Annual Report for the period 15 October 2015 to 14 October 2016 EL 4170 Cato Plateau and EL 4171 Cato River Combined Reporting Number GR077/09 Cato Project

Abstract

EL 4170 Cato Plateau and EL 4171 Cato River were applied for by BHP Minerals Pty. Ltd. (BHP) on 3rd December 1982. EL 4170 was granted on 14th October 2004 and EL 4171 was granted on 12th September 2005. EL 4170 has been renewed untill 13th October 2016 (with a further two year renewal pending) and EL4171 until 11 September 2017. Rio Tinto Exploration Pty Limited (RTX) signed an agreement with BHP on 27th March 2000 whereby RTX took over management of EL 4170 and EL 4171 (the tenements). This agreement was amended in 2007 to allow for BHP to conduct simultaneous activities for manganese within the licence package. GEMCO (a subsidiary of South32) now are the responsible party for the agreement. The original tenement application, ELA 4170 covered an area of 593.5 km2 of which only 57.0 km2 (28 blocks) was granted. The remainder of the area was split off into a new application, EL 24389 and put into moratorium. The original ELA 4171 tenement application covered an area of 846 km2 of which 598.2 km2 (208 blocks) was granted. Both tenements have undergone relinquishments, with the retained areas being 16 blocks (El 4170) and 14 blocks (EL 4171). The tenements are located 30 km west of Nhulunbuy, east Arnhem Land and consequently are administered under the Aboriginal Land Rights Act 1975 (ALRA). Combined reporting of EL 4171 and EL 4170 was granted and the project called 'Cato Project' with reporting number GR077/09. The Cato Project forms part of the larger contiguous tenement package in east Arnhem Land, which is prospective for bauxite and manganese. These two licences (Cato project) cover part of the Cato plateau, which is a known occurrence of bauxite within the east Arnhem area. The Cato plateau bauxite target has the potential to contain resources similar in style to the nearby Gove deposit. BHP (now GEMCO), under the agreement with RTX, retains the right to explore for manganese (Mn) on EL4170 and EL 4171. In 2015 a review of the licenses, in conjunction with GEMCO, resulted in EL 4171 undergoing a significant relinquishment with only 14 out of the 96 blocks retained. No field work was completed on EL 4170 during the reporting period. Focus during the year continued on the effort to gain access to the adjoining application (EL 24389) that was originally split out of EL 4170 upon grant. This included anthropological surveys by the NLC to determine the potential consent area, and subsequently a data review was carried out to assess the exploration potential of the broader Cato plateau, which included the ground covered by exploration licences EL 4170, EL 4171, and EL(A) 24389. When EL 24389 was granted on 23 June 2016 (for a period of 6 years), the bauxite targets identified from the data review were prioritised A program of work was developed to initially drill test the priority bauxite targets on the newly granted EL 24389 with subsequent phases of drilling extending to ground peripheral to the main plateau on EL 4170. A mine management plan (MMP) for exploration for the broader Cato Plateau Project (EL 24389, EL 4170, and EL 4171) was prepared and submitted to Government. The MMP was assessed on 21 September 2016 and authorised by the Northern Territory Mines Directorate i.e., Authorisation 0882-01. Further work on the broader Cato Plateau Project included desktop and ground based envionrment and cultural surveys, as well as field preparations for earthworks and drilling. The initial program of work which is being executed during Q3/Q4 2016 (at the time of annual reporting of GR 077) is focused on drill testing priority areas on EL 24389 and if the results of this initial phase warrant further work, there are up to 8 drillholes planned on EL 4170.