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History of Deposit Exploration

• Mabrouk Minerals Pty Ltd – “Mabrouk Minerals” - first noted the potential for Iron Ore at Cashmere Downs in 2003.
• An airborne magnetic survey revealed strong magnetic anomalies associated with prominent Banded Iron Ridges. This led to:

• Large scale assessments designed to delineate potential Iron ore targets based on satellite imagery and
• Aeromagnetometry
• Preliminary gravity surveys
• RC reconnaissance drilling program and
• Preliminary metallurgical testing.

        

Resource Definition

Inferred Resource (Mabrouk Minerals: Mackay and Schnellmann 2005)

• Preliminary exploration led to a Resource Definition Program, which covered the southern portion of the NW Target Area. This area is located on the NW flank of the northern synclinal structure. The program was conducted from late 2004 and 2005 by Mackay and Schnellmann (Geological Consultants).

• The program included geological mapping, geophysical interpretation and RC drilling with down hole geophysical surveys. This work covered 2.5km of the ridge top meta-BIF.
• Iron mineralization is present as Magnetite Banded Iron Formation (BIF) at depth, and near surface oxidized Haematite.
• The JORC (Australasian Joint Ore Reserves Committee) Code compliant Inferred Resource was estimated at:

• Haematite Banded Iron Formation: 25M Tonnes at 35.6% Fe and Magnetite Banded Iron Formation: 135 M Tonnes at 36.7% Fe.
• Total for both Types; 160M Tonnes at 36.5% Iron.

• Beneath the Inferred Resource, is a Magnetite Banded Iron Formation Deep exploration target of 179M tonnes.
• Davis Tube testing showed that a high-grade Fe concentrate with over 40% weight recovery could be produced from the resource.
• In Oct 2007 a new JORC Resource Program was commenced to drill the entire 7.5km of the NW Target Area.
• All geological work and program supervision has been by Consultants MacKay & Schnellmann.
• 91 holes were drilled for over 16,000m of RC drilling and 1600m of diamond core.
• 3m down hole composites were tested by Davis Tube for concentrate quality and recovery.
• Metallurigical testing by AMMTEC and Promet Engineers.

JORC Compliant Resource Statement (Mackay and Schnellmann 2010)

Leading resource consultant Mackay & Schellmann Pty Limited completed the independent JORC Code compliant magnetite and hematite resource estimate at Cashmere Downs. The resource estimate summarized below is above 200m RL, which represents a depth of 350m below the surface:

Mineral Resource Summary Table (Mackay and Schnellmann 2010, March)

Metallurgical studies show that a magnetite concentrate of greater than 66% Fe with Silica levels of 4.5% SiO2 can be achieved with a weight recovery in excess of 40%.

This gives a combined Magnetite-Haematite Resource total of 1,014 million tones of which 92% falls within the Measured/Indicated categories.

Additional Deep Target Mineralisation

Below the magnetite bearing banded iron formation resource and from a depth of 200m RL to 0m RL, Mackay & Schellmann Pty Limited find there to be a magnetite bearing banded iron formation target that ranges from an additional 660Mt to 920Mt. No grade is ascribed to this deep exploration target, nor is any opinion expressed on the Davis Tube recovery. This deep exploration target is considered to be conceptual in nature at this time as there has not yet been sufficient exploration to define the mineral resource and it is uncertain whether further exploration would result in determination of mineral resources. A major high-grade magnetite deposit of strategic significance.

Further Reconnaissance/Exploration (Magnetite/Haematite)

• Drilling along strike south of the NW Measure/Indicated Resource has also intersected significant magnetite core enrichment giving DTR's of over 68%Fe with +42% weight recoveries
• Eastern ridges show a repition of rock types similar to the western flank of the structure.
• Reconnaissance RC drilling of the NE Target Area has intersected high grade magnetite bearing meta-BIF.
• Geological mapping has revealed other magnetite bearing meta-BIF units within the southern block of the tenements. Potential haematitic deposits have also been mapped. These take the form of haematitic channel fills, canga deposits that flank the main ridges and haematitic cap enrichments of the BIF, which has give rock chip results as high as 64% Fe.
• Exploration for iron channel deposits will begin at the Arrowhead structure within the NW Target Area. A drilling program is planned to define an open-ended 1500m long haematitic canga filled channel.