ASX ANNOUNCEMENT 29 July 2016

QUARTERLY ACTIVITY REPORT JUNE QUARTER 2016

HIGHLIGHTS

New Exploration Team

• The June quarter saw the commencement of a new organisational structure for exploration, headed up Dr Kevin Wills, with a new exploration team.

  Gold

• In April, the 2016 calcrete sampling program commenced with new exploration team on the Gawler Craton gold tenements surrounding the Challenger gold mine.

• Marmota acquired, from a private party, 100% interest in 3 additional tenements around Challenger - EL 5087, 5088, 5527 [ASX:MEU 14 April 2016 ]

• New holdings further expand Marmota's dominant position around the Challenger Gold mine.

• Marmota then negotiated agreement with joint venture partner Apollo Minerals. Under the terms [see ASX:MEU 4 July 2016 ], Marmota has assumed full control of Aurora Tank (EL 5589) and increases its stake to 100% ownership (on registration).

• Drilling program design undertaken.

  Copper

  • In June, Marmota, produced a copper Exploration Target, at the Champion prospect at West Melton.

  • Future priority placed on Champion + drilling program designed

    [ ASX:MEU 16 June 2016 ]

    Corporate

  • New capital brought in

    • $267,750 placement to Southern Cross Capital Pty Ltd [ASX:MEU 20 June 2016 ] further to $258,750 placement (before costs) to same [ASX:MEU 31 March 2016]

    • New cornerstone investor

• EDI Taxation Credits issued to shareholders [ ASX:MEU 23 May 2016 ]

  Exploration Activities during Quarter

  GOLD Gawler Craton

  Tenement	Name	MEU Holding
  EL4510	Ambrosia	100%
  EL5684	Pundinya	100%
  EL5195	Muckanippie	100%
  EL5799	Indooroopilly	100%
  EL4995	Mt Christie	100%
  EL5060	Lake Anthony	100%
  EL5377	Cudyea	100%
  EL5759	Mulgathing	100%
  EL5087	Woorong Downs	100% *
  EL5088	Comet	100% *
  EL5527	Bradman	100% *
  ELA2016/00050	Carnding	100% ‡

  * tenements acquired from private party

  ‡ tenement application submitted during the June 2016 Quarter

  Work undertaken during reporting period

  Background

  • Marmota is searching for Challenger-style gold systems. The Challenger mine has already produced 1 million ounces of gold (over A$1.5 billion of gold, at current prices).

  • Marmota has a dominant tenement holding around Challenger. Marmota tenements cover approximately 5,300 km2 of highly prospective area around the Challenger gold mine, in the Woomera Prohibited Defence Area in the Gawler Craton.

  • Marmota is adopting the same calcrete sampling methodology that was used to find Challenger -- to highlight areas of gold anomalism with the potential for Challenger-style gold mineralisation.

    Gold Exploration Activities

    • The June quarter saw the commencement of a new organisational structure for exploration, headed up Dr Kevin Wills, with a new exploration team.

    • Dr Wills is recognised as a pioneer of the use of calcrete sampling for gold exploration in the Gawler Craton. In particular, he designed the calcrete sampling program that ultimately led to the discovery of the Challenger Gold Mine.

    • April saw the start of 2016 gold exploration activities in the Gawler Craton gold project. This work was temporarily interrupted by unusual and heavy rain in the region throughout the June 2016 Quarter. The program features calcrete sampling across multiple targeted areas on the:

      • Lake Anthony (EL 5060)

      • Muckanippie (EL 5195) and

      • Mt Christie (EL 4995) tenements

    • At the start of the June 2016 Quarter, Marmota conducted a site reconnaissance over a number of its tenements in the Gawler Craton gold project. This included revisiting locations where anomalous gold in calcrete samples were obtained at Westpoint Hill in October 2015 and undertaking further field analysis under the guidance of Dr Wills.

      Westpoint Hill

    • In the recent March Quarterly[ see ASX:MEU 29 April 2016 ], Marmota reported that it had repeatedly been unable to reproduce the 3 high gold-in-calcrete anomalies at Westpoint Hill: Neither by detailed infill sampling program, nor by subsequent taking of new duplicate samples [ see ASX:MEU 29 April 2016 ].

    • As a final check, as part of the site reconnaissance activities mentioned above, Marmota's new exploration team took duplicate samples by hand-based auger at the 3 sample points [ ASX:MEU 12 April 2016 ]. This was again unable to reproduce any anomalous gold-in- calcrete results at those 3 sample points.

  • As the Company has consistently and repeatedly been unable to reproduce the 3 high values [ see ASX:MEU 17 Feb 2016, 24 Feb 2016, 29 April 2016], Marmota will not conduct any further work over them.

    New Tenements

  • Acquisition of new licences from a private party

    In April 2016, Marmota entered into a binding agreement with a private party to acquire a 100% interest in 3 tenements around the Challenger gold mine in the central Gawler Craton - EL 5087, 5088 and 5527 [ seeFigure 1 above ]. These licences have received virtually no historical drilling for gold, and are an important addition to the Company's gold exploration portfolio. The acquisition was completed shortly after the end of the June 2016 Quarter [ see ASX:MEU 15 July 2016 ]

  • Aurora Tank Gold Project

    During the quarter, Marmota negotiated an agreement with its joint venture partner Apollo Minerals. Under the agreement, Marmota immediately assumes full control of Aurora Tank (EL 5589), and increases to 100% ownership [see ASX:MEU 4 July 2016 ] effective as soon as the transfer is registered.

    The new agreement between Marmota and Apollo finalises all matters under the farm in agreement. Apollo has transferred to Marmota its interest in the Aurora Tank tenement and Marmota has paid Apollo $50,000.

    This project represents the Company's most advanced gold project and will be the focus of follow-up drilling in the September 2016 quarter.

    Aurora Tank [ JV with Apollo Minerals LimitedASX:AON ]

    Tenement	Name	MEU Holding
    EL5589	Aurora Tank	Marmota: 75% Apollo: 25% (being transferred to Marmota)

    Work undertaken during reporting period

    • No work was undertaken at Aurora Tank during the June 2016 Quarter.

      Note: Under an agreement entered into with Apollo Minerals [see ASX:MEU 4 July 2016 ], Marmota has assumed full control of Aurora Tank (EL 5589), and 100% ownership on registration of same.

      URANIUM Junction Dam project

      Tenement	Name	MEU Holding
      EL5682	Junction Dam	100% of uranium
      EL5124	Mulyungarie	100%

      Future exploration focus

    • Uranium is on back-burner pending uplift in market conditions

    • Watching developments re prospective re-opening of adjacent Honeymoon Plant