Unit 8, Level 1, Churchill Court 331-335 Hay Street Subiaco WA 6008 PO Box 190 West Perth WA 6872 Tel: +61 8 9382 8799 Fax: +61 8 9382 4760 ABN 60 060 525 206 ASX Announcement 16 March 2007 WNP Update The Company is pleased to update shareholders on the progress of drilling and work programs at the Windarra Nickel Project – WNP. Drilling has continued to intersect massive nickel sulphide mineralization at Denny Bore with NMD0004A intersecting two zones of massive sulphide mineralisation which are currently being logged and core cut for assay. Results will be released as soon as they become available. Drilling is currently proceeding on NMD0005 which is located approximately 100 metres north-west of NMD0004 and is positioned to gain a further understanding of the geological setting which hosts the high grade nickel sulphide mineralization at Denny Bore. Progress has been slow due to poor rig performance and break-downs though this should now improve with the refurbishment of the main drilling engine completed. It is expected the target zone will be intersected in the coming week. The arrival of a second higher capacity diamond drill rig is scheduled for the June quarter and is currently being prepared for transport by float from Queensland to Kalgoorlie where it will undergo final hydraulic fit-out . It is intended that this second rig will be utilized to complete the NMD0001F DHTEM platform hole at Mt Windarra and to further define the high grade massive nickel sulphide mineralisation located beneath the historic workings at Mt Windarra. The Company is pleased to advise that Mr Steve Eggart has been appointed the initial mine manager. Steve comes to Niagara from the Norseman operations of Croesus Mining and will guide the mine development during the recommencement of operations. A little further down the track Steve will take on the permanent responsibility as underground manager. Mobilisation of the initial underground mining contract workforce is underway with the arrival this week of key underground mining personnel, equipment and stores. Erection of the heavy duty workshop is taking place and installation of the electrical workshop is complete. Niagara’s electrical supervisor, Arthur Anderson commenced duties at Windarra on Monday 12th March. The occupational, safety and health officer has been appointed and he will commence duties at Windarra on 2nd April. A fully equipped ambulance has been purchased and placed at Mt Windarra and, subject to our own
Unit 8, Level 1, Churchill Court 331-335 Hay Street Subiaco WA 6008 PO Box 190 West Perth WA 6872 Tel: +61 8 9382 8799 Fax: +61 8 9382 4760 ABN 60 060 525 206 operational requirements, will be available for emergencies in the district if required. The portal haulage road at Mt Windarra has been re-established and application for approval for re-entry to the mine decline to begin mine refurbishment is progressing. Independent resource calculations for the “G Shoot” at Mt Windarra, initially down to the 10200RL (approximately 200 metres below surface), are expected to be delivered late next week to assist in the mine planning now underway. Resource calculations for the entire Mt Windarra mine area are ongoing with digitization of historic exploration and mine records essentially completed. It is expected that G shoot will provide the first nickel ore from the WNP and the Company is currently in discussions with a number of parties interested in taking the product. First ore is scheduled to reach the surface in the September quarter. Installation of an extended power plant is underway. This is required for the expansion of on-site services and for the commencement of de-watering of the Mt Windarra mine and its refurbishment. Dewatering pumps have arrived on-site this week with installation down the historic Mt Windarra mine shaft scheduled to be completed by the month's end, subject to works approvals. Piping for discharging the mine water is ready to be laid to the northern tailings storage facility (NTSF) with welding due to commence shortly. It is expected de-watering will begin by the end of the current quarter and continue until the end of the calendar year or completion, whichever comes first. At this point the mine will be completely dewatered allowing for mining operations to proceed including decline development towards the high grade massive nickel sulphide zone identified below the historic Mt Windarra mine workings. Submission of the South Windarra Nickel Heap Leach proposal to relevant government departments has occurred and the Company awaits the outcome. As announced previously, our initial work will focus on the small (150,000 tonnes) low-grade nickel sulphide stockpile situated on the northern side of the South Windarra pit. Test pits recently excavated from the surface of the adjacent dump has confirmed the presence of an even larger tonnage of nickeliferous material. Samples have been submitted for analysis and, whilst technically we must wait for the results, visual examination leads us to a confidence that the South Windarra Heap Leach project (SWHL) will expand to include the much larger tonnages of material available in the adjacent dump, as expected. At current nickel prices the cashflow projections are robust. Examination of other known nickel oxide resources is under way and we expect that this work will result in a substantial extension to the life of this operation at South Windarra.
Unit 8, Level 1, Churchill Court 331-335 Hay Street Subiaco WA 6008 PO Box 190 West Perth WA 6872 Tel: +61 8 9382 8799 Fax: +61 8 9382 4760 ABN 60 060 525 206 The Company looks forward to updating shareholders on the progress of its activities at the WNP over the coming weeks. Douglas C. Daws EXECUTIVE CHAIRMAN Note: The information in this report that relates to exploration results is based on information compiled by Mr Mick Elias, consulting geologist, who is a Fellow of the Australian Institute of Mining and Metallurgy. He has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration, and to the activity undertaken. He is qualified as a competent person as defined in the 2004 Edition of the “Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves”. He has consented to the inclusion of this information in the form and context in which it appears. The Australian Stock Exchange has not received and does not accept responsibility for the accuracy or adequacy of this release.
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