ferrets stock to watch: summit resources ltd

Ferrets Stock to Watch: SUMMIT RESOURCES LTD
09:27, Friday, 27 October 2006

AN EXPLORER FOCUSING ON THE MT ISA REGION FOR COPPER, URANIUM

Sydney - Friday - October 27: (RWE Aust Business News)
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OVERVIEW
********

One of Ferret's early periods as a young financial reporter was
to visit many mines across the country.

It was instilled into Ferret's mind by his peers and mining
experts that the Mt Isa region had the greatest base metals deposits in
Australia and for that matter the world.

This was before the advent of WMC's stunning Olympic Dam
discovery.

The big tragedy of course was that Mt Isa went to offshore
operator Xstrata in a takeover because of the shortsighted attitude of
the institutional funds at the time.

Meanwhile the story at hand is all about Summit Resources Ltd
(ASX:SMM) and its prospects in the Mount Isa areas.

Subsidiary Summit Uranium has reported exploration and resource
definition drilling of the company's deposits around Mount Isa in
northwest Queensland is accelerating, with approximately 20,000 metres of
a two-year 25- to 30,000-metre $7 million resource definition drill
program completed, sampled and the results reported.

Drilling results for eight deposits have been released with
substantial widths and high grade uranium oxide and vanadium pentoxide
intersections being reported.

The uranium resource drilling program has been designed to
underpin JORC compliant resource estimates for each of Summit's eight
uranium deposits.

The company expects to have estimates released for at least
five, and possibly six, of these deposits before the end of 2006.

A revised JORC compliant resource estimate has recently been
released for Valhalla and JORC compliant resource estimates are being
modelled and calculated for the Andersons, Skal, Mirrioola, Bikini and
Watta uranium deposits with the first drill holes just completed at
Warwai.

Further drilling is required at Tjilpa to commence modelling and
calculation of a resource estimate.

Highlights over the year are:

* Summit's market capital more than doubled to over $350 million
in past year;

* However, a more sobering fact is that losses for the year
were reduced by 12 per cent to $557,625 (last year $636,453) but revenue
jumped to $676,366 against $168,235 in the previous year;

* Summit is now included in S&P/ASX300 and the All Ordinaries
indices;

* Summit now controls 18,700 square kms of exploration tenements
in northwest Queensland;

* The 57 million pound JORC compliant resource estimate has
recently been released for Valhalla.

All the uranium deposits remain open and further drilling is
ongoing to delineate the size of the deposits.

Metallurgical testwork is underway to confirm the uranium
deposits can be treated at a centrally located processing and metal
recovery plant proposed to be built 25 kilometres north of Mount Isa.

Fully funded greenfields uranium search is now under way in the
Georgina Basin to the west of Mount Isa.

Summit is now set on a course to become a very successful and
profitable mining house, directors believe.

Uranium oxide price continues its upward trend and is now $US56 a
pound on the spot market.

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

Shares of Summit yesterday rose 17c to $2.23. Rolling high for
the year was $2.23 also set this week while the low was reported as 52c.
The company has 197.4 million shares on issue while market cap is $496.7
million.

All of Summit's Mount Isa uranium deposits remain open at depth
and along strike.

Uranium breccias encountered at Valhalla, Andersons, Skal,
Bikini, Mirrioola, Tjilpa, Watta and Warwai deposits are present in
large iron oxide copper gold deposits elsewhere in Australia including
Xstrata's Ernest Henry copper gold mine near Cloncurry, 150 kilometres
east of Mount Isa, and BHP Billiton's massive Olympic Dam uranium copper
gold mine in South Australia (the world's largest uranium mine).

Dating of Summit's uranium mineralisation has confirmed the
deposits are the same age as, and related to the same metallogenic event
that deposited, the world-class copper breccia deposits at nearby Mount
Isa.

In addition to the deposits currently being drilled, Summit has
fifteen mineralised uranium prospects within its Mount Isa Project area
on which exploration is yet to commence.

Each of the prospects will be progressively explored and drill
tested as rigs become available.

BACKGROUND
**********

Summit Resources was listed on the Australian Stock Exchange in
April, 1994.

It has changed direction significantly since then.

Most of the company's operations now centre on the Mount Isa
region.

Greenfields uranium exploration is underway with Summit recently
announcing it has pegged 12,000 square kms of exploration tenements over
the Georgina Basin west of Mount Isa along with a $5 million funding
agreement to explore the area.

Contracts are being be finalised to fly an EM survey over the
basin where Summit is searching for calcrete channel, paleochannel,
unconformity, roll front and basement breccia style uranium deposits.

The EM survey results will be combined with existing geological
and geophysical databases, satellite imagery and night-time heat sensing
thermal imagery to select the first drill targets by early 2007.

Encouraging rock chip samples of the Constance Range iron
formations have identified several areas with greater than 50 per cent
iron (Fe) (maximum values of 59pc Fe), silica between 8pc and 17pc, and
low Al and P contaminants.

Summit is now looking to list a new company to manage and fund
further exploration and development of the Constance Range iron ore and
phosphate deposits.

Copper-gold exploration along the Mount Isa Paroo Fault zone to
the south of Mount Isa is progressing with an extensive new IP survey
underway to design the next round of drill tests.

Summit will use this data to identify and drill anomalies,
searching for deep-seated copper bodies similar to those being mined by
Xstrata to the north at Mount Isa.

ENDS

Copyright © 2006 RWE Australian Business News. All rights reserved.