Third annual report on EL 28273 Karinga Lakes year ending 13 April 2014

Abstract

EL 28273 is one of seven contiguous ELs in Rum Jungle Resources' Karinga Lakes Potash Project. Exploration is targeting potassium- and magnesium- sulfate-salts in subsurface salt lake brine to eventually produce potassium sulfate (SOP) and potassium magnesium sulfate (schoenite) fertiliser probably using staged solar evaporation in ponds and flotation in an onsite plant. The project has a recently upgraded JORC 2012 brine potash resource of 8.4 million tonnes K2SO4 including over 70% in the Measured and Indicated category. This is equivalent to 19 million tonnes of schoenite. The overall project previously involved a JV with ELs held by Reward Minerals and their subsidiary, some 50%:50% Reward and Rum Jungle Resources, as well as ELs held and operated wholly by Rum Jungle Resources. Rum Jungle Resources has been operator and sole-funding for several years. EL 28273 has always been operated by Rum Jungle Resources but was held jointly with Reward Minerals. Recently, this JV has been rationalised with Rum Jungle Resources having bought out the remaining proportion held by Reward Minerals and its subsidiary. Upon completion of the dealings, now being assessed for Stamp Duty, it is Rum Jungle Resources' intention to rationalise/amalgamate the whole of the area into a single company name which will allow the company to apply for Amalgamated Reporting and an Expenditure Project Area. The Karinga Lakes Project is currently undergoing a scoping study which is being lead by Chinese Group CICCC. This study should be completed during the next reporting period. Apart from being an adjunct to the JORC resource, EL 28273 also has strategic importance in terms of potential sites for evaporation ponds, plant and highway access. This will be assessed during the scoping study. As a result of the referral of a routine project MMP from DME to the EPA, Rum Jungle Resources cannot now undertake any on-ground work on this project until it has been approved by the EPA. As of the time of writing, such permission has not been forthcoming.