Ann: Quarterly Activities Report , page-2

highly encouraging


Munglinup Project Geological Review
The Company engaged Dr. Jon Hronsky, of Western Mining Services, to review the nickel sulphide
potential of the Munglinup Project, in the context of data gathered to date. Dr. Hronsky has particular
expertise in targeting for nickel sulphide deposits, and his work led to the discovery of the West
Musgrave nickel sulphide province in Western Australia. Key observations and outcomes of the
review were:
• From a nickel exploration perspective, the most significant result from this work is the
widespread hydrothermal veining and alteration, with associated low-level Cu-Pt-Pd
anomalism, that has been intersected in all four holes drilled on E74/518. Excluding zones of
supergene enrichment, maximum values are of the order of 500 ppm Cu and 50 ppb Pt+Pd.
• The Cu-Pd-Pt anomalous veining/alteration is consistent with the distal expression of a nickel
sulphide deposit (Figure 2 – Conceptual Model).
• No high-MgO komatiite rocks, which are the primary host for NiS mineralisation, were
encountered in these drill holes. However, it is plausible that the intersection of high-MgO
basalt, bordering on low-MgO komatiite in MCDD003 might represent the upper part of a
sequence that contained such rocks at its base. The anomalously low Ni contents of these rocks
may represent the distal signature of a sulphide-saturation event that occurred lower in the
sequence.
• On a regional scale, it is clear that the Munglinup region hosts significant strike-lengths of Ni-S
prospective ultramafic rocks.
• In summary, it is reasonable to consider the Munglinup region to represent an effectively
totally unexplored strike extension to a known nickel sulphide mineralised province.
The Company is highly encouraged by these findings, and the potential for the Munglinup Project to
host nickel sulphide deposits along with graphite.