The Yerecoin magnetite project is located 10 kilometres east of New Norcia and 150 kilometres north of Perth, within 1 kilometre of existing rail access.  Moderately dipping Archaean aged Banded Iron Formation (“BIF”) outcrops over a strike length of approximately 1.5 kilometres within the tenement area on wooded hills within cultivated paddocks.  A detailed aeromagnetic survey flown by Giralia in late 2007 highlighted significant strike extensions to the outcropping iron formations, with around 10 kilometres of strike of magnetic anomalies on Giralia’s tenement.

An initial program of reverse circulation (“RC”) drill traverses and deeper diamond core holes was completed in February-March 2009 to test the subsurface grade and thickness of the iron formations and provide fresh material for metallurgical testwork. A total of 23 holes (2043 metres) were completed including 3 diamond core tails (295.5 metres) in five drill traverses across outcropping and buried BIF units over around 3 kilometres of strike.

The drilling intersected moderately dipping (45 to 65 degrees) magnetite mineralisation, with better intersections of; 72 metres @ 32.4% Fe including 56 metres @ 35.7% Fe and 50 metres @ 30.3% Fe within 116.3 metres @ 21.7% Fe.

Sighter Davis Tube recovery testwork was completed on a selection of pulp samples from the drilling program to establish magnetic separation characteristics. Results from the sighter magnetite recovery tests are very positive, returning average weight recoveries of in excess of 40%, and DTR concentrate grades of over 70% Fe, and less than 2% SiO2, which indicate potential for a premium product.

Further grind optimisation testwork confirms that the mineralisation has very favourable liberation characteristics, and is amenable to much coarser grinding than is usual for Western Australian magnetite deposits.  The work has established the optimum grind size for magnetite liberation is likely to be around 80% passing 100 microns, and even at 80% passing 150 microns a concentrate grading 69.3% Fe and 3.37% SiO2 was returned.

Note; samples from hole RDY002, 201- 215 m, head assay 36.9% Fe, 44.2%SiO2.  P80  38 microns = 80% passing size

The Company has entered an option agreement to acquire a key tenement adjoining the Company’s 100% owned Yerecoin magnetite iron ore project. The new tenement contains in excess of 20 kilometres of strike of outcropping and magnetically interpreted banded iron formation (BIF), significantly extending the current 10 kilometres of strike at Yerecoin.

Geological mapping and sampling of the outcropping iron formations on the new tenement is planned prior to initial drill testing.

Fig 1: Yerecoin 2009 drill hole locations on aeromagnetic image