S2 Resources Ltd. advised that it has completed nine holes of the ten hole diamond drilling program testing six electromagnetic (EM) conductors and four geological targets at its Polar Bear nickel project where the Company has 100% of the nickel rights. This program, concentrated in a six kilometre long corridor containing approximately 15 strike kilometres of folded and structurally repeated ultramafics, has confirmed the presenceof significant accumulations of prospective ultramafic stratigraphy ­ namely high magnesium cumulate channel facies ultramafics - with frequent occurrences of trace to disseminated sulphide mineralisation as summarised below. Trace sulphide is defined by sulphide minerals comprising up to 2% of the rock, and disseminated sulphide is defined by sulphide minerals comprising 2-10% of the rock.

The sulphide minerals are logged as a variable mix of pyrrhotite (iron sulphide) and pentlandite (nickel sulphide). Five holes (50% of holes drilled) intersected intervals of trace to disseminated sulphide mineralisation within and at the base of thick channelised ultramafic sequences Two holes appear to have intersected the target horizon, which is the basal contact of the ultramafic, at the depths predicted by surface EM without intersecting conductive rocks that would explain the EM anomalies, suggesting that these holes may have narrowly missed the actual position of the conductors and will require down hole electromagnetic (DHEM) surveys to verify and resolve the position of these conductors to guide follow up drilling Two holes intersected conductive black sulphidic shales at the downhole depth predicted by EM, so these conductors have been definitively tested but with a negative outcome Although no new zones of massive sulphide were intersected in this program, the abundance of thick, high magnesium, channelised ultramafics with the frequent occurrence of trace to disseminated sulphide mineralisation is considered encouraging, attesting to the fertility of these rocks and the potential for the presence of massive nickel sulphide accumulations. The intervals of trace to disseminated sulphides described in this release are based on visual logging only and are described as a fine grained mix of pyrrhotite (iron sulphide) and pentlandite (nickel sulphide).

The actual grade and width of these intervals is unknown and cannot be estimated until laboratory analyses have been completed. It is important to note that visual estimates of sulphide mineralisation are qualitative not quantitative, should not be considered a proxy or substitute for laboratory analysis, and should not be relied on to draw conclusions relating to potential economic value or in making investment decisions. It is anticipated that a full set of definitive laboratory analyses will be available by late March.

Hole SPBD0370, drilled to test conductor PBC22-1 located approximately one kilometre east of the Halls Knoll prospect, passed through a thick (145 metre) sequence of high magnesium channel facies cumulate ultramafics and intersected the target horizon (the basal ultramafic contact) at a depth of 319 metres. This is within 10 metres in a downhole sense of the modelled position of the surface EM conductor. The lower 12 metres of the ultramafic, immediately above the basal contact, contains finely disseminated sulphides which are interpreted to be the down dip continuation of the anomalous nickel and copper intersected in previous aircore drilling (8 metres at 0.32% Ni and 0.03% Cu from 4 metres in SPBA3578, refer to S2 ASX Quarterly Report of 19th October 2015).

This confirms that the ultramafic contains nickel sulphides at this location and indicates that these sulphides persist over a significant dip extent of at least 280 metres and over an unknown strike extent. Importantly, the proximity of the basal contact with the modelled depth of the conductor, the presence of disseminated sulphides in the lowermost 12 metres of the ultramafic at this point, and the lack of any conductive rocks capable of explaining the conductor, suggest that the drill hole may have missed the target and that the surface conductor may be located nearby. A down hole electromagnetic (DHEM) survey will be required to provide better spatial constraint on any such conductor, and to guide a follow up drill hole if warranted.

Hole SPBD0371 targeting conductor PBC22-2a, a poorly constrained conductor located on the southern extension of the Halls Knoll ultramafic trend, passed through a thick sequence of basalt and intersected the target horizon (in this case the overturned basal contact of the high magnesium channel facies ultramafic) at a depth of 436 metres. This contact is interpreted to represent the structurally inverted basal contact of the same ultramafic package that hosts the Halls Knoll mineralisation to the north and conductor PBC22-1 ­ the potential near-miss in drill hole. SPBD0370.