Minotaur Exploration : Quarterly Report Period Ended 30 June 2017

Period ended 30 June 2017

MINOTAUR EXPLORATION LIMITED ACN 108 483 601

www.minotaurexploration.com.au

ASX: MEP

MINOTAUR

EXPLORATION

The 2017 financial year operating expenditure totaled

$6.3M, of which 78% was applied to exploration and 22% to administration.

The dominance of 'money in the ground' is notable due to active joint venture farm-in arrangements, by which Minotaur maintains above average exploration expenditure levels comparative to its peers.

Recently reported work can be characterised as frontier exploration where drill intersections are the ultimate and only avenue to establish whether mineralisation is expressed as a geophysical anomaly in basement rocks. Often, the source of anomalism is adequately resolved by the presence of non-economic minerals (such as pyrite, graphite, pyrrhotite etc).

Such results, while disappointing, do not diminish the investment rationale, relevance and accuracy of the geoscientific rigour applied to generate and test high quality drill targets.

Meanwhile, the Company is constantly reviewing openings to expand its field of endeavour and to that end continues to selectively assess advanced stage or operationally capable resource assets in base metals and gold, within Australia.

Minotaur held A$2.3 million in cash at 30 June 2017 (refer appendix 5B for details).

History shows that major discoveries such as Carapateena, Eloise, Ernest Henry and Cannington have evolved through such methods. Increasingly, exploration under-cover across Australia is needed, more so to reveal blind orebodies for future mine extraction. Minotaur is an active agent in this space and maintains its faith in discovery potential.

Figure 1: Minotaur Exploration's project locations

10,092

Table 1: Minotaur Exploration's tenement areas, under application and/or held 100% and/or in joint venture§.

LEVEL 1, 8 BEULAH ROAD, NORWOOD SOUTH AUSTRALIA 5067 T+61 8 8132 3400 F+61 8 8132 3499 Eadmin@minotaurexploration.com.au

www.minotaurexploration.com.au

QUEENSLAND

Minotaur is actively exploring along the Cloncurry mineral belt of Northwest Queensland, for iron oxide copper-gold (IOCG), iron sulphide copper-gold (ISCG) and Cannington-style lead-silver-zinc mineral systems (Figure 2) obscured by up to 180m of conductive Mesozoic sediment cover.

Figure 2: Location of Minotaur tenements in the Cloncurry region of Northwest Queensland.

The 2017 field exploration season commenced early in the Quarter with diamond drilling and ground geophysical surveys at both the Eloise and Osborne joint venture projects.

Minotaur 100% (except on those parts of MDL431 and EPM17838 where Sandfire Resources NL can earn 80%), Area 670km2

OZ Minerals committed $1.5 million to the joint venture program January through to June, enabling a third phase drill program at Iris-Electra (Figure 3)

(ASX: MEP 16/06/17 and 10/07/17). Two holes probed the

large Electra EM conductor and a further two holes tested each side of Iris where drilling in 2016 identified encouraging Eloise-style copper-gold mineralisation (Figure 4). All four holes intersected copper-gold mineralisation including; EL17D01: 25m @ 0.23% copper and 0.03g/t gold from 832m, EL17D02: 7m at 0.23% copper and 0.08g/t gold from 836m, EL17D03: 27m @ 0.26% copper and 0.09g/t gold from 536m, and EL17D04: 5m @ 1.00% copper and 0.11g/t gold from 439m within a broader zone of 37m @ 0.31% copper and 0.04g/t gold from 438m. These grades and thicknesses are consistent with results from inaugural 2016 holes intersecting the EM plates at Iris.

Geophysical techniques have clearly proven their value in generating prospective targets in close proximity to the Eloise mine. While drill assays are sub economic, they build confidence that an extensively mineralised structural system exists beyond the known Eloise deposit and could conceivably host a repetition.

The 2km long Iris-Electra system remains open to the north and south and at depth.

Eloise Farm-In (OZ Minerals)

The results of the drill program reinforce the targeting methodology for locating mineralisation under highly conductive cover. An extensive ground EM survey covering some 17km of strike along the Levuka Shear, south of the Eloise mine (Figure 3), is underway.

This zone is interpreted to be a continuation of the

Mt Norna Quartzite that hosts Eloise, Iris-Electra and Altia locally and Artemis, Sandy Creek, Maronan and Cannington deposits regionally.

Figure 3: Eloise project depicting the Iris and Electra Cu-Au prospects and new ground EM survey area on EPM 26233, over RTP1VD magnetics (and Channel 35

X-component EM at Iris/Electra). Locations of the Sandfire JV 'Altia' Pb-Ag deposit, the Maronan Pb-Ag and Cu-Au deposits and the Eloise Mine shown for reference.

The survey commenced early June and is expected to be completed mid-August.

Figure 4: Long-section looking west showing Iris and Electra modelled EM conductors and drill traces.

Sandfire 60%, Minotaur 40%

No activity reported for the Quarter by Sandfire Resources (Operator).

Minotaur 100%, Area 1,686km2

The Osborne project is a joint venture between Minotaur and Japan Oil, Gas and Metals National Corporation (JOGMEC). JOGMEC may earn up to 51% equity in the project by spending up to A$3.5M. Project expenditure to date is A$2.1M with further A$1M budgeted through to March 2018.

Six targets were drilled at three prospects, being Lark, Winter and Robin (Figure 5). Deep drilling such as this represents frontier exploration in a poorly investigated region very prospective for Cannington- style silver-lead-zinc and Eloise-style copper-gold mineralisation.

JOGMEC Osborne Joint Venture

Depth to basement, conductive cover and scarcity of previous drill history raise significant challenges.

The Lark targets comprises two EM conductors; a western plate lying parallel to but adjacent a linear magnetic anomaly and an eastern conductor occurring along strike northwest of a discrete moderate-amplitude magnetic anomaly. Two diamond holes, OS17D07 and OS17D08, successfully tested both EM conductors; graphite-rich lithologies adequately explain the source of each anomaly at the modelled conductor position.

The Winter targets, a discrete low to moderate-amplitude magnetic anomaly with two coincident and subjacent EM conductors, was tested with one diamond drill

hole OS17D06. The drill intersected a sequence of metasediments with weakly disseminated and vein-hosted sphalerite (zinc sulphide) noted within graphitic lithologies. Field portable XRF (fpXRF)

readings indicate the level of anomalism to be minor. The upper conductor is explained by graphite-rich lithologies, while the lower conductor source is thin concordant pyrrhotite veins.

The Robin targets comprises two EM conductors; a western conductor lying adjacent a discrete

moderate-amplitude magnetic anomaly and an eastern conductor occurring coincident with the magnetic anomaly. Two diamond holes, OS17D09 and OS17D10 tested the conductors. Graphite-rich lithologies adequately explain the eastern conductor tested by drill hole OS17D09. The source of the western conductor in drill hole OS17D10 appears due to a

clay-rich fault zone, approximately 5m wide, where fpXRF readings show weakly anomalous Zn and Pb only.

While the outcome of this campaign was mostly unrewarding Minotaur remains positive about the regional potential for discovery and notes the unequivocal success of its targeting techniques.

Further target generation across the tenements using ground geophysical techniques, given their positive performance in this terrain, is being considered.

Figure 5: Osborne project - prospect locations for recent drilling over RTP magnetics image.

Minotaur 100%, except in relation to EPM 8608 which has a net smelter royalty of 2% payable to South 32; Area 676km2

Minotaur seeks to introduce a new JV partner into the tenement package.