Annual Report Year 18 MLN 1154 Merlin Diamond Project for the period 1 January 2015 to 31 December 2015

Abstract

Exploration activities during the reporting period were less extensive than 2014, with minimal on-ground work undertaken. The company-owned diamond exploration laboratory at Wangara in Perth, WA, closed down in mid 2015. This facility serviced all exploration projects held by Merlin Diamonds across the NT as well as WA. As storage facilities at the Laboratory were very full, a review of samples held there was undertaken during 2014, and again in 2015 prior to its closure in June. Samples, such as sample concentrates, sample duplicates and other non-critical material, were de-catalogued and the material discarded. No drill core was discarded, although some RC drill chips were relinquished as they were not considered of any further value. The company continued to review progress of rehabilitation in exploration areas by way of an annual photographic survey. The 2015 survey was undertaken in April and the photographs included in the exploration MMP for the lease. Water testing in the flooded mine pits and at strategic places around the mining lease has been on-going - results are included in the annual environmental report. A review of all exploration undertaken on MLN 1154 was undertaken in order to identify drill-ready high confidence targets. Six targets were identified, and one potential target. During the reporting period, Merlin Diamonds Limited has focused on furthering development of the mechanical clamshell grab mining technique. Key developments include the finalisation of the Feasibility Study, and the preliminary design of the barge arrangement upon which the clamshell grab will operate. Capital-raising to fund the project has also been a key aspect of 2015 activities.