Macarthur Minerals

Diversified Gold, Lithium and Iron Ore Portfolio In Western Australia and Nevada

This profile is part of a paid investor education campaign.*

Overview

Macarthur Minerals Ltd (TSXV:MMS) is an Australian resources company focused on the identification and exploration of gold and high-grade lithium in Australia’s Pilbara region. The company is also developing two iron ore projects in Western Australia and has a lithium exploration project in Nevada.

Historically focused on iron ore, Macarthur Minerals has diversified into lithium and gold, most recently becoming involved in the conglomerate gold rush in Western Australia’s Pilbara region. Conglomerate gold was first identified in the area by Artemis Resources Limited (ASX:ARV). It presents as gold nuggets in the shape and size of watermelon seeds and exists within a craton of metamorphic and igneous rock akin to the Witwatersrand Basin in South Africa.

The company entered the Pilbara with an initial focus on lithium exploration; however, following the emergence of the conglomerate gold story, Macarthur Minerals has identified the potential for conglomerate-hosted gold and uncovered the presence of gold on its own  acreage.  Macarthur Minerals is conducting exploration for both minerals in parallel, which have been found to co-occur such as at Kidman Resources’ Mt Holland project.

Macarthur Minerals currently holds 18 exploration licenses (or claims) in the Pilbara for an area of approximately 325 km2. Exploration licenses for 17 out of 18 of these have been granted. A key point of differentiation to other exploration companies in this area is that the majority of Macarthur Minerals’ exploration licenses have been granted (as opposed to being applications pending grant).

Macarthur Minerals has entered into an agreement for Artemis Resources to earn up to 80 percent interest in two of its Pilbara exploration licenses. Artemis Resources is conducting exploration on these properties to determine target drilling areas and confirm the presence of conglomerate gold occurrences.

Macarthur Minerals also has two advanced iron ore projects in the southern region of Western Australia in which it has invested a total AU$61 million. The Ularring hematite project and the Moonshine magnetite project each have NI 43-101-compliant resource estimates. Macarthur Minerals is looking to develop these projects following the planned closure of Cleveland Cliffs Koolyanobbing operations. Macarthur is looking to access existing rail and port infrastructure that will shortly become available.  A Preliminary Feasibility¹ was completed in 2012 for the Ularring project, although requires updating to reflect a DSO operation utilising existing infrastructure.

Outside of Australia, Macarthur Minerals also has a lithium brine project in Nevada’s Railroad Valley. The Reynolds Springs project is in the exploration stage and shown promising results from soil sediments recording up to 405 ppm lithium. Macarthur’s property contains several abandoned oil and gas wells drilled to several thousand feet. Logging of historical drilling logs indicates several zones displaying high conductivity that are indicative of a brine aquifer. The Company has recently obtained drill cuttings for one of these historical holes and will be submitting samples for assay.

The Macarthur Minerals management team has significant experience in the mining industry and its board includes Artemis Resources executive David Lenigas. Over seven percent of the company’s shares are held by management with another 15 per cent held by  a strategic shareholder, Cadence Minerals Plc (previously Rare Earth Minerals).

¹NI 43-101 Technical Report filed 1 October, 2012, titled “NI 43-101 Technical Report, Macarthur Minerals Limited, Pre-Feasibility Study, Ularring Hematite Project, Western Australia.”

Company Highlights

● 1,325 square kilometers in Pilbara region experiencing the conglomerate gold rush
● Highly prospective gold exploration licenses, two of which Artemis Resources will earn up to 80% interest.
● Lithium prospects in Pilbara region that can be explored in parallel to gold exploration
● Two iron ore projects with inferred and indicated resource estimates with environmental approval.
● Lithium claims in Nevada with sample results of up to 405 ppm lithium
● C$1.9 financing to be completed by December 2017
● Strong and capable executive team and board including Artemis Resources, executive David Lenigas

Pilbara Gold and Lithium Projects

Macarthur Minerals owns 18 exploration licenses that collectively make up 325 square kilometers in Western Australia’s Pilbara region, known for its emerging conglomerate gold rush. While these properties were originally purchased with lithium exploration in mind, Macarthur Minerals has analysed historical data to identify that some of the exploration licenses are also highly prospective for conglomerate gold and – gold mineralization.

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Panorama and Bonnie Scot Gold Projects in the Pilbara

Interest in the Pilbara region has grown significantly in the last year following the discovery of gold nuggets in conglomerate resembling those found in the Witwatersrand Basin. The discovery, made by Artemis Resources, has spurred a gold rush in the Pilbara that has attracted a number of major companies, including Novo Resources Corp (TSXV:NVO) and Kirkland Lake Gold Ltd (TSX:KL, ASX:KLA).

Since the discovery, Artemis Resources has seen exceptional growth in its market cap (+717 percent) and it has entered into a joint venture with the Canadian based Novo Resources for their Pilbara properties. Together, the companies have raised AU$12 million from institutional investors, including clients of Sprott Capital Partners. Following this, Kirkland Lake Gold also invested C$56 million into Novo, tying all three big players into the region. All in all, the Pilbara is proving to be an extremely profitable gold jurisdiction.

Macarthur Minerals’ Panorama and Bonnie Scot Project consists of three granted exploration licences covering and area of 256 km2 and are located to the west of Millennium Minerals Limited’s (ASX:MOY) gold project and Novo Resources’ Beatons Creek gold project.

Geological mapping of the tenements shows areas of the Mt Roe Basalt which is known to overlie conglomerate gold horizon. Macarthur Minerals has entered into a JV withfor Artemis Resources to earn up to an 80 percent interest in two of tenements. These two exploration licenses cover 243 square kilometers and Artemis Resources will be conducting site visits, mapping, sampling and ground geophysics as part of its initial exploration initiatives.

Hillside Gold Project in the Pilbara

The Hillside Gold Project consists of four granted exploration licences covering a total area of 400 km2. The project is approximately 11 kms south east of the Panorama project and covers the Coongan greenstone of narrow Archaean belt consisting mainly of mafic rocks which have been extensively deformed and heavily faulted.

An initial reconnaissance trip showed potential for gold mineralisation with a rock chip returning 8.5 grams per tonne gold. Historical sampling results show up to 7.8 percent copper, as well as 700 ounces of gold recently extracted by prospectors including recovery of surface based gold nuggets.

Macarthur plans to commence a detailed VTEM geophysical survey at 150m line spacing and will be conducted over the two areas covering 125km2. The aim of the survey is to define high priority targets from conductors such as clusters of massive sulphide hosted base metal deposits at depth. The area is heavily faulted with multiple shear zones and rock types suggests a positive environment for gold mineralization.

Macarthur Minerals recently announced that it has entered into heritage agreements with two native title groups, clearing the pathway for exploration on Macarthur Minerals’ Pilbara exploration licenses.

 

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Lithium in Pilbara

In parallel to the gold exploration work being done on the Pilbara exploration licenses, Macarthur Minerals is planning exploration for hard-rock lithium. The exploration licenses sit within a highly prospective lithium region that includes the Pilbara Minerals Ltd (ASX:PLS) property with a JORC mineral reserve estimate of 80.3 million tonnes at 1.27 percent lithium oxide and the Altura Mining Ltd (ASX:AJM) with a resource of 34.2 Mt at 1.04 percent lithium oxide. Altura Mining’s project is due to be commissioned in the first quarter of 2018 and Pilbara Minerals’ project is due to commissioned in the second quarter of 2018.

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Since the acquisition of the exploration licenses, Macarthur Minerals has conducted several heliborne reconnaissance programs over the exploration licenses to identify areas with outcropping pegmatites that may host lithium mineralisation. These programs discovered pegmatites with minerals that indicate rare element lithium-caesium-tantalum pegmatites.

Assays from rock chip sampling on Macarthur Mineral’s Tambourah Lithium Project in the Pilbara, returned very promising results of up to 1.47% lithium (Li2O), confirming the presence of lithium bearing pegmatites.

Macarthur Minerals will begin with ground survey work, mapping, sampling and geophysics that will help determine drill targets for lithium on the tenements. Additionally, Macarthur Minerals is also exploring joint venture opportunities for one of the tenements adjacent to the Pilbara Minerals and Altura Mining properties.

Iron Ore Projects

Ularring Hematite and Moonshine Magnetite Projects

Macarthur Minerals owns two iron ore projects, the Ularring hematite project and the Moonshine magnetite project, in the Yilgarn region of Western Australia. The projects co-occur on 15 granted mining leases covering a total of 62 square kilometers with a 33-kilometer strike of outcropping banded iron formation.

The region is known for multiple hematite and magnetite iron ore deposits and is home to two operating iron ore mines in close proximity to Macarthur Minerals’ iron projects. Macarthur Minerals’ projects are located 175 kilometers northwest of Kalgoorlie and within 120 km of railway access to the Port of Esperance. The Port is owned by the Western Australian Government and currently licensed to export 11.5 million tonnes of iron ore per annum. The port has also agreed to expand its capacity to 20 million tonnes per annum pending third party funding.

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Resource Estimates

The Ularring Hematite Project has an indicated mineral resource of 54.46 million tonnes at 47.2 percent iron and an inferred resource of 25.99 million tonnes at 45.5 percent iron. Having received environmental approval to establish an iron ore mine, Macarthur Minerals plans to further develop the project based on existing export infrastructure in the region. A Preliminary Feasibility² was completed in 2012, although requires updating.

The Moonshine magnetite project has an inferred mineral resource consisting of 1,316 million tonnes at 30.1 percent iron and a PEA for the property was completed in 2011.

²NI 43-101 Technical Report filed 1 October, 2012, titled “NI 43-101 Technical Report, Macarthur Minerals Limited, Pre-Feasibility Study, Ularring Hematite Project, Western Australia.”

Treppo Grande Project

Macarthur recently expanded the iron ore portfolio with the addition of the Treppo Grande Project located approximately 32km west of the Ularring and Moonshine Projects. The project is proximate to current mining operations that is linked to established rail infrastructure to the Port of Esperance .The plant located at Koolyanobbing has been producing iron ore for the export market to Asia for approximately 25 years. This mining operation produced 9.8 million tonnes of iron ore for export through the Port of Esperance in 2017 and 11.8 million tonnes in 2016.

The Mt Manning Iron Ore Project was explored in recent years for high grade hematite iron ore mineralisation. Exploration by Kalgoorlie prospector, Mel Dalla-Costa identified three potentially economic styles of Direct Shipping Ore (“DSO”) mineralisation including massive dense hematitic ironstones, specular hematite and oxidised ‘Indurated Detrital Ironstone’ (“IDI”).

A drilling programme consisting of two diamond holes have penetrated the hematitic iron stone at the J-Hook prospect. Significant intercepts include 17.5m @ 65.49% Fe from 2.5m from hole MMS002 and 40.4m @ 55.77% Fe from 3.6 m from hole MMS001. The iron-rich mineralisation (> 55% Fe) is centred on the J-Hook prospect that contains occurrences of massive, fissile and specular hematite.

Lithium Project in Nevada

As well as its Western Australia projects and exploration licenses, Macarthur Minerals also owns the Reynolds Springs lithium brine project in Nevada

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Reynolds Springs Project

The Reynolds Springs project is located in the Railroad Valley, a Nevada region known historically for some of the highest lithium records outside of Clayton Valley. The project sits 290 kilometers north of Las Vegas and 530 kilometers away from the Tesla Gigafactory.

The most recent work conducted on the claims includes a geochemical soil sampling program in which 206 soil samples were collected. Results from this program included grades of up to 405 ppm lithium.

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Macarthur Minerals is currently seeking joint venture opportunities for its Nevada project.

Management

Joe Phillips—CEO and Director

Joe Phillips was previously the Company’s CEO in 2015 and was responsible for the original funding and development of the Company’s significant iron ore assets, having completed its 2012 prefeasibility study for the Ularring Hematite Project and obtaining environmental approvals.

He was educated at the University of Queensland and he combines strong project management skills with a discipline in economics and a detailed understanding of the operation of public administrations and the elected governments in Australia.

Cameron McCall—Executive Chairman

Cameron McCall has a wealth of experience across the financial services and commercial property industries within Australia and internationally. He has been providing investment advice, equity capital raising and share trading for over 17 years to corporate entities and private clients at Hartley’s Limited and Macquarie Bank Limited. He has, during his 40 year career, built an extensive network of international and Australian based high net worth individuals and corporate entities.

McCall is currently running a corporate advisory business providing advice on asset acquisition and capital raising to international and Australian based organisations.

David Lenigas—Independent Director

David Lenigas is a Mining Engineer, with extensive experience in the lithium business, having retired as the Executive Chairman of Cadence Minerals plc (AIM: KDNC) (previously Rare Earth Minerals plc). Cadence is a London and New York listed Investment Company, which has a number of strategic investments in lithium projects around the world.

He is Executive Chairman of LGC Capital Ltd listed on the TSX-V (TSX-V: QBA). In addition, he is the Executive Chairman of a bespoke agri-logistics company; London listed AfriAg plc (ISDX: AFRI) and Executive Chairman of UK oil company, Doriemus plc (ISDX: DOR). He is also director of ASX listed companies, Southern Hemisphere Mining Limited  (ASX:SUH) Auroch Minerals Limited (ASX:AUO) and Artemis Resources Limited (ASX:ARV).

Alan Phillips—Non-Executive Director

Alan Phillips has been a senior executive, director and chairman of ASX, TSX-V, TSX and AIM listed companies over a period of 40 years. He has experience in a broad range of industries, but predominantly in the mining and exploration of copper, gold, ethanol and iron ore and technology sectors.

Earl Evans – Independent Director

Earl Evans has held numerous senior executive roles throughout his 26 year career in the financial services industry and is currently Joint CEO of Shaw and Partners which is one of Australia preeminent investment firms with offices in each state of Australia, managing $14 billion in assets.  Prior to this role, Mr Evans has had an impressive investment banking career spanning 11 years as Executive Director within the Macquarie Group Limited including 5 years in Canada as the Head of Banking and Financial Services for North America.


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