Annual Exploration Report - Year 16 MLN 1154 Merlin 1 January 2013 to 31 December 2013

Abstract

An extensive loam and stream gravel sampling program commenced over the mining lease and surrounding exploration licence EL 26944 targeting the unconformity between the Bukalara Sandstone and the overlying Cretaceous Sandstone. A total of 110 samples were collected with 61 samples processed during the reporting period. A total of 32 reported positive results. The results are considered encouraging and highlight the potential for additional discovery within the mining lease. A total of twenty targets were identified for investigation using an EM34 ground electromagnetic instrument. A total of 43 line kilometers were completed. Pending further investigation a number of these targets may be recommended for drill testing during the next reporting period. Several targets remain to be investigated. A borehole mining trial operated for a one month period and achieved success in a number of key areas. Further engineering works are required to increase the rate of production to sustain an economic operation.