LETTER TO SHAREHOLDERS - ASX · 11/13/2017  · LETTER TO SHAREHOLDERS Dear Shareholder Following...

ACN 148 860 299 E | enquire@ausmexgroup.com.au T | (02) 8315 3268 A | Level 13/50 Carrington Street, Sydney NSW 2000

13November2017 ASXMarketRelease

LETTERTOSHAREHOLDERS DearShareholderFollowing the recent ASX announcement (Refer ASX announcement 8 November 2017)describingourinstantsuccesswiththeSub-AudioMagneticGeophysicalSurvey(SAM)ontheMt Freda Mining Lease, I wish to personally write to all shareholders to describe thesignificanceoftheresults.Alarge~950metreconductivestructurehasbeenidentifiedextendingalongstrikefromthewestoftheMtFredaopencut.Thepresenceofsuchconductivestructures,ifmineralised,hasthepotentialtosignificantlyincreasethecurrentResourceDefinitiondrillingtargetswithintheMtFredaOpenCutgoldproject.CurrentlythecompanyiscompletingresourcedrillingatboththeMtFredaandGildedRosegoldprojectstoestablishJORC2012resourceestimatesandtheconductiveextensionsidentifiedatMtFredaarenowprioritydrillingtargetswithintheresourcedefinitiondrillprogram.(ReferASXannouncement8thNovember2017).

Figure1:Sub-AudioMagneticGeophysicalSurvey(SAM)indicatinghighprioritydrilltargetsattheMtFredaOpencut.

Conductivedrilltargets

SubtleConductivedrilltargets

For

per

sona

l use

onl

y

Sub-AudioMagneticGeophysicalSurvey(SAM)interpretationItappearsthattheconductivestructurescontinuebeyondtheareaofthesurveytothewestintoAusmex’sEPM14163.DuetotheexceptionalresultsfromtheMtFredaSAMtrial,theSAMsurveyisnowcurrentlybeingexpandedintoEPM14163asoutlinedinfigure2belowtocapture the entire southern gold and copper field previously identified within EPM14163(ReferASXannouncement7thAugust2017forassayresults).TheGeophysicalSurveyinvolvesinjectingelectricalcurrentintothegroundwhichisdesignedtomapgeologicalstructuresthatshowacontrastinconductivitycomparedwithsurroundingcountry rock. TheGeophysical Survey data results indicate the potential for theMt Fredaorebodymineralisedstructurestoextendtothenorthwestandadjointhe700-metregoldstructureidentifiedbythefirstphaseofexplorationonEPM14163,asinterpretedinFigure2below.

Figure2.EPM14163highgraderockchipsresults(ReferASXannouncement7thAugust2017forassayresults)with interpretedextensionofthehighlyconductivestructures identifiedbySAMextendingfromtheMtFredaOpenCutfor~950mandadjointhepreviouslyidentified700mgoldmineralisedstructure.(Combinedpotentialdrillingtargetstrikelengthof>1.7km).

For

per

sona

l use

onl

y

Consideringthemagnitudeoftheadditional~1.7kmdrillingtargetsidentifiedatMtFredafromtheSAMGeophysicaltrial,thereisnowpotentialtoaddsignificantscopetothecurrentResourceDefinitiondrillingprogram.DrillingwillcontinueonsiteatMtFredauntilJORC2012resourceestimatesareachieved.GildedRoseplannedSub-AudioMagneticGeophysicalSurveyFollowingtheextraordinaryresultsfromtheMtFredaSAMgeophysicaltrial,thecompanyhasplannedaSAMsurveyoverthecurrentGildedRosehighgradegoldprojectwherecurrentResourcedefinitiondrillingisunderway.ThepotentialtoidentifyfurtherconductivestructuresatGildedRosethatcorrelatewithknownmineralisationmayfurtherdefineadditionaldrillingtargetsfortheproject.ThecurrentdrillrigscommittedtotheGildedRoseProjectwillremainonsiteandcontinuedrillinguntilJORC2012resourceestimatesareachieved.

Figure3.PlannedSAMtrialfootprintover~1.5kmGildedRosemineralisedstrikelengthcoveringhighgraderockchipslocationsofupto277gpertonneGold.(ReferASXannouncement12Julyforassayresults)

GildedRoseSAMtrialfootprint

For

per

sona

l use

onl

y

FurtherExplorationUpdateDrillingonAusmexEPM14163(abutstheMtFredaMiningLease)DrillingonEPM14163whichadjoinstheMtFredaMLhascommencedwiththeAusmexownedtrackmountedairimpactdrillrig,aimingtoquicklyidentifytargetsfortheRCandDiamondCorerigs.Thedrillinghasstartedonthe4mainoutcropsthatmakeupthepossible700mgoldsystempreviouslyidentifiedbyrockchipsampling.(figure2above).Rockchipassaysofup to 79.8 g/t Au have previously been recorded along strike of the four surface quartzoutcropsthatmadeupthe700mpossiblecontinuoussystem.(ReferASXannouncement7thAugust2017forassayresults).Culturalheritageclearances,havebeencompletedfacilitatingdrilling.Afifthquartz/ironstoneoutcropover3minwidthand3mhigh,strikingE/W,hasnow been identified approx. 1 km to the west of themost westerly outcrop. This largeroutcropwhichisidenticalinrocktypetothe4outcrops,ispossiblyacontinuationofthe700msystem.OncetheairtrackimpactdrillhasidentifiedtargetsfromtheassayingtheRCanddiamondcorerigswillbeassignedtofollowupthedrilling.Attimeofreporting28holeshavebeendrilledalonga300mstrikelength.

Fig4:Ausmex’sImpactairdrill,drillingthe700mpossiblecontinuousgoldsystemidentifiedbyrockchipsamplingalongthe700mwithgradesupto79.8g/tAu

For

per

sona

l use

onl

y

TheJoker,Trump,BelgiumandAnswerLeasesexplorationupdateReversecirculationdrillinghasalsojustcommencedonthehistoricalcopper/gold“JokerProspect”,whichislocatedwithintheEPM15858locatednorthofEPM14163.(SeeFig8)TheJokerisanhistoricalCoppermineinproductionuntil1928withanaveragecopperproductiongradeof21%Cu.DrillinghasalsocommencedattheTrumpCopperMiningLeasesouthofMalbonand30kmssouthofCloncurry.DrillingwillalsocommenceontheBelgiumandAnswerMiningLeaseswhicharelocatedwithintheSelwynarea70kmssouthofCloncurry.Ourpreviouslowimpactexplorationonthehistoricalhigh-gradeBelgiumprospectresultedinthefaceoftheorebody,inthesmallopenpit,acrossthe23mwideorebodyfacewithanaveragegradeof2.93%Cuincluding13m@4.24%Cu.(Refer,ASXannouncement23rdAugust2017).

Fig5:AssaysfromhistoricalJokerCopperMineFig6:AssayingthefaceoftheBelgiumMine 23m@2.93%Cuincl:13m@4.24%Cu

For

per

sona

l use

onl

y

Fig7:DrillingcommencesattheTrumphistorical Fig8:DrillingcommencesattheJokerCopperMinelocatednearMalbon(SofCloncurry)ProspectwithinAusmexEPM15858Drill pads have also been cleared for RC drilling at another Ausmex historical high-gradeCoppermine, the “Answer”mining lease, located a little further south from the Belgiummininglease.WeexpectthatallthreeoftheabovegrantedleaseswillhavephaseonedrillingcompletedpriortotheXmasshutdownofexploration.TwofieldexplorationcrewswillworkthroughtheChristmasshutdownperiod.AusmexhasnowestablisheditselfintheCloncurryGoldandCoppermineralfieldasthemostactiveexplorerintheregion,with5Drillrigsexploringthehighlyprospectivemineralgroundheld by the Company. In four months we have established an exploration team with 9geologists and 8 field and service personnel in the exploration crew. The service crew isparamount for an effective and smooth exploration program by cutting in access roads,cuttingandformingdrillpadsandprovidingwaterandfuelfortherigs,managingtheon-sitefuelfarm,maintenanceofourfleetofvehicles,servicingourownrigetc.ACloncurryregionaloffice,workshops,vehicles,core,mineralsamplefarmandcorecuttingfacility,fullysecuredtogetherwithhousinghaveallbeenestablishedwithinthe4-monthperiod.TheCompanyhasalready, in this short time identifiedmultiplemajor high-quality targets.Weare also veryfortunate, tohavebeenable to secureknowngolddeposits thathadprevious JORC2004compliantgoldandcobaltresourcesandnowintheprocessofupgradingthemtothe2012JORCCode.InadditiontotheseprojectstheCompanyhassecuredseveralotherhistoricalCopper andGoldmines that have had perviousmining and significant grades of gold andcopper.

For

per

sona

l use

onl

y

As the Managing Director of the Company I wish to thank the current Board and allshareholdersfortheircurrentsupportofthecompanyandtrustyousharemyenthusiasmregardingthefutureprospectivityofthehighvalueprojectsthecompanyhasacquiredwithinbothCloncurryQueenslandandBurraSouthAustralia.IexpectsoontobeabletoprovideyouwithanupdateonexplorationprogressofthecompanytenementsinSouthAustralia.I lookforwardtocontinuallyupdatingshareholderswithresultsandactivities,andhopetomeetasmanyinpersonaspossibleattheupcomingCompanyAGMon24thNovember.Yourtruly

MatthewMorganManagingDirectorAusmexMiningGroupLimited

For

per

sona

l use

onl

y

Figure9.Ausmexcurrenttenementlocationplan

For

per

sona

l use

onl

y

Ends.Forfurtherinformation,pleasecontact:MattMorganManagingDirectorAusmexMiningGroupLtdForwardLookingStatementsThematerialsmayincludeforwardlookingstatements.Forwardlookingstatementsinherentlyinvolvesubjectivejudgement,andanalysisandaresubjecttosignificantuncertainties,risks,andcontingencies,manyofwhichareoutsidethecontrolof,andmaybeunknownto,thecompany.Actualresultsanddevelopmentsmayvarymateriallyfromthatexpressedinthesematerials.Thetypesofuncertaintieswhicharerelevant tothecompanymay include,butarenot limitedto,commodityprices,politicaluncertainty,changestotheregulatoryframeworkwhichappliestothebusinessofthecompanyandgeneraleconomicconditions.Given theseuncertainties, readersarecautionednot toplaceunduerelianceonforwardlookingstatements.Any forward looking statements in thesematerials speak only at the date of issue. Subject to anycontinuingobligationsunderapplicablelaworrelevantstockexchangelistingrules,thecompanydoesnot undertake any obligation to publicly update or revise any of the forward looking statements,changesinevents,conditionsorcircumstancesonwhichanystatementisbased.CompetentPersonStatementStatements contained in this report relating to exploration results and potential are based oninformationcompiledbyMr.MatthewMorgan,whoisamemberoftheAustralasianInstituteofMiningandMetallurgy(AusIMM).Mr.MorganistheManagingDirectorofAusmexMiningGroupLimitedandGeologist whom has sufficient relevant experience in relation to the mineralization styles beingreported on to qualify as a Competent Person as defined in the Australian Code for Reporting ofIdentifiedMineralresourcesandOrereserves(JORCCode2012).Mr.Morganconsentstotheuseofthisinformationinthisreportintheformandcontextinwhichitappears. JORCCode,2012Edition–Table1reportSection1SamplingTechniquesandData(Criteriainthissectionapplytoallsucceedingsections.)Criteria JORCCodeexplanation Commentary

Samplingtechniques

• Natureandqualityofsampling(egcutchannels,randomchips,orspecificspecialisedindustrystandardmeasurementtoolsappropriatetothemineralsunderinvestigation,suchasdownholegammasondes,orhandheldXRFinstruments,etc).Theseexamplesshouldnotbetakenaslimitingthebroad

• RandomRockchip

samplestakenbyGpick• Sampleswere~2-3kgin

weight• Sampleswereselected

fromoutcroppingmineralisationwithin

For

per

sona

l use

onl

y

Criteria JORCCodeexplanation Commentary

meaningofsampling.• Includereferencetomeasurestakento

ensuresamplerepresentivityandtheappropriatecalibrationofanymeasurementtoolsorsystemsused.

• AspectsofthedeterminationofmineralisationthatareMaterialtothePublicReport.

• Incaseswhere‘industrystandard’workhasbeendonethiswouldberelativelysimple(eg‘reversecirculationdrillingwasusedtoobtain1msamplesfromwhich3kgwaspulverisedtoproducea30gchargeforfireassay’).Inothercasesmoreexplanationmayberequired,suchaswherethereiscoarsegoldthathasinherentsamplingproblems.Unusualcommoditiesormineralisationtypes(egsubmarinenodules)maywarrantdisclosureofdetailedinformation.

EPM14163

Drillingtechniques

• Drilltype(egcore,reversecirculation,open-holehammer,rotaryairblast,auger,Bangka,sonic,etc)anddetails(egcorediameter,tripleorstandardtube,depthofdiamondtails,face-samplingbitorothertype,whethercoreisorientedandifso,bywhatmethod,etc).

• Nodrilling,loggingorsamplingwasconductedaspartofthisrelease.

Drillsamplerecovery

• Methodofrecordingandassessingcoreandchipsamplerecoveriesandresultsassessed.

• Measurestakentomaximisesamplerecoveryandensurerepresentativenatureofthesamples.

• Whetherarelationshipexistsbetweensamplerecoveryandgradeandwhethersamplebiasmayhaveoccurredduetopreferentialloss/gainoffine/coarsematerial.

• Nodrilling,loggingorsamplingwasconductedaspartofthisrelease

Logging • WhethercoreandchipsampleshavebeengeologicallyandgeotechnicallyloggedtoalevelofdetailtosupportappropriateMineralResourceestimation,miningstudiesandmetallurgicalstudies.

• Whetherloggingisqualitativeor

• Nodrilling,loggingorsamplingwasconductedaspartofthisreleaseF

or p

erso

nal u

se o

nly

Criteria JORCCodeexplanation Commentary

quantitativeinnature.Core(orcostean,channel,etc)photography.

• Thetotallengthandpercentageoftherelevantintersectionslogged.

Sub-samplingtechniquesandsamplepreparation

• Ifcore,whethercutorsawnandwhetherquarter,halforallcoretaken.

• Ifnon-core,whetherriffled,tubesampled,rotarysplit,etcandwhethersampledwetordry.

• Forallsampletypes,thenature,qualityandappropriatenessofthesamplepreparationtechnique.

• Qualitycontrolproceduresadoptedforallsub-samplingstagestomaximiserepresentivityofsamples.

• Measurestakentoensurethatthesamplingisrepresentativeoftheinsitumaterialcollected,includingforinstanceresultsforfieldduplicate/second-halfsampling.

• Whethersamplesizesareappropriatetothegrainsizeofthematerialbeingsampled.

• Nodrilling,loggingorsamplingwasconductedaspartofthisrelease

Qualityofassaydataandlaboratorytests

• Thenature,qualityandappropriatenessoftheassayingandlaboratoryproceduresusedandwhetherthetechniqueisconsideredpartialortotal.

• Forgeophysicaltools,spectrometers,handheldXRFinstruments,etc,theparametersusedindeterminingtheanalysisincludinginstrumentmakeandmodel,readingtimes,calibrationsfactorsappliedandtheirderivation,etc.

• Natureofqualitycontrolproceduresadopted(egstandards,blanks,duplicates,externallaboratorychecks)andwhetheracceptablelevelsofaccuracy(ielackofbias)andprecisionhavebeenestablished.

• IndustrystandardFireassaysforAuwerecompletedbySGSlaboratoriesforGoldandICPanalysisforcopper

• RepeatandcheckswereconductedbySGSlaboratorieswhilstcompletingtheanalysis

Verificationofsamplingandassaying

• Theverificationofsignificantintersectionsbyeitherindependentoralternativecompanypersonnel.

• Theuseoftwinnedholes.• Documentationofprimarydata,data

entryprocedures,dataverification,data

• Nodrilling,loggingorsamplingwasconductedaspartofthisrelease

• Noassayswereadjusted

For

per

sona

l use

onl

y

Criteria JORCCodeexplanation Commentary

storage(physicalandelectronic)protocols.

• Discussanyadjustmenttoassaydata.Locationofdatapoints

• Accuracyandqualityofsurveysusedtolocatedrillholes(collaranddown-holesurveys),trenches,mineworkingsandotherlocationsusedinMineralResourceestimation.

• Specificationofthegridsystemused.• Qualityandadequacyoftopographic

control.

• RockChipsamplelocationswerecollectedfromwithinEPM14163.ThesamplelocationwasrecordedbyHandHeldGPS(accuracy+/-5)andrecordedinMGA94,Zone54datum

Dataspacinganddistribution

• DataspacingforreportingofExplorationResults.

• WhetherthedataspacinganddistributionissufficienttoestablishthedegreeofgeologicalandgradecontinuityappropriatefortheMineralResourceandOreReserveestimationprocedure(s)andclassificationsapplied.

• Whethersamplecompositinghasbeenapplied.

• Rockchipsamplesweretakenrandomlyalongthestrikeofthemineralisation.

• DataspacinganddistributionisNOTsufficientforMineralResourceestimation

• Nosamplecompositinghasbeenapplied.

Orientationofdatainrelationtogeologicalstructure

• Whethertheorientationofsamplingachievesunbiasedsamplingofpossiblestructuresandtheextenttowhichthisisknown,consideringthedeposittype.

• Iftherelationshipbetweenthedrillingorientationandtheorientationofkeymineralisedstructuresisconsideredtohaveintroducedasamplingbias,thisshouldbeassessedandreportedifmaterial.

• Theorientationofsamplesisnotlikelytobiastheassayresults.

Samplesecurity

• Themeasurestakentoensuresamplesecurity.

• SamplesweretakentoCloncurrybycompanypersonnelanddespatchedbycouriertotheSGSLaboratoryinTownsville

Auditsorreviews

• Theresultsofanyauditsorreviewsofsamplingtechniquesanddata.

• Noauditsorreviewshavebeenundertakenatthisstage.

F

or p

erso

nal u

se o

nly

Section2ReportingofExplorationResults(Criterialistedintheprecedingsectionalsoapplytothissection.)Criteria JORCCodeexplanation Commentary

Mineraltenementandlandtenurestatus

• Type,referencename/number,locationandownershipincludingagreementsormaterialissueswiththirdpartiessuchasjointventures,partnerships,overridingroyalties,nativetitleinterests,historicalsites,wildernessornationalparkandenvironmentalsettings.

• Thesecurityofthetenureheldatthetimeofreportingalongwithanyknownimpedimentstoobtainingalicencetooperateinthearea.

• ML2718,ML2709,ML2713,ML2719,ML2741&EPM14163areowned100%bySpinifexMinesPtyLtd.AusmexMiningGroupLimitedowns80%ofSpinifexMinesPtyLtd.QueenslandMiningCorporationLimitedown20%ofSpinifexMines.ExplorationiscompletedunderanincorporatedJointVenture.

• EPM14475,EPM15858,&EPM18286areheldbyQMCExplorationPtyLimited.AusmexMiningGroupLimitedowns80%ofQMCExplorationPtyLimited.QueenslandMiningCorporationLimitedown20%ofSpinifexMines.ExplorationiscompletedunderanincorporatedJointVenture.

• ML2549,ML2541,ML2517are100%ownedbyAusmex.

Explorationdonebyotherparties

• Acknowledgmentandappraisalofexplorationbyotherparties.

• AllRockChipsamplingandexplorationprogramswereconductedbyAusmexMiningGroupLimited.SAMGeophysicalsurveywasconductedbyGAPGeoPhysicsExplorationServicesPtyLimited

Geology • Deposittype,geologicalsettingandstyleofmineralisation.

• ML2718,ML2709,ML2713,ML2719hoststheGildedRosesheerhostedquartzreef.Thereareseveralgoldmineralisedhydrothermalquartzreefswithinthedeposit.

• ML2741hoststheshear

For

per

sona

l use

onl

y

Criteria JORCCodeexplanation Commentary

hostedquartzrichMtFredaGolddepositcontainingAu,Cu,&Co.

• ML2549,ML2541,ML2517hostcoppermineralisationassociatedwithcarbonateintrusionsintoalteredmafichostrocks

• EPM14163&EPM15858containThereareseveralgoldmineralisedhydrothermalquartzreefswithinthedepositcontainingAu,Cu,&Co

DrillholeInformation

• AsummaryofallinformationmaterialtotheunderstandingoftheexplorationresultsincludingatabulationofthefollowinginformationforallMaterialdrillholes:o eastingandnorthingofthedrill

holecollaro elevationorRL(ReducedLevel–

elevationabovesealevelinmetres)ofthedrillholecollar

o dipandazimuthoftheholeo downholelengthandinterception

deptho holelength.

• IftheexclusionofthisinformationisjustifiedonthebasisthattheinformationisnotMaterialandthisexclusiondoesnotdetractfromtheunderstandingofthereport,theCompetentPersonshouldclearlyexplainwhythisisthecase.

• Nodrilling,loggingorsamplingwasconductedaspartofthisrelease.

Dataaggregationmethods

• InreportingExplorationResults,weightingaveragingtechniques,maximumand/orminimumgradetruncations(egcuttingofhighgrades)andcut-offgradesareusuallyMaterialandshouldbestated.

• Whereaggregateinterceptsincorporateshortlengthsofhighgraderesultsandlongerlengthsof

• Nodrilling,loggingorsamplingwasconductedaspartofthisrelease

• Nomaterialinformationisexcluded.

• Nointersectionshavebeenreportedaspartofthisrelease.

• Allsamplelocationsandfire

For

per

sona

l use

onl

y

Criteria JORCCodeexplanation Commentary

lowgraderesults,theprocedureusedforsuchaggregationshouldbestatedandsometypicalexamplesofsuchaggregationsshouldbeshownindetail.

• Theassumptionsusedforanyreportingofmetalequivalentvaluesshouldbeclearlystated.

assayAuresultshavebeendisplayedinthepreviousreportedASXannouncementon7thAugust2017.

•

Relationshipbetweenmineralisationwidthsandinterceptlengths

• TheserelationshipsareparticularlyimportantinthereportingofExplorationResults.

• Ifthegeometryofthemineralisationwithrespecttothedrillholeangleisknown,itsnatureshouldbereported.

• Ifitisnotknownandonlythedownholelengthsarereported,thereshouldbeaclearstatementtothiseffect(eg‘downholelength,truewidthnotknown’).

• Nodrilling,loggingorsamplingwasconductedaspartofthisrelease

• Nomaterialinformationisexcluded.

• Nointersectionshavebeenreportedaspartofthisrelease.

Diagrams • Appropriatemapsandsections(withscales)andtabulationsofinterceptsshouldbeincludedforanysignificantdiscoverybeingreportedTheseshouldinclude,butnotbelimitedtoaplanviewofdrillholecollarlocationsandappropriatesectionalviews.

• MapsshowingthelocationoftheEPMsandMLsarepresentedintheannouncement,resultsandmapswerealsopreviouslyreportedtoASX,referannouncement7thAugust2017.DiagramsproducedbyGAPGeoPhysicswereattacheddisplayingconductivityidentifiedfollowingaSAMsurvey.

Balancedreporting

• WherecomprehensivereportingofallExplorationResultsisnotpracticable,representativereportingofbothlowandhighgradesand/orwidthsshouldbepracticedtoavoidmisleadingreportingofExplorationResults.

• AllcomprehensiveassayresultswerepreviouslyreportedtoASX,referannouncement7thAugust2017.

Othersubstantiveexplorationdata

• Otherexplorationdata,ifmeaningfulandmaterial,shouldbereportedincluding(butnotlimitedto):geologicalobservations;geophysicalsurveyresults;geochemicalsurveyresults;bulksamples–sizeand

• GAPGeophysicshaveconducteda“SAM”SubAudioMagneticGeophysicalsurveywithresultsdisplayingtheconductivitywithinthesurvey.

For

per

sona

l use

onl

y

Criteria JORCCodeexplanation Commentary

methodoftreatment;metallurgicaltestresults;bulkdensity,groundwater,geotechnicalandrockcharacteristics;potentialdeleteriousorcontaminatingsubstances.

•

Furtherwork • Thenatureandscaleofplannedfurtherwork(egtestsforlateralextensionsordepthextensionsorlarge-scalestep-outdrilling).

• Diagramsclearlyhighlightingtheareasofpossibleextensions,includingthemaingeologicalinterpretationsandfuturedrillingareas,providedthisinformationisnotcommerciallysensitive.

• Additionalmapping,costeans,geophysicalsurveys,RAB,RC,andCoredrilling

For

per

sona

l use

onl

y