MLS' 77 to 86 incl 2008 Annual report Jinka Plain Fluorite Prospect

Abstract

Central Pacific Minerals N.L. (CPM) on behalf of a Joint Venture consisting of itself (93.75%) and Magellan Petroleum Australia Ltd (6.25%) holds Mining Leases 77 to 86. The Leases are located in the Jinka Plains vicinity, about 340kms by road northeast of Alice Springs, Northern Territory. Delineation of the prospect by drilling and mapping were largely carried out during the period 1970-73, and has been reported previously. In the period since then, the leases have been retained, pending the development of a suitable marketing and development opportunity. CPM was put into receivership on 3 December 2003 and receivers and managers ran exploration activities until the completion of the asset sale process on 13 April 2004. Queensland Energy Resources Limited (QERL) was the successful buyer of the CPM assets including the Jinka tenements. Central Pacific Minerals NL itself has since been acquired by QERL. This report is a summary of both the past work and the 2007 program. The deposit geology is routinely reviewed from time to time, in case new information should come to light which might enhance the prospect and support a more in-depth review, or reworking of the geological interpretation. Of particular note in this regard is the similarity of the deposit in style to the Speewah Fluorite Deposit in the Kimberley region of Western Australia (110km southwest of Kununnurra), which is a more advanced project than Jinka. The steeply dipping veins of this deposit have been estimated to contain 4.4Mt indicated and inferred resources at 23.6% CaF2 to a depth of about 80 metres. Recent drilling has extended the known resource, and has identified new zones to be tested further in 2008 (as well as potential for associate epithermal copper gold and mafic-hosted vanadium mineralisation). Despite its significant tonnage advantage over the Jinka Deposit, Speewah is yet to be developed. NiPlats Australia Ltd (NiPlats) has acquired the deposit from Mineral Securities (Minsec) who remains a significant shareholder of NiPlats. Engineering, environmental studies and metallurgical testwork completed earlier by Minsec, did not appear to result in development. Projected high cost levels caused the Speewah partners to consult with potential customers before proceeding further. NiPlats is currently conduction advanced drilling and exploration activities to further assess the deposit (NiPlats, 2008). A major Southeast-Asian fluorite resource, whose economics is underpinned by strong by-product credits, is currently under development for supply to the global market. In 2005, Tiberon Minerals announced the completion of a final feasibility study on the Nui Phao tungsten-fluorite deposit in Vietnam (USGS, 2005). The deposit is estimated to contain a total of 55.7Mt at 8.13% CaF2 and 0.207% WO3 (Tiberon Minerals Ltd, 2007). Based on the September 2006 43-101 technical report, Tiberon anticipates production from the Nui Phao mine to begin in early 2009, ramping up to full production in the second half of 2009. Annual concentrate production is projected to average 4,788 tonnes of tungsten trioxide and 222,458 tonnes of acid-grade fluorite over a 16.3-year mine life. The shallow nature of the ore body allows Nuiphaovica to utilize conventional open-pit mining technology which, combined with significant by-product revenue from bismuth, copper, gold and silver, places the mine at the very low end of the production cash cost curves for both tungsten (US $18/mtu) and acid-grade fluorite (US$39/tonne). With the development of Nui Phao, Vietnam's share of annual global fluorite production is expected to reach 9%. During 2006, Vietnamese investment bank Dragon Capital, holder of 12% of Tiburon, made an offer for the remaining 88% of the company. In March 2008, the USGS considered that unless a significant upgrade of the ore grade was forthcoming from more drilling investigations, a viable mining operation may be difficult (USGS, 2008). A fluorite mining and/or processing operation at Jinka Plains is not economically feasible given the present prices available for potential fluorite products, and the status of the markets. Nevertheless, a future major price increase, or the emergence of a specific local market, cannot be excluded as possible triggers for a detailed reevaluation of project economics. Both the resource itself and its potential for development will continue to be kept under review.