Below is my limited understanding, maybe someone can clarify further.
You cant purchase shares as a director within a certain time period prior to a price sensitive announcement (it's to prevent insider trading). ASX is asking if he breached by option conversion. Mek are answering explaining that the drilling was not for new resource but more to confirm and optimise the existing resource (pit optimisation). They are arguing it wouldnt effect a purchasing decision as this was already known to market (resource estimate in the DFS). Mek marked the results as price sensitive (out of abundance of caution), this is what the issue is I believe.
MEK Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
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(20min delay)