HUN.L Regulatory News (HUN)

22 December 2014

Hunter Resources plc

("Hunter" or the "Company")

(AIM: HUN)

PROGRESS REPORT FROM THE COMPANY'S PAMPAMALI GOLD AND BASE METAL PROJECT IN PERU

UPDATE ON COMMUNITY RELATIONS

REVISED TERMS OF AGREEMENT WITH OWNER OF PAMPAMALI

NEW PROJECTS OFFERED AND UNDER REVIEW

The Company is pleased to announce the following update on Pampamali, its high-grade gold, silver and base metal project in Peru. Pampamali is Hunter's first project.

Pampamali

Pampamali consists of 36 veins identified from surface outcrops. The high-grade veins have mapped outcrops of between 100 and 2,000 metres in length, with widths ranging from 0.20 to over 3.00 metres. The Pampamali Project has 8 exploration concessions covering a total area of 3,500 hectares and is located in central Peru in the Department of Huancavelica, approximately 550 km by road from the city of Lima.

Recent Results from Exploration Programme

Sampling was undertaken in the southern portion of the concessions mainly around the Santa Domingo and Luz veins but elsewhere the programme was delayed while agreements with local communities were progressed.

Twenty eight assay results have been returned to date from rock chip sampling from the Luz/Liz vein and other veins in the area. Assay results from another 37 samples are awaited and a rock chip sampling programme currently underway is focusing on the Santa Domingo and the Luz veins in the first instance. This programme aims to confirm and extend the gold anomalies previously identified from the Buaneventura (Compañia de Mínas Buenaventura S.A.A., Peru's largest listed mining company) database as requiring follow up and of the extensions of the previously reported anomalies outlined from historical Buaneventura sampling.

Sample Results from Luz and surrounding area

Eighteen samples from veins around Luz returned a range of results peaking at 5.91 g/t Au although several samples returned lower values reflecting their position to the side of the main vein.

· The table below shows results collected from the Luz vein. Several returned anomalous to high values with the highest gold value being 5.91 g/t Au. This was supported by several other samples confirming the presence of high grade gold in this area although a number of other results were lower than expected. Silver values did not correlate with gold values but were anomalous in all of the Luz samples.

· Field observations show that Luz has a very sinuous character that incorporates large sections of the host rock. The Luz vein can widen up to 4 metres in width and in these sections has several branching's of the vein. The incorporated host rock takes up approximately 50% of the vein zone in these sections.

· Comparison of these sample locations to the earlier Buenaventura locations, shows that the majority of the Buenaventura samples were taken from an adit that was only partly accessible during Hunter's sampling programme due to flooding. To sample this adit to check the Buenaventura results, the standing water would have to be removed from the Luz working to provide access.

Nine samples were also taken in an area previously mapped as being under cover, north of an unnamed vein located to the north east of Luz. Small outcrops and sub-cropping veins were sampled and returned grades peaking at 6.39 g/t Au. This adds support to the belief that mineralised veins exist below cover and remain unmapped and untested.

Three wide spaced samples tested the area east of the Luz/Liz vein area with one sample taken returning 7.98 g/t Au and 27.4 g/t Ag (Sample 3541). This result warrants follow up as it suggests a possibly significant extension of a previously unremarked mineralised vein.

Sampling and Assaying Continues

In addition, further sampling has and is being undertaken on the Santa Domingo vein and on Luz/Liz extensions and surrounding areas. Assay results from sampling of the Santa Domingo vein are awaited but visual assessment confirms a well-defined mineralised vein structure. In addition there is a strong vein development >1m thick to the south that has not been mapped, nor apparently sampled and presents a good opportunity for further mineralisation.

Approximately 100 samples have been taken over the other areas and are being lodged for assay. Results are anticipated during January 2015.

Update on Community Relations

To commence the planned drilling program, the Company is required to lodge a DIA (Environmental Impact Assessment) application to seek approval from the relevant Government department. The DIA requirements include approvals from the relevant communities for access by the Company and its employees to land controlled by them.

From a legal perspective, there are four affected communities. However, in line with our policy of seeking to gain a consensus view from all local communities who might have an influence, there are others whose approval needs to be sought apart from the four. As with all new community engagements we stress the importance of obtaining the right social licence to work for the long term.

We have appointed an experienced Community Relations Officer who has already made very good progress. A meeting of all communities involved to consider the companies DIA application, including access approvals, was held on the 5 December 2014, but was adjourned without a decision being made until early in 2015. The Company is working to obtain the DIA approval as soon as possible, along with community approvals, to enable drilling to start immediately thereafter.

Revised Terms of Agreement with the Owner of Pampamali

We are also pleased to announce that we have negotiated improved terms to the Joint Venture agreement with the vendor of Pampamali (as described in detail in the Company's announcement of 9 June 2014) which will allow us to acquire 51% of the project for a lower price and sooner than anticipated.

The original deal would have seen us acquire a 20% interest within 12 months of re-listing for a payment of US$100,000, in addition to the US$40,000 already paid, following an expenditure of at least US$150,000 on exploration. This would have been followed by a further payment in year 2 of US$200,000 and an exploration commitment of US$500,000 to acquire an additional 31%.

We now have the right to acquire a 51% interest at any time, but no later than 12 months from the receipt of the DIA, for a payment of US$115,000 and the same commitment to spend US$150,000 on exploration, plus US$75,000 by way of tenement costs. The saving will be US$610,000.

We have exchanged letters on this revised transaction subject to final legal documentation.

Other Projects

Since re-Admission to AIM the Company has actively reviewed and considered involvement in other mining projects. These have primarily been in Peru. As the global mining sector is under pressure this has resulted in the Company being offered a large number of joint venture and acquisition opportunities. Most of these are for gold, silver and copper where a variable but usually material amount of exploration has already been completed.

The Company will continue to assess these opportunities as and when they arise with the objective of expanding its exploration projects in Peru and South America.

Simon Hunt, Executive Chairman of Hunter, said "We are progressing the application for the DIA that will allow the Company to conduct its planned drilling programme at Pampamali. The results of our initial sampling programme are encouraging with additional results from the current programme expected early in the New Year. Whilst later than expected we plan to commence drilling once the DIA is issued. The revised agreement with the vendor is an important improvement and could enable us to achieve a controlling position much earlier than anticipated."

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Andrew Richards BSc (Hons), DipEd MAusIMM MAIG MSEG GAICD, a Director of Hunter and a qualified geologist with over thirty years of experience in the mining industry, is the qualified person as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies, who has reviewed and approved the technical information contained in this announcement. Mr. Richards has also relied on primary information supplied by staff and third party consultants in carrying out his review."

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ENDS