CULLEN RESOURCES LIMITED — Capital/Financing Update 2011

Mar 7, 2011

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ABN 46 006 045 790
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8 [th] March 2011
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ASX ANNOUNCEMENT

Farm-in to Base Metal property in British Columbia, Canada

SUMMARY

Hand pitting has established the presence of weakly oxidized sulphide near surface in the centre of a large (~600x600m) geochemical anomaly (thallium and cadmium) in a regional base metal district in SE British Columbia, Canada. Cullen has signed a farm-in agreement with a Vancouver-based prospecting syndicate, and can earn an 80% interest in their mineral concessions held over this area. Cullen plans to further investigate this prospect area in the first instance with a programme of trenching, to be initiated as soon as approvals are received and weather permits, probably in the next Quarter.

Introduction

Cullen Resources Limited (ASX Code: CUL) ( Cullen ) has signed a farm-in agreement with a Vancouver-based private prospecting syndicate ( Syndicate ) comprising expert Vancouver-based geoscientists, to further examine a base metal prospect and, if Cullen so wishes, to earn an 80% interest in mineral concessions held by the Syndicate.

The mineral concessions offered for farm-in (known as Mabel Lake or the “ TL Property ”) are over an area in south east British Columbia, in the region between the Cottonbelt and Sullivan base metal deposits (see Figure). This region contains the most extensive and highest concentration of base metal mineral showings and mineral deposit types in the Canadian Cordillera. However, mineral exploration in this area has lagged over the past 20 years, partly because of an obsolete (>30 year old) geoscience knowledge base, and, consequently, lack of modern exploration.

Six stratabound zinc-lead-silver deposits, called the “Monashee Zn-Pb-Ag” deposits, are known in highly metamorphosed and deformed Palaeoproterozic metasedimentary and meta-igneous rocks of the Monashee Complex of southeastern British Columbia. One of these deposits, at Ruddock Creek, owned by Selkirk Metals Corporation, a wholly-owned subsidiary of Imperial Metals Corporation, has a 43.101 compliant resource (using a 4% Pb+Zn cutoff, the Indicated Resource is estimated at 2.3 million tonnes grading 7.79% zinc, 1.61% lead and the Inferred Resource is estimated at 1.5 million tonnes grading 6.50% zinc and 1.26% lead – www.imperialmetals.com), and is in the pre-production permitting phase. Imperial optioned out 50% of the project to Itochu Corporation Ltd and Mitsui Mining and Smelting Co. for $20M of on-going funding, in July 2010.

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TL Property
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Geological setting

In all of the six Monashee Zn-Pb-Ag deposits, mineralization occurs within a relatively narrow (~50-100m thick), pelitic schist-calcsilicate-marble-amphibolite-quartzite succession, called the Monashee Cover Sequence. A strong case can be made that the mineralized interval is part of the same stratigraphic interval at all deposit localities.

The exploration and trenching to be funded by Cullen will be focused on an area of the Tsuius Valley where biogeochemical surveying identified a very large thallium (Tl) anomaly over ~6 strike km by sampling Douglas-fir needles from a helicopter. Thallium and cadmium in plant-based sample material are interpreted to be effective pathfinder elements for base metal mineralization. Follow up tree-bark sampling, substantiated the major thallium anomaly discovered in the regional survey. The survey also highlighted anomalies at “Kingfisher”, where there is known base metal mineralization, as well as in the Tsuius Valley/Creek, which is unexplored.

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KINGFISHER
5623000
5621000
5619000
High Elevation
No Douglas-fir
5617000
5615000 Mt. Mabel
5613000
5611000
5609000
5607000 Shuswap R i ve r
5605000
370000 372000 374000 376000 378000 380000 382000 384000 386000 388000 390000 392000 394000 396000 398000 400000 402000 404000
TSUIUS CK.
Hound C reek
Tsuius Ck
Wap Creek
Hunters Ck
Tsuius Ck
Mabel Lake
Kin gf ish er C k
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Figure above: Location of geochemical samples using top twigs of Douglas fir (562 samples) collected over a 700 km[2] including the Mabel Lake area.

Figures below: Geochemical results - Cadmium and Thallium from ashed fir needles; (Kingfisher Pb-Zn prospect in NW corner provides a comparison with the Tsuius valley anomaly)

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Mapping of the TL Property around the various geochemical anomalies described at the Tsuius Valley, has concluded the bedrock strata are the target Monashee cover sequence. Five of the six Monashee Zn-Pb-Ag deposits mentioned above occur above tree line where direct bedrock observation has been the primary exploration tool. Other deposits existing below tree line can only be detected by prospecting and the type of geochemical surveying undertaken by the TL Property owners.

Farm-in Terms

Cullen can earn an 80% interest in the TL Property by:

• Paying the Syndicate a total of $75,000 Canadian dollars ( CDN ), in installments over three years (CDN$15,000 upon signing of the agreement and CDN$30,000 on each of the first and second anniversaries of signing);

• Issuing an aggregate of 1,000,000 ordinary shares in Cullen to the TL Property owners within three years; and,

• Funding an aggregate of CDN$690,000 on exploration and TL Property maintenance costs within a period of three years (with a minimum of CDN$50,000, CDN$270,000 and CDN$370,000 being spent within the first, second and third years respectively).

Cullen will be responsible for the design and direction of exploration but will utilize the local geological and logistical expertise of the Syndicate in implementing and conducting exploration on the prospect.

Cullen may withdraw from the farm-in agreement at any time prior to having earned the 80% interest.

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If Cullen earns the 80% interest in the TL Property, Cullen and the Syndicate will be associated in an unincorporated joint venture for the exploration and, if warranted, development and mining of the TL Property. Upon Cullen earning an 80% interest, the Syndicate may elect to convert its 20% interest to 10% interest which will be free carried by Cullen until a decision to mine. Upon the making of a decision to mine, the Syndicate will have the option of converting its joint venture interest to a 2% net smelter royalty.

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Figure: Regional geological map showing the distribution of stratabound Pb-Zn-Ag deposits around the TL Property (note the Selkirk Allochthon rocks between Kingfisher and Ledge, have been remapped as Monashee Cover Sequence ).

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Dr Chris Ringrose, Managing Director, +61 8 9474 5511

ATTRIBUTION - Competent Person Statement

The information in this report that relates to Exploration Results is based on information compiled by Dr Chris Ringrose, Managing Director, Cullen Resources Ltd who is a Member of the Australian Institute of Mining and Metallurgy. Dr. Ringrose is a full time employee of Cullen Resources Ltd. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration, and to the activity which has been undertaken, to qualify as a Competent Person as defined by the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr. Ringrose consents to the report being issued in the form and context in which it appears.

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