Annual Report Year 8 Exploration Lease EL 26944 Merlin Orbit Project for the period 30th April 2016 to 29th April 2017

Abstract

This Annual Report details exploration activity carried out by Merlin Diamonds Limited (MDL) over EL 26944 for the period 30 April 2016 to 29 April 2017. This period represents Year Eight of the Licence. The Exploration Licence is located on the Bauhinia Downs (SE53-03) 1:250,000 map sheet and the Glyde (6164) 1:100,000 map sheet. Access to the Licence is via a 64 kilometre formed gravel access road from the Carpentaria Highway to the Merlin Diamond Mine - the turn-off for this road is approximately 6 kilometres south-west of the McArthur River Mine turn-off. The Licence has been subjected to mineral exploration since the 1960's when the Carpentaria Exploration Company explored for base metals. Historic diamond exploration including airborne geophysics and ground exploration was undertaken by CRA during the 1980's and Ashton Mining during the 1990's. On-ground exploration activity was not undertaken during the reporting period as Company resources were directed towards resumption of commercial-scale mining operation at the Merlin Mining Lease (MLN 1154) located within EL 26944. Merlin has refurbished and recommissioned the existing ore processing plant including the Dense Media Separation (DMS) plant at the Merlin mine. Overall plant circuit has been simplified with the introduction of contract mobile crushing and screening unit at the front end and the improvement to final recovery system by installation of Flowsort two twin-stage x-ray sorting machines, installation of grease table (planned) and caustic diamond cleaning facility.