Kingsgate Consolidated : Chile – Drill Results from District Exploration

ABN 42 000 837 472

27 February 2017

Manager

Company Announcements Office Australian Securities Exchange

Chile - Drill Results from District Exploration

Kingsgate Consolidated (ASX:KCN) ("Kingsgate" or the "Company) is pleased to provide an update on exploration activities at its 100% owned Nueva Esperanza Precious Metals Project in Chile. ("Nueva") Nueva is a feasibility stage development project with a resource base of approximately 1.9 million ounces gold equivalent1. Kingsgate is moving forward with feasibility and permitting activities in 2017 and in parallel is pursuing a systematic exploration program covering the highly prospective 45km2 alteration footprint (See Figure 1).

Two emerging exploration targets of interest are Huantajaya and Carachitas, both of which highlight the potential for gold discoveries outside the existing resource envelopes.

Three diamond drill holes totalling 525.5 metres were completed in January 2017 testing the depth projection of outcropping zones of mineralised breccias. All three holes intercepted the targeted silicified and oxidised breccia at depth with the following intercepts:

• Hole KDD-1 intercepted 24.0 metres grading 1.81 g/t Au and 86.24 g/t Ag or 3.25 g/tAuEq602

  from 101 metres;

• Hole KDD-2 intercepted 11.0 metres grading 2.07 g/t Au and 57.03 g/t Ag or 3.02 g/tAuEq60

  from 153 metres; and,

• Hole KDD-3 intercepted 3.0 metres grading 3.33 g/t Au and 31.48 g/t Ag or 3.85 g/tAuEq60

  from 146 metres.

  Carachitas Target: Carachitas is located approximately 2.3 kilometres southeast of the Arqueros deposit (See Figure 3). The target footprint was significantly expanded in late 2016 by the innovative property-wide bedrock Air-Blast drilling campaign (~800 holes property-wide) undertaken by Kingsgate. This campaign returned a highly anomalous bedrock sample of 8.83 g/t Au and 27.90 g/t Ag located some 450 metres west of earlier scout-drilling.

  Ten shallow RC holes totalling 1,062.10 metres have now been completed between the anomalous Air-Blast sample and the earlier scout RC drilling. Results for the first, westernmost RC hole (KRC-23) have been received, and the highlights of which are noted below:

• Hole KRC-23 returned 10 metres grading 6.66 g/t Au and 31.81 g/t Ag or 7.13 g/tAuEq60 from 12 metres. (The interval is oxidised)

Carachitas was historically highlighted by limited RC scout-drilling in 2015, which returned an intercept of 38 metres grading 2.30 g/t Au and 22.0 g/t Ag (Hole ECCR-02) from a depth of 14 metres. (See ASX:KCN released titled "New Gold Discovery at Nueva Esperanza Project, Chile" dated 15 December 2015)

Results from the remaining nine RC holes are pending. Once all results have been received additional holes will be planned for the area.

Kingsgate has planned for a budget of ~US$5 million for exploration at Nueva during 2017.

Since mid-2016, the experienced Chile exploration team has stepped back from the three defined deposits that are the foundation for feasibility and focused on broader property-wide exploration. All historical exploration data in Kingsgate's possession has now been systematically compiled into one GIS database which is driving on-going drill-target generation.

The geological models being applied have evolved, with added exploration focus around the margins of large and barren dacitic flow-domes that occur in the district and elsewhere in the northern Maricunga. Exploration has now been prioritised around the peripheries of the numerous dacitic domes on the property, in particular in areas that present strong hydrothermal alteration and accompanying anomalous geochemistry.

The survey has highlighted a number of highly resistive features, consistent with silicic alteration, some of which remain untested by drilling to date.

The resource base of 1.9 million ounces of gold equivalent is broken down as follows: Measured - 0.08 Moz, Indicated - 1.46 Moz and Inferred - 0.33 Moz. (See ASX:KCN released titled "Kingsgate Mineral Resources and Ore Reserves 2016" dated 7 October 2016)

Rounding of figures may cause numbers to not add correctly. Nueva Esperanza silver equivalent: AgEq(g/t) = Ag(g/t) + Au(g/t) x 60. Gold Equivalent Ounces (GEO): AuEq(g/t) = Au(g/t) + Ag(g/t) ÷ 60. Calculated from metal prices of US$1,200/oz Au and US$19/oz Ag and metallurgical recoveries of 70% Au and 75% Ag, estimated from test work by Kingsgate. It is the Company's opinion that all elements included in the metal equivalents calculation have a reasonable potential to be recovered and sold. Although gold is not the dominant metal, gold equivalent values are reported to allow comparison with Kingsgate's other projects.

Figure 1: Nueva Esperanza target location map.

Figure 2: Huantajaya drill hole location map.

Huantajaya drill holes completed in January 2017.

Figure 3: Carachitas drill collar location map.

These materials include forward looking statements. Forward looking statements inherently involve subjective judgment & analysis & are subject to significant uncertainties, risks & contingencies, many of which are outside of the control of, & may be unknown to, the company. Actual results and developments may vary materially from that expressed in these materials. The types of uncertainties which are relevant to the company may include, but are not limited to, commodity prices, political uncertainty, changes to the regulatory framework which applies to the business of the company & general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements. Forward looking statements in these materials speak only at the date of issue, subject to any continuing obligations under applicable law or any relevant stock exchange.

In this report, information relating to Exploration Results at the Nueva Esperanza Gold Silver Project in Chile is based on information compiled by the following Competent Persons: Alistair Waddell, who is an employee of the Kingsgate Group. Alistair Waddell qualifies as a Competent Person as defined in the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the JORC Code, 2012 Edition) and is a Member of The Australasian Institute of Mining and Metallurgy. Alistair Waddell possesses relevant experience in relation to the mineralisation being reported herein as Exploration Results. Alistair Waddell has consented to the public reporting of these statements and the inclusion of the material in the form and context in which it appears.