Significant Maiden SOP Resource at Lake Wells

The Directors of Wildhorse Energy Limited ('Wildhorse' or 'Company') are pleased to report the Company's maiden JORC Mineral Resource estimate from the Lake Wells Project, totalling 29 million tonnes (Mt) of Sulphate of Potash ('SOP'). The resource is calculated only on the upper 16 metres of the lake, with over 79% in the 'Measured' category.

This initial shallow resource confirms Lake Wells' potential to host a large, high grade salt lake brine project to produce highly sought after SOP for domestic and international fertiliser markets.

Highlights:

Ø The total Mineral Resource Estimate (MRE) at Lake Wells of 29 million tonnes (Mt) of SOP, with 90% classified as Measured and Indicated.

Ø The Measured SOP resource estimate, totalling 23 Mt of SOP, reports an average potassium concentration of 4,009 mg/L:

Ø The Mineral Resource Estimate confirms that Lake Wells is one of the largest undeveloped salt lake brine projects in the World.

Ø A Scoping Study on the Lakes Wells Project will commence shortly.

Ø The Mineral Resource estimate is based on an average depth of only 16 metres below surface.

Ø Mineralisation was open at depth across most of the Lake. An aircore drilling program is currently underway to test the extent and geology of the brine pool at depth.

Wildhorse's Executive Director, Jason Baverstock, said "The successful completion of our shallow drilling program and estimation of such a high quality JORC resource is a major step forward in demonstrating the potential of Lake Wells to support a substantial SOP brine project. The potential for an even larger resource at depth, as well as the Project's inherent location and infrastructure advantages, indicate a really exciting future for the Project and Company"

The mineral resource is described in more detail below and the announcement being released on ASX will be available on the Company's website, www.wildhorse.com.au.

For further information please visit www.wildhorse.com.au or contact:

Mineral Resource Estimate

Following the completion of the 2015 Shallow Core Drill Program, the Company engaged an independent hydrogeological consultant with substantial salt lake brine expertise, Groundwater Science Pty Ltd, to complete the maiden Mineral Resource Estimate (MRE) for the Lake Wells project as set out in Table 1 below.

Table 1: Lake Wells Project - Mineral Resource Estimate (JORC 2012)

Measured Resource Estimate

The Measured resource estimate of 23 Mt is confined to the area of the lake playa within the granted exploration licenses and constrained to within 3,800m of drillhole data points.

Indicated Resource Estimate

The Indicated resource estimate of 3 Mt, is confined to the area of the lake playa for which a drill spacing exceeding 3,800m but within 5,000m has been satisfied.

Inferred Resource Estimate

The Inferred resource estimate of 3 Mt, is confined to the area of islands within the lake playa. Analysis of the available drilling data from three islands indicates that the shallow brine beneath islands is diluted and the depth of dilution extends approximately 14 to 18 metres (m) below the water table surface, resulting in a significantly lower average potassium concentration.

Total Resource Estimate

The total resource estimate of 29 Mt is hosted within approximately 7.4 billion cubic meters of lake playa sediments with an average thickness of 15.5 metres beneath 477 km2 of lake playa surface.

The estimated tonnage represents the in-situ brine with no recovery factor applied. It will not be possible to extract all of the contained brine by pumping of bores or trenches; the amount which can be extracted depends on many factors including the permeability of the sediments, the drainable porosity, and the recharge dynamics of the aquifers.

Lake Wells Project

The Lake Wells project is located in the Northern Goldfields of Western Australia approximately 200 km north of Laverton. The area is well sourced by sound infrastructure, including the Great Central Road, the Goldfields Highway, the Goldfields gas pipeline and the railway sidings at Malcolm and Leonora.

The Lake Wells Project comprises 1,126 km2 of granted Exploration Licences covering the Lake Wells Playa, and substantial area immediately contiguous to Lake Wells.

Geology

The Lake Wells project is in the North Eastern Goldfields Province at the margin of the Archaean Yilgarn Craton. The province is characterised by granite-greenstone rocks that exhibit a prominent northwest tectonic trend and low to medium-grade metamorphism. The Archaean rocks are intruded by east-west dolerite dykes of Proterozoic age, and in the eastern area there are small, flat-lying outliers of Proterozoic and Permian sedimentary rocks. The basement rocks are generally poorly exposed owing to low relief, extensive superficial cover, and widespread deep weathering.

Early Tertiary sediments are preserved in palaeochannels within an infilled palaeodrainage system, and are concealed by a sequence of Cainozoic deposits. These Cainozoic sediments underlie the Lake Wells project and comprise the host aquifer for the brine resource.

The shallow geological profile beneath the lake is relatively homogenous. The top approximately 5m comprises slightly coarser grained material due to the variable abundance of evaporite minerals including gypsum sands. Beneath this layer the profile is dominantly clay with some interbedded silt and sand.

In the northern arm of the lake, two holes, LWG007 and LWG024, appear to have encountered shallow basement, interpreted as Proterozoic meta-sediments, at 6.8 m and 6.75 m below lake surface, respectively. Drilling terminated on this material.

Islands are present on the lake surface, dominantly in the southern arm. Holes LWG021, LWG031 and LWG035 were drilled on islands within the lake playa to test geological continuity beneath the islands, and to assess the impact of islands on brine chemistry. The data demonstrates that the islands are a surficial feature, sitting on top of the lake sediments, and the shallow stratigraphic sequence is continuous beneath the islands. Brine beneath the islands exhibits lower concentration at surface, increasing with depth. The data available from three islands indicate that brine concentration increases linearly with depth from approximately 1000 mg/L potassium at surface to a maximum concentration at 14-18 m depth. At depth under the islands, the brine concentration is comparable to the surrounding lake indicating that the dilution effect of islands is limited to the upper brine.

This observation has been made in other salt lakes in the Yilgarn Block and elsewhere in Australia.

Area

The lateral extent of the resource is defined by the salt lake boundary as defined in Geoscience Australia's 1:250K topographic dataset. The resource is further constrained by the tenement boundaries which do not encompass the entire lake surface. The total area of the resource is 477 km2.

Hydrology

The lake exhibits a catchment of 19,000 km2, making it the tenth largest salt lake basin in Australia. The total lake area is approximately 440 km2 yielding a catchment to lake area ratio of 40.

The lake is interpreted to be a terminal groundwater sink on the basis of the large lake surface area and the shallow water table observed at all sites beneath the lake which will facilitate evaporative loss. Groundwater beneath the lake is hypersaline and comprises the brine potash resource.

Drilling Techniques

Drilling comprised drilling 198mm holes using hollow augers and collecting predominately intact core into sealed lexan tubing to preserve moisture content and structure. In total 32 holes were drilled including 2 twinned holes. Of these 4 were cased as 50mm ID water monitoring wells. The average depth of drilling was 16 m. Bulk brine samples were pumped from the drillholes, and core samples were dispatched for laboratory determination of porosity and brine concentration.

The drill program utilised a lightweight auger rig capable of drilling core to the targeted depth. The drill rig was towed by a tracked LandTamer amphibious vehicle with Argo vehicles providing support. The drilling method recovered intact sediment core in 750mm lengths of clear tubing.   

Thickness

The top of the resource is defined by the top of the water table. The water table depth beneath the lake surface ranged from 0.2 to 1.2m averaging 0.47 m. Beneath the islands, which are elevated above the lake surface, the depth to water table ranged from 1 to 2.3m.

The depth of the resource is defined by the current depth of drilling. All drill holes terminated in saturated material and the resource is open at depth.

The base of drilling below the water table (and hence base of the resource) was interpolated between drill holes by inverse distance interpolation to the fourth power and a search distance of 6,000m.

Sampling Techniques

All drilling and sampling used for the resource estimate was completed using hollow auger coring. This method allows a number of samples to be taken - split tube, intact tube (both 0.75 m long) and bulk water (brine) samples.

The intact core is recovered using clear Lexan tubes which are sealed shortly after drilling.

Bulk water (brine) samples were taken by pumping from inside the hollow augers using a sample down-hole sampling pump. Holes were purged for approximately three hole-volumes before samples were taken. Brine samples were taken:

• At the base of the coarser shallow sediments

• At the end of the drillhole

Entrained brine in samples were recovered by centrifuging selected intervals of intact drill core in the laboratory. Entrained brine samples were extracted from 0.1m lengths at an average interval of 6.3 m downhole. Intervals were selected in the field and subsequently cut from the core in the laboratory and processed immediately.

Porosity samples are marked up at 0.1 m intervals in the field at pre-determined depths (average interval 3.2 m down hole). Porosity samples were cut from the core in the laboratory and processed immediately.

Core handling was designed to minimise loss by evaporation. Core was contained in plastic tubing during drilling, and sealed immediately upon recovery. The sections of core that were processed were un-sealed only in the laboratory and immediately prior to processing.

Drill sample recovery

Core recovery was 79% due to the difficulty of recovering soft, unconsolidated sediment. Brine concentration and porosity is relatively consistent downhole. No relationship is inferred between core loss and brine concentration and hence no sample bias is considered to have occurred.

Logging

All drill holes were geologically logged by a qualified geologist, noting in particular moisture content of sediments, lithology, colour, structural observations for each 0.75m length of intact core. Logging was complicated by the core being encased in plastic tubing; texture could only be logged at the end of each tube, where the sample could be inspected. A systematic logging process was developed specifically for this project.

Sub-sampling techniques and sample preparation

Entrained Brine

A 100mm length of core is cut, the sample is removed from the tube and the contents are centrifuged to try and extract solution. When/if any solution is recovered, the pH and SG's are determined and the solutions are diluted to a known volume (to give the assay lab enough sample for assaying) and then submitted for assay.

Porosity Determination

A 100 mm length of core is cut, the sample is removed from the tube and the contents are placed in a tray and weighed. The sample is then dried at 80 degrees celsius until a constant mass is achieved and then the sample is reweighed. The initial to final difference (mass lost) is the moisture content of the sample.

Conversion to a volume / volume porosity was calculated using brine salinity and brine density data for each drillhole, and using the average particle density measured for a subset of 38 samples.

Total porosity (Pt) relates to the volume of brine filled pores contained within a unit volume of aquifer material. A fraction of this pore volume can by drained under gravity, this is described as the specific yield (or drainable porosity). The remaining fraction of the brine, which is held by surface tension and cannot be drained under gravity, is described as the specific retention (or un-drainable porosity). The form of porosity used in brine resource estimation varies with different proponents of the method. The Company elected to use total porosity to assess the Lake Wells resource.

The mean and median total porosity of 146 samples was 46.4% v/v. The data is normally distributed with a standard deviation of 6.9 and no consistent spatial trends are observed laterally or with depth. A value of 46.4% was applied in calculation of the brine volume of the resource. The value is consistent with typical values for mixed fine-grained sediment (Fetter, 1996 pp86) and lacustrine clay, silt and fine alluvial sand, (Spitz and Moreno 1996, pp346).

Quality of assay data and laboratory tests

Quality assurance checks are described below. Following QA/QC and removal of deficient data as described below the data set is considered suitable for estimation of a potash resource for the project.

Inter-lab Duplicate analysis

The Primary Laboratory was Bureau Veritas Minerals Laboratory in Perth. Duplicate samples were sent to two secondary laboratories; Intertek, Perth and ALS Metallurgy, Perth. Differences in analysis are summarised in Table 2.

Table 2: Inter-laboratory duplicate analysis

Standard Solutions

Two standard solutions were procured and analysed by the primary laboratory and one of the secondary laboratories. Errors in analysis are summarised in Table 3.

Table 3: Reference Standard Solutions analysis percentage error

Charge Balance

Analysis of charge balance was undertaken. Charge balance checks the sum of all positively charged ions against the sum of all negatively charged ions. These should be equal. Charge balance is calculated as the difference between positive and negative ions divided by the sum of all ions.

For analysis of groundwater systems, the acceptable limit for charge balance error is 5% (Drever 19881, APHA, 1999)2. Two samples failed this check and were removed from the dataset.

Ionic Ratios

Ionic ratios are the ratios of dissolved ions against total dissolved ions, and/or chloride (Chloride is used as the most soluble conservative ion). The analysis is qualitative and looks for anomalous trends in the data. For instance samples where only one parameter is elevated compared to all other parameters. Anomalous results are summarised in Table 4.

Table 4: Anomalous results identified through ionic ratio analysis

A sub-population of data exhibits low concentrations of all ions. These are identified as samples from drillholes located on islands. The data are considered valid and reflect dilution of salt lake brines by meteoric water beneath islands.

[1] Drever (1988) Geochemistry of Natural Waters. Prentice Hall New Jersey

2 APHA (1999) Standard Methods for the Examination of water and wastewater. American Public Health Association, Washington DC

Porosity

Porosity determination is comprised of two mass measurements (one wet and one dry). The laboratory applied standard calibration procedures to scales used by mass measurement.

The dataset was inspected for outliers. Three samples exhibit anomalous high porosity these were removed from the dataset. The remaining data exhibit normal distribution and are consistent with depth.

Verification of sampling and assay

The brine is relatively homogenous and no significant intersections required verification. The database was checked for transcription errors by comparison to the primary laboratory reports. Assay data were not adjusted.

Data point location, spacing and distribution

Drill hole Coordinates are presented as Appendix 1.

Data points are distributed on an approximate 5 km by 5 km grid with some irregularity due to access constraints on the lake surface, and the irregular lake shape.

The drilling data comprises 30 holes (excluding twinned holes) for 477 km2 area equating to an average drill hole spacing of 4.0 km. Down-hole sample spacing averaged 3.2 m and 6.3 m for porosity and entrained brine samples respectively.

Orientation of data in relation to geological structure

All drill holes are vertical as geological structure is generally flat lying.

Drilling transects are oriented perpendicular to the Lake orientation in order to provide cross sections across the lake.

Solute Concentration

The solute (K, Mg, SO4) concentration dataset comprised a mixture of samples downhole with overlapping and varying sample intervals:

• Entrained brine samples from consistent 10cm intervals taken from varying depths

• Pumped brine samples from varying intervals and varying depths.

With the exception of brine beneath islands, the brine concentration is relatively consistent with depth. The maximum down hole variance from the mean was 15%, whilst the average variance was 0.4%. Average solute concentration for the full thickness of the brine aquifer penetrated at each drill hole was calculated as a length-weighted average using all samples. Entrained brine samples were assigned the length from the mid-point between adjacent samples (or the water table, or the end of hole). Pumped brine samples were assigned the length of open hole during the sampling event. The resulting dataset was used for interpolation of brine concentration across the lake.

Modelling / Interpolation

Solute concentration was interpolated across the lake area using inverse distance weighting algorithm with power of 2, search radius of 3800m, single search sector, three grid passes, and a requirement for minimum of 1 sample point per sector.

Dilution beneath islands was modelled by applying a linear dilution from the value of the interpolated grid, to a minimum value at surface of 1000 mg/L K. The estimate of the resource beneath islands was assigned a lower level of confidence (Inferred). Resource grade (brine concentration) continuity in this setting is implied rather than confirmed.

The interpolated grid had a cell size of 500 x 500m. The contained solute in each cell was calculated as the product of the area, thickness (from the geological model), porosity, and interpolated solute concentration for that 500 x 500m cell.

Results

The estimated mineral tonnage is presented in Table 1. The total contained tonnage of SOP is 29 Mt. Of this 23 Mt is assigned a measured resource classification and 3 Mt is assigned an indicated classification.

Table 5: Mineral Tonnage Calculation

Table 6: SOP Resource Estimate

Mining factors or assumptions

Mining of the resource is assumed to be undertaken by gravity drainage of the brine by pumping from trenches or wells.

Metallurgical factors or assumptions

No metallurgical factors or assumptions have been applied.

The brine is characterised by elevated concentration of potassium, magnesium and sulphate elements and distinctly deficient in calcium ion. Such a chemical makeup is considered highly favourable for efficient recovery of SOPM from the lake brines (the main feedstock for SOP fertiliser production), using conventional evaporation methods (Arakel, pers. comm., 2015).

Further Work

Resource definition at depth

The current resource estimate is defined by the depth of drilling which was constrained by drill rig capacity. The resource is considered open at depth and additional deeper drilling to define the extent and geology of the underlying resource is currently underway.

Hydrogeological assessment

The primary constraint on production of mineral brines is the proportion of the resource that can be recovered, and the rate at which it can be mined. Brine will drain to wells and trenches at a rate that is controlled by the permeability of the host material. Drainage rates can be optimised but not increased above a natural limit. Further work will focus on determining the hydrogeological parameters of the orebody:

• Drainable porosity

• Permeability

• Recharge dynamics (Rainfall infiltration and groundwater inflow)

• Surface water interaction (Lake inundation)

Competent Persons Statement

The information in this report that relates to Mineral Resources and Exploration Results for Lake Well's is based on information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy and a member of the International Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking 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 Jeuken consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

APPENDIX 1 - Lake Wells Project Auger Drill Hole Collar and Survey Details

Abbreviations:

EOH: End of Hole

SWL: Standing Water Level (below playa surface)

ASL: Above Sea Level

APPENDIX 2 - Bulk Water Samples Chemical Analysis Results

APPENDIX 3 - Entrained Brine Samples Chemical Analysis Results

APPENDIX 4 - Sediment Porosity Determinations

APPENDIX 5 - Summary of Resource Estimate and Reporting Criteria

This ASX announcement has been prepared in compliance with JORC Code 2012 Edition and the ASX Listing Rules. The Company has included in Appendix 1, the Table 1 Checklist of Assessment and Reporting Criteria for the Lake Wells Project as prescribed by the JORC Code 2012 Edition and the ASX Listing Rules.

The following is a summary of the pertinent information used in the MRE with full details provided in JORC Table 1 included as Appendix 6.

Geology and Geological Interpretation

Lake Wells is located the North-eastern margin of the Yilgarn Craton. The playa lake morphology comprises recent Cainozoic lacustrine sediments which overlie undifferentiated clay, potentially the upper surface of Tertiary paleochannel fill. The Quaternary lacustrine sediments which host the resource defined in this report are labelled Lake Playa Sediments (LPS) for this purpose.

The shallow geological profile beneath the lake is relatively homogenous. The top approximately 5 m comprises slightly coarser grained material due to the variable abundance of evaporite minerals including gypsum sands. Beneath this layer the profile comprises interbedded clay, silt and sand.

In the northern arm of the lake, two holes, LWG007 and LWG024, appear to have encountered shallow basement, interpreted as Proterozoic meta-sediments, at 6.8m and 6.75m below lake surface, respectively. Drilling terminated on this material.

Islands are present on the lake surface. Holes LWG021, LWG031 and LWG035 were drilled on islands within the lake playa to test geological continuity beneath the islands, and to assess the impact of islands on brine chemistry. The data demonstrates that the islands are a surficial feature, and the shallow stratigraphic sequence is continuous beneath the islands. Shallow (0-10m depth) brine beneath the islands exhibits lower concentration compared to the Lake. The data available from three islands indicate that brine concentration increases linearly with depth up to 10m. At that depth the concentration is comparable to the surrounding lake indicating that the dilution effect of islands in limited to 10m depth.

This is a phenomenon recorded from salt lakes in the Yilgarn Block and elsewhere in Australia.

Drilling and Sampling Techniques

The MRE is based upon data obtained from Company's shallow core auger drill program. The drill program utilised a lightweight auger rig capable of drilling core to the targeted depth. The drill rig was towed by a tracked Landtamer amphibious vehicle with Argo vehicles providing support. The drilling method recovered intact sediment core in 750mm lengths of clear tubing.

All drilling and sampling used for the resource estimate was completed using hollow auger coring. This method allows a number of samples to be taken - split tube, intact tube (both 0.75m long) and bulk water (brine) samples.

The intact core is recovered using clear Lexan tubes which are sealed shortly after drilling.

Bulk water (brine) samples were taken by pumping from inside the hollow augers using a sample pump. Holes were purged for approximately three hole volumes before samples were taken. Brine samples were taken:

• At the base of the Lake-Bed Sediments

• At the end of the drillhole

Entrained brine in samples were recovered by centrifuging selected intervals of intact drill core in the laboratory. Entrained brine samples were extracted from 0.1m intervals. Intervals were selected in the field. The Intervals were subsequently cut from the core in the laboratory and processed immediately.

Porosity samples are marked up at 0.1m intervals in the field at pre-determined depths (approximately 3m down each hole). Porosity samples were cut from the core in the laboratory and processed immediately.

Core handing was designed to minimise loss by evaporation. Core was contained in plastic tubing during drilling, and sealed immediately upon recovery. The core was un-sealed only in the laboratory immediately prior to processing.

Sample Analysis Method

Porosity was determined gravimetrically by weighing the wet sample, drying at 80 degrees and weighing the dry sample.

Brine samples were analysed using ICP-AES for K, Na, Mg, Ca, with chloride determined by Mohr titration and alkalinity determined volumetrically. Sulphate was calculated from the ICP-AES sulphur analysis Primary samples were sent to Bureau Veritas Minerals Laboratory, Perth. Secondary samples were send to ALS Ammtec Laboratory in Perth, and Intertek Genalysis Laboratory in Perth.

Reference standard solutions were sent to Bureau Veritas Minerals Laboratory, and Intertek Genalysis Laboratory to check accuracy.

Classification Criteria

The MRE has been classified and is reported as Measured, Indicated and Inferred based on guidelines specified in the 2012 JORC Code. Classification of the Mineral Resource estimates was carried out taking into account the robustness of the geological understanding of the deposit, the quality of the sampling and density data, and drill hole spacing.

Resource Estimation Methodology

The resource is calculated as the tonnage of minerals dissolved in the liquid brine contained in pores within the host rock. Tonnages are calculated as dissolved minerals in brine on a dry weight by volume basis e.g. kilograms potassium per cubic meter of brine.

The Potassium (K) tonnage of the resource is calculated as Rock volume multiplied by volumetric porosity equalling Brine volume. Tonnage is the formula of Brine volume multiplied by Concentration.