shareholder update - may 2005

Key indicators as follows:

*' The Project surrounds three operating nickel mines and Africa's largest nickel concentrator and smelter
complex; therefore access to infrastructure is excellent.
The possibility of toll treating nickel ore at the nearby concentrator/smelter complex greatly enhances the economics of putting our nickel deposits into production as significantly less capital expenditure will be required than at greenfields site.'

*' The inferred resource is currently 1.2 million tonnes @
0.84% Ni and 0.46% Cu (at a nickel cut-off grade of 0.5% Ni) for 10,800 tonnes of contained nickel. It is
worthwhile noting that at current prices, a 0.84% Ni deposit has an in-ground value equivalent to a 10g/t gold deposit. In early May 2005 DNL commenced a 2,500
metre drill program with the aim of significantly expanding the inferred resource at Dikoloti. It is anticipated that the resource will be able to be increased by over 50% to approximately 15,000 tonnes
of contained nickel which would have an in-ground value of almost A$300 Million at current nickel prices.

* 'The government is very pro-mining and in 1999 enacted very efficient and workable mining legislation.
Overall, it is easier and more cost effective to conduct mineral exploration in Botswana than Australia. This has
allowed Discovery Nickel to complete a work program in six months in Botswana, which would have taken 12-18 months in Australia.'

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My view? Can someone tell me what A$300 Million in value, divided by just 53,970,000 shareholders works out to be? Yes, that's what I thought, and that's just
based on the first stage of the project with the Kima
prospect, which is shaping up as even bigger again,
still to be factored in. Let's just say I am excited, and its got to be the best kept secret in recent years!
Great investment, good luck and happy trading to all
investors.
wrxsti