Minotaur Exploration : drilling cracking Copper targets in 2 States

MINOTAUR EXPLORATION LIMITED ACN 108 483 601 ASX: MEP15 September2016

MINOTAUR

EXPLORATION

Adelaide based Minotaur Exploration Ltd (ASX: MEP) is now drilling for copper and other base metals

in two highly endowed geological provinces; the

Olympic Dam domain (South Australia) and around Cloncurry (Queensland).

Both programmes involve OZ Minerals Ltd (ASX: OZL) but under differing arrangements. Drilling is testing geophysical targets Bellatrix, Orion, and Jupiter (SA) plus Iris North, Iris South and Royal (Qld).

Background

Around its Prominent Hill copper mine in South Australia OZ Minerals took the highly unusual step of opening its exploration tenements to junior explorer Minotaur. Following several months of database research and modelling Minotaur recommended

4 geophysical targets for joint follow-up work, with which OZ Minerals concurred. Recent months have been consumed with detailed on-ground

geophysics, IP and EM, refining those targets to drill readiness status. Diamond drilling has commenced, testing 3 prospective electrical-geophysical responses: Bellatrix, Orion and Jupiter. This work

is proceeding under an Alliance agreement whereby OZ Minerals and Minotaur each contribute up to $1.5 million to proof test agreed targets. Minotaur will be awarded 20% beneficial interest in any designated target and can earn an additional 10% upon

electing to sole fund a further $2M of exploration expenditure.

At the Eloise JV (55km south-east of Cloncurry) OZ Minerals is farming into Minotaur's tenements (Figure 1) through an initial $1.5 million spend

through 2016. Ultimately, OZ Minerals could earn 70% interest by investing $10 million in the ground. Here, the partners are targeting Cannington-

style silver-lead-zinc and Eloise-style copper-gold mineralisation. With the benefit of OZ Minerals' funding Minotaur recently completed extensive ground gravity and electromagnetic (EM) surveys, along the Levuka Shear Zone north of the existing Eloise copper mine, locating three strong EM conductors about 5km from the mine. The Iris

and Royal anomalies lie just 135m below surface and represent high conductance indicators to the presence of sulphide mineralisation; potentially containing base metals. In geological terms these prospects sit within, or immediately adjacent

to, interpreted Mt Norna Quartzite, a regionally significant rock unit that hosts the Eloise and Osborne copper-gold mines and the world-class Cannington silver-lead-zinc mine.

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Prominent Hill, South Australia

Titeline Drilling is diamond drilling 5 reconnaissance holes within sight distance of OZ Minerals' Prominent Hill mining operation (Figure 2). Three, high-priority targets have been selected for drilling following recent ground EM surveys by Minotaur.

Orion and Bellatrix targets sit at opposing ends of a 7.5km long magnetic feature named Taurus

(Figure 3). This magnetic-gravity complex had been the focus of iron-oxide copper-gold (IOCG) style mineral exploration previously, however the new targets mostly lie adjacent in magnetically-quiet zones and are thought to represent Fe-rich sulphide occurrences similar in style to those being targeted in the Eloise region.

Orion occurs as 2 separate, structurally offset, south- west dipping EM plates with a combined strike

length of 2.2km, modelled high conductivities of

5,000-6,000 Siemens (S) and depth to top from 120- 330m. One hole each will investigate the southern and northern EM plates.

Bellatrix presents as 2 separate, south-west dipping EM plates with modelled high conductivities of 6000 and 1800S, depth to top of 100-150m and up to 900m of strike. One hole will investigate the western EM plate.

Jupiter is modelled as multiple conductors including a prominent vertical body over 800m of strike,

from 130m below surface, exibiting exceptionally strong conductance >10,000S; highly suggestive of the presence of massive sulphides. Two holes will investigate the main, vertical EM conductor.

Notably, these targets are merely 10km and 30km from OZ Minerals' mining camp (Figure 2).

Conversion of any geophysical target to discovery and mineable resources would boost the potential for future satellite mine development.

Drill investigation is expected to be complete by the end of October.

Eloise JV, Cloncurry

Positioned on a probable splay on the east side of the Levuka Shear the Iris anomalies would ordinarily be invisible to standard geophysical tools, located as they are inside a large area of magnetically-quiet rocks not normally a target for undercover exploration. Minotaur, however,

targeted the low magnetic zones along the eastern side of the mineralised Levuka Shear, specifically in search of conductive sulphide bodies, using state of the art ground EM techniques that have been effective elsewhere in the project area. Should

drilling show the presence of copper rich sulphide minerals the result will light up exploration options around the district where low magnetic zones are typically discounted, as potential hosts to copper mineralisation, in favour of magnetic highs.

The Royal anomaly lies within a fault splay in the central part of the Levuka Shear and is

prospective for copper-gold and silver-lead- zinc styles of mineralisation.

Contractor DDH1 is presently diamond drilling one reconnaissance hole into each of Iris North, Iris South and Royal, to below-surface depths of 200m, 180m and 250m respectively. The holes are planned to be completed by mid-October.

Comment

Minotaur's Managing Director, Andrew Woskett, said "Minotaur would be suitably chuffed should our work ultimately reveal an economic grade mineral discovery to complement either of the existing nearby mines. It would vindicate our learnings, some favourable and some less so, through recent years

around Cloncurry, now applied around Prominent

Hill and Eloise. These are all cracking targets and we can't wait to see the drill core evidence to explain

each source of anomalism".

All targets are within 5km (Figure 1) of the operating Eloise copper-gold mine (historical

production1of ~10 million tonnes @ 3.5% copper plus

0.9g/t gold, presently mining from +1200m below surface), within 10km of the Altia base metals resource2(5.8 million tonnes at 4% lead, 40g/t silver and 0.5% zinc, a joint venture between Minotaur and Sandfire Resources, ASX: SFR, earning 80%), and within 15km of the large Maronan lead-silver and copper-gold deposits3(31 million tonnes at 6.5% lead and 106g/t silver and 19 million tonnes at 1.2% copper and 0.6g/t gold).

Figure 1: Minotaur's 'Eloise' tenements and the new 'Royal' and 'Iris' 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. FMR Investments Pty Ltd, pers comm, 24 August 2016

2. Breakaway Resources Ltd; Altia Mineral Resource Estimate, ASX report dated 23 July 2013, Sandfire commences drilling at Altia JV, North Queensland

3. Red Metal Limited, Maronan Deposit - Summary of Inferred Resource Estimates, ASX report dated 27 October 2015

Figure 2: Location of copper-gold targets generated by Minotaur showing those adopted by OZ Minerals for joint work and those self selected by Minotaur; background image is RTP magnetics