Soil Chemistry and Exploration Results at Woolgar...Soil Chemistry and Exploration Results at...

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Strategic Minerals Corporation N.L. Level 29, Waterfront Place www.stratmin.com.au ASX Code: SMC 1 Eagle St, Brisbane, Qld 4000 [email protected] ACN: 008 901 380 P.O. Box 52 (08) 6141 3500 ABN: 35 008 901 380 West Perth. WA 6014 (08) 6141 3599

13 March 2018 ASX Release

Woolgar Gold Project, Queensland Strategic Minerals Corporation N. L. (Strategic) 100%

Soil Chemistry and Exploration Results at Woolgar

The Company is pleased to announce results from the multiple geochemistry and mapping programs at its wholly-owned Woolgar Project in North Queensland through 2017.

Rock-chip sampling was completed over a number of prospects, concentrated along the Woolgar Trend, along with Hampstead Queen on the recently granted EPM 26263 in the far south-east of the project area, see Figure 1. Highlights include:

62.7g/t gold in outcrop and 13.4g/t in subcrop at Belle Brandon Spring;

6.6g/t gold in outcrop and 60.3g/t in mullock at Hit or Miss; and

19.7g/t gold in outcrop and 16.3g/t in mullock at Hampstead Queen.

Soil sampling was conducted across EPM 11886, 9599 and ML 90238 which includes AI, Tomi, Exeter, Union and Hit or Miss during the second and third quarterly periods, see Figure 1. Initial results have now been finalised, and include:

Lead-zinc anomaly at AI confirmed and extended, although gold values low;

Lead anomalies at Tomi correlate to known or interpreted structures; and

Anomalies generated in the Union sector.

An ultratrace soil orientation survey was conducted over known blind mineralisation under cover in

the south of the BVS resource:

Orientation survey apparently successful; with correlations to known blind mineralisation,

although the principal elements, gold, lead and zinc, respond poorly;

Cadmium identified as a potential pathfinder to blind gold mineralisation.

These programs are required to maintain a pipeline of exploration targets, test areas for potential infrastructure and to meet with statutory work commitments. Each exploration program generated anomalous results which are currently being assessed in context with data from other exploration tools. These are generative programs that produce indicative results that should be used in conjunction with the other exploration tools rather than as stand-alone methods to define drill targets. This multi-technique approach, rather a reliance on a single stand-alone technique, forms the basis of Strategic’s on-going target definition work.

ASX:SMC Soil Geochemistry Results at Woolgar 2 of 23

Figure 1: Plan of Strategic’s tenement holdings for the Woolgar Project summarising the locations and extents of exploration activities conducted throughout 2017.

Strategic’s Exploration Strategy Exploration practices have to be tailored to the local conditions. Over the last five years, the company has trialled multiple, well established and widely used target generation and definition systems, including mapping, and geophysical and geochemical surveys. The geochemical surveys have included both direct and indirect methods, and compared multiple sample collection and analytical techniques, to identify the most effective and economical methods over the complex and varied ground conditions present in Woolgar.

There is unlikely to be a single, stand-alone tool that can predict mineralisation at Woolgar. The Company’s approach is that through interpreting all the available effective tools in conjunction, it should be possible to develop a suite of tools that validate each other. The most effective combination of techniques to date appears to be preliminary assessments based on initial reconnaissance and follow-up mapping where required, rock-chip sampling of any material of interest, including subcrop, mullock and scree, followed by targeted, locality-appropriate soil sampling. Data from these techniques, interpreted in conjunction with available geophysics (aeromagnetics, IP) form the basis of Strategic’s target definition work.

The results from the soils and mapping programs will assist Strategic in assessing the initial prospectivity of the targets outside the main areas of interest, increase the efficiency and effectiveness of drill programs and ensure that the Company meets its statutory work commitments on these tenements.


Geological Mapping & Rock-chip Sampling Rock-chip sampling and geological mapping were completed across a range of prospects. Preliminary assessment reconnaissance surveys were made over several prospects identified as potentially interesting, but with very little geological data to make informed assessments. These included: Hampstead Queen, Belle Brandon Spring, Rhys’ Vein, Karuka, Crooked Creek, Union West South (UWS) and Laidlow’s.

The reconnaissance surveys are designed to gather field observations about the style, occurrence and distribution of the mineralisation, structures and associated alteration, along with sufficient samples to assist in geochemically categorising the mineralisation. This program is primarily a tool to guide future exploration planning based on the overall prospectivity of each prospect.

Based on the positive observations at Hit or Miss, follow-up rock chip sampling was completed. This is an area of the Upper Camp, south of the river from Union (Figure 1), where previous mapping, sampling and scout drilling has identified occurrences of all three styles of mineralisation in close proximity.

Highlights from rock-chip sampling at each prospect are displayed below in Table 1. Note some samples are of mullock – loose material discarded by historic miners adjacent to pits and shafts.

Table 1: Highlights of rock-chip sampling from 2017.

Sample ID Prospect MGA94_E MGA94_N Au (g/t) Occurrence

17RL065 Belle Brandon Spring 742327 7814793 62.7 Outcrop

17RL071 Belle Brandon Spring 742425 7814703 13.4 Subcrop

17A018 Hit or Miss 746584 7818732 6.6 Outcrop

17RL020 Hit or Miss 746649 7818318 60.3 Mullock

17RL046 Hampstead Queen 769345 7801978 19.7 Outcrop

17RL038 Hampstead Queen 769578 7801775 16.3 Mullock

Hampstead Queen Preliminary assessment geological mapping and rock-chip sampling was completed at the Hampstead Queen prospect, located in the far south east of the project area, on the newly acquired EPM 26263 (Figure 1). Since this tenement is not part of the Approved Project at Woolgar, it requires a dedicated exploration program to maintain the Company’s work commitments since these cannot be offset against programs elsewhere.

This sector is dominated by a predominantly schist metamorphic basement, with Jurassic sandstone capping ridges, and alluvial fill across low-lying areas (Figure 2, Figure 3). The quartz-muscovite schist is clearly of a lower metamorphic grade than that common throughout the Woolgar Fault Zone and is more reminiscent of basement rock in the Sandy Creek area.

The majority of historic workings are focussed along a north-east trending mesothermal quartz vein (Figure 4), which outcrops almost continuously over a strike length of 400 metres, before disappearing under Jurassic sandstone and alluvium, as shown in Figure 2.

Mineralisation occurs in sheared bucky quartz with a late tectonic-hydrothermal breccia overprint bringing sulphide. The vein is typically 2 metres in width at surface. Several smaller parallel veins were recognised.


Figure 2: Rock-chip samples in outcrop and float/mullock (smaller symbols) over the historic workings at the Hampstead Queen prospect in EPM 26263, east of the main Woolgar district.

Rock-chip sampling indicates anomalous gold over much of the exposed strike length of the main vein, with several samples returning >2g/t gold, see Figure 2. Mullock from a small working in the south returned ~16g/t gold. A strong north-west grain in the aeromagnetic imagery, and a minor digging targeting a similarly orientated structure suggest there may also be a north-west control on mineralisation. Geochemically, the prospect appears distinct from Big Vein South, with indications of an intrusive related overprint to mineralisation. Hampstead Queen represents an attractive target due to the length and continuity of the main vein, the good gold grades derived from rock-chip samples to date and the possibility of multiple mineralising styles.

Figure 3: (left) Example of the terrain surrounding Hampstead Queen in EPM 26263. The vast flat area in the far distance consists mostly of Cenozoic sedimentary cover, with remnants of resistant Jurassic sedimentary rock forming various pop ups and mesa formations. In the foreground, Proterozoic basement rock is exposed, in a window between sedimentary fill in the valley and Jurassic sandstone capping the hills. Figure 4: (Right) An example of the Hampstead Queen workings. Hampstead Queen (including the Hampstead King and Lady Mary workings) was one of the top historical producers of gold in the Woolgar Goldfield.


Belle Brandon Spring Belle Brandon Spring is located in the Middle Camp in the west of the project, approximately nine kilometres north of BVS. A strong gold, silver, lead signature appears to be a reasonably typical mesothermal gold occurrence in the Woolgar Project, although anomalous bismuth (Bi) enrichment are unusual, and could indicate an intrusive-related influence, possibly as a later overlapping event.

All the workings can be attributed to structures intersecting pre-existing, rheologically-favourable, thick, bucky quartz vein or silicified wallrock where these are sheared and brecciated. Orientations are ambiguous in the old workings, but are interpreted to be north easterly.

This appears to be a system forming locally related to pre-existing favourable host-rocks, thus has similarities to and is moderately proximal to BVS, although on a lesser structure. More detailed mapping and soil sampling are recommended, although some areas are compromised by alluvium.

Karuka Karuka (Figure 5) appears to be hosted in impure granite-related quartz, near a sheared contact with dolerite. In parts the rock is extremely gossanous (Figure 6), although this does not appear to be all after sulphide: Iron carbonate introduced into the system by the doleritic country rock may be partly responsible.

The style is clearly different to the typical mesothermals along the Woolgar Fault Zone and a copper, silver, arsenic and bismuth-rich signature suggests an intrusive origin, similar to occurrences in the Gilberton/Georgetown region.

Figure 5: (Left) Example of the landscape surrounding the Karuka prospect, looking east towards the Woolgar River. The resistive topography characteristic of quartz-rich material in the area is illustrated in the left middle distance. Figure 6: (Right) Gossanous breccia at the Karuka prospect.

Whilst gold-poor, the system is still considered prospective for other metals, including copper, and the presence of an intrusive-related system itself is encouraging. These systems appear to cover an area from Union on the Woolgar Fault Zone to Crooked Creek (Figure 1). The veining at Karuka appears to trend NNE, into a less well explored portion of EPM 11886.

Follow-up is warranted since the contrasting rock types provide a favourable position for discrete pods of higher grade mineralisation. The strike extension of this system is considered a viable target, but is not a priority due to the more limited volume potential and distance from BVS.

Crooked Creek This is hosted in a more typical NW trending discontinuous euhedral bucky quartz vein. The country rock here is dominated by granite, with sheared lenses of dolerite, considered a more favourable assemblage than the regionally dominant metamorphic rocks. There is also outcrop of rhyolite and flow banded rhyolite breccia, significant evidence of Permo-Carboniferous volcanism, which is related to several major deposits in the region, such as the Sandy Creek epithermals, Agate Creek and Kidston. Whilst the rhyolite at Crooked Creek does not appear to be mineralised, its presence opens up a number of exploration possibilities in the north-western portion of the Project.


The enrichment levels of most metals were relatively low at Crooked Creek and do not provide any assistance in classifying the system. At this stage, alteration and mineralisation in this area is thought to be of typical mesothermal style and age, with the Permo-Carb volcanism occurring as a later overprint. However, it is considered a strong possibility that mineralisation directly related to the Permo-Carb volcanism could be present in the area surrounding Crooked Creek.

The host rock and setting are considered highly favourable, but generally disappointing analytical results and its distance from BVS render it a lower priority at this time.

Union West South UWS appears to be a typical mesothermal vein occurrence, both geologically and geochemically, although notably trending NE, rather than the usual NNE. It outcrops discontinuously over >1km before disappearing under a Jurassic sandstone mesa. It displays significant brecciation and mesothermal-style veining, however, despite systematic sampling, only one sample returned gold greater than 1g/t, unusual in the district.

Although UWS has considerable strike length, the results were disappointing and there does not appear to be a major feature to focus mineralisation, and it is possible that the structural orientation is unfavourable to produce the necessary dilation and fluid flow. Despite this, the prospect and the surrounding area are still considered prospective. Techniques such as MMI, successfully trailed at BVS, could be used to ascertain whether buried mineralisation is present, although this is a low priority for follow-up.

Laidlow’s Laidlow’s prospect, in the Top Camp (Figure 7), appears to be hosted in typical Woolgar Fault Zone higher-grades of schist and gneiss, with most hills capped by Jurassic sandstone, similar to BVS. Despite bordering an ML where active alluvial mining is taking place, and in a region of historic Chinese workings, little evidence of a possible hard rock source for Au was found. The alluvial gold mined at Laidlow’s prospect is interpreted to be sourced from palaeo-alluvial gold from the base of the Jurassic Sandstone, and this sector is of reduced priority.

Hit or Miss This is an area of the Upper Camp, south of the river from Union, where previous mapping, sampling and scout drilling has identified occurrences of three styles of mineralisation in close proximity. A limited follow-up sampling program was run to tie in with the soil-sampling program, see Figure 8. This mostly targeted mullock from historic workings to infill blank areas in the geochemical database locally.

Figure 7: (Left) Area of reconnaissance geological mapping and soil sampling in the Top Camp area Figure 8: (Right) En-echelon tensional veins within the Woolgar Fault Zone at the Hit or Miss prospect.


Soil Sampling & XRF Analysis Soil sampling was conducted across AI, Tomi, Exeter, Union and Hit or Miss, see Figure 1, during the second and third quarterly periods. Sample analysis was conducted via XRF, followed by laboratory checks on selected samples. This built on the 2016 orientation program, which successfully proved the potential of this sampling procedure to generate meaningful targets at Woolgar.

Outline Traditional soil sampling is used to detect anomalies in primary soils formed by the weathering of the underlying rocks at that location. At Woolgar, traditional soil sampling should target soils derived from the metamorphic basement.

Sample Method The methodology for sample distribution, selecting locations, depth and sieve fraction were proven and optimised based on the 2016 orientation survey.

Analytical Method The analytical methodology was also proven and optimised in the orientation survey. Analysis using a portable XRF machine under controlled conditions and strict methodology was proven to give acceptable levels of precision and accuracy compared to laboratory analysis.

The XRF analytical technique does not directly measure gold at the levels normally present in soils, but is used to map the indicator elements, such as lead, which are known to correlate strongly to gold at Woolgar. Thus, where XRF analysis identifies anomalies, laboratory analysis of select samples is required in order to determine the magnitude of the gold anomaly. This also serves as ongoing quality control on the XRF analysis. The results are presented below (Figure 10), whereby the lead (Pb) from each laboratory analysis is compared to those obtained via the portable XRF.

Figure 9: Graph showing comparison between pXRF and laboratory multielement (ICP-MS) analytical techniques. The element lead (Pb) is presented here since this is the principle indicator element for gold in the mesothermal deposits at Woolgar. Detailed analysis has not been made of all elements, but lead is considered the most important and appears representative of the data as a whole.

This graph demonstrates the acceptably high precision of the XRF (the concentrations returned by both methods follow a very similar pattern). The accuracy is also considered acceptable (the actual

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Soil Sample Analysis Comparison - pXRF vs Laboratory ICP-MS

Lab Niton


numbers returned are quite similar), with the XRF typically returning readings 10-20% lower than the lab in both high and low-levels. This is apparently due to x-ray attenuation as the pXRF readings were taken through sample bags.

In order to define areas of anomalism (as is the aim of Strategic’s soil programs), being able to accurately distinguish between areas of high and low concentration is most important, rather than the actual concentrations themselves. It can clearly be seen in Figure 9 that the highs and lows correlate consistently and are of similar magnitudes. Thus, the XRF is shown to be an excellent tool for defining areas of lead anomalism.

AI Infill soil sampling followed up on multielement anomalies from the 2016 program. Higher density sampling aimed to ascertain both if the original results were repeatable, and better define the area of strongly anomalous lead and zinc in particular. These are known to be strongly correlated to gold at Woolgar, both in soils and drilling.

Figure 10: Plan of lead assay by pXRF over the AI and BV2 sector, approximately 2km north of the BVS resource.


The results confirm the original anomaly and show that it extends over a larger area to the north, see Figure 10. However, subsequent laboratory analysis indicated that gold concentrations are relatively low, regardless of the strong lead and zinc. Rock-chips from the area also returned subdued gold. As a result, the area is considered of moderate priority to follow up.

Tomi The Tomi sector is an area of low relief and limited outcrop with highly variable surface expression, 1,500 metres NW of BVS and is a potential site for mine development infrastructure. A window of exposed metamorphic basement is partially overlain by Jurassic sandstones and conglomerates, and both are locally covered and reworked by extensive modern alluvial sediments.

Figure 11: Plan of lead assay results in soils by pXRF over the Tomi and Caledonia sector, approximately 1.5km northwest of the BVS resource.


This complicates soil surveys by both creating discontinuous areas to survey and the potential for reworked alluvial contamination from both the Jurassic and recent sediments. Additionally, this low relief area locally shows signs of overland flow from major flood events.

Despite these restrictions causing a highly fragmented survey, a plot of the lead (Pb) results, Figure 11, shows several anomalous zones, some of which coincide with historic workings and interpreted structures. Follow up mapping and sampling is planned to assess the most prospective zones.

Exeter & Caledonia This is a broad area of historic workings 2,000 metres north of BVS, also potentially within a BVS development footprint. The results at Exeter are generally subdued and corelate poorly to the known mineralisation (Figure 12), possibly as a result of the extensive historic disturbance and potentially overland flow. The low results over Caledonia may also be due to disruption through overland flow at this low-lying prospect, close to the river and adjacent to an existing mud pan, the May Day Flats.

The sector is still considered prospective and merits follow-up work based on its location within the Mowbray structural corridor adjacent to the intersection with the Woolgar Fault Zone, extensive historic workings and proximity to BVS with potential to be within the mine infrastructure footprint.

Figure 12: Plan of lead in soils by pXRF-assay over the Exeter and Caledonia prospects in the Lower Camp.

Union The Union and Hit or Miss prospects in the Upper Camp were surveyed by a grid of 235 pXRF soil samples. Plots of lead, Figure 13, and zinc from the XRF analysis suggest the Woolgar Fault Zone forms a broad geochemical divide across the area. The eastern side of the fault is typified by a


subdued lead and zinc response with patchy, strong anomalies along structures and workings. In contrast, the western side of the fault contains consistent, broad areas of moderate anomalism. Geological mapping and the interpretation of existing data may confirm whether this contrast is predominantly due to a difference in lithology, or if it is directly alteration or mineralisation related.

Figure 13: Plan of lead by pXRF-assay soil samples over the Union / Hit or Miss sector in the Upper Camp

Several strongly anomalous zones can be distinguished once the relative background levels have been accounted for. These are flagged for follow-up, but are currently a lower priority due to their relative distance from the BVS, moderate strength and requirement for significant further soil, mapping and potentially geophysical methods to generate stronger targets in this area of limited exposure.


Ultra-low Detection Soil Sampling (MMI)

Outline This is a well established and widely used technique that uses ultra-low levels of analytical detection to identify anomalies in soils derived from younger sediments overlying buried (blind) mineralisation. This requires the mineralisation to be either occurring on or close to the unconformable contact between the sedimentary layer and the underlying basement, and to be undergoing some degree of oxidation (weathering). The oxidation of the sulphidic minerals creates a weak electrolytic cell that slowly transports weakly anomalous quantities of metal, which are deposited at the surface. This in turn requires limited erosion and a stable climate over a long period to accumulate to measurable levels, both of which are present over certain sedimentary plains at Woolgar. If successful, the MMI technique could be applied to the widespread zones across the project where prospective structures and veins disappear beneath younger sedimentary cover, or to improve target definition where highly prospective features are identified in the geophysical datasets prior to committing to expensive drilling programs.

Sample Method A detailed sampling method was developed based on industry best practice with reference to recent research on sample selection and collection. Particular care is required to avoid sample contamination at these ultra-low detection levels.

Analytical Method Two alternate laboratories were trailed as part of this orientation survey: Mobile Metal Ion (MMI) at SGS; and Ionic Leach at ALS, both via their Townsville facilities.

Interpretation Any interpretation of anomalies must consider that this is both an indirect method and will show peak anomalism where the strongest mineralisation occurs coincident with the strongest oxidation, rather than where the strongest mineralisation occurs at depth. Thus, anomalies must be interpreted as indications that there is potential mineralisation within the area and correlated to as many other sources of information as are available, such as geophysical interpretations.

In the case of the southern extensions of the Lower Camp, anomalies would be cross-validated to aeromagnetic anomalies, such as the interpreted southwards extension of the Woolgar Fault Zone, south of BVS.

BVS Orientation Survey An orientation survey was conducted across the southern portion of Big Vein South targeting soil derived from post-mineral Jurassic sediments overlying known mineralisation. The sampled medium is considered to be relatively stable and in-situ. Two samples were taken from each site, so the analytical results from competing laboratories could also be assessed.

A total of 156 samples were taken at 78 sites in three lines, see Figure 14. The sample lines were designed to cross perpendicular to the projected surface trace of mineralisation and extend on either side to establish background readings to define what is actually anomalous.

The geochemical patterns are broadly similar in results received from both laboratories. Disappointingly, there is no discernible pattern to anomalous concentrations of Au, Pb and Zn. In contrast cadmium (Cd), a known pathfinder element at Big Vein South, appears to correlate closely with the position of the Woolgar Fault Zone, as shown in Figure 14. The size and intensity of the Cd anomaly increases to the south. Whilst broadly the intensity of the known BVS mineralisation decreases heading south in this area, the Au grade and intersection width at shallow levels (i.e. closest to the overlaying sandstone) actually increases. This is interpreted to account for the


observed pattern in the MMI.

Further MMI sampling may be completed, to confirm the Cd association, and to investigate Cd response south of the known mineralisation. Historic MMI sampling has been completed in the region by previous companies, however, its reliability is not currently clear. It is currently being recompiled from source data and will be re-interpreted and assessed as part of the ongoing program.

Figure 14: Plan of Cadmium in ultra-low detection (MMI) soil orientation survey over the southern portion of BVS. Note that the highest values corelate to where the strongest mineralisation occurs close to the top of the basement unconformity, thus is most exposed to active oxidation, rather than correlating to the best intercepts at deeper levels in the basement.


Summary Strategic has been able to undertake generative soil and mapping programs whilst still executing successful drilling and evaluation programs at Big Vein South. The results from the preliminary assessment soil and mapping programs have considerably advanced our geological understanding of various old and new targets which will in turn allow the Company to maximise future expenditure committed to traditional and ultratrace soil sampling. This ultimately should improve the effectiveness of drilling programs for future targets, such as those proximal to BVS like Tomi, Caledonia and the possible southern extension to BVS.

Laif Allen McLoughlin

EXECUTIVE CHAIRMAN

COMPETENT PERSON STATEMENT

The information in the report to which this statement is attached that relates to Exploration Results is based on information compiled by Alistair Grahame, a Competent Person who is a Member of The Australian Institute of Geoscientists. Mr Grahame is a full-time employee of Strategic Mineral Corporation NL. Mr Grahame has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Grahame consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.


Appendix One

JORC Code, 2012 Edition – Table 1 BVS Gold Deposit

Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.)

Criteria JORC Code explanation Commentary

Sampling techniques

• Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

• Aspects of the determination of mineralisation that are Material to the Public Report.

• In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

• Sampling involved the collection of soil and rock-chip samples.

• Soil sampling was conducted using a 2-person team, with at least one geologist.

• Soil samples sites were subjected to an initial assessment by the geologist. If the site was deemed likely to contain soil significantly affected by alluvial, colluvial or anthropogenic processes, it was relocated or not sampled.

• Traditional soil sampling was completed using an Estwing paleo pick, an aluminum scoop, a soil sieve (or sieves) and small paper geochemistry bags.

• At each suitable soil site, loose surface material was first scraped away. The ground was then broken up and dug to a depth of 20cm. The hole was cleared of loose material. The sample was then excavated from the base of the hole and transferred to a sieve using the aluminium scoop. A paper bag was used to collect and store the sieved sample. Before moving onto the next site, the sampling hole was re-filled with the excavated material, and all sampling implements thoroughly cleaned with a brush.

• Details of each site were recorded onto a tablet or paper template.

• Soil sampling for the purposes of mobile metal ion analysis was conducted in a similar manner, except for the use of a paint-free paleo pick, a plastic (instead of metal) scoop and plastic geochemistry bags.

• Rock-chip samples were taken as seen fit by a geologist, where rock of potential geochemical interest was identified.

• Rock-chip sampling involved chipping off samples using a hammer and placing into a numbered calico bag. The bag was immediately tied up.

• Details of each sample were recorded into a tablet or notebook, including whether the sample was outcrop (character or



representative), float, mullock, etc,.

• Rock-chip and mobile metal ion samples were sent to a commercial lab for analysis.

• Traditional soil samples were analysed using a portable XRF, with selected samples also submitted to a commercial lab to ascertain Au concentration and check XRF performance.

• Sampling and assaying techniques are considered appropriate for deposit type.

Drilling techniques

• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

• No drilling reported in this announcement.

Drill sample recovery

• Method of recording and assessing core and chip sample recoveries and results assessed.

• Measures taken to maximise sample recovery and ensure representative nature of the samples.

• Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

• No drilling reported in this announcement.

Logging • Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

• The total length and percentage of the relevant intersections logged.

• BV2 and AI soil sampling: logging consisted of hand written, detailed hardcopy log sheets transcribed into digital data.

• Tomi, Exeter and Union soil, and BVS mobile metal ion sampling: logging was completed directly onto a tablet in the field, utilising an Excel-based log sheet.

• Rock-chip sampling logging was completed into notebooks, using predefined logging codes.

• Logging is both qualitative and quantitative, depending on the characteristic being described.

• No systematic photography completed.

Sub-sampling techniques and sample preparation

• If core, whether cut or sawn and whether quarter, half or all core taken.

• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

• For all sample types, the nature, quality and appropriateness of the sample preparation technique.

• Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

• Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field

• BV2 and AI soil sampling: as part of an orientation program, three samples were taken at each site, consisting of a 180, 425 and 850 micron sieve fraction.

• Tomi, Exeter and Union soil sampling: soil samples were sieved to 850 microns using a plastic stackable sieve and nylon mesh.

• BVS mobile metal ion soil sampling: soil samples were sieved to 2mm using a plastic stackable sieve and nylon mesh.

• Only dry soil samples were taken. If planned for XRF analysis, several day’s drying time was allowed for each, to ensure uniformly dry samples.



duplicate/second-half sampling.

• Whether sample sizes are appropriate to the grain size of the material being sampled.

• All sample preparation, sample sizes and analytical methods are deemed appropriated.

• All laboratories were certified commercial laboratories working to best practices.

• Standards and blanks were inserted as part of the XRF analysis process. For laboratory samples, standards were inserted as seen fit into each batch.

• Duplicates were taken during BV2 and AI soil sampling (as part of the orientation study), but not during later programs.

Quality of assay data and laboratory tests

• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

• For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

• Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

• Traditional soil samples were analysed using a Niton XL3t GOLDD+ portable XRF instrument.

• Analyses were conducted using Soil Mode with a 120 second total reading time.

• BV2 and AI: each sample was analysed 3 times, with vigorous shaking of the sample between each analysis. Subsequent samples from Tomi, Exeter and Union were analysed twice following the same methodology.

• A System Check was completed after any shutdown and subsequent restart of the instrument.

• Standards and blanks were analysed at set intervals throughout the process, so any drift in instrument performance could be recognised.

• Where results from standards and blanks fell outside acceptable parameters, samples within the range of the incorrect readings were reanalysed.

• With this method, acceptable levels of accuracy and precision were established.

• A suite of samples was sent to a commercial laboratory as a further check of XRF data. The comparison of the results indicated a high range of agreement.

• Rock-chip samples were prepared and assayed at the ALS Minerals Division - Geochemistry (“ALS”) laboratory in Townsville; an ISO-9001:2013 certified facility. Methods used were: gold by fire assay, AA finish (50 gram charge); and other elements by aqua regia ICP-AES (35 elements). Samples returning greater than 100 g/t gold were automatically re-assayed using a dilution analyses.

• Mobile metal ion soil samples were prepared and assayed at ALS and SGS laboratories. Methods used were ME-MS23 (ALS) and MMI-M (SGS).



Verification of sampling and assaying

• The verification of significant intersections by either independent or alternative company personnel.

• The use of twinned holes.

• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

• Discuss any adjustment to assay data.

• A suite of soil samples which the XRF indicated were anomalous in a variety of pathfinder elements were submitted to a commercial laboratory for verification of results. The outcomes were considered excellent.

• BV2 and AI soil sampling consisted of hand written detailed hardcopy log sheets transcribed into digital data. For Tomi, Exeter and Union, this was replaced by using a tablet to record information at source.

• XRF results were downloaded in NDT format, before being exported as CSV. The data was the copied into a template similar to that used for laboratory data and uploaded into the database. Results were checked by Database Manager and Project Geologist for errors and omissions.

• Laboratory results were received digitally in SIF and CSV spreadsheets and certified pdf formats, as well as hard copy. The text files were loaded into the database and verified by the Project Geologist and Database Manager.

• No adjustments made to XRF or laboratory assay data except for replacement of below-limit-of-detection values with half-limit-of-detection. Some elements known to be unreliable in XRF data were removed from assays prior to database upload.

• No independent verification has been conducted at this stage.

Location of data points

• Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

• Specification of the grid system used.

• Quality and adequacy of topographic control.

• Soil and rock-chip sample sites were identified and recorded using a hand-held GPS unit. This is generally considered accurate to within +/- 5m horizontally, and suitable for the style of sampling being conducted.

• All location data and maps are in MGA94 Zone 54 grid projection.

• There is no topographic control, other than that provided by the hand-held GPS.

Data spacing and distribution

• Data spacing for reporting of Exploration Results.

• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

• Whether sample compositing has been applied.

• Traditional soil samples were taken from a 100 x 25m, or 200 x 25m grid. As discussed, unsuitable sites were skipped or relocated, leading to an irregularly shaped final grid. This is considered acceptable for the exploratory nature of the program.

• Soil samples for mobile metal ion analysis were taken from a grid of approximately 50 x 20m. This is considered suitable for an orientation program.

• Rock-chip samples were selected at the geologist’s criteria where material of interest was encountered, typically resulting in an irregular



sampling distribution. This is considered appropriate for the exploration of new prospects.

• No sample compositing was used.

Orientation of data in relation to geological structure

• Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

• If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

• Traditional soil sampling grids were orientated east-west. This was designed to cross-cut the majority of the mineralised trends which typically trend NNE in the areas investigated.

• Soil samples for mobile metal ion analysis were collected along a grid orientated parallel to most drilling at BVS – azimuth 280 (MGA94z54) 273 (magnetic).

• As above, sampling orientations are appropriate with no bias.

Sample security

• The measures taken to ensure sample security. • Traditional soil samples were packed into cardboard boxes and stored securely before XRF analysis.

• Rock-chips, were bagged into polyweave sacks, and secured with cable ties, before dispatch to a laboratory.

• Soil samples for ultratrace analysis were packed tightly for protection and then dispatched with other samples, but transported by the drivers in their cabs due to the delicacy of the material.

• All shipment was by SMC chartered lorry to a private depot in Richmond and then via a local transport company direct to the lab in Townsville. Shipments were not sent via regional transport hubs to avoid multiple handling or insecure temporary storage.

Audits or reviews

• The results of any audits or reviews of sampling techniques and data. • Sample technique is reviewed frequently. The use of standards and blanks was optimized for this program.

• No independent audits have been undertaken.

Section 2 Reporting of Exploration Results (Criteria in this section apply to all succeeding sections.)


Mineral tenement and land tenure status

• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

• The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

• The Woolgar project is comprised of 5 EPMs, 8 MLs and an ML application. These are wholly owned by Strategic Minerals. The EPMs are operated jointly as a project under approval of the Mines Registrar.

• There is no known impediment to operations in the area.

• Woolgar Project tenements: (* = Project Approval accepted)



TENEMENT PROJECT STATUS SUB-BLOCKS

HA

* EPM 9599 Woolgar Granted 32 -

* EPM 11886 Woolgar Renewal Pending

23 -

* EPM 13942 Steam Engine

Granted 3 -

* EPM 14060 Woolgar South

Granted 40 -

* EPM 14209 Woolgar Granted 49 -

EPM 26263 Woolgar Granted 100 -

ML 2642 Soapspar Granted - 4.05

ML 2728 Shamrock Granted - 128

ML 2729 Mowbray Granted - 128

ML 2739 Mowbray #3

Granted - 128

ML 2793 New Soapspar

Granted - 146.4

ML 90044 Sandy Dam

Granted - 29.2

ML 90122 Sandy Creek

Granted - 350.8927

ML 90123 Flat Creek Granted - 124.7277

ML 90238 North Star Granted - 882.6

Exploration done by other parties

• Acknowledgment and appraisal of exploration by other parties. • The Woolgar is the site of a historic goldrush in the 1880’s, followed by limited artisanal mining until 1984. There has been continuous exploration over the Woolgar since the late 1970’s. Initial activity centred on the traditional reefs along the Woolgar River, then in the 1980’s focussed on the epithermal veins in the Sandy Creek sector, ~10km east of the river. In 2008 attention returned to the historic reefs, initially as satellite pits to possible mining of the Sandy Creek and Soapspar deposits, then from 2013, as the main focus of the project following the discovery of the main mineralisation at BVS.

• The Lower Camp (including BVS, BV2, AI, Tomi and Exeter) was



partially explored during the 1970’s, including localised geological mapping and sampling, and limited drill-testing of principal targets. None of this work identified the potential of the Big Vein South deposit and no drilling occurred on this prospect prior to 2010.

• Little recent work has been carried out in the Lower Camp area prior to the RC and DDH programs by SMC from 2008. The current project management reviewed the available data and found it acceptable as a basis for exploration.

• The Upper Camp (including Hit or Miss and Union) has seen intermittent exploration over the past several decades.

• This included localised geological mapping and sampling, and limited, shallow drill-testing of principal targets.

• Previous soil sampling across the region is of limited value since it did not discriminate between in-situ and potentially transported soil, and was commonly only analysed for a restricted suite of elements.

Geology • Deposit type, geological setting and style of mineralisation. • The Lower Camp is predominantly a mesothermal style of mineralisation.

• It is shear hosted within the regional-scale Woolgar Fault Zone. Structural style is interpreted to be a sinistral steeply oriented sigmoidal tension zone exhibiting substantial dilation to accommodate silica-gold-sulphide mineralisation. Later, brittle, E-W steep dipping faulting has offset sections of the mineralisation into Southern, Central and Northern zones.

• It consists of quartz and quartz-carbonate veins, mineralised tectonic breccias, stockworks and veinlets. It is regarded as diffuse mineralisation with no discrete mineral boundaries.

• Gold mineralisation is associated with disseminated pyrite, and lesser galena, sphalerite and pyrrhotite, that occur within strongly phyllic altered, sheared and brecciated schists, silicified breccias and veins.

• The mineralisation is associated with a phyllic alteration, which is locally strong to intense around the mineralisation, with a silicified zone overlying the best mineralisation in the central part of the BVS.

• The mineralisation often occurs as multiple sub-structures, occurring obliquely within a lower-grade mineralised envelope within the shear zone.

• The host rocks are a strongly deformed amphibolite-grade schists, gneisses and migmatites with granitic layers locally. These are intruded by granodiorite and minor dolerites.

• The Upper Camp contains mesothermal-style mineralisation. There is



geological and geochemical evidence for an intrusive-related system overprinting the mesothermal mineralisation, although this remains to be confirmed. There is additional geological and geochemical evidence for an epithermal event, but no significant gold values have been found associated with this.

• The mesothermal mineralisation is shear hosted, and associated with the Woolgar Fault Zone and cross cutting, associated features.

• Host rocks are similar to the Lower Camp.

• The epithermal mineralisation is predominantly quartz-adularia to quartz-carbonate veining hosted within structural trends with the mineralisation apparently focussed around intersections to mafic intrusions. The host rocks are andalusite-schists.

Drill hole Information

• A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level – elevation above sea level in

metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length.

• If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

• Drill hole results not being reported.

Data aggregation methods

• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

• Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

• The assumptions used for any reporting of metal equivalent values should be clearly stated.


Relationship between mineralisation widths and

• These relationships are particularly important in the reporting of Exploration Results.

• If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

• If it is not known and only the down hole lengths are reported, there




intercept lengths

should be a clear statement to this effect (eg ‘down hole length, true width not known’).

Diagrams • Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.


Balanced reporting

• Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.


Other substantive exploration data

• Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.


Further work • The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

• Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.


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