of this release for Qualified Persons statements; 2) ZnEq% refers to a calculated Zn equivalent
grade the formula for which is stated in Appendix 1 and these are different to the originally reported (May 2009) ZnEq grades which were based on a different formula; 3)
Values are rounded to two significant numbers and some rounded related discrepancies may occur in the totals; 4) The Mineral Resource is reported in a manner compliant
with the JORC 2004 and NI 43-101 Codes. This information was prepared and first disclosed under the JORC Code (2004) in May 2009. It has not been updated since to
comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. 5) TriAusMin acquired more drill hole data in
2008, subsequent to the Mineral Resource estimation. That data however does not materially alter the Mineral Resource estimate and due to data collection problems it is
not viable for use in a re-estimate. Nevertheless, statistics of the later assays confirm the reported estimated grades.

PEA Scope & Plant Feed
The PEA was prepared by SRK Consulting (Australasia) Pty Ltd (SRK) with contributions from GR Engineering Services
Limited (GRES), other consultants and Company employees.

The Project will be developed as a combined underground project together with a tailings retreatment project, with feed
processed through a single plant designed for co-treatment. The base case Plant Feed Estimate, detailed in Table 3 below,
of 15Mt (“UG Starter Case”) assumes the following parameters:
 Underground tonnages above a variable 4.7 to 6.6% ZnEq cut-off grade depending on stoping method;
 Underground mining recoveries ranging from 85 to 98% depending on the stoping method and stope width;
 Underground dilution of mineralisation includes a minimum mining width of 3m and in addition dilution ranging from
9 to 20% at zero grade depending on lens location and stope width;
 Tailings tonnages above the 0% ZnEq cut-off grade;
 Tailings mining recovery based on an average expected loss of 20cm of tailings material in contact with other
material; and
 Tailings dilution equivalent to 10cm average vertical gain at no grade to account for potential contamination from
the original ground surface.
Table 3 Woodlawn PEA Plant Feed Estimate

Type Category Quantity ZnEq(%) Zn(%) Cu(%) Pb(%) Au(g/t) Ag(g/t)
(Mt)
Underground
Polymetallic Indicated 1.0 16.1 7.9 1.3 2.9 0.32 54
Inferred 2.1 15.5 6.6 1.4 2.6 0.78 59
Copper Indicated 0.2 10.2 2.4 2.1 0.8 0.11 21
Inferred 0.5 9.1 1.1 2.4 0.3 0.05 10
Tailings
Tailings Measured & Indicated 9.4 6.3 2.3 0.5 1.4 0.30 32
Inferred 1.8 4.4 1.7 0.4 1.1 0.15 26
Notes to accompany Woodlawn PEA Plant Feed Estimate Table 3: 1) Please refer to the page 33 of this release for Qualified Persons statements; 2) ZnEq% refers to a
calculated Zn equivalent grade, the formula for which is stated in Appendix 1. Values are rounded to two significant numbers and some rounding related discrepancies may
occur in the totals.
Whilst the current Mineral Resource base forms the foundation of the PEA and will also be the starting point for the future
FS, the Board is of the view that there is very strong potential for the Project to deliver significantly greater tonnages from
underground based on the exploration potential of the Woodlawn mineralised system.
Plant Design
GR Engineering Services Limited have updated the previous Woodlawn Retreatment Project Feasibility Study / FEED Study
design for the 1.5Mtpa tailings processing facility to deliver a plant that has been designed on the basis of a 50% blend of
fresh underground material being co-treated with 50% reclaimed tailings over life-of-mine . The design allows initial operations
to treat 100% reclaimed tailings, whilst at the same time the development of the initial mine decline will be undertaken to
provide access for mining of fresh material. The contribution from underground approaches 700Ktpa during the middle years
of the current preliminary mine life and the mill feed blend ratio will be reviewed further in the next stage of the project studies.
For underground production, a two stage crushing circuit has been incorporated into the plant design, together with a primary
grind ball mill. For tailings material, a fine grind mill is planned that reduces the particle size down to 30µm, a size which
previous and current testwork confirms maximises recovery performance from the flotation circuit. For the underground
material, the initial float (copper concentrate) is undertaken at a 75µm grind size, with a regrind of copper tails to 30µm being
employed subsequent to that stage to maximise the recoveries from the lead and zinc flotation stages.

The flotation circuit comprises a talc, copper, lead and zinc differential flotation sequence. The overall plant design is
consistent with the design of the original 1978-1998 plant that was historically used to successfully treat Woodlawn ore. Talc
cleaner concentrate recovered from the talc flotation cleaner cell will be discarded to final tails to remove some of the talcose
gangue ahead of the differential flotation circuit. A differential flotation circuit for copper, lead and zinc will be utilised with
concentrate regrind stages in the copper, lead and zinc circuits to produce marketable copper, lead and zinc concentrates.
The copper circuit will also utilise a rougher and scavenger tailings regrind circuit prior to the lead flotation stage. Tailings
from the flotation plant will be thickened for recovery of process water and underground paste fill, with slime tailings deposited
into a new tailings storage facility TSF4.
As outlined in the Company’s release of 11 February 2015 - “Successful Metallurgical Testwork”, the PEA metallurgical
testwork program was undertaken by Australian Mineral Metallurgical Laboratories Pty Ltd (“AMML”) in their Gosford testing
facility with input from GRES and focused on the underground massive sulphides at the Woodlawn Zinc-Copper Project. This
work represents the first full suite of metallurgical tests undertaken on the underground mineralisation since the 1998 mine
closure, and also the first tests on a combination of the tailings and fresh zinc-copper mineralisation. The overall results from
this work have demonstrated better than historical operational performance and reflect the advancements made in the field
of sulphide flotation, and in-particular fine grinding technology. The testwork demonstrated the ability to produce three readily
saleable concentrates.
Concentrates from the copper, lead and zinc flotation circuits will be thickened and subsequently filtered for road transport.
Copper and zinc concentrates will be shipped via Port Kembla in bulk carriers. Transport of the concentrate from site will be
by road with concentrate loaded into half-height containers via front end loader at site. The high precious metals lead
concentrates will be loaded into “bulka” bags via a bagging plant at the process plant. Loaded bags will then be containerised
for dispatch via Port Botany or Port Kembla.
Final flotation tailings will be de-slimed and used in the paste fill plant which will generate a cemented paste that will be
reticulated underground and used to backfill completed stopes.
Outotec has completed an initial set of testwork on the paste fill, including rheology and strength testing, using tailings
samples from the recent metallurgical testing. Whilst this is sufficient for the PEA, further work will be undertaken during the
FS including leachability tests, additional trial mix tests to optimise binder type and mix to deliver adequate strength to mine
fill, and longer term strength and stability tests.
Underground Mining
Beck Engineering (Beck), an east coast Australia-based specialist consultancy, was engaged to assist with the rock
mechanics input to the proposed underground operation. As a component of their work, the extensive historical mine records
have been reviewed to better understand the ground conditions previously encountered at Woodlawn and previous ground
control practices. In addition to this historical knowledge base, inspection and geotechnical logging of Kate Lens diamond
drill core has led Beck to note that the hanging wall appears competent for this new lens. This competency, together with
the use of competent backfill, are important input parameters for the selection of an appropriate mining method that provides
for maximum recovery and high productivity.
A number of changes to historic work practices will improve the future management of the ground conditions. These include:
 Full time geotechnical resources on site to provide timely day-to-day support to mine operations;
 Whole-of-mine structural modelling to improve the predictive capacity for mine planning;
 Adoption of alternative extraction techniques to minimise creation of isolated sill pillars; and
 Implementation of cemented paste fill as a competent support medium that will enable significantly higher resource
recovery whilst providing local and regional ground support to the mine excavations.
The deposit will be accessed with a box cut located on the western side of the existing open-pit, which provides for early
access to underground material. Stoping areas will be accessed by rehabilitating some of the existing workings and
constructing additional underground declines and levels to access the new areas.
The mining methods have been selected to mine both areas of unmined and remnant material around the previously mined
areas of the deposit. The mining method selection takes into consideration the location of the existing open-pit above the
deposit which is being used as a bioreactor by Veolia Environmental Services Ltd (Veolia). The mine design has assumed
that stopes will be filled with paste fill, and multi-level continuous fill method areas will be filled using rock fill.

Production will be transferred from stoping areas to loading bays and a haulage fleet used to deliver plant feed to the run-of-
mine (ROM) pad.
Appendix 1 provides details of the proposed production schedule. The production schedule for the underground benefits
from the inclusion of significant material discovered from the recent drilling campaigns, with approximately 2.8 million tonnes
of Inferred Mineral Resources identified from this work. Importantly, 80% of the total underground plant feed material is away
from former mining areas and is amenable to low cost, low risk mining methods. Figure 4 below shows the stope designs
currently planned, with stopes coloured green being material which is away from previously mined areas and hence amenable
to lower cost, lower risk mining methods, with areas in orange being adjacent to previously mined areas for which more
conservative mining methods have been employed.
Figure 4: PEA Stope Design (SRK)
Previous mining was undertaken to a depth of 620m below surface. The underground Resource within the production
schedule for the PEA extends this by only 80m to 700m. Considerable potential remains to investigate further depth
extensions to the mineralisation, which will best be assessed by underground drilling once underground access is secured.
Capital and Operating Costs
Capital costs have been estimated to a +/-25% accuracy. Tailings retreatment process plant capital costs have been updated
to allow for installation of equipment sized to also accommodate the underground feed, potentially allowing a staged
development of the project to be undertaken. Initial capital costs to Peak Cash Draw are estimated at A$101.4 million for the
tailings components, with an incremental A$38.6 million required to complete the underground access and plant additions,
for a total of A$140.0 million including contingency. Refer to Appendix 1 for full details.
Operating costs have been estimated by GRES for the plant component and by SRK for the mining component, with additional
costs estimated by Heron. The detailed cost breakdown is provided in Appendix 1. The resulting cost profile for the operation

based on the Production Target provides C12 costs of US$(0.01)/lb or US$(30)/tonne) of zinc in concentrate produced over
the initial 11 year mine life.
On a C33 cost basis, the operation averages costs of US$0.44/lb of zinc in concentrate.
Summary Economics
The Woodlawn project economics have been assessed using the discounted cash flow method, based on a quarterly
schedule of tonnes mined and processed from both the WUP and the WRP. Capital and operating costs are applied to mining,
processing and overheads. The processed material has recovery factors applied, together with flotation splits to the three
concentrates which make up the project production. Shipping and logistics, product payability, treatment and refining costs,
state royalties and taxes are adjusted for to derive a Net Present Value (NPV) for the project.
The Project’s post-tax NPV at an 8.3% post-tax real discount rate (approximately equivalent to a 10% post-tax nominal
discount rate) is A$300 million and the IRR is 46%. Payback of start-up capital is achieved approximately 2 years from
commissioning.
Forecast Commodity Price Deck Forward Curve Price Deck
Post-tax NPV8.3 A$300 million A$192 million
UG Starter Case
Post-tax IRR 46% 34%
Initial Capital A$140M / US$112M A$141M / US$113M
Payback Period 2 years from commissioning 2.5 years from commissioning
Mine life 11 years 11 years
Post-tax Cash Flow1 A$594M A$408M
C1 Cash Cost US$(0.01)/lb Zn US$0.12/lb Zn
C3 Total Cost US$0.44/lb Zn US$0.56/lb Zn
1: Net increase in cash after tax and after paying back capital.
Results are based on AUD/USD FX trending from 0.80 to 0.73 by 2021 (forward curve as at 31 March 2015). The Forecast
Commodity Price Deck is based on the average of a number of forecasts for each commodity resulting in prices of US$1.09/lb
Zn, US$0.95/lb Pb, US$3.00/lb Cu, US$18.5/oz Ag and US$1,200/oz Au. Other economic assumptions are detailed in
Appendix 1.
For comparison, the economics are also shown using commodity forward curves which were sourced and applied as at 27
March 2015. The results demonstrate that the project economics remain robust at lower prices. Refer to Appendix 1 for
more detailed sensitivity analysis.
The project is highly leveraged to commodity prices. In particular, zinc makes up around 47% of expected total payable metal
value for the project. Hence the project provides excellent exposure to what is anticipated to be a market where demand will
exceed supply, with positive potential implications for the future price of zinc.
Whilst the UG Starter Case presents a strongly positive economic outcome for the project and will form the basis for the
future FS in order to minimise development time and costs, there is potential for the project to deliver significantly greater
tonnages from underground based on both expansion of the current resource and on the broader exploration potential of the
Woodlawn mineralised system.
With plant, underground access and development costs included for mining to a depth of 700 m below surface under the UG
Starter Case, the incremental net present value associated with new discoveries and/or conversion of additional resource
tonnes into the future mine plan has the potential to be very positive.
2 C1 costs calculated as total direct cash operating costs including all mining and processing costs, mine site overheads and realisation
costs (including transport costs, treatment and refining costs and smelter recovery deductions) net of revenue credits from sale of by
products (Pb, Cu, Ag and Au), divided by the amount of payable zinc produced.
3 C3 is calculated using the same methodology as C1 but incorporates a capital charge and royalties.

Exploration
Very significant exploration potential exists for the Project, with the majority of the recent drilling focused on shallow
extensional targets within the underground to develop the production schedule for the PEA. Future exploration will focus on:
 Following up on additional shallow, up-dip targets which have the potential to be added in to the resource base for
the underground;
 Regional targets including the Montrose, Cowley Hills and the Currawang prospects; and
 Deeper targets at the Woodlawn mine.
Project Funding Strategy
The funding strategy for the Woodlawn Project is to finance the project through a combination of debt and equity.
An early stage development concept is being evaluated which would allow construction of the plant to commence whilst the
FS for the underground mine is completed. Under this staged scenario the plant would be commissioned and run on tailings
only with underground feed to be introduced as soon as practicable.
Whilst the staged development option is under consideration, the Company continues to be fully funded for the forthcoming
FS on the combined Project and is continuing with this work.
Forward Programme
Heron’s Board is delighted with the outcomes of the PEA and has determined that it will continue with the further study of the
Woodlawn project through undertaking a FS on the combined underground and tailings project. Whilst detailed planning is
under way, the Company considers that the FS could be completed within approximately 12 months.
An initial step in the FS is a further drilling program that will cover the required resource in-fill drilling as well as the testing of
high priority exploration targets. The in-fill drilling is designed to lift the resource classification to permit the calculation of a
Mineral Reserve as part of the FS. The high priority exploration targets include locations previously generated from downhole
EM surveys, unexplained high-grade intercepts and interpreted structural positions, all of which have the potential to discover
new massive sulphide lenses. The program consists of approximately 18,000 to 19,000 metres and has been approved by
the Heron Board.
About Heron Resources Limited:

Heron is engaged in the exploration and development of base and precious metal deposits in Australia. Heron’s projects
include the high-grade Woodlawn Zinc-Copper Project located 250km southwest of Sydney, New South Wales, and the
Kalgoorlie Nickel Project located north of Kalgoorlie, Western Australia. In addition the Company holds a number of other
high quality exploration properties located in the Lachlan Fold Belt, New South Wales.
For further information, please visit www.heronresources.com.au or contact:
Australia:
Mr Wayne Taylor, Managing Director and Chief Executive Officer:
Tel: +61 2 9119 8111 or +61 8 6500 9200
Email: heron@heronresources.com.au
Canada:
Tel: +1 905 727 8688 (Toronto)

Cautionary Statements:
In accordance with Canadian requirements in relation to preliminary economic assessments, the Company advises that the
Preliminary Economic Assessment is preliminary in nature, that it includes some Inferred Mineral Resources considered too
speculative geologically to have the economic considerations applied to them that would enable them to be categorised as
mineral reserves, and that there is no certainty that the economics set out in the Preliminary Economic Assessment will be
realised. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
In accordance with the ASX listing rules, the Company advises the PEA referred to in this announcement is based on lower-
level technical and preliminary economic assessments, and (other than in relation to the Woodlawn Tailings Retreatment
Project) is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at
this stage, or to provide certainty that the conclusions of the PEA will be realised. The Production Target referred to in this
announcement is partly based on Indicated Mineral Resources and on Inferred Mineral Resources detailed herein. There is
a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further
exploration work will result in the determination of Indicated Mineral Resources or that the Production Target or Preliminary
Economic Assessment will be realised.
Forecast financial information provided in this announcement is based on the Production Target disclosed herein. The
Company has concluded that it has a reasonable basis for providing the forward-looking statements included in this
announcement. The detailed reasons for this conclusion are outlined throughout this announcement and in particular in
Appendix 1 headed “Disclosure of Additional Assumptions”. However, the Company cautions that there is no certainty that
the forecast financial information derived from the Production Targets will be realised.
Forward-Looking Statements:
This release contains certain “forward looking statements” and certain “forward-looking information” as defined under
applicable Canadian and U.S. securities laws. Forward-looking statements and information can generally be identified by the
use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”,
“plans” or similar terminology. Forward-looking statements and information are not historical facts, are made as of the date
of this press release, and include, but are not limited to, statements regarding discussions of future plans, guidance,
projections, objectives, estimates and forecasts and statements as to management's expectations. These forward looking
statements involve numerous risks and uncertainties and actual results may vary. Important factors that may cause actual
results to vary include without limitation, certain transactions, the successful completion of a Feasibility Study within the next
12 months, the timing and receipt of certain approvals, changes in commodity and power prices, changes in interest and
currency exchange rates, risks inherent in exploration results, timing and success, inaccurate geological and metallurgical
assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), changes in
development or mining plans due to changes in logistical, technical or other factors, unanticipated operational difficulties
(including failure of plant, equipment or processes to operate in accordance with specifications, cost escalation, unavailability
of materials, equipment and third party contractors, delays in the receipt of government approvals, industrial disturbances or
other job action, and unanticipated events related to health, safety and environmental matters), political risk, social unrest,
and changes in general economic conditions or conditions in the financial markets. Information concerning Mineral Reserve
and Mineral Resource estimates also may be considered forward-looking statements, as such information constitutes a
prediction of what mineralisation might be found to be present if and when a project is actually developed. The actual results
or performance by the Company could differ materially from those expressed in, or implied by, any forward-looking statements
relating to those matters. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial
condition of the Company. Except as required by law, we are under no obligation, and expressly disclaim any obligation, to
update, alter or otherwise revise any forward-looking statement, whether written or oral, that may be made from time to time,
whether as a result of new information, future events or otherwise, except as may be required under applicable securities
laws.

Appendix 1: Disclosure of Additional Assumptions
Note: In the tables and graphics disclosed herein, years are financial years ending 30 June unless otherwise specified.
Compliance  The updated underground Mineral Resource estimate for Woodlawn comprises 33 separate domains of
with ASX polymetallic (Zn-Pb dominated) or copper-dominated VMS mineralisation styles, which were individually wire
Listing Rule framed, based primarily on geological criteria. Heron has remodelled the underground Mineral Resource,
5.8.1 for incorporating the recent and historical drilling results with newly digitised information compiled from detailed
updated underground mapping of geology and structure, combined with careful consideration of the expected mining
Underground methods.
Mineral  Sample points were mostly derived from diamond drill core, half or quarter-core sampled over an average
Resources of 1m intervals, to geological contacts, using an orientated cut line. Samples were analysed by an
independent commercial laboratory using industry standard analytical techniques including fire assay and
AAS finish for Au and mixed acid digest and ICP finish for the multi-element suite (40 elements), including
Zn, Cu, Pb, Ag and Fe.
 Mineral Resource grades were estimated into a conventional digital block model for Zn, Pb, Cu, Au, Ag and
Fe using ordinary kriging, employing parameters derived from an independent geostatistical analysis of the
sample data set. Statistical analysis indicated that high-grade sample cuts were not required for most
elements estimated except for Ag, where a high-grade cut of 880ppm was applied. A ZnEq grade was
calculated for each block and a ZnEq lower cut-off grade of 7% was used in the reporting of the Mineral
Resource. Density was assigned to each block using a grade regression equation derived from densities
measurements.
 In general terms the Mineral Resource was classified as Inferred where geological continuity was confirmed
and the drill hole spacing better than 50m x 50m centres and as Indicated where drilling was on 20m x 20m
centres or better. This closer spacing reflects much of the drill hole spacing in the underground historical
drilling and is not necessarily a reflection of drill hole spacing required to achieve Indicated Mineral
Resources in future drilling.
 A variety of conventional underground mining methods, employing paste-fill where required, were
considered for the extraction of the mineralised material including, underhand stoping, and drift and half-
upper stoping. Preliminary metallurgical testwork has been undertaken on the mineralised material which
has demonstrated that it can be processed through a fine grinding circuit and industry standard sequential
flotation to produce a Zn, Cu and Pb concentrate.
Please refer to Appendix 2 for further details.
Capital A summary of the initial capital cost estimates (+/-25%) and inclusive of a 7.7% contingency is provided below:
Initial Capital Item Scope Tailings Underground Total
Components Components (A$m)
(A$M) (Incremental A$M)
Underground Development & Rehabilitation
Pre-commissioning 0.0 3.3 3.3
Post-commissioning 0.0 3.3 3.3
Mining Equipment & Infrastructure 1.8 0.0 1.8
Treatment Plant and Services 61.4 27.2 88.7
Infrastructure 8.6 3.6 12.2
Tailings Storage 1.6 0.0 1.6
Construction & Engineering 21.4 0.0 21.4
Subtotal 94.8 37.5 132.3
Owners Costs Pre-Production 1.9 0.0 1.9
Working Capital 4.7 1.1 5.8
Total to Peak Cash Draw 101.4 38.6 140.0
Peak Cash Draw is defined as initial capital working capital post commissioning until the mine achieves a break-even
cash position, and excludes financing costs. Maintenance capital has been built into the operating cost estimates. No
allowance has been made for financing charges or interest, GST related cash flows, or fluctuations in the exchange
rate (estimates were provided on the basis of an exchange rate of 0.80 AUD:USD).
The basis for the capital estimates includes:

 Engineering, Procurement and Construction model for non-mining infrastructure;
 Owner operator processing facilities and workforce;
 Owned fixed plant, mobile surface plant, and administration buildings;
 Contract mining and leased underground mining equipment and maintenance facilities;
 Contract concentrate road haulage, port storage and handling and ship loading; and
 The construction of the new tailings storage facility TSF4.
Ongoing capital of A$107.7 million is required for the underground decline and lateral development, decline
rehabilitation, ventilation raises, escapeways, infrastructure and sustaining capital. The profile is driven by the
production schedule and is shown below starting in the second quarter post commissioning (being the quarter
immediately after Peak Cash Draw, with capital prior to that period being shown in the table above):
Mining As disclosed in the body of the announcement, total plant feed of 15.0 million tonnes has been modelled to provide an
Production 11 year mine life at a rate of 1.5Mtpa. Timing is assumed to deliver a commissioned project in the first quarter of
Schedule calendar year 2018. The overall tonnes / grade profile is illustrated below by financial year and by source:

The detailed production schedule is provided in the table overleaf:
Financial Year LOM 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
U/G Polymetallic Tonnes Mined kt 3,060 65 341 495 634 618 624 284 - - - -
Zn Grade (Equiv.) kt 15.72% 15.72% 15.42% 17.42% 19.30% 16.34% 12.89% 10.03% 0.00% 0.00% 0.00% 0.00%
Zn Grade % 7.01% 6.28% 5.51% 6.59% 9.54% 8.31% 5.96% 3.53% 0.00% 0.00% 0.00% 0.00%
Pb Grade % 2.66% 3.19% 2.90% 2.70% 3.48% 2.76% 2.09% 1.34% 0.00% 0.00% 0.00% 0.00%
Cu Grade % 1.38% 1.21% 1.27% 1.74% 1.47% 1.31% 1.19% 1.28% 0.00% 0.00% 0.00% 0.00%
Ag Grade g/t 57.1 76.9 95.7 81.7 58.6 44.9 37.6 29.8 - - - -
Au Grade g/t 0.63 0.89 0.86 0.89 0.70 0.40 0.45 0.61 - - - -
U/G Copper Tonnes Mined kt 715 - - 58 39 90 75 316 137 - - -
Zn Grade (Equiv.) kt 9.44% 0.00% 0.00% 12.00% 11.34% 9.07% 10.50% 8.97% 8.57% 0.00% 0.00% 0.00%
Zn Grade % 1.55% 0.00% 0.00% 4.70% 3.03% 1.57% 1.53% 1.05% 0.94% 0.00% 0.00% 0.00%
Pb Grade % 0.46% 0.00% 0.00% 2.48% 1.07% 0.35% 0.41% 0.19% 0.16% 0.00% 0.00% 0.00%
Cu Grade % 2.26% 0.00% 0.00% 1.08% 2.18% 2.20% 2.61% 2.38% 2.34% 0.00% 0.00% 0.00%
Ag Grade g/t 13.8 - - 48.7 20.4 11.3 14.5 10.4 6.4 - - -
Au Grade g/t 0.07 - - 0.52 0.05 0.02 0.05 0.04 0.02 - - -
Tailings Tonnes Mined kt 11,240 479 1,140 947 827 792 801 900 1,363 1,500 1,500 990
Zn Grade (Equiv.) kt 5.99% 5.71% 5.71% 5.71% 5.71% 5.71% 6.19% 6.26% 6.26% 6.18% 6.04% 6.04%
Zn Grade % 2.22% 2.43% 2.43% 2.43% 2.43% 2.43% 1.97% 1.90% 1.90% 2.06% 2.34% 2.34%
Pb Grade % 1.31% 1.15% 1.15% 1.15% 1.15% 1.15% 1.40% 1.44% 1.44% 1.42% 1.38% 1.38%
Cu Grade % 0.49% 0.47% 0.47% 0.47% 0.47% 0.47% 0.57% 0.59% 0.59% 0.52% 0.40% 0.40%
Ag Grade g/t 31.1 23.4 23.4 23.4 23.4 23.4 33.4 34.9 34.9 35.6 36.9 36.9
Au Grade g/t 0.28 0.21 0.21 0.21 0.21 0.21 0.34 0.36 0.36 0.32 0.26 0.26
Total Tonnes Mined kt 15,015 544 1,481 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 990
Zn Grade (Equiv.) kt 8.14% 6.46% 7.67% 9.66% 11.43% 10.46% 9.31% 7.77% 6.72% 6.18% 6.04% 6.04%
Zn Grade % 3.16% 2.71% 3.04% 3.82% 5.32% 4.89% 3.70% 2.18% 1.85% 2.06% 2.34% 2.34%
Pb Grade % 1.55% 1.30% 1.50% 1.70% 2.09% 1.81% 1.66% 1.22% 1.33% 1.42% 1.38% 1.38%
Cu Grade % 0.76% 0.53% 0.63% 0.89% 0.94% 0.92% 0.94% 1.09% 0.81% 0.52% 0.40% 0.40%
Ag Grade g/t 35.5 27.6 38.5 43.9 38.0 32.3 34.3 29.8 32.6 35.6 36.9 36.9
Au Grade g/t 0.34 0.27 0.35 0.44 0.41 0.30 0.36 0.36 0.33 0.32 0.26 0.26
Zn equivalents (ZnEq) in the above table are based on the formula: Zn(%) + 0.81 x Pb(%) + 3.12 x Cu(%) + 0.86 x
Au(gpt) + 0.03 x Ag(gpt). The factors in the equation, determined by SRK, take into account the plant feed grade
together with relative mining recoveries, mining dilution, metallurgical recovery rates, payability and realisation costs,
and are expressed as an equivalent zinc only grade (the effective grade that is delivered to the processing plant).
Metal prices used in the calculation are: Zn US$2,300/t, Pb US$ 2,050/t, Cu US$6,600/t, Au US$1,250/oz and Ag
US$18/oz. Metal recoveries are provided in the section on metallurgy below and it is Heron’s view that all the metals
within this formula are expected to be recovered and sold.
As disclosed in more detail in the body of the announcement, the production schedule for the UG Starter Case contains
36% Measured, 35% Indicated and 29% Inferred Resources, broken down into WUP: 32% Indicated Resources, and
68% Inferred Mineral Resources, and WRP: 47% Measured, 37% Indicated and 16% Inferred. Approximately 80% of
tonnes from underground mining relates to areas which have not previously been mined. The breakdown between
remnant and new areas is illustrated below:

The underground Resources falls into two main types, a “Polymetallic” type which refers to polymetallic massive
sulphide mineralisation with high-grade Zn and Pb, and a “Copper” type which refers to Cu dominated massive and
stringer sulphide mineralisation. The mining schedule preferentially feeds the Polymetallic material, with the Copper
material generally being skewed to the back end of the production profile.
A one month stockpile on the ROM pad has been assumed for the underground production, consistent with the
previous operations. Reclaimed tailings are fed directly into the mill after thickening.
Production Based on the mining schedules above, the table below presents the detailed life-of-mine production schedule for the
Woodlawn Project on an annual basis, showing concentrate production on a dry tonne basis and gross metal content
by concentrate. Moisture in the shipped concentrates is expected to be around 10%.
Average annual Production Target figures are as follows for the life-of-mine (LOM) and for the 4 year period where the
underground is producing at target production rates:
Annual Commodity LOM Average Steady State 2020-2023
Gross Production p.a. p.a.
Zinc Kt 32.1 50.9
Lead Kt 10.2 15.6
ASX/TSX Release Heron

Production Resources Limited
by Product LOM 2018 2019 2020 2021 2022 2023 2024 2025 2026 16
2027 of 2028
34
Zn Concentrate dry kt 779.7 21.0 73.7 96.2 136.6 125.5 94.5 54.0 42.5 46.9 53.4 35.3
Copper Kt 7.0 10.0
Silver Koz 805 1,099
Gold Koz 5.3 8.7
Mining Costs Underground

Underground mining costs have been developed by SRK from first principles based on the mining method, vertical
development, horizontal access, stoping and back fill costs, and vary according to the physical location and
characteristics of the mined material within the underground. The capital cost profile is shown above. The operating
costs are provided below on a A$/t mill feed basis on a contract mining (and leased equipment) basis and include
maintenance costs:
Tailings
Tailings materials will be recovered from the three tailings dams in sequence, utilising the proven technique of high
pressure water jet monitoring. The pulped material will then be pumped to the concentrator, thickened, and processed.
The mining rate is tied to the mill feed ramp up rate, described below, and the resulting schedule is provided above.
The cost assumption for mining the tailings material is A$2.14/t whilst blended feed is processed, reducing to A$1.67/t
mill feed when the plant is running on tailings alone.
Processing & The operating cost estimate has been developed on the basis of a process plant feed tonnage of 1,500,000 tonnes
Overheads per annum. The operating cost estimate is A$23.42 per tonne of feed.

UG Starter Case Unit Cost A$/t
Crushing & Grinding 1.96
Tailings Reclamation & Grind 3.09
Flotation 13.03
Concentrate Handling 0.72
Plant services 0.76
Administration 3.86
Total Plant Operating Cost 23.42
The reagent component of the operating cost is subject to exchange rate fluctuation and was based on a $1.00 AU to
$0.80 US exchange rate. Additional fixed costs of A$4.25 million have been estimated and applied annually and
include general administration costs, insurances, and some underground fixed costs including technical services, fuel
and power. Maintenance capital is included in the operating costs above.
Metallurgical Extensive testwork was conducted on the retreatment of tailings from previous operations leading to a Front End
Engineering Design study (FEED) in 2012. Since then testwork has concentrated on fresh drill core composites of
underground polymetallic type massive sulphides, copper type massive sulphides and blends of these composites
with the tailings from previous production. With 11.2 million tonnes of tailings plant feed in the production schedule for
retreatment, the new processing rate has been set at 1.5Mtpa.
Design work for the PEA has been based on start-up of operations on retreatment of tailings from previous production,
and moving to processing a blend comprising 0.75Mtpa fresh underground material and 0.75Mtpa of tailings from the
previous operations. Refer to Heron’s announcement of 11 February 2015 titled “Successful Metallurgical Testwork”
for details of the flotation results from the PEA testwork programme for the polymetallic and the blended underground
& tailings samples. Based on the testwork, the recovery outcomes to concentrates are described in the tables below,
firstly as the constituent parts, and then as a blended outcome:
Underground Concentrate Recoveries
Total Zn Pb Cu
Zn 84.2% 79.4% 3.9%(*) 0.9%(*)
Pb 84.1% 8.1%(*) 71.0% 5.0%(*)
Cu 84.3% 4.4%(*) 9.2% 70.7%
Ag 75.5% 13.9% 51.7% 9.9%
Au 64.9% 6.0% 45.9% 13.0%
Tailings Concentrate Recoveries

Total Zn Pb Cu
Zn 75.7% 69.6% 5.1%(*) 1.1%(*)
Pb 46.2% 7.5%(*) 35.8% 2.9%(*)
Cu 62.1% 7.0%(*) 23.3% 31.8%
Ag 38.9% 12.2% 23.5% 3.3%
Au 17.3% 4.6% 9.8% 3.0%
Blended Underground plus Concentrate Recoveries

Tailings
Total Zn Pb Cu
Zn 79.8% 74.2% 4.5%(*) 1.0%(*)
Pb 60.0% 8.1%(*) 48.3% 3.7%(*)
Cu 73.5% 5.9%(*) 17.1% 50.6%

Ag 51.6% 13.4% 32.8% 5.3%
Au 35.9% 6.4% 22.8% 6.7%
Items marked with a (*) are unlikely to be payable, and in the case of lead in the copper concentrate, may attract a
small penalty if levels exceed specified amounts.

A ramp up in recoveries has been assumed based on 80% of design recoveries being achieved in the first quarter
post commissioning, 90% in the following quarter, thus allowing for a ramp up to 100% of design recoveries over a 6
month period. This ramp up is reflected in the life-of-mine averages provided above.
These recoveries provide life-of-mine average concentrate specifications as follows:
UG Starter Case Concentrate Specifications
Zn Pb Cu
Zn % 45.2% 8.6% 2.0%
Pb % 2.4% 44.8% 3.5%
Cu % 0.9% 7.8% 23.5%
Ag gpt 92 701 116
Au gpt 0.42 4.65 1.39
Further testwork will be undertaken during the FS to improve recoveries and refine product specifications.
Infra- The Woodlawn site is well supplied with existing infrastructure including:
structure
 A sealed access road to the mine site;
 Shared administration building and offices;
 An existing site laboratory;
 Raw water tank;
 Evaporation ponds;
 Site water pipe systems and pumps; and
 Electrical supply sub-station.
Electrical power for the operation, estimated to be an average load of 12 MW for the processing plant and associated
services, and excludes the underground mining requirement. The PEA assumes that power is provided from the grid
on normal commercial terms.
Raw water will be sourced from the existing Willeroo Borefield and stored in the existing 10,000m³ raw water dam at
the plant site. Potable water will be generated onsite from a raw water supply to a reverse osmosis plant.
A new tailings storage facility TSF4 will be constructed adjacent to the existing Tailings Dam North (TDN) site. The
design of this dam is unchanged from the WRP Feasibility Study. The TSF4 dam will be utilised for initial tailings
storage, with TDS being re-processed and then re-used as the operation progresses.
Economic Unless otherwise stated, all cash flows are in Australian dollars, are undiscounted and are not subject to
inflation/escalation factors, and all years are financial years (ending 30 June). All cash flows are unleveraged (pre-
finance) and are post-tax unless otherwise specified.
An exchange rate of 0.80 A$ / US$ has been employed for capital cost estimation, and an FX profile based on the
forward curve has been used in modelling, which commences at 0.75 in 2017, reduces to 0.73 in 2021 and is kept flat
thereafter.
The following metals prices have been assumed by Heron in the modelling. These prices have been based on analysis
of forecast commodity price data from a number of different sources, with the selected prices being in the middle of
the range of expected outcomes. Nominal prices have been deflated for inflation at 2.5%, are expressed below in 2015
dollar terms, and have been held constant for the duration of the model:
Commodity Forecast Price per Unit Spot Price as at 15 April

2015 basis, flat 2015 (for comparison)
Zinc US$2,400/t (US$1.09/lb) US$2,226/t

Lead US$2,100/t (US$0.95/lb) US$1,984/t
Copper US$6,600/t (US$3.00/lb) US$6,018/t
Silver US$18.5/oz US$16.2/oz
Gold US$1,200/oz US$1,193/oz
A real, post-tax discount rate has been applied to the project to calculate a net present value. The selected discount
rate of 8.3% is approximately equivalent to a post-tax nominal discount rate of 10%.
Sensitivities The sensitivity of the project NPV (A$M) and IRR (%) to percentage changes in key inputs are summarised below for
individual changes between -20% and +20%:
NPV / IRR -20% -10% 0% 10% 20%
Commodity prices $115.2M / $207.9M / $299.9M / $391.6M / $483.2M /
24% 36% 46% 56% 65%
Zinc price $212.9M / $256.4M / $299.9M / $343.2M / $386.6M /
36% 41% 46% 51% 55%
Exchange rate (FX) $485.1M / $382.3M / $299.9M / $232.3M / $175.8M /
65% 55% 46% 39% 32%
Pre-production capital $334.8M / $318.3M / $299.9M / $279.5M / $257.1M /
65% 55% 46% 39% 34%
Mining costs $321.5M / $310.7M / $299.9M / $289.1M / $278.3M /
49% 47% 46% 45% 44%
Grade delivered to mill $155.4M / $227.4M / $299.9M / $370.9M / $442.5M /
29% 38% 46% 53% 61%
Processing costs $330.7M / $315.3M / $299.9M / $284.5M / $269.0M /
50% 48% 46% 45% 43%
Recoveries $155.4M / $227.4M / $299.9M / $370.9M / $442.5M /
29% 38% 46% 53% 61%
Limits - Worst $115.2M / $207.9M / n/a $391.6M / $483.2M /
24% 36% 56% 65%
Limits – Best $485.1M / $382.3M / n/a $232.3M / $175.8M /
65% 55% 39% 32%
The relative sensitivities are charted below:

Marketing & The inland transportation, port storage and handling charges, shipping quantity and cost, payability and TC/RC terms
Logistics vary by concentrate and commodity depending on the concentrate specifications and the levels of by-products in each
concentrate. Independent advice has been sought to provide estimates for these based on expected concentrate
characteristics. The assumptions are in line with normal market terms.
Realisation costs are equivalent to:
Realisation Costs Zinc Concentrate Lead Concentrate Copper Concentrate
A$/t Plant Feed A$/t Plant Feed A$/t Plant Feed
Transportation 4.6 1.9 1.8
Treatment and Refining 14.9 4.5 3.0
Total 19.5 6.4 4.8
Payability terms are at normal benchmark terms for the various products, with the main payability terms assumed
being 85% for zinc, 95% for lead and 96.5% for copper.
Concentrate is assumed shipped in lots of 10Kt for zinc, 5Kt for copper and 2.5Kt for lead. It is assumed that 90% of
revenue will be received 30 days following concentrate shipment, and the remaining 10% after a further 90 days.
Payment terms are assumed to be 30 days.
Legal All Mineral Resources which are the subject of the Production Target are owned 100% by Heron on granted Special
Mining Lease (SML) 20.
Environ- During 2012 the Company carried out an extensive Environmental Assessment (EA), seeking Major Project approval
mental under Part 3A(transitional) of the NSW Environmental Planning and Assessment Act 1979 (EP&A Act) to establish the
Project. The EA included a public exhibition stage during which a total of 17 submissions were received, including 11
from public agencies, 2 from special interest groups and 4 from the general public.
On 4 July 2013 the Company received project approval under Section 75J of the EP&A Act from the NSW Minister for
Planning and Infrastructure in relation to the Project. The approvals have been granted and allow mining operations
at the Woodlawn site until 31 December 2034.

Social The workforce for the Project is assumed to be sourced on a drive-in, drive-out basis from the communities around
Woodlawn. With more than 430,000 people living within 55km of site and an attractive and liveable environment, it is
anticipated that the Woodlawn Project will present an attractive employment opportunity both for locals and for qualified
personnel relocating from elsewhere.
Govern- The project is subject to Australian corporate tax, which has been applied at 30%. Tax calculations are impacted by
mental depreciation deductions for capital items.
New South Wales levies mineral royalties for extractive operations within the state. The royalties are based on an “ad
valorem” value of minerals, being 4% of the ex-mine value less allowable deductions. Allowable deductions are
confined to the direct costs incurred in upgrading the mineral, after the first stockpile, and bringing it to market, and
include crushing and milling, concentration, assaying and analysis, realisation costs, and a depreciation allowance.
When applied to the project costs, the equivalent royalty expressed as a percentage of net smelter revenue averages
approximately 3.0% over the life of the mine.
Opening capitalised exploration expenditure of A$12 million has been depreciated on a unit of production basis.
Heron’s opening tax losses of A$60 million have been fully netted against the project tax calculations. In addition, a
portion of $53 million in additional losses subject to the available fraction rule have been netted against the project tax
calculations. For the UG Starter Case, the total tax losses subject to the available fraction rule applied is $44 million.
These losses reflect accumulated losses for the group companies and are based on preliminary independent advice
received following the merger between Heron and TriAusMin.

Appendix 2: JORC Code, 2012 – Table 1
Woodlawn Underground Mineral Resource Estimate (April 2015)
Section 1 Sampling Techniques and Data

(Criteria in this section applies to all succeeding sections)
Criteria Commentary
Sampling  The sample dataset was collected over a number decades and, for reporting purposes, is split into
techniques two groups, Historical being pre-1999 samples from Jododex, CRA and Denehurst exploration and
mining operations, and Recent being post 1999 drilling samples from exploration by Heron
Resources Ltd (Heron) and TriAusMin Ltd (TriAusMin). The Heron drilling was undertaken from
September 2014 to February 2015 (Phase I drilling program) and the TriAusMin drilling was
undertaken between January 2007 and May 2013.
 The majority of the Recent diamond core samples were taken from NQ sized core (with a small
proportion of HQ sized core) and collected on a nominal interval length of 1m, with samples
terminated at geological contacts. The core was halved along the core orientation line. In massive
sulphide zones, quarter core was submitted for assaying, half core preserved for metallurgical
testing, with the remaining quarter retained as reference material. In non-massive sulphide
material half core was submitted for assaying.
 The Recent percussion reverse circulation (RC) holes were drilled using a 4.5 inch sized bit.
Samples were collected on 1m intervals. In the waste zones, a sample spear was used to collect a
split from each interval, which were subsequently combined to form 4m composites. In the
mineralised zone, the 1m interval was retained and a split collected using a riffle splitter.
 The Recent sampling methods were consistent with accepted industry practice and are considered
to provide representative samples for the mineralisation encountered.
 Historical RC drilling was used as guide to grade but this has not been used in the Mineral
Resource.
 Historical surface and underground diamond drilling has been used in the Mineral Resource. The
majority of the samples were collected from half NQ core, although some underground samples
were taken from whole BQ core. Core was sampled on 1m intervals, with the intervals usually split
at lithological boundaries. Some of the early exploration core was sampled on imperial intervals,
which were subsequently metricised in the Historical database.
 Some Historical face chip samples have been used in the Mineral Resource calculation. This was
limited to samples taken from cross cuts that spanned the complete section of the mineralised lens.
Rock chip samples were taken as a continuous channel from the wall rocks on a 2m intervals, with
each sample weighing were approximately 2-3kg.
 To date there has been insufficient twin hole sampling to assess the accuracy of the Historical
sampling. Historical production reconciliation suggests that there was a reasonable correlation
between the grades derived from sampling and concentrate production over the life of the
underground mine.
Drilling  The Recent diamond-core drilling was performed mostly using McCulloch DR800 rigs (or similar)
techniques fitted with HQ and NQ sized equipment. Various techniques were employed to ensure the hole
was kept within limits of the planned position, including directional negation drilling. The retrieved
core was laid out in standard plastic cores trays.
 The Recent RC drilling was performed using a Schramm T450WSI rig fitted with a 4.5 inch face
sampling hammer. One metre samples were collected via a Jones 5:1 splitter fitted to the rig
cyclone.
 Historical diamond drilling was undertaken by both surface and underground rigs. The full
drill company and rig details are poorly understood, however anecdotal evidence it was
conducted with standard drill equipment and procedures for that time . Historical core stored
on site represents approximately fifty percent of the historical drilling. The majority of core is
intact and in good condition, apart from some limited surface oxidation and degradation of
the sulphide zone in the vicinity of joint planes. Metre marks, sample marks and hole
numbers are visible for almost all holes stored on site. Select key holes have been stored off
site at Geological survey of NSW Maitland core library.

Criteria Commentary
Drill sample  Recent core was transported to an enclosed facility for logging and preparation. The average
recovery recovery exceeds 95%. The core was orientated, where possible and marked with 1 metre
downhole intervals for logging and sampling.
 The recoveries for the Recent RC drilling were visually estimated, with most being close to 100%.
 Historical core stored on site shows a similar level of recovery to that from the recent diamond
drilling. With the exception of some geotechnical holes, the Historical exploration and underground
core does not appear to have been orientated.
Logging  For recent drilling, both diamond core and RC holes were geologically logged. Geotechnical
logging was conducted on selected core intervals. Samples for metallurgical testing were stored in
a freezer to reduce oxidation prior to metallurgical testing.
 Historical core was geologically logged. Some holes were geotechnically logged, and some were
used for metallurgical test work.
Sub-sampling  For recent drilling, all core samples were crushed and then pulverised in a ring pulveriser (LM5) to
techniques and a nominal 90% passing 75 micron. For each interval, a 250g pulp sub-sample was taken, with the
sample remainder stored for reference.
preparation  For Recent programs a quartz flush was put through the LM5 pulveriser prior to each new batch of
samples. Multiple quartz flushes were also put through the pulveriser after each massive sulphide
sample processed. A selection of the flush material was analysed and reported by the lab to gauge
the potential level of contamination that may be carried through from one sample to the next.
 The Recent RC samples were pulverised in an LM5 ring pulveriser. The same quartz flush
procedures as those described above were used.
 For the vast majority of Historical sampling, preparation and analysis was carried out on site by
Denehurst Analytical Services Pty Ltd, a NATA accredited laboratory. An independent review of the
laboratory was carried out in 1986 by Robertson Research. At that time the following procedures
were being used: 1) All samples were crushed to 1.5mm using a combination of jaw and roll
crushers; 2) Crushed samples were quartered to obtain a 150gram cut for pulverising in a Rocklabs
bowl and puck pulveriser; 3) A quartz flush was used between individual samples.
 A number of Historical samples, including all early exploration surface diamond drilling, were
prepared at other commercial laboratories using methods that are understood to be similar to those
described above.
Quality of assay  Recent sample preparation and assaying was conducted by ALS Laboratories, Orange, with the
data and final analysis of the pulps undertaken at ALS Laboratory, Brisbane.
laboratory tests  Recent Gold assays were determined by 30g fire assay fusion with AAS analysis to 1ppb LLD.
 Recent other elements were assayed by mixed acid digestion followed by ICP analysis. The digest
is considered to be a total digest.
 Recent Laboratory quality control standards (blanks, standards and duplicates) were inserted at a
rate of 5 per 35 samples for ICP analysis.
 Most of the Historical sample preparation and assaying was carried out by Denehurst Analytical
Pty Ltd (Denehurst Laboratory), which was a NATA accredited laboratory operating at the
Woodlawn site. Zinc, lead and copper grades were determined by acid digest and AAS finish. An
aliquot from each pulp was also analysed by XRF pressed powder for precious metals, iron,
silicon, aluminium, magnesium and barium, along with repeats of zinc, lead and copper. Gold
assays over 2g/t were retested by fire assay and AAS finish. QAQC procedures included
Standards inserted at a frequency of 1:30, however the actual QAQC data have not been located.
Anecdotal evidence indicates the Denehurst Laboratory was well regarded at the time of operation
and was used for umpire assaying by other laboratories.
 Some sample preparation and assaying for the Historical data, in particular the early exploration
diamond drilling samples, were carried out by various other commercial laboratories. Exact details
have not been located for these samples and the Historical database does not contain information
describing which laboratories or assay methods were used for the various programmes.
Verification of  For Recent data, an internal review of results was undertaken by company personnel. No
sampling and independent verification has been undertaken.
assaying  All Recent field and laboratory data were entered into a database using a consultant database

Criteria Commentary
administrator (DBA), who is based in the Company’s Perth office. Validation of both the field and
laboratory data was undertaken prior to final acceptance and reporting of the data.
 For Recent drilling, quality control samples from both the Company and the Laboratory were
assessed by the DBA and reported to the Company geologists for verification. Company
procedures dictate that all assay data must pass this data verification and quality control process
before being reported.
 All data was from Historical data bases were entered into the Heron Database by the DBA. Original
source data and laboratory records have not been located and the assay data has not been
verified.
 At the time of Historical data collection, QAQC checks were not routinely carried out by the mine
geology department, however the laboratory did do internal standard analysis at the rate of 1 in 30
samples. During operations, the mine claim grades (derived from the Reserve and Resource
models) were routinely reconciled against the mill concentrate grades. As a semi-quantitative test,
this suggests that the Historical drilling assay results are sufficiently accurate for the prediction of
mining grades.
 No adjustments have been made to assay data within the database.
Location of data  The deposit is not thought to contain magnetic minerals in concentrations that may adversely affect
points survey equipment.
 For the Recent drilling, drill collars were initially located with a combination of handheld GPS and
licenced surveyor using a DGPS system, to an accuracy of approximately 1m. The final drill collar
locations are surveyed by a licenced surveyor.
 For Recent drilling, downhole surveys were conducted using an Eastman, Pathfinder survey tool to
record the magnetic azimuth and dip of the hole. These recordings were taken approximately
every 30 metres downhole. Approximately 80% of the Recent holes were also surveyed with
gyroscopic equipment.
 For Recent drilling a north seeking gyroscopic tool was used to provide collar azimuth data for
approximately half the diamond holes.
 For Historical drilling collar surveys were carried out on all surface and underground holes using
conventional Total Station equipment.
 Down-hole surveys of Historic holes were carried out using down-hole cameras of various types,
and recording intervals of approximately 30m.
 Historical drill holes intersected in underground workings were routinely picked up by the mine
surveyor. These data indicated the downhole survey azimuth accuracy was usually in the order of
+/- 2 degrees.
 All Historical primary source data for collar surveys, and most down-hole surveys have been
located and verified against the Historical drill hole database.
 Down-hole magnetic survey data have been checked and adjusted for changes in magnetic
declination.
Data spacing  Drill data spacing varies from 15m x15m in some remnant parts of the historical mine to greater
and distribution than 80m x 80m in some exploration areas.
 Historical backs mapping data covering all development (generally on 5m flitches) have been used
to help define geological contacts in areas of previous mining. Geological structures identified in
the mapping data have been used to constrain the dimensions of drilled extensions to previously
mined lenses.
 Data are considered to be of sufficient spacing to establish geological and grade continuity for
resource estimation, and the resource classification reflects the geological and grade continuity
confidence of the modelled material.
 Lenses with insufficient drilling data have been modelled for exploration targeting purposes, but
have not been assigned resource classifications or included in the resource inventory. This
includes the new Lisa Lens, portions of B Deeps and parts of the G lens extensions.
 The majority of the sample lengths are between 0.22m to 1.0m, but they were not composited prior
to assaying. Some Historical samples were taken over 3’ intervals (converted to metric equivalents
in the database). Some underground face samples are 2m in length.
 All samples were composited to 1m length for resource modelling purposes. All composites were

Criteria Commentary
density weighted.
Orientation of  The Recent drill hole orientation was designed to intersect the mineralised lenses at a close to
data in relation perpendicular angle. The mineralised lenses dip at approximately 50-70 degrees to the west and
to geological the hole dip at approximately 60 degrees to the east.
structure  The majority of Historical drilling has been orientated to intersect the lenses at a close to
perpendicular angle.
 No significant sampling bias due to the orientation of the drilling has been identified.
Sample security  Sampling was conducted according to written procedures, and was performed by appropriately
trained and supervised sampling personnel.
 Core was photographed after mark up, but before sampling.
 Half and quarter core samples were placed in numbered and tied calico sample bags.
 Samples were weighed on site before being sent to the laboratory.
 Samples were secured in plastic bags and are transported to the ALS laboratory in Orange, NSW
via a courier service or with Company personnel.
 The sample security of Historical drilling is not known, however most samples were assayed at the
onsite laboratory.
 All recent drilling, and approximately half of the Historical drilling is stored at the Woodlawn core
farm.
Audits or reviews  In September 2014 a review and assessment of the ALS laboratory procedures was carried out by
company senior geology personnel resulted in some changes to the laboratory sample pulverising
procedures resulting in additional quartz flushed being inserted after massive sulphide samples .
 The majority of Historical assay work was carried out by the NATA certified Denehurst Analytical
Laboratory.
 The Historical laboratory procedures were reviewed as part of a broader independent assessment
of resources and reserves carried out by Mr R E Cotton of Robertson Research in 1986.
Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)
Criteria Commentary
Mineral  The Woodlawn project is located 250km south-west of Sydney in the state of New South Wales.
tenement and The area is near the top of the Great Australian Dividing range and has an elevation around 800m
land tenure above sea-level. The mineral and mining rights to the project are owned 100% by Heron
status Resources through the granted, special mining lease 20 (SML20), also known as S(C&P)L 20. The
lease has recently been renewed for 15 years and has an expiry date of the 16th November 2029.
 The project area is on private land owned by Veolia who operate a waste disposal facility that
utilises the historical open-pit void. An agreement is in place with Veolia for the Company to
purchase certain sections of this private land to facilitate future mining and processing activities.
 A cooperation agreement is also in place between Veolia and the Company that covers drilling and
other exploration activities in the area.
Exploration done  The Woodlawn deposit was discovered by the Jododex JV in 1970 and open-pit mining began in
by other parties 1978 and continued through to 1987. The project was bought outright by Rio Tinto (CRA) in 1984
who completed the open-pit mining. Underground operations commenced in 1986 and the project
was sold to Denehurst Ltd in 1987 who continued underground mining up until 1998. The mineral
rights to the project were then acquired by TriAusMin Ltd in 1999, who conducted further studies on
a tailings re-treatment and revived underground operation. Heron took 100% ownership of the
project in August 2014 following the merger of the two companies. Some 980 surface and
underground drill holes have been completed on the project to date and several studies
undertaken.
Geology  The Woodlawn deposit comprises volcanogenic massive sulphide mineralisation consisting of
strata bound lenses of pyrite, sphalerite, galena and chalcopyrite. The mineralisation is hosted in

Criteria Commentary
the Silurian aged Woodlawn Felsic Volcanic package of the Goulburn sub-basin on the eastern
side of the Lachlan Fold Belt.
 Mineralisation is hosted within strata bound lens shaped lodes. The lenses can be further divided
into three favourable horizons which host multiple lenses. The lenses have an average strike of
between 330 and 350 degrees, and dip at between 50 and 75 degrees to the west. There is a
prominent northwest oriented plunge to the mineralisation of most lenses. Some of the lenses are
further subdivided by later faulting, associated with regional deformation. Mineralisation is
polymetallic with copper, lead and zinc being the primary economic minerals along with secondary
silver and gold.
Drill hole  A total of 928 drill holes and associated assays and lithological data are currently held in the
Information database for the Woodlawn deposit. All recent and most historic drilling was reported at the time of
drilling, and has been used in previous resource models.
 Due to the size of the database it is not practical to list every individual drill hole in Table 1. All
Recent drilling results have been released to the market prior to the calculation of the Mineral
Resource estimate.
Data  The details related to intercepts and assay management for Mineral Resource estimation are to be
aggregation found under the Mineral Resource estimation section of the Table 1 (section 3).
methods
Relationship  No exploration results in addition to those already published are included in the Mineral Resource
between estimate.
mineralization
widths and
intercept lengths
Balanced  No exploration results in addition to those already published are included in the Mineral Resource
reporting estimate.
Other  No exploration results in addition to those already published are included in the Mineral Resource
substantive estimate.
exploration data
Further work  A further program of in-fill and extensional drilling will be undertaken to provide inputs into future
feasibility studies.
 The deposit is open down plunge and along strike, and further up dip positions in the hanging wall
lenses remain to be tested. Drilling programs are planned to test these extensional targets.
Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria Commentary
Preamble and  The revised underground Mineral Resource estimate for the Woodlawn Project has been largely
responsible undertaken in-house by Heron personnel, in particular Heron’s Senior Resource Geologist (Mr
people. Steve Jones, who is a member of the AusIMM).
 This work has been reviewed on a semi-continuous basis by SRK Consulting personnel: Mt Rod
Brown and Mr Daniel Guibal, who have provided the final Independent Competent Person’s sign-
off to the estimate.
Database  For Recent data, all data was captured digitally, including, collar survey, down-hole survey,
integrity geological logging, geotechnical logging, sample selection and assay results. The geological and
geotechnical logging and sampling data were validated on entry in the field. Clear written
procedures outline how all data is entered and managed in the field, and field geologists update the
procedures as changes are made to suit new data types (eg updating of geological legend).

Criteria Commentary
 Digital records were uploading into the database by the DBA. All source files were stored within
the database. The database has internal validation for most data types to minimise the chance of
transcription errors. Initial data validation was done automatically (the database will not accept
data contrary to validation criteria).
 Secondary validation was carried out as data was added to the database. Regular downloads from
the database were validated in 3D mining packages by the geological team after each assay batch
received.
 All updates and changes to the database, including corrections from the geological team, were
carried out by the DBA.
Site visits  Rod Brown (SRK Consulting) conducted a site visit in March 2015 to inspect the project site,
examine the geology, inspect core samples, and to discuss aspects of the data acquisition and
deposit geology with site personnel. The geological setting and controls on mineralisation
observed in the exposures (pit walls) and core samples are considered to be consistent with the
geological understanding that has been used for the preparation of the geological model. There
were no drill rigs operating at the time of the site visit. However, an inspection of the core storage
facilities indicated both the Historical and Recent core to be of an acceptable quality, and suitable
for the preparation of resource estimates
Geological  The geological interpretation was built upon on from an extensive body of work by both
interpretation researchers, and previous operators at the mine.
 The geological model of the mine was built up from detailed underground mapping, Historical
underground and surface diamond drilling, and Recent RC and diamond drilling by TriAusMin and
Heron Resources.
 The underground mapping was completed during underground mining operations, and consisted of
1:500 and 1:250 scale backs maps of every underground development drive, including all flat back
stope lifts. The mapping line work was digitised by Heron geologists and is used to develop
wireframes of major faults and mineralisation domain boundaries.
 The majority of mineralisation domain boundaries correspond to the sharp contacts between the
massive or stringer sulphide zones and the silicate host rock. As a result the mapped and logged
geological contacts between sulphides and silicates provide a robust basis for the interpretation of
volumes and the selection of samples for estimation of Mineral Resources.
 It was recognised in the previous mining operations that individual lenses can have distinct
mineralisation characteristics, and this has been reflected in the domains used in the resource
estimate. In particular polymetallic mineralisation (sphalerite, pyrite, galena, chalcopyrite and other
minor components) has been separated from Copper mineralisation (principally pyrite,
chalcopyrite) by domain boundaries within the model.
 The impact of alternative interpretations on the resource quantities is considered to be adequately
reflected in the classifications assigned to the resource estimates:
 Indicated material is defined in areas where both sufficient drill hole and underground
mapping data are available to confirm both the grades and controlling structures (and thus
volumes) of the lenses. There is limited scope for an alternative interpretation that would
result in significantly different volumes or grades.
 In areas where grade and geological continuity can be demonstrated, but the geological data
is limited to widely spaced drilling only, the resource classification has been downgraded to
Inferred.
 Where insufficient intercepts are available to confirm continuity of either grade or geology
between holes, the model cells have been flagged as ‘Not Classified’, and excluded from the
resource estimates.
 There is some scope for reinterpretation of Inferred material geometry and considerable
scope for alternate interpretation of Not Classified portions of the model. It is expected that
further drilling will be required to improve the robustness of the interpretation of these
materials.
 A similar approach to resource modelling was used during the Historical underground operations,
and it was considered that the reconciliation between mine and mill supported the classification that
had been assigned during this period.
 The geological model includes material that has been mined and the lens models closely match the

Criteria Commentary
models generated by the mining department during operation.
Dimensions  The Resource Model has 33 separate lenses, 30 of which are reported to contain Indicated or
Inferred resources above the modelled cut-off grade of 7% Zn Equivalent Grade (ZnEq). Two
lenses contain low grade mineralisation below the reporting cut-off grade and one lens has
insufficient data to be assigned resource classifications.
 The typical lens dimensions are 40 to 120m along strike, approximately 80 to over 500m down
plunge and 2 to 30m across strike.
 Mineralisation has been modelled to a depth of 820m, however the deposit is considered to be
open at depth. The current Mineral Resource estimate is constrained by the limited drill coverage
below 700m.
Estimation and Modelling:
modelling
techniques  All modelling of domains was completed using a combination of Micromine and Leapfrog
modelling software to generate domain wireframes. Mapping data was digitised using
Micromine. Flagged lens outlines from the mapping data and drill hole pierce points were
imported into leapfrog where the footwall and hanging wall of each lens were modelled using
implicit modelling routines appropriate for the geometry of the surface being modelled. The
completed wall wireframes were wire-framed together in Micromine using appropriate
geological constraints, including faults, adjacent lens domains and Boolean mathematics to
build the final enclosed domain boundaries.
 A regular block model was built using the lens boundaries and a digital terrain model of the
surface. Only the sulphide portion of lenses has been domained and modelled. Waste
material was not subdivided into different geological units for this model.
 The parent cell of 10m x 20m x 20m in the X, Y and Z dimensions was chosen to reflect the
principal mining method of sub-level retreat long hole mining with paste fill over 20m x20m
spans. This also reflects the drill hole intercept spacing of 20m x 20m for a significant portion
of the deposit. In some inferred portions of the model, drill hole spacing approaches 50m x
50m spacing.
 The parent blocks were sub-celled to 1m x 2m x 2m to accurately estimate the volume of
material inside each lens domain for mining assessment.
Estimation of grades:
 Each individual lens was interpolated separately from other lenses by the flagging of both drill
hole assays and the block model. Lens boundaries were therefore considered as hard.
 For resource modelling purposes two adjustments were made to assay data during prior to
modelling;
o Not all historic samples were routinely assayed for Au. The detection limit of 0.01g/t
has been applied to all absent Au assays prior to compositing and interpolation.
o Fe assays were absent for a small number of holes in portions of the I, K and D
lens. Appropriate Fe values were assigned to the intervals based nearby drill holes
within the relevant domains during compositing.
 Assays were selected and composited based on drill hole flagging, independent of the
domain wireframe boundaries. This technique was used to accommodate small differences in
the accuracy of drill hole data relative to the underground mapping data.
 No cut grades were required for assays except for silver in the G1 domain, where a high-
grade cut of 800ppm was applied to three samples in two adjacent holes.
 Due to the limited number of samples in each domain, geostatistical modelling was carried
out on all the domained assay data simultaneously, to produce global semi-variogram
models for Au, Ag, Cu, Fe, Pb and Zn. These global geostatistical models were considered to
be robust for all elements modelled. They show good continuity in general, with low nugget
effects.
 No estimates of deleterious elements were carried out.
 Fe was estimated for all lenses to assist with the calculation of density for the mineralisation
by way or a regression equation based on Fe, Zn and Pb grades.
 Grades were interpolated using Ordinary Kriging in Micromine software, with Kriging

Criteria Commentary
parameters derived directly from the semi-variogram models. Search parameters were based
on the variogram models with octant searches being used to set a maximum of 32 samples
for the initial search, and 16 and 4 for subsequent searches. Search sizes were set to ensure
all blocks were filled by the third search and were orientated to match the variography. Only
blocks filled for all elements in the first search were considered for indicated classification.
 Although separate estimation parameters were used for each element modelled there is
good correlation between lead and zinc, and moderate correlation between gold and silver.
Copper was found to have a markedly different orientation to the other elements modelled,
being anisotropic across strike of the lenses, where all other elements were broadly
anisotropic and of similar orientation and plunge to the lenses.
 The maximum range of extrapolation for inferred resources was 80m. Mineralisation
estimates beyond this range were not classified or reported.
ZnEq was calculated for each block from the estimated block grades. The ZnEq calculation
takes into account, mining costs, milling costs, recoveries, payability (including transport and
refining charges) and metal prices in generating a Zinc equivalent value for each block grade
for Au, Ag, Cu, Pb and Zn. ZnEq = Zn%+Cu%*3.12+Pb%*0.81+*Au g/t*0.86+Ag g/t*0.03
Metal prices used in the calculation are: Zn US$2,300/t, Pb US$ 2,050/t, Cu US$6,600/t, Au
US$1,250/oz and Ag US$18/oz. Metal recoveries are provided in the section on metallurgy
(Appendix 1) and it is Heron’s view that all the metals within this formula are expected to be
recovered and sold.
 Validation of Estimates:
 The volumes of the block model were checked against the calculated interior volumes of the
wireframe models and found to be reasonable for the level of confidence of the model.
 All domains were checked visually, individually by element for assay composite grades
against estimated block grades.
 50m meter thick Swath plots in the vertical plane were produced for all lenses, comparing
drill hole composite grades with block modelled grades. No significant departures in grades
were noted for material classified as inferred or indicated.
 Diluted results of the resource estimates were similar to the reported historic mine production
grades but due to historic operations being based on multiple mining sources to a single
stockpile only overall averages can be compared, and the accuracy of individual lenses
cannot be precisely determined from historic production records.
Moisture  All estimates were based on dry density. The rock mass is non-porous fresh rock and contains no
residual moisture, except along major fault planes (less than 0.01% of the rock mass).
Cut-off  A ZnEq cut grade of 7% minimum was applied to reported resources. This cut grade was based on
parameters the likely foreseeable minimum incremental grade required for underground mining at the
Woodlawn mine site.
Mining factors or  Dilution factors have not been applied to the Mineral Resource estimate.
assumptions  The deposit has previously been mined both as an open cut pit, and an underground mine. Open
cut mining has not been considered for the mineral resource at this time.
 It is assumed that underground mechanised mining will be used to mine the deposit in the future.
 The entire resource model was assessed for underground mining as a part of the PEA.
Assessment was carried out by SRK mining engineers in conjunction with Beck geotechnical
engineers.
 The study included both capital and operating underground mining costs, based on a contract
mining scenario with trackless mining equipment and employing primarily long-hole stoping and
paste backfill. Other considerations included the presence of existing historic underground
development openings, filled and unfilled historic stopes, as well as the ongoing use of the open
cut by Veolia.
 The mine design included new box-cut and decline access, ventilation design, escape-way design,
ground support requirements, stockpiles and cross-cuts, as well as level development and stoping

Criteria Commentary
designs.
 The size of stopes, mining methods and dilution parameters are based on historic mining
performance and geotechnical assessment of recent drilling, applied to the mining methods
chosen by the study.
 The mining study is a thorough, but preliminary study and further work will be undertaken on the
mining studies as resources are further defined by drilling.
 Material assessed to be inaccessible or unrecoverable by underground mining during the PEA
study were excluded from the Mineral Resource estimate and not reported. This includes material
in non-recoverable pillars, the edge of previously mined stopes and areas of known collapse in the
mining records from the previous underground mine.
 More detailed work on the proposed mining plan can be found in the body of the PEA document.
Metallurgical  The deposit was previously mined and processed to produce saleable and profitable metal
factors or concentrates for copper lead and zinc in the past.
assumptions  Recent metallurgical test work by Heron Resources on underground mineralisation intercepts,
including material representing mining dilution, as a part of the PEA study indicates that good
recoveries of saleable concentrates can be achieved for Copper, Lead and Zinc concentrates from
both the underground mineralisation, as well as from a 50:50 blend of underground mineralisation
and tailings stored on site from previous mining operations.
 The test work was based on crushing and grinding underground mineralisation to 70μm,
floating of a copper concentrate with separate talc pre-float, then regrinding a blend of
tailings and underground material to 30μm with separate talc pre-float, copper, lead, and zinc
concentrate floats.
 Test work included the classification of tailings to produce material suitable for use as a past
fill in underground voids.
 The metallurgical study was a thorough, but preliminary study and further work will be undertaken
on the mining studies as resources are further defined by drilling.
 Detailed work on the proposed metallurgical processing of the deposit, including estimated capital
and operating costs, and plant preliminary designs, metal recoveries, concentrate grades and
payabilities can be found in the body of the PEA document.
Environmental  The site has been subject to previous mining activities, and has not been fully rehabilitated.
factors or  On July 4th, 2013 the company received project approval under Section 75J of the EP&A Act from
assumptions the NSW Minister of Planning and Infrastructure in relation to the project, covering both:
 The Woodlawn Retreatment Project (WRP) — involving the establishment of a hard-rock
processing facility and the processing of existing tailings material stored within three existing
tailings dams; and
 The Woodlawn Underground Project (WUP) — involving excavation of a new box-cut and
underground mining development to extract metalliferous sulphide material, subject to
successful exploration.
 The approvals have been granted to allow mining operations at the Woodlawn site until 31st
December 2034.
 The approvals come with a number of reasonable, workable operating conditions relating to hours
of operations, operating standards, community consultation, conditions on site operations and
restrictions on volumes and transport routes approved.
 Aside from the conditions the company must also design new tailings dams, implement water
management systems (to ensure zero discharge of contaminated water off site), identify and
implement a passive system for the treatment of potential acid forming seepage from the existing
waste dump, refurbish, monitor and maintain the existing bore fields.
 Further environmental details can be found in the body of the PEA document.
Bulk density  No historic density data has been located, although mention of the taking of density measurements
is mentioned in a number of historic resource reports.
 Bulk densities were determined for all Heron samples by the wet weight/dry weight method on site,
by suitably trained personnel. As the mineralisation is hosted wholly in non-porous fresh rock, it is
reasonable to expect that dry density and bulk density of material are the same.

Criteria Commentary
 Dry density for each block was determined via a historic regression equation based on the
following formula for each block in the model.
Dry Density = 2.2118 +Fe%*0.0552 + Zn%*0,0226 + Pb%*0.0487
 The performance of the historic regression equation was validated against the recent drilling
results by Heron and found to be sufficiently accurate for the purpose of the Mineral Resource
estimate with the application of a lower limit to the regression.
 All densities below 2.65 were assigned a density of 2.65, this being the lowest value of measured
densities from the recent Heron drilling.
 Waste was assigned a density of 2.65, based on recent sampling and density work carried out by
Heron.
Classification  The resource classification was based on both geological and mining engineering assessment.
 Geological Criteria;
 Indicated Mineral Resource classifications was applied where the geological confidence of
controlling geological structures was robust, the drill spacing was generally 20m x 20m or
better, and Kriging parameters indicated confidence in the interpolation. In the majority of
cases indicated resources were supported by both underground geological mapping and drill
hole data. This closer spacing reflects much of the underground Historical drill hole spacing
and is not necessarily a reflection of drill hole spacing required to achieve Indicated Mineral
Resources in future drilling.
 Inferred Mineral Resource classifications was applied to areas where geological and grade
continuity was proven by adjacent drill holes, and projection of geological data could be used
to apply reasonable geological structural controls to the extents of mineralisation. Drill hole
spacing was usually 50m x 50m or better for this domain, and included both lens extensions
and new lenses previously not modelled, and was usually based on drill hole intercepts with
projected geological interpretations from mapped areas.
 Although a portion of the Mineral Resource estimate classified as Indicated has sufficient drill
density to be classified as Measured Heron plans to review, as a part of the FS:
o the relative accuracy between historic assay methods and current assay methods
through a combination of re-assay of historic drill holes and assay of select twin
holes drilled for metallurgical purposes into proposed mining areas;
o determination of measured density data for the remnant areas of deposit to confirm
density assumptions; and
o refinement of the geological interpretation in proposed remnant mining areas,
before reclassifying the material as Measured.
 Areas of poor geological confidence, or limited sampling, were not classified and have not
been reported.
 Engineering Criteria;
 As a part of the PEA study Heron has completely remodelled the existing underground voids
from the source survey data for the entire mine. This included making adjustments to the void
model to reflect the shanty-back profiles of the cut-and-fill jumbo stoping used in much of the
historic mine stoping. No resources were reported from within the modelled voids.
 Areas adjacent to, and directly below existing historic stopes were excluded from
classification as it was considered unlikely that this in-situ material could be recovered safely
from the deposit. All stope skins were treated in this manner.
 Areas in and around zones of collapse in the previous mine were also not classified or
reported.
 Estimated resource blocks below the likely future minimum mining grade of 7% ZnEq were also
removed from the resource inventory by the application of a low grade cut to reported blocks.
Audits or reviews  Review of the Mineral Resource estimates have been carried out by Mr D Guibal of SRK
Consulting. This included the following steps:
o Regular discussions with Heron’s Senior Resource Geologist during the building of
the geological model.
o Visual examination of the final geological model against existing drill hole and

Criteria Commentary
mapping data
o Variography of the major elements: Zn, Cu, Pb, Ag, Au and Fe, as described in a
previous paragraph
o Review of the kriging parameters used by Heron
o Review of the resulting block model (Visually and statistically)
o Review of the quality of the estimation through an evaluation of kriging quality
parameters (slope of regression and kriging efficiency)
o Review of the classification criteria and results.
 The overall conclusion of the review is that the model and resource estimates are sound,
based on a thorough analysis of the geology and the data. If anything, the results are
conservative, as a number of zones are eliminated from the resources based on fairly strict
criteria of confidence in the geology, data density and mineability.
Discussion of  The Competent Person has a relatively high confidence in the Mineral Resource estimate
relative  The principal reasons are:
accuracy/ o Underground backs mapping data has been digitised and used to develop a
confidence geological frame work for the Mineral Resource estimate which is inclusive of all
geological observations made during previous mining of the deposit.
o Lenses have been modelled on an individual basis, with a clear separation of the
principal mineralisation styles within each lens. Interpretation of lens volumes and
location directly incorporates underground mapping data where available,
significantly increasing the confidence in the geological model and the Mineral
Resource estimate.
o The modelling of the variography is sound and interpolation of the deposit using
ordinary kriging is a robust and proven method for modelling this style of deposit.
The method is employed to model other similar deposits, including current
producing mines.
o Because the quality of the variograms is generally very good, showing good grade
continuity (low nugget effect, ranges varying between 25 and 100 m), the quality of
estimation itself, as measured by indicators such as the slope of regression or the
kriging efficiency is good . As expected, blocks classified as indicated show better
quality indices in general than Inferred blocks.
o Globally, no precise evaluation of the uncertainty surrounding the estimation was
performed, but based on the individual block estimation quality, a precision of the
order of ±15% for the Indicated resources should be expected, while the
uncertainty on the Inferred resources should be lower than ±30%
o The void model has been completely remodelled for original source data,
significantly increasing the confidence in the location of remaining unmined
material.
 The model is suitable to accurately predict the grades of 20m x20m stoping panels, as used for the
basis of the PEA mining study. It also provides a reasonable global estimate of the portions of the
deposit which has been explored to date. The deposit remains open at depth and along strike.
 No recent production data exists to verify the accuracy of the resource estimate as the deposit is
currently not being mined. Historic production figures are of a similar grade to the diluted resource
model on a global scale in areas which have been previously mined.

Qualified Persons
The Woodlawn Project underground Mineral Resource, mine design, production schedule and PEA results have been
produced or reviewed by SRK Consulting (Australasia) Pty Ltd (SRK) under the direction of Anne-Marie Ebbels, Principal
Consultant (Mining), an Independent Qualified Person as defined by NI 43-101. Ms Ebbels consents to the inclusion in this
report of the matters based on her information in the form and context that it appears.
The plant and metallurgy has been produced or reviewed by GR Engineering Services Limited (GRES) under the direction
of Peter Allen, Manager – Process & Technical Services, who is a Member of the Australasian Institute of Mining and
Metallurgy and accredited by the AusIMM as a Chartered Professional (CP) in the metallurgy discipline, and an Independent
Qualified Person as defined by NI 43-101. Mr Allen consents to the inclusion in this report of the matters based on his
information in the form and context that it appears.
The information in this report that relates to Mineral Resources for the Woodlawn Underground Project has been compiled
by Rodney Brown and Daniel Guibal, who are both full time employees of SRK Consulting (Australasia). Rodney Brown,
who is a member of the AIG, takes responsibility for the integrity of Data that have been used to prepare the resource
estimates, and for the Geological Model. Daniel Guibal, who is a Fellow of the AusIMM, takes responsibility for the Mineral
Resource Estimate. Both Mr Brown and Mr Guibal have sufficient experience that is relevant to the style of mineralisation
and type of deposit under consideration and to the resource estimation activity that he is undertaking to qualify as a
Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results and “qualified
person” as this term is defined in Canadian National Instrument 43-101 (“NI 43-101”). Mr Brown and Mr Guibal consent to
the inclusion in this report of the matters based on his information in the form and context that it appears.
The information relating to the Woodlawn Tailings Mineral Resource contained in this news release has been reviewed and
is based on information compiled by Mr Robin Rankin, a Competent Person who is a Member of The Australasian Institute
of Mining and Metallurgy (AusIMM) and accredited by the AusIMM since 2000 as a Chartered Professional (CP) in the geology
discipline. Mr Rankin consults to Heron (and previously TriAusMin Ltd) as Principal Consulting Geologist of independent
geological consultancy GeoRes. He has sufficient experience, which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the
JORC Code (2012 edition) and “qualified person” as this term is defined in Canadian National Instrument 43-101. Mr Rankin
consents to the inclusion in this release of the matters based on his information in the form and context in which it appears.
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with
the JORC Code (2012 edition) on the basis that the information has not materially changed since it was last reported.
The technical information in this news release relating to the exploration results and forward program at the Woodlawn Project
is based on information compiled by Mr David von Perger, who is a Member of the Australian Institute of Mining and Metallurgy
(Chartered Professional – Geology). Mr von Perger is a full time employee of Heron Resources Limited and has sufficient
experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the JORC Code (2012 edition) and “qualified person” as
this term is defined in Canadian National Instrument 43-101 (“NI 43-101”). Mr von Perger has reviewed this press release
and consents to the inclusion in this news release of the information in the form and context in which it appears.

Heron Resources Limited 2015

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Heron Resources Limited 2015

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Level 1, 37 Ord Street, West Perth WA 6005

ASX/TSX Release ABN: 30 068 263 098

Preliminary Economic Assessment Delivers Strong

Combined Post-tax NPV8.3* A$300 million

 Attractive project characteristics:

 Quality resource and mine plan:

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Underground (WUP) Mineral Resource

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Table 1: Mineral Resource Estimate - Woodlawn Underground Project (WUP)

Polymetallic Indicated 1.6 21 10.7 1.5 4.0 0.46 78

Copper Indicated 0.8 10 1.0 2.8 0.3 0.07 16

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Table 2: Mineral Resource Estimate - Woodlawn Retreatment Project (WRP)

Measured + Indicated Mineral Resources

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Limited (GRES), other consultants and Company employees.

Table 3 Woodlawn PEA Plant Feed Estimate

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About Heron Resources Limited:

For further information, please visit www.heronresources.com.au or contact:

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Mining Costs Underground

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Tailings Concentrate Recoveries

Blended Underground plus Concentrate Recoveries

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small penalty if levels exceed specified amounts.

Commodity Forecast Price per Unit Spot Price as at 15 April

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Gold US$1,200/oz US$1,193/oz

The relative sensitivities are charted below:

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Section 1 Sampling Techniques and Data

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Section 2 Reporting of Exploration Results

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Section 3 Estimation and Reporting of Mineral Resources

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Dry Density = 2.2118 +Fe%*0.0552 + Zn%*0,0226 + Pb%*0.0487

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Dry Density = 2.2118 +Fe%0.0552 + Zn%0,0226 + Pb%*0.0487