03afe4fd-607f-41f3-92f9-c1ef92f097dd.pdf

ARGONAUT RESOURCES NL

ABN 97 008 084 848

argonautresources.com

ASX: ARE

CAPITAL STRUCTURE:

Issued shares: 443,791,701

Listed options: 38,004,957

(6c, Mar 2017)

Unlisted options: 10,000,000

(15c, Dec 2015)

Unlisted options: 7,000,000

(10c, Dec 2015)

Cash on hand: $690,000

DIRECTORS:

Patrick Elliott,

Non-Exec Chairman

Lindsay Owler,

Director/CEO

Andrew Bursill,

Director/Secretary

Malcolm Richmond,

Non-Exec Director

COPPER FOCUS

Lumwana West, Zambia

• Copper, cobalt (bulk tonnage)

• Advanced exploration stage

• Funding by option agreement

• Antofagasta earning 70%

• Argonaut operator

  
  

  Torrens, South Australia

• Copper, gold (large IOCG)

• Access negotiation/ exploration stage

• Pro-rata funding under JV

• Straits Resources Ltd 70%, Argonaut 30%

• Argonaut operator

  
  

  Alford, South Australia

• Copper (IOCG)

• Exploration stage

• Funding via farm-out

• Sandfire Resources NL earning 70%

• Sandfire operator

  
  

  Quarterly report

  FOR THE PERIOD ENDING 30 SEPTEMBER 2015

  
  

  Argonaut Resources NL (Argonaut or the Company) (ASX: ARE) is pleased to provide the following report for the three months to 30 September 2015 (the Quarter).

  
  

  Highlights

  Lumwana West, Zambia

  Exploration program:

  • An 11 hole Diamond core drilling program for a total of 2,006m was completed in July 2015 at five prioritised copper targets.

  • The collection and analysis of over 1,000 new soil samples was completed in the Quarter.

  • This program substantially completed the first phase of an option agreement with Antofagasta. The results of this program are being assessed.

    
    

    Kabikupa prospect:

  • 2015 drilling at Kabikupa prospect sought to extend the mineralised strike extent to 1,800m.

  • Significant copper mineralisation was not intercepted by drilling outside of the main surface anomaly, meaning subsurface copper mineralisation is likely to be confined to a strike length of approximately 1,000m.

    
    

    Kamafamba prospect:

  • Three drill holes for 409m were drilled at the Kamafamba prospect. Highlights from this drilling included:

    ¬ KMDD001: 15.85m at 0.30% copper from 41m

    ¬ KMDD003: 17.6m at 0.40% copper from 134.5m, including 5.6m at 0.67% copper from 146.5m

    Regional drilling program:

  • Three additional targets known as Sharamba, Luamvunda and Mufuka that were defined by soil sampling and structural geology interpretation were drill tested between May and July 2015.

  • No significant mineralised intercepts were returned from these targets.

    
    

    Outlook

  • Argonaut's major projects benefit from farm-in or joint venture arrangements with funding partners.

  • Current low asset valuations is providing a unique opportunity to secure additional high quality exploration projects.

  • Argonaut is evaluating numerous opportunities with a view to adding new assets to the Company's portfolio.

Registered Office

Suite 4, Level 9, 341 George Street Sydney, NSW, 2000, Australia

T +61 2 9299 9690

F +61 2 9299 9629

E [email protected]

Adelaide Office

Level 1, 63 Waymouth Street Adelaide, SA, 5000, Australia T +61 8 8231 0381

F +61 8 8231 6092

E [email protected] 1

Zambia

Lumwana West (Argonaut 90%)

The Lumwana West project is located in the Central African Copperbelt, North-Western Province, Zambia (Figure 1). The area is prospective for large tonnage, low to medium grade copper deposits. There are several major mines nearby to Lumwana West that are hosted in similar geological settings.

Argonaut, via its 90% held subsidiary, Mwombezhi Resources Ltd, has been successful in intercepting broad copper intercepts at the Nyungu deposit and has defined a series of large, prospective targets that have now undergone first- pass drill testing.

350,000 mE 400,000 mE

DEMOCRATIC REPUBLIC OF CONGO

Location

ZAMBIA

Argonaut

LUMWANA WEST

Nyungu Deposit and target areas

First Quantum

KANSANSHI

300,000tpa copper from 2015

16121-HQ-LPL

Barrick

LUMWANA

0 25

kilometres

Road

Nyungu Deposit and targets

1.1Bt at 0.50% Cu

170,000tpa copper - nameplate

Tenement boundary

Mineral deposit projected to surface

Target areas

Lumwana11

Figure 1: The Domes Region has an international scale copper endowment and is host to the new generation of mines in the Central African Copperbelt

Exploration Program

Key points

• The drilling program completed in early July 2015 was designed to test large footprint copper targets defined by surface geochemistry, geological mapping and structural geology interpretation.

• The 2014/15 program now comprises over 8,100m of drilling, plus geological mapping and soil sampling. To date, 36 Diamond core drill holes have been completed and 12,947 soil samples collected and analysed.

• 2,006m of additional Diamond core drilling was completed between May and July 2015.

• The 2015 exploration program completes the first phase of an option agreement with Antofagasta.

• Antofagasta can earn a 25% interest in the Lumwana West project at the completion of the first phase by funding US$3.9m of exploration.

The 2014/15 program was the first exploration phase under the option agreement between Argonaut and a wholly owned subsidiary of Antofagasta plc (Antofagasta), dated 28 April 2014 (the Overlying Agreement). According to the Overlying Agreement, exploration expenditure of US$3.9m in the first period earns Antofagasta a 25% interest in the project.

The 2014/2015 program was jointly planned by Argonaut and Antofagasta. The first phase exploration program was completed in July 2015 and included a total of 8,129m of Diamond core drilling plus the collection and analysis of 12,947 soil samples.

The focus of the program was on testing major target areas, previously defined by Argonaut, as well as new targets that were progressively generated by an extensive regional soil sampling program.

2 Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2015

340,000 mE 350,000 mE 360,000 mE

Kavipopo Prospect

8,650,000 mN

West Mwombezhi Prospect

ZNS

Prospect

LMW

Prospect

Pr

Mufuka ospect

D o m e

8,640,000 mN

Sharamba Prospect

Kabikupa Prospect

wo M

Lua

Pro

m b e z h i

mvunda

spe

ct

kezhi spect

ro

Shi P

Nyu

ngu Deposit

Kamafamba Prospect

8,630,000 mN

16121-HQ-LPL

LumwanaW_13

0 5

kilometres

ZAMBIA

Location

ZAMBIA

ZAMBIA

Licence boundary Drainage path (Dambo)

Road Track

Prospect (+40ppm Cu soil sampling)

Figure 2: Lumwana West Large-scale Prospecting Licence and prospect locations.

Of the total drill meterage, 6,123m were drilled during the 2014 field season with holes targeting the following areas: West Mwombezhi, Kavipopo, ZNS, LMW, Mufuka, and Kabikupa prospects plus the Nyungu deposit (Figure 2).

An additional 2,006m were drilled between May and July 2015 targeting geochemical anomalies and structural targets at Kabikupa, Kamafamba, Mufuka, Sharamba and Luamvunda prospects (Figure 2).

Kamafamba

The Kamafamba target sits near the southern margin of a large granite body. The prospect is defined by a 1,100m soil geochemistry anomaly. Structural interpretation indicates the geochemical anomaly is coincident with a thrust system related to the granite margin. The presence of the thrust system is interpreted to enhance the prospectivity of the target due to increased scope for the emplacement of mineralised fluids.

Drill intercepts reported in the Quarter for the Kamafamba prospect are shown in Figures 3-5 and in Table 1.

Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2015 3

348,500 mE 349,000 mE 349,500 mE

8,620,500 mN

0 200

metres

KMDD001

[email protected]% Cu from 41m

KMDD002

[email protected]% Cu from 41m

KMDD003

[email protected]% Cu from 134.5m including [email protected]% Cu from 146.5m

Soil geochemistry Cu (XRF) 200 ppm

100 ppm

40 ppm

Drilling

Drill collar with surface projection of drillhole

8,628,000 mN

KAMAFAMBA PROSPECT

Drillhole location plan

Kanafamba_03

Figure 3: Kamafamba soil anomaly contours and drill intercepts.

North

8,628,400mN 8,628,300mN 8,628,200mN 8,628,100mN

South

KMDD001

Surface geochemical peak (>100ppm)

Top of fresh rock

1,200mRL

[email protected]% Cu from 41m

TD

1,100mRL

,000mRL

Soil cover Biotite gneiss

Sulphide mineralised biotite kyanite schist

Biotite kyanite schist/gneiss

1 Amphibolite and biotite gneiss

KAMAFAMBA PROSPECT

KMDD001 Section

Looking east

Simplified interpretation

100 metres

Kamafamba_02

Figure 4: Kamafamba KMDD001 cross section.

4 Argonaut Resources NL | QUARTERLY REPORT | For the period ending 30 September 2015