Annual Report for ML 24510 Andranangoo for period 7 September 2013 to 6 September 2014

Abstract

This annual report covers ML 24510 located on the north east coast of Melville Island, part of the Tiwi Islands, in the Northern Territory (see Figure 1 & Figure 2). The area is prospective for zircon and rutile rich mineral sands however suitable mining areas must be outside of environmentally sensitive beach, mangrove and river zones. The tenement was purchased by MZI Resources (previously Matilda Zircon) from Stirling Zircon Pty Ltd who obtained the tenement from the Administrator of Matilda Minerals in July 2009. The first tenement owner Matilda Minerals Ltd ('Matilda') was admitted to the Australian Stock Exchange on 15 September 2004. Matildas objective was to explore and mine small to medium sized heavy mineral deposits which are rich in zircon and rutile, have low clay content, little or no overburden, a small environmental footprint and require low capital expenditure to develop. The potential deposits on the Tiwi Islands met these criteria. The tenement was awarded on the 7th September 2005. Based on a mining reserve of 2.54 mt at 3.56 % HM, containing approximately 52% zircon, 22% rutile and minor leucoxene and ilmenite heavy minerals the project was expected to have a mine life of approximately 3 years. Mining and processing operations commenced at the ML 24510 'Andranangoo' in early November 2006 and were completed in September 2008. Total production by Matilda Minerals between 2006 - 2008 has been estimated at 1.76mt at 3.95 % HM. The vast majority of the economic mineralisation within ML 24510 (at a nominal 2% HM cut off) has been mined with only remnant mineralisation at a lower grade remaining. During the reporting period no mineral sand mining work was completed because the area is mined out and undergoing rehabilitation. The company was focussed on plant sale and removal at ML 27438 (Lethbridge South) and occasional visits were made to the Andranangoo area for weed spraying and environmental monitoring by the company's consultants. A rehabilitation monitoring update produced in 2014 by EcOz consultants is attached as an Appendix to this report.