THICK ZONE OF NICKEL MINERALISATION INTERSECTED IN DRILLING AT...

THICK ZONE OF NICKEL MINERALISATION INTERSECTED IN DRILLING AT GREEN DAM

KEY POINTS
RC drilling intersects 45m @ 0.60% Ni & 0.23% Cu within a 700m-long mineralised zone.

Drilling in progress – further results pending from sulphide intersections.

Potential for large-tonnage Ni-Cu deposit.

A 1,200m reverse circulation (RC) drilling program is in progress at the Green Dam prospect in the Roe project, 120km east of Kalgoorlie (Figures 1 and 2). The eight hole program is designed to follow up results of previous reconnaissance drilling (announced on 21st February 2007) which confirmed a nickel-copper sulphide zone over a strike length of 700m near the basal contact of the Green Dam mafic-ultramafic complex (Figure 3). The aim of the program is to infill around the best result from the previous drilling of 16m @ 0.74% Ni,
0.37% Cu & 0.16g/t Pt+Pd (including 2m @ 2.2% Ni, 1.41% Cu & 0.35g/t Pt+Pd) in drillhole YRC009 and to test other basal contact positions of the mafic-ultramafic complex along a 1km strike length.

The second drill-hole in this program, YRC013, which was drilled beneath YRC009, intersected a thick zone of Ni-Cu mineralisation comprising 45m @ 0.60% Ni & 0.23% Cu from 162m (Table 1), approximately 40m down-dip from the intersection in drill-hole YRC009
(Figure 4).

This intersection included an intercept of 2m @ 2.04% Ni & 0.20% Cu which may be correlated with the intercept of similar width and grade in drill-hole YRC009 (Figure 4).

The mineralisation appears to be thickening with depth in this area.

Assays for the upper parts of drill-holes YRC012 and YRC013 are pending as are results from the other drill-holes. Several zones of disseminated and massive sulphides have been logged in the other drill-holes. Pt and Pd results for the intervals reported above are also
pending. The remaining assay results should be available within the next two weeks.

A number of factors indicate the potential for a large-tonnage Ni-Cu deposit at Green Dam:

• The mineralised zone appears to be at least 700m long and is open along strike to the northwest and southeast.
• Most of the historic drilling at the prospect is relatively shallow and mineralisation is open at depth – the results from drill-hole YRC013 demonstrate the depth potential.
• The basal contact position which hosts the latest results is very poorly tested.
• Several historic drill intersections at the prospect are of a similar nature to those reported above (Table 2).

A substantial drilling program is planned at the prospect to determine the potential for a large-tonnage deposit.

A helicopter-borne electro-magnetic (VTEM) survey of the northern part of the project was flown recently (Figure 2). This technique is designed to detect massive sulphide mineralisation up to several hundred metres below surface. The survey mapped five
significant conductors in the Yindi Ultramafic Belt (Figure 2) one of which is over the area of current drilling (i.e. around and to the southeast of drill-hole YRC013). These anomalies highlight the potential of the belt to host further zones of mineralisation. Ground EM surveys and drilling programs are planned to test the anomalies to the north of Green Dam.

Magma Metals Limited holds a 100% interest in the tenement over the Green Dam prospect.