MINREX RESOURCES LIMITED — Interim / Quarterly Report 2016

Apr 12, 2016

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Quarterly Activities Report for the Period Ended 31 March 2016

13 April 2016

HIGHLIGHTS

• The Company is continuing exploration on its mineral properties, with work underway or imminent at both the Heemskirk and Deflector Extended Projects.

• Preparations are underway for a further panned-concentrate, stream sediment sampling program at the Heemskirk Tin Project. Work between 2012 and 2015, saw eleven of the 79 samples collected return values over 1% tin, with a further eleven samples returning values between 0.5% and 1.0% tin.

• An exploration and sampling program has commenced (in April 2016) to further test MinRex’s Deflector Extended Gold Project, which lies along the same structure as Doray Minerals nearby newly commissioned Deflector Gold Mine.

• At the end of March 2016 the Company had available cash of $0.898 million.

About MinRex

MinRex Resources Limited (“MinRex”) is an exploration company, listed on the Australian Securities Exchange, with its present focus being the exploration of gold, base metal and tin projects in Western Australia and Tasmania. The Company is also actively evaluating other exploration and corporate opportunities.

MinRex currently holds two projects, the Deflector Extended Gold Project at Gullewa in Western Australia and the Heemskirk Tin Project in Tasmania (Figure 1). Significantly, MinRex’s Deflector Extended Gold Project is along strike from Doray Minerals Limited’s Deflector Gold Mine, where mining has commenced and the plant commissioning is underway for the start of ore treatment in mid-2016.

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Figure 1: Location of MinRex Project Areas

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Heemskirk Tin Project

The Heemskirk Tin Project (E18/2011) is in a remote, tin-bearing area on the northwestern coast of Tasmania, to the WNW of the town of Zeehan. MinRex has been exploring the Heemskirk Tin Project for tin, tungsten, silver and base metals mineralisation through 2012 to 2015.

The field work completed by MinRex has included reconnaissance surveys, stream sediment sampling, examining and sampling historic workings and mapping geology. The area contains many small, tin oxide bodies associated with various vein types, which were worked between 1876 and 1900 (Figure 2). Some of these areas of old workings have been identified as worthy of exploration and having the potential to be associated with larger mineralised systems (Figure 3).

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Figure 2: Plan of the Old Tin Workings identified in the 2012 to 2015 sampling at Heemskirk

A surface reconnaissance, mapping and panned-concentrate stream sediment sampling field program was completed at Heemskirk in 2015, in Area B in the northwest of the tenement, and also at Area C in the south of the tenement (Figure 4). All previous samples were also reanalysed in 2015, using a new (laser ablation) method. The full assay results were reported in MinRex’s September 2015 Quarterly Report.

There are now 102 analyses available from the MinRex work programs at Heemskirk. These comprise an initial 10 stream sediment samples and 13 rock chip samples from sampling in proximity to old workings in 2012, and a total of 79 large panned-concentrate stream sediment samples from drainages in Areas A, B & C in E18/2011.

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Figure 3: Panning sample 53272 and old overgrown shaft - 2015 Sampling Program

The sampling work is ongoing and it is planned to sample Area D, along with infill sampling in areas with the best results in Area B, starting in April or May 2016. The results of this work will be included in the June 2016 Quarterly Report.

To date, tin is the only metal found at highly anomalous levels in the sampling and assaying. The 79 panned-concentrate stream sediment samples average 0.6% Sn and have a highest value of 6.9% Sn. Comparing the 2012 stream and rock sampling reveals that, on average, the stream sediment samples are twice the values of the rock chip samples, showing the propensity for tin to accumulate in streams.

Of the total 79 panned stream sediment samples from Areas A, B and C, 11 have values over 1% tin and another 11 have values between 0.5 and 1% tin, for a total of 22 (or 28%) of the samples being over 0.5% tin. The samples are panned-concentrate samples and are therefore higher grade than the in-situ stream sediments; nonetheless, it is thought that the higher grade samples will be directly relatable to the bedrock areas with the highest distribution of contained tin minerals. A plan showing the 22 assays over 0.5% tin has been prepared and is included below as Figure 4.

All 102 samples have been analysed for gold and none were anomalous, the highest value being 5.4ppb Au, showing that gold is not present in anomalous amounts in the mineralisation or sediments in the tenement. This is also in accord with the absence of sulphide minerals and chalcophile elements in the samples.

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Figure 4: Plan of the Panned-Concentrate Tin Grades from Stream Sampling at Heemskirk

Sulphide minerals and chalcophile elements are rare in the area, suggesting that the granitic host rocks, greisen, alteration and veining have not generated any large volume of alteration and sulphide minerals. All 79 panned heavy mineral samples contain low levels of sulphur, only one rock chip sample (550660) contained significant sulphide (arsenopyrite), assaying 1.1% sulphur, 30,100ppm arsenic (As) and 2ppm silver, from a small vein at the McGuinness mine workings. In accord with this observation all of the samples are low in chalcophile elements including:- copper, lead, zinc, molybdenum, silver and arsenic.

Tungsten is present at levels up to 850ppm W in rock chip samples and up to 360ppm W in the panned concentrate stream sediment samples, with the average level of tungsten in all 79 panned stream sediment samples being 48ppm W.

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The next stage of the exploration will include stream sediment sampling of Area D and infill sampling in Area B, where the best results have been received to date. A work program application was submitted on 3[rd] March 2016 and this program should commence in the June Quarter 2016. Also, sample residues have been retained and it is possible that future analyses may include other granite-associated elements such as lithium, thorium, uranium, zirconium, yttrium, dysprosium, scandium and other REE.

Deflector Extended Gold Project

MinRex’s Deflector Extended Gold Project (E59/1657) lies along a north-eastern extension of the Deflector mineralisation trend at the Gullewa Mining Centre. Doray Minerals Limited’s (“Doray”) Deflector Gold Mine lies about 5km to the southwest of the MinRex tenement (Figure 5). Doray commenced open pit mining, in February 2016, and is now commissioning the new plant, and plans to commence underground mining in June 2016. The Deflector Gold Mine is projected to produce the equivalent of 150160,000ozpa of gold (with copper credits) over a 6 year mine life.

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Figure 5: Doray plan showing Deflector Mine and prospects on trend with MinRex’s E59/1657

MinRex’s Deflector Extended Gold Project is predominantly covered by transported soil, colluvium and alluvium; which effectively conceal any mineralisation present. The area has historically been examined by regional soil geochemistry, rock chip sampling and minor RAB and AC drilling. The completed exploration work is encouraging, and aircore drilling shows some anomalous gold values including, 1m at 0.36ppm gold from 29m depth and 3m at 0.28ppm gold from 17m depth.

The Deflector trend is in an area of little outcrop, runs along a lithological boundary and/or a fault, and is also in proximity to the buried Salt Creek Fault, an interpreted major structure which lies below the alluvial sediments of Salt Creek (Figure 5).

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Figure 6: Plans showing the 2015 soil sample locations, geology and assay results

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In April 2015 a detailed soil sampling program was completed across the Deflector trend within E59/1657. The soil sample assay results were generally low, with highest results of 8ppb for gold, 0.05ppm for silver, 15.6ppm for arsenic, 1.4ppm for molybdenum, 18ppm for lead, 52ppm for copper, 56ppm for nickel and 38ppm for zinc. However, the results for copper and arsenic show an overlapping coincidence of the highest values in an approximately 400x100m zone (Figure 6). With the highest values lying close to the interpreted geological contact between the mafic meta-basalt and felsic metasedimentary rock types and trend parallel to this contact. Vein quartz fragments and occasional outcrops are also seen along this trend line, suggesting faulting, and these provide a target for further rock sampling programs. The full assay results were reported in MinRex’s June 2015 Quarterly Report.

These results are seen as encouraging, as they demonstrate a concurrence of the highest copper and arsenic values, the geological contact and fault zone, all within the same structure, and along strike from, the Deflector Gold Mine. Consequently, a further surface sampling program along this trend, and elsewhere in the tenement, has been commenced in April 2016 and these results will be reported in the June Quarter of 2016.

Commercial Opportunities

The Company is continuing to assess a range of commercial opportunities and this work will continue through the current quarter. MinRex remains in a favourable position to consider commercial opportunities.

Corporate

As at 31 March 2016, the Company had available cash of $0.898 million.

For further information, please contact:

Simon Durack Executive Director and Company Secretary T: +61 8 9486 8806 F: +61 8 9321 3559 info@minrex.com.au

Competent Persons Statement:

The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Mr Kieron Munro, a Competent Person who is a Member of the Australian Institute of Geoscientists and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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”. Mr Munro is employed as an independent geological consultant by MinRex and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013

Name of entity

MINREX RESOURCES LIMITED

ABN

81 151 185 867

Quarter ended (“current quarter”) 31 MARCH 2016

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows	Current quarter $A’000	Year to date (...9....months) $A’000
	- (15) - - (111) 3 - - -	- (52) - - (590) - 14 - - -
	(123)	(628)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	- - - - - - - - -	- - - - - - - - -
	-	-
	(123)	(628)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(123)	(628)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows	- - - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(123) 1,021 -	(628) 1,526 -
	898	898

Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		11
		-
1.25	Explanation necessaryfor an understandingof the transactions
	N/A

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

N/A

• See chapter 19 for defined terms.

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

N/A

Financing facilities available

Add notes as necessary for an understanding of the position.

	3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
		-	-
		-	-

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration		$A’000
			50
			-
			-
			150
Total			200
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000		Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	1		4
	897		1,017
	-		-
	-		-
Total: cash at end of quarter(item 1.22)	898		1,021

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Changes in interests in mining tenements and petroleum tenements

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased	Tenement reference and location	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
	N/A
	N/A

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	18,375,001	18,375,001	N/A	N/A
	- -	- -	- -	- -
7.5 +Convertible debt securities (description)	N/A

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	N/A
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	16,625,000	-	Exercise price 20 cents	Expiry date 11 July 2016
	16,625,000		20 cents	11 July 2016
	N/A
	N/A
7.11 Debentures (totals only)	N/A
7.12 Unsecured notes(totals only)	N/A

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: Date: 13/04/2016 Director Print name: Simon Durack.....................................

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements and petroleum tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement or petroleum tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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• See chapter 19 for defined terms.

Appendix 5B Page 6

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