COPPERMOLY LIMITED

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ADDRESS PHONE PO Box 6965 +61(07) 5592 1001 Gold Coast Mail Centre FAX Qld 9726 Australia +61 (07) 5592 1011 EMAIL ABN 54 126 490 855 [email protected] WEBSITE www.coppermoly.com.au

ASX Announcement

27 October 2009

ASX Code: COY

QUARTERLY TECHNICAL REPORT – SEPTEMBER 2009 (AND CURRENT UPDATE)

HIGHLIGHTS

Letter Agreement signed with Barrick for farm-out of Coppermoly tenements.
Rights Issue, shortfall and placement raises $2.2 million.
Talelumas rock sample results of 9.47 g/t gold and 552 g/t silver.
Further drilling warranted at Simuku to define near surface secondary copper enrichment.
Coppermoly’s interest in EL 1077 Simuku increased from 90% to 100%.

1.0 CORPORATE

The Entitlements Issue of shares and free attaching options received applications for 10.7 million shares and 5.3 million options, raising approximately $0.5 millon. The Company placed the shortfall of 30.3 million shares and 15.1 million options, raising an additional $1.5 million.

On 9 October 2009 Barrick (PNG) Exploration Ltd (Barrick), a wholly owned subsidiary of Barrick Gold Corporation, one of the world’s pre-eminent mining companies, signed a Letter Agreement (LA) with Coppermoly Ltd and its subsidiary, Copper Quest PNG Limited. Barrick can earn up to a 72% interest in exploration licences EL 1043 (Nakru), EL 1077 (Simuku) and EL 1445 (Talelumas) through a Farm-in and Joint Venture arrangement.

Barrick has committed to a minimum expenditure of AUD$3 million within the first two years. If Barrick withdraws at any time after it has met the minimum expenditure but before it earns 72% equity in the Farm-in, it will not retain any interest in the exploration licences.

Barrick must sole fund minimum expenditure of AUD$20 million on exploration expenditure within 8 years of commencement date to earn 72% equity.

Once Barrick has earned 72% equity, Coppermoly can elect that the payment of its share (28%) of ongoing costs incurred up to the production of a feasibility study may be delayed until that stage to be repaid from 50% of its share of revenue.

Upon satisfaction of the conditions of the LA Barrick will subscribe for 6,309,647 shares at $0.09 representing approximately 5% thereby injecting AUD$567,868.23 into Coppermoly. The shares issued to Barrick will be subject to voluntary escrow for a period of 24 months.

The Letter Agreement is conditional on the satisfactory completion of due diligence by Barrick prior to 5pm on 9 November 2009. After Barrick’s due diligence and the share placement are completed, Coppermoly will have approximately $2.8 million in cash.

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2.0 PROJECT SUMMARY

Coppermoly Ltd is an Australian based company, listed on the Australian Stock Exchange (ASX) and Port Moresby Stock Exchange (POMSOX) that is focussed on exploring for copper-goldmolybdenum and gold deposits on the Island of New Britain in Papua New Guinea. It holds full title to three Exploration Licences EL 1077 (Simuku), EL 1043 (Mt. Nakru) and EL 1445 (Talelumas) covering 170 km[2] .

Projects are located in an excellent geological environment (refer to Figure 1) and close to essential infrastructure including roads, an airfield and an operating deep water port at the provincial capital of Kimbe.

Major exploration programs have been successfully completed at Simuku where 6,021 metres of drilling in 31 diamond drillholes and 28 kilometres of bulldozer surface trenching have defined a 3,500 metre by 650 metre copper envelope of mineralisation. A maiden Inferred Resource has been estimated at 200 million tonnes of 0.47% copper equivalent* within one-third of the known area of surface mineralisation. Near surface secondary copper enrichment was intersected in at least eleven drillholes. Additional drilling is required to define the extent of near surface secondary copper enrichment and to expand on the size of primary copper mineralisation.

At Mt.Nakru, 2,380 metres of drilling in nineteen diamond drillholes and nine kilometres of bulldozer surface trenching have defined copper-gold mineralisation associated with geophysical anomalies which are yet to be fully tested by drilling. Drilling results from our first two drill holes into the Nakru-2 prospect have helped in re-evaluating and improving our understanding of the mineralisation potential within all of our tenements. Drilling intersected 6.7 metres grading 3.8% copper and 8 metres grading 3.18% copper at 25 metres depth, related to a 700 metre diameter hydrothermal breccia or volcanogenic hosted massive sulphide (VHMS) system.

The Talelumas tenement partly surrounds the northern and western periphery of the Simuku tenement (refer to Figure 1). The Isme Creek and Mt.Misusu prospects within the tenement are within a one hour drive from the provincial capital of Kimbe with access through tracks built in 2008 for the Simuku camp. An outcrop rock chip sample from the Isme Creek prospect returned assays of 9.47 g/t gold, 7.94% zinc, 552 g/t silver, 0.15% copper and 7.05% lead. The Mt. Misusu coppermolybdenum prospect returned eight copper anomalous rock samples including 1.07% copper and 109 ppm molybdenum.

Topography of all Coppermoly project areas is moderate, at between 300 metres and 800 metres above sea level, enabling relatively easy conditions for on-site development and logistics. Access to Simuku from the provincial capital of Kimbe takes one hour using a four wheel drive vehicle via a logging road. Access to Nakru takes approximately four hours driving along roads and logging tracks.

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Figure 1: Coppermoly Projects on New Britain Island

3.0 EXPLORATION AT TALELUMAS (EL 1445)

The Talelumas Exploration Licence (EL1445) encompasses the northern and western periphery of the Simuku tenement. The area was explored previously by CRA Exploration, BHP, Nord Resources, Esso, City Resources, Macmin NL and Placer (PNG) Exploration from 1965 to 1995. Drainages within the entire tenement have been covered by historical regional stream sediment sampling together with limited ridge and spur and grid-based soil sampling.

Coppermoly sampled rocks from outcrop and stream float from three gold and copper anomalous areas at Mt. Misusu, Isme Creek and Talelumas Creek Prospects (refer to Figure 2). A soil sampling grid was also completed at the Talelumas Creek Prospect.

The Isme Creek prospect was initially identified from historical stream sediment anomalies and historical rock samples which included 0.86% copper, 0.77 g/t gold, 0.74 g/t gold and 0.58 g/t gold. The prospect occurs as a zinc anomalous area approximately 2.3 kilometres long by 1.0 kilometre wide and is located on a major structural “Kulu-Awit” trend, which traverses the island (refer to Figure 1).

At Isme Creek, Coppermoly collected thirteen outcrop samples (refer to Figure 3) with one sample grading an exceptional 9.47 g/t gold, 552 g/t silver, 0.15% copper, 7.94% zinc and 7.05% lead. Six samples assayed highly anomalous zinc (refer to Table 1).

These results present a promising target for ongoing exploration, particularly in light of last year’s drilling at our Nakru-2 prospect where zinc and other base metals were encountered in semimassive sulphide.

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Figure 2: Prospects in the Talelumas Tenement

Table 1: Isme Creek Prospect Rock Sample Assay Results

Sample Number	Gold (g/t)	Silver (g/t)	Copper (ppm)	Molybdenum (ppm)	Lead (%)	Zinc (%)
97287 <0.01 0.1 16 <1 - 67.000 97288 0.02 0.2 36 2 - 136.000 97289 0.04 0.5 240 <1 162.000 1,450.000 97290 1.09 3.6 508 3 0.050 1.320 97291 0.02 1.2 50 2 149.000 0.019 97292 9.47 552.0 1,510 19 7.050 7.940 97293 0.27 5.8 346 4 0.637 8.010 97294 0.66 3.0 197 5 0.236 1.870 97295 0.4 3.6 352 30 0.056 1.560 97296 0.08 3.5 275 37 0/071 1.380 97297 0.03 2.8 251 3 0.063 0.220 97298 0.06 1.9 124 3 0.103 0.307 97299 0.06 0.6 29 <1 - 0.043

At the Nakru-2 prospect in the south of New Britain Island, historical outcrop samples in creeks obtained values up to 21% zinc. The first two holes drilled by Coppermoly last year encountered significant base metal and precious metal mineralisation associated with semi-massive sulphide including 7 metres grading 3.36% copper, 2.0% zinc, 0.19g/t gold and 11g/t silver.

Previous explorers have paid little attention to high lead and zinc occurrences as they were more interested in copper and gold mineralisation in the Talelumas/ Simuku area. This promising, newly identified, style of mineralisation within the Talelumas tenement represents additional economic potential to the larger copper systems under evaluation. There are some similarities between the Nakru-2 mineralisation and that found in the outcrop rock sampling at Isme Creek.

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Figure 3: Isme Creek Prospect Rock Sample Locations

At the Mt. Misusu copper-molybdenum prospect, nine out of the eighteen samples collected by Coppermoly were anomalous in copper including 1.07% copper and 109 ppm molybdenum (refer to Table 2). These samples occur within a copper anomalous area of 850 metres by 500 metres where historical rock sample results of 7.89% copper and 0.85 g/t gold, 3.66% copper and 0.80 g/t gold were located (refer to Figure 4). Further work is required at Mt. Misusu to define a likely sub parallel porphyry mineralised system such as demonstrated at nearby Simuku.

Table 2: Mt. Misusu Prospect Rock Sample Assay Results

Sample Number	Gold (g/t)	Silver (g/t)	Copper (ppm)	Molybdenum (ppm)	Lead (ppm)	Zinc (ppm)
97260 0.03 0.2 645 26 19 40 97261 0.03 1.2 30 <1 29 280 97262 0.01 4.8 16 <1 155 563 97263 <0.01 0.2 15 <1 4 102 97264 <0.01 0.2 1,540 <1 45 267 97265 0.10 2.0 7,290 12 13 174 97266 0.08 1.2 7,390 34 2 84 97267 0.07 2.1 10,700 109 11 280 97268 0.05 0.8 4,300 102 10 246 97269 0.06 2.7 6,750 384 8 637 97270 0.03 0.6 435 4 11 107 97271 0.12 1.0 2,970 4 14 153 97272 0.03 0.4 837 1 24 36 97273 0.01 0.6 103 1 14 30 97274 0.09 1.0 618 12 8 17 97275 0.39 1.1 2,430 17 27 61 97276 0.02 0.5 853 <1 16 130 97277 0.10 0.3 1,050 4 53 133

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Figure 4: Mt. Misusu Prospect Rock Sample Locations

At the Talelumas Creek prospect, no significant results were obtained from the grid soil sampling and rock sampling results. The soil sampling grid and rock sampling followed-up on historical anomalous ridge-and-spur gold in soil sample results.

4.0 EXPLORATION AT MT. NAKRU (EL 1043 )

The Mt. Nakru tenement (EL 1043) encloses copper-(gold) and copper-(molybdenum) hydrothermal breccia, porphyry and/or volcanogenic hosted massive sulphide (VHMS) systems. The Mt. Nakru property is owned 100% by Copper Quest (PNG) Ltd.

At the Nakru-1 Prospect over 2,100 metres of trenching was completed during 2008. A total of over 9,000 metres of trenching and 1,967.6 metres of diamond drilling in 17 holes have been completed to date. During 2008, Coppermoly completed 880.8 metres of drilling in eight drillholes and over 2,100m of trenching.

Coppermoly also completed a three dimensional Induced Polarisation (3D-IP) geophysical survey which clearly identified for the first time two large chargeable bodies of sulphide related to copper mineralisation which present very exciting features for further drill testing (refer to Figure 5). The first deep drillhole NAK017 completed by Coppermoly tested the south-west part of the IP anomaly The drillhole intersected semi-massive sulphides, with 28.4 metres grading 1.10% copper plus 0.27 g/t gold below the ‘base of oxidation’ at 30 metres vertical depth. Above the ‘base of oxidation’, NAK017 intersected 35.5 metres grading 0.39 g/t gold from 13 metres vertical depth.

An upper gold bearing breccia blanket has been defined by trenching and soil sampling over a 700 metre by 300 metre area. Trench intersections include 9 metres grading 1.08 g/t gold. Drilling results include an interval of 5.8 metres grading 1.9 g/t gold from surface. This blanket of gold mineralisation overlies intervals of 17.1 metres grading 0.5% copper and 7.6 metres grading 1.1% copper in historical drillhole NAK001.

Historical drillholes partly tested the IP anomaly with intervals of 40 metres grading 0.95% copper in drillhole NAK006 and 86.15 metres grading 0.50 g/t gold and 0.46% copper (including 14.4 metres grading 2.2 g/t gold and 0.40% copper from 80 metres vertical depth) in drillhole NAK003.

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