Annual Report Year 9 EL 26944 Merlin Orbit Project for the period 30 April 2017 to 29 April 2018

Abstract

This Annual Report details exploration activity carried out by Merlin Diamonds Limited (MDL) over EL 26944 for the period 30 April 2017 to 29 April 2018. This period represents Year Nine 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. Field based exploration activities were not undertaken on EL 26944 during the reporting period as Company continue to direct its financial and technical resources towards ongoing commercial-scale mining operation and upgrading of ore processing plant at the Merlin Mine Lease (MLN 1154). Merlin has purchased and installed TOMRA XRT machine at the mine which has replaced the conventional concentration and recovery process of the current DMS plant followed by the Flowsort X-ray sorting. This advance X-ray transmission (XRT) technology reliably detects all diamonds, including coated low luminescent and Type II diamonds that are difficult to detect with traditional X-ray technology. Exploration activities were also taken place on the Merlin mine lease which is located in the centre of EL 26944. The objective was to find new kimbelite pipes within the Merlin kimberlite field. MDL mapped some of previously identified geophysical/soil geochemical/indicator minerals anomalies with high resolution ground electromagnetic surveys and drill tested many of these anomalies by RC drilling. It is anticipated that results acquired from this exploration program will have implication for future exploration work on EL 26944.