Altona Mining : Quarterly Report - June 2017

Quarterly Report June 2017

26 July 2017

ABOUT ALTONA Altona Mining Limited (ASX: AOH) is a cashed up ASX listed company with a record of shareholder returns. It is focussed on the Cloncurry Project in Queensland, Australia. The Cloncurry Copper Project has resources containing some 1.65Mt of copper and 0.41Moz of gold. The first development envisaged is the 7Mtpa Little Eva open pit copper-gold mine and concentrator. Major permits are in place with proposed annual production of 38,800t of copper and 17,200oz of gold for a minimum of 10 years. A Definitive Feasibility Study was published in March 2014. Key metrics as at 30/06/2017: Shares on issue: 536,975,592 Share rights on issue: 8,419,200 Cash: A$36.2M Share price: 13 cents Market capitalisation: A$70M Altona Mining Limited ACN: 090 468 018 Level 1, 2 Kings Park Road West Perth Western Australia 6005 T: [phone] E: [e-mail] W: www.altonamining.com ASX: AOH Frankfurt: A20

SRIG Transaction Terminated SRIG transaction: On 24 July, Altona announced the termination of the agreement with Sichuan Railway Investment Group (SRIG) due to SRIG failure to sign a Subscription Deed by 21 July 2017. The termination of this arrangement now frees Altona from its exclusivity obligations with SRIG. Project Strategy: Altona will now commence the process of engagement with third parties to realise value from the Cloncurry Project for shareholders. Definitive Feasibility Study: Altona is nearing completion of a major update to prior studies on the Cloncurry Copper Project. It is hoped to release the study and the financial modelling shortly. Cash Balance: At 30 June 2017 Altona's cash balance was A$36.2 million. Altona has US$23.6 million which was purchased at an average rate of AUD:USD of 0.754. * Assumes AUD:USD of 0.754.

ASX Releases

Altona lodged four ASX releases relating to its activities since the last Quarterly Report. These announcements provide a more detailed description of activities than this report.

28/04/2017	Quarterly Reports - March 2017
11/05/2017	FIRB Approve Cloncurry Project Transaction
03/07/2017	Cloncurry Copper Project Transaction Status
24/07/207	Cloncurry Copper Project Terminated

SRIG Joint Venture Transaction Terminated

On 24 July, it was announced to the market that the agreement with Sichuan Railway Investment Group (SRIG) had been terminated. The termination arose as a result of SRIG failing to execute an agreed Subscription Deed by 21 July 2017. If the Subscription Deed had been signed, this would have provided for a close of the then proposed transaction on 11 August 2017.

Under the existing agreement with SRIG, Altona was bound by certain exclusivity clauses which prevented Altona from engaging with any other party to transact on the Cloncurry Copper Project. The termination of the agreement with SRIG has now freed Altona from these obligations and it is now free to engage with other parties in relation to the Cloncurry Project.

Altona will recommence the process of engagement with its advisors to seek an alternative transaction with a third party that delivers value to shareholders.

Corporate

Altona maintains a strong cash balance

Altona had A$36.28 million of funds on deposit at 30 June 2017. A portion of these funds (US$23.65 million) is retained in US dollars. The US dollar funds were retained in anticipation of meeting its obligations under the now terminated transaction with SRIG.

Cash movements for the quarter are tabulated below:

A$ (millions)
Opening cash (31 March 2017)	37.19
Exploration, evaluation and licence fees	(0.48)
Corporate including SRIG transaction costs	(0.17)
Staff costs	(0.22)
Exchange rate movement and other	(0.04)
Closing cash (30 June 2017)	36.28

Share Price Activity on ASX

Quarter open 15¢

High 14¢

Low 13¢

Quarter close 13¢

Average daily volume 108,043

Cloncurry Copper Project (Altona 100%) The Cloncurry Project offers a large resource of 290 million tonnes at 0.58% copper, 0.05g/t gold for 1.65 million tonnes contained copper and 0.4 million ounces gold and is close to infrastructure. It is located 90 kilometres north-east of Mt Isa and 11 kilometres north of MMG's Dugald River zinc mine which is in construction.
Permitted project with a DFS completed	The Little Eva copper-gold development is planned to be the first development at the Cloncurry Copper Project. A Definitive Feasibility Study ("DFS") announced by Altona on 13 March 2014 for Little Eva anticipates the construction of a 7 million tonne per annum open-pit mine and flotation plant capable of annual production of 39,000 tonnes copper and 17,000 ounces gold. Mine life is estimated to be 13 years. The project sits within granted mining licences with native title agreements and an Environmental Authority ("EA") in place.
Little Eva part of an emerging mineral field	The Dugald River zinc mine 9 kilometres from Little Eva, is currently under construction. Dugald River is owned by MMG Limited. Construction of a 110kV power-line to Dugald River is completed. Altona has had initial discussions to access the power-line for the Little Eva development.
Update to DFS	Altona, as part of ensuring its readiness for the development of the project is preparing an update and synthesis of all technical work completed since the original DFS was released in 2012. This DFS Status Report will provide a current and comprehensive view of the project and an updated financial analysis. This Study is expected to be released to market shortly.
Roseby South Project (Altona 100%)
Exploration footprint of 3,362km2	The Company has applications for 14 Exploration Permits ("EPM's") in the region surrounding its Cloncurry Project and Roseby South. The applications cover an area of 2,005 square kilometres. Altona holds 3,362 square kilometres of exploration tenure and applications in the Mt Isa area. The new project areas are being targeted for copper-gold (IOCG) as well as gold only and lead-zinc-silver deposit types.

Figure 1. Tenement locations

Competent Persons Statement and ASX Compliance

Competent Persons Statement: The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr Alistair Cowden, BSc (Hons), PhD, MAusIMM, MAIG and Mr Roland Bartsch, BSc(Hons), MSc, MAusIMM. Dr Cowden and Mr Bartsch are full time employees of the Company and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral