EPM19508: COURTENAY WEST 2016 Annual Report

28 May 2015 – 27 May 2016

Author(s) P. Tyrrell - Geology Manager H. McVicar - Geologist

Tenure Holder New Hope Exploration Pty. Ltd. – 100%

Report Lodged By T. Dehle

Report Lodged On 13/06/2016

ACKNOWLEDGEMENT AND WARRANTY

1. Subject to 2, the mining tenement holder acknowledges that this report, including the material, information and data incorporated in it, has been made under the direction or control of the State of Queensland (the State) within the meaning of section 176 of the Copyright Act 1968 (Commonwealth). 2. To the extent that copyright in any material included in this report is not owned by the State, the mining tenement holder warrants that it has the full legal right and authority to grant, and does hereby grant, to the State, subject to any confidentiality obligation undertaken by the State, the right to do (including to authorise any other person to do) any act in the copyright, including to: a. use; b. reproduce; c. publish; or d. communicate in electronic form to the public, such material, including any data and information included in the material. 3. Without limiting the scope of 1 and 2 above, the mining tenement holder warrants that all relevant authorisations and consents have been obtained for all acts referred to in 1 and 2 above, to ensure that the doing of any of the acts is not unauthorised within the meaning of section 29(6) of the Copyright Act 1968 (Commonwealth).

New Hope Group 3/22 Magnolia Drive, Brookwater, QLD 4300 Phone: (07) 3418 0500 Facsimile: (07) 3418 0341 Web: www.newhopegroup.com.au

TABLE OF CONTENTS

SUMMARY ...... 4 LOCALITY ...... 5 MAP SHEETS ...... 5 COMMODITY ...... 5 TECTONIC UNIT ...... 5 AGE ...... 5 STRATIGRAPHY ...... 5 KEY WORDS ...... 5 TENURE ...... 6 LOCATION AND TENEMENT ACCESS ...... 7 EXPLORATION BY NEW HOPE EXPLORATION ...... 9 SUMMARY OF HISTORICAL EXPLORATION ...... 11 PREVIOUS EXPLORATION BY NEW HOPE GROUP ...... 12 GEOLOGICAL DATA ...... 15 REGIONAL GEOLOGICAL SETTING ...... 15 LOCAL GEOLOGY ...... 16 GROUND GEOPHYSICAL SURVEYS ...... 16 GEOCHEMICAL DATA ...... 16 GEOLOGICAL MODELLING AND RESOURCE ESTIMATES ...... 17 REFERENCES ...... 18

FIGURES

Figure 1 - Location Map ...... 8 Figure 2 - 2015 Courtenay Project IP Survey Location ...... 10 Figure 3 - Regional Historical Exploration ...... 12 Figure 4 - Areas of interest at Courtenay due to gravity or magnetic anomalies ...... 13 Figure 5 - Location of Courtenay Project Tenure With Mapped Regional Geology ...... 16

TABLES

Table 1 - Queensland Government Map Sheets Reference ...... 5 Table 2 - List of Sub-Blocks ...... 6

ATTACHMENTS

2015 Courtenay IP Survey ‐ Raw data 2015 Courtenay IP Survey ‐ Zonge Logistics Report

SUMMARY

This report describes the background information, and exploration & evaluation work conducted by New Hope Exploration (NHE) on EPM19508: Courtenay West during the twelve-month period from 28 May 2015 to 27 May 2016.

The Courtenay tenement is deemed to have the potential to host Iron Oxide Copper Gold (IOCG) and Broken Hill Type (BHT) mineralised systems.

It should be noted that EPM19508: Courtenay West and the adjoining EPM18581: Courtenay tenement is regarded by New Hope Group (NHG) as one project.

The primary focus of NHE’s exploration program for 2015-2016 was to:

• Complete negotiations with landholder’s for Conduct & Compensation Agreements; • Conduct site reconnaissance, cultural heritage clearance and site preparation activities in advance of the on-ground exploration program commencing; and • Carry out an exploration program of near surface geophysical surveying to better delineate future exploration targets.

LOCALITY

EPM19508: Courtenay West is located approximately 45km north-north-east of Cloncurry in northwest Queensland. It lies contiguous to NHE’s tenement EPM18581: Courtenay.

MAP SHEETS

The relevant 1:100000 map sheet can be downloaded from the Queensland Government Department of Natural Resources and Mines - Queensland Spatial Catalogue.

TABLE 1 - QUEENSLAND GOVERNMENT MAP SHEETS REFERENCE Map Sheet Name Map Number Cloncurry 7056

COMMODITIES

The principal commodities being sought are gold, silver, copper, lead and zinc. The exploration models for the tenement are Iron Oxide Copper Gold (IOCG) and Broken Hill Type (BHT) mineralised systems.

TECTONIC UNIT

This project area is located in the Carpentaria Basin, with the target basement rock interpreted to be the Soldiers Cap Group, Corella Formation and Toole Creek Volcanics.

AGE

The basement rock is of Paleoproterozoic age.

STRATIGRAPHY

The basement sequence varies from lower greenschist to amphibolite facies metamorphism, and underwent complex deformation in multiple events at around 1570-1530Ma. Subsequent intrusion of large granitic bodies and lesser diorites took place during the latter stages of the deformational period between approximately 1530-1500Ma. These later thermal events have been linked to the occurrence of copper-gold mineralisation in the district by many researchers.

KEY WORDS

Exploration, Carpentaria Basin, Courtenay Project, IOCG, Iron, Oxide, Copper, Gold, Mineralisation, BHT, Broken Hill, Ernest Henry, Soldiers Cap Group, Corella Formation, Toole Creek Volcanics.

TENURE

In 2012, New Hope Exploration Pty. Limited applied for a total area of 7 (seven) sub-blocks (Table 2) situated in the Cloncurry region of North West Queensland, 770km west of the city of Townsville via the Flinders Highway. The permit allows for the exploration of all minerals other than coal (AMOC).

The sub-blocks of EPM 19508 are contiguous, and the centroid of the EPM area lies about 25 kilometres north-north-east of Cloncurry. On the 28th of May 2013, the Minister for Natural Resources & Mines granted NHE the exploration permit to explore for all minerals other than coal. The adjacent EPM18581: Courtenay was granted on 28th January 2012 for a period of five years and both tenures are recognised by NHG as the greater Courtenay Project area.

A list of the current 7 sub-blocks for EPM19508 can be found in the below table.

BIM Block Sub-Blocks Number CLON 465 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ W X Y ‐ 3 CLON 466 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ W X ‐ ‐ 2 CLON 537 ‐ B ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1 CLON 538 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Q ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1 Total Number of Sub‐Blocks: 7 TABLE 2 - LIST OF SUB-BLOCKS

LOCATION AND TENEMENT ACCESS

EPM19508: Courtenay West is located approximately 45km north-north-east of Cloncurry in northwest Queensland. It lies contiguous to NHE’s EPM18581: Courtenay (Figure 1). The tenement is location close to the Ernest Henry Mine, a copper and gold mining and processing operation that began commercial production in March 1998 as an open pit mining operation.

The Courtenay region is located in a summer dominant rainfall zone, and experiences the effects of the monsoon trough across this flat-lying flood country between December and March. Vehicular access to EPM19508 is via Flinders Highway, and unsealed station access tracks. Prior access to the tenement has been granted using the Ernest Henry haul roads (subject to condition).

The current tenement area is utilised for cattle grazing and breeding land.

FIGURE 1 - LOCATION MAP EXPLORATION BY NEW HOPE EXPLORATION

EXPLORATION RATIONALE

Exploration at the Courtenay Project area by New Hope Group conceptualised from historical exploration activities, proximity to known viable mineral deposits, regional geology, the availability of valuable open file data, and the knowledge and experience of NHE employees.

LAND ACCESS

A Conduct and Compensation Agreement (CCA) was negotiated for the recent work that was undertaken on the tenure.

CULTURAL HERITAGE AND NATIVE TITLE

There has been a new registered Traditional Owner over the area.

At the time of the activities and previously, New Hope Exploration Pty Ltd (NHE) liaised with the last known claimant which was the Mitakoodi People to complete a survey to meet our Duty of Care.

EXPLORATION ACTIVITIES

28 MAY 2015 - 27 MAY 2016

During this reporting period, land access agreements, Cultural Heritage, and staff/contractor site induction activities were completed in preparation for on-ground exploration activities. The Courtenay IP Survey was completed during September 2015 by Zonge Engineering and Research Organization (Australia) Pty. Ltd. (Zonge). This survey highlighted a number of anomalous responses across the 9 survey lines (15.1km in total).

FIGURE 2 - 2015 COURTENAY PROJECT IP SURVEY LOCATION

From preliminary interpretation, both GeoDiscovery and Zonge suggested that the central and eastern survey areas were extremely conductive. A number of features have been highlighted that are: o Highly conductive and chargeable (potentially graphitic shales, or could host massive sulphides) o Moderately conductive and chargeable (possible indication of a deeper feature) o Resistive and chargeable (potential for disseminated sulphides and associated gold mineralisation and resistive quartz veining)

A further review of survey results along with the large volume of regional open file reports was carried out prior to on-ground exploration. Post-rehabilitation checks were conducted on site and during this; an assessment of surface features above zones of anomalous IP Survey response was conducted. Rock samples have been taken and field observations have contributed to the current project assessment in conjunction with a Cloncurry Regional Structural Geology Study. SUMMARY OF HISTORICAL EXPLORATION

A number of historical exploration programs have been undertaken in the Courtenay area. The most recent exploration was undertaken by the EXCO group (Mt Margaret Project focussing on Ernest Henry style deposits). Previous exploration has also been undertaken by BHP (Fisher Creek Project targeting BHT deposits in the Soldiers Cap Group), Placer Dome (targeting ironstone hosted Cu-Au Selwyn style deposits), North Ltd. (targeting IOCG Ernest Henry and BHT deposits) as well as Savage Resources/Pasminco.

Prior to 1990, historical exploration was focussed on the sediments of the Carpentaria Basin, exploring for oil shale and uranium. However, some exploration was focussed on base and precious metals in the underlying basement. No digital data is available from this period.

The majority of exploration activity in the Courtenay region was undertaken between 1990 and 2000. Limestone was the focus of Savage Resources in the eastern portions, while IOCG and Cannington type mineralisation were the targets in the western and central region where depth to basement is predicted to be within 200m.

BHP held tenure in the central portion of the Courtenay Project Region, with the main target sought being Broken Hill-type Pb-Zn-Ag mineralisation within the Soldiers Cap Group (Fisher Creek Project). Ground magnetics and gravity profiles were acquired. Two higher priority gravity anomalies were drilled by BHP and both holes intersected thick mafic sills hosted within graphitic phyllites of the Toole Creek Volcanics. The mafic bodies were considered by BHP to be sufficient to account for the gravity anomalies and down-hole geochemistry did not define any significant anomalism.

PREVIOUS EXPLORATION BY NEW HOPE GROUP

28 MAY 2012 - 27 MAY 2013

During the reporting period, vacant sub-blocks adjacent to EPM18581 were acquired as EPM 19508 Courtenay West. The planned gravity survey was extended to include this area.

Daishsat completed the gravity survey in August 2012 with 217 gravity stations in EPM18581 and 70 stations in EPM19508. Consultants GeoDiscovery processed the gravity data. Based on the resulting gravity model, GeoDiscovery recommended an electrical survey to refine drilling targets.

In the figure below, bounding boxes (white) of the data used for modelling shown with the Regional Reduced to Pole (RTP) image, linear colour stretch. Locations of MT stations are shown as white dots; yellow lines are the approximate locations of modelled conductors. Mineral prospect locations (from QLD Government QMIN database) are shown by coloured symbol and name.

FIGURE 3 - REGIONAL HISTORICAL EXPLORATION

28 MAY 2013 - 27 MAY 2014

The review of the available geophysical information (both historic and newly acquired) suggested that there are still unexplained anomalies. Several potential regions of interest have been highlighted in Figure 4 based on their electrical properties; their discrete magnetic character; or, their regional gravity signature. The majority of these regions of interest are located in the central and western portions of the Courtenay EPM’s.

During the 2013-14 reporting period, it was the intention of New Hope Exploration to undertake Induced Polarisation (IP) surveys on Area B & Area C, see Figure 4, in order to refine the geophysical targets. In November 2013, site reconnaissance and cultural heritage activities occurred on these targets, which identified two key issues:

1. The proposed IP lines in Area B were inaccessible due to timber pulling by the landowner. At the risk of personal injury and property damage, work in this area was been postponed until the landholder was able to clear this fallen timber and create a safer working environment. Therefore, no cultural heritage clearances occurred at this location.

2. A recently constructed haul road bisects the proposed IP lines in Area C. The Glencore haul road links Mt Margaret and Ernest Henry mines. Whilst this road would not interfere with the IP survey acquisition, the close-space steel picket fence on either side of the haul road would. The IP lines that were accessible in this target area were culturally cleared. The cultural heritage clearance report was not been received by NHE during the reporting period which caused delays in the project commencement.

Whilst on-ground activities were limited during this reporting period, work had continued on the desktop review of Courtenay. GeoDiscovery assisted New Hope Exploration to update the review of Open File Company Reports in region, and review the MT data for the Courtenay project area (EPM18581 & EPM19508).

FIGURE 4 - AREAS OF INTEREST AT COURTENAY DUE TO GRAVITY OR MAGNETIC ANOMALIES 28 MAY 2014 - 27 MAY 2015

During the reporting period, further review of the gravity model and regional geophysical information was carried out. In the prior reporting period, it was concluded that as the Courtenay area is completely covered by younger sediments which mask the prospective Proterozoic basement rocks and that appropriate geophysical data be obtained for drilling target delineation and assessment.

The review of the available geophysical information (both historic and newly acquired) suggests that there are still unexplained anomalies. Several potential regions of interest were highlighted based on their electrical properties; their discrete magnetic character; or, their regional gravity signature. The majority of these regions of interest are located in the central and western portions of the Courtenay project area (EPM18581 & EPM19508).

During the 2014-15 reporting period, work continued on the desktop review of Courtenay West. Re-planning of the Courtenay project IP survey (that was unsuccessful in the prior reporting year due to insufficient ground conditions and interaction with adjacent mining operations) was finalized. Cultural Heritage clearances were obtained across the IP survey area and site reconnaissance activities had commenced.

A review of the regional geological and geophysical information continued and information gathered in the Courtenay IP Survey program was collated to feed into the model to better delineate exploration drilling target locations. The recommendations on the review of this survey were used for the 2015-16 exploration program. GEOLOGICAL DATA

REGIONAL GEOLOGICAL SETTING

The Courtenay region is almost entirely covered by sediments of the Carpentaria Basin and no outcrops of Proterozoic basement are present (Figure 5). An understanding of the geology of the area relies on the results of historical exploration drill holes, the interpretation of regional aeromagnetic and gravity data and the extrapolation of geological information from adjacent outcropping areas and areas that have experienced previous exploration and/or mining.

The basement is interpreted to be the Paleoproterozoic Soldiers Cap Group, Corella Formation and Toole Creek Volcanics. The basement sequence varies from lower greenschist to amphibolite facies metamorphism, and underwent complex deformation in multiple events at around 1570-1530Ma. Subsequent intrusion of large granitic bodies and lesser diorites took place during the waning stages of the deformational period between approximately 1530-1500Ma. These later thermal events have been linked to the occurrence of copper-gold mineralisation in the district by many researchers.

To the northwest, the Ernest Henry, E1 and E2 deposits occur within the Corella Formation. To the south, the Cannington deposit occurs within the Soldiers Cap Group at slightly higher metamorphic grade. Local increase in magnetic response within the area is possibly due to alteration that is often associated with the Iron Oxide Copper Gold (IOCG) or Broken Hill Type (BHT) mineralisation. The Courtenay area is deemed to have the potential to host such mineralised systems, and targets identified within the area may therefore be considered worthy of further exploration and possible drill testing.

LOCAL GEOLOGY

The Courtenay area is prospective for both Iron Oxide Copper Gold (IOCG) and Broken Hill- type (BHT) mineralisation. Both the IOCG and BHT style deposits are characterised by distinctive geophysical signatures, enabling a direct targeting focus to explore for such deposits with some confidence beneath cover sediments.

The below map illustrates the open file geological interpretation from the Geological Society of Queensland.

FIGURE 5 - LOCATION OF COURTENAY PROJECT TENURE WITH MAPPED REGIONAL GEOLOGY (COVER SEDIMENTS)

GROUND GEOPHYSICAL SURVEYS

Zonge completed the dipole-dipole Induced Polarisation Survey across the Courtenay Project area in September 2015.

Specifications of this survey can be found in the attached report by Zonge.

Raw, processed data can be found in the attached folder from GeoDiscovery.

GEOCHEMICAL DATA

Not applicable to this reporting period. Outcrop samples were taken at the time of the 2015 Courtenay Project IP Survey; however these are yet to be analysed.

GEOLOGICAL MODELLING AND RESOURCE ESTIMATES

Not applicable to this reporting period. A preliminary review of the Courtenay Project IP Survey by GeoDiscovery has highlighted a number of areas of interest for further exploration.

Exploration drilling is anticipated in future work programs which will feed into a revised geological model.

REFERENCES

Coopes, G.A. (2012) ‘New Hope Coal – Queensland Gravity Surveys Logistics and Processing Report – April / July-August 2012’ Confidential Report prepared for GeoDiscovery Group Pty. Ltd. on behalf of New Hope Exploration Pty. Ltd. by Daishsat Geodetic Surveyors Pty. Ltd.

GeoDiscovery Group Pty. Ltd. (2010) ‘Additional Information to Support an Application for an Exploration Permit for Minerals (EPM) Project Name: Courtenay’ Confidential Report prepared for New Hope Exploration Pty. Ltd.

GeoDiscovery Group Pty. Ltd. (2012) ‘Summary of Historical Exploration, Available Data and Target Delineation’ Confidential Report prepared for New Hope Exploration Pty. Ltd.

Nelson, K (2012a) ‘2012 Courtenay Gravity Survey – EPM 18581 and 19508 Results’ Confidential Memorandum prepared for New Hope Exploration Pty. Ltd. by GeoDiscovery Group Pty. Ltd.

Nelson, K (2012b) ‘Magnetic and Gravity Modelling, Target Review and Recommendations for Further Exploration – Courtenay Project EPM18581 and 19508’ Confidential Memorandum prepared for New Hope Exploration Pty. Ltd. by GeoDiscovery Group Pty. Ltd.

Nelson, K (2012c) ‘Courtenay Area – EPM18581 & EPMA19508: Summary of Historical Exploration, Available Data and Target Delineation’ Confidential Memorandum prepared for New Hope Exploration Pty. Ltd. by GeoDiscovery Group Pty. Ltd.

Zonge Engineering and Research Organization (Australia) Pty. Ltd., (2015) ‘Courtenay Dipole-Dipole Induced Polarization Survey – Logistics Summary’. Confidential Report prepared for New Hope Exploration Pty. Ltd.