Announcement PDF ASX ANNOUNCEMENT 11 April 2017 EMU NL CHILE DRILLING PROGRAM - UPDATE Australian explorer, Emu NL (ASX: EMU), provides the following update on its drilling program on the Company’s Vidalita project in northern Chile. The objective of the program is, in addition to testing some of the targets generated from the December 2016 and January 2017 surface geochemical programs, to test below these surface indications of mineralisation for the inferred core of the mineralised system producing these surficial responses. Drill samples from diamond drill holes 17DV1 & 2 have been sent for assaying. Diamond drill hole 17DV3, located at 6,935,900N, 492,500E (100m west of 17DV1), was commenced on 6th April. As at 10th April, the hole was at ~60m and drilling ahead. The geology is similar to hole 17DV1 as in the same argillic (clay) alteration and sulphides typical of high sulphidation epithermal Au/Ag ore deposits in the region. A trench has been excavated between 17DV1 and 17DV3 to expose bedrock for mapping and sampling. Surface prospecting in the area around the trench has located numerous examples of banded chalcedonic silica and ferruginous/chalcedonic rocks containing sulphide minerals, secondary copper minerals and a mineral, based on previous work, probably alunite. Alunite is one of several alteration minerals characteristic of high sulphidation epithermal systems. Photos of some of these samples are included in this ASX release. While in themselves, these samples are not directly providing evidence of significant mineralisation, the combination of these occurrences, the results of the surface rock and soil geochemistry, and the sulphide mineralisation and argillic alteration in 17DV1 and 17DV3 are substantial reasons to believe that Emu is drilling into the upper levels of a high sulphidation epithermal system. The resistivity target that underlies the extensive surface geochemical target remains untested as 17DV2 (stopped at 193.35m) was best positioned to do this. Hole 17DV3 is drilled too far west to properly test the resistivity target. Interestingly, at ~170m downhole in drill hole 17DV2, just short of the resistivity target, the geology changed from argillically altered but fresh (unoxidised) breccia to a breccia flooded with iron oxides, the cause of which at this time is unknown. A follow-up hole to test the resistivity target is planned (probably for the next field season) to be collared further east of 17DV2 to go under an area of sinter at surface and then to intersect the resistivity target below 17DV2. For more information on the Company see the website www.emunl.com.au 10 Walker Avenue, West Perth, WA 6005 PO Box 1112, West Perth, WA 6872 T +61 8 9226 4266, E info@emunl.com.au, www.emunl.com.au ABN 50 127 291 927 Page 2 Alunite crystals Banded chalcedony Alunite pseudomorphs Page 3 ABOUT THE CHILE GOLD PROJECTS The Vidalita and Jotahues gold projects are located in the highly mineralised Oligocene/Miocene Maricunga gold belt in northern Chile, approximately 200 km east from the city of Copiapó in the Atacama Region of Chile. The two projects cover an area of approximately 2,800 hectares of mineral exploration concessions and host alteration and mineralization that appear geologically similar to other high sulphidation oxide 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/Kinross) and the Caspiche project (Exeter). Refugio is located 30 km to the northwest of Vidalita. Apart from the current programme, due enquiry having been made, the Company is unaware of the project having been drilled before. Emu has an option agreement with Prospex SpA and BLC SpA, Chilean subsidiaries of Altius Minerals Corporation of Canada, 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 11 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. Page 4 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 Issued Capital: Quoted: Shares 65,687,006 fully paid shares Contributing Shares 36,580,667 paid to $0.03; $0.03 to pay, no call before 31/12/2018 Unlisted Options 3,750,000 options, exercise price $0.10, date 20/12/18 300,000 options, exercise price $0.25, date 20/12/18 Directors: Peter Thomas Chairman Greg Steemson Managing Director Gavin Rutherford NonExecutive Director COMPETENT PERSON’S STATEMENT The details contained in this report that pertain to exploration results, mineral resources and mineral reserves are based upon information compiled by Mr. Greg Steemson, Managing Director of Emu NL. Mr. Steemson is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM) 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. Steemson consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears. FORWARD LOOKING STATEMENT This report contains forward looking statements concerning the projects owned by Emu NL. Statements concerning mining reserves, resources and exploration results may also be deemed to be forward looking statements in that they involve estimates based on specific assumptions. Forwardlooking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on management’s beliefs, opinions and estimates as of the dates the forward looking statements are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments. Page 5 JORC Code, 2012 Edition – Table 1 report, EMU NL Vidalita drilling 17DV3 & trenching 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. No assaying done. Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information. The diamond core samples are to be analysed for gold using 50g fire assay (ALS method Au-ICP22) and for multi-elements by 50g aqua regia digest ICP multi element analysis for 44 elements (ALS method Au-ME-ST44 ICPMS). The trench samples are to be analysed for multi-elements by 50g aqua regia digest ICP multi element analysis for 44 elements (ALS method Au-ME-ST44 ICPMS). Drilling techniques Drill type (eg core, reverse circulation, open- 17DV3 is being drilled with HQ hole hammer, rotary air blast, auger, diamond drilling. 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). Drill sample recovery Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the Core is placed in core trays. Core recovery and RQD measurements are made as soon as possible after drilling due to the altered nature of the core rendering the core samples. unstable once out of the hole. 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 All of the core is being geologically and geotechnically logged to a geologically logged. 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. Sub-sampling techniques and sample preparation If core, whether cut or sawn and whether quarter, half or all core taken. No assaying done. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. 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. Whether sample sizes are appropriate to the grain size of the material being sampled. Quality of assay data and laboratory tests The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis The fire assay will report total gold content. The aqua regia digest in this instance is considered appropriate given the stage of the program and the altered nature of the rocks. including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established. Verification of sampling and assaying Laboratory standards and checks only. The verification of significant intersections No results at this time. by either independent or alternative company personnel. No twinned holes. The use of twinned holes. Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Discuss any adjustment to assay data. Location of data points 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. 17DV3 was located using hand held GPS accurate to < 5m. Specification of the grid system used. UTM grid system Quality and adequacy of topographic control. Data spacing Data spacing for reporting of Exploration and distribution Results. 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. 17DV3 is 100m west of 17DV1 and the holes are not being used in any resource calculation at this time. Whether sample compositing has been applied. Orientation of data in relation to geological structure Whether the orientation of sampling achieves The controls on mineralisation are unbiased sampling of possible structures and unknown at this time. the extent to which this is known, considering the deposit type. 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 assessed and reported if material. Sample security The measures taken to ensure sample security. Management was present during the drilling. Core is stored in a secure location in Copiapo. 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 with Prospex SpA and BLC SpA, Chilean subsidiaries of Altius Minerals Corporation of Canada, to acquire 11 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 11 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 security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. Exploration done by other parties Acknowledgment and appraisal of exploration by other parties. 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 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: 17DV3 location 6,935,900N, 492,500E. Azimuth 270 degrees UTM Inclination 60 degrees. RL is 4,884m. easting and northing of the drill hole collar elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar The hole is still in progress. 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. Where aggregate intercepts incorporate short lengths of high grade results and 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 No assays at this time. 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 scales) and tabulations of intercepts should 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. Not yet applicable – assays yet to be received and drilling is continuing 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 and drilling is continuing 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. Further work The nature and scale of planned further Drilling is continuing. work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.