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OM Manganese Ltd

Title holder (s): OM (Manganese) Ltd (100%) Operator: As above Tenement Manager: Australian Mining and Exploration Title Services Pty Ltd (AMETS)

EL28604 Renner Springs Project

Annual Technical Report for period 27th September 2011 to 26th September 2012 (Year 1)

Authors: Reddell, C.T. (Geologist Manager, OMM) Bailey, M.H. (Database/GIS Manager, OMM) Target Commodity: Manganese Date of report: 24/10/2012 Datum/zone: GDA94 MGAz53 250k mapsheet: Helen Springs SE 53-10 100k mapsheet: Helen 5661 Contact Details: OM (Manganese) Ltd (Head Office) Level 1, 46 Parliament Place, West Perth, WA, 6005 P.O. Box 279, West Perth, WA, 6872 Ph 08 6311 1500 Fx 08 9841 0966 Bootu Creek Mine Site PMB 40, Tennant Creek, NT 0861 Ph 08 8962 0207 Fx 08 8962 0299 Author contact: craig.reddell@ommanganese.com.au miles.bailey@ommanganese.com.au

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Abstract Exploration licence EL28604 makes up the southern portion of OM (Manganese) Ltd’s Renner Springs Project area and is largely composed of land previously held under EL23459 (expired). EL28604 has several occurrences of manganese mineralisation identified within its boundary. Exploration activity in 2011/2012 included north and south extensions of an earlier 2010 Gradient Array IP survey over Carruthers prospect, a 13 hole (1,194m) RC drill program testing a south trending GAIP anomaly and the down dip extension of mineralisation identified at Carruthers prospect in 2010 RC drilling on EL23459.

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Contents

ABSTRACT ..................................................................................................... 2

ELECTRONIC FILE LIST ................................................................................ 4

1 INTRODUCTION ...................................................................................... 5

2 GEOLOGY................................................................................................ 6

3 PREVIOUS EXPLORATION ACTIVITY ................................................... 8

3.1 Exploration Activity 2003/2011 .................................................................................................... 8

4 2011-2012 EXPLORATION ACTIVITY .................................................... 8

4.1 RC Drill Program ......................................................................................................................... 8

4.2 Ground Geophysics ..................................................................................................................... 10

4.3 Rehabilitation .............................................................................................................................. 12

5 CONCLUSIONS AND RECOMMENDATIONS ...................................... 13

6 REFERENCES ....................................................................................... 13

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Electronic file list File Name File type Content EL28604_2012_A.pdf Pdf This report EL28604_2012_collars.txt Tab del txt Drill hole collars location data EL28604_2012_assays.txt Tab del txt Sample assay results EL28604_2012_geol_logs.txt Tab del txt Down hole geology logs EL28604_2012_DHsurvey.txt Tab del txt Down hole survey data EL28604_2012_logging_codes.pdf Pdf OMM geology logging codes Carruthers_Gradient_Grid2_Chargeability Jpg Gradient array chargeability plan Carruthers_Gradient_Grid2_Resistivity Jpg Gradient array resistivity plan Field Data.zip Gdf Gradient array field data Processed_Data.zip Ers Gradient array processed data

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1 Introduction

Exploration licence EL28604 was granted on the 26th of September 2011 covers an area of 87.5 sq km (29 blocks). The EL is located approximately 10 kilometres southwest of Renner Springs Roadhouse and 160 kilometres north of Tennant Creek. Figure 1 shows the location of the licence in relation to the Bootu Creek manganese mine and local stations. The western boundary of the exploration licence is approximately 20 km east of the Alice Springs-Darwin railway. Access to the exploration licence from Stuart Highway is via a dirt road used to service the natural gas pipeline, running alongside the northern boundary fence of Muckaty station.

Figure 1. Location plan and access tracks for EL28604

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2 Geology The Renner Springs project is predominately located within the Namerinni Group in the Ashburton Province of the Tennant Creek Inlier. The favourable manganese bearing horizon is hosted principally by the Shillinglaw Formation. The most significant manganese occurrence in EL28604 is located in the south- east portion of the Licence and referred to as Carruthers (R10) prospect. The manganese mineralisation does not outcrop and was first intersected in percussion drill hole number W38, drilled by Keys Resources NL intersecting 9m @ 36.7% Mn (Ward 1987), see Figure 3.

Figure 2. Geology from the NTGS 1:250k Helen Springs sheet, Hussey et al 2001.

Physiography of the exploration licence consists of hilly terrain in the east of the exploration licence with the highest point at Mount Willieray (361m). Several incised creeks head west across the exploration licence before dissipating into the sand covered plains to the west.

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Figure 3. Renner Springs Manganese Prospect locations

Manganese prospects - distribution of manganese at Renner Springs (red) from all Mn units mapped at 1:20,000 (Blake) and 1:4,000 (Drake-Brockman) and public domain data. Structural features - northwest trending fault suite and air photo lineaments in (mauve), major faults (black) and fold axes (blue).

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3 Previous Exploration Activity 3.1 Exploration Activity 2003/2011

Exploration carried in the 8 year life of EL23459 include -

• Handheld EM (E31 & E34) surveys conducted by Neil Scriven, • Excavation and sampling of a costean (since rehabilitated), • Review of multispectral satellite imagery (by Amit Eliyahu), • Helicopter-borne SkyTEM survey, • Detailed aeromagnetic and radiometric survey, • Aerial photography, • Regional geology mapping (1:20,000) by Tim Blake, • Detailed prospect mapping (1:4,000) by Joe Drake-Brockman, • RC drilling at Carrruthers, Willieray Dam and Northern Costean prospects, • Gradient Array IP (GAIP) ground survey at Carruthers prospect.

Detail of these exploration programs is included in the EL23459 Final Technical report (2003-2011).

4 2011-2012 Exploration Activity

Exploration activities undertaken in 2011/2012 period include -

• 700m north & 500m south extension of 2010 Carruthers GAIP ground survey, • 13 hole (1,194m) RC drill program testing potential southern and down dip

extension of Carruthers prospect, • Rehabilitation of costean excavated in 2007.

4.1 RC Drill Program

13 RC holes (1,194m) drill program testing a south trending IP anomaly and potential down dip extension of mineralisation identified at Carruthers prospect in the 2010 RC drilling on EL23459. Carruthers Prospect Carruthers Prospect (previously referred to as W38) was further tested by RC drilling a potential southern extension identified in GAIP ground surveys and down dip extensions. Drill sections 7962810N and 7962610N tested the GAIP anomaly trending south from Carruthers prospect, intersected barren sandstone/siltstone with a dolomite footwall. Drilling on section 7963010N, 50m south of existing Carruthers drill testing, intersected only minor weak/narrow mineralisation. RSRC0255 3m @ 14.6% Mn (from 72m) 7963010N RSRC0257 1m @ 32.1% Mn (from 29m) 7963010N

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Down dip testing on the three existing drill sections only returned significant manganese on the centre drill section. RSRC0259 2m @ 27.7% Mn (from 80m), 5m @ 35.3% Mn (from 86m) 7963110N

Figure 4. Plan showing drill activity and GAIP survey extension for 2011/2012.

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4.2 Ground Geophysics

Gradient Array IP ground geophysics extended the earlier 2010 GAIP survey extent by 700m to the north and 500m to the south, for a total of 7.8 line km. The southern extension indicates a weakening of the moderate intensity south trending chargeability anomaly identified in the 2010 Carruthers GAIP survey. Subsequent RC drilling has failed to identify any manganese mineralisation associated with that anomaly. The northern survey extension highlighted two local medium-high intensity chargeability anomalies associated with small manganese outcrops at the Willieray Dam prospect. Previous RC drilling at Willieray Dam limited the down dip extent of these manganese outcrops, and the recent GAIP survey restricts any significant strike extension. The 2010 survey and subsequent extensions were conducted by contractors GPX Surveys Pty Ltd using the following specifications,

Configuration: Gradient Array Line Spacing: 100m Line Direction: east-west A space: 25 m Transmitter: GDD Tx current: variable Tx frequency: 0.125 Hz Receiver: GDD 16 Rx readings: Minimum 2/stations Field data: GDD format files Processed Data: AMIRA format

The northern and southern lines from the original 2010 GAIP survey were repeated in the more recent survey, to assist with data levelling between surveys. The levelled chargeability image for the combined Carruthers GAIP surveys is shown in Figure 5.

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Figure 5. Carruthers Prospect Gradient Array Chargeability image

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4.3 Rehabilitation

The costean originally excavated by Neil Scriven in 2007 on EL23459 was backfilled by dozer and top soil replaced level with the surrounding topography. Mapping and sampling records for the costean are detailed in the Final technical report for RL23459.

Figure 6. Backfilled costean (originally excavated by N. Scriven in 2007)

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5 Conclusions and Recommendations

The objective of the Year 1 exploration program was to expand the previously defined extents of manganese mineralisation at the Carruthers prospect, and to evaluate the potential for delineating a Mineral Resource. The 2010 Gradient Array IP has since been extended 700m to the north and 500 metres to the south. The two small anomalies identified near Willieray Dam in the northern survey extension had been tested by earlier an RC drill program which only intersected surficial manganese. No strike extension of the areas tested in that drilling is apparent in the chargeability image. The southern survey extension demonstrates a weakening of the north-south chargeability anomaly associated with the Carruthers manganese prospect, first identified in the 2010 survey. Subsequent testing of the anomaly in two x 200m spaced reconnaissance RC drill sections, drilled through the host stratigraphy into footwall dolomite, failing to identify any significant manganese mineralisation. Minor down-dip extensions to the Carruthers prospect were identified in the proximal RC drill program. The Carruthers prospect now appears limited to a 150 metre strike length by unmineralised drill sections to the north and south. Exploration expenditure in Year 1 was limited to 80% of the $200,000 covenant by the lack of significant mineralisation intersected in the 2012 RC drill program, and by budgetary constraints due to low manganese prices and thin operating margins at the Bootu Creek manganese operation. It is recommended that exploration revert to a more reconnaissance mode over the full extent of EL28604, in order to identify other more substantial manganese prospects.

6 References

Reddell,C.T., Bailey,M.H., (2011) EL23459 Renner Springs Project, Final Technical Report for period 4th March 2003 to 3rd March 2011, OM (Manganese) Ltd, unpublished. Hussey, K.J., Beier, P.R., Crispe, A.J., Donnellan, N., and Kruse, P.D., (2001) Helen Springs, Northern Territory. 1:250,000 geological map series and explanatory notes, SE53-10 (Second Edition) Northern Territory Geological Survey Blake, T. S. (2010), Report following 1:20,000 Scale Mapping of the Helen Springs and Renner Springs Tenement Areas (Northern Territory). Unpublished report for OM (Manganese) Ltd. Drake-Brockman, J. A. P. (2010), Report following 1:4,000 Scale Mapping of the Selected Areas in the Renner Springs Tenement Area (Northern Territory). Unpublished report for OM (Manganese) Ltd.