CORAZON MINING LIMITED — Interim / Quarterly Report 2005

Oct 30, 2005

Level 2, 22 Oxford Close WEST LEEDERVILLE WA 6872 T: +61 8 9381 1436 F: +61 8 9381 1068 ...
PO Box 1681 WEST PERTH WA 6873 www.graynicmetals.com.au

Quarterly Report For September 2005

HIGHLIGHTS:

Ouartz Circle

• Drilling results point to a substantial VMS system at Emperor Prospect $\bullet$
• Best results include:
• 12m grading $1.12\%$ Pb, $2.07\%$ Zn from 60m (GM 5) $\circ$
• $\circ$ 4m grading $4.48\%$ Zn from 56m(GM 7)
• 16m grading 1.78% Zn from 56m (GM 9) $\circ$
• Aeromagnetics survey commissioned for November $\bullet$
• Ni potential indicated by 3.5km long soil anomaly with elevated Ni, Co, Cr
• Application for new tenement near diamondiferous kimberlite dyke

Jutson Rocks

Application for adjoining ground to north, taking land position to 400 sq kms.

West Kimberley

Application for new tenement containing large diamondiferous lamproite intrusion

1. QUARTZ CIRCLE PROJECT

Aeromagnetics

Gravnic has commissioned UTS Surveys to carry out a low level, high-definition aeromagnetic and radiometric survey over the Company's entire tenement package at its Quartz Circle Project. The survey, which is expected to be completed in mid November, will be flown at 50m line spacing with sensor height of 25m above terrain. The resulting high quality data is expected primarily to assist in target generation for continued base metal exploration, but will also be of valuable assistance in detailed geological mapping (including the identification of ultramatics which could contain nickel) and in the delineation of structures that might play a role in the economic concentration of gold.

Base metals

The Company has completed its first round of drilling at the Igloo and Emperor prospects based on data generated by previous explorers. The program consisted of 5 reverse circulation (RC) holes and 6 diamond drill holes with RC precollars, and the best intersections are shown in the following table.

Hole ID	QUARTZ OINGEE DINIEEING NEGOETO Northing	Easting	Downhole	Sample	Interval	Αu	PЬ	Zn
			Depth (m)	Type	(m)	ppm	%	%
Igloo Prospect
GM 1	7601392	208914	76-80	RC comp	4	1.50
			177-183	Core	6	1.59
GM 2	7601408	208993	170-171	Core	1	2.22
Emperor Prospect
GM 5	7600694	209504	48-52	RC comp	4			1.49
			60-72	RC comp	12	0.30	1.12	2.07
			96-104	RC comp	8			1.20
			144-145	Core	1	0.34	0.20	1.73
			185-186	Core	1	0.22	0.60	3.86
GM 6	7600700	209502	56-60	RC comp	4			3.28
			68-76	RC comp	8			1.50
			148-150	RC comp	2			2.19
GM 7	7600690	209485	56-60	RC comp	4			4.48
			103-104	Core	1		0.50	1.03
GM 8	7600727	209537	$12 - 16$	RC comp	4		2.10	1.60
GM 9	7600834	209510	28-32	RC comp	4			2.82
			56-72	RC comp	16			1.78
			76-80	RC comp	4			1.83
			100-104	RC comp	4			1.05

OUADTZ CIDOLE DOILLING DECLILTO

The results confirm the Emperor Prospect as a strongly-mineralised base metal system, within a rock assemblage typical of a volcanic massive sulphide environment. It is particularly encouraging that all 5 holes drilled at the Emperor Prospect intersected significant mineralisation, with drill hole GM 9 at the northern limit of previous drilling having the most substantial mineralisation.

Continued field investigations have now shown that the prospective rocks continue northwards for about 500m from GM 9, and this extensive new target zone will be tested in the next round of drilling. Further drill holes will be planned when we have received the results of the detailed aeromagnetic survey commissioned for mid November, as the aeromagnetic data may indicate specific targets within this zone.

QUARTZ CIRCLE DRILLHOLE STATISTICS
HOLE ID	EASTING		NORTHING PROSPECT NAME	INCL (degrees)	AZIMUTH (degrees)	lRC. DEPTH m	NQ DIAMOND. DEPTH m	TOTAL DEPTH m
GM 1	208914	7601392	IGLOO	72	140	130	104.3	234.3
GM 2	208993	7601408	IGLOO	70	225	138	95.4	233.4
GM 3	208812	7601390	IGLOO	60	255	150	RC only	150
GM 5	209504	7600694	EMPEROR	60	250	110	208.7	318.7
GM 6	209502	7600700	EMPEROR	70	250	150	RC only	150
GM7	209485	7600690	EMPEROR	60	250	70	68.2	138.2
GM 8	209537	7600727	EMPEROR	70	325	150	118.7	268.7
GM 9	209510	7600834	EMPEROR	65	330	150	99.5	249.5
GM 10	208938	7601229	IGLOO	60	270	80	RC only	80
GM 11	208969	7601226	IGLOO	60	270	53	RC only	53
GM 12	209171	7601406	IGLOO	90		102	RC only	102
TOTALS						1283m	694.8	1977.8

Note: GM 4 was not drilled.

The Company is confident that the Quartz Circle Project area is the appropriate geological environment in which to find a large VMS deposit.

Nickel

Preliminary investigations have commenced on E 45/2602 which is situated about 7km north of the original Quartz Circle tenements. The initial focus has been a discrete aeromagnetic high recognised from the widely-spaced aeromagnetic survey flown for CRA in 1995. This small anomaly is located at the northern edge of the exploration licence in an area previously covered by a soil sampling program for base metals by Cazaly Resources in 2004. These soil samples have now been reassayed by Graynic for Co, Cr and Ni and reveal a well-defined elongate anomaly some 3.5km long but which could extend in either direction beyond the limits of the soil sampling survey. The geochemical anomaly occurs along strike from an ultramafic unit shown on the Geological Survey 1:100,000 geological map. The scope of previous exploration has been reviewed and it consisted only of field mapping and 4 drillholes. The shape and extent of the ultramafic unit may be revealed by the new aeromagnetic survey and the Company will consider a follow-up program once this new data becomes available.

Diamonds

The Company is aware that diamonds have been found in the general Nullagine area and that other explorers are actively seeking this commodity. Alluvial diamonds were first discovered north of the Nullagine townsite in 1895 and other alluvial diamonds have since been discovered in the same area. In 1998 Stockdale Prospecting Limited (now De Beers Australia Exploration Ltd) discovered the diamond-bearing Brockman Creek kimberlite dyke which is located some 50km northwest of Quartz Circle. The kimberlite was tested at that time but was deemed uneconomic. The find resulted from a regional stream sediment sampling program for indicator minerals (pyrope garnet, chrome spinel and picroilmenite) but no other kimberlites were located from this survey. Graynic has identified a circular feature in the vicinity of this kimberlite dyke and has applied for exploration licence E 45/2788.

2. JUTSON ROCKS

The Company holds two exploration licences E 38/1450 and E 38/1451 which have both recently been granted. It has also applied for another exploration licence which adjoins to the north, taking the total project area to 400 sq kms. These tenements now cover the greater part of this elongate greenstone belt which contains komatiitic lavas, ultramafic and gabbroic sills and sheared, silicified volcanics. Collectively this assemblage has considerable potential for Cu, Ni, Platinum Group Elements (PGEs) and gold. Access to the area must be negotiated with the traditional owners but this process can commence now that the main tenements have been granted.

3. WALGIDEE HILLS PROJECT

The Company has applied for Exploration Licence 04/1551 which hosts the entire Walgidee Lamproite Intrusion in the West Kimberley region of Western Australia. The Walgidee Lamproite is a known diamond-bearing intrusion from which 891 micro

diamonds and 62 macro-diamonds have been recovered. The 11 macro-diamonds recovered by Diamond Rose NL in 1998 comprised 6 white (colourless) stones, 4 brown and 1 vellow, ranging in size from 0.8mm to 1.5mm. The results of previous exploration are summarised in the following table:

Diamond Exploration - Walgidee Lamproite Project, West Kimberley
Company	Year	Indicator Macro	Minerals diamonds diamonds	Micro	Total diamonds
Stellar Minerals	1968-71
Stockdale Prospecting 1970
Seltrust Mining Corp	1978-80			Not tested
CRA Exploration	1988-1989-		17	520	537
Great Central Mines	1993-95	Yes	33	368	401
Diamond Rose NL	1997-2005 Yes		11		14
Totals			62	891	953

The Walgidee Lamproite is reputedly the largest lamproite in the world, with a diameter of about 2.5km and an area of about 490ha. Various campaigns of bulk testing of pit samples as well as testing of drill samples have been carried out over the years, but most of these trials have been confined to the eastern half of the intrusion. It is the Company's opinion that the amount of testing to date may have been inadequate for such a large intrusion and that there is good potential for a commercial diamond deposit to be discovered.

The project area is located approximately 80 kilometers south of the Ellendale Diamond mine operated by Kimberley Diamond Company NL and currently undergoing an expansion which will establish the operation as a "Top 5 Western World diamond producer". In the same area Blina Diamonds NL has recently completed a bulk sampling program at its alluvial project at Ellendale 9 North and recovered 3766 diamonds weighing 1442 carats from a 3773 tonne gravel sample.

At the Walgidee Project, Diamond Rose NL has reported on a "zone which may contain a very high potential for an economic discovery" (Diamond Rose NL Quarterly Report, March 2002) which has yet to be followed up. In addition "some concentrates from bulk samples remain to be tested for macro-diamonds". Although these concentrates may no longer be available, the comment points to the incompleteness of the previous evaluation programs.

The Company will review all available data before making a field visit to evaluate the project and formulate an exploration program.

DATA DERIVED FROM PUBLISHED SOURCES

CORPORATE

On 18 August 2005 the Company issued a prospectus offering shareholders the opportunity to participate in a 1 for 2 non-renounceable entitlements issue for a total of 12,250,002 options at 1 cent each. The offer closed on 16 September 2005 and the issue raised \$122,500 before costs of the issue.