EMU NL - Interim / Quarterly Report 2011

==> picture [181 x 75] intentionally omitted <==

QUARTERLY REPORT for the Quarter Ended 31 December 2010

______________

Emu Nickel NL ABN 50 127 291 927

ASX Code: EMU

SUMMARY

Level 2 16 Ord Street West Perth, WA 6005

A high grade intersection (0.25m @ 5.68% Ni) at Emu Lake confirms potential for extensions of mineralisation south of the Binti Gossan.

T +61 8 9226 4266 F +61 8 9485 2840 E [email protected]

Modelling in progress at Windy Knob to define VMS targets.

PO Box 1112 West Perth, WA 6872

More massive iron sulphide intersections with anomalous copper and silver at Kambalda West.

Issued Capital : Shares - Quoted: 59,828,940 fully paid shares

Follow up sampling extends a gold anomaly to a possible 1km length, open along strike, at Salmon Gums on the Tropicana trend.

Options – Unquoted: 10,000,000 exercisable at $0.50 by 27.2.2013

1,830,000 exercisable at $0.27 by 22.12.2014

EMU LAKE (Emu 26 ⅔ % earning 33 ⅓ %)

Cash: $5.5 million

Directors:

Peter Thomas Chairman George Sakalidis Managing Director Roger Thomson Executive Director

Three diamond drill holes (totalling 1,359 metres) have been completed at the Emu Lake nickel project, 70km north east of Kalgoorlie. The drilling was designed to test multiple electromagnetic (EM) conductor targets in three areas at Binti South, some 500m to 1,000m south of the Binti Gossan zone. The drilling results are summarised in Table 1.

Table 1 Emu Lake Diamond Drilling Results

Drillhole Number	Collar Coordinates East North	Collar Coordinates East North	Azimuth	Dip	From m	To m	Interval m	Ni %	Cu %
ELD 045	400120	6647590	232	-63	362.8	363.8	1.00	1.41	0.13
ELD 046	400001	6647723	232	-55				nsa
ELD 047	399540	6647825	056	-56	172.25	172.95	0.7	1.82	0.14
					447.35	447.60	0.25	5.68	0.67

nsa; no significant assay. True width not yet confirmed. PGE assays pending.

Drill hole ELD 047 encountered high grade nickel sulphides grading 5.68% Ni over a 0.25 metre intersection width, located close to the interpreted basal contact of the main target ultramafic unit. This intersection occurs 170 metres down dip from a similar high grade intersection in drill hole ELD 023 (drilled 2009) with 0.28 metres @ 5.35% Ni, indicating potential for extensions to this contact mineralisation south of Binti Gossan.

Drill hole ELD 045 intersected stringer mineralisation (1 metre @ 1.41% Ni) at the same interpreted contact position some 500 metres to the south, however the intervening drill hole ELD 046, about 200 metres further south, did not intersect significant mineralisation.

Down hole EM surveys in ELD 045 and ELD 046 did not detect any significant conductors. Down hole EM data from ELD 047 is still being assessed.

Emu Nickel is encouraged by the high tenor of the mineralisation intersected in the latest programme and is continuing to assess the results of the drilling and geophysical surveys in a search for thicker accumulations of these high grade nickel sulphides.

WINDY KNOB (Emu 51%)

Interpretation of geological results from the previous quarter’s drilling is continuing, together with modelling of down hole geophysical results. The aim of this work is to refine targets for further drilling for volcanogenic massive sulphide mineralisation.

KAMBALDA WEST (Emu 24%, earning 30%)

An 11-hole, 2,228m reverse circulation drilling programme was completed at Woolgangie, about 60km south west of Coolgardie. The drilling was designed to follow up massive iron sulphides intersected during the previous quarter and test for possible metal zonation trends. The massive sulphides, anomalous in copper and silver, are associated with a pronounced magnetic anomaly several kilometres in length and with open ended EM conductors which have not been fully tested – see Figure 1. Results of the recent drilling are summarised in Table 2.