metals australia ltd outlook

Metals Australia Ltd “Outlook”

I see looking forward for “MLS” a number of positive announcements over the coming weeks and months for both;

1. Mile 72 Uranium Project - Namibia

2. Manindi Zinc Project – Western Australia

I will start with Manindi first. An update on Jorc upgrade is expected. Current 2000 jorc is 1,052,540 T @ 7.6% Zinc (at a 1% Zinc cut off grade). My expectation of an upgrade Jorc calculation amount is probably more conservative and realistic than what other ‘mls’ shareholders would have it.

If we got an upgrade of between 30% to 50% increase, I will be happy with that. Getting more than this I will be very happy.

As if you look at the last quarterly report for the period ending 31 Dec 2007 on pages 7-9. The long sectional views of those diagrams for Zone A, Zone B, Zone D South and Zone D north.

If you notice the 2000 Jorc resource outlines on all four views it’s hard to see more than 50% increase, than double plus, like a lot of investors are suggesting, that said, I really think they are really only hitting the surface with this one, they mentioned other ‘VMS’ Volcangenic Massive Sulphide deposits with similar geology i.e. ‘Oxiana’ golden grove’s and Jabiru Metals Ltd Jaguar’s deposit. All quite close by.

So typically ‘vms’ plays like those and mls’s Manindi will have repetition along strike and at depth as mention by Coffey mining, results of the detailed modelling as mentioned in page 6 of the last quarterly. This modelling shows that the ore bodies currently found, are part of a larger ore system that requires further exploration along strike, laterally and at depth.

This is how Oxiana’s golden grove started out. So I’m happy for them to keep drilling along strike and a lot deeper at depth if need. As it could end up having a number of 1,000,000 plus tonne loads at Manindi and you will find that the market will agree with that.

Summary Manindi is an evolving and growing story, a story with a number of chapters left in it, which is and will underwrite current and future share price for metals.

Now for “Mile 72 Uranium Project – Namibia

Firstly let me make this very clear, this prospect “IMHO” is and will be the company maker and I would bet that’s why management have fast tracked this development.

Considering it’s a green field site, they’ve had to start from scratch. When it was first secured by mls, it was thought of as a paleochannel prospect. I.e. Calcrete/Gypcrete shallow deposit, but wide spread, similar to wme/pdn deposits, (shallow by nature) regarding Namibia.

If you have noticed in the last few announcements on September 2007 activity report and the latest activity report for December 2007. Their has been a distinct omission and that is the word paleochannel i.e: there isn’t one at Mile 72. There is however a small depression on the central coast of Namibia, where Mile 72 prospect is, and that is all.

What we have here “IMHO” is a full blown “Rossing style” prospect, which has numerous times been indicated by the company. Quote page 4 or latest quarterly activity report Geological mapping and modelling at Kudu the geological team from UNAM have been contracted (paid) to assist in the exploration of the Mile 72 uranium project due to their expertise in alaskite-hosted uranium mineralization in southern Africa.

The preliminary mapping shows the basement geology to be a package of schistose sediments that has been variably intruded by a sequence of felsic intrusives including, leucogranites, alaskites and pegmatites. These intrusives have been mapped over significant intervals and show highly anomalous levels of radioactivity. Sampling has thus far only been undertaken in areas where scintillometer readings exceeded 500 counts/second, however further sampling is now underway.

We could probably expect some very exciting assay results, channel sampling from the trenches. As mentioned in the last activity update, drilling to commence before end of current quarter, my guess would be say mid March 08 i.e. 4-5 weeks time.

I have no doubt they have uranium there and at depth. My only question to be really answered how big is this prospect.

As Mile 72 prospect is “greenfield’ my nature the market will discount the company accordingly, as most other uranium miner’s have had historical drill holes associated with their prospects, i.e some value adding, that said Metal’s Australia Ltd Imo have done a great job to date, proving ups it’s virgin site, it’s no easy task, literally start from scratch to now drilling within weeks.

Which tells me they are extremely confident of their large prospect, as otherwise there board would not have approved an expansive and expensive drill program so quickly, as other companies in the area have had historical drilling information etc at their disposal. This makes Mile 72 prospect, very prospective indeed.

Because both Kudu and Implala are large targets. No doubt more to be found. Liken to the likes of bmn and ext.

As mls already proven they have the same geology as Rossing.

Summary Metals has lots going for them, in the short to medium term, and hence mile 72 project is a priority for the company.

The market has pushed down many exploration companies including mls. So we took the initiative and bought more of the heads last Friday. Being 650k @ 6.5 cents.

I am very positive about the company specially mile 72 project. With a market cap of just over $40,000,000 and more than 10% in cash, I class this as very cheap.

Combined this updated jorc of say 30%-50% increase for Manindi and good assay results from trenching, should bring the share price back to at least 10-12 cents in this current market. Then once drilling commences in 4-5 weeks at Mile 72 it should firm up higher.

If the drilling results are up to expectation as I believe it possibly to be from good first past drill program a share price from 20-25 cents range is highly likely. As mls will then seriously contemplate a very substantial and ongoing exploratory drill program. “Exciting times for mls”

Regards Expand

Disclaimer this is my interpretation only “DYOR”