Cue Project

Musgrave Minerals Ltd commenced exploration on the Cue Project in early 2016 and progressed from earning a joint venture interest, to acquire a 100% interest in the Cue Project in August 2017 from Silver Lake Resources Ltd.

The Cue Project consists of the Cue Gold and Hollandaire Copper areas in the highly prospective Murchison province of Western Australia (Figures 1 and 2).

In March 2019 Musgrave expanded its gold interests at Cue by entering into an Option Agreement to acquire 100% of the non-alluvial gold rights to the Mainland Project directly adjacent to our 100% owned tenure at Cue. Mainland has seen very limited basement drilling but has produced significant quantities of alluvial gold since circa 1900.

A joint venture agreement has been executed with Cyprium Australia Pty Ltd where Cyprium has earned an 80% interest in the non-gold rights over the northern tenements at the Cue Project. Musgrave will retain the gold rights to the tenure and a 20% free carried interest on the non-gold rights.

In September 2019 Musgrave announced that it had entered into an Earn-In and Joint Venture Exploration Agreement with Evolution Mining Limited over a select area of Lake Austin and surrounds (JV Area) of the Cue Project in the Murchison District of Western Australia.  The JV Area excludes all the known resources including Lena and Break of Day and the Mainland option area. Evolution can earn a 75% interest in the JV Area by sole funding A$18 million on exploration over a five-year term with a minimum commitment of A$4 million in the first two years. Musgrave will manage the JV during the initial period.

Figure 1: Cue Project location plan

Figure 2: Prospect location map

Cue Gold Project

Lake Austin North

Musgrave entered into an Earn-In and Joint Venture Exploration Agreement with Evolution Mining Limited over a select area of Lake Austin and surrounds (JV Area) of the Cue Project in the Murchison District of Western Australia.  The JV Area excludes all the known resources including Lena and Break of Day and the Mainland option area. Evolution can earn a 75% interest in the JV Area by sole funding A$18 million on exploration over a five-year term with a minimum commitment of A$4 million in the first two years. Musgrave will manage the JV during the initial period.

The Lake Austin North, A-Zone gold discovery is approximately 3km north of Break of Day on Lake Austin. The target was initially defined through the integration of newly acquired gravity data with the existing aeromagnetic data and some minor broad spaced historical regional aircore drilling and partial leach geochemistry.

The A-Zone mineralisation at Lake Austin North is located along the continuation of the Break of Day/Lena shear on the margin of a tonalite (granite) intrusive. To date basement RC and diamond drilling has only tested 300m of a potentially 3km long mineralised trend. Drilling results include:

RC drilling

  • 84m @ 1.7g/t Au from 84m (18MORC039), including 36m @ 3.6g/t Au from 111m, including 20m @ 6.1g/t Au from 116m.
  • 94m @ 2.2g/t Au from 156m (18MORC057), including 52m @ 3.8g/t Au from 198m and 29m @ 5.1g/t Au. Diamond drilling:
  • 20m @ 4.5g/t Au from 102.2m (18MODD005) and
  • 242m @ 1.0g/t Au from 61m (18MODD008), including 45m @ 3.3g/t Au from 70m and 5.8m @ 4.5g/t Au from 199.8m
  • 9m @ 2.0g/t AU from 85.8m (19MODD013).

Lake Austin North has the potential to be a large well-mineralised gold system with the mineralisation at A-Zone currently open to the north and at depth.

A combined strike of more than 8km of aircore anomalism has now been identified and multiple new basement gold targets have been developed and are currently being prioritised for follow-up drill testing.

Figure 3: Prospect location map on gravity image

Figure 4: Plan showing drill holes completed under the EVN JV in year one

Figure 5: Discovery Cross section 6939200mN at A-Zone, Lake Austin North showing latest drilling (a cross-section is a vertical section perpendicular to the line of mineralisation)

Mainland

In March 2019 Musgrave entered into an Option Agreement to acquire 100% of the non-alluvial gold rights to the Mainland Project directly adjacent to our gold tenure at Cue. Mainland has seen very limited basement drilling but has produced significant quantities of alluvial gold.  Initial drilling has been positive with high-grade gold intersected at Consols including 3m @ 38.2g/t Au (19MORC018) and 2m @ 55.4g/t Au (19MORC019) (see ASX releases dated 27 November 2019 and 13 January 2020).

Break of Day and Lena

Musgrave successfully increased the Mineral Resources at both Break of Day (797kt @ 10.2g/t Au for 262koz Au) and Lena (4.3mt @ 2.3g/t Au for 325koz Au)  in 2020 for a total combined JORC (2012) and JORC (2004) compliant Mineral Resource  for the Cue Project of 6.4Mt @ 3.2g/t Au for 659kOz Au. (refer Table 1 below and MGV ASX announcements 11 November 2020, “Break of Day High-Grade Mineral Resource” and 17 February  2020 “Lena Resource Update”).

Multiple gold targets remain untested including a series of high priority regional targets where early stage drilling results have been very encouraging. The discovery of the high garde Starlight gold lode at Break of Day and the subsequent re-interpretation of the gold lode geology and structure has significantly enhanced the regional prospectivity, opened the exploration search space and has led to the identification and drill testing of  numerous new targets.

Reverse circulation (“RC”) and diamond drilling has intersected high-grade gold mineralisation at Break of Day. Significant drill results within the resource include:

  • 11m @ 54.0g/t Au from 217m (17MORC084)
  • 21m @ 21.5g/t Au from 157m (16MORC026)
  • 6m @ 46.5g/t Au from 99m (17MORC002)
  • 15m @ 16.6g/t Au from 170m (17MORC050)
  • 14m @ 14.4g/t Au from 111m (17MORC044)
  • 30m @ 11.3g/t Au from 120m (17MORC127)
  • 11m @ 6.8g/t Au from 23m (17MORC001)
  • 5m @ 53.5g/t Au from 138m (16MORC043)
  • 3m @ 54.9g/t Au from 187m (16MORC041)
  • 5m @ 33.0g/t Au from 154m (16MORC048)
  • 4m @ 28.5g/t Au from 99m (17MORC053)
  • 3m @ 38.6g/t Au from 274m (16MORC039)

(see ASX releases dated 10 October 2016, 18 October 2016, 3 November 2016, 9 November 2016, 17 March 2017, 20 April 2017, 8 May 2017 and 3 December 2019)

Diamond drilling has confirmed the gold mineralisation and includes:

  • 2m @ 26.6g/t Au from 238.5m (16MODD002)
  • 0m @ 9.6g/t Au from 231.0m (16MODD003)
  • 6m @ 7.3g/t Au from 127.35m (16MODD001)

(see ASX release dated 30 January 2017; “Diamond Drilling Confirms High Grade Gold at Break of Day & Extends High Grade Gold at Lena”)

The mineralisation is interpreted to occur in vertical to steep westerly dipping, semi-parallel quartz lodes hosting high-grade gold with minor (1-2%) pyrite, within a basaltic stratigraphic sequence. The separation of the gold lodes varies along strike from 10 to 60 metres.

The 2020 discovery of the new Starlight and White Light gold lodes at Break of Day has led to significant near-surface high-grade resource growth. Significant intercepts from the new Starlight Lode at Break of Day (within the new resource boundary) include:

  • 31m @ 44.8g/t Au from 37m (20MORC037)
  • 12m @ 109.4g/t Au from 340m (20MORC033)
  • 22m @ 21.0 g/t Au from 2m (20MORC036)
  • 60m @ 13.1g/t Au from 77m (20MORC031)
  • 9m @ 16.5g/t Au from 225 (20MORC029)
  • 42m @ 6.8g/t Au from 70m (20MORC018)
  • 42m @ 5.6g/t Au from 146m (20 MORC013)
  • 6m @ 55.8g/t Au from 108m (20MORC012)
  • 4m @ 10.3g/t Au from 225m (20MORC001)
  • 7m @ 7.0g/t Au from 183m (20MORC014)
  • 55m @ 2.8g/t Au from 97m (20MORC015)

Musgrave’s goal is to grow the high-grade gold resources and underpin a clear path to development.

Figure 6: Cross section 13300mN (local grid) at Break of Day

Starlight

The recent discovery of the new Starlight and White Light gold lodes at Break of Day highlights the upside discovery potential of the project.  The Starlight and White Light gold lodes host a combined 360kt @ 13.9g/t Au for 161kOz contained gold.  The Break of Day resource hosts a combined (Indicated and Inferred) resource of 797kt @ 10.2g/t Au for 262,000 Oz contained gold.  At Break of Day ~85% of the gold is endowed within five main lodes (Starlight, White Light, Twilight, Velvet and Lode 13) with the top 175m of the deposit averaging more than 1,100oz per vertical metre. The new discoveries will significantly enhance the economics of the project with more than 80% of the gold endowment in the top 200m at Break of Day.

Table 1: Starlight and White Light lodes November 2020 Mineral Resource

(0.5g/t Au cut-off above 260mRL, 3.0g/t Au cut-off below 260mRL)

  Indicated Inferred Total
Lode

Tonnes

Mt

Au

g/t

Au

kOz

Tonnes

Mt

Au

g/t

Au

kOz

Tonnes

Mt

Au

g/t

Au

kOz

Starlight lode

0.22

17.1 119 0.02 16.3 12 0.24 17.0

131

Starlight FW lode

0.02

2.4 1       0.02 2.4

1

White Light lode

0.07

11.3 23 0.03 5.7 6 0.10 8.7

29

Total

0.30

14.6 143 0.05 10.4 18 0.36 13.9 161

*Rounding discrepancies may occur

(MGV ASX announcement 11 November 2020, “Break of Day High-Grade Mineral Resource”)

Figure 7: Schematic diagrams showing the location and orientation of the new Starlight Lode with respect to the Twilight and Velvet gold lodes at Break of Day and the Lena deposit

Figure 8: Plan view of Break of Day gold lodes

Hollandaire Copper Project

A joint venture agreement has been executed with Cyprium Australia Pty Ltd were Cyprium has earned an 80% interest in the non-gold rights over the northern tenements at the Cue Project. Musgrave retains 100% of the gold rights to the tenure relating to gold dominant deposits and a 20% free carried interest on the non-gold rights. The Hollandaire Copper Project was discovered by Silver Lake Resources Limited in 2011 and hosts a JORC (2012) compliant total Mineral Resource base of 2.8Mt @ 1.9% Cu for 51,500t of contained copperand 574koz silver at 6.4g/t Ag (refer Table 1 and CYM ASX announcement 29 September 2020; “Hollandaire Copper-Gold Mineral ResourcesEstimate”).

The Hollandaire and Hollandaire West deposits are tabular stratabound volcanic-hosted massive sulphide deposits (VMS). The mineralisation forms a moderate dipping zone of massive sulphide mineralisation averaging 10 metres thick that plunges to the south-west. Copper mineralisation is located approximately 50m from surface, and drilling to date indicates it is open to the south-west and at depth (Figure 2).

Historical drill intersections at Hollandaire (refer SLR ASX announcement dated 10 November 2011; “High Grade Copper Discovery at Hollandaire”) include:

  • 3m @ 15.4% Cu, 2.0g/t Au & 29.0g/t Ag from 61 metres (drill hole 11HOD009)
  • 3m @ 7.8% Cu, 1.0g/t Au & 20.1g/t Ag from 109 metres (drill hole 11HOD0039)

Table 1: Total Cue Project Gold Mineral Resources as at 11 November 2020

Deposit

Indicated Resources

Inferred Resources TOTAL RESOURCES
Tonnes

‘000s

Au
g/t
Ounces Au
‘000s
Tonnes

‘000s

Au
g/t
Ounces Au
‘000s
Tonnes

‘000s

Au
g/t

Ounces Au
‘000s

Moyagee
Break of Day

450

12.1 176 350 7.7 86 797 10.2

262

Lena

2,253

1.7 121 2,053 3.1 204 4,305 2.3

325

Leviticus

42 6.0 8 42 6.0

8

Numbers

 – 278 2.5 22 278 2.5

22

SUBTOTAL
2,703
3.4
297
2,723
3.7
320
5,422
3.5
617
Eelya
*Hollandaire

2,179

0.3 21 605 0.4 8 2,784 0.3

29

Rapier South

171 2.2 12 171 2.1

12

SUBTOTAL
436
0.3
4
292
1.4
13
728
0.6
13
Tuckabianna
Jasper Queen

175 2.6 15 175 2.6

15

Gilt Edge

 – 96 3.1 9 96 3.1

9

SUBTOTAL
271
2.8
24
271
2.8
24
TOTAL

3,138

3.0 301 3,286 3.4 358 6,421 3.2

659

 *Note 1: Hollandaire Resource Estimate is on 100% basis (MGV as a 20% attributable interest in the Hollandaire deposit, free carried to completion of DFS). Totals are on an attributable interest basis. Gold mineralisation not associated with the copper resource at Hollandaire, that is 100% attributable to MGV, is yet to be modelled and reported in compliance with JORC 2012.

Note: Due to the effects of rounding, the totals may not represent the sum of all components

Figure 8: 3D schematic of the Hollandaire and Hollandaire West mineralisation and down-plunge targets. Red drill traces represent drill holes with down hole transient electromagnetic (DHEM) survey data. Surface moving loop transient electromagnetic (MLTEM) models are also shown on the image.