Announcement PDF EMU NL CHILE DRILLING UPDATE 3rd APRIL 2018 Gold Exploration Projects – Maricunga Region, Chile Vidalita Project The drilling completed to 27 March in the 2018 exploration campaign is summarised in Table 1. To 27 March 2018, a total of 2,533 metres have been drilled. Figure 1 – rig LF90D drilling diamond drill hole 5700-1 Exploration drilling has generated a large number of samples. Delays with sample preparation in Chile has caused a backlog of drill assays for the project. Assays are expected to be available from April. Results will be reported when received from the laboratory and assessed. Included in this release are photographs of intervals of core that, based on the evidence of surface rock sample results, could be mineralised. A brief comment is included below each photograph. Figure 2 - Drill rigs at Vidalita, March 2018. From left, DD rig LF90D drilling hole 5700-1, RC rig TH75 drilling hole 5300-1, AC rig D34 drilling hole 5500-2. Page 1 of 7 EMU NL CHILE DRILLING UPDATE 3rd APRIL 2018 Figure 3 – Drill hole locations Hole ID Drilling Contractor Pad N° Start Date End Date Type 6500-1 8500-1 8500-2 8300-1 5900-3 5900-4 5900-4b 5500-1 5500-2 4900-1 5100-1 5100-2 Wallis Wallis Wallis Wallis Wallis Wallis Wallis Wallis Wallis Wallis Wallis Wallis Hole1 X AL AM A B B F E J AI AN 9/01/2018 2/02/2018 5/02/2018 7/02/2018 13/02/2018 16/02/2018 14/03/2018 16/03/2018 18/03/2018 20/03/2018 24/03/2018 27/03/2018 21/01/2018 4/02/2018 6/02/2018 9/02/2018 15/02/2018 17/02/2018 15/03/2018 17/03/2018 20/03/2018 23/03/2018 26/03/2018 AC AC AC AC AC AC AC AC AC AC AC AC East North RL metres Azimuth (WGS84 (WGS84 grid Zone 19S) Zone 19S) 492963 6936511 4873 0 493149 6938509 4840 270 492986 6938506 4814 90 492949 6938301 4826 90 492397 6935899 4905 270 492700 6935899 4885 270 492700 6935899 4901 270 492552 6935503 4893 270 492455 6935500 4900 270 492548 6934901 4939 90 492799 6935093 4909 270 492300 6935095 4950 90 5700-1 5700-1 5300-1 8300-2 8300-3 Perfomin Perfomin Perfomin Perfomin Perfomin C2 C2 I T2 U2 16/03/2018 18/03/2018 18/03/2018 19/03/2018 21/03/2018 27/03/2018 27/03/2018 RC DD RC RC RC 492498 492498 492648 492197 492296 AC -air core RC -reverse cirulation DD -diamond drilling 6935703 6935703 6935291 6938298 6938295 4888 4888 4796 4865 4868 Dip Total Depth metres Comment -90 -60 -60 -60 -60 -60 -60 -60 -60 -60 -60 -60 140 168 176 158 148 71 199 180 183 168 183 102 Abandoned TD TD TD TD Abandoned TD TD TD TD TD In progress 102 265 53 231 6 2533 Pre-collar In progress In progress TD In progress 270 -60 270 -60 270 -60 270 -60 270 -60 Total Metres Drilled = TD -total depth Table 1 – Drill Hole Details Page 2 of 7 EMU NL CHILE DRILLING UPDATE 3rd APRIL 2018 Figure 4 - rig D34 drilling air core hole 8500-1 Figure 5 – rig TH75 drilling reverse circulation hole 5300-1 Figure 6 – rig LF90D drilling diamond drill hole 5700-1 Page 3 of 7 EMU NL CHILE DRILLING UPDATE 3rd APRIL 2018 Figure 7 – Diamond drill hole 5700-1: 187.25 to 194.85m showing rock textures, brecciation, veining and alteration Figure 8 – Close-up hole 5700-1: 74m (wet) breccia showing alunite alteration (pink) Page 4 of 7 EMU NL CHILE DRILLING UPDATE 3rd APRIL 2018 Figure 9 – Air core hole 4900-1: showing structural controlled silica replacement from 36 to 64m Figure 10 – Air core hole 5500-1: with distinct dark quartz veining, similar to that observed in the discovery outcrop Page 5 of 7 EMU NL CHILE DRILLING UPDATE 3rd APRIL 2018 About: EMU is an ASX listed Company seeking to deliver tangible outcomes for investors by: • focusing on testing substantive mineralised systems capable of forming commercially attractive development opportunities using existing technologies; • seeking to reduce risk by selecting operating environments with established minerals law and mining industries; • remaining alert to best practice exploration technologies, seeking to bring new insights to our work; • drawing on our depth of relevant experience; and • remaining active, with meaningful programs of work. About the gold projects, Maricunga Belt, Chile The Vidalita and Jotahues gold projects are located in the Maricunga gold belt in the Atacama Region in northern Chile hosting numerous world class gold and silver projects. Emu’s projects cover an area of approximately 6,900 hectares secured by mineral exploration concessions and host alteration and mineralisation that appear geologically similar to other high sulphidation gold deposits of the Maricunga gold belt. The projects are accessed using a network of roads that link Copiapó with the Refugio project (Kinross), Cerro Casale project (Barrick/Goldcorp) and the Caspiche project (Goldcorp). Refugio is located 30 km to the northwest of Vidalita. Emu is unaware of the project having been drilled other than for the 3 holes it drilled in 2017. The Company holds an option (Option) to acquire a 100% interest in certain of the Vidalita and Jotahues concession packages from two Chilean companies. The concessions the subject of the Option comprise 2 packages: one package, (the Prospex SpA concessions) covers six concessions at Vidalita, is subject to a 2% NSR on any production, and the second package, (the BLC SpA concessions) comprised of three concessions at Jotahues and two concessions at Vidalita (Vidalota A&B), is subject to a 1% NSR. The royalties apply to any concession acquired by Emu within 5km of the outer boundary of any of the interests listed in the Option agreement. Any concession interest within that area acquired by the other parties to that agreement shall be offered to Emu on the same terms as the other party acquired the same. The Option will lapse if Emu fails to pay US$100,000 in November 2018. The Option may be exercised in November 2019 on payment of US$2M following expenditure of US$1M, electing to continue on or before November 2018 (by paying US$100,000 refer to above), the issue of 2.5M Emu shares and then if Emu defines: (i) 0.5Moz of gold in measured resources, a further 5M ordinary shares will be issued; and (ii) 1Moz of gold in measured resources, a further 5M ordinary shares will be issued. Emu continues to look for new mineral exploration, development and mining opportunities within Australia and at various overseas jurisdictions. Page 6 of 7 EMU NL CHILE DRILLING UPDATE 3rd APRIL 2018 COMPETENT PERSON’S STATEMENT Emu NL ABN 50 127 291 927 ASX Code: EMU 10 Walker Ave West Perth, WA 6005 T +61 8 9226 4266 E info@emunl.com.au PO Box 1112 West Perth, WA 6872 Fully paid shares (listed) 73,910,387 (inc. 4m which Emu can buy back for nil consideration) Contributing Shares (listed) 37,304,001 paid to $0.03, $0.03 to pay, no call before 31/12/2018 Options (unlisted) 4,750,000, exercise price $0.10, expiring 20/12/18 2,000,000 exercisable (subject to minimum share price milestones being met in the case of 1,500,000 of these options) at $0.11, expiring 20/12/18 300,000, exercise price $0.25, expiring 20/12/18 1,276,670, exercise price $0.03 to acquire a contributing share EMUCA expiring 30/4/18 Any details contained herein that pertain to exploration results, mineral resources or mineral reserves are based upon information compiled by Mr Francisco Montes, Senior Geologist of Emu NL. Mr Montes is a Member of the Australian Institute of Geoscientists (MAIG) and has sufficient experience in the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Montes consents to the inclusion herein of the matters based upon his information in the form and context in which it appears. FORWARD LOOKING STATEMENTS As a result of a variety of risks, uncertainties and other factors, actual events and results may differ materially from any forward looking and other statements herein not purporting to be of historical fact. Any statements concerning mining reserves, resources and exploration results are forward looking in that they involve estimates based on assumptions. Forward looking statements are based on management’s beliefs, opinions and estimates as of the respective dates they are made. The Company does not assume any obligation to update forward looking statements even where beliefs, opinions and estimates change or should do so given changed circumstances and developments. Directors: Peter Thomas Non-executive Chairman Greg Steemson Managing Director Gavin Rutherford Non-Executive Page 7 of 7 JORC Code, 2012 Edition – Table 1 report, EMU NL Vidalita air core, reverse circulation and diamond drilling Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.) Criteria Explanation Commentary Sampling techniques Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. Air core samples – are samples from each 1m of drill hole taken by PVC spear. The sample is usually around 1kg representing ~ 15 to 20% of the mass of the 1m interval. Pieces of core recovered by the air core system are stored in core trays for logging and geological reference. Include reference to measures taken to ensure sample representivity and the Reverse circulation (RC) appropriate calibration of any measurement samples - are samples from each tools or systems used. 1m of drill hole taken by PVC spear. The sample is usually Aspects of the determination of around 1kg representing ~ 10% of mineralisation that are Material to the the mass of the 1m interval. Public Report. In cases where ‘industry standard’ work has been done this would be Diamond drill (DD) samples – relatively simple (eg ‘reverse circulation the core is marked up on drilling was used to obtain 1 m samples notionally 1m intervals (geology from which 3 kg was pulverised to produce dependent) and cut in two. a 30 g charge for fire assay’). In other cases more explanation may be required, All sample submissions for such as where there is coarse gold that has drilling samples are crushed to inherent sampling problems. Unusual 2mm, 800g split, pulverised and commodities or mineralisation types (eg 150g shipped to Intertek, Perth, submarine nodules) may warrant disclosure for analysis. of detailed information. Drilling techniques Drill sample recovery Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). Air core drilling using 75mm diameter bit. Method of recording and assessing core and chip sample recoveries and results assessed. Geological team makes a qualitative estimate (as good, moderate or poor) of sample recovery for each 1 meter down hole sample interval. Measures taken to maximise sample RC drilling using a 5 3/8” tricone. DD drilling using HQ (63mm) and NQ (47mm) bit sizes. 1 recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. The total length and percentage of the relevant intersections logged. Supervising geologist ensures that representative chip and air core samples are collected during drilling. Sampling is considered to be unbiased. Alteration and rock types are logged and recorded from the drill samples. Pieces of core recovered by the air core system are stored in core trays for logging and geological reference. Chips from the RC drilling are stored in chip trays for future reference. The half core is stored for future reference. Total hole length is logged. Sub-sampling techniques and sample preparation If core, whether cut or sawn and whether quarter, half or all core taken. Diamond core is cut in two and one half sent for analysis. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. Air core samples (fines) from each 1m of drill hole taken by by PVC spear. The sample is usually around 1kg. For all sample types, the nature, quality and appropriateness of the sample preparation RC samples from each 1m of drill technique. hole taken by by PVC spear. The sample is usually around 1kg. Quality control procedures adopted for all sub-sampling stages to maximise The 1m samples are prepared for representivity of samples. analysis by standard laboratory procedures. Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. Sub-sampling is done using splitters. 2 Whether sample sizes are appropriate to the The samples collected are grain size of the material being sampled. representative of the in situ material. Quality of The nature, quality and appropriateness of assay data and the assaying and laboratory procedures laboratory tests used and whether the technique is considered partial or total. Sample sizes are appropriate to the grain size of the material being sampled. A 25g split from each 1m air core pulp and 1m RC pulp is taken from 4 consecutive metre samples, combined, re-pulverised to homogenise and a 25g split is taken for analysis. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis Each 1m pulp from the DD core is including instrument make and model, analysed reading times, calibrations factors applied and their derivation, etc. All samples are digested using 25g aqua regia and analysed using Nature of quality control procedures ICP-MS at Intertek’s laboratory in adopted (eg standards, blanks, duplicates, Perth. external laboratory checks) and whether acceptable levels of accuracy (ie lack of All drill samples samples - 9 bias) and precision have been established. elements are reported including gold (10ppb DL). The aqua regia digest in this instance is considered appropriate given the stage of the program and the altered nature of the rocks. 10% of driling samples will be sent for check analysis to another laboratory. Verification of sampling and assaying The verification of significant intersections by either independent or alternative company personnel. The use of twinned holes. Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Laboratory standards, blanks and checks are also reported. No drilling assay results at this time. No twinned holes. All geochemical and geological data is loaded into databases managed by independent third party entities for verification, 3 Location of data points Discuss any adjustment to assay data. storage and plotting. Assay data are not adjusted. Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. All samples are located using hand held GPS accurate to < 5m. Specification of the grid system used. WGS 84 UTM zone 19 south grid system Quality and adequacy of topographic control. Data spacing and distribution Data spacing for reporting of Exploration Results. Topographic control is deemed adequate at this stage of the exploration program. The drillholes are irregularly spaced (but generally >100m) as they are testing geological, geophysical or geochemical targets. No mineral resources are being reported. Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. The aircore and RC samples are composited into 4m composites in the laboratory. Whether sample compositing has been applied. Orientation of data in relation to geological structure Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. The controls on mineralisation are unknown at this time. If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be The controls on mineralisation are unknown at this time. 4 assessed and reported if material. Sample security The measures taken to ensure sample security. Management was present during the drilling and, generally, deliver the samples to the laboratory. Audits or reviews None undertaken. The results of any audits or reviews of sampling techniques and data. Section 2 Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section.) Criteria Explanation Commentary Mineral tenement and land tenure status Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. Emu has an option agreement dated 14 November 2016 with two Chilean companies, Prospex SpA and BLC SpA, to acquire 8 concessions at Vidalita and 3 concessions at Jotahues. This option maybe exercised any time up until November 2019 by granting Prospex and BLC a 1% NSR on production and allotting them up to 15 million Emu ordinary shares subject to certain vesting conditions (see ASX release 15th November 2016). Prospex SpA in turn has an option to acquire 6 of the 8 Vidalita concessions from local Chilean parties. Under the terms of that agreement, Prospex has the right to exercise that option by November 2019 by paying US$2 million and granting the Chilean parties a 1% NSR over those 6 concessions. Under the Emu option agreement, Emu has assumed the rights and obligations of Prospex in relation to those 6 concessions. The option agreements are subject to a 5km AOI from the boundaries of the 11 concessions. Since entering into the option agreement with Prospex and The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. 5 BLC, additional concessions have been applied for and were reported in subsequent ASX releases. Exploration done by other parties Acknowledgment and appraisal of exploration by other parties. Prior to the March 2017 drilling program, no drilling is known on these concessions. Previous work was limited to rock sampling. Geology Deposit type, geological setting and style of mineralisation. The project is a green fields exploration project and while the source of the surface evidence of mineralization can only be speculation at this stage, it is likely to be similar to known high sulphidation epithermal style ore deposits in the same geological setting. Drill hole Information A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: Table included in the text easting and northing of the drill hole collar elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar dip and azimuth of the holes, down hole length and interception depths hole length. If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. Data aggregation methods In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. No drill assays at this time. Where aggregate intercepts incorporate short lengths of high grade results and 6 longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearly stated. Relationship between mineralisation widths and intercept lengths These relationships are particularly important in the reporting of Exploration Results. Project is at an early stage of exploration and any conclusions at this stage would be speculation. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’). Diagrams Appropriate maps and sections (with Not yet applicable – assays yet to scales) and tabulations of intercepts should be received. be included for any significant discovery being reported. These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views. Balanced reporting Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. Not yet applicable – assays yet to be received. Other substantive exploration data Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. None undertaken. 7 Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). Drilling is continuing. The planned program was released to ASX on 21 August 2017. Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive. 8