questions

Hi Guys

per my previous post I have just received responses from David Harley to a number of questions I emailed last night - came through at 1131 EST so kust after my last post. I have been impressed with the way David has responded to my contacts over the last couple of months.
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My questions first, then his response marked by his initials DH.

The assay results out of MG48 are very disappointing indeed as it suggests to me that any decent copper at Chianti is a small deep deposit therefore probably uneconomic to explore further. Is this the sense that you get from Noranda? What do you think is likely to be their decision about ongoing drilling at Mt Gunson?

DH. The assays from Chianti Prospect were disappointing and Noranda, who incidentally are not the operators of the exploration program ( we are) I think believe that Chianti may be getting a bit hard for them. That said, if you look at the size of the TEM anomaly on figure 2, there is still plenty of room for a medium sized deposit at Chianti. Noranda do not say much but they have a difficult decision on the future of Mount Gunson. There are still 2 good untested gravity targets mentioned in the quarterly. Your guess is as good as mine. A very useful bit of background reading on the belt in which we are exploring is the December 2007 issue of Economic Geology - entirely devoted to mineral deposits in the Gawler Craton

MG14. Is the size of this project likely to be of interest to Noranda? Will they be considering it together with the work being done on analysing Windabout?

DH. MG 14 is too small for Noranda and I hope they will leave us to it. The dark horse is Windabout, which is 10 times bigger than MG 14. Noranda have done nothing of consequence on Windabout despite having been given the technical data a year ago. They were sitting on it as potential incremental feed for a plant based on a bigger iron oxide associated copper - gold deposit in the basement, which is yet to be discovered

Windabout. When can we expect to hear the results of the Windabout analysis by Xstrata? If it is positive and they wish to proceed what do they need to do to earn their rights? Do they have to do the balance of the $3.5 million drilling program or can that capital be utilised in other ways? (I assume this also applies to MG14).

DH. Windabout analysis by Xstrata. Good question, which they keep avoiding. See 2. above. They will not earn anything in the Mount Gunson Project unless they spend $3.5 million by mid June 2008. I do not believe that they can cut corners in the manner you suggest, although our Agreement does not cover this aspect specifically

Emmie Bluff. Since this is the biggest of our deposits at Mt Gunson is there any work to be done on it as well? Why was MG14 chosen ahead of Emmie Bluff for the joint project with Mines Trust?

DH. Emmie Bluff is at a depth of 1 km. Do I need to say any more?

Burkin. Now that BHP have elected not to exercise their rights (also disappointing), where does this leave GUN? Will we be proceeding with the diamond drill holes on our own? If so when, how many and by whom? Also why did BHP reject the prospect? Are they of the opinion that the aeromagnetic survey is not in fact encouraging?

DH. BHP rejected Burkin for internal reasons - they are focused on low risk exploration for Archean nickel sulphide deposits in the Norseman - Wiluna belt. This is plain dumb for a company like BHP. Burkin is higher risk but if successful could fill their nickel smelter at Kalgoorlie for decades, and is on the main railway line into Kalgoorlie. We intend testing the waters with other majors who are chasing nickel sulphides but the front runner is TeckCominco, who surround us at Burkin. As stated in the report, we have 3 targets, so one hole into each is the first pass preference

Coburn - congratulations on the recent excellent news on expanding reserves. Also on continuing progress on other aspects. There is no question that Coburn offers encouraging value potential for an investor so hopefully you will nail a contract with the Chinese sooner rather than later to allow progression.

DH. Coburn. We are in discussions with several Chinese companies who want to buy our product. Watch this space! Thanks for your kind comments on Coburn.