COPPERMOLY LIMITED — Interim / Quarterly Report 2018

Apr 26, 2018

27 April 2018

ASX Code: COY

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March 2018 Quarterly Activity Report

The following report details the operating and corporate activities of Coppermoly Ltd ( Coppermoly or the Company ) for the quarter ended 31 March 2018 and to the date of this report.

Summary for the Quarter Ended 31 March 2018

• Exploration Activity

  • Simuku VTEM

  • Nakru next stage

  • New Exploration Licence application (ELA 2578)

• Current Exploration Portfolio

• Corporate Activity

Exploration Activity

Simuku (EL 2379) VTEM™ survey

• 3 highest ranked conductive anomalies lie in close proximity to and along strike to main Simuku deposit

• Highest ranked targets are predicted to be largely within 100m of the surface

• VTEM survey covers entire tenement showing clear geophysical anomalies outside historical Simuku geophysical focus for first time (Figure 1 )

• New exploration licence application enclosing existing Simuku tenement including areas near the boundaries of EL 2379 showing encouraging signs for potential conductive anomalous zones

On 23 April 2018 Coppermoly announced that it has received the final assessment of the VTEM™ survey data collected at the Company’s EL 2379 Simuku Cu-Au exploration project in December 2017. The assessment was completed by experienced geophysical consultants, GeoDiscovery Group. GeoDiscovery’s assessment included processing/3D inversions of the magnetic data from the VTEM survey and EMaxAir CDI compilation of the VTEM survey. GeoDiscovery’s assessment has highlighted multiple anomalies of interest within, and also outside of, currently defined mineralised porphyry-style prospects in the Simuku licence area which Coppermoly believes warrant follow up with a combination of geochemical sampling and focussed geophysical (IP) surveys and analysis (Figure 1).

Highlights include:

1. The reprocessing and modelling of the EM data has removed most of the near surface effect of the water saturated and weathered jungle terrain and hence can highlight clear basement anomalies which are potentially indicators of mineralised systems. However, it is interpreted that surface conductive influence has largely saturated Target #1 and 2 in the lower elevation terrane in the north of the tenement.

2. The 3 highest ranked conductive anomalies lie in close proximity to and along strike to the main Simuku deposit within the centre of the tenement. This provides encouragement that the currently defined mineral system has greater potential for expansion (see anomalies #5, 7 and 9 on Figure 1 and section in Figure 2 and Figure 3).

3. For example, Target 5 is a weak to moderate conductive zone(s) coincident with Simuku circular magnetic expression and centred on a historical untested IP anomaly. It lies immediately west of drill-intersected mineralisation and only two existing drill-holes are located within the central zone. This new data has upgraded this area to be a prime target of interest for the next phase of exploration at Simuku.

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March 2018 Quarterly Activity Report

Exploration Activity (continued)

1. Also, the highest ranked targets are predicted to be largely within 100m of the surface which makes them cost effective, accessible zones to test and develop.

2. The next tier of anomalies lie proximal and along strike to the known mineralised system at Kulu. With only a handful of historical holes drilled into this system, the new EM modelling provides encouragement that there is scope for extension of the known mineralised system (see anomalies #6 and 8 on Figure 1 and section in Figure 2).

3. The magnetic data processing and modelling has allowed for detailed structural map interpretation which compliments the high rank EM anomalies by showing the key structural setting to focus a mineralised system (Example in Figure 4).

4. As this VTEM survey covers the entire tenement this is the first time that clear geophysical anomalies have been found outside of the detailed historical geophysical focus on the Simuku system only (Figure 1).

5. It was observed that the historical geophysical data (Helimag and Gradient Array Induced Polarisation- GAIP) covering the Simuku deposit did not match well with the new VTEM data and therefore it was reprocessed and now shows a better match with the new EM data (Figure 4). This enhances the local geological interpretation for the Simuku mineralised system which provides greater confidence where to focus future exploration effort.

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Figure 1: Target areas selected by Geodiscovery to follow up with geochemical sampling and several IP lines over the highest priority anomalies. Labelled yellow dots are historical drill holes; the main Simuku deposit is located in the centre of the image and Kulu prospect is mainly within Target 8.

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Exploration Activity (continued)

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Figure 2: EW CDI Section @ 9368800N: Example of vertical extent of interpreted basalt layer and larger intrusions in relation to conductive zones 5 (Simuku) and 6.

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Figure 3: EW CDI Section @ 9364000N: Example of vertical extent of interpreted conductive zone 9 on the southern boundary of the tenement.

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Figure 4: These images show geophysical survey data focussed on the Simuku prospect in the centre of the tenement. Historical drill holes are plotted as black dots. The pink outline depicts the location of the published ‘inferred’ resource for Simuku. The image on the left is the reprocessed historical ‘Gradient Array Induced Polarisation’ (GAIP) chargeability which has a strong correlation with the VTEM conductive anomaly (Target 5). The middle image is the 1997 Helimag data and the image on the right is the RTP image from the VTEM survey. The grey lines represent the structural interpretation of the various processed and modelled magnetic images from the VTEM survey. The main feature to note is the circular ‘volcanic caldera’ which is cross cut by predominantly WNW-ESE structures.

The VTEM™ survey was a helicopter-borne geophysical survey undertaken by Geotech Ltd’s Perth based company UTS Geophysics and utilised Geotech’s Versatile Time-Domain Electromagnetic (VTEM™) geophysical system. The VTEM™ Plus system is ideal for locating discrete conductive anomalies as well as mapping lateral and vertical variations in resistivity. This system also collects magnetic data which can be utilised for geological interpretation of structures and buried porphyry systems (Figure 2 and Figure 3). The survey covered all of the current Simuku licence area with a total of approximately 928 line-kilometres (line spacing at 150m).

The Simuku project area hosts both a large tonnage low grade porphyry style copper mineralisation zone and near surface higher grade secondary copper mineralisation. Both mineralisation zones have untested extensions. Also, several historical geochemical and geophysical anomalies within the licence area have not yet been tested.

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Exploration Activity (continued)

Mt Nakru (EL 1043)

The Company is in the process of finalising plans for the next stage of exploration at its primary exploration asset, Mt Nakru EL 1043 Cu-Au project ( Nakru ). The program will largely consist of in-fill and 50m step out extension drilling at Nakru 1 to upgrade the resource category. Nakru hosts an updated JORC Inferred Mineral Resource that was estimated by Mining Associates in June 2017. The Inferred resource totals 29Mt at 0.92% Cu & 0.22 g/t Au using a cut-off grade of 0.3% Cu across two Cu-Au deposits at Nakru 1 & Nakru 2 for a combined total of 267kt of Cu and 208koz of Au (2Moz of Ag).

Since both deposits have higher grades concentrated in the upper levels, and shallow depth (overall less than 200m), an open-pit mine with conventional copper flotation processing is a likely option.

Please refer to the ASX Announcement released on 22 June 2017 for details of the Inferred Mineral Resource Estimate update as well as ASX Announcements released 16 March, 19 April and 27 April 2017 for full details of the last drilling program at Nakru, including all relevant assay results. The Company is not aware of any new information or data that materially affects the information included in these announcements and all the material assumptions and technical parameters underpinning the Inferred Mineral Resource Estimate in the ASX Announcement released on 22 June 2017 continue to apply and have not materially changed.

Kori River (ELA 2578)

On 23 April 2018 Coppermoly announced that it has had an application for a new Exploration Licence accepted by the PNG Mineral Resources Authority. The new application, ELA 2578 Kori River, covers ground that encloses the existing EL 2379 tenement and includes areas near some of the boundaries of EL 2379 that show encouraging signs for potential conductive and resistive anomalous zones. The next steps in the application process includes the convening of a Warden’s Hearing, technical assessment by the MRA, Mining Advisory Council consideration before approval by the Mining Minister.

Current Exploration Portfolio

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Map 1: Coppermoly’s current exploration licences on New Britain Island

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Current Exploration Portfolio (continued)

The Company’s current exploration licences, all located on New Britain Island, PNG:

	PERIOD
PROJECT	ACQUIRED	AREA	LOCATION
EL 1043 Mt Nakru*	Jan 2008	47km²	West New Britain
EL 2379 Simuku*	Jan 2008	122km²	West New Britain
EL 2514 Makmak	Sep 2017	269km²	West New Britain
ELA 2578 Kori River	Pending	396km²	West New Britain

• Two of the Company’s exploration licences, EL 1043 Mt Nakru and EL 2379 Simuku, together known as the West New Britain Projects ( WNB Projects ), were previously subject to a farm-in agreement with Barrick (PD) Australia Ltd ( Barrick ), a subsidiary of Barrick Gold Corporation. Barrick earned a 72% interest in the WNB Projects by spending more than $20 million on exploration. In July 2013 Coppermoly entered into an agreement with Barrick to reacquire 100% ownership of the WNB Projects’ licences on a staged basis. Barrick still holds a nominal 28% interest in the WNB Projects, which the Company has a binding agreement to acquire, completion of which will be effected on the payment of a further $4.5 million to Barrick within 6 months following the commencement of commercial production at the WNB Projects. Barrick do not have to contribute any further costs for exploration or development of the WNB Projects nor are they entitled to any profits from the projects.

Corporate Activity

Cash at 31 March 2018

On 13 April 2018 the Company released its Appendix 5B Quarterly Cashflow Report for the 3 months ended 31 March 2018. The report released to the ASX showed cash and cash equivalents as at 31 March 2018 totalled $A2.1M.

Corporate DirectoryCoppermoly Limited (ABN 54 126 490 855)	Corporate DirectoryCoppermoly Limited (ABN 54 126 490 855)
Non-Executive DirectorsDr Wanfu HuangMr Jincheng YaoMr Kevin GriceMr Zule Lin	Registered officeSuite 1B, 91 Upton Street,Bundall, Queensland 4217Telephone:+61 7 5510 3994Facsimile:+61 7 5510 3997Email: info@coppermoly.com.auWebsite: www.coppermoly.com.au
Company SecretaryMr Paul Schultz CPA

About Coppermoly

Coppermoly (COY) is an ASX listed junior exploration company which has been listed on the ASX since 2008. Coppermoly’s head office is located on the Gold Coast, Australia and mineral exploration activities are focused entirely on the island of New Britain in PNG where it is exploring for copper, gold, silver, zinc, and molybdenum.

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