september 2015 quarterly activities report...

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September 2015 Quarterly Activities Report

Musgrave Minerals Ltd is an Australia 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: 121M Cash Balance: $3.0M ABN: 12 143 890 671 Directors Graham Ascough Robert Waugh Kelly Ross John Percival Top shareholders Mithril Resources Ltd Independence Group NL ABM AMRO Clearing Sydney Nominees Barrick (Australia Pacific) Ltd Silver Lake Resources Ltd Head Office 28 Richardson Street West Perth, 6005 Western Australia T: +61 (8) 9324 1061 F: +61 (8) 9324 1014 [email protected] www.musgraveminerals.com.au

Highlights

Mamba Project

- Five priority nickel-copper targets

identified from recent gravity survey

- Three high priority gold targets identified

- Aircore drilling planned for November to

follow-up targets

- Anomalous copper and gold intersected in

RC drilling at M8

Corunna Project

- Highly elevated lead, zinc and silver

identified in aircore drilling over 300m

strike and open to north and south

- Results include: o 11m @ 1.0% Pb, 0.5% Zn, 4.2g/t Ag from 19m

o 6m @ 1.0% Pb, 0.2% Zn, 8.2g/t Ag from 14m



mailto:[email protected]

Quarterly Activities Report for the period ended 30 September 2015

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Introduction

Musgrave Minerals Ltd (ASX:MGV) is an Australia focused gold and base metal exploration company. Musgrave plans to grow through the discovery and development of gold and base metal resources within Australia.

The Company is currently focused on exploration in the Fraser Range region of Western Australia and the Musgrave Geological Province and Gawler Craton regions of South Australia (Figure 1).

Corporate

During the period, the Company spent $0.5 million on exploration activities as summarised in the Exploration Activities section of this report. At the end of the September 2015 quarter, the Company was well resourced to explore its Fraser Range, Musgrave and Gawler Craton projects with $3.0 million in cash.

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 new project opportunities within Australia for joint venture or acquisition.

Exploration Activities

Exploration for the quarter focused on the planning and implementation of field programs at the Mamba project in Western Australia and the assessment of recent encouraging results from the Corunna project in South Australia.

At Mamba in the Fraser Range, the Company completed RC drilling of the M8 electromagnetic target and a gravity survey over the entire tenement delineating eight new targets for drill testing.

At Corunna in the Southern Gawler Craton of South Australia, aircore drilling of six targets identified encouraging silver, lead and zinc anomalism over a strike extent of more than 300m.

Figure 1: Musgrave Minerals’ Project Location Map


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Figure 2: Mamba Project Location

Fraser Range

Mamba Project

E28/2405 (100% Musgrave Minerals Ltd)

The Mamba nickel-copper project is in the same belt as the world class Nova-Bollinger nickel-copper sulphide discoveries of Sirius Resources NL in south-eastern WA. The tenement is located only 5km from the Trans Australian rail line access corridor (Figure 2).

Musgrave completed a gravity survey over the entire tenement and following processing and integration of this data with the detailed aeromagnetic and ground electromagnetics (EM), five new priority nickel-copper targets and three priority gold targets have been identified at Mamba (Figure 3).

The nickel-copper targets correlate with interpreted intrusives that commonly reflect the more dense lithologies associated with the mafic-ultramafic host rocks to nickel-copper mineralisation in the district.

The new targets will be prioritised and tested through an aircore drilling program planned to commence early November 2015.

The recently completed reverse circulation (RC) drilling program at Mamba intersected anomalous copper, gold and palladium in assay results from the two drill holes at M8.

The drill program consisted of two reverse circulation holes totalling 806m to test the M8 electromagnetic bedrock conductor. The drill holes intersected a combination of stringer pyrrhotite and pyrite with minor chalcopyrite and graphite within a metasediment in a sequence of mafic and intermediate granulite. Anomalous copper, gold and palladium was returned in both RC drill holes. A best interval of 1m @ 730ppm Cu, 214ppb Au and 16ppb Pd from 363m was identified in MAMRC001 (see MGV ASX announcement 10 September 2015).

Figure 3: Ground EM Survey Areas (colour) on Detailed Aeromagnetic Data


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Southern Gawler Projects

Corunna Project

EL5497 (100% Musgrave Minerals Ltd)

The Corunna project (Figure 4) is in the emerging epithermal porphyry province of the Southern Gawler Craton which hosts the Menninnie Dam Zn-Pb-Ag deposit and the 20Moz Paris epithermal silver deposit. The Corunna project is located approximately 50km west of Port Augusta and is well positioned in regards to infrastructure and proximity to the coast.

The recent aircore drilling program at Corunna intersected anomalous silver, lead, zinc and copper over a strike extent of more than 300m.

Aircore drilling tested six surface geochemical targets with best results being returned from Area 1 including:

• 11m @ 1.0% Pb, 0.5% Zn and 4.2g/t Ag from 19m in drill hole COAC017; • 6m @ 1.0% Pb, 0.2% Zn and 8.2g/t Ag from 14m in drill hole COAC018; • 13m @ 0.6% Pb, 0.4% Zn and 7.2g/t Ag from 32m in drill hole COAC019 and • 22m @ 0.5% Pb, 0.2% Zn and 13.2g/t Ag from 17m in drill hole COAC021.

49 holes were drilled (Figure 5) for a total of 1,740m with hole depth varying from 9m to 58m (see MGV ASX announcement 27 August 2015). The silver-lead-zinc anomalism in Area 1 is present in five drill holes over a strike length of 300m and open to both the north and south (Figure 6). Area 1 is located at a potentially significant intersection of two major structures. All exploration data is currently being reviewed in preparation for further exploration to follow-up this positive result.

Figure 5: Aircore Drill Hole Locations on Epithermal Ag-Pb-Zn-Cu Targets with Gridded Silver Soil Geochemical overlaying Landsat Backdrop

Figure 4: Location of Musgrave’s Southern Gawler Projects in South Australia


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Figure 6: Aircore Drill Results for Area 1 Target on Gridded Silver Soil Geochemical

Menninnie Dam Project

EL5039, EL4813, EL5453, EL4669, EL4865

During the quarter Musgrave (with its wholly owned subsidiary Musgrave Exploration Pty Ltd) agreed with Menninnie Metals Pty Ltd (“MMPL”), a wholly owned subsidiary of Terramin Australia Ltd (ASX: TZN), to terminate the Menninnie Dam Mining Farm-In and Joint Venture Agreement (see MGV ASX announcement 21 July 2015).

As part of the termination, MMPL agrees to pay Musgrave an amount equal to 1% of net smelter returns (“NSR”) in respect of all minerals produced from each of EL5039 (Menninnie Dam) and EL4813 (Nonning). MMPL has the right (but not the obligation) to buy back 50% of the NSR (being 0.5%) for $1,250,000 within 60 days of first receiving product sale proceeds from any of these tenements.

The decision to terminate the joint venture was made following a strategic review performed by the Company.

Musgrave Region Projects

Deering Hills, Pallatu and Mimili Projects

EL5172, EL5173, EL5317 and EL5175 (100% Musgrave Minerals Ltd)

The Deering Hills and Mimili projects are located in the east of the Musgrave geological province in far north-west of South Australia (Figure 7).


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Figure 7: Location of MGV’s Musgrave Region Projects, South Australia

Musgrave has previously intersected massive and disseminated nickel and copper sulphide at Pallatu (see ASX announcement dated 21 August 2014). These early results combined with strong magnetic, gravity and surface nickel-copper-PGE geochemical support confirm that a 20km long untested contact is prospective for massive nickel sulphide at Deering Hills.

A follow-up ground EM survey and infill geochemistry survey is proposed for both the Zarek and Roslin targets at Mimili. The Zarek prospect is a 200m long Ni, Cu, Co geochemical anomaly associated with a gossan on the margin of a discrete gabbroic intrusive. The gossan and geochemical response may reflect the surface expression of weathered nickel-copper sulphide mineralisation. The Roslin target, only 10km east of Zarek is a Cu, Co and Mn gossan co-incident with a basement ground EM response (see ASX announcement 22 April 2015).

There was no new significant field activity to report on the Musgrave projects during the quarter.

Musgrave Other

As part of a strategic review performed by the Company, wholly owned tenement EL5171 (Mt Woodroffe) was surrendered during the quarter.

Subsequent to the end of the quarter Musgrave 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).

Upcoming Activity

During the December 2015 quarter, Musgrave Minerals is planning the following activities:

• Aircore drilling of three gold and five nickel-copper targets at Mamba • Follow-up surface geochemical survey at the Corunna project • Rehabilitation of drilling activities at Mamba, Deering Hills/Pallatu and Mimili • Evaluation and assessment of new and advanced project opportunities to balance the Company’s

existing project portfolio


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Notes Specific – September 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:

• 06/07/2015 Mamba Drilling Update • 20/07/2015 Change of Share Registry Address • 21/07/2015 Termination of Menninnie Dam JV • 27/07/2015 June 2015 Quarterly Activities and Cash flow Report • 27/08/2015 MGV Exploration Update – Corunna • 10/09/2015 Gravity survey focuses exploration on new targets at Mamba • 14/09/2015 BRR Interview – Musgrave Exploration Update • 25/09/2015 Annual Report including full year statutory accounts • 25/09/2015 Notice of Annual General Meeting/Proxy Form • 07/10/2015 Withdrawal from PMC-Zeil JV

For enquiries contact:

Robert Waugh Managing Director Musgrave Minerals Ltd [email protected] 08 9324 1061

Competent Person’s Statement

The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves 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 full-time 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 Ore 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.

About Musgrave Minerals

Musgrave Minerals Ltd is an active Australian gold and base metals explorer with a highly prospective Ni-Cu sulphide project in the Fraser Range of Western Australia and an active epithermal Ag-Pb-Zn-Cu project in the prospective silver and base metals province of the southern Gawler Craton of South Australia. The Company also holds a large exploration footprint in the Musgrave Province in South Australia, with tenements covering an area of approximately 25,000km2. Musgrave has a powerful shareholder base with four mining and exploration companies currently participating as cornerstone investors.


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Tenement information in accordance with Listing Rule 5.3.3

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%

EL5171 EL3940 Musgrave SA Granted 100% 0%




EL5205 EL4047 Musgrave - PMC JV SA Granted 0% (may earn up to 75%)

0% (Withdrew from JV)

EL5039 Musgrave - Menninnie Metals JV SA Granted 0% (may earn up

to 75%) 0%

(JV terminated)


to 75%) 0%

(JV terminated)

EL5453 EL4285 Musgrave - Menninnie Metals JV SA Granted 0% (may earn up

to 75%) 0%

(JV terminated)


to 75%) 0%

(JV terminated)


to 75%) 0%

(JV terminated)

EL5403 Toondulya Bluff SA Granted 100% 100%

EL5497 Corunna SA Granted 100% 100%

E28/2405 Mamba WA Granted 100% 100%

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+ See chapter 19 for defined terms. 01/05/2013 Appendix 5B Page 1

Rule 5.5

Appendix 5B

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”)

12 143 890 671 30 September 2015

Consolidated statement of cash flows

Cash flows related to operating activities

Current quarter

$A’000

Year to date (3 months)

$A’000 1.1 Receipts from product sales and related debtors

1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration

(516)

(228)

(516)

(228) 1.3 Dividends received 1.4 Interest and other items of a similar nature

received 36 36

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

(708)

(708)

Cash flows related to investing activities

1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets

- -

(2)

- -

(2) 1.9 Proceeds from sale of:

(a) prospects (b) equity investments (c) other fixed assets

- - 7

- - 7

1.10 Loans to other entities - - 1.11 Loans repaid by other entities - - 1.12 Other (provide details if material) - - Net investing cash flows 5 5 1.13 Total operating and investing cash flows

(carried forward)

(703)

(703)



1.13 Total operating and investing cash flows (brought forward)

(703)

(703)

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. - - 1.15 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

(703)

(703)

1.20 Cash at beginning of quarter/year to date 3,737 3,737 1.21 Exchange rate adjustments to item 1.20 - -

1.22 Cash at end of quarter 3,034 3,034

Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities

Current quarter $A'000

1.23

Aggregate amount of payments to the parties included in item 1.2

86

1.24

Aggregate amount of loans to the parties included in item 1.10

1.25

Explanation necessary for an understanding of the transactions

Directors’ fees, salary payments and superannuation.

Non-cash 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

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the

reporting entity has an interest



Financing facilities available Add notes as necessary for an understanding of the position.

Amount available $A’000

Amount used $A’000

3.1 Loan facilities

- -

3.2 Credit standby arrangements

- -

Estimated cash outflows for next quarter

$A’000 4.1 Exploration and evaluation

550

4.2 Development

-

4.3 Production

-

4.4 Administration

170

Total

720

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’000

5.1 Cash on hand and at bank 1,784 1,465

5.2 Deposits at call 1,250 2,272

5.3 Bank overdraft

5.4 Other (provide details)

Total: cash at end of quarter (item 1.22) 3,034 3,737

Changes in interests in mining tenements and petroleum tenements Tenement

reference and location

Nature of interest (note (2))

Interest at beginning of

quarter

Interest at end of quarter

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed

EL5171 (SA)

Surrendered

100%

-

6.2 Interests in mining tenements and petroleum tenements acquired or increased



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.

Total number Number quoted Issue price per security (see

note 3) (cents)

Amount paid up 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, buy-backs, redemptions

-

-

-

-

7.3 +Ordinary securities

121,000,000 121,000,000 Fully Paid Fully Paid

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

-

-

-

-

7.5 +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

500,000 375,000 500,000

75,000 550,000

Exercise Price $0.36 $0.50 $0.25 $0.36 $0.25 $0.25 $0.25 $0.12

Expiry Date 17 Feb 2016 17 Feb 2016 19 Apr 2016 8 May 2016 23 Jan 2017 5 Mar 2018 23 Mar 2018 10 Mar 2019

7.8 Issued during quarter 500,000 200,000

75,000 250,000

$0.36 $0.25 $0.25 $0.12

8 May 2016 23 Jan 2017 23 Mar 2018 10 Mar 2019

7.9 Exercised during quarter - - 7.10 Expired during quarter - - 7.11 Debentures

(totals only)

-

-

7.12 Unsecured notes (totals only)

-

-



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: 19 October 2015

(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 6.2.

3 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.

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september 2015 quarterly activities report...

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