Royal extremely pleased..worth reading Royal Resources Limited...

Royal extremely pleased..worth reading


Royal Resources Limited (ASX code – ROY) recently announced a high grade hematite discovery at the Shine Prospect within the Warriedar Joint Venture (Gindalbie Metals maintaining 60%, ROY 40%) in the Midwest region of
Western Australia.

Can you explain the extent of the high grade intersections?
Can you describe the quality of the drill results? What do the drill results tell you about the project so far?

Chairman Phil Crabb
The assay results from this very broad spaced drilling at the Shine prospect are extremely promising, but more importantly are very encouraging for locating further hematite mineralisation in the Warriedar Joint Venture areas.

I should add that the high grades and the wide drill intersections in some holes came as a pleasant surprise.

The detailed surface mapping within the Shine prospect area
indicated that the hematite alteration was limited in width and intermittent along strike. The first two drill holes of the program, SNC001 and SNC002 recorded 65 metres at 55.4% Fe and 60 metres at 62.6% Fe respectively. Our interpretation of these initial results clearly indicates that the surface expression is not necessarily a
good guide to what might exist below the surface. It is important in our exploration work that we do not overlook those areas where there is no outcrop and that we need to be very thorough in drill testing.

From the results to date we consider there is very good upside in these prospect areas. Other significant results include 60 metres at 62.6% from 59 metres, 27 metres at 63.1% from 55 metres and 22 metres at 63.9% from 44 metres. The planned drilling programs going forward will be to confirm that we can establish a robust hematite resource in this area.

corporatefile.com.au
What was the extent of the Phase 1 RC drilling program, particularly in terms of metres drilled the number of drill holes and the spacing between each hole?

Chairman Phil Crabb
The recent drilling, comprising some 3,670 metres on three prospect areas, is a major test program. The results from the Shine prospect have indicated that the hematite mineralisation extends over a strike of at least 800 metres with widths of up to 65 metres. These parameters provide a very sound basis on which we can proceed to the next stage of drilling which will confirm the continuity of the
hematite mineralisation and the depth to which it extends. Both of these areunknowns at present.

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How do these results compare with other iron ore deposits, particularly in terms of width and grades? To what extent will the depth of the mineralisation be a factor in proving up an economic project?

Chairman Phil Crabb
It is too early to make any valid comparisons at this stage however within the Midwest region Mt Gibson Iron’s Tallering Peak hematite mine is probably one where we can make a comparison. The Tallering Peak hematite mine has been a success story for Mt Gibson Iron where they are presently producing about 3 million tonnes per annum of hematite lump and fine ores. One of the main ore bodies being mined at present at Tallering Peak is the T3b open pit which is a high grade hematite resource with low contaminants. The main part of the ore body is approximately 60 metres wide and extends over a strike in excess of 800 metres. The current drilling at the Shine prospect has returned comparable results and we will know after the next round of drilling if we can start to make a valid comparison.
The Shine, Lister and Gap prospects are located some 3-4 kilometres from the Minjar gold mining operations (presently on care and maintenance) which in turn is located 5 kms west of the world class Golden Grove base metals mine. Most of the infrastructure we need is close by and for an iron ore mining operation to be economically viable the proximity of infrastructure is of paramount importance. I do not want to jump the gun, but we have more positive here than negatives and that is a good situation to be in.

corporatefile.com.au
When do you expect the assay results from Phase 1 drilling on the Gap and Lister
Prospects? What are your expectations with reference to the geology?


Chairman Phil Crabb
Gindalbie Metals Limited (“GBG”), our joint venture partner, is managing all aspects of the drilling and geology and they have completed some excellent work
to date. We have not yet received the complete record of data for these two prospect areas and the geology is still being interpreted. It would be hard to beat the data from the Shine prospect if we are to use the near surface expression of the altered Banded Iron Formation. The geology we know will vary and this is a reflection of the original depositional environment and the subsequent tectonic activity. The Gap prospect at surface did not have the same robust surface expression as Shine and therefore we may expect this to be indicative of what is at
depth.
You know this is the great part of exploration – you just never know what will come from the next drill hole.

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What amount of further drilling might be required to determine whether you might have a project worthwhile pursuing to feasibility stage? What is planned in the Phase 2 drilling program?

Chairman Phil Crabb
As I have mentioned, this is managed by Gindalbie and they have indicated to us that the next round of drilling will commence early in the 2008. Some of the holes for the next program have been approved, however additional holes will be
required and the regulatory approval for these is now being sought. So the upshot of this is that there are logistical issues and although it would be expedient to be able to continue drilling there are these other matters that we need to co-ordinate.
The next phase of drilling will be to fill the gaps of the present drilling, bring the line spacing down to 100 metres and start looking further along strike under areas of cover. This is where the elephants often hide.

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What might Royal’s involvement be in the event that a commercial project is established at the Warriedar Joint Venture? What are you future obligations?

Chairman Phil Crabb
Under the terms of the Warriedar Joint Venture (WJV) Gindalbie are maintaining their 60% interest by the expenditure of $1.0 million over 3 years – and we have
now completed the first year as of June 2007. Royal’s 40% is free carried up to when this commitment is met and then we will be required to contribute on a pro rata basis. In the event that a commercial operation is established we will look at the options available to us – these could be to elect to remain in the WJV and contribute, dilute or sell our equity. We will consider both what is best for Royal’s shareholders and where we should be putting our energies in growing the company.

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This year, Royal acquired several uranium exploration projects in Colorado and Utah. What are the next activities planned?

Chairman Phil Crabb
Our decision to move to the USA and commence a very aggressive acquisition program of uranium projects has been one of Royal’s highlights for 2007. We went to the USA in April and in a very short time formed two Joint Ventures and
as of the end November 2007 have staked unpatented lode claims covering about 197 square kilometres. It is very important to emphasise here that the project areas
we have acquired through the JV’s are areas of historical proven uranium production. We are in a uranium producing area and all that is required of us is to drill and locate the old uranium hosting paleo-channels that lie beneath the
surface. This puts Royal well ahead of the race to be in production – and at the same time to be located in a country that has over 100 nuclear power stations and an increasing future demand.
To again emphasise our commitment here – after eight months of commencing our activities in the USA we have started drilling on the Egnar project and we are in advanced negotiations with landholders who have substantive uranium
resources on their properties. This could not be said for the many uranium exploration companies here in Australia.

corporatefile.com.au
Can you outline the field activity you’ve commenced at your Pilbara iron ore projects? How will these be progressed?

Chairman Phil Crabb
Our Pilbara projects are now at a point where we can start to move forward. We are expecting the last three project areas to be granted before the end of the year and we have just submitted our first Programme of Work to undertake broad spaced drilling on our Railway project area to the north-east of Newman. Once approvals are given we would expect to be drilling in February 2008.
On our other project areas our surface rock chip sampling has identified mineralised BIF and we will be looking to drill test these areas in 2008. The short answer is we are now progressing our work on these areas and we expect to be
announcing to the market some encouraging results throughout 2008.

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In addition to the projects discussed, what will be the focus for Royal in 2008?

Chairman Phil Crabb
Royal will remain committed to the projects it currently has – iron ore in Western Australia and uranium in the USA. We have about $7 million in the bank and this will be used mainly to increase the exploration efforts on our uranium projects in the USA and to acquire uranium resources. Our iron ore exploration will be maintained and we will be drilling our Pilbara projects in 2008.

I should add here that since arriving in the USA we have been approached to look at other projects outside of those we presently have. Royal have very experienced people who have the breadth of experience in mining and exploration to be able to assess the technical and economic merits of projects relatively quickly. We have decided that if we can increase shareholder wealth through the acquisition of say a
gold project then we will pursue this avenue. This is one of the benefits of being a small Australian company working in what is now a very much global industry – we can make soundly based quick decisions where we identify an opportunity – 2008 should be a great year for Royal.

corporatefile.com.au
Thank you Phil.