Ausmex Exploration Update - New Acquisitions 06072018 ... · E | [email protected] T | (02) 8315 3268 W | A | Level 13/50 Carrington Street, Sydney NSW 2000 Figure 1

E | [email protected] T | (02) 8315 3268 W | www.ausmexgroup.com.au A | Level 13/50 Carrington Street, Sydney NSW 2000

06 July 2017

ASX ANNOUNCEMENT

EXPLORATION UPDATE

3 X NEW MINING LEASE ACQUISITIONS

HIGH GRADE COBALT 31,800g/t Co (3.18% Co) AND COPPER 25.59% Cu RECORDED FROM NEWLY AQUIRED SOUTHERN MINING LICENCE

ROADWORKS FOR ACCESS AND DRILL PADS UNDERWAY

DRILL PADS UNDERWAY FOR GILDED ROSE AND MT FREDA DRILLING

The Company is pleased to inform AMG shareholders that our exploration team and employees are well advanced into the exploration of our mining tenements in the Cloncurry Mineral Field with field work and drill pads being prepared on 5 locations for the first phase of drilling on our tenements. A total of 8,000 meters of RC and diamond core drilling has been planned at Gilded Rose (2,000m) and Mt Freda Gold (6,000m) projects due to commence shortly.

Field Exploration – New Discoveries

Our 5-man field exploration team have already obtained positive results on our most Southern EPM with a discovery of a historical copper/gold mining operation (1936), a short distance South of Gilded Rose Gold Project. Rock chip samples, in and around the old workings on our EPM’s, have been lodged with SGS for assaying. Fifteen other locations, including some historical Copper/Gold mines have also been identified, within our EPM’s, with abundant visual copper around the sites. The historical mines appear to have had minimal exploration work done on them since the early 1940’s due to their isolated location. In addition to the historical prospects two large quartz, ironstone and jasper outcrops (typical style of formation and rock type for Gold in this area), have been observed within the EPM’s. Some formations appear very similar, to the Mt Freda orebody. These prospects will be followed up with drilling.

New Granted Mining Lease Acquisitions: Purchase of 3 historical producing Gold/Copper mines (Copper Up to 25.59% Cu and Cobalt up to 31,800g/t Co (3.18% Co)

In addition to the Companies already granted mining leases and several EPM blocks, within the Cloncurry Mineral Field, the Company has in the past weeks, purchased 100% interest in 3 granted historical mining leases in the Cloncurry Mineral Field.

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All three prospects are located South of Cloncurry and all three having been previously producing Copper and Gold mines with one unknowingly, containing exceptionally high-grade Cobalt up to 31,800g/t, (3.18%Co) produced by Hand held XRF analysis. Historical production, on these 3 leases, was for Copper and Gold. Further sampling and assaying is underway. Air track drilling, at the new potential high-grade Cobalt/Copper find, will commence during the quarter.

Selected samples for Copper, from the small open pit on one of the new acquisitions (Cobalt 1) returned hand held XRF results of up to 25.59% Cu and up to 31,800g/t Co, (Cobalt 3.18%). The average grade from 5 Cobalt samples was 20,060g/t Co (2.06% Co) and from 7 samples assayed for Copper/Cobalt averaged of 7.78% Cu. The other two acquisitions will receive attention during the current quarter. At the time of analyzing for the Copper the “Cobalt was not visible at the time of sampling” and appears to be associated within the Manganese.

Above: Screen results, from XRF NITON XL2. The assay analysis results are from rock chip sampling of Copper/Cobalt, from the newly acquired Mining Lease, located south of Cloncurry. The analysis was taken across a 2m wide zone of manganese mineralisation which intrudes at the SW end of the small open cut and approximately 5m to the south from the main 15m wide copper face of the zone of mineralisation. The company will be air track drilling the prospect to prove the strike direction of both zones of mineralisation.

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Figure 1. Ausmex current and newly acquired (PINK) tenement suite location plan.

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Ausmex’s newly acquired 100% owned prospect (to be known as Cobalt 1) is located North of one of Queensland highest ever grade Cobalt producing mine Mt Cobalt, with recorded Cobalt grades of more than 28% Co, with 2,000 tonnes averaging 17% Co, exported to the UK (Official Govt Records, 1921-1934). The total average official production grade between 1921 to 1934 not including the exported high-grade, from the ore milled on site, was between 8,000g/t Co and 16,000g/t Co (0.8% and 1.6% Co), with an average concentrate grade of 20% Co.

The mineralization at Cobalt 1 (Ausmex 100%) appears at the surface and visually, from the small 5m deep, open pit and appears mineralisation strikes in an east/west direction. Drilling will commence in the bottom of the open pit and then along the perceived strike length. At this stage only shallow 20-30m air track holes will be drilled to identify the actual strike and grade of the mineralization together with some holes in the small open pit.

Photo on left: Ausmex Managing Director Matt Morgan sampling the wall of the open pit at Cobalt 1

Photo on right: High Grade Copper Oxide ore “Malachite “at the Cobalt 1 ML copper returned via Niton X2 XRF up to 25.59% Cu

In addition to the new acquisitions, the Company is in discussions with a number of tenement holders in the Cloncurry Mineral Field with a view for purchase and or JV.

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Mt Freda – Access Roads and Drilling

Access roads have been developed over existing tracks to the Mt Freda Gold Project (Granted Mining Lease) so that drill rigs can gain comfortable access. Drill pads are complete with 19 ready for drilling. The first round of drilling consists of 6,000 meters of reverse circulation (RC) drilling. This phase of drilling is expected to be completed by end of this quarter. Drilling will commence under the existing open cut that was mined to a depth of approx. 60 meters. Mt Freda, historically a high-grade underground producing Gold mine, but only mined to a depth 60 meters over 330m of the total strike length of 450m. In 1987, it was reopened as an open pit, with a CIP processing plant and closed in late 1988 due to low Gold price below $240oz. (average Gold grade was 4g/t Au with 98% recoveries). However, geophysics over the area has identified the possible extension in an east and west direction of over 1400m in total. Drilling will commence mid-July to test this geophysical anomaly, together with the main known orebody.

Geophysics Survey identifies possible 950 meter extension of Mt Freda Gold strike length

The Mt Freda open cut is approx. 450 meters in length. Recently acquired historical data from the Government Geophysics Department has identified the possible 950m extension to the east and west of the main Mt Freda open cut. The possible extension was identified by the Queensland Government Geophysical unit using “Imaginary Horizontal Component of the Electro Magnetic Field” data. This geophysical technique was used to identify the Mt Freda Gold Mine which produced gold until 1987. The magnetic imagery which appears to extend Mt Freda in both east and west directions, is identical to the known Mt Freda orebody. No drilling has ever been carried out on these possible east/west extensions and if it exists would extend the Mt Freda strike length to over 1400m. The geophysics has also identified another large target to the South of the current workings and within the Mt Freda Lease.

The Mt Freda mining lease also encompasses, two historically high-grade Copper mines which were previously producing mines up until 1987. These two prospects are also being readied for drilling.

One RC drill rig will be on site at Mt Freda in coming days with the diamond core rig at Gilded Rose gold project. The Company expects to have up 4 drill rigs, (dependent upon availability), drilling prior to the end of the next quarter. This is in addition to the Company’s own drill rig. The Company’s air track drill is for regional and shallow exploration holes.

Geophysical Surveys over the Company’s EPM’s (Exploration Permits) The Company’s management are currently in discussions with several independent Geophysics providers with additional alternative mineral discovery techniques, to provide 100% coverage of our existing EPM’s and Mining Leases. F

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Photo of “Cobalt Ridge” 3.5M Height X 3.0M width X 1.62 klms Long Cobalt bearing outcrop. Queensland Government Reported as Cobalt bearing outcrop over 1 mile in length (1.62klms)

IRONSTONE COBALT BEARING RIDGE: (excerpt from the Queensland Government Northern Australia Geological and Geophysical Survey. The 1.62klms outcrop is located within Ausmex owned EPM’s, Cloncurry. No work has been done on this EPM prospect until native title and regulatory approval. This is expected to be approved within the next 6 weeks.

An early report by the Queensland’s Government Report in 1939 reported “Cobalt Bloom, (sulpharsenenide of Cobalt. CoAaS) when pure contains 35.5% Cobalt. Erythrite also referred to as Cobalt Bloom (hydrous arsenate of Cobalt Ca3As2O8SH2O,) can be seen in a 1 mile long outcrop consisting of essentially of oxides and iron and manganese. The iron lode contains crusts and veinlets of Erythrite, strikes approximately north and south and dips almost vertically. It has a length of 1 miles and towards its southern end is faulted. The width ranges from 1 foot on surface to 10 feet and in one place the outcrop is 10 feet wide and stands about 12 feet above the ground”

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Plate excerpt graphic from the Queensland Geophysics Government Report showing the 1 mile long (1.62 klms) Cobalt Bearing ironstone/magnetite/manganese outcrop. We will commence a more detailed exploration phase on this prospect once regulatory and native title clearance are approved.

To the North of this anomaly, is a second historical mine in the mineral field, which the report also describes the shaft having intersected Copper, Cobalite and Erythrite. Cobalite and Erythrite both contain Cobalt metal. We are currently awaiting results from SGS from other historical Copper working, within the suites of Ausmex EPM’s. The old workings, many shallow pits, some collapsed are strewn with Copper oxide ore in the form of Malachite, Azurite (Copper oxides).

Managing Director Matt Morgan stated:

“New discoveries and new acquisitions, more great value adding events for Ausmex Shareholders. Multiple mineralized targets discovered by the Ausmex Team, plus the strategic acquisition of the additional three granted mining licenses, has produced numerous drill ready targets. With the commencement of an 8,000m drilling program at the Mt Freda and Gilded Rose gold projects, the Ausmex Team look forward to continually updating shareholders on our progress moving forward. The next six months look very exciting for Ausmex.”

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Photos above: Access Roads to our Mining leases, with drill pads being prepared for imminent drill program. Pads are being prepared at 5 sites with the first rig due to commence mid-July.

Ends.

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Forward Looking Statements The materials may include forward looking statements. Forward looking statements inherently involve subjective judgement, and analysis and are subject to significant uncertainties, risks, and contingencies, many of which are outside the control of, and 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 and general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on forward looking statements. Any forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or relevant stock exchange listing rules, the company does not undertake any obligation to publicly update or revise any of the forward looking statements, changes in events, conditions or circumstances on which any statement is based.

Competent Person Statement

Statements contained in this report relating to exploration results and potential are based on information compiled by Mr. Matthew Morgan, who is a member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr. Morgan is the Managing Director of Ausmex Mining Group Limited and Geologist whom has sufficient relevant experience in relation to the mineralization styles being reported on to qualify as a Competent Person as defined in the Australian Code for Reporting of Identified Mineral resources and Ore reserves (JORC Code 2012). Mr. Morgan consents to the use of this information in this report in the form and context in which it appears.

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JORC Code, 2012 Edition – Table 1 report

Section 1 Sampling Techniques and Data(Criteria in this section apply to all succeeding sections.)

Criteria JORC Code explanation Commentary

Sampling techniques

• Nature and quality of sampling (eg 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.

• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

• Aspects of the determination of mineralisation that are Material to the Public Report.

• In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

• Random Rock chip samples taken by G pick

• Samples were ~2-3kg in weight

• Samples were selected from outcrops and analysed using a hand held Niton XLR XRF

Drilling techniques

• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

• No drilling, logging or sampling was conducted as part of this release.

Drill sample recovery

• 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

• No drilling, logging or sampling was conducted as part of this release

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sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Logging • 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.


Sub-sampling techniques and sample preparation

• 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.


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.

• 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 (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

• In Field XRF results were obtained by a recently purchased and calibrated Niton XL12 XRF. Analysis were completed during daylight hours in the field on samples collected and chipped off insitu material

•

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Verification of sampling and assaying

• 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.


• No assays were adjusted

Location of data points

• 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.

• Specification of the grid system used. • Quality and adequacy of topographic

control.

• Rock Chip sample locations were determined by hand-held GPS readings at the location of each sample (accuracy +/- 5m) and recorded in MGA94, Zone 54 datum

Data spacing and distribution

• Data spacing for reporting of Exploration Results.

• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

• Whether sample compositing has been applied.

• Rock chip samples were taken randomly along outcrop

• Data spacing and distribution is NOT sufficient for Mineral Resource estimation

• No sample compositing has been applied.

Orientation of data in relation to geological structure

• 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.

• The orientation of samples is not likely to bias the assay results.

Sample security

• The measures taken to ensure sample security.

• Samples were taken to Cloncurry by company personnel and despatched by courier to the SGS Laboratory in Townsville

Audits or reviews

• The results of any audits or reviews of sampling techniques and data.

• No audits or reviews have been undertaken at this stage. F

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Section 2 Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section.)


Mineral tenement and land tenure status

• 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 security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

• ML2718, ML2709, ML2713, ML2719, ML2741 & EPM14163 are owned 100% by Spinifex Mines Pty Ltd. Ausmex Mining Group Limited owns 80% of Spinifex Mines Pty Ltd. Queensland Mining Corporation Limited own 20% of Spinifex Mines. Exploration is completed under an incorporated Joint Venture.

• EPM14475, EPM15858, & EPM18286 are held by QMC Exploration Pty Limited. Ausmex Mining Group Limited owns 80% of QMC Exploration Pty Limited. Queensland Mining Corporation Limited own 20% of Spinifex Mines. Exploration is completed under an incorporated Joint Venture.

• ML2549, ML2541, ML2517 are 100% owned by Ausmex

Exploration done by other parties

• Acknowledgment and appraisal of exploration by other parties.

• All exploration programs conducted by Ausmex Mining Group Limited

Geology • Deposit type, geological setting and style of mineralisation.

• ML2718, ML2709, ML2713, ML2719 hosts the Gilded Rose sheer hosted quartz reef. There are several gold mineralised hydrothermal quartz reefs within the deposit.

• ML2741 hosts the shear hosted quartz rich Mt Freda Gold deposit containing Au, Cu, & Co

Drill hole Information

• 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: o easting and northing of the drill

• No drilling, logging or sampling was conducted as part of this release. F

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hole collar o elevation or RL (Reduced Level –

elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole o down hole length and interception

depth o hole length.

• If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

Data aggregation methods

• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off 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.


• No material information is excluded.

• No intersections have been reported as part of this release.

• All sample 65 sample locations and fire assay Au results have been displayed.

• An average sample grade was displayed from the total samples taken, yet not a weighted average.

Relationship between mineralization widths and intercept lengths

• 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 (eg ‘down hole length, true width not known’).


• No material information is excluded.

• No intersections have been reported as part of this release.

Diagrams • Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should

• Maps showing the location of the Gilded Rose and Mt Freda projects are all EPMs and ML’s

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include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

presented in the announcement

Balanced reporting

• 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.

• All XRF hand held results were reported

Other substantive exploration data

• 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.

• Historical mining grades have been stated.

•

Further work • The nature and scale of planned further work (eg 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.

• Additional mapping, costeans, geophysical surveys, RC and Core drilling

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Documents

Ausmex Exploration Update - New Acquisitions 06072018 ... · E | [email protected] T | (02) 8315 3268 W | A | Level 13/50 Carrington Street, Sydney NSW 2000 Figure 1