LOUNGE LIZARD EXPLORATION UPDATE Kagara Ltd is pleased to announce the results of hole LFPD0025W2W1W2W1 which was drilled approximately 80 metres down dip of the 33.70 metre nickel sulphide intersection announced on 14 December in hole LFPD0025W2W1W1W2. The hole intersected 13 metres of disseminated and blebby nickel sulphides in ultramafic cumulates followed by 3 metres of massive nickel sulphides (see section attached). The true width of the intersection is estimated at 60% of the down hole length. This hole confirms the continuity of the massive nickel sulphides on the basal contact over 80m and increases the down dip extent of the Lounge Lizard nickel sulphide bearing ultramafic to 600m. It is now planned to extend this hole to test for an interpreted flat lying fault that was intersected in drill holes approximately 100m to the north and which displaces mineralisation 200 metres to the east. Dependent on this result the massive nickel sulphides will be followed further down dip or drilling will be directed to the south along strike. Drilling is continuing. Joe Treacy EXECUTIVE DIRECTOR
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