ELEMENT 25 LIMITED — Interim / Quarterly Report 2007

Oct 30, 2007

QUARTERLY REPORT

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Three Months Ending: 30 September 2007

ASX CODE: MZM ISSUED SHARES: 36.9M 52 WEEK HIGH: $0.36 52 WEEK LOW: $0.16

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CONTACT:

JUSTIN BROWN Managing Director +61 8 9228 4833

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BOARD:

Denis O’Meara: Chairman Terry Grammer: Non-Exec Ian Cornelius: Non-Exec

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KEY PROJECTS:

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PEAK HILL (100%) Gold

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ROBINSON RANGE (70%) Uranium, Gold

CALLAWA (100%) Copper, Gold

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TALGA (90%) Gold, VMS

PILGANGOORA (90%) Gold, Nickel

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HIGHLIGHTS

• Peak Hill gold mine acquired from The Rio Tinto and Barrick Groups for $1M cash.

• First-pass drilling completed at Mt Padbury and Peak Hill. Assays are awaited.

• Preparations underway for first pass drilling at Callawa (copper) and Talga (gold) Projects.

• Capital Raising completed to raise $963,180 before costs.

• Montezuma listed on the Frankfurt stock exchange.

With the acquisition of the Peak Hill Mine and the commencement of drilling at Peak Hill and the highly prospective Mt Padbury Gold Project, Montezuma has successfully made the transition from grass roots exploration to become and emerging producer in the Peak Hill region.

The coming months present an exiting opportunity for the Company to capitalise on these opportunities and to generate significant value for our investors through ongoing exploration and acquisitions.

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PEAK HILL (MZM 100%)

During the quarter, Montezuma completed the purchase of the Peak Hill Gold Mine from the Barrick Group and Rio Tinto Group. The principle terms of the purchase were:

1. The payment of $1,000,000 cash to the vendors.

2. Assumption of environmental bonds totalling approximately $600,000.

Tenements

The Project comprises four granted mining leases and six miscellaneous licences covering a total of 2,162 Ha, and includes four pits with significant production histories and excellent potential for the discovery of additions to the existing resource base.

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Production History

The project has a strong gold production history having produced from four modern-era open cut pits on top of extensive historical high grade production from underground mining in the latter part of the 19[th] century.

Since the 1980’s, the Main, Jubilee, Fiveways and Harmony open cut operations have produced approximately 650,000 oz of gold while historically, pre-1913 production yielded around 270,000 oz. The combined ounces highlight the Peak Hill field as a +million ounce high grade gold system.

The size and grades associated with the system to date is suggestive that the geology is conducive to additional mineralisation with further work, and underpins Montezuma’s confidence in making the acquisition.

Existing Resources

The project includes previously reported pre-JORC resources of 3.17Mt @ 1.81 g/t for 184,000 ounces of gold at a 0.5 g/t cut-off or 1.78 Mt @ 2.64 g/t gold at a 1.0 g/t cut-off. In addition to these resources, there are also low-grade stockpiles containing approximately 29,200 ounces.

Under the agreed terms, this equates to a purchase price of approximately $7.50 per resource ounce, assuming there is no value attributed to the exploration potential. The resources (0.5 g/t cut-off) are summarised in the following table.

Prospect	Tonnage	Grade(g/t Au)	Contained Ounces
Inferred Resources
Enigma North	1,000,000	1.04	33,441
Total Inferred	1,000,000	1.04	33,500
Indicated Resources
Enigma North	510,000	2.10	34,437
Fiveways Deeps	105,363	3.22	10,909
Mini Pit Area	309,677	1.50	14,936
Jubilee J2 Zone	43,381	1.82	2,539
Reefers	27,969	1.70	1,529
Total Indicated	996,400	2.01	64,400
Measured Resources
Fiveways Deeps	513,609	2.75	45,416
Jubilee J3 Zone	125,939	1.77	7,168
Harmony	275,550	2.90	25,694
HarmonySW Laterites	258,677	0.94	7,819
Total Measured	1,173,800	2.28	86,100
Total Mineral Resources	3,170,200	1.81	184,000

Low-grade Stockpiles
Stockpile 1	202,000	0.90	5,846
Stockpile 2	874,023	0.83	23,326
Total Stockpiles	1,076,023	0.84	29,172

Note: This resource estimate is sourced from reports to the JV dated as at 30th June 1998 and which were certified as being compliant with the assessment criteria of the Australian Code for Reporting of Identified Mineral Resources and Ore Reserves. However further verification is required to determine a mineral resource that is fully compliant with the revised JORC code and the current economic environment.

Ownership History

The history of the Peak Hill mining camp involves a string of successive owners each the subject of takeovers by progressively larger companies, until the project resided with the current owners

Previous holders and operators included Grants Patch, Forsayth, Afmeco, Peko-Wallsend, North, Plutonic, Homestake and finally Rio Tinto and Barrick Gold.

Gold production continued from 1988 until 1997 when the Barrick and Rio joint venture partners took the decision that the reserve potential was insufficient to meet their minimum size criteria and ceased operations.

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Since 1999, activities have focussed on rehabilitation with no exploration work being undertaken. The field has effectively been inactive throughout the current mining boom, and represents a unique opportunity to reignite a high grade, historically profitable mining camp.

Further Potential

From a review of the data relating to the project, Montezuma is of the view that existing resources will form an excellent foundation upon which additional resource ounces can be added through exploration and acquisitions. Montezuma intends to immediately commence exploration to add to an existing resource base of in excess of 200,000 ounces of gold with an initial target of between 500,000-1,000,000 ounces to underpin the Company’s goal of becoming a gold producer within three years.

Given the existence of both near surface and potentially higher grade deeper mineralisation, Montezuma believes there is excellent potential for open cut and underground production scenarios within the project, providing numerous possible production scenarios, from standalone to toll treating of ore.

The existing drilling data highlights numerous potentially high-grade targets at the Main Pit, Jubilee, Harmony and Enigma North deposits in addition to excellent potential for new discoveries both within the underexplored Peak Hill Project and within Montezuma’s regional holdings at Mat Padbury and Robinson Range.

The Main Pit Deeps have in ground assays up to 878 g/t over a metre with separate composite intersections including 8m @ 124.22 g/t providing strong indications of the potential for high grade underground production.

At Jubilee, a small test pit has yielded 6,500 oz. at 4.0 g/t from an extensively mineralised zone with in ground intersections of up to 590 g/t gold over a metre and composite intersections including 5m @ 201.74 g/t and 10m @ 14.83 g/t .

The majority of the drilling is at Jubilee is only 50m deep and sporadic deeper drilling demonstrates the continuity of mineralisation at depth. Mineralisation is also open along strike. Jubilee will be the target of early drilling to add to the existing known resources.

At the Harmony/Baxter lease, production has yielded 221,000 ounces at 3.24 g/t from a shallow open-cut operation that mined down to approximately 100m. Significant mineralisation remains below the current pit limits, and this will be the target of further drilling and resource modelling to assess the potential of this mineralisation to contribute ore to a production scenario.

At Enigma North, previously defined resources of approximately 67,000 ounces are open down plunge and at depth and will be further tested to build on the existing mineralised corridor.

In addition to these clear target areas, historically the project area has had only limited exploration outside the immediate production areas. While some areas have been drill tested, it has generally been very shallow and there are large prospective areas that have had no drilling to date.

Exploration at Peak Hill will be proactive and aggressive, with early positive results expected. The Board is of the view that the gold industry in Western Australia has a strong future. Recent success by Ramelius Resources Limited and Apex Resources Limited have clearly illustrated that positive in ground results can underpin a re-rating on the markets and the Company’s clear view is that the historically high grade mineralisation at Peak Hill will lead to similar success for Montezuma.

RC Drilling has commenced at Peak Hill, initially targeting the Jubilee prospect and results will be compiled and released on receipt of the assays.

At the time of writing, 8 holes had been completed for a total of 962m. The current work programme comprises an initial 23 holes for 2,760m, although it is likely that additional holes will be added as assay results are received.

MT PADBURY (MZM 90%)

The project lies approximately 100km north of Meekathara and 30km west of the Peak Hill gold mine in Western Australia. The project abuts the eastern boundary of Montezuma’s Robinson Range Uranium JV. The Mt. Padbury Project comprises one exploration licence E52/1529 covering approximately 214 km[2] .

Previous work over the project has included comprehensive surface geochemical sampling and RAB testing of the resulting gold anomalies at Rudd’s Ridge, Rudd’s Ridge East, Bare Flat and Wood Creek.

The Wood Creek prospect has returned the best results to date, with a surface anomaly extending over 800m X 400m coincident with a northwest trending regional structure. Gold mineralization at

Wood Creek has been defined by RAB drilling over a strike length of approximately 400m, open to the southeast and northwest. The mineralised envelope is approximately 200m wide in the central section, suggesting excellent potential for a significant mineralised system.

First pass RC drilling has been undertaken at Wood Creek with four holes completed for a total of 399m to test the depth extension of the mineralisation.

The holes intersected a broad zone of intense silicification, quartz veining and brecciation with chalcopyrite and pyrite visible in some sections. The location and sample information for these holes is currently being compiled and full details will be released once the assays have been received. Further drilling will be planned for the current quarter subject to assay results.

CALLAWA (MZM 100%)

Previous sampling at the Callawa Project confirmed extensive high grade copper mineralisation over a strike length of at least 100m, with the surrounding extensions of the system masked by a thin layer of transported cover. A total of five samples taken along the exposed interval returned an average 11.1% copper.

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The mineralisation occurs near the margin of an ultramafic xenolith within granites of the Warrawagine complex. The surface mineralisation comprises secondary copper dominated by malachite within highly altered quartz mineralised and sheared/brecciated host rock. The degree of alteration observed in the samples is indicative of the potential for this to be a part of a major mineralised system. Further encouragement is provided by the moderate to strong associated gold and silver mineralisation up to 102 ppb and 46 g/t respectively.

Given the very high grade copper values, and the potential for the mineralised zone to be significantly expanded through low cost follow up work, the Company regards the Callawa Project as a high priority component of our tenement portfolio and intends to drill-test the immediate high grade target as well as regional work to look for additional analogues as soon as a suitable rig can be mobilised. Delays are currently being experienced due to the lack of availability of drilling equipment in the area.

ROBINSON RANGE (MZM 70%)

Montezuma is continuing work at the Robinson Range Project which is highly prospective for unconformity style and calcrete hosted uranium mineralisation, with results to date of up to 0.53% uranium at surface.

Montezuma intends to follow up these results with drilling and geochemical programmes as soon as the Peak Hill acquisition and associated exploration programmes and budgets have been successfully bedded down and are fully operational.

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CAPITAL RAISING

During the quarter, Montezuma completed a placement to raise $963,180 before costs. 4,815,900 fully paid shares were issued at a price of $0.20. Subject to shareholder approval at the Company’s AGM on 12 November 2007, a 1 for 4 free attaching $0.20 option will be issued to participants.

After shares have been issued pursuant to the placement, Montezuma will have approximately 36.9M shares on issue.

The funds will be used to finance drilling programmes at the newly acquired high grade gold project at Peak Hill, as well as initial drilling at Mt Padbury (gold), Callawa (copper), and first pass testing of the large coherent gold in soil anomalies at the Talga Project.

FRANKFURT STOCK EXCHANGE LISTING

During the quarter Montezuma was successfully listed on the Frankfurt and Berlin stock exchanges with the view to attracting investors from the large European markets to join the Company share register.

Justin Brown Managing Director

Montezuma Mining Company Ltd

Phone: +61 8 9228 4833 Mobile: +61 438 745 675

The Information in this report that relates to exploration results is based on information compiled by Liam Cornelius, who is a member of the Australian Institute of Mining and Metallurgy. Mr Cornelius is a geologist and has sufficient experience which is relevant to the style of mineralisation 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 “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Liam Cornelius is an Executive Officer of South Boulder Mines Ltd and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.