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SPITFIRE MATERIALS LTD

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MORE STRONG DIAMOND DRILLING RESULTS STRENGTHEN HIGH-GRADE UNDERGROUND RESOURCE AT APHRODITE

ASX Announcement 3 September 2018 

Recently completed drill campaign confirms continuity of high-grade mineralisation in lower zones of Alpha Lode, paving the way for an updated Mineral Resource

Key Points: 

  • Phase 2 Resource drilling now completed at the 100%-owned Aphrodite Gold Project near Kalgoorlie in WA, with a total of 16 diamond holes for 6,552m of drilling. 
  • Results confirm strong continuity gold mineralisation in the lower zones within the Alpha lode to the north and south of the existing Resource area, including 8m at 11.27g/t gold from 477m down-hole including 1m grading over an ounce. Significant assays include: 
  • 18APD027 2m @ 5.71g/t Au from 357m, including 

1m @ 10.33g/t Au from 358m; and 

17m @ 6.38g/t Au from 475m, including 

8m @ 11.27g/t Au from 477m; and 

1m @ 34.56g/t Au from 479m; and 

1m @ 10.23g/t Au from 489m

  • 18APD028 1m @ 11.05g/t Au from 419m; and 

10m @ 5.27g/t Au from 468m, including 

1m @ 10.26g/t Au from 470m; and 

8m @ 7.23g/t Au from 486m, including 

1m @ 14.38g/t Au from 489m

  • 18APD022 16m @ 2.74g/t Au from 322m, including: 

3.0m @ 4.45g/t Au from 322m; and 

3.0m @ 4.63g/t Au from 329m

  • All primary assay results from the drilling have now been received and will be incorporated in an updated Mineral Resource estimate targeted for completion by late-September 2018.
  • This updated Mineral Resource will, in turn, form the basis of a Pre-Feasibility Study on the combined Spitfire Materials and Excelsior Gold projects once the current merger is finalised.

Spitfire Materials Limited (ASX: SPI) is pleased to advise that it has completed the second diamond drilling program its flagship 1.26Moz Aphrodite Gold Project, 65km north of Kalgoorlie in the Eastern Goldfields of WA, with the final primary assay results confirming the continuity and quality of the underground Resource that will form the basis of upcoming economic studies on the project.

Spitfire has completed two diamond drilling programs at Aphrodite this year, comprising over 13,000m of drilling in the Phase 1 and Phase 2 programs.

The second program was mainly designed to in-fill and upgrade the underground Mineral Resource, comprising an Indicated and Inferred Resource of 2.9Mt at 7.0g/t Au for 663,000oz (refer Resource Table on page 7 of this Announcement) as the basis of a Pre-Feasibility Study on the combined Aphrodite and Excelsior Gold projects (following completion of the merger of the two companies – Refer ASX Release 14 August 2018).

The majority of assay results from Phase 2 have now been received with the results confirming both continuity and grade within the lower zones of the Alpha lode, while also confirming the Company’s upgraded geological model for the Aphrodite deposit, providing increased confidence in the ability to target highergrade lodes.

The drilling program also included three diamond drill holes to test the Phi North Exploration Target (Refer ASX 16 May 2018 Exploration update and new drilling program at Aphrodite). While confirming the presence of the key structure hosting the mineralisation in this area, further drilling will be required in this area to extend the Resource.

APHRODITE DIAMOND DRILLING PROGRAM 

Drill holes 18APD021, 18APD022, 18APD023 and 18APD027 – 18APD029 were completed on sections approximately 40m to 80mapart and were designed to intersect the lower section of the Alpha lode at depths in excess of 300m (below surface), within the Inferred and unclassified section of the current Resource model.

Drilling was successful in intersecting the footwall Alpha lode, with 18APD027 intersecting 17m @ 6.38g/t Au from 475m, including 8m @ 11.27g/t Au from 477m and 1m @ 34.56g/t Au from 479m down-hole (see Figure 1 – Cross-Section 6,659,860mN). Hanging wall mineralisation outside of the current Resource was also intersected in this hole with 2m @ 5.71g/t Au including 1m @ 10.33g/t Au from 357m.

Drill-hole 18APD028 intersected strong Alpha lode mineralisation of 10m @ 5.27g/t Au from 468m in the hanging wall position of the lode and 8m @ 7.23g/t Au from 486m in the footwall position of the Alpha lode (see Figure 2 – Cross-Section 6,660,000mN). These intersections confirm and in-fill the results previously reported for drill holes 18APD006 and 18APD007 (see ASX release 16 April 2018 Strong Initial Assays at Aphrodite Project and 29 May 2018 Aphrodite latest assays and drilling resumes).

Hole 18APD029 on section 6,659,640mN intersected 34m @ 1.41g/t Au from 297m. This intersection is within the unclassified portion of the Alpha Mineral Resource and confirms that the mineralisation, while lower grade, does extend to the south and follows up on results from holes 18APD010, 18APD019 and 18APD022 (see Figure 3 – Cross-Section 6,659,680).

This in-fill drilling has again confirmed the model now being applied to the remodelling of the deposit, with the higher grade zones associated with a narrow vein network (associated with an increase in arsenopyrite with grades in excess of 10g/t Au) that appear to have a shallow (20-25°) plunge towards a 340°.

This strong geological control has never been applied in targeting the higher-grade shoots or to the interpretation used for previous resource estimation methods. 

The latest results provide further momentum for the Company’s objective of upgrading the existing Underground Inferred Resource at Aphrodite (1.4Mt at 7.5g/t for 332,000oz – see ASX release 25 January 2018) as the cornerstone of its development studies.

Click here to view the full announcement

UPDATE ON MERGER OF SPITFIRE MATERIALS AND EXCELSIOR GOLD AND REGISTRATION OF EXCELSIOR SCHEME BOOKLET

ASX Announcement 14 August 2018 

TRANSACTION TO CREATE LEADING ASX-LISTED GOLD COMPANY PROGRESSING ON SCHEDULE


  • Scheme booklet registered with ASIC and to be dispatched to shareholders 
  • Independent Expert concludes Scheme is in the best interests of Excelsior shareholders 
  • Scheme meeting to be held on 19 September 2018

Spitfire Materials Limited (ASX: SPI or the “Company”) is pleased to advise that the Scheme Booklet in relation to the proposed merger with Excelsior Gold Limited (ASX: EXG or "Excelsior") by scheme of arrangement ("Scheme") has been registered with the Australian Securities and Investment Commission (“ASIC”).

The merger will create a leading ASX-listed gold company with a diversified portfolio of exploration and development assets and a clear pathway to production in the highly prospective North Kalgoorlie region of Western Australia. The merger will also allow the two companies to realise the strong synergies that exist between their neighbouring North Kalgoorlie gold projects, located 35-70km north of Kalgoorlie in Western Australia along the highly prospective Bardoc Tectonic Zone within an almost contiguous landholding of ~200km2.

The merged entity will have a combined Indicated and Inferred Mineral Resource inventory of over 2.1Moz (refer to the ASX announcement dated 25 June 2018 and the Scheme Booklet dated 13 August 2018), providing the critical mass required to accelerate development plans with the aim of becoming a recognised mid-tier gold producer.

The independent expert engaged by the board of Excelsior Gold to review the transaction has concluded in an Independent Expert’s Report included in the Scheme Booklet that the merger, in the absence of an alternative offer, is not fair but reasonable and in the best interests of Excelsior shareholders.

Spitfire's Managing Director, Mr John Young, said: 

“We are looking forward to completing this game-changing transaction, which will result in the creation of a diversified Australian gold developer with an exciting growth future. Having met with a number of Excelsior shareholders and investors in recent weeks, I am encouraged by the strong support for this transaction, and look forward to continuing to work closely with the Excelsior team to deliver the foundations of what we believe will be a significant new mid-tier Australian gold producer.”

A copy of the Scheme Booklet has been released to the ASX separately and is also available on the Company’s website at www.spitfirematerials.com. The Scheme meeting for Excelsior shareholders will be held on Wednesday, 19 September 2018. If the Scheme is approved by Excelsior shareholders at the Scheme meeting, and all relevant conditions of the Scheme are satisfied or waived, Excelsior will apply to the Court for orders approving the Scheme.

Click here to view the full announcement

OUTSTANDING INITIAL HIGH-GRADE HITS FROM NEW PHASE OF DRILLING AT APHRODITE

ASX Announcement 30 July 2018 

Results from first three holes targeting the Alpha Lode return grades of up to 31g/t Au

Key Points: 

  • Outstanding start to new 6,000m resource in-fill and extensional diamond drill program at the 100%- owned Aphrodite Gold Project, near Kalgoorlie in WA.
  • Assay results received for the initial three holes completed as part of the second drilling campaign, with a total of 14 holes already completed to date for 5,563.6m. 
  • Results confirm strong gold mineralisation in the lower zones along the Alpha lode to the north and south of the existing Resource area, including a spectacular intercept of 6m at over half an ounce in hole 18APD018 at depths of over 500m to the north of the Alpha lode. Significant assays include:

Spitfire Materials Limited (ASX: SPI) is pleased to advise that it has made a strong start the second diamond drilling program at its flagship 100%-owned 1.26Moz Aphrodite Gold Project, 65km north of Kalgoorlie in the Eastern Goldfields of WA with the first three holes returning a series of outstanding high-grade results.

The drilling continues to confirm both continuity and grade within the lower zones of the Alpha lode, while also confirming the Company’s upgraded geological model for the Aphrodite deposit, providing increased confidence in the ability to target higher-grade lodes.

APHRODITE DIAMOND DRILLING PROGRAM 

Drill holes 18APD014, 18APD017, 18APD018 and 18APD019 were completed on sections approximately 100m apart and were designed to intersect the lower section of the Alpha lode at depths in excess of 300m (below surface), within the Inferred section of the current Resource model. Drill hole 18APD017 was abandoned due to drilling issues. 18APD027 was drilled to replace this hole.

Drilling was successful in intersecting the Alpha lode, with 18APD014 intersecting 25.61m @ 4.11g/t Au from 485.68m down-hole (see Figure 1 – Cross-Section 6,659,880mN), with both footwall and stronger hanging wall mineralisation occurring some 110m south and up-plunge of 18APD018. The true width of this zone is approximately 50% of the down-hole intersection width.

18APD018 intersected the higher-grade footwall lode within Alpha and returning an intercept of 6m @15.98g/t Au from 546m (Figure 2 – Cross Section). The mineralised zone intersected in 18APD019 is 80m south of 18APD014, and the tenor of the mineralisation in both the footwall and hanging wall appears to weaken in comparison over a similar width of 17m.

This in-fill drilling has again confirmed the model now being applied to the remodelling of the deposit, with the higher grade zones associated with a narrow vein network (associated with an increase in arsenopyrite with grades in excess of 10g/t Au) that appear to have a shallow (20-25°) plunge towards a 340°. This strong geological control has never been applied with regard to targeting of the higher grade shoots or to the interpretation used for previous resource estimation methods.

The latest results provide further momentum for the Company’s objective of upgrading the existing Underground Inferred Resource at Aphrodite (1.4Mt at 7.5g/t for 332,000oz – see ASX release 25 January 2018) as the cornerstone of its development studies.

Click here to view the full announcement

JUNE 2018 QUARTERLY ACTIVITIES REPORT

ASX Announcement 25 July 2018

Spitfire continues its aggressive growth trajectory – announcing an $80m merger with Excelsior Gold, confirming significant growth potential at Aphrodite and acquiring 100% of Mulwarrie

MERGER WITH EXCELSIOR GOLD 

  • Spitfire signed a Merger Implementation Agreement with Excelsior Gold (ASX: EXG) to combine the companies by way of a court-approved Scheme of Arrangement. 
  • The merger will create a leading ASX-listed gold company with an attractive diversified portfolio of exploration and development assets and a clear pathway to production in the highly prospective North Kalgoorlie region of Western Australia.
  • The merger will allow the companies to realise the strong synergies that exist between their neighbouring gold projects, with the merged entity set to have a combined Indicated and Inferred Mineral Resource inventory of 2.1Moz – providing the critical mass required to accelerate development plans with the aim of becoming a recognised mid-tier producer.

WA GOLD PROJECTS

  • Exploration Target of 3.9Mt to 4.7Mt at 4g/t to 6g/t Au for between 500,000oz and 900,000oz* estimated between a vertical depth of 150m and 500m in the Alpha and Phi lodes at the Aphrodite Gold Project, 65km north of Kalgoorlie. 

*The potential quantities and grades of the Exploration Target are conceptual in nature and there has been insufficient exploration to date to define a Mineral Resource. It is not certain that further Exploration will result in the estimation of a Mineral Resource. 

  • This Exploration Target is in addition to the current JORC Indicated and Inferred Resource of 13.1Mt at 3g/t Au for 1.261Moz (See ASX Release 25 January 2018). 
  • High-grade intercepts including assays of up to 19.31g/t within the lower Alpha and Phi lodes confirm the continuity and consistency of the mineralisation, as well as strong potential for resource extensions. 
  • Significant mineralisation also intersected west of the Phi Lode in a high-grade footwall zone referred to as the Omega Lode. The Omega Lode is currently defined over 900m of strike and is not included in the current Resource model. 
  • Major new 6,000m diamond drill program commences to test the newly-defined Exploration Target between 150m and 500m depth. Drilling ~50% complete at Quarter-end.
  • Acquisition of remaining 49% of the Mulwarrie Gold Project near Kalgoorlie completed, giving Spitfire 100% ownership of this potential satellite ore source to the Aphrodite Project.

Overview 

Spitfire Materials Limited (ASX: SPI) Managing Director, John Young, said the June Quarter had been an active and highly successful period for the Company at both the corporate and asset level.

“The key highlight of the quarter was without doubt the announcement of the proposed merger with Excelsior Gold, our near-neighbour in the North Kalgoorlie district. This landmark transaction continues our track record of aggressively building a large, high-quality gold resource inventory in the Kalgoorlie region and represents our third significant M&A transaction in an 18-month period.

“The combination of the Spitfire and Excelsior gold assets will create a company with a 2.1Moz JORC compliant resource inventory, the ability to unlock the extraordinary synergies that exist between our adjoining projects, and the critical mass to pursue a near-term development strategy based on the establishment of a new production hub near the world-class mining centre of Kalgoorlie.

“We are looking forward to progressing this transaction towards completion during the September quarter, allowing us to embark immediately on a Pre-Feasibility Study of the combined Aphrodite and Kalgoorlie North Projects.

“While these corporate activities were a key focus during the quarter, we also continued to rapidly advance the Company at the asset level – unveiling a substantial Exploration Target for the Aphrodite Gold Project based on last quarter’s successful drilling and commencing a major new 6,000m diamond drill program. We also completed the acquisition of 100% of the Mulwarrie Project, further strengthening our strategic growth pipeline in the district.

“With results from the Aphrodite Project expected to continue to flow over the coming months, paving the way for an upgraded Resource estimate, we expect to be able to continue to generate strong and consistent news-flow while we complete the merger with Excelsior Gold.”

CORPORATE ACTIVITIES 

Merger with Excelsior Gold 

Overview

On 25 June, Spitfire Materials and Excelsior Gold Limited (“Excelsior”) (ASX: EXG) entered into an agreement to merge the two companies to create a significant diversified Australian gold company.

The merged entity will have an extensive resource inventory totalling over 2.1Moz in the prospective North Kalgoorlie district of WA, outstanding synergies due to their neighbouring project locations and near-term production potential, and a strong exploration and growth pipeline covering Tier-1 mineral provinces in WA and Queensland.

The merger is to be implemented by way of a Scheme of Arrangement whereby Spitfire has agreed to acquire all of the issued capital of Excelsior by the issue of 1 new SPI share for every 2.208 Excelsior shares held. Further details of the MIA and Scheme of Arrangement are provided under the heading “Transaction Summary” below.

The merged entity will have an enhanced capital markets profile, a strengthened investor base and a strong growth pipeline of assets – positioning it to become a significant new ASX-listed gold developer at a favourable period in the market cycle for Australian gold companies.

Full details of the merger were provided in the Company’s ASX announcement of 25 June 2018. Refer to Annexure A to this announcement for further details of the merged entity’s projects and JORC resource inventory. An abbreviated summary of that announcement is provided below.

Click here to view the full announcement

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