CORAZON MINING LIMITED — Interim / Quarterly Report 2007

Apr 29, 2007

1evel 2, 22 Oxford Ciose WEST LEEDERVILLE WA 6872 T: +61 8 9381 1436 F: +61 8 9381 1068 PO Bos 1681 WEST PERTH WA 6872 www.graysicmerals.com.au

Quarterly Report for March 2007

Highlights: Quartz Circle

• High grade gold intervals at Igloo Prospect including $\bullet$
• $\circ$ IG 20: $8m \text{ @ } 4.1$ g/t Au, 26 g/t Ag from 117m
  • $\circ$ IG 21: 8m @ 14.1 g/t Au from 70m
• New gravity targets coincide with known geochemical anomalies
• RC drilling under way to test extensive Zn-Pb anomalism underpinned by gravity highs

WESTERN AUSTRALIA Quartz Circle Project, Nullagine, WA (Graynic 80%)

Completed drilling

IGLOO Cu-Au-Ag PROSPECT

Six RC drill holes were completed at this prospect in January for a total of 750m. Strong gold mineralization was encountered in several drill holes below the known copper mineralization, and the results for 4m composites are tabulated below. The assays were by Genalysis using the A/OES method for Ag and the FA25 method for Au.

	iman i internet
Hole ID	Easting	Northing	Azimuth	Dip	Depth	Interval	Au	Ag
					downhole		g/t	g/t
IG 18	208977	7601412	240	60	NSI
IG 19	208976	7601409	240	70	NSI
IG 20	208957	7601426	240	70	116-132m	16 m	2.87	19
IG 21	208954	7601425	240	60	68-80m	12 m	13.1
IG 22	208930	7601451	240	70	NSI
IG 23	208930	7601451	240	60	24-28m	4m	6.1

Iglan Prospect

NSI No significant intersection

Assays have been received for the 1m splits for three of these mineralized intervals giving the following results. Assay methods as above.

Hole ID	Easting	Northing	Azimuth	Dip	Depth	Interval	Au	Ag
					downhole		g/t	g/t
IG 20	208957	7601426	240	70.	$117 - 125m$	8m	4.1	26
IG 20	208957	7601426	240	70	131-132m	1m	17.3	10
IG 21	208954	7601425	240	60	70-78m	8m	14.1	$\blacksquare$

These and other gold intersections at Igloo will be modeled as a potential gold resource underneath the Cu-Au-Ag mineralization previously announced.

EMPEROR LEAD-ZINC PROSPECT

Six RC holes were drilled at Emperor to try to extend the known mineralization. Four of these holes intersected zinc mineralization at various depths from 68m to 250m as shown in the table below. The samples are 4m composites, the assays were by Genalysis using the A/OES method for Cu, Pb, Zn, and Ag, and the FA25 method for Au.

Hole ID	Easting	Northing	Azimuth	Dip.	Depth	Width	$Zn\%$
						downhole
GM 41	209545	7601117	0	75	NSI
GM42	209542	7601113	120	60	228-232m	4m	1.53
GM 43	209572	7601094	125	55	NSI
GM 44	209672	7600936	015	60	68-72m	4m	1.4
GM 45	209732	7600932	015	60	156-164m	8m	1.16
GM 46	209411	7600499	090	60	NSI
GM 48	209254	7600025	015	70	248-250m*	2m	1.75
	Standard and Count Corp. and count of the bank of

Emperor Prospect

mineralization at end of hole

Vulcan 3D modeling of recent and historic drilling results has indicated substantial continuity of mineralization at Emperor.

Gravity survey

A ground gravity survey has now been completed for the tenement area. The data shows a moderately high gravity anomaly in the north east of the area at Emperor with increasing gravity response south westwards towards Imperial, where the gravity anomaly is a prominent high. This gravity anomalism may reflect an increasing sulphide content from northeast to southwest.

Current drilling program

A new program consisting of about 3000m of RC drilling is now underway mainly targeting the zone which extends southwestwards from Emperor over a distance of about 1.5 km. This zone of Zn-Pb anomalism was identified by previous explorers from soil sampling surveys but has never been drilled. A recent survey has revealed prominent gravity anomalies coincident with the most geochemically anomalous areas, substantiating these as important drilling targets.

In the current program:

• the known mineralization at Emperor will be further tested by RC drilling which should enable the estimation of a preliminary Zn-Pb-Au-Ag resource
• Modelling shows that the mineralization drilled at Emperor is open to the south west. The well-defined Zn-Pb geochemical anomaly containing Emperor continues south westwards for at least 500m and will be tested by about 5 RC drill holes.
• At the Imperial Prospect another large, well-defined Zn-Pb soil anomaly and a gossan $\bullet$ outcrop with reported values of 0.5% Zn and 2.9% Pb will also be drilled. This prospect gave the highest gravity response in the recent gravity survey.
• An RC drill hole which was previously terminated at 232m will be extended to a depth of about 350m to try to intersect a conductive horizon interpreted as the source of an EM conductance anomaly.

The current drilling program is expected to be completed at the end of April and the first assays are expected in mid May.

NEW SOUTH WALES

Gulf Creek (Graynic 100%)

Gulf Creek is a historic copper mining area north of Tamworth in NSW which has not been subject to modern exploration. The copper was mined from three well-defined sulphide lodes which averaged between 2% and 6% Cu. There was also a significant amount of zinc in some of these lodes which was not of interest to the miners at that time but which now would be a significant credit.

A heritage and cultural survey has recently been completed at Gulf Creek to enable access for exploration, and a report is expected later this month. Once clearance is obtained a drilling program will be implemented to test the copper lodes.

Wertago (Gravnic 100%)

This base metal project encompasses the Nutherangie Silver Fields and Wertago Copper Field adjacent to the Koonenberry Fault. Historic drilling has intersected up to 2m @ 4.6% Cu below some of the old workings and also 12.2m @ 4.6 g/t Au with no follow up. The target is a Cu-Zn-Au-Ag deposit adjacent to the large fault, which could have acted as a conduit for metal-bearing fluids.

Interpretation of the EM survey has been completed and there are a number of EM conductors and magnetic anomalies to be followed up. Field work is planned during the next quarter to identify suitable drilling targets for early drilling.

Yanco Glen (Graynic 100%, excluding rights to tin and tungsten)

The Yanco Glen project consists of a large exploration licence which has potential for tungsten, tin, gold and base metals. Graynic recently transferred its interest in the tin and tungsten potential of this exploration licence to Wolf Minerals Limited for a consideration of 2 million Wolf shares. Wolf has recently commenced an RC drilling program to further test the tin and tungsten potential within this tenement.

Ron Thom Managing Director 30 April 2007

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves was compiled by R Thom, who is a Member of the AusIMM. R Thom has sufficient experience which is relevant to the style of mineralization 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'. R Thom, who is an employee of Graynic Metals Ltd, consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Appendix 5B

Rule 5.3

Year to date

(9 months)

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Graynic Metals Limited

ABN

87 112 898 825

Quarter ended ("current quarter") 31 March 2007

Current quarter

\$A'000

Consolidated statement of cash flows

Cash flows related to operating activities

			\$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for
	(a)exploration and evaluation	(361)	(1,001)
	(b) development
	(c) production
	(d) administration	(154)	(347)
1.3	Dividends received
1.4	Interest and other items of a similar nature	26	84
	received
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows	(489)	(1, 264)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a)prospects
	(b)equity investments		(12)
	(c)other fixed assets		(4)
1.9	Proceeds from sale of:
	(a)prospects
	(b)equity investments	14	88
	(c)other fixed assets
1.10 1.11	Loans to other entities
1.12	Loans repaid to other entities Other (provide details if material)
	Net investing cash flows	14	72
1.13	Total operating and investing cash flows
	(carried forward)	(475)	(1.192)

⁺ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows
	(brought forward)	(475)	(1,192)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.		1,105
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other - Capital raising costs	(4)	(54)
	Net financing cash flows	(4)	1,051
	Net increase (decrease) in cash held	(479)	(141)
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	1,735	1,397
1.22	Cash at end of quarter	1,256	1,256

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter \$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	60
1.24	Aggregate amount of loans to the parties included in item 1.10

^1.25 Explanation necessary for an understanding of the transactions 1.23 includes directors fees and salaries.

Non-cash financing and investing activities

• $2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
• $2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available \$A'000	Amount used \$A'000
-3.1	Loan facilities	m.
3.2	Credit standby arrangements	w.

⁺ See chapter 19 for defined terms.

Estimated cash outflows for next quarter

4.1	Exploration and evaluation	\$A'000 350
4.2	Development
	Total	350

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as	Current quarter	Previous quarter
	shown in the consolidated statement of cash flows) to	\$A'000	\$A'000
	the related items in the accounts is as follows.
5.1	Cash on hand and at bank	162	195
5.2	Deposits at call	1.094	1,540
5.3	Bank overdraft
5.4	Other
	Total: cash at end of quarter (item 1.22)	1,256	1,735

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed	E38/1840		100%	Nil
6.2.	Interests in mining tenements acquired or increased	E04/1551		Nil	100%

⁺ See chapter 19 for defined terms.

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price per security (see note $3)$ (cents)	Amount paid up per security (see note 3) (cents)
7.1	Preference i securities (description)
7.2	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3	+ Ordinary securities	40,265,772	37,371,204
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	871	871	20 cents	20 cents
7.5	+ Convertible debt securities (description)
7.6	Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7	Options (description and conversion factor)	12,219,643 2,000,000 2,000,000 6,000,000 2,000,000 250,000 1,000,000	12,219,643	Exercise price 20 cents 20 cents 30 cents 30 cents 30 cents 46 cents 30 cents	Expiry date 31/10/2007 16/06/2007 16/06/2008 30/04/2008 31/10/2008 24/10/2011 31/7/2009
7.8	Issued during quarter
7.9 7.10	Exercised during quarter Expired during	871	871	20 cents	31/10/2007
	quarter
7.11	Debentures (totals only)
7.12	Unsecured notes (totals only)

$+$ See chapter 19 for defined terms.

Compliance statement

• $\mathbf{I}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• $\overline{2}$ This statement does give a true and fair view of the matters disclosed.

Sign here:

(Company Secretary)

Date: 30 April 2007

Print name:

Kent Hunter

Notes

• 1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• $\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
• The definitions in, and provisions of, AASB 1022: Accounting for Extractive 4 Industries and AASB 1026: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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• See chapter 19 for defined terms.