Avanco Resources : CentroGold Improved Mineral Resource Confidence 26 Apr 2017

Avanco Resources (ASX: AVB)

26 April 2017

Suite 3, 257 York Street

Subiaco, WA 6008 Australia.

PO Box 1726

West Perth, WA 6872, Australia

Tel: +61 8 9324 1865

Fax: +61 8 9200 1850

Contacts:

Nicholas Bias

Head of Corporate Affairs nbias@avancoresources.com Tel: +61 497 888 227

+44 (0)7771 450 679

For the latest news:

www.avancoresources.com

Directors: Colin Jones Tony Polglase Simon Mottram Luis Azevedo Vern Tidy

Luiz Ferraz

Management: Wayne Phillips Scott Funston Nicholas Bias Otávio Monteiro

Avanco Resources ("Avanco" or the "Company") is pleased to announce upgraded mineral resource estimates (MREs) from the inferred to indicated category for the Contact and Blanket Zones at the CentroGold Project1 ("Project").

• Completion of outstanding works, including a detailed quality analysis and quality control (QAQC) study on all historical drilling and assaying, and a site visit by the independent consultants

• Re-classification to JORC (2012) standard, above a cut-off grade of

  1.0 g/t gold as summarised:

  CentroGold Mineral Resources - April 2017
  Cipoeiro Deposit	Category	Million Tonnes	Au (g/t)	Gold Metal (Oz)
  Indicated	2.1	2.5	168,000
  Contact Zone	Inferred	5.9	2.2	424,000
  Total	8.0	2.3	592,000
  Indicated	10.8	1.7	597,000
  Blanket Zone	Inferred	1.4	2.2	97,000
  Total	12.2	1.8	694,000
  CentroGold Total	20.2	2.0	1,286,000

• Approximately 65% of Cipoeiro resources have been reported in the indicated category, comprising approximately 90% of resources at Blanket Zone, and 25% of the Contact Zone

• Higher confidence indicated resource at the Contact Zone with an average grade of 2.5 g/t gold compared to 2.3 g/t gold globally.

• With the majority of resources now in the indicated category, the CentroGold Scoping Study can be completed.

• Resolution of licencing issues continue to make progress, with active local community engagement.

• The Company holds the right to earn up to a 100% interest in the Project

  1

  CENTROGOLD MINERAL RESOURCE ESTIMATES

  The Cipoeiro Deposit within the CentroGold Project consists of two separate zones; the Contact Zone and the Blanket Zone, for which a maiden JORC 2012 inferred category mineral resource estimate was reported, totalling over 1.2m oounces of gold at an average grade of 2.0 g/t.

  Re-classification of this into the higher confidence indicated category under JORC (2012) is now possible following the completion of a detailed QAQC study and analysis of all historical drilling and assaying and a site visit by the Company's independent resource consultants, CSA Global Pty Ltd (CSA Global).

  Consequently, this re-classification has concluded:

  • Approximately 90% of resources at the geologically simpler Blanket Zone now fall in the indicated category.

  • Approximately 25% of resources at the geologically more complex Contact Zone now fall in the indicated category.

  • Indicated resources at the Contact Zone are present in an area of the deposit that has a more attractive grade, averaging 2.5 g/t gold.

  • Overall, approximately 65% of resource tonnes at Cipoeiro are now in the indicated category.

With the completion of work programmes required to reclassify existing JORC (2012) mineral resources, and more than 50% of resources classified in the indicated category, the Company is now able to complete a Scoping Study on the Project.

CSA Global have been commissioned to independently complete the scoping study and this is expected to be completed in May 2017.

Resolution of licencing issues continue to make satisfactory progress, with the relevant agencies involved in the process. Furthermore, the Company's representatives are actively engaging the local community and believe that there is support for any mine development plan that could have a positive socio-economic benefit for the region.

Tony Polglase

Managing Director

General Manager Corporate Affairs nbias@avancoresources.com

Tel: +61 497 888 227 / +44 (0)7771 450 679

ASX Listing Rule 5.8.1 Compliance

Gold mineralisation within the CentroGold project is considered to be typical of mesothermal vein- style, or orogenic-style gold mineralisation.

Two main litho-types are recognised at Cipoeiro, a tonalite and arkosic, fine-grained arenite. The host of the primary mineralisation at the Contact Zone is a coarse, equigranular intrusive of tonalitic composition. Rocks have been significantly affected by hydrothermal alteration. Gold mineralisation is closely associated with sulphide content within zones of quartz-sericite-pyrite alteration.

Mineralisation at the Contact Zone is typically sub-vertical, with flatter lying high-grade zones hosted in rafts of sediment within the tonalite intrusion host rock. The Mineral Resource has been completed using 3 grade domains (in 13 separate wireframes) using a nominal 0.4 g/t Au cut-off grade for wireframing.

The Blanket Zone is a shallow dipping (approximately 20-30 degrees), tabular body of medium grade gold mineralisation. For the purpose of the Mineral Resource estimate (MRE), the Blanket Zone has been interpreted as 9 separate wireframes.

Drilling supporting the Mineral Resource was predominantly diamond core drilling (DD) with minor Reverse Circulation (RC). The Cipoeiro deposit database (covering the Blanket and Contact Zones) includes 324 drill holes for 50,377m of drilling, made up of 68 RC holes (7,143m) and 256 DD holes (43,234m). The Contact Zone Mineral Resource is based on assay data from 113 DD holes and 26 RC holes. All drilling within the resource area was included in the MRE.

Drilling at the Contact Zone has been angled to the to achieve the most representative intersections through mineralisation.

Drilling at the Blanket Zone was undertaken at a range of angles due to the variable dip of the mineralisation, varying from vertical to -50° to the northwest.

DD core was typically continuously sampled at 1m intervals from the collar to the end of hole. Where required by changes in lithology, mineralisation or alteration, core samples may be shorter or longer than the typical 1m. Samples in the database have a minimum core length of 20cm and a maximum core length of 2m. Core was cut into half with one half sent for analysis and the other half stored in the core library at the project site.

RC cuttings were continuously sampled at 1m intervals from the collar to the end of each drill hole. The sample material was transported to the field sample preparation facility where it was dried and then split by cone-and-quartering methods.

Drill samples were crushed to minus 10 mesh; then a 2kg split was pulverised to a nominal 90% passing 150 mesh, using a ring pulveriser. An assay split of 250g was collected from the pulp for a 50g fire assay digestion, and atomic absorption (AA) determination for gold. Results greater than 10.0g/t Au were re-assayed with a gravity finish. The analysis is considered total and appropriate.

Assay results (with focus on high grade intersections) have been re-assayed and validated in several phases of independent reviews (2004 and 2009, unpublished) on historic work carried out when the property changed hands.

The Contact Zone MRE uses a Surpac block model with parent cells of 10m E by 20m N by 10m RL. No sub-celling was employed, instead a proportion figure was assigned to each block based on its proportional inclusion within mineralised wireframes. For the Blanket Zone MRE, a Surpac block model with parent cells of 20m E by 20m N by 5m RL, and sub-celling to 5m E by 5m N by 1.25m RL was constructed.

Gold grades for the main mineralised zones were interpolated using ordinary kriging. Samples were composited to 1m intervals based on assessment of the raw drill hole sample intervals. High grade cuts ranging from 15.0g/t to 40g/t Au for the Contacts Zone MRE, and high grade cuts ranging from 5.0g/t to 28g/t Au for the Blanket Zone MRE, were applied to the mineralisation domains and following statistical analysis.

The project database contained results for 230 bulk density measurements from the Cipoeiro deposit (Blanket and Contact Zones). Measurements were taken on drill core using the water immersion method. Fixed density values were assigned into the block model for each regolith and lithological unit, setting colluvium and oxide to 1.53t/m3, transitional material to 2.3t/m3, fresh arkose waste to 2.7t/m3, fresh tonalite waste to 2.8t/m3 and fresh sulphide mineralisation to 2.72t/m3.

The resource model was validated prior to final reporting.

In the Contact Zone MRE, wireframes were generated using a nominal 0.4g/t cut-off grade and a minimum down hole width of 2m, while for the Blanket Zone MRE wireframes were generated using a nominal 0.5g/t cut-off grade and a minimum down hole width of 3m. The Mineral Resource is reported using a 1g/t cut-off which approximates a conservative cut-off grade used for potential open pit mining.

Mineral Resource have been classified in the Indicated and Inferred categories, taking into account the level of geological understanding, quality of samples, density data, drill hole spacing, historical nature of the drilling, and sampling and assaying processes.

Previous mining studies have shown that both the Contact Zone and Blanket Zone could be economically exploited by open cut mining methods at the reported average model grade. Open pit mining is considered as the appropriate method for future studies.

Metallurgical amenability was based on comprehensive metallurgical test work, completed on the CentroGold Project as part of the 2011 TechnoMine Feasibility Study. Extensive metallurgical testwork was also completed in older studies. Testwork included preliminary, detailed and final metallurgical testwork, and covers several alternative approaches, including bulk cyanidation, froth flotation and heap leaching.