ASX RELEASE 2 August 2016

ASX: MGV

More High Grade Gold at Break of Day

• Assay results received for first two drill holes at Break of Day

• RC drilling intersects high grade gold mineralisation:

  o 2m @ 10.8g/t Au from 66m down hole (16MORC006); o 2m @ 36.8g/t Au from 101m down hole (16MORC006); o 1m @ 33.5g/t Au from 80m down hole (16MORC007)

• Drilling confirms the continuity of two parallel gold veins approximately 40m apart that remain open at depth and along strike

• Drilling is ongoing at Break of Day with assays expected for further 7 drill holes in the coming weeks

Musgrave Minerals Ltd ("Musgrave" or "the Company") (ASX: MGV) is pleased to advise that high grade gold has been intersected in follow-up reverse circulation ("RC") drilling at the Break of Day prospect on the Cue Project in the Murchison region of Western Australia (Figure 3). Assay results have been received for the first two drill holes in the program (16MORC006 and 16MORC007) and returned 2m @ 10.8g/t gold from 66m to 68m down hole (hanging-wall vein) and 2m @ 36.8g/t gold from 101m to 103m down hole (footwall vein) in 16MORC006 (Figure 1) and 1m @ 33.5g/t gold from 80m down hole (hanging-wall vein) in 16MORC007 (Table 1).

Drill hole 16MORC006 was drilled to test the up-dip projection of the footwall vein and 16MORC007 was drilled 25m to the south (Figure 2). The two holes intersected both the footwall and hanging-wall veins, successfully demonstrating the continuity of the mineralisation which remains open at depth and along strike. Drilling is continuing.

Musgrave Managing Director Rob Waugh said, "This is another strong result at Break of Day. The confirmation of the twin parallel gold veins is a huge positive and we look forward to announcing further results as they come to hand."

The Company would also like to take this opportunity to remind those shareholders eligible to participate in the fully underwritten Share Purchase Plan announced on 4th July 2016 that the Offer closes on Friday 5th August 2016.

28 Richardson Street, West Perth WA 6005 Telephone: (61 8) 9324 1061 Fax: (61 8) 9324 1014

Web: www.musgraveminerals.com.au Email: [email protected] ACN: 143 890 671

BREAK OF DAY

RC drilling is underway at Break of Day as part of a broader RC drill program on the Cue Project. Nine drill holes have been completed at Break of Day to date as part of the current program and assay results have been received for the first two holes showing encouraging gold grades.

The gold mineralisation is currently open along strike (Figure 1) and down dip (Figure 2. Break of Day is on a granted mining lease.

The mineralisation at Break of Day is interpreted to be steep to moderately dipping twin parallel quartz veins hosting high grade gold mineralisation with minor (1-2%) pyrite, within a basaltic stratigraphic sequence.

Sampling was undertaken on one metre intervals in visible quartz loads and four metre composites outside these zones.

Drilling is continuing at Break of Day to follow-up these high grade results. Musgrave's goal is to delineate a high grade gold resource.

Figure 1: Plan of Break of Day drill hole collar locations showing projected surface trace of mineralisation, interpreted fault offsets and high grade intersections

Figure 2: Break of Day cross section showing RC drill holes on section 13300mN (local grid)

This RC drill program is part of a larger drilling campaign that also includes drilling at the Mt Eelya copper- gold massive sulphide discovery and the new Purple Rain gold prospect (Figure 3). Assay results for the remainder of the drilling program are expected over the next three to four weeks.

ABOUT THE CUE PROJECT

The Cue Project ("The Project") is a Farm-In and Joint Venture Agreement with Silver Lake Resources Limited ("Silver Lake") (ASX: SLR) where Musgrave can earn up to an 80% interest. The Project consists of the Moyagee Gold and Hollandaire Copper Resources (see ASX announcement "25 November 2015, "Musgrave Secures Advanced Gold and Copper Project") and surrounding tenure in the highly prospective Murchison province of Western Australia. There is significant potential to extend existing mineralisation and also discover new mineralisation within the Project area.

Figure 3: Cue Project location plan

Enquiries:

Rob Waugh Managing Director

Musgrave Minerals Limited

+61 8 9324 1061

About Musgrave Minerals

Musgrave Minerals Limited is an active Australian gold and base metals explorer. The Cue Project in the Murchison region of Western Australia is an advanced gold and copper project. Musgrave's focus is to increase gold and copper resources through discovery and extensional drilling to underpin studies that will demonstrate a viable path to development in the near term. Musgrave also holds the highly prospective Mamba Ni-Cu sulphide project in the Fraser Range of Western Australia and an active epithermal Ag-Pb-Zn-Cu project in the prospective silver and base metals province of the southern Gawler Craton of South Australia and a large exploration footprint in the Musgrave Province in South Australia. Musgrave has a powerful shareholder base with four mining and exploration companies currently participating as cornerstone investors.

Competent Person's Statement Exploration Results

The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled and/or thoroughly reviewed by Mr Robert Waugh, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM) and a Member of the Australian Institute of Geoscientists (AIG). Mr Waugh is Managing Director and a full- time employee of Musgrave Minerals Ltd. Mr Waugh has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration 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 Waugh consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Table 1(a): Summary of Drill Hole Locations and Significant Assay Intervals

Table 1(b): Individual Assay Data for Drill Holes

Notes to Table 1(a) & 1(b)

1. An accurate dip and strike and the controls on mineralisation are only interpreted and the true width of mineralisation is not yet confirmed although it could be 50-90% of the intersection width

2. Composite 4 metre samples outside the vein load systems and one metre individual samples within the vein loads were submitted for analysis. Composites samples are analysed using aqua regia digest and 10g SAA (0.01ppm) gold analysis by Genalysis-Intertek. Individual one metre samples were analysed using 50g fire assay with MS finish.

3. g/t (grams per tonne), ppm (parts per million), ppb (parts per billion), X = below detection limit

4. NSA (No Significant Assay) - No gold assay above 1g/t

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