December 2015 Quarterly Activities Report

Transcription

1 December 2015 Quarterly Activities Report Musgrave Minerals Ltd is an Australian focused gold and base metal exploration company. Musgrave plans to grow through the discovery and development of gold and base metal resources within Australia. ASX Code: MGV Issued Shares: 125M Cash Balance: $2.6M ABN: Directors Graham Ascough Robert Waugh Kelly Ross John Percival Top shareholders Silver Lake Resources Ltd Mithril Resources Ltd Independence Group NL ABN AMRO Clearing Sydney Nominees Barrick (Australia Pacific) Ltd Highlights Cue Project Musgrave secures advanced gold and copper project through a Farm In and Joint Venture Agreement with Silver Lake Resources Limited on the Cue Project Cue hosts the Moyagee and Hollandaire gold and copper Mineral Resources and Reserves in the Murchison Goldfield of Western Australia The project delivers on the Company s previously announced strategy to acquire an advanced stage project within Australia High priority drill ready targets to be tested in early February Airborne geophysical survey and ground geochemical surveys underway Head Office 28 Richardson Street West Perth, 6005 Western Australia T: +61 (8) F: +61 (8) info@musgraveminerals.com.au Mamba Project Aircore drilling intersected favourable mafic host rocks for nickel copper sulphide mineralisation 1

2 Introduction Musgrave Minerals Ltd ( Musgrave or the Company ) (ASX:MGV) is an Australian gold and base metal exploration company focused on growth through the discovery and development of gold and base metal resources within Australia. Quarterly Activities Report for the period ended 31 December 2015 The Company has recently entered a Farm In and Joint Venture Agreement on the Cue Project where it will look to advance targets through discovery and extensional drilling to define sufficient resources to underpin a profitable near term development scenario. The project is in a well endowed gold district and an emerging, under explored Figure 1: Musgrave Minerals Project Location Map base metal province with significant upside in both gold and copper. Musgrave also has projects in the Fraser Range region of Western Australia and the Musgrave Geological Province and Southern Gawler Craton regions of South Australia (Figure 1). Corporate During the period, the Company progressed exploration as summarised in the Exploration Activities section of this report. At the end of the December 2015 quarter, the Company was well resourced to explore its project portfolio with $2.6 million in cash. Musgrave issued Silver Lake Resources Limited 4,032,258 fully paid ordinary shares as consideration in relation to the Cue Project Farm In and Joint Venture Agreement on 4 December The shares are in voluntary escrow for 12 months. Musgrave now has 125,032,258 shares on issue. The Company is continuing its research and development initiatives in the regions in which it operates with active programs covering multiple projects. Musgrave Minerals is continuing to assess options to focus funding on its key projects through the divestment of non core projects. Exploration Activities Exploration for the quarter focused on drilling of nickel copper and gold targets at the Mamba Project in Western Australia and the assessment and planning for the commencement of field activities at the new Cue Project Joint Venture. Murchison Cue Project Musgrave Minerals Ltd earning up to 80% Musgrave Minerals Ltd entered into a Farm In and Joint Venture Agreement with Silver Lake Resources Limited ( Silver Lake ) (ASX: SLR) to earn up to an 80% interest in the Cue Project (previously part of SLR s Murchison Operation) consisting of the Moyagee Gold and Hollandaire Copper Projects ( Project ) in the highly prospective Murchison province of Western Australia (Figure 2) (see MGV ASX announcement 25 November 2015: Musgrave Secures Advanced Gold and Copper Project ). 2

3 Quarterly Activities Report for the period ended 31 December 2015 The Project hosts the Moyagee and Hollandaire Mineral Resources and Reserves (Table 1) in the Murchison goldfieldofwesternaustralia: o o o o 1.9Mt@2.0Au(126,900ozcontainedAu)inResourcesatMoyagee*, 0.7Mt@1.6Au(34,300ozcontainedAu)inResourcesatHollandaireandRapier*, 2.0Mt@1.9%Cu(38,800tcontainedCu)inResourcesatHollandaire*,and 0.4Mt@3.3%Cu(14,700tcontainedCu)inReservesatHollandaire*. *Note:GoldandCopperresourcesareestimatedbySilverLakeandreportedinSLRASXAnnouncement Mineral ResourcesandReservesUpdate,28August2015(referTable1). Musgrave will focus on a combination of extensional drilling and new target testing to build the resource base while continuing to defineapipelineoftargetsforfuturedrilling. The Company has commenced a Geotech Versatile Time Domain Electromagnetic ( VTEM )geophysicalsurveyoverthebroader Hollandaireprojectarea(Figure2)toidentify bedrock conductors that may be associated with new mineralisation. The survey is expected to take approximately 7 days to complete with preliminary data available in late January and final products available in eightweeks. To complement the new VTEM survey, soil geochemical and surface rock chip sampling has commenced along with geological mappinginselectedprospectiveareas. An initial reverse circulation ( RC ) drill program is currently being planned and is expected to commence in early February. Approximately10drillholesfor1,000metres will be drilled to test a combination of extensional positions to existing resources and new targets for both gold and copper mineralisation. Figure2:CueprojectlocationplancomprisingHollandaire&MoyageeProjects OverviewofCueProject HollandaireCopperProjectArea TheHollandaireCopperProjectwasdiscoveredbySilverLakein2011andhostsaJORC(2004)compliantMineral Resourceof2.0Mt@1.9%Cufor38,800tofcontainedcopper,2.7Mt@5.8Agforapproximately495,000oz containedsilverand0.52mt@1.35aufor22,500ozcontainedgold(refertable1orslrasxannouncement 28August2015: MineralResources Reserves August2015 ). The Hollandaire and Hollandaire West deposits are near surface (~50 metres) tabular stratabound volcanic hosted massive sulphide deposits ( VMS ). The mineralisation is likely to be amenable to open pit mining methods. The deposit is predominantly massive sulphide mineralisation averaging 10 metres in thickness and plungingtothesouth west.drillingtodateindicatesthemineralisationisopentothesouth westandatdepth (Figure3).RCdrillingisplannedtoinitiallytestthedownplungeextensionofHollandaireWest. HistoricaldrillintersectionsatHollandaireinclude(referSLRASXannouncementdated10November2011: High CopperDiscoveryatHollandaire ): 3

4 Quarterly Activities Report for the period ended 31 December % Cu, 2.0 Au & 29.0 Ag from 61 metres (drill hole 11HOD009) 7.8% Cu, 1.0 Au & 20.1 Ag from 109 metres (drill hole 11HOD0039) Figure 3: Long section of the Hollandaire and Hollandaire West mineralisation and down plunge targets. Mineralisation shells are shown on the image with an initial proposed drill hole Moyagee Gold Project Area The Moyagee Project hosts a combined JORC (2012) and JORC (2004) compliant Mineral Resource of 2.0 Au for 126,900oz contained gold within four separate deposits; Lena, Leviticus, Numbers and Break of Day (refer Table 1 or SLR ASX announcement 28 August 2015: Mineral Resources Reserves August 2015 ). Significant gold targets remain with extensional potential at Break of Day (Figure 4), Leviticus and the undrilled Vostock target. RC drilling to test the potential of these targets will commence in early February. Figure 4: Cross section of Break of Day gold mineralisation and proposed drill hole. Refer MGV ASX announcement 13 January 2015 announcement: Cue Project Airborne Geophysical Survey Commences for drill hole details 4

5 Quarterly Activities Report for the period ended 31 December 2015 FraserRange MambaProject E28/2405(100%MusgraveMineralsLtd) TheMambaNickel CopperProjectisinthesamebeltastheworldclassNova Bollingernickel coppersulphide discoveriesofindependencegroupnl(siriusresourcesnl)insouth easternwesternaustralia.thetenementis locatedonly5kmfromthetransaustralianraillineaccesscorridor(figure5). Following a detailed gravity survey Musgrave drill tested six nickel copper targets and three gold targets with aircoredrillinginnovember2015(figure6). Atotalof56aircoreholesfor2,185metreswerecompletedwithanaveragedrillholedepthof39metres.The drilling was focused on discrete target areas and was designed to penetrate the shallow cover and extend through the weathered zone into fresh bedrock with the objective of providing insights into the subsurface geology. The drilling intersected favourable mafic host rocks for nickel copper sulphide mineralisation but did notreturnanyassayresultsofsignificance(seemgvasxannouncement4december2015: ProjectsUpdate ). TheCompanyiscurrentlyevaluatingtheseresultstodeterminethenextstepsfortheproject. Figure6:Locationofaircoredrillholesongravity(colour)and magnetic(greyscale)atmamba Figure5:MambaProjectLocation SouthernGawlerProjects CorunnaProject EL5497(100%MusgraveMineralsLtd) TheCorunnaProject(Figure1)isintheemergingepithermalporphyryprovinceoftheSouthernGawlerCraton ofsouthaustralia.nofieldactivitywasundertakenduringthequarter. 5

6 Musgrave Region Projects Deering Hills, Mimili and Eunyarinna Projects Quarterly Activities Report for the period ended 31 December 2015 EL5172, EL5173, EL5317, EL5175 and EL4850 (100% Musgrave Minerals Ltd) The Deering Hills and Mimili Projects are located in the east of the Musgrave geological province in far northwest of South Australia (Figure 1). The Company has continued to rationalise it s exploration holdings in the Musgrave region and during the quarter withdrew from the Musgrave Block Farm In and Joint Venture agreement with Pitjantjatjara Mining Company Pty Limited and Zeil No.1 Pty Limited (see ASX announcement 7 October 2015: Withdrawal from PMC Zeil JV ). The Company now holds five granted exploration licences and 15 exploration licence applications covering more than 22,000 km 2. Drill site and track rehabilitation was completed during the quarter. Upcoming Activity During the March 2016 quarter, Musgrave Minerals is planning the following activities: Airborne VTEM and surface geochemical surveys with extensional RC drilling of key gold and copper targets at the Cue Project, Murchison. Notes Specific December 2015 Quarter ASX Announcements Additional details including JORC 2012 reporting tables, where applicable, can be found in the following announcements lodged with the ASX during the quarter: 07/10/2015 Withdrawal from PMC Zeil JV 19/10/2015 September 2015 Quarterly Activities and Cash flow Report 29/10/2015 AGM Chairman s Address 29/10/2015 AGM Presentation by Managing Director 29/10/2015 Results of Meeting 29/10/2015 Constitution 30/10/2015 Drilling Commences at Mamba 25/11/2015 Musgrave Secures Advanced Gold and Copper Project 02/12/2015 BRR Interview Musgrave Secures Advanced Gold and Copper Project 04/12/2015 Projects Update 04/12/2015 Appendix 3B & Secondary Trading Notice 07/12/2015 Becoming a Substantial Holder from SLR 13/01/2016 Cue Project Airborne Geophysical Survey Underway For enquiries contact: Rob Waugh Managing Director Musgrave Minerals Ltd Info@musgraveminerals.com.au

7 Quarterly Activities Report for the period ended 31 December 2015 About Musgrave Minerals Musgrave Minerals Limited is an active Australian gold and base metals explorer. The Cue Project in the Murchison region of Western Australia is an advanced gold and copper project. Musgrave s focus is to increase gold and copper resources through discovery and extensional drilling to underpin studies that will demonstrate a viable path to development in the near term. Musgrave also holds the highly prospective Mamba NiCu sulphide project in the Fraser Range of Western Australia and an active epithermal AgPbZnCu project in the prospective silver and base metals province of the southern Gawler Craton of South Australia and a large exploration footprint in the Musgrave Province in South Australia. Musgrave has a powerful shareholder base with four mining and exploration companies currently participating as cornerstone investors. Competent Person s Statement Exploration Results The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled and/or thoroughly reviewed by Mr Robert Waugh, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM) and a Member of the Australian Institute of Geoscientists (AIG). Mr Waugh is Managing Director and a fulltime employee of Musgrave Minerals Ltd. Mr Waugh has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Reserves. Mr Waugh consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Competent Person s Statement Mineral Resources and Reserves The information in this report that relates to Mineral Resources or Reserves that relate to the Hollandaire deposit based on information compiled by Mr Matthew Karl, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Karl is a fulltime employee of Silver Lake Resources Limited. Mr Karl has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Reserves. Mr Karl consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. All other information in this report that relates to Mineral Resources or Reserves is based on information compiled and/or thoroughly reviewed by Mr Antony Shepherd, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Shepherd is a fulltime employee of Silver Lake Resources Limited. Mr Shepherd has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Reserves. Mr Shepherd consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 7

8 Quarterly Activities Report for the period ended 31 December 2015 Table 1. Summary of JORC Resources and Reserves for the Cue Project Resources Gold Mineral Resources as at 30 June June 2015 Indicated Resources Inferred Resources Resources Deposit Au oz. Au Au oz. Au Au oz. Au Moyagee Lena , Leviticus Numbers Break of Day Moyagee , , Eelya Hollandaire Rapier South Eelya Copper Mineral Resources as at 30 June June 2015 Indicated Resources Inferred Resources Resources Deposit Tonnes Tonnes Tonnes % Cu % Cu % Cu Hollandaire Copper 1, , Silver Mineral Resources as at 30 June June 2015 Indicated Resources Inferred Resources Resources Deposit oz. Ag oz. Ag oz. Ag Hollandaire Silver 1, Reserves Copper Mineral Reserves as at 30 June June 2015 Proven Reserves Probable Reserves Reserves Deposit % Tonnes Cu % Tonnes Cu % Tonnes Cu Hollandaire Copper Silver Mineral Reserves as at 30 June June 2015 Proven Reserves Probable Reserves Reserves Deposit oz. Ag oz. Ag oz. Ag Hollandaire Silver Notes to Table 1: The Lena Mineral Resource at Moyagee is produced in accordance with the 2012 Edition of the Australian Code of Reporting of Mineral Resources and Reserves (JORC 2012). The remaining Mineral Resources and Reserve estimates were first prepared and disclosed in accordance with the 2004 Edition of the Australian Code of Reporting of Mineral Resources and Reserves (JORC 2004) and have not have not been updated since to comply with JORC 2012 on the basis that the information has not materially changed since it was last reported. For further details refer to SLR ASX announcement 28 August 2015: Mineral Resources Reserves August

9 Quarterly Activities Report for the period ended 31 December 2015 Tenement information in accordance with Listing Rule Tenement ID Previous Tenement ID Project State Status MGV Interest at start of quarter MGV Interest at end of quarter EL5317 Musgrave SA Granted 100% 100% EL4850 Musgrave SA Granted 100% 100% EL5172 EL3941 Musgrave SA Granted 100% 100% EL5173 EL3942 Musgrave SA Granted 100% 100% EL5175 EL3955 Musgrave SA Granted 100% 100% EL5403 Toondulya Bluff SA Surrendered 100% 0% EL5497 Corunna SA Granted 100% 100% E28/2405 Mamba WA Granted 100% 100% E20/606 Cue WA Granted 0% 0% (MGV earning up to 80%) E20/608 Cue WA Granted 0% 0% (MGV earning up to 80%) E20/630 Cue WA Granted 0% 0% (MGV earning up to 72%) E20/616 Cue WA Granted 0% 0% (MGV earning up to 80%) E20/836 Cue WA Granted 0% 0% (MGV earning up to 80%) E21/144 Cue WA Granted 0% 0% (MGV earning up to 80%) E20/629 Cue WA Granted 0% 0% (MGV earning up to 80%) E20/698 Cue WA Granted 0% 0% (MGV earning up to 80%) E20/699 Cue WA Granted 0% 0% (MGV earning up to 80%) E20/700 Cue WA Granted 0% 0% (MGV earning up to 80%) E20/779 Cue WA Granted 0% 0% (MGV earning up to 80%) E21/129 Cue WA Granted 0% 0% (MGV earning up to 80%) E21/163 Cue WA Granted 0% 0% (MGV earning up to 80%) E21/177 Cue WA Granted 0% 0% (MGV earning up to 80%) E58/335 Cue WA Granted 0% 0% (MGV earning up to 80%) M20/225 Cue WA Granted 0% 0% (MGV earning up to 80%) M20/245 Cue WA Granted 0% 0% (MGV earning up to 80%) M20/277 Cue WA Granted 0% 0% (MGV earning up to 80%) M21/106 Cue WA Granted 0% 0% (MGV earning up to 80%) M21/107 Cue WA Granted 0% 0% (MGV earning up to 80%) M58/224 Cue WA Granted 0% 0% (MGV earning up to 80%) M58/225 Cue WA Granted 0% 0% (MGV earning up to 80%) P20/2038 Cue WA Granted 0% 0% (MGV earning up to 80%) P20/2039 Cue WA Granted 0% 0% (MGV earning up to 80%) P20/2040 Cue WA Granted 0% 0% (MGV earning up to 80%) P20/2041 Cue WA Granted 0% 0% (MGV earning up to 80%) P20/2042 Cue WA Granted 0% 0% (MGV earning up to 80%) P20/2094 Cue WA Granted 0% 0% (MGV earning up to 80%) P20/2219 Cue WA Granted 0% 0% (MGV earning up to 80%) P21/651 Cue WA Granted 0% 0% (MGV earning up to 80%) P21/654 Cue WA Granted 0% 0% (MGV earning up to 80%) P21/656 Cue WA Granted 0% 0% (MGV earning up to 80%) P21/657 Cue WA Granted 0% 0% (MGV earning up to 80%) P21/665 Cue WA Granted 0% 0% (MGV earning up to 80%) P58/1372 Cue WA Granted 0% 0% (MGV earning up to 80%) P58/1373 Cue WA Granted 0% 0% (MGV earning up to 80%) P58/1374 Cue WA Granted 0% 0% (MGV earning up to 80%) P58/1375 Cue WA Granted 0% 0% (MGV earning up to 80%) L20/57 Cue WA Granted 0% 0% (MGV earning up to 80%) 9

10 Quarterly Activities Report for the period ended 31 December 2015 JORC TABLE 1 Section 1 Sampling Techniques and Data Criteria Explanation Commentary Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. Sampling techniques Drilling techniques Drill sample recovery Logging Sub sampling techniques and sample preparation Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. Drill type (e.g. core, reverse circulation, open hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, facesampling bit or other type, whether core is oriented and if so, by what method, etc). Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. The total length and percentage of the relevant intersections logged. If core, whether cut or sawn and whether quarter, half or all core taken. If non core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub sampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second half sampling. Whether sample sizes are appropriate to the grain size of the material being sampled. Sampling is undertaken using standard industry practices including the use of duplicates and standards at regular intervals. Reverse circulation (RC) and aircore samples were collected at 1m intervals with samples riffle split to 3 5kg in weight. Diamond core sampling was undertaken on geological intervals. Soil sample co ordinates are in UTM grid (GDA94 Z50) and have been either surveyed or measured by handheld GPS with an accuracy of >±5 metres. A combination of aircore, RC and diamond drilling has been used by multiple companies. Diamond core recoveries are logged and recorded in the database. RC bulk sample weights are observed and noted. Diamond core is reconstructed into continuous intervals on angle iron racks for orientation and reconciliation against core block markers. Rod and metre counts are routinely carried out by the driller. No significant sample loss or bias has been noted. Some sample loss identified in a few selected drill holes. All sample loss is recorded in database. All geological, structural and alteration related observations are stored in the database. Logging of lithology, structure, alteration, mineralisation, colour and other features of core or RC chips is undertaken on a routine 1m basis. Photography of diamond core is undertaken prior to cutting and sampling. All drill holes are logged in full on completion. Diamond core is cut and sampled on geological intervals. A diamond core saw is used to cut the core and selected half core intervals are submitted for analysis. RC and aircore samples are routinely riffle split if dry. Drill sample preparation and base metal and precious metal analysis is undertaken by a registered laboratory. Sample preparation by dry pulverisation to 90% passing 75 micron. Field QC procedures involve the use of certified reference standards, duplicates and blanks at appropriate intervals. Sampling is carried out using standard protocols and QAQC procedures as per industry best practice. Duplicate samples are inserted and routinely checked against originals. Sample sizes are considered appropriate for grain size of sample material. Sample collected from full width of sample interval to ensure it is representative of samples lithology. 10

11 Quarterly Activities Report for the period ended 31 December 2015 Quality of assay data and laboratory tests The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. Drill sample analysis is undertaken by a registered laboratory, multi element analysis by acid digest and ICP OES and ICP MS to acceptable detection limits. Standard 40g Fire Assay analysis is undertaken for gold. Verification of sampling and assaying Location of data points Data spacing and distribution Orientation of data in relation to geological structure For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established. The verification of significant intersections by either independent or alternative company personnel. The use of twinned holes. Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Discuss any adjustment to assay data. Accuracy and quality of surveys used to locate drill holes (collar and down hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Internal certified laboratory QAQC is undertaken including check samples, blanks and internal standards. No geophysical tools were used to estimate mineral or element percentages. Standards, duplicates, blanks, and repeats are utilised as a standard procedure. Certified reference materials that are relevant to the type and style of mineralisation targeted are inserted at regular intervals. Samples are verified by the geologist before importing into the main database (Datashed). Few twin holes have been drilled. Primary data is collected using a standard set of templates. Geological sample logging is undertaken on one metre intervals for all RC drilling and geological intervals for diamond drilling with colour, structure, alteration and lithology recorded for each interval. Data is verified before loading to the database. Geological logging of all samples is undertaken. No adjustments or calibrations are made to any assay data reported. All maps and locations are in UTM grid (GDA94 Z50) and have been surveyed or measured by hand held GPS with an accuracy of >±5 metres. Down hole surveys are undertaken at nominal 30m intervals using a digital down hole camera and spear. Specification of the grid system used. Drill hole co ordinates are in UTM grid (GDA94 Z50) and commonly plotted using local grid reference. Quality and adequacy of topographic control. Drill hole collars and RL s are surveyed by qualified surveyors in most instances. Data spacing for reporting of Exploration Results. Variable drill hole spacings are used to adequately test targets. Whether the data spacing and distribution is sufficient to establish Existing drill hole spacings are variable and at Lena vary the degree of geological and grade continuity appropriate for the from 20m x 20m to 40m x 40m and to 80m x 80m at Mineral Resource and Reserve estimation procedure(s) and depth. The nominal drill hole spacing at Hollandaire is classifications applied. 25m x 25m. These spacings identify sufficient continuity to support the definition of Mineral Resource and Reserves under the classification applied under the 2012 and 2014 JORC Code. Whether sample compositing has been applied. No sample compositing has been undertaken within ore zones. Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. Drilling is designed to cross the mineralisation as close to perpendicular as possible. Most drill holes are designed at a dip of approximately 60 degrees, however, the Lena mineralisation dips at ~85 degrees and the Hollandaire mineralisation dips at ~35 degrees. No orientation based sampling bias is known at this time. Sample security The measures taken to ensure sample security. Chain of custody is managed by internal staff. Drill samples are stored on site and transported by a licenced reputable transport company to a registered laboratory in Perth. When at the laboratory samples are stored in a locked yard before being processed and tracked through preparation and analysis. Audits or reviews The results of any audits or reviews of sampling techniques and data. No external audits or reviews of modelling techniques and data have been undertaken. 11

12 Mineral tenement and land tenure status Quarterly Activities Report for the period ended 31 December 2015 Section 2 Reporting of Exploration Results Criteria Explanation Commentary Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The primary tenement holder is Silver Lake Resources Ltd and Cue Minerals Pty Ltd (a wholly owned subsidiary of Silver Lake Resources Ltd). Musgrave minerals commenced a Farm In and Joint Venture on the project on 24 November 2015 (see MGV ASX announcement 25 November 2015: Musgrave Secures Advanced Gold and Copper Project. All drilling and soil sampling is within the Cue project tenements (Lena is M21/106 and Hollandaire E20/699) as outlined in the Farm In and Joint Venture Agreement. The tenements are subject to standard Native Title heritage agreements and state royalties. Third party royalties are present on some individual tenements. The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. The tenements are in good standing and no known impediments exist. Exploration done by other parties Acknowledgment and appraisal of exploration by other parties. Historical drilling, soil sampling and geophysical surveys have been undertaken in different areas on the tenements by third parties. Geology Deposit type, geological setting and style of mineralisation. Geology comprises typical Archaean Yilgarn greenstone belt lithologies and granitic intrusives. Two main styles of mineralisation are present, typical Yilgarn Archaean lode gold and volcanic massive sulphide (VMS) base metal and gold mineralisation. Drill hole Information Data aggregation methods Relationship between mineralisation widths and intercept lengths Diagrams Balanced reporting Other substantive exploration data Further work A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: easting and northing of the drill hole collar elevation or RL (Reduced Level elevation above sea level in metres) of the drill hole collar dip and azimuth of the hole down hole length and interception depth hole length. In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cutoff grades are usually Material and should be stated. Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearly stated. These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. down hole length, true width not known ). Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views. Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large scale step out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive. All drill hole information has previously been reported. No new exploration data is reported in this release. No new exploration results are reported in this release. No new exploration data is reported in this release. No new exploration data is reported in this release. No new exploration data is reported in this release. Some diagrams referencing historical data can be found in the body of this report. No new exploration data is reported in this release. No new exploration data is reported in this release. All material results from geochemical and geophysical surveys and drilling related to these prospects has been reported or disclosed previously. A range of exploration techniques will be considered to progress exploration including additional drilling. Refer to figures in the body of this announcement. 12

13 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Appendix 5B Rule 5.5 Mining exploration entity and oil and gas exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name of entity MUSGRAVE MINERALS LTD ABN Quarter ended ( current quarter ) December 2015 Consolidated statement of cash flows Cash flows related to operating activities 1.1 Receipts from product sales and related debtors Current quarter $A 000 Year to date (6 months) $A Payments for (a) exploration & evaluation (b) development (c) production (d) administration (259) (189) (775) (417) 1.3 Dividends received 1.4 Interest and other items of a similar nature 3 39 received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows (445) (1,153) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows operating and investing cash flows (carried forward) (445) (1,148) (2) 7 + See chapter 19 for defined terms. 01/05/2013 Appendix 5B Page 1

14 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report 1.13 operating and investing cash flows (brought forward) (445) (1,148) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows Net increase (decrease) in cash held (445) (1,148) 1.20 Cash at beginning of quarter/year to date 3,034 3, Exchange rate adjustments to item Cash at end of quarter 2,589 2,589 Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities Current quarter $A' Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item Explanation necessary for an understanding of the transactions Directors fees, salary payments and superannuation. Noncash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows Issue of 4,032,258 fully paid ordinary shares to Silver Lake Resources Ltd in respect of the Cue Project Farmin and Joint Venture Agreement as outlined in the ASX announcement dated 25 November Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest + See chapter 19 for defined terms. 01/05/2013 Appendix 5B Page 2

15 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Financing facilities available Add notes as necessary for an understanding of the position. 3.1 Loan facilities 3.2 Credit standby arrangements Amount available $A 000 Amount used $A 000 Estimated cash outflows for next quarter 4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration $A Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter $A 000 Previous quarter $A Cash on hand and at bank 339 1, Deposits at call 2,250 1, Bank overdraft 5.4 Other (provide details) : cash at end of quarter (item 1.22) 2,589 3,034 Changes in interests in mining tenements and petroleum tenements 6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased Tenement reference and location Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter EL5403 (SA) Surrendered 100% + See chapter 19 for defined terms. 01/05/2013 Appendix 5B Page 3

16 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. number Number quoted Issue price per security (see note 3) (cents) 7.1 Preference + securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks Amount paid up per security (see note 3) (cents) 125,032, ,032,258 Fully Paid Fully Paid 4,032,258 4,032, Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options (description and conversion factor) 4,750,000 2,500,000 7,750, , , ,000 75, , Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) $ Deemed $ Exercise Price $0.36 $0.50 $0.25 $0.36 $0.25 $0.25 $0.25 $0.12 Expiry Date 17 Feb Feb Apr May Jan Mar Mar Mar See chapter 19 for defined terms. 01/05/2013 Appendix 5B Page 4

17 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5). 2 This statement does give a true and fair view of the matters disclosed. Sign here:... Date: 28 January 2016 (Director/Company Secretary) Print name: Patricia Farr Notes 1 The quarterly report provides a basis for informing the market how the entity s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2 The Nature of interest (items 6.1 and 6.2) includes options in respect of interests in mining tenements and petroleum tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement or petroleum tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. == == == == == + See chapter 19 for defined terms. 01/05/2013 Appendix 5B Page 5