Mount Peake Project Second Group Annual Report GR226/12, 18 February 2012 to 17 February 2013

Abstract

The main focus of the Mount Peake project has been evaluation of the potenitally world class Fe-V-Ti deposit which lies within EL 29578. The project has reached Feasibility with a final report due Q4 2013. In April 2012 eight regional holes for 1266m were drilled within EL 23271 (now EL 29578), EL 27069 and EL 27941. The reverse-circulation (RC) drilling programme was aimed at confirming the presence of additional magnetite-gabbro (the host to the Fe-V-Ti mineralisation at the Mount Peake deposit) within large magnetic features around the existing Mount Peake deposit. Assay results from two of the assayed holes have produced grades consistent with those noted at the Mount Peake deposit of >0.2 percent V2O5. HELITEM was flown over previously identified anomalies BGC1/G9 (EL 27070), G10, G13 and M1 (EL 23271/EL 29578) and G34 (EL 27069). Recommendations for geochemical testing and drilling has been made for two of these targets. Core from ARD01, drilled by Discovery Nickel in 2004 was reanalysed for carbon with grades of 6% being returned over intervals within 252-263m. A total of 59 RC holes and 14 diamond holes were drilled over the Mount Peake Fe-V-Ti deposit in late 2012. The RC drilling programme was designed primarily to upgrade the existing resource to measured status. In addition, bulk RC samples would be provided to METS to supplement the diamond drill metallurgical program if required. The diamond drilling program was designed to provide samples for metallurgical testwork. Good continuity of grade and thickness was apparent throughout the deposit. The best intercept from hole 12MPRC096, where high grade mineralisation was encountered from the base of the thin transported cover sand unit at surface to the end of the hole, providing a total intersection of 147 metres at 0.48 percent V2O5, 8.80 percent TiO2 and 31.9 percent Fe. Several holes, including 12MPDDH020, contain mineralisation from the top of the coring section, further illustrating the thin transported cover that overlies the deposit. Results were sent to Snowden for a resource update. The Prefeasibility results were released in July 2012 based on the updated Indicated and Inferred Resource for Mount Peake published on 12 October 2011 of 160Mt at 0.3 percent V2O5, 5 percent TiO2 and 23 percent Fe. The positive results have meant that progression to Feasibility is warranted and Arccon Mining Services were commisioned to undertake the Definitive Feasibility Study in February 2013. An Environmental Impact Study will be undertaken by GHD. Discussions regarding the commercialisation of the TIVAN hydrometallurgical process have commenced with a highly regarded European engineering firm and due diligence is currently being carried out. A formal agreement has been signed with the CSIRO for the completion of a pilot plant trial. The CSIRO will undertake the design, construction and operation of a pilot plant, which will run continuously for up to 15 days to provide critical information for the scaleup to an industrial-sized plant for the Mount Peake mining operation.