speculative buy

RM RESEARCH PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE OF RM CAPITAL PTY LTD (AFSL 221938)


 




2 Q Update…targeting Uranium resource by 2H 07 7th February 2007
Recommendation: SPECULATIVE BUY
GICS Industry: Materials
Capital Structure:
Share Price A$0.16
Fully paid ordinary Shares 201.5m
Partly Paid Shares (0.1c , 2.3c 08/08) 36.0m
Listed Opt (ex 5c, exp 24/08/08) 79.3m
Listed Opt (ex 20c, exp various hurdles) 9.5m
Unlisted Opt (ex 10–18.8c, exp 11/7-11/9) 8.6m
Market Capitalisation - diluted A$50.7m
Cash Position (31/12/06) A$2.0m
Share Price Year High-Low A$0.25 -0.07
Directors:
Non-Executive Chairman Rodger Johnston
Technical Director/CEO Leon Reisgys
Executive Director Terence Shanahan
Major Shareholders:
Shareholder Shares %
Nefco Nominees Pty Ltd 16.3m 8.1%
Accord Investment Corporation P/L 9.0m 4.7%
CSBC Fourth Nominees Pty Ltd 8.9m 4.4%
Temorex Pty Ltd 6.2m 3.1%
National Nominees Limited 5.2m 2.6%
Kaliara Nominees Limited 5.1m 2.5%
Minerichie Investments Pty Ltd 4.6m 2.3%
12 Month Share Price History:
Investment Highlights

West Australian Metals Ltd (“WA Metals” or “the Company”) has executed a
agreement to acquire 80% of the highly prospective Marenica Uranium
Project in Namibia;

Gold Fields had previously estimated a palaeo-channel hosted uranium,
resource (non-JORC) of 40Mt at 200ppm eU3O8 containing 8,000 tonnes
(around 18 million pounds) of U3O8 outlined by 32,000m of drilling;

Although lower grade than similar deposits (cf Langer Heinrich 32Mt at
700ppm U3O8), the resource demonstrates that significant amounts of
uranium mineralisation is present and abundant scope remains to define
higher grade areas;

The mineralisation defined to date is very similar to the nearby Langer
Heinrich deposit and the Project is also prospective for “Rossing” style
mineralisation;

Results from trench sampling by WA Metals within an 18 km2 area in the
northeast sector of the project confirm the presence of significant and wide
spread areas of near surface uranium mineralisation with assay results up to
1,483ppm U3O8;

Field work has located about 1,000 holes of the 2,000 holes previously drilled
by Gold Fields. Open holes will be surveyed using down hole radiometric
logging to allow uranium concentrations to be estimated at various intervals
below ground. Importantly this would result in less holes having to be redrilled
with considerable time and cost savings;

Previous exploration has only covered approximately 30% of the Project area
and only minimal exploration has been carried out on 25km of the main
Marenica Palaeo-channel;

Metallurgical testwork carried out by Gold Fields has indicated that
mineralised material from Marenica can be treated using conventional
processing techniques to achieve high uranium recoveries;

The Company is looking to undertake its first round of drilling on both
previously drilled areas and virgin targets at the Marenica Project within 1H
2007;

Political hurdles to production and export should be low as Namibia is a
member nation of the International Atomic Energy Agency and currently an
exporter of uranium products.
OUTLOOK

WA Metals continues to advance the Marenica Uranium Project with a multifaceted
exploration programme;

The location of a large number of previously drilled holes will allow for an
accelerated exploration programme;

The Company plans to have a JORC-compliant resource calculation
completed on the project within 2H 2007.
RM RESEARCH PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE OF RM CAPITAL PTY LTD (AFSL 221938)
Prospective for ”Langer Heinrich” and
“Rossing” style mineralisation
Company Background
West Australian Metals Ltd (“WA Metals”) is an ASX-listed mineral explorer that
has recently turned its focus to uranium exploration at the Marenica Project, an
exciting project in Western Namibia.
Marenica Uranium Project (WA Metals earning 80%)
The Marenica Uranium Project (the “Project”) is located in Namibia, 60km north of
the Rossing Uranium Mine and 90km northeast of the town and deep-water port
of Walvis Bay. The Project comprises a granted Exclusive Prospecting License
(EPL 3287) covering 706km2 and contains palaeo-channel type uranium
mineralisation similar to the Langer Heinrich Deposit, which has recently
commenced production. In addition, the Project covers ground prospective for
Rossing (7% of world uranium production) and vein style uranium mineralisation.
Location of the Marenica Uranium Project
Disclosure of Interest-CORPORATIONS ACT s849
In consideration for previous services to be provided by RM Research
Pty Ltd (“RMR”), RMR will receive fees of A$12,500. Representatives,
Authorised Representatives and directors of RM Capital Pty Ltd and RM
Research may hold shares in West Australian Metals Ltd.
Know Your Client-CORPORATIONS ACT s851
This document has been prepared for the general information of
investors and not having regard to any particular person’s investment
objectives, financial situation and particular needs. Accordingly, no
recipients should rely on any recommendation (whether express or
implied) contained in this document without obtaining specific advice
from their advisors at RMR.
DISCLAIMER
RMR makes no representation, gives no warranty and does not accept
responsibility for the accuracy or completeness of any recommendation
or information contained herein and RMR will not be liable to the
recipient or any other person in contract, in tort for negligence or
otherwise for any loss or damage arising as a result of the recipient
acting on any recommendation or information herein except insofar as
any statutory liability cannot be excluded.
RM RESEARCH PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE OF RM CAPITAL PTY LTD (AFSL 221938)
Typical terrain at the Marenica Project area
32,000m of drilling completed by Gold
Fields…focussed on the north -eastern
portion of the project
The area is semi-desert and access is very good due to the flatness of the terrain
and the existence of established roads and tracks.
In April 2006, WA
Metals entered into
a JV to earn an
80% interest in the
Marenica Uranium
Project. Approval
of the joint venture
has been received
from the Ministry of
Mines and Energy with environmental clearance for exploration activities received
from the Ministry of Environment and Tourism.
The Marenica uranium mineralisation was discovered in the 1970’s along with a
number of other significant uranium bearing palaeo-channels in the same
province, including the Langer Heinrich deposit. Reports held by The Geological
Survey of Namibia show that to the end of 1982, when the area was relinquished,
Gold Fields of South Africa Ltd had completed around 32,000m of drilling in more
than 2,000 holes on the Marenica Project. This work had focused on the northeastern
sector of the project area where airborne radiometrics, supported by wide
spaced trenching and pitting located four major uranium anomalies (Anomalies 1-
4) covering close to 7km2. Uranium mineralisation was also reported between and
adjoining Anomalies1-4 within a broader airborne radiometric anomaly covering
18km2.
The four major anomalies were investigated by detailed geophysical surveys and
drilling. Closer spaced drilling, in places to a 40m x 40m grid, was undertaken to a
depth of 35m with holes radiometrically probed to allow log based grades to be
calculated. Gold Fields reported a resource within the eastern half of the EPL, of
40Mt at 200ppm eU3O8 containing 8,000 tonnes (around 18 million pounds) of
Marenica Project showing
target resource area
RM RESEARCH PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE OF RM CAPITAL PTY LTD (AFSL 221938)
Mineralisation was also encountered in
weathered granite, pegmatite and schists …
…as well as in the palaeo-channels
Out-cropping uranium mineralisation
(circled) at the Marenica Project.
Trench excavated by previous explorers
and sampled by WA Metals
U3O8. This resource was outlined in the shallow palaeo-channels and weathered
bedrock to a maximum depth of only some 20m. Although this resource estimate
is not compliant with the JORC code, the estimate was carried out by an
international mining company and a uranium inventory summary was prepared
and submitted by Gold Fields to the Nuclear Development Corporation of South
Africa. This resource statement conformed to the then internationally accepted
protocol for reporting of uranium mineralisation to the International Atomic Energy
Agency.
Higher-grade zones within this body of mineralisation were encountered and
reported higher-grade intersections included;

9.7m at 980ppm e U3O8;

8.1m at 500ppm e U3O8;

11.7m at 240ppm e U3O8; and

3m at 754ppm eU3O8.
The mineralisation present in these anomalies consists of carnotite in palaeochannel
sediments. Mineralisation was also encountered in weathered granite,
pegmatite and schists.
Importantly, the area explored by Gold Fields covered only 30% of the presentday
Marenica exploration licence and did not include large sections of the 25km
long Marenica Palaeo-channel interpreted to traverse the project area.
Exploration work on the project by Gold Fields ceased in 1982 as a result of
depressed uranium prices.
Since acquiring the project WA Metals has undertaken a multidisciplinary
exploration programme which includes geological mapping, satellite imagery
interpretation, airborne and ground geophysics, rock and trench geochemical and
radiometric sampling and will shortly commence radiometric sampling of old drill
holes and social and environmental studies. This programme is conjunction with
drilling is designed to achieve the Company’s objective of defining a JORC
compliant resource within the area previously drilled by Gold Fields in 2H 2007.
Numerous exploration trenches and pits within an 18 km2 area hosting surface
and near surface uranium mineralisation in the northeast sector of the project
area have been sampled and radiometrically surveyed. The results confirm the
presence of significant and wide spread areas of near surface uranium
mineralisation with assay results up to 1,483ppm U3O8. Significant results
received included:

Trench A4T3 - 3m @ 1,483ppm U3O8

Trench A4T2 - 5m @ 868ppm U3O8

Trench A4T2 - 80m @ 241ppm U3O8, including 5m @ 590ppm U3O8

Trench A3T1 - 50m @ 160ppm U3O8 and 45m @ 153ppm U3O8

Trench A2T1 - 125m @ 120ppm U3O8
RM RESEARCH PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE OF RM CAPITAL PTY LTD (AFSL 221938)
Trench sampling returned numerous “oregrade”
intersections
… airborne radiometric and magnetic survey
has recently been completed over a 135km2
area of the EPL

Trench A1T2 - 60m @ 540ppm U3O8 (including 5m @ 1,005ppm U3O8)
and 35m at 151ppm U3O8 (including 5 m @ 262ppm U3O8).

Trench A1T4 - 10m @ 242ppm U3O8 (including 5m @ 376ppm U3O8).

Trench A1T12 - 130m @ 113ppm U3O8 (including 5m @ 235ppm U3O8).

Trench A2T4 - 70 metres @ 130ppm U3O8.

Trench A2T5 - 20 metres at 192ppm U3O8 (including 5m 305ppm U3O8)
Trench sampling results from phase 1 (above) and phase 2 (below)
Importantly, the results of the sampling programs show that the highest uranium
grades in the trenches are located in the most north-western and south-western
trenches indicating likely extensions, or presence, of higher grade zones outside
of the sampled area with a further 25km of largely untested palaeo-channel
interpreted to extend west within the project area.
RM RESEARCH PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE OF RM CAPITAL PTY LTD (AFSL 221938)
Gold Fields testwork…favourable
metallurgy
Radiometric logging of previous drill holes will
save considerable time and cost
high-resolution airborne radiometric and
magnetic survey has recently been completed
over a 135km2 area of the EPL
Radiometric logging of historic holes
may be used in future resource
calculations
A program to locate in the field some 2,000 historic drill holes (totally 32,138m)
drilled by Gold Fields of South Africa has commenced. This drilling was the basis
for Gold Fields’ resource estimation. To date about 1,000 holes have been
located with the remainder expected to be located during the current quarter. The
principal purpose of the current program is to ascertain whether any of these old
holes are still open and acceptable for down hole radiometric logging to allow
uranium concentrations to be estimated at various intervals below ground. Such a
logging program would greatly add to the existing database of information.
Importantly it could also result in the company not having to re-drill a significant
number of holes resulting in considerable time and cost savings - and allowing the
company to execute a more focused drill program in the near future.
A close spaced high-resolution airborne radiometric and magnetic survey has
recently been completed over a 135km2 area of the EPL. The survey was
designed to radiometrically map the uranium areas drilled by Gold Fields in the
north-east sector of the licence as well as to detect other anomalies and
geological environments that may relate to possible primary uranium targets in
the basement rocks. The survey data is currently being processed by a leading
geophysical company.
Furthermore, a detailed geological interpretation of the entire 706 km2 Marenica
exploration licence using satellite imagery and airborne magnetic and radiometric
data has been commenced. RM Research is confident that that this work will
greatly contribute to the geological understanding of the project area as well as
identify new targets for future exploration for uranium.
Additional to the above programs recently completed or initiated, the following
programs are presently being planned to commence during the current quarter;

Field checking and sampling of new anomalies/targets interpreted from
the airborne and satellite studies;

Radiometric logging of historic drill holes. The results will be analysed
and used in planning future drilling programs to allow calculation of a
JORC compliant resource.

A radon survey to investigate areas covered by barren surface material
for new areas of concealed/blind uranium mineralisation within the
interpreted palaeo-drainage system.

Environmental and socio-economic studies.
It is also important to note that metallurgical testwork was carried out by Gold
Fields, including extensive beneficiation work, radiometric sorting, attritioning, and
alkaline leaching on mineralised calcrete and weathered schist/granite samples
containing secondary uranium mineralisation. The metallurgical program indicated
that mineralised material from Marenica can be treated using conventional
processing techniques and has provided important information on the
metallurgical characteristics of mineralised material at Marenica.
RM RESEARCH PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE OF RM CAPITAL PTY LTD (AFSL 221938)
OTHER PROJECTS
WA Metals holds a number of uranium,
base metal and gold projects in Australia as
well as a 1.125% gross production income
share from the Badgebup Gold Project in
Western Australia. The Company is
considering divesting or farming-out the
non-uranium projects in order to
concentrate on the Marenica Uranium
Project and on the acquisition and
evaluation of new uranium opportunities.
DIRECTORS
Rodger Johnston
Non-Executive Chairman
Mr Johnston has a Bachelor of Economics degree from the University of Sydney
and was a Member of the Australian Society of Accountants (CPA Australia) from
1976 to 1996. He commenced his career as an insolvency specialist, rising to the
level of Senior Management.
During the 1980's he managed a private investment company following which he
was principal of a venture capital firm for a period of eight years.
Mr Johnston is Chairman and CEO of ASX listed IC2 Global Limited and a nonexecutive
director of People's Merchant Bank Limited which is listed on the
Colombo Stock Exchange.
Leon Reisgys
Executive Director and Acting CEO
Mr Reisgys holds a Bachelor of Science (Honours) in Applied Geology from the
University of New South Wales and a Graduate Diploma in Mineral Economics
from Macquarie University.
Mr Reisgys brings to West Australian Metals extensive experience in the
successful exploration for and the development of uranium, base metals, precious
metal and mineral sand deposits in Australia and internationally. Mr Reisgys'
experience includes six years as a uranium geologist with Pechiney Australia Pty
Ltd and Total. During this period, Mr Reisgys explored for and evaluated
Australian uranium deposits of all types, and was a member of the teams credited
with the discovery of the Manyingee and Ben Lomond uranium deposits in
Australia.
Mr Reisgys has served as Managing Director and Chief Executive Officer for
several ASX listed companies.
Terrence Shanahan
Non-Executive Director
Mr Shanahan, a former funds manager has consulted to various projects in the
mining sector. He has experience in corporate matters including corporate
restructures, new business acquisitions, new listings and capital raisings. He was
a founding shareholder and director of Astrovision Australia Ltd, a company now
51% owned by Horizon Global Ltd.
CONCLUSION

The Company is in an excellent position to fast track exploration by virtue of
the fact that numerous holes (of 2,000 holes drilled by Gold Fields) may be
accessible for re-surveying using down hole radiometric logging;

Recent trench sampling in the north-east of the project area has also
confirmed the presence of significant and wide spread areas of near surface
uranium mineralisation with assay results up to 1,483ppm U3O8;

RM Research is optimistic of a JORC compliant resource by end of 2H 2007.
RM RESEARCH PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE OF RM CAPITAL PTY LTD (AFSL 221938)
RM CAPITAL GROUP DIRECTORY
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Corporate Finance
James Richardson + 61 8 9321 3277 [email protected]
Guy Le Page + 61 8 9321 3277 [email protected]
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