MINOTAUR EXPLORATION LIMITED ACN 108 483 601 ASX: MEP

MINOTAUR

EXPLORATION

Quarterly Report

Period ended 30 June 2016

www.minotaurexploration.com.au

Exploration Highlights

• Attractive gold results returned from infill drilling at Chameleon gold deposit near Kalgoorlie (WA)

• Ground geophysical surveys initiated at Mt Woods copper project near Prominent Hill (SA), in

  collaboration with OZ Minerals and Osborne JV near Cloncurry (Qld), in collaboration with JOGMEC

• Ground geophysical surveys completed at Eloise copper project near Cloncurry, also in collaboration with OZ Minerals

Corporate Review

The Company welcomed Dr Roger Higgins to the Board at the close of the Quarter and appointed Mr Varis Lidums as Company Secretary. Dr Higgins has an

exemplary career record spanning over 40 years across a range of minerals, operational and scientific disciplines and is a non-executive director of Newcrest Mining Ltd (ASX: NCM). Mr Donald Stephens retired as Company Secretary, calling time on over 20 years service to the Minotaur group, for which the Board emphatically thanks him. Mr Lidums is a full time employee, having held the role of Commercial Manager since December 2010.

At Quarter end Minotaur held $4.5 million in cash. Completion of the unmarketable parcels buy-back resulted in the total shareholder base reducing

by 40% and consequent savings in the Company's administrative costs.

LEVEL 1, 8 BEULAH ROAD, NORWOOD, SOUTH AUSTRALIA 5067 T+61 8 8132 3400 F+61 8 8132 3499 E[email protected]

www.minotaurexploration.com.au

Review of Activities

Project Location

Figure 1: Minotaur Exploration's project locations

QUEENSLAND

Minotaur is actively exploring along the Cloncurry mineral belt of Northwest Queensland where an extensive package of iron oxide copper-gold and Cannington-style lead-silver-zinc prospective tenements has been assembled (Figure 2).

Table 1: Minotaur Exploration Limited's tenement areas, under application and/ or held 100% and/or in joint venture§ or within Minotaur Gold Solutions Ltd§(Minotaur Exploration as to 73%)

The Company's approach, here and elsewhere, continues to maximise joint venture participation as a means of defraying exploration risk and expanding operational breadth. Around $2.5M of JV-funded

QUEENSLAND

exploration activity is underway through 2016 at the Eloise and Osborne projects targeting copper-gold and lead-silver-zinc mineralisation. Field activities accelerated this Quarter with a significant program of work planned to continue through to December.

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

Eloise Farm-In

EPM 17838, 18442, 18624, 19500, 25237, 25238, 25389, 25801, MDL431;

Minotaur 100% (except on those parts of MDL431 and EPM17838 where Sandfire Resources NL can earn 80%), Area 728km2

Drilling on IP anomalies at Olympus and Bullwinkle at the Eloise JV with OZ Minerals (Figure 3), saw a total of 1,116.6m drilled in 3 holes (Appendix 1 - Table 1). Two

holes at Olympus did not show base metal mineralisation and lacked sulphides, quite unexpected given the size and strength of the IP anomaly. One hole at Bullwinkle intersected minor copper sulphide in the target zone.

Representative samples have been sent for geochemical analyses and results will be presented when available.

Overall, the results are disappointing and Minotaur is reviewing technical explanations for the apparent strong IP anomalism at both targets given the absence of extant sulphide minerals. To assist, core samples from all 3

holes have been sent for geophysical testing of galvanic electrical resistivity and IP effect to help determine chargeability and resistivity characteristics of the rocks intersected in the target zones.

Ground gravity and EM surveys were completed. 1567 gravity stations were collected, primarily over the Levuka Shear zone, with data used to assist the construction of more robust basement geology interpretation for ongoing targeting.

The EM survey, comprising 117.6 line kilometres, focused on the prospective Levuka Shear Zone in the northeast of the Eloise JV project area (Figure 3). The survey was conducted in an area where the prospective basement rocks are concealed by 50-100m of younger cover and there has been limited previous exploration. Two strong EM conductors are identified at the Iris Prospect, located approximately 5km northeast of the Eloise copper-gold mine. The Iris North target lies at a depth of 100m with

a modelled strike of 250m, depth extent of 600m and conductance of 1500 Siemens (S). The Iris South target lies at a depth of 135m with a modelled strike of 400m, depth extent of 120m and conductance of 3200 S. The targets lie within interpreted Mt Norna Quartzite, a regionally significant geological unit that hosts the Eloise and Osborne copper-gold mines and the world-class Cannington silver-lead-zinc mine. Planning for drill testing the targets is underway.

QUEENSLAND

Figure 3: Eloise project magnetics with tenements and main prospects including Bullwinkle, Olympus, Artemis, Sandy Creek and the new Iris EM target. Locations of Altia JV and the Eloise Mine shown for reference.

Altia Joint Venture

MDL432, parts of MDL431 and parts of EPM17838; Sandfire Resources NL earning 80%, Area 43.7km2

Sandfire Resources completed one diamond drill hole at the Capricorn North prospect on EPM17838. Capricorn North lies approximately 4km north of the Alita Pb-

Ag deposit. Drilling targeted a downhole EM anomaly identified in previous drilling. The hole intersected narrow zones of weak copper sulphide mineralisation and was terminated at 394m. Assay results have not yet been returned for this work and will be reported when available. A downhole electromagnetic survey in this hole identified a stronger off-hole conductor at depth.

A second drillhole commenced at the Altia deposit targeting the down plunge extension of the mineralisation below a flat fault. The fault is interpreted to offset the mineralisation to the west by approximately 150m.

JOGMEC Osborne Joint Venture

EPMs 18571, 18574, 18575, 18576, 18720, 19061, 19066, 25197, 25699,

25886, 25888 & EPM 25960; Minotaur 100%, Area 1,795km2

Target generation work continued over the project area aimed at defining targets for ground geophysical

refinement prior to drill testing. A suite of magnetic and structural targets are identified (Figure 4) and ground EM and IP geophysical surveys have commenced. The surveys are expected to take 6-8 weeks to complete. Drilling is expected to be conducted in the fourth Quarter.

Figure 4: Osborne project magnetics with tenements and main targets for geophysical testing

Regional Cloncurry Project

EPMs 8608, 16975, 18068, 18861, 19412, 19530, 25856, 25889, EPMAs

26230, 26233 Minotaur 100%, except in relation to EPM 8608 which has a net smelter royalty of 2% payable to BHP Billiton Limited; Area 969km2

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

SOUTH AUSTRALIA

Prominent Hill Project

EL 5019, 5210, 5263, 5439, 5554, 5573; OZ Minerals 100% (Minotaur testing selected targets in collaboration with OZ Minerals), Area 3,532km2

The Mt Woods JV, centred around OZ Minerals' Prominent Hill copper-gold mine, finalised heritage surveys and land access arrangements enabling ground based geophyiscal surveys. EM and IP programs are initially focussed on targets