EL 10316 Reward Annual progress report for the period ending 21 July 2009

Abstract

EL 10316 Reward is located approximately 700 kilometres southeast of Darwin and some 20km west and south of the world class McArthur River zinc-lead mine. The Reward project comprises several occurrences of zinc + lead mineralisation, including the Reward lead deposit, which was discovered and mined briefly in the late 1950's by Mount Isa Mines Ltd. MIM retain title to a small Mining Lease over the Reward deposit. Rox Resources Limited ('Rox') entered into an Option to Explore and Purchase Agreement (the 'Option') with North Mining Limited ('North') over the Reward tenement in January 2008. In September 2008 Rox exercised the Option to purchase the tenement from North. A diamond core exploration drilling program was conducted over the Myrtle Sub-basin prospect in the southern portion of the Exploration Licence from May to July 2008. A total of 2,057 metres of was drilled in 6 diamond core holes, and 295 metres in 2 RC holes. Significant intersections of Zn and Pb sulphide mineralisation (sphalerite and galena respectively) were made in this drilling. Assays were previously reported in 2008 for the first four holes (MY-016 to 019), and assays for the last four holes (MY-020 to MYR-023) are reported herein: MY-020: 3.0 metres grading 4.7% Zn + Pb from 327 metres depth, 6.3 metres grading 5.3% Zn + Pb from 339 metres depth, including 3.0 metres grading 5.9% Zn + Pb from 339 metres depth, 8.9 metres grading 6.6% Zn + Pb from 363.1 metres depth, 3.0 metres grading 4.0% Zn + Pb from 430 metres depth. MY-021: No Significant Results MYR-022: 11 metres grading 4.3% Zn + Pb from 60 metres depth, including 3 metres grading 6.3% Zn + Pb from 60 metres depth, MYR-023: 6 metres grading 3.6% Zn + Pb from 115 metres depth. Geological interpretation based on the drilling results suggested that the mineralised zone should outcrop. Soil sampling identified a Zn anomaly greater than 200ppm which was also coincident with an IP anomaly from a 1967 survey. Extension of the soil sampling has defined a 2km long soil anomaly peaking at 580ppm Zn. An Inferred Mineral Resource for the Myrtle zinc-lead deposit has been estimated using JORC Code guidelines. This is 37 million tonnes grading 4.2% Zn, 1.0% Pb (5.2% Zn+Pb) at a 3% Zn+Pb cut-off. A high grade core is present of 15 million tonnes grading 5.5% Zn, 1.5% Pb (7.0% Zn+Pb) at a 5% Zn+Pb cut-off, demonstrating that Myrtle is a significant new mineral deposit in the Northern Territory. The size of the resource is currently limited by drilling, and it is felt the ultimate potential resource will be several times larger. A Scoping Study is now underway to investigate various economic aspects of a mining operation at Myrtle. Expenditure on the project during the reporting year totalled $459,636.