DREADNOUGHT RESOURCES LTD — Board/Management Information 2011

Mar 22, 2011

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ASX Announcement

23 MARCH 2011

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M I N I N G
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The Manager Companies Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000

CORPORATE UPDATE AND REVIEW OF HEAVY MINERAL SANDS POTENTIAL - PADTHAWAY, SA

Highlights

• ERO holds 5,134 km[2] prospective for heavy mineral sands in SA

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SA
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• Evaluation of heavy mineral sands exploration potential carried out by GEOS Mining Mineral Consultants

Padthaway 

• Discussions commenced with parties interested in exploration for mineral sands

• Share Purchase Plan offer period extended

• Appointment of Alternate Director

ERO Mining Limited ACN 119 031 864 62 Beulah Road Norwood South Australia 5067 PO Box 3126 Norwood South Australia 5067 Phone 61 8 8132 7970 Fax 61 8 8132 7999 Email info@eromining.com web www.eromining.com

ERO Mining Limited’s (ERO) wholly owned subsidiary, South East Energy Limited (South East), holds nine exploration licences and four exploration licence applications near Padthaway in the southeast of South Australia (the “Tenements” - Table 1). The

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Tenement Tenement Area (km [2] )
Application/ Name
Number
EL 4040 Geegeela 461
EL 4041 Keith 973
EL 4042 Keppoch 245
EL 4043 Bordertown 497
EL 4044 Sugarloaf Hill 411
EL 4045 Kumorna 286
EL 4046 Mt Boothby 263
EL 4054 Mt Charles 669
EL 4418 Eden 627
EL Total 4,432
ELA326/10 Makin 377
ELA327/10 Wolseley 55
ELA02/11 Willalooka 116
ELA64/11 The Gap 154
ELA Total 702
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Table 1 Padthaway Project Tenements.

Tenements are 100% owned by South East.

South East had taken up these areas to explore for uranium in areas of anomalous surface uranium, as well as areas where anomalous concentrations of uranium were discovered in the 1970s, in particular where areas of Olney Formation occur at shallow depths. The Tenements are located in the south western part of the Murray Basin, a Cainozoic basin which contains a number of heavy mineral sand deposits.

The closest known mineral sands deposits are to the north at the Mindarie Mineral Sands Mine and the Iluka Resources Limited Douglas Mine, approximately 80 km to the south-southeast. The Mindarie deposit is a classic strandline deposit and the Douglas Mine is a high grade deposit situated on a strandline in which the accumulation of heavy minerals has been enhanced by headlands associated with a basement high.

ERO engaged GEOS Mining Mineral Consultants to undertake an assessment of the heavy mineral sands potential across the Tenements. GEOS’ background assessment,

ERO Mining Limited 1

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0 20 km
EL4418 ELA326/10
-36° EL4044
EL4054
EL4041
EL4043
EL4040
-36°30'
EL4042
140° 140°30' 141°
EL4046 EL4045
ELA327/10
ELA02/11
ELA64/11
SA VIC
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Figure 1 Digital Terrain Model showing Tertiary strandlines and historic drillholes from PIRSA database (PIRSA, 2011).

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0 20 km
EL4418 ELA326/10
-36° EL4044
EL4054
EL4041
EL4043
EL4040
-36°30'
EL4042
140° 140°30' 141°
EL4046 EL4045
ELA327/10
ELA02/11
ELA64/11
SA VIC
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Figure 2 Radiometrics highlight radioactive materials found in mineral sands to strandlines (PIRSA, 2011).

together with ERO’s own review, has significantly contributed to ERO’s understanding of the geology of the area and will enable the Company to further evaluate potential joint ventures for mineral sands exploration across the Tenements.

Publicly available Digital Terrain Model (DTM) and Radiometrics data (Figures 1 & 2) have been used to infer the locations of possible heavy mineral sand deposits. Strandlines are clearly defined by higher elevations in the DTM (Figure 1).

Historic Exploration

to the northwest into South East’s tenement areas, to be good heavy mineral sands exploration opportunities (Table 2).

Iluka Resources carried out broadscale exploration in the area from 2001 to 2003. Drilling confirmed the extent of prospective sand horizons and the quality of the Parilla Sand sequence, but no economically significant heavy mineral intersections were made (Table 3).

Drilling by Kymura Pty Ltd (1999 to 2004) and Southern Titanium NL (2001 to 2005) in areas adjacent to South East’s tenements indicate undifferentiated sands, possibly Parilla Sands or Quaternary age sand, above the Murray Group Limestone.

Strand Minerals NL intercepted heavy minerals in the area in 1998/99 and ERO considers the strandlines, which continue

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Hole ID Depth from (m) Depth to (m) Result (Total -3.35mm)
BT-1 11 12 1M@0.28% HM
BT-1 20 21 1M@0.34% HM
BT-3 13 14 1M@0.52% HM
BT-11 20 21 1M@0.13% HM
BT-11 23 24 1M@0.18% HM
BT-13 16 17 1M@0.35% HM
BT-22 24 25 1M@0.26% HM
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Table 2 Results of Strand Minerals NL drilling.

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Licence Work performed Holes/metres Intersections (>1% or >3%) Interval (m) Grade (%)
Hole Number
EL2872 eg. Lit, Mag interp; 152/3907 S0034 13.5-15 1.3
geol-modelling; S0036 13.5-15 1.2
drilling
S0037 13.5-15 1.3
S0041 21-22.5 1.1
S0041 22.5-24 1.2
S0041 24-25.5 1.1
S0093 12-13.5 4.4
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Table 3 Heavy mineral intersections greater than 1% in Iluka’s EL2872 (Pochinetto, 2003).

2 ERO Mining Limited

Forward Plans

Mr Hatcher’s exploration roles include exploration manager for Greenbushes Mines and its subsidiary Lithium Australia; exploration manager and director of Driffield Mining, a consortium of private exploration companies active in the Northern Territory. Mr Hatcher has extensive experience in the near mine exploration programs conducted at the many operations he has been involved with.

• ERO’s stated policy is to:

• » Focus exploration on key lithium, uranium and gold projects in SA and the Northern Territory.

• » Evaluate potential mineral sands joint ventures or farmin opportunities in the Padthaway region.

Mr Hatcher is a member of the Australasian Institute of Mining and Metallurgy, and is currently also a non-executive director of ASX listed Outback Metals Limited and Peninsula Resources Ltd.

• Proposed Exploration Program:

• » Close spaced low altitude magnetic and radiometrics data as an aid in planning drilling.

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• » Initially explore the prospective Parilla sands.

• » Reconnaissance drilling to confirm the presence of other Parilla Sand strandlines and investigate the Quaternary sands.

Shane Gale Chief Executive Officer

Extension of Share Purchase Plan

Recent global events, including the catastrophic earthquake and tsunami in Japan and emerging conflicts in northern Africa, have negatively impacted markets over the past few weeks. Sentiment appears to be improving as markets come to better appreciate the effects of these events and market conditions continue to stabilise.

23 March 2011

The Board of the Company is supporting the Share Purchase Plan (SPP) and has resolved to extend the closing date of the SPP to 8 April 2011 to provide shareholders with an opportunity to assess the merits of the offer in a more stable market environment. The Board reserves the right to close the offer early.

As a result of the extension, the SPP indicative timetable has been revised as follows:

EVENT DATE

Offer Closing Date Friday, 8 April 2011 Allot new shares Friday, 15 April 2011 ASX quotation of new shares Monday, 18 April 2011 Bonus Issue Record Date Monday, 2 May 2011

Media and investor relations contacts:

Shane Gale ERO Mining: t (08) 8132 7911, m 0459 128 252

Duncan Gordon Adelaide Equity: t (08) 8232 8800, m 0404 006 444

Kevin Skinner

Appointment of Alternate Director

ERO is pleased to announce the appointment of Mr Michael Hatcher as an Alternate Director for Dr Neville Alley effective as of 23 March 2011.

Mr Hatcher BSc (Hons), MAusIMM has a geology degree from the University of Adelaide and over 40 years’ experience in the resources industry during which time he has held a range of senior technical and managerial positions.

Mr Hatcher’s career includes 16 years with the Newmont/ Normandy Mining/North Flinders Mines corporate group. During this period he held positions including director geology –Ghana, and was chief operations geologist for Normandy/Newmont’s many Australian mines (including Golden Grove, Tanami, Jundee and Pajingo) as well as its New Zealand (Waihi), Turkey (Ovacik) and USA (Midas) operations.

Field Public Relations: t (08) 8234 9555, m 0414 822 631

Further information relating to ERO Mining Limited and its various exploration projects can be found on its website: www.eromining.com

Disclaimer

This document may contain forward looking statements that are subject to risk factors associated with the exploration and mining industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by variables which could cause actual results or trends to differ materially.

Information in this report that relates to Exploration results, Mineral Resources and Reserves is based on information compiled by Sue Border, who is a Fellow of the AusIMM and of AIG and is a consultant employed by Geos Mining. She has sufficient relevant experience to qualify as a competent person as defined in the 2004 edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC code). Sue Border consents to the inclusion in this report of this information in the form and context in which it appears.

ERO Mining Limited 3