Manhattan : Ponton Mineral Resource Estimates

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ASX Release Monday, 23 January 2017

PONTON MINERAL RESOURCE ESTIMATES

DOUBLE 8 INFERRED RESOURCE ESTIMATE UPGRADED TO JORC CODE 2012

MAIDEN RESOURCE ESTIMATES FOR STALLION, HIGHWAY and SHELF URANIUM DEPOSITS REPORTED

HIGHLIGHTS

• Double 8 Inferred Mineral Resource of 17.2Mlb uranium oxide upgraded to JORC Code 2012
• Stallion Inferred Mineral Resource of 3.3Mlb uranium oxide;
• Highway Inferred Mineral Resource of 1.9Mlb uranium oxide; and‌‌
• Shelf Inferred Mineral Resource of 1.8Mlb uranium oxide reported

  INTRODUCTION

  Manhattan Corporation Limited's ("Manhattan") flagship Ponton uranium project is located approximately 200km northeast of Kalgoorlie on the edge of the Great Victoria Desert in WA. The Company has 100% control of around 1,100km2 of exploration tenements underlain by Tertiary palaeochannels within the Gunbarrel Basin. These palaeochannels are known to host a number of uranium deposits and drilled uranium prospects (Figures 1 & 2).

  The Company is drill testing and developing palaeochannel sand hosted uranium mineralisation amenable to in-situ metal recovery ("ISR").

  FIGURE 1: MANHATTAN'S PONTON URANIUM PROJECT

  The Double Mineral Resource previously reported under the JORC Code 2004 has undergone a comprehensive review by resource specialists H&S Consultants Pty Ltd ("H&SC") and is now reported in accordance with the JORC Code 2012. The reported Inferred Resource for the Double 8 uranium deposit at Ponton in WA of 17.2 million pounds ("Mlb") of uranium oxide ("U3O8") at a 200ppm cutoff remains unchanged. This updated resource estimate prepared by H&SC is supported by further detailed information in Appendix 1 being the JORC Code 2012 prescribed Table 1.

  Maiden Mineral Resource estimates for three deposits at Ponton have reported combined Inferred Mineral resources of

  21.5 million tonnes ("Mt"), grading from 137 to 151ppm U3O8 totalling 6.97Mlb U3O8 at the 100ppm U3O8 cutoff. These resource estimates have been prepared by H&SC and reported in accordance with the JORC Code 2012. The three maiden Resource Estimates reported for Ponton uranium project are:

• Stallion uranium deposit of 3.3Mlb U3O8 at 100ppm cutoff;

• Highway uranium deposit of 1.9Mlb U3O8 at 100ppm cutoff; and

• Shelf uranium deposit of 1.8Mlb U3O8 at 100ppm cutoff

  These maiden Resource Estimates prepared by H&SC are supported by further detailed information in Appendix 1 being the JORC Code 2012 prescribed Table 1.

  The Double 8 uranium deposit is located on granted exploration licence, E28/1898, located mostly within the Queen Victoria Spring Nature Reserve ("QVSNR"). The Stallion, Highway and Shelf uranium deposits are located on E28/1523 and E39/1143 to the north and outside of the QVSNR (Figures 2 & 3).

  FIGURE 2: MANHATTAN'S PONTON TENEMENTS

  Exploration Results at Ponton, reported by Manhattan on 7 February 2014, have also identified four wide spaced drilled Exploration Targets with tonnage ranges of 4 to 45 million tonnes ("Mt"), grade ranges of 250 to 450ppm U3O8 totalling 33 to 67Mlb U3O8 at the 200ppm U3O8 cutoff. In accordance with clause 17 of the JORC Code 2012, the potential quantity and grade reported as Exploration Targets in this report must be considered conceptual in nature as there has

  been insufficient exploration and drilling to define a Mineral Resource and it is uncertain if further exploration and drilling will result in the determination of a Mineral Resource.

  The four Mineral Resource Estimates reported here, and the four Exploration Targets previously reported in 2014, are based on actual exploration results including Manhattan's aircore and sonic drilling of over 767 holes and 52,700 metres of drilling along the palaeochannels immediately to the north of QVSNR in 2009 and 2010, 21 holes and 1,170 metres of drilling by Manhattan in 2016 and over 70km of conductive palaeochannels defined by the Company's airborne EM and magnetic surveys within QVSNR (Figure 3) and uranium mineralised sands discovered in previous drilling of 114 holes and 6,900 metres of drilling and down hole gamma logging by PNC Exploration ("PNC") and Uranerz Limited ("Uranerz") in the area in the 1980's.

  REGIONAL GEOLOGICAL SETTING AND DRILLING

  The Ponton project area is underlain by Tertiary palaeochannels within the Gunbarrel Basin. Carbonaceous sand hosted uranium mineralisation, below 40 to 70 metres of cover, has now been defined by drilling along 55 kilometres of the palaeochannels at Stallion, Stallion South, Double 8, Ponton, Highway, Highway South and the Shelf prospects (Figure 3). At a depth of 40 to 70 metres the uranium mineralisation is in shallow reduced sand hosted tabular uranium deposits in a confined palaeochannel with uranium mineralisation that is potentially amenable to in-situ metal recovery ("ISR"), the lowest cost method of producing yellowcake with the least environmental impact.

  FIGURE 3: DOUBLE 8, STALLION, HIGHWAY & SHELF INFERRED RESOURCES (IR) STALLION SOUTH, HIGHWAY SOUTH & PONTON EXPLORATION TARGETS (ET)

  Manhattan has obtained and compiled all the PNC and Uranerz exploration drilling results from 1983 to 1986 that discovered the palaeochannel sand hosted uranium mineralisation in the area. This information including the geological drill logs, assay results, down hole gamma logs, logging tool calibrations and estimated disequilibrium factors have been digitised and verified by Manhattan's independent consultants 3D Exploration Pty Ltd.

  Forty four (44) of these drill holes were drilled into the Double 8 deposit. Double 8 was found to host roll-front or tabular type uranium mineralisation in the lower parts of the palaeochannel (40-70 metres depth) in reduced sands. The uranium mineralisation was drill intersected in an area along approximately nine kilometres of the palaeochannel, at widths of approximately 500m on average and down hole thicknesses of 3 to 25 metres.

  From December 2009 to December 2010 Manhattan drilled over 52,700 metres of aircore and sonic drilling in 767 holes along the palaeochannels at Ponton to the north of the QVSNR. In September 2016 Manhattan completed a 24 hole 1,170 metres of aircore drilling along the palaeochannels north of the QVSNR utilising a high resolution gamma probe.

  PNC and Uranerz's drilling from the 1980's and Manhattan's 2009, 2010 and 2016 exploration drilling results have been reviewed and the Inferred Resource estimates for Double 8, Stallion, Highway and Shelf are based on these drilling results.

  DISEQUILIBRIUM CORRECTION FACTORS

  The original analog gamma logging data for the PNC and Uranerz drill holes has been digitized and recalibrated by 3D Exploration Pty Ltd in April 2009 and provided to H&SC as digitized logs converted to eU3O8. David Wilson, of 3D Exploration Pty Ltd, takes responsibility for the quality and accuracy of radiometric uranium (eU3O8 ) measurements used in these estimates.

  PNC did not establish a disequilibrium factor or factors that could be used for their work at Double 8. Instead they compared the gamma results from several diamond core holes against the chemical assays and established a calibration factor for their gamma probes. This calibration factor, 0.4CPS/ppmU, would have incorporated any disequilibrium factor present in the diamond core samples used for comparison. The actual disequilibrium was unknown.

  At Double 8 where U3O8 is reported it relates to grade values calculated from down hole radiometric gamma logs. Double 8 drill holes were logged by PNC using Austral L300 Middiloggers for natural gamma radiation. Four Austral L300 loggers were used by PNC in the area, calibrated against each other on a regular basis, and gamma responses compared to chemical assays from a number of core holes. Conversion factors for gamma response to U assays assuming secular equilibrium were then established. eU3O8 grades are then estimated by converting down hole radiometric gamma logs to equivalent uranium eU and multiplied by 1.179 to convert to equivalent uranium grades eU3O8. Down hole radiometric gamma logging in sand hosted uranium deposits, similar to Double 8, is a common and well established method of estimating uranium grades. All U3O8 grade results reported are subject to disequilibrium factors that may vary from those used in the original gamma to chemical assay comparison. This should be taken into account when assessing the reported grades.

  Radiometric disequilibrium corrections for Manhattan and Uranio drill holes:

• The disequilibrium ratio for the Manhattan and Uranio aircore holes were derived from a comparison of chemical and radiometric assays for the sonic Manhattan sonic drill holes, as these holes have the most reliable samples;

• A Q-Q plot of the chemical and radiometric assays for the Manhattan sonic holes was divided into three grade ranges based on distinct changes in slope of the relationship and power curve regressions were fitted to each grade range. Care was taken to ensure a smooth transition for the regression formulas from one grade range to the next;

• The regression formulas for the Manhattan and Uranio aircore drill holes are;

  o Low grade (0 - 71ppm eU3O8): y = 0.023x1.8779;

  o Medium grade (71 - 105ppm eU3O8): y = 0.00002x3.5318; and

  o High grade (>105ppm eU3O8): y = 4.3372x0.8922.

• The regression for the high grade range is broadly concordant to the results of the closed can tests undertaken by Manhattan and to a correction factor derived by our consultant, David Wilson of 3D Exploration Pty Ltd; and

• These regressions were then applied to the radiometric gamma logs for the Manhattan and Uranio aircore holes and sections of sonic holes missing chemical assays for the Stallion, Highway and Shelf uranium deposits.

DOUBLE 8 INFERRED RESOURCE ESTIMATE

The Double 8 uranium deposit is located in granted tenement E28/1898 in the southwest of the project area within the QVSNR (Figures 2 & 3).