Ann: Spectacular Copper Discovery - Greater Duchess Project, page-174

Firstly a planshowing the location of the Nil Desperandum, Duchess and Trekelano Deposits.Given what we know about the scale of the IP4 anomaly at Nil Desperandum I think we should be looking at a target with atleast a similar size to the high grade zones mined at the other two deposits, around 200,000t @ 10-12% Cu plus a larger surrounding halo of disseminated copper mineralisation at around 1% Cu.The disseminated mineralisation is at least 5,000,000t but could easily be many times this, 10-20Mt is not unreasonable as a target once the deposit is drilled out and closed off in all directions including the Lady Maria and Central workings and to the NE where a mineralised zone is emerging. Closing off has not happened yet, open in pretty much all directions. With the deposit not closed off my estimates are not closed off either, just estimates based upon what we know now.CNB reported that drilling of IP anomaly NLIP2 found copper sulphide mineralisation exactly where the IP anomaly said it should be.This means that 2 of the 4 anomalies have been drilled and found copper sulphides and the other 2 undrilled look likely plus the undrilled old IP anomaly along strike to the NE which is where large soil anomalies are.

This will be amine.The final JORC resources will determine how big and precisely what grade.The large IP anomaly beneath the Duchess workings give some more confidence now that it will be a repetition of the 205,[email protected]% Cu from the existing mine. Add in Mount Birnie and the known resources at Duchess/Ivanhoe and there is no reason to believe that we do not have a mine project with the current price of copper and gold.

The high gradeshoots at Duchess, 205,000t @12.5% Cu, and Trekelano, 188,000t @10.9% Cu, areprobably indicative of the grades of semi massive sulphide breccias in thelocal area.The RC drill chips in the latest announcement from CNB are of similar grade in the richest 24m with some disseminated Cu halo mineralisation around it (disseminated seems to be from 0.5% to 1.5% Cu based upon the CNB drilling).It should be noted that massive sulphides do not necessarily have high Cu grades.I inspected core at the Highway/Reward discovery QLD in 1987 and there was 30+m of solid sulphide core in one hole, a true VMS.Most of it was pyrite and from memory it came back at just over 3% Cu. So a semi massive sulphide breccia can be higher grade than a massive sulphide lens. Perhaps the terminology should change to massive sulphide breccia where we all know the breccia clasts are barren and the matrix holding it together is Cu rich sulphides.

As to what constituteseconomic grades for a copper deposit. It depends entirely on the tonnage, metallurgy, ground stability, depth, geometry of the ore, waste to ore ratio, distance to infrastructure and human resources. Generally anything around 1% Cu should be economic provided it is of a similar geometry to what we already know from Nil Desperandum.Larger deposits can be profitable down as low as 0.4% Cu.With the CNB projects near Mt. Isa there will be gold credits which may reduce the copper grade required for an economic mine. Do not underestimate how important a few high grade zones of 5-10% Cu will be to the final economics and profitability.

The question ofdirect shipping ore (DSO) was raised.Yes 10-12% may be DSO but in this case it will be the catalyst for proceeding with mine development because it will tip the economics and profitability to enable mining of the 1% Cu disseminated ore, of which there will be much greater tonnage.

To think we only havea few rock chips is to misunderstand the large number of long and economicgrade drilling intersections we have already built up.This is just the sweetener.To illustrate I have prepared a table of drill intersections from Nil Desperandumbut I cannot be certain that it includes even all the best ones, just the ones I could find easily from ASX announcements.Additional to the drill results are our visuals on NLDD044 – open at depth but intersected 34m of copper sulphides including 24m of semi massive copper sulphide breccia in a pre-collar to the diamonddrilling which was to be the main event.NLDD042 – intersected 80m of disseminated copper sulphides and thin bonanza zones.

Nil DesperandumSW plunging shoot (Western workings) drill results -

	Drill hole	Intersection high grade zone	Copper	Gold	Alternative intersection with grade spread including lower grade halo	Copper	Gold	Comments
1	ND0005	8m	2.3%		15m	1.1%		Includes [email protected]% Cu and 1.41g/t Au from 29m depth
2	ND010	20m	2.4%	0.27g/t	30m	1.7%		From 11m depth- Includes [email protected]% Cu and 0.77g/t Au
3	ND012	24m	1.5%		52m	1.0%		Includes [email protected]% Cu and 0.63g/t Au
4	ND013	16m	2.0%		67m	0.8%
5	ND016				29m	0.5%
6	ND017	19m	2.3%	0.56g/t	50m	1.1%
7	NDD028	4m	1.4%		17m	0.6%
8	NLRC001	11m	2.0%	0.3g/t				Includes [email protected]% Cu and 0.6g/t Au
9	NLRC002	6m	2.5%		52m	0.7%
10	NLRC017	30m	1.8%	0.3g/t	56m	1.1%		Includes [email protected]% Cu and 0.9g/t Au incl. [email protected]% Cu and 1.2g/t Au – Can be shown as [email protected]% Cu
11	NLRC019				8m	1.1%
12	NLRC024	8m	1.3%		53m	0.5%		SE of main shoot
13	NRLC026				33m	0.8%		Includes [email protected]% Cu, SE of main shoot
14	MRLC027	23m	1.7%	0.4g/t	60m	1.0%		Includes [email protected]% Cu and 0.7g/t Au
15	NRLC028	7m	2.4%	0.3g/t	62m	0.5%
16	NRLC029	9m	1.9%	0.4g/t	61m	0.6%		Includes [email protected]% Cu and 0.9g/t Au
17	NRLC031	11.1m	1.4%		48.2m	0.6%		Another zone of [email protected]% Cu in hole
18	NRLC032				8m	1.0%
19	NRLC039	15m	1.0%

*Note thatthere are drill results up to [email protected]% Cu from the Central workings andproductions records indicating a head grade of 5% Cu at the Lady Maria openpit.

*32 channelsamples from the Lady Maria and Central Workings waste dumps gave 1.2% Cu and0.3g/t Au.This is a resource at surface.