Annual Technical Report for ELR 130 Esmeralda - Union Reefs Project for the period 17 November 2014 to 16 November 2015

Abstract

ELR (Exploration License in Retention) 130 covers strategic landholding, which is located about 210 km southeast of Darwin, NT, and 8km northeast of Pine Creek. Newmarket Gold NT Holdings Pty Ltd ('Newmarket Gold') acquired the tenement in November 2009 as part of the acquisition of all assets held by GBS Gold Australia Pty Ltd in the Northern Territory. ELR 130 currently sits where MLN 27999 is under application. It is planned to try and progress this application in the coming year Previous exploration by Cyprus Gold Corporation and Acacia Resources had outlined two significant adjacent and sub parallel gold resources (Zones 'A' and 'B'), known as the Esmeralda deposit, which is located roughly 4km south of the Union Reefs mill. AngloGold estimated that the deposit at 0.7g/t Au cut-off contains a combined inferred resource of 1.26Mt @ 1.62g/t Au (66,000oz). In 2013, Newmarket Gold revised the resource outlined by both Cypress and Acacia and published their findings in their Mineral Resource report by Edwards and Bremmer (2013). From this report, it was deduced that the combined inferred resource for the Esmeralda area was 1.06Mt @ 2.06 g/t Au (70,300oz). ELR 130 lies on the eastern margin of the north-west trending Pine Creek Shear Zone (PCSZ). Rocks of the Mt Bonnie Formation that is the uppermost formation of the South Alligator Group, and the Burrell Creek Formation, which is the lowest unit of the Finniss River Group, dominate the stratigraphy of the Union Reefs field. The tectonic corridor is confined to the east (Allamber Springs Granite) and west by lobes of the Cullen Batholith and rocks within this zone have been tightly folded and in high strain areas, subjected to fold limb failure. Axial planes and bedding tend to dip steep westerly. The area of ELR 130 is dominated by siltstones, mudstones and greywackes of the Mt Bonnie Formation, the unit is punctuated by horizons of chert and tuffite as well as thin distinctive banded iron formation facies. Thin tourmalinites have been recorded in the area. Exploration activities during the reporting period include the design and implementation of an extensive RC and diamond drill program across the Esmeralda Gold Deposit to confirm and update the Resource Estimation. Information from this drill program will be collated along with environmental baseline and geotechnical information to be used in a scoping study for the development of the Esmeralda Gold Deposit. Work undertaken for the preparation for the drilling program and scoping study includes lease boundary survey, Indigenous Land use Agreement negotiations and signing of the agreement, heritage surveys of drill sites and environmental monitoring.