EMU NL - Interim / Quarterly Report 2009

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QUARTERLY REPORT for the Quarter Ended 30 September 2009

Emu Nickel NL HIGHLIGHTS ABN 50 127 291 927 ASX Code: EMU Level 2, 16 Ord Street West Perth WA 6005 EMU LAKE

T +61 8 9226 4266 • A 10-Hole diamond drilling programme completed with F +61 8 9485 2840 results of 7 holes received. E [email protected] PO Box 1112 • Nickel sulphides intersected to the north, south and within

West Perth WA 6872 the Binti Gossan Zone.

Issued Capital: • A potential new nickel sulphide position 300m south of the Shares: Binti Gossan Zone (0.28m @ 5.35% Ni and 0.40% Cu from

55,369,877 fully paid shares - quoted 292.79m) open at depth. 4,459,063 fully paid shares - unquoted • A strong intersection (1.58m @ 3.70% Ni and 1.33% Cu from and escrowed until 27 February 2010 320.56m) indicating continuity of mineralisation between 59,828,940 Total the upper and central Binti Gossan Zone sulphide lenses. Options: 10,000,000 exercisable at $0.50 by WINDY KNOB 27 February 2013 - unquoted and escrowed until 27 February 2010 • A 5,125m first pass aircore drilling programme completed Cash: over several geochemical and geophysical targets near the

$6.8 million Austin VMS discovery. Directors: • An 80m-wide anomalous Cu-Zn zone with silica-magnetite

Peter Thomas alteration identified over a pronounced 1km-long magnetic Chairman target at Defiance. George Sakalidis

Managing Director • Anomalous zinc values intersected west of Austin and Roger Thomson anomalous gold intersected north northeast of Austin. Executive Director

Nickel sulphides intersected to the north, south and within the Binti Gossan Zone.
A strong intersection (1.58m @ 3.70% Ni and 1.33% Cu from 320.56m) indicating continuity of mineralisation between the upper and central Binti Gossan Zone sulphide lenses.

KAMBALDA WEST

Drill access to nine strong VTEM anomalies completed in preparation for drilling these nickel sulphide targets in November.

EMU LAKE (Emu earning 33⅓%)

Diamond drilling at the Emu Lake joint venture 70km northeast of Kalgoorlie (Emu Nickel earning 33⅓% and Xstrata Nickel earning 66[2] /3%) has intersected nickel sulphides to the north, south and within the Binti Gossan Zone, indicating that this mineralisation remains open to the north and identifying a potential new nickel sulphide position 300m to the south which is open at depth.

Significant intersections include:

ELD 023: 0.28m @ 5.35% Ni and 0.40% Cu from 292.79m ELD 035: 0.22m @ 1.84% Ni and 0.74% Cu from 528.97m ELD 036: 1.58m @ 3.70% Ni and 1.33% Cu from 320.56m

Ground EM surveys, diamond drilling and downhole EM surveys have been carried out at Emu Lake. The diamond drilling program comprised ten holes totalling 5,552m, with results from three holes yet to be received. A series of detailed fixed loop ground EM (FLEM) surveys were completed over and along strike from the Binti Gossan Zone, covering an aggregate strike length of about 6km. Three main target areas were identified by these surveys; the Binti Gossan Zone itself and conductors some 1km and 4km southeast along strike as shown in Figure 1. Xstrata Nickel is earning a 66⅔% interest in the venture by funding $3.25million over a three year period to September 2010.

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Figure 1

Main Fixed Loop EM Targets (black) on Aeromagnetic (TMI)

The diamond drilling targeted extensions to the Binti Gossan Zone and downhole EM anomalies within this zone, together with two holes at Zone C some 2.7km northwest of the Binti Gossan Zone. The drilling results are summarised in Table 1.

Table 1 Emu Lake Diamond Drilling Results

Hole Number	AMG_East	AMG_North	Azimuth	Dip	From (m)	To (m)	Interval (m)	Ni %	Cu %
ELD023	399843	6647980	267	-60	292.79	293.07	0.28	5.35	0.40
ELD033	397223	6649871	360	-75				NSA	NSA
ELD034	399703	6648219	229	-60				NSA	NSA
ELD035	399597	6648667	229	-60	528.97	529.19	0.22	1.84	0.74
					540.55	542.00	1.45	0.76	0.16
ELD036	399564	6648402	229	-60	320.56	322.14	1.58	3.70	1.33
	Including				320.73	321.71	0.98	5.40	1.44
ELD039	399702	6647302	49	-60				NSA	NSA
ELD040	397179	6649842	360	-75				NSA	NSA
ELD041A	399797	6648307	226	-62				Pending	Pending
ELD042A	400097	6647704	229	-55				Pending	Pending
ELD044	401998	6645780	229	-60				Pending	Pending

NSA- no significant assays . Pt and Pd assays pending. ELD043 will not be completed during this drilling program.

A location plan and a longitudinal section showing the location of the drilling are shown in Figures 2 and 3 respectively. The nickel sulphide intersections in drill holes ELD 023, ELD 035 and ELD 036 are of particular significance. ELD 023 (0.28m @ 5.35% Ni from 292.79m) is located about 300m south of the Binti Gossan Zone sulphides and represents a potential new mineralised position below which there is no existing drilling . ELD 035 (0.22m @ 1.84% Ni from 528.97m and 1.45m @ 0.76 Ni from 540.55m) indicates that the Binti Gossan Zone sulphides remain open to the north at depth. ELD 036 (1.58m @ 3.70% Ni and 1.33% Cu from 320.56m) indicates continuity of mineralisation between the upper and central lobes of the sulphide zones outlined to date. The two drill holes targeting an historic EM anomaly at Area C did not intersect significant mineralisation.

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Figure 2

Drill Hole Locations and FLEM anomalies (black) on Aeromagnetics (TMI)

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