new em conductors at west kambalda nickel prospects

58 King William Road T: (61 8) 8378 8200 ASX Code: MTH Goodwood, South Australia, 5034 F: (61 8) 8378 8299 Issued Shares: 252,557,750 of 9 www.mithrilresources.com.au E: [email protected] Market Capitalisation: $3.54 million

Figure 1: West Kambalda Project Location Plan

New EM conductors at West Kambalda nickel prospects

New EM conductor at Hendrix immediately adjacent historic drill intercept of 9.1m @ 2.5% nickel

Drilling to commence as soon as possible once statutory approvals received in early June Quarter

Mithril Resources Ltd (ASX: MTH) is pleased to advise that electromagnetic (EM) geophysical surveying has identified new conductors at both the Hendrix and Floyd nickel prospects at its West Kambalda Project, located approximately 30 kilometres west of the Kambalda Nickel Mining Centre in Western Australia (Figure 1).

Hendrix and Floyd occur within the Logan’s Find area which is subject to a Farm-in and Joint Venture Agreement with KalNorth Gold Mines Limited (ASX:KGM) whereby Mithril can to earn up to an 80% interest by completing expenditure of $2 million over 4 years (Figure 2).

Shallow drilling previously undertaken in 1970 by International Nickel Australia Limited (INCO) at Hendrix intersected a broad zone of strongly anomalous nickel including 9.1m @ 2.5%Ni from 10.7 metres which up until now has not been followed up (ASX Announcement dated 7 March 2014).

Mithril has just finished a program of geological mapping, and Moving Loop EM (MLEM) geophysical surveying with the aim of identifying geophysical anomalies potentially indicative of nickel sulphide mineralisation at depth. At Hendrix, a 300-metre long zone of anomalous conductivity was identified within ultramafic rocktypes immediately adjacent the nickel mineralised zone drilled by INCO (Figure 3). Interpretation of the geophysical data suggests a substantial deepening of the weathering profile, the significance of which will need to be established with follow-up drilling (Figure 4).

At Floyd, a sub vertical bedrock conductor (with modelled conductivity of 1500-2000 Siemens) has been defined over a 600-metre strike length, proximal to an ultramafic / basalt contact. The ultramafic at Floyd is interpreted to be the southern equivalent (i.e. same stratigraphic horizon) to the Hendrix ultramafic (Figure 5).

The conductor has not been previously tested; however one traverse of shallow vertical holes was drilled across the southern end of the conductor by INCO in 1970. Resampling of drill spoils collected at surface by Mithril returned anomalous nickel and copper (Sample R08569 – 1,135 ppm copper, 363 ppm nickel).

Mithril will drill test these new EM conductors as soon as possible once all statutory approvals have been received early in the June 2014 Quarter.

ASX Release – 27 March 2014

http://www.mithrilresources.com.au/

mailto:[email protected]


Figure 4: Hendrix nickel prospect – line 2 cross-section showing INCO drill results, interpreted geology and zone of

anomalous conductivity

Figure 2: Logan’s Find area location plan Figure 3: Hendrix nickel prospect showing ch15 EM image (Z-axis), anomalous conductivity (red) and rock chip results




Figure 5: Floyd nickel prospect summary plan showing EM conductor axis and rock chip results




Table 1. Rock chip sampling details and results

Sample_ID Prospect Easting Northing Ni_ppm Cu_ppm Pd_ppb Pt_ppb

R08512 Hendrix 350,242 6,531,035 1,251 121 5 16

R08513 Hendrix 350,254 6,531,032 1,235 188 10 15

R08514 Hendrix 350,289 6,530,947 1,025 223 29 16

R08515 Hendrix 350,293 6,530,948 1,972 138 15 23

R08516 Hendrix 350,304 6,530,942 765 93 6 8

R08517 Hendrix 350,302 6,530,925 1,883 156 12 10

R08518 Hendrix 350,312 6,530,896 1,561 300 5 7

R08519 Hendrix 350,312 6,530,896 1,679 435 6 19

R08520 Hendrix 350,125 6,530,885 1,719 28 4 7

R08521 Hendrix 350,113 6,530,882 3,448 119 7 10

R08522 Hendrix 350,081 6,530,929 1,553 20 4 7

R08523 Hendrix 350,217 6,531,127 980 170 6 13

R08524 Hendrix 350,140 6,531,199 579 23 4 5

R08525 Hendrix 350,090 6,531,210 1,057 83 8 13

R08526 Hendrix 350,061 6,531,210 3,606 80 5 8

R08527 Hendrix 349,998 6,531,310 2,990 58 30 36

R08528 Hendrix 349,940 6,531,263 1,170 71 4 8

R08529 Hendrix 349,919 6,531,250 1,427 119 9 16

R08530 Hendrix 349,946 6,531,111 1,455 42 10 8

R08531 Hendrix 350,319 6,531,381 19 30 1 2

R08532 Hendrix 350,326 6,531,349 41 73 2 3

R08556 Scott 351,099 6,527,381 1,230 199 5 9

R08557 Scott 351,050 6,527,261 1,471 52 4 8

R08558 Scott 351,048 6,527,198 115 213 4 5

R08559 Scott 351,059 6,527,161 402 180 5 9

R08560 Scott 351,087 6,527,086 98 131 9 9

R08561 Scott 351,126 6,527,034 122 247 11 21

R08564 Floyd 350,783 6,528,487 1,305 76 11 30

R08565 Floyd 350,783 6,528,487 433 101 10 26

R08566 Floyd 350,755 6,528,483 1,232 173 19 30

R08567 Floyd 350,730 6,528,527 1,572 249 15 39

R08568 Floyd 350,824 6,528,431 1,258 227 16 35

R08569 Floyd 350,990 6,528,408 363 1,135 6 27

R08570 Floyd 350,967 6,528,229 1,073 100 21 21

R08571 Floyd 351,113 6,528,184 164 205 4 7




Table 2. Electromagnetic (EM) geophysical surveying details

Item Details

Operator Outer Rim Exploration Services (ORE)

Sensor EMIT Smart Flux B-field Magnetometer

Receiver EMIT SmartEM-24

Transmitter Terra Tx-50

Configuration In-loop

Loop Size 100x100m

Number of Turns 1

Tx Frequency 30-40A

Base Frequency 0.5 to 1.56 Hz

Station Spacing 50m

Line Spacing 100m

Quality Control Measures Repeat readings at each station

JORC TABLE 1

Section 1: Sampling Techniques and Data

Criteria JORC Code explanation Commentary

Sampling techniques

Nature and quality of sampling (e.g. 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.

Rock chip samples were collected at various locations over the Hendrix and Floyd Prospects (West Kambalda Project). Samples of around 1 – 3kg were collected of either outcrop, subcrop or float/lag material.

Moving Loop Electromagnetic (MLEM) geophysical surveying was also undertaken over the Hendrix and Floyd Prospects. Technical specifications of the Moving Loop Electromagnetic (MLEM) geophysical surveying is also given in Table 2 of this Report.

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

Each rock chip location (easting and northing) was collected by a handheld GPS. A brief sample description and additional comments as necessary, were recorded at every sample location. All sampling protocols remained constant throughout the program.

The MLEM surveys were designed to cover an area consisting of the immediate targets and surrounding rocks to ensure geophysical surveying was representative of the prospect area.

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 (e.g. ‘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 (e.g. submarine nodules) may warrant disclosure of detailed information.

1 – 3kg rock chip samples were collected from either outcrop or subcrop and placed inside calico sample bags for transport to the laboratory and subsequent geochemical analysis.

In the laboratory, samples were crushed (~10mm) and pulverised to produce a representative 25g sub-sample for analysis using fire assay with ICP-MS finish for Au, Pt, and Pd (FA25MS3 – Lab Code) and four acid digest with ICP-OES finish for Ag, Al, As, Ba, Be, Bi, Ca, Cd, Ce, Co, Cr, Cu, Fe, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sn, Sr, Te, Ti, Tl, V, W, and Zn (MA4010 – Lab Code).

Drilling techniques

Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. 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.).

Not applicable as no drilling techniques are utilised during rock chip sample and / or MLEM geophysical surveying.

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.


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.

Rock chip samples have been described geologically but not to a level of detail suitable for Mineral Resource estimation, mining and metallurgical studies.

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

Logging of rock chip samples is of a qualitative nature.

Samples are logged for lithology and sometimes logged for colour, texture, weathering, minerals and alteration. An overall sample description and general comment on location is also included.

The total length and percentage of the relevant intersections logged.

Logging was restricted to describing individual rock sample collected for analysis.

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.

Samples were collected from outcrop, subcrop or float and all samples were dry.

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

The sample preparation of the rock chip samples follows industry best practice, involving oven drying (110°C) where necessary, crushing and pulverising (~90% less than 75μm).

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

The laboratory completed repeats analysis on samples returning >100ppb Au. Routine (around 1 in 30) repeats and regular blanks and standards analysed throughout.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

No field duplicates were taken. All samples collected were ~1 – 3kg, and entire sample pulverized.

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

Sample sizes are considered appropriate for the exploration method.

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.

Four acid digest is considered a near total digest and is appropriate for the type of exploration undertaken. The Fire Assay method used is considered to be a total digest and appropriate for the re-assay work undertaken.

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.

No geophysical tools, spectrometers, handheld XRF instruments, etc. were used during rock chip sampling.

Details of geophysical tools used during the EM geophysical surveying are given in Table 2.

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

The laboratory completed repeats analysis on samples returning >100ppb Au. Routine (around 1 in 30) repeats and regular blanks and standards analysed throughout. From results achieved it is determined an acceptable level of accuracy and precision has been established.

Verification of sampling and assaying

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

The geophysical anomalies were identified by the Company’s consulting geophysicist and verified by the Company’s Geology Manager.

The use of twinned holes. Not applicable as no drilling was undertaken.

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

Handwritten data entry was used for documenting the rock chip sampling.

Raw data for the geophysical surveying was captured electronically in the field and transferred by the contractor to the Company’s consultant geophysicist in Perth for processing and interpretation.

Discuss any adjustment to assay data None undertaken

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.

Data points (rock chip sample locations and EM stations) were recorded using a handheld GPS with an expected accuracy of+/- 5m. For the nature of the program completed, this level of accuracy is considered to be suitable. No down-hole surveys were





completed.

Specification of the grid system used. Data points have been quoted in this Report using the GDA1994 MGA, Zone 51 coordinate system.

Quality and adequacy of topographic control. An RL value using the handheld GPS was recorded at each rock chip sample location

Data spacing and distribution

Data spacing for reporting of Exploration Results.

The rock chip samples were randomly located based on where prospective rocks occurred as either outcrop or subcrop at the surface.

Details of the EM surveying data spacing are given in Table 2 of this Report.

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.

No mineral resource or ore reserve estimation has been undertaken. Rock chip sample results and geophysical results are not suitable for incorporation into mineral resource or ore reserve estimations.

Whether sample compositing has been applied. No composite sampling has been applied.

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.

Rock chip sampling was of a reconnaissance nature only and it is not possible to determine whether the rock chip sampling has achieved an unbiased sampling of possible structures.

Given that the geophysical data was collected over a large area from regularly-spaced stations and not designed to test any specific orientation, it may be considered to be unbiased.

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.

No orientation based sampling bias has been identified.

Sample security The measures taken to ensure sample security.

All rock chip samples were collected by Company personnel and stored in a secure location until completion of the program. Samples were taken to the Ausdrill Pty Ltd storage area (Kalgoorlie) and sent directly to the laboratory in Perth.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

All results were reviewed by Company personnel including the Geology Manager and Managing Director. No negative issues were identified from these reviews.

JORC TABLE 1 Section 2: Reporting of Exploration Results


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 rock chip sampling and Moving Loop Electromagnetic (MLEM) geophysical surveying program was completed over 2 tenements (P15/5216 and P15/5236).

P15/5216 and P15/5236 are owned by KalNorth Gold Mines and are subject to the Spargoville JV in which Mithril is earning up to an 80 % interest by completing expenditure of $2M over 4 years.

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.

There are no existing impediments to the tenements.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

The area has been primarily explored for gold with a range of activities undertaken, including geological mapping, surface geochemical sampling (auger, soil, rock chip) and reconnaissance drilling (diamond, RC and RAB). Nickel – focussed activities including reconnaissance drilling was last undertaken by INCO in 1970.

Geology Deposit type, geological setting and style of Geology over the area consists of Archaen mafic/ultramafic





mineralisation. units, felsic volcanics and sedimentary lithologies. The tenements are prospective for vein and shear hosted gold deposits and ultramafic – hosted nickel sulphide deposits.

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:

easting and northing of the drill hole collar, elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar, dip and azimuth of the hole, down hole length and interception depth, hole length.

The results of the rock chip sampling has been displayed in conjunction with historic drill hole locations in Figures 3, 4 and 5 of this Report.

The locations of the EM survey boundaries and EM conductors identified from the Moving Loop Electromagnetic (MLEM) geophysical surveying at the Hendrix and Floyd Prospects are also shown in 2, 3 and 4 of this Report.

Technical specifications of the Moving Loop Electromagnetic (MLEM) geophysical surveying is also given in Table 2 of this Report.

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.

No information has been excluded.

Data aggregation methods

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

No weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades have been applied when reporting Exploration Results.

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.

Not applicable for the sampling method used.

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

No metal equivalents reported.

Relationship between mineralisation widths and intercept lengths

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

The rock chip sampling data in this Report provides geochemical information on individual samples only and cannot be used to demonstrate a relationship between mineralisation widths and intercept lengths.

Information relating to the geometry of any mineralisation is also unattainable based on these results.

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

Not applicable – see previous comment

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).

Not applicable – see previous comment. Also the results do not relate to drilling.

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.

See Figures 3, 4, and 5 of this Report.

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.

All results are reported.

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;

No other exploration data is available.





potential deleterious or contaminating substances.

Further work

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

Drilling to determine the significance of the EM conductors at Hendrix and Floyd prospects.

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

Figures displaying areas of interest over the project area have been included

ENDS

For Further Information Contact:

Mithril Resources Ltd David Hutton, Managing Director [email protected] 58 King William Road Goodwood, South Australia 5034 ABN: 30 099 883 922 T: (61 8) 8378 8200 F: (61 8) 8378 8299 www.mithrilresources.com.au

Competent Persons Statement:

The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr David Hutton, who is a Competent Person, and a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Hutton is Managing Director and a full-time employee of Mithril Resources Ltd.

Mr Hutton 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 Hutton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Mithril Resources Ltd:

Mithril Resources Ltd is an Australian exploration company focused on the discovery and development of base metal deposits primarily copper. Mithril is a frontier explorer with a small but highly experienced team based in Adelaide. Combining advanced technology with a proven field‐based approach ensures the bulk of the company’s expenses go directly into the ground.





new em conductors at west kambalda nickel prospects

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