CORAZON MINING LIMITED — Interim / Quarterly Report 2008

Oct 28, 2008

QUARTERLY REPORT FOR THE PERIOD ENDING 30 SEPTEMBER 2008

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Highlights

• Drilling programme completed at Quartz Circle identifying a new mineralized structure at the Emperor Zinc Prospect

• Resource modelling and mining study of the Igloo copper prospect at the Quartz Circle Project shows positive cashflow

• Channel iron deposit identified at Quartz Circle

• Project generation activities identify potential new project opportunities

WA PROJECTS

Quartz Circle, Nullagine WA (Graynic 80%)

During the quarter Graynic completed a drill program to test the surface XRF anomalies defined at the Emperor zinc prospect, and one in-fill diamond hole at the Igloo copper prospect. Further surface sampling was also completed on regional targets including a channel iron deposit (“CID”) mesa which is the eastern continuation of Giralia Resources NL’s Crescent Moon mesa at their McPhee’s Creek project (see Figure 1) .

Emperor Zinc Prospect – Drilling

Six RC drill-holes completed for 1,094m at the Emperor Prospect (see Figure 2 and Table 1) defined a mineralized horizon within the existing prospect. Three anomalous intersections of greater than 3m true thickness (see Table 2) were made in a sub-vertical body of disseminated pyrite-sphalerite (see Error! Reference source not found. ). Analysis using a portable Niton® XRF analyser[1] recorded zinc levels consistently greater than 1% in each intersection, which will be confirmed when the assays are returned in the next few weeks.

The drill program tested an anomalous trend defined by previously reported close spaced surface sampling (10m intervals on 50m lines) completed in May 2008. The anomalous trend continues over 400m. Although significant drilling had been completed at the prospect in the past, this trend was relatively untested. The recent programme has provided confidence that sub-vertical northeast orientated structures are the primary mineralization control, and cross-cutting north-south to north-northwest structures likely to have created thickened higher grade zinc zones as intersected by previous drilling (including down-hole intersections in ALCO019 of 17.74m@16.06% Zn from 46m and GMRC068 12m@5.48% Zn from 76m) .

1 The estimates of zinc grade at Emperor referred to in this release are based on multiple readings using a Niton® XLt portable analyser including a quality control procedure involving analysis of standards, duplicates and blanks to ensure validity of readings. While Graynic believes the Niton® estimates are indicative of the grades contained within the prospect area the Company makes it clear that the Niton® results are not based on formal assays and are therefore estimates of zinc grades.

Graynic Metals Limited ACN: 112 898 825

Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872

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Table 1 Quartz Circle - Drill-holes completed during the September 2008 Quarter

Hole_Id	North_MGA	East_MGA	RL	Dip	Azimuth	EOH	Prospect
GMRC69	7600729	209411	372	-60	305	154	Emperor
GMRC70	7600850	209375	378	-60	124	202	Emperor
GMRC71	7601030	209491	383	-65	134	192	Emperor
GMRC72	7601100	209578	387	-60	299	142	Emperor
GMRC73	7600948	209425	378	-60	134	160	Emperor
GMRC74	7600655	209258	383	-60	131	244	Emperor
GMRC75	7599692	208038	358	-60	125	226	Imperial
IGD24	7601346	208958	370	-90	0	57.3	Igloo

Table 2 Quartz Circle - Drill-hole Intersections greater than one percent zinc

Hole_Id	Intersection	Intersection	From	Niton Portable XRF Estimated Grade
	True Width	Down‐hole
GMRC69	3	5	75	>1 % Zn
GMRC70	2.5	4	81	>1 % Zn
GMRC71	3	5	162	>1 % Zn
GMRC71	3.5	6	178	>1 % Zn
GMRC74	1	2	143	>1 % Zn

Imperial Prospect – Drilling

One RC drill-hole was completed for 226m testing a previous intersection in GMRC58 of 8m @ 1.26% Zn, 0.97% Pb and 458g/t Ag from 100m down-hole and a coincident gold-arsenic anomaly in surface geochemical sampling. Although no anomalous base metals sulphides were noted in the RC chips or portable XRF values, a zone of quartz veining, siliceous alteration, pyrite and arsenopyrite (with highly anomalous arsenic values) may indicate the presence of gold. The significance of this hole will be determined once the assays have been returned.

Igloo Copper Prospect – Mineral Resource and Mining Study

During the quarter a mining study was completed for the Igloo copper prospect. While the size of the deposit limits the cashflow, the project is sensitive to transport and process cost, process recoveries and of course assumed Cu price. A decision has been made to continue assessing the opportunities for the prospect with a view to current copper prices.

Channel Iron Deposit – Quartz Circle

Recent rock chip sampling undertaken on the northern part of the Quartz Circle project area has delivered encouraging iron ore results which indicate a Channel Iron Deposit (“CID”) that appears to be a continuation of the Crescent Moon CID Mesa which adjoins Giralia Resources NL’s (“Giralia”) McPhee Creek Iron Ore project. A significant number of the rock chip samples obtained by Graynic returned ore grades in excess of 56% Fe, with some samples returning in excess of 59% Fe. Giralia recently announced drill intersections include 12 metres @ 56.1 % Fe, 10 metres @ 57.2% Fe and 14 metres @ 55.9% Fe, with mineralisation commencing at surface. The rock chip sampling results obtained by Graynic are below.

Graynic Metals Limited ACN: 112 898 825

Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872

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Table 3 Quartz Circle Iron Ore Rock Chip Sample Results

		Rock Chip Sample Results – E04/2602
Sample_Id	East	North	Fe_%	SiO2_%	Al2O3_%	CaO_%	P_%
QCN001	205675	7610269	59.53	2.65	2.41	0.03	0.047
QCN002	205640	7610261	57.89	3.12	4.2	0.07	0.03
QCN003	205599	7610254	58.62	3.65	3.95	0.05	0.078
QCN004	205562	7610244	56.87	3.54	4.88	0.05	0.039
QCN005	205516	76610231	53.16	5.18	7.59	0.03	0.033
QCN006	205480	7610225	56.60	4.24	5.89	0.09	0.043
QCN007	205436	7610230	54.97	6.43	5.67	0.12	0.043
QCN008	205401	7610248	56.39	4.11	5.32	0.09	0.033
QCN009	205359	7610271	57.26	4.22	4.14	0.19	0.04
QCN010	205326	7610297	59.14	2.9	4.21	0.03	0.04
QCN011	205290	7610322	40.44	15.59	14.82	0.06	0.062
QCN012	205237	7610343	56.96	3.62	4.91	0.01	0.034
QCN013	205199	7610357	44.71	11.4	10.34	0.06	0.044
QCN014	205166	7610371	45.39	11.32	10.87	0.04	0.036
QCN015	205125	7610386	57.72	2.89	4.58	-0.01	0.053
QCN016	205093	7610406	54.31	6.45	5.37	0.08	0.044
QCN017	205054	7610414	58.60	2	3.1	0.02	0.045
QCN018	205020	7610416	46.43	9.32	9.73	0.03	0.041
QCN019	204984	7610412	58.18	2.38	3.11	0.02	0.047
QCN020	204926	7610395	56.48	3.69	5.1	0.02	0.052

NSW PROJECTS

Yanco Glen

Graynic recently completed a sale agreement for the Company's Yanco Glen Project with Silver City Mining Limited. The Yanco Glen Project (Corona - EL6489) is located 40km to the north of Broken Hill in eastern New South Wales.

The consideration for Silver City’s purchase of 100% of Graynic’s interest in Yanco Glen is a combination of Silver City shares and options, along with participation in a pool of converting performance shares. Participation will be based on exploration success.

Silver City will be responsible for developing and implementing exploration programmes for Yanco Glen, and for maintaining the tenement in good standing in accordance with all statutory requirements, including the annual tenement expenditure requirements set by the New South Wales Department of Primary Industries - Mineral Resources.

Graynic Metals Limited ACN: 112 898 825

Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872

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The Sale Agreement is subject to, and conditional upon, the Australian Stock Exchange granting Silver City conditional approval for its ordinary shares to be listed for quotation on the ASX on or before 30 June 2010. If Silver City fails to meet this timeframe Silver City will be deemed to have withdrawn from the Agreement and ownership of the tenement will revert to Graynic.

CORPORATE

As outlined in the June 2008 Quarterly Report, whilst Graynic’s current projects focus is on base metals in Western Australia and NSW, work continued during this quarter on the acquisition of a project within a broader range of base and precious metals. Work undertaken during this quarter included due diligence on new country entry, further technical review of specific opportunities and assessment of sub-province prospectivity. A number of high quality options have been generated and the Company is considering a number of project opportunities in line with our defined strategy.

In addition the current market has created a number of opportunities that have been presented for our review. Given the current market volatility Graynic is continuing to review project opportunities in line with long term commodity pricing and supply outlooks.

Enquiries: Bronwyn Barnes James Moses Managing Director Fortbridge Consulting 08 6364 0518 0420 991 574 0417 093 256 James.moses@fortbridge.com bronwyn@graynicmetals.com.au www.graynicmetals.com.au

Competent Person Statement: The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves was compiled by Mr. Mark Fletcher, who is a member of the Australian Institute of Geoscientists. Mr. Fletcher 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’. Mr Mark Fletcher, who is a full-time 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.

Graynic Metals Limited ACN: 112 898 825

Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872

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7,612,000 mN
Quartz Circle
Giralia Resources CID Mesa
Crescent Moon Mesa
7,608,000 mN
7,604,000 mN
Igloo
Emperor
7,600,000 mN Imperial
Graynic tenement
boundary
Access track
7,596,000 mN
0 1 2 Scale 1:100,000
kilometres
200,000 mE 204,000 mE 208,000 mE 212,000 mE
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Figure 1 Quartz Circle Project Location with Landsat Imagery

Graynic Metals Limited ACN: 112 898 825 Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872

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7,601,750 mN
September 2008
Drilling
7,601,500 mN Previous drill-hole
collars
Igloo Prospect Access track
Longsection
Tenement
boundaries
7,601,250 mN
7,601,000 mN Emperor Prospect
7,600,750 mN
0 50 100 200 Scale 1:10,000
7,600,500 mN metres
208,500 mE 208,750 mE 209,000 mE 209,250 mE 209,500 mE 209,750 mE
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Figure 2 Quartz Circle – Drilling Plan

Graynic Metals Limited ACN: 112 898 825 Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872

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Figure 3 Emperor Zinc Prospect – Long Section

Graynic Metals Limited ACN: 112 898 825 Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872