GRAYNIC INTERSECTS HIGH-GRADE SILVER AND GOLD AT QUARTZ CIRCLE

Highlights: $\bullet$

Confirmation of strong zinc mineralisation at Emperor Prospect:

12m @ 5.48% Zn from 76m $4m \; (2) \; 3.9\%$ Zn from 68m

High silver values in first-ever base metal intersection at Imperial Prospect:

8m @ 1.26% Zn, 0.9% Pb & 458 g/t Ag from 100m

High- grade gold intersection: Imperial Prospect:

4m @ 21.8 g/t Au from 64m

The Company has now received the assay results from an RC drilling program at Quartz Circle base metal project near Nullagine in the East Pilbara. The program consisted of 19 drill holes totaling 3300m and was designed to:

seek extensions to the Emperor Prospect zinc-lead mineralisation
test a Zn-Pb soil anomaly just southwest of Emperor which coincides with a moderate gravity anomaly
test strong Zn-Pb soil and rock chip anomalies which coincides with a pronounced gravity anomaly at Imperial Prospect
extend existing RC drill hole GM 47 by 100m into an EM conductance anomaly

Significant mineralisation from this drilling were as follows:

HoleID	Easting	Northing	RL	Azm	Dip	Intersection	Interval	Au g/t	Ag g/t	Pb %	Zn %
GMRC058	208102	7599645	360	220	$-70$	100-108m	8m		458	0.90	1.26
GMRC063	208083	7599924	363	211	$-70$	64-68m	4m	21.8
GMRC065	209458	7600579	369	295	$-65$	100-104m	4m		26	0.96	2.84
GMRC066	209503	7600808	371	338	$-60$	$28 - 32m$	4m		8		2.50
						76-80m	4m				1.35
w 44						80-84m	4m	0.26			2.53
$\mathbf{d}$ и.						92-96m	4m				2.00
$\mathcal{M}$ . и						104-108m	4 _m	0.30			1.56
GMRC067	209537	7601069	391	180	$-60$	64-68m	4m	0.32			1.40
éé. и						68-72m	4m				3.88
GMRC068	209544	7601110	385	160	$-60$	76-88m	12m				5.48
46 ĸ						88-92m	4m				1.51

Quartz Circle Project: Significant Results - RC Drilling

Imperial Prospect

Two of the five drill holes at the Imperial Prospect returned significant results:

The intersection of 8m grading 1.26% Zn, 0.9% Pb, and 458 g/t Ag from GMRC58. This is the first mineralized base metal drill intersection achieved at Imperial, and confirms this location as an important base metal target. The hole was sited farther south than any other hole to date and may indicate the best location for follow-up drilling. No high-density lithologies were encountered in the drilling indicating that the gravity anomaly could well be indicative of sulphides at greater depths than has been drilled to date. The high silver value in this intersection is another example of the richness of some of the mineralisation at Quartz Circle and confirms the Imperial Prospect as an exciting base metal target for future drilling.

GMRC63 contained 4m grading 21.8 g/t Au from 64m downhole. This high grade gold value occurs about 300m south southwest of a cluster of older drill holes also with high gold values. These old and new holes are aligned over a total distance of about 500m and they could form part of a significant gold-bearing structure. This zone will be investigated on the ground prior to follow-up drilling.

Emperor Prospect

Previous drilling at this prospect has outlined a zone of substantial zinc mineralisation. In this recent drilling GMRC68 was drilled on a southeasterly azimuth between two previous successful holes GMRC21 and GMRC34 to help determine the geometry of this strongly-mineralised zone, and GMRC67 was drilled in the same vicinity but with an

azimuth due south. The new results GMRC65 to GMRC68 are currently being modelled with existing data.

EM conductance anomaly

Drill hole GMRC47 was extended by about 100m from 238m to 334m to further penetrate the three modeled plates interpreted to be the source of the anomaly. Pyritic felsic volcanics were intersected, there were no significant base metal values.

Central area

Drill holes GMRC51 to GMRC55 were drilled in the central area where a recent survey has shown a gravity anomaly and a coincident Zn-Pb geochemical anomaly. Several of the holes were anomalous in zinc but no values >1% Zn were obtained. The target is interpreted to lie at greater depth than drilling to date.

The results fromn the drilling continue to show that the Quartz Circle project displays significant widespread base metal mineralisation. Newly discovered mineralisation at the Imperial prospect, where base metal mineralization in drilling and surface sampling coincides with a gravity anomaly, further understates the potential for the project to host a significant base metal deposit. Follow up drilling is currently being planned.

Yours sincerely,

Ivan Hoffman Executive Chairman

The information in this report that relates to the Exploration Results, Mineral Resources or Ore Resources is based on information compiled by Mr Clive Jones, who is a Member of The Australasian Institute of Mining and Metallurgy and who has sufficient experience relevant to the style of mineralisation and types of deposits under consideration and to the activity which is being undertaken to qualify as Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Jones consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Suite 5 Level 1, 350 May Street, Sublact WA 6008 ACN : 112 898 825 STO SON 1998 West Perth WA 6872 P: (08) 6364 0518

200000 m.E. 208250 m.E. 208500 m.E. 7600750 mN .



7600500 mN
P46/1366 :QCRC057 (40-46m: [email protected]/t Au)
☆QCRC056 (62-64m: [email protected] t Au)
* 7600250 mN QCRC062
(60-62: [email protected]/t Au)

7600000 mN
*GMRC063 (64-68m: [email protected]/t Au)

7599750 mN
*GMRC058
(100-108m: [email protected]%Zn, 0.9%Pb, 458g/t Ag)
7599500 mN Contractor