CONICO LTD — Capital/Financing Update 2009

Aug 24, 2009

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EXPLORATION AND OPERATIONS UPDATE

Barra Resources Limited (“Barra”) is pleased to provide the market with the following update on exploration and operational activities at its Mt Thirsty, Phillips Find and Burbanks projects.

Mt Thirsty Project

Mt Thirsty is located 20 kilometres north-northwest of Norseman, Western Australia.

Earlier this year Barra and Joint Venture partner Fission Energy Limited set out to explore the Mt Thirsty area for a potential primary source to the world class Cobalt-Nickel-Manganese Oxide Deposit. Subsequent detailed surface geological mapping identified a very large lava channel system associated with the formation of the surface oxide deposit. Lava channels are the primary target for the accumulation of nickel sulphide mineralisation on the basal footwall contact or bottom of the channel.

After completing surface geophysical surveys over small priority areas delineated from surface mapping, the first ever diamond hole MTDD008 at Mt Thirsty was drilled (Figure 1).

Figure 1: Mt Thirsty geological interpretive map showing lava channel position, location of potential nickel sulphides on footwall contact, location of MTDD008, future planned drilling and position of Co-Ni-Mn Oxide Deposit.

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The discovery of primary nickel sulphide mineralisation in MTDD008 was announced on 1 July 2009. This hole was designed to test a substantial electromagnetic (EM) anomaly adjacent to the Mt Thirsty cobalt-nickel-manganese oxide deposit.

Barra Resources Limited (ABN 86 093 396 859) Mercury House, Level 3, 33 Richardson Street, West Perth, Western Australia 6005 Telephone: (08) 9481 3911 Facsimile: (08) 9481 3955

As previously reported, diamond hole MTDD008 intersected several zones of nickel sulphide mineralisation. The drill hole, collared at 372357E and 6447256N (AGD84 Zone 51) was orientated at 75[o] to the west and based on the current geological interpretation, the down hole intercepts are believed to be close to true width. Spot readings, using a Niton hand held XRF device on selected pieces of core from 2 to 5 centimetre thick stringer veins of massive sulphide returned readings of approximately 1% nickel but very low levels of cobalt and copper (Figures 2 and 3).

The most exciting discovery from the hole was a small 6 centimetre thick stringer of massive nickel sulphide caught up in a much younger Proterozoic aged mafic dyke. Narrow Proterozoic dykes are common in the Norseman-Kambalda area but don’t contain nickel sulphide mineralisation.

It is thought the dyke has thrust its way up from great depths beneath the earth’s crust through massive nickel sulphides on the basal footwall contact, dragging up fragments of nickel ore on its way to the surface (Figure 4). The interesting thing about this particular fragment is its unusually high values of cobalt (0.15%) and copper (0.60%), very different from the low grades of cobalt and copper returned from the massive stringer sulphide zones elsewhere in the hole.

Figure 2: Mt Thirsty Interpreted East-West Geological Cross Section through drill hole MTDD008, showing spot Niton readings of stringer sulphide veins and interpreted basal footwall target zone.

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Barra Resources Limited (ABN 86 093 396 859) Mercury House, Level 3, 33 Richardson Street, West Perth, Western Australia 6005 Telephone: (08) 9481 3911 Facsimile: (08) 9481 3955

Figure 3: Zoom-in of boxed area in Figure 2 showing Proterozoic dyke and its possible relationship with potential massive nickel sulphides on the basal footwall contact.

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Figure 4: MTDD008 6cm wide massive sulphide stringer near lower contact in Proterozoic dyke 759m depth.

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----- Start of picture text ----- Barra Resources Limited (ABN 86 093 396 859)Mercury House, Level 3, 33 Richardson Street, West Perth, Western Australia 6005Telephone: (08) 9481 3911 Facsimile: (08) 9481 3955----- End of picture text -----

Clearly, the nickel sulphide fragment within the dyke is from a different source. Coincidently, the cobalt grade of the nickel sulphide fragment is also close to the overall cobalt grade of the oxide deposit at the surface. It has been the long held belief of the Joint Venture that the high grade Cobalt-Nickel-Manganese Oxide Deposit may have formed from a primary nickel-cobalt sulphide source nearby. It is possible that extensive massive nickel-cobalt sulphides deposited on the basal footwall contact beneath Mt Thirsty are indeed that source.

During the early stages of drilling MTDD008, a Niton hand held XRF device was used to test selected pieces of core to verify the presence of nickel sulphides. Three spot readings of separate 1 to 5 centimetre thick stringer veins of massive sulphide were taken at various depths down the hole. The spot sampling of the core was conducted along the orientation line of the diamond drill core.

Niton XRF analysis is not considered a substitute for conventional analytical methods as such hole MTDD008 was prepared for more comprehensive laboratory analysis. These results were received several weeks ago and announced to the market. The results differed from the Niton readings due to the effect of dilution. The Niton machine takes a reading from a very small area of the core, about half the size of a five cent piece. Unfortunately something that small cannot be analysed by current laboratory techniques as the sample is too small. To enable an affective size sample a lot more material must be sampled along with the narrow sulphide stringers, hence diluting the overall result.

Follow-Up Exploration Programs

A down hole electromagnetic (EM) survey has recently been completed. This survey will determine if there are any strongly conductive bodies (e.g. large nickel sulphide accumulations) close to or beneath the drill hole. If a positive response is obtained consideration will be given to wedging off or deepening the hole with a higher capacity drill rig.

A surface EM survey is currently underway to test the up-dip extension of the interpreted footwall zone of interest. Any near-surface conductors would be immediately tested with shallow drilling (Figure 1).

*Note: The nickel grade estimates for diamond hole MTDD008 quoted in this release have been estimated using a Niton XLT 592 portable XRF analyser. These spot estimates are indicative only and have been provided to demonstrate that some highly anomalous nickel values are present throughout the hole. Niton XRF analysis is not considered a substitute for conventional analytical methods.

Phillips Find Gold Project

Phillips Find is located 50 kilometres north-northwest of Coolgardie, Western Australia.

Recently Barra announced results from a Rotary Air Blast drilling program testing various priority targets throughout the project area. The most significant result came from the Diablo Prospect in hole PFRB051. Initial four-metre composite sampling of PFRB051 returned 24 metres grading 4.6 grams per tonne gold from 44 metres to 68 metres (end of hole) down-hole including 8 metres grading 12.11 grams per tonne gold from 44 metres to 52 metres associated with quartz veining in the oxidised felsic rock adjacent to a hanging-wall contact with basalt (see Figure 5). Subsequent one-metre resampling of this same zone returned 24 metres grading 3.6 grams per tonne gold from 44 metres to 68 metres including 14 metres grading 5.75 grams per tonne gold from 44 metres to 58 metres, and 7 metres grading 10.84 grams per tonne from 44 metres to 51 metres.

The mineralisation at Diablo which remains open along strike to the north, south and down-plunge to the north, confirms for Barra the excellent potential to define a significant oxide gold deposit amenable to open-pit mining in the medium term.

Barra Resources Limited (ABN 86 093 396 859) Mercury House, Level 3, 33 Richardson Street, West Perth, Western Australia 6005 Telephone: (08) 9481 3911 Facsimile: (08) 9481 3955

Figure 5: Plan showing location of Diablo Prospect and hole PFRB051.

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The Newminster gold deposit which hosts a JORC Indicated Resource of 84,111 tonnes at 4.62 grams per tonne for 12,500 ounces and an Inferred Resource of 32,265 tonnes at 2.50 grams per tonne for 2,600 ounces has also been a prime focus for the Company. Recently an optimisation study was carried out on this resource.

Newminster is located adjacent to the Bacchus Gift and Newhaven open pits within the historical Phillips Find Mining Centre which produced some 50,000 ounces of gold from historical underground and open pit mining operations over the past 100 years.

The findings were made independently through a recent study by Minecomp Pty Ltd (“Minecomp”) on the Newminster deposit. Minecomp found that an economically robust open pit could be mined to a vertical depth of 45 metres.

When evaluated using current mining and milling costs, Newminster’s “base case” optimum comprised:

• An open pit shell containing 5,300 ounces of gold down to 45m depth.

• • At a gold price of A$1,150, the “base case” pit shell contains 31,736 tonnes of ore in the Indicated Resource category at 3.48g/t and 18,271 tonnes of ore in the Inferred Resource category at 2.97g/t .

• This delivers a combined total of 50,007 tonnes of ore at a diluted grade of 3.29g/t

• Operating cash costs are estimated at A$669 per ounce.

• • Therefore, this could potentially generate an operating profit of approximately $2.3 million and a return of some 42%.

The deposit is situated on a granted mining lease and was permitted for production back in 2003. The deposit could potentially be brought into production within months possibly under a similar tribute arrangement to Burbanks.

Barra Resources Limited (ABN 86 093 396 859) Mercury House, Level 3, 33 Richardson Street, West Perth, Western Australia 6005 Telephone: (08) 9481 3911 Facsimile: (08) 9481 3955

Follow-up Exploration Programs

Follow-up RC drilling at Diablo is currently being planned and Barra anticipates commencing this program during late September 2009. In addition, infill RAB drilling is also planned to followup anomalous gold mineralisation intersected along strike between Diablo and Bob Hope where the first pass RAB drill spacing varied from 40 by 80 metres to 80 by 160 metres apart.

Burbanks Gold Project

The Company recommenced mining operations on the 15[th] June at Burbanks under a new tribute mining and profit sharing agreement with Kalgoorlie based Mulgabbie Mining Pty Ltd with the view of capitalising on the current strong gold price. The arrangement will see Mulgabbie bearing all the development, stoping, transportation and milling costs while Barra shares all profits from the operation with Mulgabbie on a 50/50 basis. The project has the potential to generate between A$1.0 million and A$2.5 million in revenue over the next 6-12 months by focussing on the high grade components of the major lodes utilising hand held and smaller mechanised mining methods to maximise grade and reduce costs.

The first tribute ore parcel of 2,075 tonnes of Burbanks underground ore was successfully treated at the Ramelius Burbanks mill. From that parcel of ore a total of 323.214 oz’s has been sold on the spot market for $375,754.99. Profits from this campaign are currently being calculated and due for distribution shortly. Tribute mining is continuing with a total of 1,500 tonnes of high grade ore (estimated at 8g/t) on the surface at present.

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Dean Goodwin Managing Director Barra Resources Limited

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dean Goodwin who is a Member of the Australian Institute of Geoscientists. Dean Goodwin is a full-time employee of the Company. Dean Goodwin has sufficient 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”. Dean Goodwin consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Barra Resources Limited (ABN 86 093 396 859) Mercury House, Level 3, 33 Richardson Street, West Perth, Western Australia 6005 Telephone: (08) 9481 3911 Facsimile: (08) 9481 3955