CAZALY RESOURCES LIMITED — Capital/Financing Update 2009

Sep 16, 2009

17 September 2009

ASX RELEASE DRILLING UPDATE - HUCKITTA PROJECT

The Directors of Mithril Resources Limited (ASX:MTH) are pleased to provide an update on the initial phase of drilling at Blackadder and Baldrick along with other field activities on the Company's Huckitta Project (Figure 1).

• Mineralised gabbroic rocks (assays pending) intersected in the initial phase of drilling at Blackadder and Baldrick.
• High grade copper values (up to 8.6% copper) returned from surface rockchip $\bullet$ samples from the Manuel Copper Prospect.
• Drill targets delineated at Basil, Manuel, Edmund and Kevin Darling. Heritage $\bullet$ Clearance surveys on eleven regional targets to facilitate drill testing are due to commence next week.
• The drill rig is to remain on-site so that drill programs can re-commence on the completion of downhole electromagnetic surveys ('DHEM') at Blackadder and the heritage clearance surveys over regional targets.

Blackadder - Baldrick Drill Program

Three shallow drillholes totalling 327m were completed on the Blackadder Prospect testing the mineralised contact of the Blackadder gabbro intrusion and the associated conductor identified in the ground and airborne electromagnetic ('EM') surveys (Figure 2). The first hole at Blackadder (BARC002) intersected the upper contact of the targeted gabbroic body at 22m and the basal contact at 52m. Disseminated sulphide mineralisation was noted from 42m increasing in intensity to 3%-5% stringer sulphides from 50m-52m. The second drillhole, collared 95m to the east, intersected the gabbro between 21m-54m. Traces of sulphides are present throughout the gabbro increasing to 3%-5% blebby sulphides (~5mm in size) on the basal contact between 51-54m. The third drillhole was targeted beneath BARC-003 and did not intersect the gabbro suggesting the body is plunging to the west (Figure 3). The mineralisation encountered to date is encouraging but does not explain the observed conductive response in the ground or airborne EM results.

DHEM surveys will be completed in the drillholes to help target areas of more intense mineralisation. Assays are pending.

At the Baldrick Prospect, three shallow drillholes were completed targeting the mineralised contact of the Baldrick gabbroic body. Hole BARC005 missed the body intersecting metasediments to 91m. Hole BARC006 collared in the gabbro. 2-3% secondary copper mineralisation (malachite), along with blebs of sulphides and possible gossan fragments, were noted from 22m through to the contact at 28m. BARC006 was targeted on the main gossan at Baldrick in an effort to better understand the contact relationships and mineralisation. Significant malachite (to $5\%$ ) was intersected in gabbro between 9-11m and again from 12-13m in quartz veining at the contact of the gabbro and metasediments.

From the drilling and surface mapping completed to date the geometry of the Baldrick intrusion appears quite complex. DHEM will be completed in hole BARC005 and a decision on further drilling will be based on the results along with assay values.

Two holes were completed west of Blackadder testing ground and airborne electromagnetic conductors. BARC001 (Blackadder West) was drilled to a depth of 139m and intersected a sequence of metasedimentary rocktypes (quartzites and calcsilicates) commonly containing 1-2% disseminated pyrrhotite, pyrite and minor chalcopyrite. Between 79m to 84m the sulphide content in a calcsilicate unit increased to 5% with metre intervals containing up to 10-15% sulphides as stringers which may explain the targeted conductor. DHEM surveys are planned.

The second hole at Blackadder West intersected a similar package of metasedimentary rocktypes along with a mafic unit from 110m-132m that contained up to 3-5% sulphides. DHEM surveys are planned for this hole.

The Blackadder and Blackadder West targets are situated on the Harts Range Joint Venture where Mithril may earn up to an 80% interest in ELs 25451 and 25453 for all minerals other than uranium from Oklo Uranium Limited (ASX: OKU). The Baldrick Prospect is situated on the Treasure JV where Mithril may earn up to an 80% interest in EL 25346 held by United Origin Limited and Aluminex Resources Limited.

Regional Target Confirmation

Since the initial discovery of high grade nickel and copper mineralisation at Blackadder the Company continues to identify previously unmapped mineral occurrences suggesting a large, fertile magmatic event occurred at Huckitta with the potential to host significant nickel sulphide deposits. The recent helicopter-borne geophysical survey utilising the Geotech Versatile Time-domain Electromagnetic (VTEM) system identified 24 priority targets in the region and systematic ground confirmation of these targets has commenced (Figure 4).

Ground electromagnetic surveys over the VTEM anomalies situated west of Edmund and Kevin Darling Prospects delineated bedrock conductors that require drill testing. These prospects are located on EL 25653 where Mithril is earning an 80% interest from Sammy Resources Pty Limited, a wholly owned subsidiary of ASX listed Cazaly Resources Ltd (ASX:CAZ).

Basil and Manuel Copper Prospects

As previously announced, field verification of two VTEM conductors on Mithril's 100% owned Leaky Bore tenement identified extensive gossan, ironstone and altered

outcrops with rockchip samples returning anomalous values of copper, cobalt, silver and gold (the Basil and Manuel copper prospects).

Ground electromagnetic results from Basil delineated several strong electromagnetic conductors in close proximity to high-grade copper rock chip samples (Figure 5). The mineralisation is widespread and further mapping extended the alteration and mineralised horizons to the northwest, outside of the existing VTEM coverage. The mineralisation and alteration system has now been mapped over a strike extent of 5km and remains open to the northwest.

Further geological mapping at Manuel identified abundant secondary copper mineralisation in amphibolites as well as primary copper sulphides (chalcopyrite) in close proximity to the previously reported gossan and ironstone (Figure 6). Assays from rock chips returned values of up to 8.6% Cu, 458ppm Co, 11.2g/t Ag, 0.22g/t Au and 0.23% Zn. Ground electromagnetic surveys confirmed the presence of a strong shallow conductor coincident with this outcropping mineralisation.

Drill testing of targets identified at the Basil and Manuel Prospects will commence following the successful completion of the heritage clearance surveys that are scheduled to commence next week.

Further updates will be provided when assays are received and drilling re-commences.

For more information visit www.mithrilresources.com.au or contact:

Graham Ascough Managing Director admin@mithrilresources.com.au

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr G Ascough, who is a full-time employee of the Company and a Member of the Australasian Institute of Mining and Metallurgy. Mr G Ascough has more than five years experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr G Ascough consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Figure 1: Project location with rockchip sampling highlights.

Figure 2: Blackadder & Baldrick Prospects - coloured magnetics on satellite image with drillhole locations and selected rockchip samples. The yellow dashed line is the ground EM conductor at Blackadder West.

Figure 3: Long section through the Blackadder Prospect showing interpreted plunge and target area.

Figure 4: Huckitta project area showing priority targets highlighted by the yellow boxes. Mineral occurrences are indicated by the red stars.

Figure 5: Basil Copper Prospect - VTEM results and simplified geology superimposed on a satellite image. Conductive anomalies are indicated by the red-pink colours. The triangles represent surface rockchip and lag samples with green indicating > 0.1% copper and red indicating $> 1.0\%$ copper. Blue is $< 0.1\%$ copper.

Figure 6: Manuel Copper Prospect - VTEM results superimposed on a satellite image. Conductive anomalies are indicated by the red-pink colours. The triangles represent surface rockchip samples with green indicating $> 0.1\%$ copper and red indicating $> 1.0\%$ copper. Blue is $< 0.1\%$ copper.