EMU NL — Interim / Quarterly Report 2008

Jan 29, 2009

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QUARTERLY REPORT For the Quarter Ended 31 December 2008

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SUMMARY

• Drilling of the priority VTEM nickel targets at Kambalda West anticipated to commence upon completion of permitting.

• Four strong VTEM anomalies identified at Koolyanobbing.

• Drilling of VTEM conductors and geochemical anomalies in progress at Dingo Dam, Beetle Lake and Bronzite.

• Initial expenditure requirement met to maintain Emu’s earn-in rights in the Emu Nickel Joint Venture.

• A strong cash position of $8 million.

EMU LAKE (Emu earning 33⅓%)

During the quarter a traverse of moving loop EM was carried out at Area C, about 2km north-west of the Binti Gossan Zone, to test an existing fixed loop EM anomaly. The survey did not confirm the presence of a significant conductor. Analyses of rock samples taken from this area are in progress.

Rock sampling of a sulphidic shale unit associated with a base metal soil anomaly at Wellington, about 3km SSW of the Binti Gossan Zone, returned an anomalous silver value (2.5g/t Ag) with elevated multi-element responses, but low in nickel. The significance of the results has yet to be determined.

Rock sampling of other ultramafics and/or nickel-in-soil anomalies returned one elevated copper-nickel value which is currently being checked.

Emu Nickel NL has the right to earn a 33⅓% interest in the Emu Lake project from Image Resources NL, where Xstrata Nickel (formerly Jubilee Mines) is required to sole fund expenditure of $3.25 million between mid 2007 and late 2010 at the rate of at least $1 million per year, in order to maintain its 66⅔% interest. Xstrata has so far spent approximately $1.8 million of this requirement, with a further $1.45 million remaining to be spent and is continuing exploration.

KAMBALDA WEST (Emu earning 30%)

Emu Nickel has the right to earn a 100% interest in the ten exploration licences comprising the Kambalda West joint venture. However Mincor Resources may earn up to a 70% interest (diluting Emu to 30%) by spending $1.5 million by mid 2012. During the quarter Mincor earned a 51% interest and elected to continue to sole fund the joint venture to earn a 70% interest.

A 43-hole, 1098m aircore drilling programme was completed on three joint venture tenements, testing nickel targets comprising one VTEM anomaly and several magnetic anomalies under extensive soil and sand cover. The drilling intersected amphibolite, granite and mafic rock types but no ultramafic rocks were encountered. The VTEM anomaly appears to be related to magnetite-rich quartz veining. No significant nickel mineralisation was indentified by the drilling but sampling for gold mineralisation is being carried out on the magnetite-rich quartz veining.

Environmental permitting is still in progress over the remainder of the VTEM anomalies which comprise the priority drilling targets identified to date. Planning for drilling of these attractive nickel targets upon receipt of the necessary permits is in progress.

KOOLYANOBBING (Emu earning up to 100%)

An airborne VTEM survey was carried out over interpreted ultramafic contact zones to test for conductors that may be associated with nickel sulphides (ASX release 15 January 2009). The VTEM survey identified four significant anomalies within Emu’s tenements in two groups, termed the northern and southern conductors.

The northern BTEM conductor is strongly anomalous, has a strike length of 300m under cover and is interpreted to be hosted by a sequence of mafic and ultramafic rocks. The southern VTEM conductor area comprises three distinct anomalies ranging from 150m to 600m in length with two of the anomalies associated with a

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multi-element geochemical anomaly (AS-MO-Bi-Sb). A gold-in-soil geochemical anomaly occurs adjacent and sub-parallel to two of the VTEM conductors. Shallow aircore drilling of the gold anomaly in the September 2007 quarter returned the best intercept of 2m at 0.4g/t gold from surface. The drilling intersected quartz stringers thought to be associated with a shear zone on a mafic volcanic-metasediment contact. A field inspection of the southern VTEM conductors identified a small occurrence of sulphide bearing bonded iron formation which coincides with one of the conductors. A programme of drilling is being planned, to test the most prospective conductors for both nickel and gold.

DINGO DAM, BEETLE LAKE AND BRONZITE (Emu earning up to 100%)

First-pass shallow RAB drilling is in progress on VTEM conductors and geochemical anomalies identified on these tenements west of Kambalda and Norseman. The VTEM anomalies were described in Emu’s September 2008 quarterly report. The tenements cover interpreted ultramafic rocks in a poorly explored region which may form part of a new nickel sulphide district extending south from the Queen Victoria Rocks nickel sulphide occurrence.

CORPORATE

ASX code; EMU

Cash position; $8 million, significantly in excess of the current market capitalisation of $3 million.

Issued capital; 59,828,940 fully paid ordinary shares. 10,000,000 options exercisable at 50 cents by 27 February 2013.

During the quarter Emu met the expenditure required within twelve months of listing on ASX in order to maintain its earning rights in the Emu Nickel Joint Venture with Image Resources NL.

For more information on the company visit www.emunickel.com.au Please direct enquiries to:

Roger Thomson George Sakalidis Technical Director Managing Director Phone (08) 9226 4266 Phone (08) 9226 4266 Mobile 0419 969 183 Mobile 0411 640 337 Email roger@emunickel.com.au Email george@emunickel.com.au

The information in this report that relates to exploration results is based on information compiled or reviewed by Roger Thomson BSc, ARSM, MAusIMM, MAIG. Roger Thomson is a director of Emu Nickel NL. Roger Thomson 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 ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Roger Thomson consents to the inclusion of this information in the form and context in which it appears in this report.

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