Annual exploration report Year 11 MLN 1154 Merlin 15 June 2008 to 14 June 2009

Abstract

Activities completed during the reporting period included the processing of core and pit samples for total diamond content. This work is being done to determine resource grades and to confirm the continuation of grade at depth within the tested pipes. As a prelude to undertaking prefeasibility production trials, the Merlin pilot processing plant is being upgraded in a series of stages aimed at increasing throughput to in excess of 50tph and to also test a number of process components to enable the finalization of the processing flowsheet. Two programs of resource definition drilling were completed during the previous reporting period. The first program targeted the Gawain pipe and included a total of 11 diamond drill holes (NMGW-001 to NMGW-011) for a total of 2,432 metres. The second program targeted the Palsac pipe and included a total of two diamond drill holes (NMPS-001, NMPS-002) for a total of 1,242 metres.