I think it will be hard to compete against this.RegardsNEW...

I think it will be hard to compete against this.

Regards

NEW DRILLING RESULTS CONFIRM MAJOR EXTENSIONS TO WINDIMURRA VANADIUM DEPOSIT
Results from a new 2006 drilling program at Precious Metals Australia Limited’s Windimurra vanadium
project in Western Australia have significantly extended the strike length of the world class deposit.
Results of eight new RC drill holes at the Windimurra project - already the world’s largest proven
vanadium ore reserve – have extended mineralisation 550 metres along strike. Grades of up to 1.45%
V2O5 were encountered, with the best intercepts including 15m at 0.82% from 3m depth.
Results from 12 additional holes are still to come from the new 2006 drilling program.
The results from these first eight holes are extremely pleasing, and demonstrate a continuation of the
mineralisation at surface, in widths that allow cheap bulk mining via a pit entirely within ore, and no
requirement for blasting. Geological mapping, costeaning, ground geophysics, aeromagnetics and limited
reverse circulation drilling previously indicated extensions to mineralisation at depth and along strike to
both the north and south, which are now being tested.
Highlights of new results:-
• Assays for eight new RC holes at Windimurra extend mineralisation 550m along strike. Results for
12 additional holes to come.
• All holes intersect ore grade immediately at surface.
• All holes ended still in ore grade.
• Average grade of entire length of all holes, is ore grade.
• Grades of up to 1.45% V2O5 encountered. Best intercepts include 15m at 0.82% from 3m depth.
• Estimated grade from new area bulk at 0.52% V2O5.
• Results demonstrate a continuation of the mineralisation at surface, in widths that allow cheap bulk
mining a pit entirely within ore, and no requirement for blasting.
• Windimurra is already the largest published proven vanadium ore reserve of any deposit anywhere
in the world.
• All reported JORC reserves and resources are contained within a 4,000m segment of the 26,000m
strike length within PMA’s granted mining leases.
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• Known extensions to mineralisation at depth and along strike, as defined by geological mapping,
aeromagnetics and limited RC drilling are now being tested.
• 20 hole RC programme completed in January/February 2006 on 200m spaced lines, is expected to
significantly lift indicated resources of surface material.
• Recalculated resource inventory expected by end April 2006.
New Drilling Programme
A total of 20 reverse circulation holes were drilled on 200 meter line spacing, for a total of 1,950 meters
from the northern end of the current resource. The holes were positioned similarly to the previous drilling
in respect of the orebody, and have given similar results.
All assays of the first eight holes are reported in the attached table. These holes were drilled at a spacing
of approximately 50m apart across lines 200m apart heading north along strike starting from the existing
resource, the calculation of which currently ends at grid line 11,750N. The first eight holes on lines
11,900N, 12,100N and 12,300N therefore extend the drilled mineralisation by a further 550m north.
The holes were drilled eastward across strike at a 60o dip, giving apparent intercepts approximating true
widths. Notable is that all holes started in ore grades from surface, and finished in ore grades at hole end.
Using the same cut-of as was used in the resource statement, Coffey Mining advise that the estimated
grade for the area covered by the eight hole results is .52% V2O5, which is higher than the existing
resource grade.
Grades of up to 1.45% V2O5 were encountered with best intercepts include 15m at 0.82% from 3m depth
in hole WR264.
Reserve and Resource
Reserves and Resource calculations to date by Coffey Mining are based on detailed drilling conducted by
PMA prior to 1998, confined to a 4,000m section of the 26,000m mineralised horizon. As the reserve
contained within that section was already of world class and gave a long mine life, further work was not
felt to be warranted at the time. The current drilling is the first since 1998.
Significant potential to add to the reserves and resources was previously identified, with extensions to
mineralisation at depth and along strike, as defined by geological mapping, costeaning, ground
geophysics, aeromagnetics and limited drilling. This work indicated the continuous nature of the
mineralisation, and defined a large horizon hosting significant vanadium mineralisation over a 26km
length within PMA’s tenements. The new drilling will confirm the extent of the resource along strike to the
north.
Windimurra is already considered one of the most straightforward open pit mining undertakings in
Australia, due to absence of overburden or ongoing waste removal, soft oxidised ore, low production
requirement, shallow depth, no dewatering and ground control, easy blending of ore at the face, and no
grade control requirement.
Geology
Mineralisation is in the form of vanadiferous magnetite hosted in magnetite gabbros of the Shephards
Discordant Zone (SDZ). The SDZ is a discordant intrusive within the regional Windimurra Complex,
comprised of a series of basic to ultrabasic intrusives.
Reserves and Resources
The reserve and resource model was updated late last year to reflect the material mined, and using a new
redrawn final open pit, which gave the following resource and reserve calculations announced on 20
December 2006. The reserve grade reflects the mining method which is to bulk mine and process all
material mined from surface with no attempt at selectively mining higher grade zones which exist within
the mineralised zone.
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The existing Proven Reserve is 50.4 Mt @ 0.489% V2O5 based on the parameters used to calculate the
resource, with a dilution factor of 10% and a recovery factor of 95%. This reserve is included within the
following resources at a 0.275% V2O5 cut-off grade: Combined Measured and Indicated Resource: 95.53
Mt at 0.47% V2O5 in oxidised and unoxidised material, including 58.33 Mt at 0.47% V2O5 in oxidised, and
37.19 Mt at 0.47% V2O5 in unoxidised material.
It is expected that all outstanding results will be received, and a new resource inventory calculated by end
April 2006.
Mining Experience
Due to the great width and shallow nature of the Windimurra ore body the waste:ore stripping ratio since
commencement of mining was only 0.05:1. This is an extremely low waste penalty for any open cut mine.
A more common ratio experienced in South African or other Australian vanadium resources is over 3.00:1,
meaning that 60 times as much waste must be mined for every tonne of ore. Other deposits also require
100% blasting, whereas Windimurra does not. Ore mining costs at Windimurra are therefore a small
fraction of these competitors’ costs.
Since commencement of mining in August 1999 to closure in December 2002, 7.32 Mt ore at 0.535%
V2O5 was delivered to the Windimurra plant. Reconciliation carried out by Coffey between the resource
model and actual production shows vanadium content mined was 5% in excess of that modelled.
From a mining aspect, the Windimurra project is considered one of the most straight forward and lowest
cost open pit mining undertakings in Australia.
The performance of the open cut mining technique has been tested by the mining of 7 million tonnes of
ore during 2000 – 2002 demonstrating:
• No pre-stripping required
• Almost no waste mining
• Shallow depths being exploited
• Dewatering and ground control requirements are minimal
• Ore blending is easily undertaken at the face
• No grade control drilling/supervision required
• Minimal drill and blast necessary
• Rehandle of material is minimal
• The haul distance to the ROM pad is relatively short.
The new drilling confirms major extensions to mineralisation of similar qualities to that already delineated.
Yours sincerely
PRECIOUS METALS AUSTRALIA LIMITED
RODERICK SMITH
Managing Director