EMU NL - Capital/Financing Update 2010

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ASX Release 13 October 2010

ASX code: EMU

2[nd] Floor, 16 Ord St West Perth WA 6005 PO Box 1112 West Perth WA 6872 Telephone 08 9226 4266 Facsimile 08 9485 2840 [email protected] www.emunickel.com.au

ABN 50 127 291 927

DRILLING TARGETS AT EMU LAKE

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HIGHLIGHTS

A 2km-long zone of elevated conductance identified by fixed loop ground EM, the northern part coincides with known nickel sulphides at Binti Gossan, the southern part at Binti South remains largely unexplored.
Down-hole EM modelling at Binti South has identified several conductors including one strong conductor some 400m in length associated with a nickel sulphide drill intersection.
An initial three-hole diamond drilling programme has been proposed in order to test these very attractive targets.

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Figure 1 Binti Gossan and Binti South Fixed Loop EM Conductance

Figure 2 Binti South EM Conductance and Modelled Conductors

Additional fixed loop electromagnetic (FLEM) surveys have been completed to infill gaps in the previously reported survey (EMU ASX release 28 May 2010). Whilst no new conductors were identified by the latest phase, processing of the FLEM survey

data has confirmed a 2km-long zone of elevated conductance, as shown in Figure 1 (with the recent survey area shown by the red dots). The northern 1km of this zone coincides with the known nickel sulphide mineralisation at Binti Gossan. The southern 1km of elevated conductance is largely unexplored and contains drill holes ELD023 and ELD042A both of which intersected nickel sulphides. Modelling of this zone has identified a discrete conductor plate (also interpreted from an off-hole response in drill hole ELD039), shown in blue in Figure 2, which has been recommended for drilling.

Further interpretation and modelling of down-hole electromagnetic (DHEM) data has confirmed a large strong in-hole anomaly modelled to have a strike length of 400m and a 100m dip extent shown in red in Figure 2. This conductor corresponds to a nickel sulphide intersection in drill hole ELD042A (1.57m @ 1.14%Ni from 393.43m including 0.45m @ 2.67%Ni), suggesting this drill hole intersected the edge of a much larger sulphide body. A second conductor, interpreted to be a smaller body corresponds to a second nickel sulphide intersection in the same drill hole (0.21m @ 6.32%Ni from 282.28m). A drill hole has been recommended to test the larger of the two conductors.

To the north, modelling of DHEM data from drill hole ELD023 has identified three anomalies interpreted to be high-conductance plates varying in strike length from 100m to 150m in strike length and from 30m to 70m in dip extent. Two of these conductors are shown in green and black in Figure 2. A single drill hole has been recommended to test these conductors.

It is proposed to test each of these three attractive targets with a diamond drill hole to at least 400m depth. The plan position and 3D view (looking north) of the three proposed drill holes is shown in Figures 3 and 4 respectively. Emu Nickel ranks these targets highly and plans to commence drilling as soon as possible after Emu Lake Joint Venture approval has been finalised and a suitable rig sourced.