Mustang Resources: Caula Project – Graphite Mineral Resource increases 317%

(firmenpresse) - Mustang Resources: Caula Project - Graphite Mineral Resource increases 317%

Updated Measured Graphite Mineral Resource of 21.9 Mt at 13.4% TGC (8% cut-off)

Key Points
- Total Updated JORC (Measured) Resource of 21.9 Mt (at) 13.4% TGC (8% cut-off) at the Caula Vanadium-Graphite Project in Mozambique
- 317% increase in size of Mineral Resource from 702,600 tonnes to 2,933,100 tonnes of contained Graphite
- The entire Graphite Resource now in the Measured Resource category and upgraded from the initial December 2017 Inferred Resource
- Caula Graphite Resource is subdivided into two zones:
- Oxidised Zone - 8.5 Mt (at) 13.4% TGC for 1,130,000 tonnes contained Graphite (8% grade cut-off)
- Fresh Zone - 13.4 Mt (at) 13.5% TGC for 1,803,100 tonnes of contained Grapite (8% grade cut-off)
- Substantial scope for further growth in the Graphite Resource through exploration
- Metalurgical testwork confirms exceptional quality graphite with more than 63% of cumulative proportion in large to super jumbo flakes sizes (>180m) and excellent concentrate grades of more than 97% TGC
- Caulas modified and improved flowsheet design allows for integrated vanadium and graphite extraction
- Following the merger of Mustangs ruby project with Fura, Mustang ideally positioned to become a leading vanadium and graphite company

24 July 2018 - Mustang Resources Ltd (ASX: MUS, FRA: GGY) is pleased to announce that its Caula Vanadium-Graphite project in Mozambique has taken another key step towards development with the completion of an upgraded JORC-compliant Graphite Mineral Resource estimate.

The Mineral Resource, which is all in the Measured category, is 21.9Mt at 13.4% Total Graphitic Carbon (TGC) (8% cut-off) for a total of 2,933,100 tonnes of contained Graphite. The Mineral Resource is an update from the previous Inferred Graphite Resource of 5Mt at 13% TGC for 702,600 of contained Graphite Refer to ASX Announcement dated 1 December 2017

based upon the completion of eleven additional cored boreholes during November and December 2017. The upgraded Mineral Resource represents a 317% increase in the size of the Mineral Resource from 702,600 tonnes of contained graphite to 2,933,100 tonnes of contained graphite.

Mustang Managing Director Dr. Bernard Olivier said: This is an exceptional result, Caulas Graphite Mineral Resource has not only increased over 300% but the entire resource is now in the Measured Category. The combination of the upgraded Graphite Mineral Resource and our recently announced maiden Vanadium Mineral Resource now paves the way for the fast-tracked development of the Caula project into production.

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Figure 1. Locations of Drill holes and the plan view of mineralisation

Geology of the Caula Graphite Deposit

The Caula deposit is located in northern Mozambique in the Cabo Delgado Province. The graphite mineralisation is hosted in quartzitic schists of the Xixano Complex. The most common lithologies include Graphitic Schists, Gneisses and thin Pegmatoidal zones. Sulphides are occasionally logged but are usually absent. The surrounding country rock consists of Quarzitic and Micaceous Schists and Gneisses.

The project area is situated in the Mozambique Belt of the East African Orogen, and contains highly metamorphosed meta-sediments and meta-volcanics. The rocks of the East-African Orogen are dated 850 - 620 Ma in which metamorphic facies vary from amphibolitic to granulitic.

The mineralised zone is contained within a reclined isoclinal fold structure which dips at roughly 60 degrees to the west (Figure 1). Due to the regions tectonic history these meta-sediments have been altered to the extent that no sedimentary structure remains.

Drilling, Sampling and Sub-sampling Techniques

The drilling program comprised of one RC (reverse circulation) and 16 DD (Diamond Drilling) boreholes. The initial part of the hole was drilled with PQ (III) until the rock was competent to be drilled with HQ (III). Drill core was orientated wherever possible. The mineralised core was sampled as half (Leco analysis) and quarter (metallurgical test work) core, with the remaining quarter retained in the stratigraphic sequence in the core trays. Appropriate QA/QC samples (standards, blanks, duplicates and umpire samples) are inserted into the sequence as per industry standard.

Sample Analysis

Sample preparation and analysis was completed by SGS in Johannesburg. Sampling procedure which includes drying, crushing, splitting and pulverising ensures that 85% of the sample is 75 micron or less in size. A split of the sample is analysed using a LECO analyser to determine total carbon in graphite (TGC%) content. A second split of the sample is prepared for element analysis by XRF to determine V2O5 content. Rougher and multiple re-grind and cleaner flotation, Final concentrate PSD and fraction assays was also done.

Resource Estimation Methodology

The geological models used for the resource estimation was created in Voxler (Version 4.2.584), a modelling package developed and distributed by Golden Software in Colorado. The deposit was divided into an upper oxidised zone and a lower fresh zone. Once a specific grade volume has been calculated a weighted average density is applied to the volume and a tonnage is determined.

Weighted averaging for sample length was applied. No grade truncations were applied. A cut-off grade of 8% has been applied. Grade-tonnage curves were produced and can be used to determine the effect of cut-off grades on remaining mineralised tonnages, but the drilled resource is calculated as intersected in-situ. The calculated grade is weighted for representative mass, as calculated in Voxler.

Cut-off Parameters

An 8% TGC grade cut-off was applied. The modelling is limited by drilling extent. The drilling has not intersected nor delineated the outer edge of barren host rock. The physical limits of the mineralisation will be established with additional future drilling.

Grade-tonnage curves were produced (see Figures 2 and 3) and the influence of various cut-off grades can be investigated. The physical deposit boundaries have not been intersected in the drilling work to date and hence the model is suspended within graphite and roscoelite mineralised rock. The western and northern deposit boundary (at shallow depth), is expected to be delineated with the next phase of drilling. The eastern and southern boundaries are open to at least 200m and several kilometres respectively.

Caula Graphite Resource Estimate

The Caula Mineral Resource estimate is based on 16 diamond drillholes totalling 2,233.21 metres (484.72m in 2016 and 1,748.49m in 2017) and one reverse circulation (RC) drillhole totalling 99 metres (Figure 4). Drillholes are spaced approximately 85 metres apart along a 540 metre strike length. With the exception of drillhole MORC004 (-77°), all holes were drilled at inclinations of between 55° and 60° from the horizontal.

The drillhole samples were submitted to SGS in Randfontein (South Africa) for analyses as well as to SGS (Malaga), Independent Metallurgical Operations Pty Ltd (IMO) and Nagrom, Perth for metallurgical testwork. In total, 1,128 assay results were generated and these were used with the drillhole data to complete the updated Graphite Mineral Resource estimate.

Grade estimation was completed using an inverse distance squared method. The deposit was divided into an upper oxidised zone and a lower fresh zone. Points of equal grade within the model boundary are draped with a wireframe shape (of which the anisotropy settings are defined in the gridder module) and the volume for the shape is calculated in Voxler. This is repeated for grades of 0.01% TGC to 24% TGC for the oxidised zone and up to 26% TGC for the fresh zone.

Once a specific grade volume interval had been calculated (by difference) a weighted average density was applied to the volume and a tonnage determined.

The Measured Mineral Resource totals 21.9 million tonnes at an average grade of 13.4% TGC for 2,993,100 tonnes of contained Graphite.

The results of the Mineral Resource estimate are summarised in Tabel 1, below. Drillhole information and reporting in accordance with the JORC Code 2012 Edition are included as Appendices to this announcement.

Table 1. Measured Mineral Resource estimate for the Caula Vanadium Deposit (at 8% TGC cut-off grade)

Caula Graphite Deposit - Mustang Resources - as
at
23
July 2018 (8.0 % TGC Cut-off)
ResourceVolumeDensityGTIS AveragContainResourc
Blo (ton/m (Mt) e ed e
ck (M 3) Grade Graphi Catego
m te ry
3) (% (
TGC) tonnes)

Oxidised3.3 2.550 8.5 13.4 1,130,0Measure
Zone 00 d

Fresh 5.1 2.650 13.4 13.5 1,803,1Measure
Zone 00 d

Total 8.4 2.610 21.9 13.4 2,933,1Measure
00 d

The grade-tonnage curve for the oxidised zone is shown in Figure 2 below. The Oxidised Zone displays the following grade-tonnage relationship: at a cut-off grade of 2% TGC the deposit will have as a balance 13.4 Mt of mineralised tonnes at an average grade of 10.4% TGC, for 1,390,900 tonnes of contained graphite. At a cut-off grade of 4% TGC the deposit will have as a balance 12.0 Mt of mineralised tonnes at an average grade of 11.2% TGC, for 1,350,100 tonnes of contained graphite. At a cut-off grade of 8% TGC the deposit will have a balance of 8.5 Mt of mineralised tonnes at an average grade of 13.4%, for 1,130,000 tonnes of contained Graphite in the Oxidised Zone.
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Figure 2. The Grade-Tonnage curve for the Oxidised Zone of the Caula deposit

Table 2. The TGC cut-off grades and tonnages for the Oxidised Zone of the Caula deposit

Cut-Off RemaininRemainingContained
Grade g Grade Graphite
Tons

(% TGC) (Mt) (% TGC) (tonnes)
2 13.4 10.4 1 390 900
4 12.0 11.2 1 350 100
6 10.4 12.2 1 268 200
8 8.5 13.4 1 130 000
14 3.3 17.1 572 400

The grade-tonnage curve for the Fresh Zone is shown in Figure 3 below. For the Fresh Zone the following relationship is seen from the grade-tonnage curve; At a cut-off grade of 2% TGC the deposit will have a balance of 20.5 Mt mineralised tonnes at an average grade of 10.6% TGC, for 2,180,600 tonnes of contained TGC. At a cut-off grade of 4% TGC the deposit will have a balance of 18.6 Mt mineralised tonnes at an average grade of 11.4% TGC, for 2,121,400 tonnes of contained Graphite. At a cut-off grade of 8% TGC the deposit will have a balance of 13.4 Mt mineralised tonnes at an average grade of 13.5%, for 1,803,100 tonnes of contained TGC in the Fresh Zone.
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Figure 3. The Grade-Tonnage curve for the Fresh Zone of the Caula Graphite deposit

Table 3. Cut-off grades and tonnages for the Fresh Zone of the Caula deposit

Cut-Off Tonnes Grade Contained
Grade Graphite

(% TGC) (Mt) (% TGC) (tonnes)
2 20.5 10.6 2 180 600
4 18.6 11.4 2 121 400
6 16.3 12.3 2 008 000
8 13.4 13.5 1 803 100
14 5.4 17.5 937 800

Mineral Resource Classification Criteria

The resource is classified as Measured. The core losses in the DD boreholes were assigned 0% TGC values as a conservative measure. With additional drilling in the future, the confidence in the estimate may very well improve. The Competent Person has no reason to doubt the input data from the core logging to the laboratory results. The estimate is conservative and probably understated in both tonnage and grade.

The surface area of 12.2 Ha is covered by 17 regularly spaced boreholes for an average grid of just less than 85m squared.

In addition, the geovariance which was calculated over 14 ranges with 27 data-pairs shows a sill distance of 170m. This calculation is based on information from 17 boreholes, and may well change as it gets updated with new drilling information. Based on this geovariance, the drill spacing at an average of 85m is considered to be sufficient to determine a measured resource.

Caula Graphite Resource increases 317%_Final for
releasePRcom
.004

Figure 4. Mustangs Caula Graphite & Vanadium Project, EM depicting the graphitic anomaly and the exploration drilling to date

Mining and Metallurgical Methods and Parameters

The resource estimation has assumed that the deposit could potentially be mined using open cut mining techniques. No assumptions have been made for mining dilution or mining widths, however mineralisation is generally broad.

On 25 June 2018 Mustang announced the results of additional metalurigcal testwork on the Caula Graphite - Vanadium project. The testwork was conducted on composites from borehole 15 which is centrally located in the measured resource area. The testwork flowsheet was a modification of a similar flowsheet used for the earlier work. The graphite concentrate recovery procedure comprised an initial coarse grind, a de-slime stage (by-passed on Fresh), then rougher flotation followed by three re-grind & cleaner flotation stages and two final cleaner flotation stages. By graphite industry standards, this is a remarkably simple flowsheet.

The cumulative proportion of large to super jumbo flakes (>180mm) comprises 60% of the Oxide Zone while the cumulative proportion of large to super jumbo flakes (>180mm) comprises 68% of the Fresh Zone. The high concentrate grades of more than 97% Total Graphitic Carbon have been maintained in the modified flowsheet.

The flowsheet has been extended to allow integrated extraction of both graphite and vanadium. The first vanadium concentration work is currently in progress and results are expected in due course.

Project Area Potential

The Caula Project is located within a world-class graphite province and there is significant potential to expand this Graphite Resource estimate through ongoing exploration and drilling.

In the immediate vicinity of the Caula discovery, graphite mineralisation has now been defined over a 540m strike length. This mineralisation is up to 230m wide (estimated true thickness) and the depth is completely open-ended at the limit of the current drilling.

A new program of diamond and reverse circulation drilling has been planned to test for both up-dip and down-dip extensions to the Caula deposit in this area.

In addition to the potential to define additional graphite and vanadium mineralisation immediately adjacent to the Caula discovery, there is also very strong potential to define high grade graphite mineralisation over the much larger project area.

The Caula discovery is located at the northern end of a suite of large-scale geophysical (TEM) anomalies that extend over an 18km strike length within Mustang's tenements (see Figure 5). Drilling at the Caula site confirms a strong spatial correlation between the TEM anomaly and high grade graphite drill hole intersections. The larger-scale TEM anomaly has received minimal drilling to date and therefore remains largely untested.

Mustang proposes systematically to drill test the large-scale TEM target through progressive step out drilling from the Caula discovery. This drilling has commenced.
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Figure 5. Large-scale untested SkyTEM anomaly within the greater Caula Graphite and Vanadium Project area

The Company is highly encouraged by the results received to date from its updated Graphite Resource Estimate and the Caula deposit as a whole. The combination of high grade drilling results, positive metallurgical testwork, a large Graphite Measured Resource estimate, large-scale untested exploration targets and the project's location within a demonstrated world-class vanadium-graphite province confirm the project's potential to create significant future value for the Company.

As previously reported, due to unexpected delays in receiving the final vanadium and graphite assay results from the independent laboratory, the completion of the maiden vanadium resource estimate as well as this graphite resource update was delayed. This delay means that the estimated completion of the Scoping Study has been updated to Q3 2018.

For and on behalf of the Board

Dr. Bernard Olivier
Managing Director

FOR FURTHER INFORMATION, PLEASE CONTACT:

Managing Director:
Bernard Olivier
bernard(at)mustangresources.com.au
+61 (0) 408 948 182
+27 (66) 4702 979

Media & Investor Relations:
Paul Armstrong
paul(at)readcorporate.com.au
+61 (0) 8 9388 1474


COMPETENT PERSONS STATEMENT:

Information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Johan Erasmus, a Competent Person who is a registered member of the South African Council for Natural Scientific Professions (SACNASP) which is a Recognised Professional Organisation (RPO) included in a list posted on the ASX website. Mr Erasmus is a consultant to Sumsare Consulting, Witbank, South Africa which was engaged to undertake this work. Mr Erasmus has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results. Mr Erasmus consents to the inclusion of the data in the form and context in which it appears.

Information in this report that relates to the metallurgical aspects of the Caula Graphite & Vanadium Project is based on information compiled by Dr. Evan Kirby, a Competent Person who is a registered member of the South African Institute for Mining and Metallurgy (SAIMM), which is a Recognised Professional Organisation (RPO) included in a list posted on the ASX website. Dr Kirby is a Non-Executive Director of the company. Dr Kirby has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Kirby consents to the inclusion of the data in the form and context in which it appears.

FORWARD-LOOKING STATEMENTS:

This document may include forward-looking statements. Forward-looking statements include, but are not necessarily limited to the Companys planned exploration program and other statements that are not historic facts. When used in this document, words such as could, plan, estimate, expect, intend, may, potential, should and similar expressions are forward-looking statements. Although the Company considers that its expectations reflected in these statements are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward-looking statement.

APPENDIX 1 - RC DRILLHOLE SUMMARY TABLE

RC drillhole included in this Mineral Resource estimation. Drill hole coordinates WGS 84 UTM - Zone 37S. All TGC grades reported for the intersections seen below.

Drill East North Dip AzimutEOH From To (m)Interv%TGC
Hole (m) (m) h Depth (m) al
(m) (m)

MORC004484939856334-77.9 115.5 99 0 17 17 4.48
4

22 78 56 12.40
87 93 6 11.40

APPENDIX 2 - DD DRILLHOLE SUMMARY TABLE
Note - drillhole coordinates WGS 84 UTM - Zone 37S.

DD drillholes drilled in November/December 2016 - refer to ASX announcement dated 6 November 2017 for additional information pertaining to these five drillholes

Drill East North Dip AzimutEOH FromTo Inter%TGC
Hole (m) (m) h Dept (m) (m) val
h (m)
(m)

MODD001485,08,563,5-55 153 65.6810 14 4 20.98
40 94 %

17.420.443.04 20.56
%

21.424.443 21.87
4 %

26.435.449 14.03
4 %

38.442.444 12.44
4 %

43.453.8610.4217.58
4 %

59.465.686.24 9.34%
4


MODD002485058563110-55 43 63.1419.021 1.96 19.58
7 4 %

31.633.051.41 8.43%
4

37 43.066.06 13.16
%

44.746.762.05 8.62%
1

56.558.131.59 14.50
4 %

62.663.140.45 8.06%
9


MODD003484968563488-55 115 158.414.821.426.57m15.01
6 2 5 %

26.428.422m 5.52%
2

30.631.310.68m15.50
3 %

50.353.593.25m13.60
4 %

63.164.421.31m12.70
1 %

66 66.780.78m6.98%
68 75.137.13m21.10
%

80.990 9.10m13.53
%

100 114 14m 13.09
%

116 122 6m 8.83%
122 129 7m 18.15
%

129 137 8m 19.94
%

137 144 7m 13.76
%

144 146 2m 1.99%
146 158 12.4219.53
m %


MODD004484948563339-60 91 97.0417 20.543.54m8.55%
9

21.222 0.82m7.98%
2

22.824 1.15m13.60
9 %

25.327 1.22m10.30
2 %

27.328 0.65m9.16%
9

28.630 0.93m6.89%
1

30.032.542.35m11.35
5 %

32.937.043.93m17.08
1 %

37.339 1.68m2.73%
2

39 43 4m 12.50
%

43 45 2m 3.30%
45 49 4m 17.52
%

56.559.543m 6.26%
4

61.568.546.97m17.69
7 %

70.479 8.58m18.08
2 %

79 93.2 14.2m10.98
%

93.297.043.84m1.47%

DD drillholes drilled in November/December 2017

Hole WGS 84 EOH Dip AzimuFromTo InterAveragAverag
ID UTM Depth th (m) (mval e TGC e
(m) ) (m) % V
2O5 %
Zone 37s
EastiNorth
ng ing


MODD014850585634143 53.4104.517 39 22 16.2 0.31
4 2 73 2 5

39 45 6 7.0 0.23
45 55 10 17.6 0.35
55 58 3 1.4 0.06
58 63 5 17.6 0.47
63 68 5 GneissGneiss
68 10436 16.5 0.60
104 1106 0.1 0.37
110 1188 11.0 0.48
118 1246 17.3 0.49
124 13713 11.6 0.32
137 1436 19.8 0.41

Hole WGS 84 UTM EOH Dip AzimuFromTo InterAveragAverag
ID - Zone Dept th (m) (mval e TGC e
37s h ) (m) % V
(m) 2O5 %

EastiNorth
ng ing


MODD014850585633118 54.284.9917 31 14 16.7 0.36
5 7 62 6

31 34 3 GneissGneiss
34 37 3 0.1 0.02
37 89 52 9.2 0.25
89 95 6 3.7 0.07
95 11015 7.6 0.13
110 1188 GneissGneiss

Hole WGS 84 UTM EOH Dip AzimuFromTo InterAveragAverag
ID - Zone Dept th (m) (mval e TGC e
37s h ) (m) % V
(m) 2O5 %

EastiNorth
ng ing


MODD01485108563280 54.470.9020 24 4 11.2 0.24
6 7 61 6

24 35 11 1.7 0.15
35 49 14 8.6 0.26
49 51 2 0.2 0.06

Hole WGS 84 UTM EOH Dip AzimuFromTo InterAveragAverag
ID - Zone Dept th (m) (m)val e TGC e
37s h (m) % V
(m) 2O5 %

EastiNorth
ng ing


MODD014851585631131 53.767.4814 20 6 17.0 0.31
7 8 80 1

20 23 3 6.1 0.23
23 26 3 0.3 0.35
26 38 12 GneissGneiss
38 39.41.49 8.4 0.31
9

39.447.68.17 GneissGneiss
9 6

47.648.20.57 19.8 0.37
6 3

48.250 1.77 GneissGneiss
3

50 53 3 11.1 0.16
53 56 3 13.5 0.33
56 64 8 13.0 0.30
64 70 6 1.8 0.08
70 75 5 5.9 0.14
75 78 3 0.2 0.02
78 84 6 9.5 0.34
84 94 10 6.4 0.10
94 97 3 0.8 0.10
97 107 10 7.1 0.15
107 115 8 14.2 0.40
115 121 6 8.2 0.23
121 125 4 14.8 0.33
125 131.6.1 7.7 0.13
1

Hole WGS 84 UTM DipAzimuEOH FromTo InterAveraAvera
ID - Zone th Dep (m) (m)val ge ge
37s th (m) TGC V
(m) % 2O5 %

EastiNorthi
ng ng

MODD014851185634555 80 217.6 19 13 15.470.29
8 4 5 89

19 20 1 1.29 0.28
20 25 5 16.620.52
25 28 3 5.78 0.48
28 30 2 26.6536.79
30 34 4 0.92 0.10
34 37 3 19.730.29
37 44 7 2.87 0.12
44 63 19 20.220.42
63 64 1 3.95 0.25
64 78 14 14.060.49
78 79 1 1.93 0.11
79 84 5 23.980.33
84 86 2 8.31 0.26
86 92 6 20.870.70
92 99 7 9.07 0.32
99 112 13 18.000.38
112 142 30 0.05 0.01
142 165 23 15.970.49
165 188 23 4.19 0.42
188 220.32.8916.140.78
89

Hole WGS 84 UTM DipAzimuEOH FromTo InterAveragAverag
ID - Zone th Dept (m) (m)val e TGC e
37s h (m) % V
(m) 2O5 %

EastiNorth
ng ing

MODD01485158563355 73 127.96.9 18 11.1 10.45 0.27
9 2 72 6

18 19 1 0.24 0.09
19 23 4 8.38 0.30
23 25 2 1.29 0.19
25 30 5 14.36 0.40
30 32 2 2.35 0.23
32 34 2 9.25 0.33
34 39 5 4.14 0.15
39 45 6 10.24 0.41
45 82 37 7.87 0.27
82 89 7 19.17 0.53
89 95 6 4.07 0.12
95 99 4 15.10 0.41
99 100 1 0.06 0.02
100 105 5 8.97 0.21
105 108 3 15.53 0.43
108 109 1 3.27 0.12
109 123 14 15.27 0.41
123 127.4.96 3.86 0.13
96

Hole WGS 84 UTM DipAzimuEOH FromTo InterAveragAverag
ID - Zone th Dept (m) (mval e TGC e
37s h ) (m) % V
(m) 2O5 %

EastiNorthi
ng ng

MODD024852185632955 62 125.248 51 3 1.25 0.09
0 2 1 9

51 57 6 15.77 0.35
57 63 6 5.40 0.16
63 95 32 9.83 0.24
95 98 3 1.26 0.03
98 11416 10.57 0.18
114 1184 1.14 0.03
118 1235 15.42 0.43
123 1252 0.05 0.02

Hole WGS 84 UTM DipAzimuEOH FromTo InterAveragAverag
ID - Zone th Dept (m) (mval e TGC e
37s h ) (m) % V
(m) 2O5 %

EastiNorthi
ng ng

MODD024851885634655 55 161.222 23 1 14.21 0.40
2 1 5 9

23 24 1 0.05 0.09
24 34 10 16.43 0.32
34 38 4 1.77 0.21
38 41 3 14.08 0.60
41 42 1 1.67 0.51
42 66 24 15.52 0.41
66 67 1 2.83 0.16
67 78 11 15.92 0.43
78 79 1 5.09 0.08
79 93 14 15.90 0.40
93 94 1 0.41 0.02
94 11016 16.17 0.38
110 1166 6.02 0.22
116 13216 9.71 0.26
132 1331 0.21 0.03

Hole WGS 84 UTM DipAzimuEOH FromTo InterAveragAverag
ID - Zone th Dept (m) (m)val e TGC e
37s h (m) % V
(m) 2O5 %

EastiNorthi
ng ng

MODD034850285632955 93 95.547 20 13 14.16 0.33
0 9 7

20 21 1 3.88 0.42
21 25 4 12.26 0.25
25 27 2 2.58 0.12
27 35 8 13.30 0.31
35 42 7 3.44 0.27
42 49 7 12.03 0.34
49 51 2 4.41 0.22
51 57 6 15.77 0.29
57 60 3 3.64 0.33
60 61 1 19.30 0.35
61 62 1 5.09 0.14
62 65 3 12.27 0.30
65 95.530.543.09 0.09
4

Hole WGS 84 UTM DipAzimuEOH FromTo InterAveragAverag
ID - Zone th Dept (m) (m)val e TGC e
37s h (m) % V
(m) 2O5 %

EastiNorth
ng ing

MODD03485008563455 79 131.215.423 7.56 9.98 0.27
1 1 22 4 4

23 30 7 17.49 0.42
30 31 1 1.23 0.63
31 33 2 18.25 0.40
33 36 3 6.37 0.09
36 48 12 22.67 0.35
48 49 1 2.37 0.06
49 51 2 17.25 0.27
51 56 5 6.14 0.18
56 90 34 16.51 0.41
90 94 4 0.30 0.02
94 100 6 12.96 0.37
100 101 1 0.69 0.03
101 121 20 7.89 0.17
121 124 3 2.48 0.09
124 131.7.24 12.53 0.30
24

Hole IDWGS 84 UTM - DipAzimuEOH FromTo InterAveraAvera
Zone th Dept (m) (mval ge ge
37s h ) (m) TGC V2O5
(m) % %

EastingNorth
ing

MODD032485085 8563155 63 87.596 7 1 0.43 0.19
99

7 23 16 15.060.28
23 25 2 3.54 0.19
25 63 38 12.000.26
63 69 6 3.71 0.17
69 71 2 17.150.70
71 73 2 0.96 0.04

JORC CODE, 2012 EDITION - TABLE 1
APPENDIX TO ANNOUNCEMENT - 20 JULY 2018
Section 1: Sampling techniques and data.

CriteriaJORC Code MUS Commentary
Explanation

Sampling-Nature and 2015 Field Program
techniq quality of Samples have been taken from a
ues sampling Reverse Circulation (RC)
(
eg cut drillhole (MORC004) which was
channels, drilled by Mitchell Drilling,
random an Australian company with a
chips, or regional presence in
specific Mozambique. Reverse
specialised circulation drilling was used
industry to collect 1m samples (roughly
standard 35kg) by an air cyclone which
measurement was reduced to a 3kg sample by
tools riffling. The
appropriate
to the drillhole collar location was
minerals generated based on results
under from a recently flown airborne
investigation
, such as SkyTEM EM survey (refer to
down hole previous MUS ASX
gamma announcements).

sondes, or A total of 77 intervals from RC
handheld XRF drillhole
MORC-004 were selected for
instruments, sampling.
etc). These
examples
should not Drillhole intervals were
be taken as selected for sampling based on
limiting the geological logging and samples
broad showing no clear evidence of
meaning of graphite mineralisation have
sampling. been excluded (except 1m into
barren zones) from the
-Include analysis completed by SGS
reference to Randfontein, an accredited
measures laboratory.
taken to
ensure The samples were riffle split
sample on a 50:50 basis, with one
split pulverised and analysed
representivity for Total Graphitic Carbon
and the (TGC), Total Carbon (TC) and
appropriate Total Sulphur (TS) using a
calibration
of any Leco Furnace, and the remaining
measurement split held in
tools or storage.
systems
used.
2016 Field Program
-Aspects of Five cored boreholes were
the drilled as part of the 2016
determination field program for the
of
mineralisatioCaula deposit. The diamond
n that are drilling (DD) was completed
Material to using a Boart
the Public
Report. In Longyear LF 90 drill-rig and
cases where the core was recovered with HQ
industry (III) equipment. The
standard contractor used for the 2016
work has drill program is Major
been done Drilling Group International,
this would a Canadian-based operation
be with a local presence in
relatively Mozambique.
simple
(
egreverse cir· Drillhole collar locations
culation were generated based on
drilling was results from a flown airborne
used to
obtain 1 m SkyTEM EM survey which was
samples from completed during 2015 (refer
which 3 kg to previous MUS ASX
was announcements).
pulverised
to produce a · Sampling is of HQ (III) DD
30 g charge core. A total of 298m of
for fire mineralisation were sampled
assay). In over five DD boreholes. One DD
other cases hole (MOD004) have been
more twinned with an existing RC
explanation hole (MORC004) for lithology
may be and grade verification.
required,
such as
where there · The core is photographed in
is coarse sequence as the core is packed
gold that into the core trays at the
has inherent drill
sampling site.
problems.
Unusual · The recovered DD core is cut
commodities lengthwise with a core
or splitting saw to produce 1m
mineralisatio samples. Where lithological
n types boundaries did not fit the 1m
( geometry or at end of hole
eg submarine sampling, the sample length
nodules) may was to be a minimum of 0.42m
warrant or a maximum of 1.68m.
disclosure
of detailed
information. · Core is halved for normal
analyses. In the case of
duplicate analyses (1 in 20),
the core is quartered. In
total 933kg of sample
(Including duplicates) was
taken over 296 samples for
chemical analyses.


· The remaining core is halved
in the mineralised zones to
provide a quartered sample for
metallurgical analysis. In
total 334kg of sample over 296
samples was taken for
metallurgical

testwork.
· The remaining quarters and
halves are retained in
stratigraphic sequence in the
core trays. The remaining core
has been photographed, and the
trays wrapped in cling-film,
before it was put in container
storage on site at the Mustang
camp outside

Montepuez.
· Samples were submitted for
LECO analyses. Mineralised
zone core as well as 1m
boundaries into
non-mineralised zone core were
submitted for
analysis.

· Initial metallurgical
analysis and flow-sheet

testwork was performed on 2
composited samples. The
sampling was split between the
oxidised and fresh mineralised
zones.



2017 Field Program
Eleven cored boreholes were
drilled as part of the 2017
field program for the

Caula deposit. The diamond
drilling (DD) was completed
using Boart

Longyear LF 90 drill-rigs and
the core was recovered with PQ
(III) and HQ (III) equipment.
The contractor used for the
2017 drill program is Major
Drilling Group International,
a Canadian based operation
with a local presence in
Mozambique.


· Drillhole collar locations
were generated based on
results from a flown airborne

SkyTEM EM survey which was
completed during 2015 (refer
to previous MUS ASX
announcements), and from the
2016 core drilling
program.

· Sampling is of PQ (III) and
HQ (III) DD core. Sampling

has been completed.
· The core is photographed in
sequence as the core is packed
into the core trays at the
drill
site.

· The recovered DD core is cut
lengthwise with a core
splitting saw to produce 1 m
samples. Where lithological
boundaries did not fit the 1m
geometry or at end of hole
sampling, the sample length
was to be a minimum of 0.50m
or a maximum of 2.00m.


· Core is halved for normal
analyses. In the case of
duplicate analyses (1 in 20),
the core is quartered.


· The remaining core is halved
in the mineralised zones to
provide a quartered sample for
metallurgical
analysis.

· The remaining quarters and
halves are retained in
stratigraphic sequence in the
core
trays. The remaining core has
been photographed, and the
trays wrapped in cling-film,
before it is put in container
storage on site at the Mustang
camp outside

Montepuez.
· Samples were submitted for
LECO analyses. Mineralised
zone core as well as 1 m
boundaries into
non-mineralised zone core

were submitted for analysis.

Drilling-Drill type (2015 Field Program
techniqeg Reverse circulation drilling
ues core, was used to drill a 5.5 inch
reverse diameter borehole (MORC004).
circulation, RC drill chips were collected
open-hole by an air cyclone at 1m
hammer, intervals for logging and
rotary air sampling. Approximately 35kg
blast, per metre was collected by an
auger, air cyclone which was reduced
Bangka, to a 4kg sample by riffling.
sonic, etc)
and details
( Reflex Ezy shot tools were used
eg core to take down-hole survey
diameter, measurements to record
triple or
standard drillhole azimuth and dip.
tube, depth
of diamond 2016 Field Program
tails, · The core drilling was
face-sampling completed with a Boart
bit or other
type, Longyear LF-90 drilling rig.
whether core The drilling equipment was HQ
is oriented (III) sized.
and if so,
by what
method, · Drilling was planned to be as
etc). close to perpendicular as
possible to strike, and as
close as possible to true
width intersections.


· The borehole dip and azimuth
was surveyed at 3m intervals
from the bottom of the
borehole with a Reflex EZ-Trac
tool. The maximum deviation
from the planned azimuth was
measured at
6
o in MODD003. The maximum
deviation from the planned dip
was measured at
5
o in MODD004.
· Final borehole collar
positions were surveyed with a
handheld GPS survey
instrument, and the collar
elevations were projected from
the DEM as generated during
the

SkyTEM survey in 2015.
· The core was oriented with a
Reflex
Tool.

2017 Field Program
· The core drilling was
completed with Boart

Longyear LF-90 drilling rigs.
The drilling equipment was PQ
(III) and HQ (III) sized.


· Drilling was planned to be as
close to perpendicular as
possible to
strike
/foliation, and as close as
possible to true width
intersections.


· The borehole dip and azimuth
was surveyed at 3 m intervals
from the bottom of the
borehole with a Reflex EZ-Trac
tool.

· Final borehole collar
positions were surveyed with a

differential GPS survey
instrument, and the collar
elevations were projected from
the DEM as generated during
the

SkyTEM survey in 2015.
· The core was oriented with a
Reflex
Tool.

Drill -Method of 2015 Field Program
sample recording The condition and qualitative
recover and estimates of RC sample
y assessing recovery for MORC004 were
core and determined through visual
chip sample inspection of the 1m sample
recoveries bags and recorded at the time
and results of sampling. A hard copy and
assessed. digital copy of the sampling
log are maintained for data
-Measures verification.
taken to
maximise
sample Recovery has been good with
35kg + being returned per
recovery and metre
ensure
representativdrilled.
e nature of Due to the early stage of
the exploration work for the
samples.
Caula project, no relationship
-Whether a between sample recovery and
relationship grade is known to exist at
exists this point.
between
sample
recovery and
grade and 2016 Field Program
whether The condition and qualitative
sample bias estimates of DD sample
may have recovery were determined
occurred due through visual inspection and
to measurement of the drilling
preferential core runs and recorded at the
loss/gain of time of recovery at the drill
fine/coarse rig. A hard copy and digital
material. copy of the sampling log are
maintained for data
verification.


· Core recovery measurements
are recorded for every
borehole.

· Where recoveries were found
to be less than 95%, the drill
runs were shortened to 1m, and
drilling speed lowered to
improve recovery.


· In some instances in the
oxidised zone (faulting,
jointing and severe
oxidation), core losses were
unavoidable. These losses are
recorded, and have been zero
rated in terms of grade for
the

modeling of the Caula graphite
resource. The average core
recovery for the oxidised zone
is 83.1%.


· Recoveries in the fresh zone
were very good at an average
of
98.8%.

2017 Field Program
The condition and qualitative
estimates of DD sample
recovery were determined
through visual inspection and
measurement of the drilling
core runs and recorded at the
time of recovery at the
drill-rig. A hard copy and
digital copy of the sampling
log

are maintained for data
verification.


· Core recovery measurements are
recorded for every
borehole.

· Where recoveries were found
to be less than 95%, the drill
runs were shortened

to m, and drilling speed
lowered to improve recovery.


· In some instances in the
oxidised zone (faulting,
jointing and severe
oxidation), core losses were
unavoidable. These losses

are recorded, and have been
zero rated in terms of grade
for the

modeling of the Caula graphite
resource. The average core
recovery for the oxidized zone
is 91%.


· Recoveries in the fresh zone
were very good at an average
of
98%.


Logging -Whether 2015 Field Program
core and RC drill-chip samples were
chip samples geologically logged by trained
have been geologists. The
geologically
and drillhole (MORC004) is
geotechnicall considered by MUS to be part
y logged to a of a maiden drill program
level of aimed at identifying shallow
detail to graphite mineralisation.
support Mustang used the results from
appropriate this maiden program to
Mineral prioritise target areas, which
Resource then become the focus of the
estimation, 2016
mining
studies and drillhole definition programs.
metallurgical Whilst the aim of this maiden
studies. drill program was not to
produce a Mineral Resource
-Whether estimate MORC004 was used for
logging is resource estimation purposes
qualitative in this resource estimate.
or
quantitative
in nature. Logging of RC drill holes
Core (or includes recording of
lithology, mineralogy,
costean, mineralisation, weathering,
channel, colour and other features of
the samples. RC Chip trays
etc) are photographed.
photography.

-The total Geological descriptions and
length and estimates of visual graphite
percentage percentages on preliminary
of the logs are semi-quantitative.
relevant All
intersections
logged. drillholes were logged in full.
2016 Field Program
· All holes drilled were logged
in full and sampled by the
site
geologists.

· All the logged information
which includes depth,
lithology, mineral assemblage,
structural information, Cg
mineralisation (laboratory
data), collar survey and
logging geologists are
recorded in the field logging
sheets and in digital format.


· The recovered core is
recorded in sequence as
digital
photographs.

· The analytical samples were
shipped by road to the SGS

Randfontein laboratory in South
Africa for analysis. The
analyses were completed by SGS
Randfontein, and have been
used to estimate the grade of
the

Caula deposit in this CPR.
· Umpire samples have been
identified and were dispatched
to Bureau Veritas in
Centurion. These analyses have
been completed and are
included in the
CPR.

· The samples for metallurgy tes
twork
were dispatched via South
Africa to SGS Malaga in Perth,
Australia. The

testwork has been completed and
these results have been
included in this
CPR.

· The remaining core is in
storage at the Mustang
Exploration Camp near

Montepuez in Mozambique. The
remaining core is also
recorded in sequence in
digital photograph
format.

2017 Field Program
· All holes drilled were logged
in full and sampled by the
site
geologists.

· All the logged information
which includes depth,
lithology, mineral assemblage,
structural information, Cg
mineralisation (laboratory
data), collar survey and
logging geologists

are recorded in the field
logging sheets and in
digital
format.
· The recovered core is
recorded in sequence
as
digital photographs.
· The analytical samples are to
be shipped by road to the SGS
Randfontein laboratory in
South Africa for analysis. The
analyses are to be completed
by SGS Randfontein, and will
be used to enhance the initial
estimate of the grade of the

Caula deposit in the next CPR
update.

· Umpire samples have been
identified and

have been dispatched to Bureau
Veritas in
Centurion.

· The samples for metallurgy tes
twork
were submitted for test work
once the analytical results
are available.


The remaining core is in
storage at the Mustang
Exploration Camp near

Montepuez in Mozambique. The
remaining core

was also recorded in sequence
in digital photograph
format.

Sub-samp-If core, 2015 Field Program
ling whether cut RC samples were collected on
techniq or sawn and the rig using riffle splitters
ues and whether to reduce the sample mass from
sample quarter, 35kg to 4kg. Sample
prepara half or all preparation of the RC chip
tion core samples follows industry best
taken. practice in sample preparation
involving oven drying
-If (105
non-core, oC), split (300g) and
whether pulverising to a grind size of
riffled, 85% passing 75 micron. The
tube sample preparation for RC
sampled, samples follows industry best
rotary practice.
split, etc
and whether Field QC procedures were
sampled wet adopted as
or follows:
dry.
· Insertion rate for blanks -
-For all 5% (1 in
sample 20)
types, the
nature, · Insertion rate for standards
quality and - 5% (1 in
appropriatene 20)
ss of the
sample · Insertion rate for duplicates
preparation - 5% (1 in 20)
technique.

-Quality · Umpire duplicates - 5% (1 in
control 20)
procedures
adopted for
all Two CRM (GGC004 and GGC009)
sub-

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