Minotaur Exploration : Drilling progress; Cloncurry & Prominent Hill

MINOTAUR EXPLORATION LIMITED ACN 108 483 601 ASX: MEP

MINOTAUR

EXPLORATION

27 September 2016

Highlights

Iris and Royal Targets, Cloncurry

• One reconnaissance diamond hole completed at each of Iris North and Iris South

• Narrow zones of breccia-hosted visible copper sulphides intersected in both holes

• Mineralisation appears similar in style to nearby Eloise deposit

• New EM anomalies north of Iris extend conductive zone to +2km long

• Royal EM anomaly adequately tested and resolved

  Orion Target, Prominent Hill

• First of two holes completed at Orion

• Second hole underway

Iris Targets - Drilling

The Iris targets, defined by Minotaur during a regional ground EM survey mid-year in collaboration with farm-in partner OZ Minerals Ltd (ASX: OZL),

lie 5km north-east of the Eloise copper-gold mine (Figure 1). The anomalies sit along the Levuka Shear Zone within Mt Norna Quartzite, a regionally significant rock unit that hosts the Eloise and Osborne copper-gold mines and the Cannington silver-lead-zinc mine. Minotaur's model for the

Iris targets is Iron Sulphide Copper Gold (ISCG) mineralisation similar in style to Eloise. Both targets lie under approximately 120m of younger cover.

One cored drill hole is complete as a first-pass test of each of Iris North (EL16D04) and Iris South (EL16D05) EM conductors (Figure 2, Table 1). Quartz-pyrrhotite- chalcopyrite (chalcopyrite, CuFeS2, is a copper iron sulphide mineral, with composition 34.5% Cu)

was intersected in each of the holes at positions as predicted from modelling of the EM data. The breccia zone in hole EL16D04 is rich in pyrrhotite, approximately 1m wide, with patchy chalcopyrite

developed above the breccia in veinlet and stringer zones over approximately 65m from 174.5m-240.1m, with

3) and 196.9-199.2m (Figures 4); these two zones may each have 2-3% chalcopyrite based on visual estimates. Outside these zones mineralisation appears similar to EL16D04 and contains veinlet and stringer chalcopyrite between 167.2-203.5m, with

Notwithstanding the visual estimates, Minotaur considers the breccia texture and sulphide

mineralogy in each hole shares strong visual similarities to those developed at the nearby Eloise copper-gold deposit. Their similarities provides significant encouragement for Iris, particularly given the two holes lie 600m apart and are the first to

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have tested this new prospect. It is reasonable to compare these, specifically noting Minotaur's holes are yet to be assayed, with BHP's first drill hole VO-DDH71testing the 'Eloise North' EM conductor in 1986. That hole intersected a patchy pyrrhotite-chalcopyrite veinlet-stringer zone containing low-grade copper, averaging approximately 0.1% across the zone, with a maximum copper assay of 0.51% over a 3m interval. The hole provided sufficient encouragement for BHP to continue testing local EM anomalies, leading to discovery of

the Eloise deposit only 300m to the south, the following year.

The joint venture is encouraged by the geology in each hole and sees potential for a large sulphide system at Iris.

Figure 1: Minotaur's 'Eloise' tenements and the 'Iris' and 'Royal' ground EM targets over magnetics, referenced to the Eloise copper-gold mine, owned and operated by FMR Investments Pty Ltd. Locations of Altia and Maronan base metals deposits shown

1 Combined 1986 annual report for the period ended 22 December 1986, Authorities to Prospect 3388M, 3389M, 3721M, 3855M, Cloncurry, Queensland; S.G. Walters March 1987 (report lodged with the Qld Mines Department at the time of reporting)

Figure 2: Late time Z-component EM image (plan view) of Iris North and Iris South conductors with recently completed drill holes EL16D04 and EL16D05

Figure 3: Drill core from Iris South hole EL16D05; 173.95-178.06m containing breccia and vein hosted chalcopyrite (yellow) and pyrrhotite (bronze) mineralisation

Figure 4: Drill core from Iris South hole EL16D05; 195.12-199.63m containing breccia and vein hosted chalcopyrite (yellow) and pyrrhotite (bronze) mineralisation

Iris Prospect - Geophysics extends target zone

In light of positive drill results at Iris, where copper sulphide is clearly associated with the EM conductors, Minotaur re-processed its local ground EM lines north and south of the Iris targets to look for additional anomalies along strike, under cover. Close analysis of the data revealed subtle conductive anomalies on two of those recent 800m-spaced lines north of Iris North at 'Electra', indicating the Iris conductive zone may extend up to 1.5km further north (Figure 5a). Modelling of the response on line 7688200N indicates a steep west-dipping conductor at a depth of 300m with a strike length of 350m, significant depth extent and a conductivity-thickness of 5000S. Modelling of the response on line 7689000N indicates a steep west-dipping target at a depth of 380m with a strike length of 450m, significant depth extent and a conductivity-thickness of 6000S. The modelled conductance of these anomalies are higher than those modelled at Iris North and South. The data on both lines is relatively coarse given the specifications of the original survey, however

the modelled plates show a preferred northerly strike and westerly dip that is consistent with the Iris North conductor. The northern conductive zone may represent a north-trending brittle fault zone that cuts across the geological and magnetic trends - as depicted in Figure 5b; if this is a fault, it could host structurally- controlled sulphide mineralisation, as evidenced at Iris North and Iris South.

The joint venture parties are currently determining the work program for the next phase and will inform the market shortly.

Figure 5: a) left image shows gridded conductivity (red and white zones are conductive) of the X-component EM data of channel 35 over RTP1VD magnetics. Black polygons are the modelled conductive plates; b) right image shows conductive plates over RTP1VD magnetics. Note in both images the dashed lines are interpreted faults with the larger north-trending fault interpreted to be the structure hosting the anomalies. Images are in plan view