Ferret's Stock to Watch: MAWSON WEST LIMITED 08:22, Thursday, 21...

Ferret's Stock to Watch: MAWSON WEST LIMITED
08:22, Thursday, 21 October 2004

A GOLD EXPLORER AIMS TO FIND "ANOTHER KALGOORLIE GOLDEN MILE"


Sydney - Thursday - October 21:(RWE)
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OVERVIEW
********

A small gold explorer has stirred itself into action of late and
collected a string of former gold bearing leases which had past successes
that might well be activated again.

The company is still in the initial stages of getting its
exploration act together and on Monday came out with new areas that could
make its dream become a reality.

It's interesting that many of these great mines that yielded vast
wealth in their hey-day are being revisited again with the latest
technology not in existence in those far off times.

Mawson West might well be passed over by investors looking for
established producers.

But the company has the potential to prove them wrong.

Mawson West announced to the Australian Stock Exchange details of
the Golden Mile South project acquisition in which it expects to soon
have a 70 to 100 per cent stake.

It is a group tenements known as Golden Mile South which cover
approximately 130 square km in two contiguous projects south-east of
Kalgoorlie in Western Australia.

The tenements are located in one of the most highly mineralised
areas of the world, only 4 km from the Kalgoorlie Superpit (past
production and current resources of 74 million oz).

The tenements are surrounded by several other substantial
resources, including New Celebration (4 million oz, 4 km to the
southwest), Nimbus silver deposit (9 Million oz silver, between the two
tenement groups) and the Blair Nickel mine (1.3 million tonnes @ 2.7%
Nickel) ~5 km to the east.

The close proximity to Kalgoorlie provides unparalleled
infrastructure advantages with several local operating gold mills, the
Kalgoorlie Nickel smelter (10 km to the west), sealed roads, railways and
the gas pipeline either bisecting the project or
nearby.

Directors say this opportunity complements Mawson West's overall
exploration strategy and provides a long term second major project in
addition to the advanced Norseman projects which are being drilled at
present.

The Golden Mile South project provides a package of ground with
genuine world class potential, whilst our Norseman assets are more mature
and closer to production.

The medium term goal is for production from Norseman to fund
resource expansion and exploration at both Norseman and Golden Mile
South.

Exploration logistics have good synergy as Golden Mile South is
only 180 km from Norseman.

SHARE PRICE MOVEMENTS
*********************

Mawson West shares yesterday sold 0.5c higher at 14c on a
significant turnover of 630,000. Rolling high has been 35.5c and the low
9.7c.

The company also reported the tenements were interpreted to
include the contact between the Kalgoorlie and Boorara Domains, both of
which are considered extremely important for the accumulation of major
gold deposits.

Historical interpretation has viewed the main rock type of the
Kalgoorlie domain within the area as predominately sedimentary
and/or felsic volcanic units.

Recent re-interpretation by notable independent consultants
however, has interpreted significant extents of dolerite and basalt
within the north-west of the tenements, which may represent the
continuation of the Golden Mile Dolerite.

Their work was based on amalgamated air-magnetic images and
confirmed where possible with historical geological drilling information.

According to Mawson West this presents an exciting
and extensive early target for mineralisation.

The total acquisition cost is approximately 8.2 million fully
paid Mawson West shares and $0.51 million in cash and/or shares at
weighted average market price over 10 days prior to settlement.

Mawson West will be acquiring 100 per cent of the company Golden
Mile South Ltd ("GMS"), which has 29 shareholders, none of whom
will become a substantial shareholder in Mawson West as a result of this
transaction.

None of the parties to the transaction are directors or related
parties of directors or major shareholders of Mawson West.

The GMS shareholders' long term confidence in the Golden Mile
South project is supported by escrow agreements not to dispose of their
new Mawson West shares for at least the minimum time set out below.


BACKGROUND
**********

Mawson West Limited (formerly Futurexone Limited) is an
enthusiastic gold explorer ploughing through areas previously discovered
in the late 19 and early 20th centuries, and bringing vast riches to
investors until the gold finally ran out.

The company was appropriately named after William Mawson, a gold
prospector, who discovered the first payable goldfield in the Norseman
region of Western Australia in 1893.

The original Mawsons Reward mine discovered by Mawson at this
time, forms part of the Maybell project which the company is actively
exploring to prove up a substantial high grade gold resource.

Most recent results include ore mined by vendors in 2000 which
recovered gold at 12.67 g/t.

Mawson has most of its projects located in Western Australia.

The Maybell Gold mine is 22km south of Norseman.

In 2003, drilling at Maybell returned 6m @ 31.42g/t, 10m @
6.12g/t Au and 7m @ 7.54g/t Au.

On September Mawson West acquired an option to purchase 100 per
cent of the Lady Dee Gold project (formally known as the Penneshaw Mine).

The tenement (P63/927) is situated approximately 8km SE of
Norseman and approximately 1 km to the east of Mawson West's Lady Mary
group of tenements.

The Lady Dee Mine Group has produced over 40,000 tonnes at ~12
g/t gold (for 16,000 oz) since discovery in the early 1900s.

Drilling by past explorers has intersected significant
mineralisation of up to 2m @ 8.2 g/t gold and 2m @ 3.64 g/t gold .

Rock chips results from surface trenching have returned up to 25
g/t gold.

Mawson West has outlined a significant soil anomaly that exists
for approximately 400m by 50m on its Maybell South tenement (P63/705).
The anomaly is defined by the 100 ppb contour (with a peak of over 600
ppb) and is situated adjacent to a granite outcrop.

The anomaly has the favourable North/South Norseman orientation.

RAB drilling began this month as part of a new program.

The Maybell Gold mine was the first gold discovery in the area in
the 1890's.

Mawson West is advancing this high grade gold project, with a
recent maiden gold resource reported of 40,000 ounces.

Operationally the company is now split into two divisions, mining
and exploration.

On the mining side, engineering studies are in progress to
optimise development of the initial open pit resource at Maybell.

Toll treatment of ore at the nearby Croesus Norseman mill is
financially viable on preliminary studies at toll treating prices
negotiated, and remains the preferred option.

The open pit operation would be a short 2-3 month project and
therefore start-up costs and contract prices would be higher than if a
longer term operation was established.

The mining team is also evaluating alternatives for underground
mining.

At this point underground mining at Maybell will require minimum
grades of 7g/t to be viable, which is higher than resource modeling on
drilling to date. With the limited drilling at depth, and the nuggety
gold nature of the ore-body, the grades will be confirmed with the mining
of lower benches in the planned open pit, and grade control drilling from
the bottom of the pit.

As the recent underground mining (1997-2000) achieved an average
grade of 11g/t, gold, this target grade of 7g/t gold or greater is still
considered achievable.

Following detailed analysis of all options, Mawson West believes
that the greatest value add for the business (and share price) at present
is to add additional resources to the current resource base, and is
therefore instigating an aggressive new drilling program.

ENDS

Copyright © 2004 RWE Australian Business News. All rights reserved.

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Cheers,

Fig Jam

I don't hold MWE