MGV: Drilling Identifies Extension to High Grade Gold

ASX RELEASE 27 March 2017

• Drilling at the southern end of the Break of Day deposit has extended the high grade gold mineralisation a further 25m to the south
• Drill hole 17MORC003 intersected 1m @ 117.4g/t gold from 173m down hole
• The high grade gold mineralisation is still open to the south and down plunge
• Further drilling is underway to test this southern extension
• Infill drilling at Break of Day has intersected high grade gold in drill hole 17MORC006

  o 2m @ 16.2g/t Au from 120m down hole

• Assay results are still awaited for a further 38 drill holes in the current program

Musgrave Minerals Ltd ("Musgrave" or "the Company") (ASX: MGV) is pleased to announce the receipt of assay results for a further two drill holes from the current 4,000m reverse circulation ("RC") drilling program at the Break of Day prospect on the Cue Project in the Murchison region of Western Australia (Figure 1).

Musgrave Managing Director Rob Waugh said, "This is another positive result with the high grade gold in 17MORC003 extending the Twilight Lode at Break of Day a further 25m south. The mineralisation is still open to the south (Figure 2) and down plunge which creates an opportunity for Musgrave to continue to extend this high grade gold mineralisation to grow the resource."

Musgrave has currently drilled 44 holes for a total of 4,006m in the current program. Assay results have now been received for 6 drill holes with results for the remaining 38 drill holes expected over the next six week period.

The objective of the drilling is to extend and infill the high grade gold mineralisation at both Break of Day and Lena to complete a new resource estimate in the second quarter of 2017. The new resource estimate will underpin studies to demonstrate a viable path to near term development.

Assay results for two drill holes from the recent drill program at Break of Day have been received.

Drill hole 17MORC003 intersected 1m @ 117.4g/t Au from 173m down hole and extends the high grade gold mineralisation on the Twilight Lode a further 25m south on section 13275mN (Figures 2 and 3). Drill hole 17MORC006 was drilled on section 13350mN and intersected 2m @ 16.2g/t Au from 120m down hole (Figure 4). Assays are awaited for an additional 38 drill holes at Break of Day and Lena.

There is significant potential to continue to improve the grade and increase the gold resources at Lena and Break of Day with further drilling.

The high grade gold mineralisation at Break of Day occurs in vertical to steep westerly dipping, semi-parallel quartz lodes hosting gold with minor (1-2%) pyrite, within a dolerite-basaltic stratigraphic sequence. The separation of the Twilight and Velvet gold lodes varies along strike from 15 to 60 metres. The gold mineralisation is currently open along strike and down plunge.

Figure 1: Location plan showing maximum gold in hole plotted at the drill hole collar for Break of Day and Lena gold prospects

Figure 2: Break of Day cross section 13275mN - local grid (vertical section through mineralisation)

Figure 3: Break of Day long section of Twilight gold lode (a long section or longitudinal section is a section along the plane of the lode and in this instance shows gold grade x thickness variability with depth of the Twilight Lode)

Figure 4: Break of Day long section of Velvet gold lode (a long section or longitudinal section is a section along the plane of the lode and in this instance shows gold grade x thickness variability with depth of the Velvet Lode)

The Cue Project ("the Project") is a Farm-In and Joint Venture Agreement with Silver Lake Resources Limited ("Silver Lake") (ASX: SLR). Musgrave has met the Stage 1 Earn-In holding a 60% Joint Venture interest in the Project and has elected to progress to Stage 2 and increase its equity to 80%. The Project consists of the Moyagee Gold and Hollandaire Copper Resources (see ASX announcement 25 November 2015, "Musgrave Secures Advanced Gold and Copper Project") and surrounding tenure in the highly prospective Murchison province of Western Australia (Figure 5).

The Company believes there is significant potential to extend existing mineralisation and also discover new high grade mineralisation within the Project area, shown by the recent drilling success at Break of Day and Lena.

Enquiries:

Rob Waugh Managing Director

Musgrave Minerals Limited

+61 8 9324 1061