FENIX RESOURCES LTD - Capital/Financing Update 2011

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ASX/MEDIA RELEASE

23[rd] August, 2011

EMERGENT TO PUT INCREASED EMPHASIS ON DEVELOPING GOLD ASSETS FOLLOWING ASSET REVIEW

KEY POINTS

Emergent plans to increase focus on potentially high value, near term gold projects in Western Australia on the back of positive outlook in gold price.
Significant gold potential previously identified in the eastern parts of Emergent’s Beyondie tenure and targets are being generated for drilling programme.
Emergent holds 100% equity in tenements covering a 21km strike length in the highly prospective Plutonic Well Greenstone Belt.
Metallurgy endorses a high-volume, low-grade hematite beneficiation project at Beyondie over the medium term.
Company continues to review partnership opportunities for commercialising the Beyondie iron project.

Asset Review

Emergent Resources Limited (ASX: EMG) (Emergent or The Company) is pleased to report that following an internal review the Company will increase its focus on the gold potential of the Extension and Extension North prospects at Beyondie in Western Australia’s north west, while continuing to investigate opportunities to progress the significant iron ore potential of its projects.

The internal review considered the Company’s current asset base with a focus on projects in the Company’s portfolio that have the potential to deliver near term value for shareholders. The review was also cognisant of the current global economic outlook for mineral commodities and this highlighted the positive medium to long term outlook projected in the gold price.

- Iron Ore Development Beyondie Iron Project: (Western Australia Emergent 80%, De Grey 20%)

Emergent has a potential world class magnetite deposit at Beyondie with a 561 million tonne, JORC inferred resource established and an exploration target of 3.7 – 4.2 billion tonnes*. Emergent continues to work towards the development of its Beyondie magnetite deposit and is currently in discussions with a number of potential joint venture partners of a stature that could add the necessary financial strength as well as the marketing and resources development expertise to develop the Beyondie Project into a major iron ore producer.

The Company had identified the near surface hematite at Beyondie as a possible source for deriving early cash flow and has conducted metallurgical test work to establish if a saleable product from the bedded hematite could be derived. (See Announcement, 23[rd] December, 2010)

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Level 1, 43 Oxford Close
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West Leederville, Perth, 6007 Western Australia
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New metallurgical test work results indicate that a +57% Fe product can be produced albeit with low weight recovery. The returned metallurgical results demonstrate that beneficiation is necessary to form a commercial product and the metallurgy indicates a high tonnage, low grade beneficiation based operation (See detailed analysis in Appendix). However, as a result of this recent test work and due to the large volume and associated beneficiation requirements, it is considered less likely that the hematite project will provide the early cash flow generation the Company is seeking.

Emergent Resources’ Chief Executive Officer, Nathan Lude said, “The geological exercise has been measured and systematic. It identified potentially exploitable mineralisation, and outlined the magnitude of the work program required to develop a hematite resource base. Emergent now recognises the need for a joint venture partner to assist in the development of the iron project and the Company will continue discussions with potential partners to achieve this.”

The potential quantity of this exploration target is conceptual in nature, there has been insufficient exploration to define a Mineral Resource on the property and it is uncertain if further exploration will result in the discovery of further Mineral Resources on the property

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Significant Gold Potential

On 28 March 2011, the Company announced to the market that it had identified significant gold potential in the eastern parts of Emergent’s Beyondie tenure. In the Extension and Extension North prospects, Emergent directly controls a 21km strike length, or approximately 25% of the Plutonic Well Greenstone Belt which hosts identified gold resources of over 7 million ounces, established at Barrick Gold Corporations’ Plutonic deposit along with Dampier Gold’s Marymia Gold Deposit.

The Board considers that with exploration success, the low capital requirement and short lead time associated with underpinning a gold operation at the Extension and Extension North gold prospects, offers a low risk path to near term gold production as evidenced by:

Proximity to Barrick’s established processing infrastructure which has capacity for 1.8 Mtpa and which includes an airstrip with regular charter flights to and from Perth, accommodation, messing facilities with electricity, water and gas;
Proximity to established haulage roads leading to Barrick’s Plutonic processing facility;
The 100% equity interest that Emergent holds in the project tenements at Extension and Extension North.

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Level 1, 43 Oxford Close
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West Leederville, Perth, 6007 Western Australia
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Figure 1 – Project and infrastructure in close proximity to Extension & Extension North gold prospects.

Emergent has identified several noteworthy, shallow gold intersections within its tenure during its compilation of historical drilling results, including:

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Table 1: Historical drilling results

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West Leederville, Perth, 6007 Western Australia
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The Company has been undertaking an internal compilation of previous drilling conducted at the Extension and Extension North prospects with a number of targets delineated for future drilling programmes.

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For further information please contact:

Nathan Lude Chief Executive Officer

Wolfgang Fischer Executive Chairman

Emergent Resources Limited PH: +61 8 9380 9122 E: [email protected] Website: www.emergentresources.com.au

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Media: David Brook Professional Public Relations +61 8 9388 0944 Em: [email protected]

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Competent Persons Statements

Technical information in this report has been prepared under the supervision of Mr Jonathan King, Chief Geologist for the company and a member of the Australasian Institute on Mining and Metallurgy (AusIMM). Mr King has sufficient experience which is relevant to the style of mineralisation 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 for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code). Mr King consents to the inclusion in this report of the Information, in the form and context in which it appears.

The information in this statement that relates to Mineral Resources and ExplorationTargets is based on information compiled bySharron Sylvester who is a full time employee of AMC Consultants Pty Ltd and a Member of the Australian Institute of Geoscientists and has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration to qualify as a Competent Person as defined in the JORC Code (2004). Sharron consents to the inclusion of this information in the form and context in which it appears.

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West Leederville, Perth, 6007 Western Australia
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- Appendix Technical Analysis of Metallurgical Hematite Test Work

The Company undertook a phase 1 metallurgical test program to identify the requirements associated with delivering a beneficiable +57% Fe material. The purpose of this metallurgical test work was to ensure that the Company had a good understanding of the bedded hematite mineralisation, before committing funds to further drilling. Mineral Liberation Analysis (MLA)[1] was utilised to examine the structure of the material and in turn, provide a framework for advancing exploration and future metallurgical studies. (See Announcement, 23[rd] December, 2010)

Metallurgical test work program:

The test work involved assessing selected intervals from several RC drill holes developed in ironenriched bedded mineralisation (announced December 23rd, 2010). The bedded mineralisation was tested over a limited area of only 5 kilometres of the exposed 21 km segment of identified hematite outcrop located at E52/2215. Three composites were developed for MLA analysis based on:

Drill-indicated ore grades
Mineralogy and spatial relationships of the potential ore types identified through drilling
Field mapping and rock chip results within the project area

The composites were then summarised as follows:

A Moderate grade Fe% with moderate-high Si and Al, and moderate P
B1 Low-moderate grade Fe% with moderate-high Si and Al, and high P
B2 Low grade Fe% with high Si, moderate Al, and low-moderate P

Each composite was crushed to below one millimetre and then sized at one half, one quarter and one eight of a millimetre, for scanning and imaging to determine the liberation characteristics of the various sizes. Material finer than one eighth of a millimetre was not considered.

Technical results

The composites had Target Assays as shown in Table 2 below.

Table 2 – Target Composite Head Assays

	Fe%	SiO2%	Al2O3%	P%	S%
Composite A	49.1	14.2	7.95	0.154	0.108
Composite B1	43.5	18.9	8.57	0.280	0.033
Composite B2	41.2	29.8	5.56	0.108	0.048

Mineral Liberation Analysis (MLA) is a scanning microscope technology that assesses minerals in the various size fractions and determines the extent of mineralisation, the degree of association of the minerals and the make-up (mineralogy) of the various particles.

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Mineralogical analysis (Table 3) shows iron-based minerals are the major component of the composites, with kaolinite (a clay mineral) the major impurity followed by quartz (silica) and phyllosilicates (further clay minerals).

In testing the iron-based minerals, goethite dominates the hematite material. Goethite predominantly has a lower propensity for beneficiation than hematite due to its lower specific gravity.

Table 3 – Grouped mineral abundances per size fraction per Composite.

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Composite A Composite B1
Composite B2
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The beneficiation process identifies a 41.1% mass recovery at good iron, silica and alumina grades with high phosphorous.

Table 4 summarises the overall recovery from all composites.

	Table 4 – Maximum recoveryfrom composites	Table 4 – Maximum recoveryfrom composites	Table 4 – Maximum recoveryfrom composites	Table 4 – Maximum recoveryfrom composites	P% 0.341 0.476 0.251
	Mass Rec(%)	Fe%	SiO2%	Al2O3%	P%
Composite A	41.1	61.1	4.1	2.9	0.341
Composite B1	50.9	57.7	5.6	4.0	0.476
Composite B2	39.8	60.5	5.4	3.7	0.251

The available data shows that while developing a suitable iron grade at a reasonable mass recovery is possible, the phosphorous content of the concentrate will need close monitoring.

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West Leederville, Perth, 6007 Western Australia
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Assessment and next steps

Based on this initial data and analysis, the hematite project at Beyondie is most likely to be developed on the basis of a high-tonnage, low-grade beneficiation based operation.

Emergent has begun the process of significantly increasing the tonnage at Beyondie by undertaking reconnaissance of the remaining 16km of the hematite discovery area utilising portable XRF technologies and field mapping to define potential high grade positions.

The next steps associated with advancing a hematite project at Beyondie include:

Extensive drilling to confirm high grade zones within the bedded mineralisation to establish a resource base.
Further test work to determine the mechanism for producing a concentrate from the ore.

ENDS

About Emergent Resources:

Emergent Resources Limited (ASX: EMG) is a multi-commodity exploration and development company which listed on the Australian Stock Exchange in August 2008. Emergent has secured over 5000 square kilometres of highly prospective acreage in Western Australia, including the Company’s prospective flagship Beyondie Iron Project, with an undeveloped JORC Inferred Magnetite Resource of 561 million tonnes at 27.5% Fe. The Company has significant potential to increase the resource base as it explores more than 60 kilometres of available strike in the magnetite-bearing unit.

The Company has identified significant gold exploration potential in the extensions of the rich Plutonic Well Greenstone Belt that lies in the eastern parts of the Company’s Beyondie tenure in Western Australia. The Company controls a 21km length, or approximately 25%, of the Plutonic Well Greenstone Belt, which has produced some 5 Moz’s of gold since the 1990’s and hosts Barrick Gold Corporations’ Plutonic deposit, along with Dampier Gold’s Marymia Gold Deposit.

The Yerrida Basin, which forms a part of the Capricorn Orogen, hosts the Company’s Glengarry Project. Emergent is quickly establishing new Base Metal and Uranium targets in this underexplored region of Western Australia near Wiluna. Sandfire’s Doolgunna Copper-Gold Project lies within this important orogenic domain. The Company’s Mt Bartle Project lies adjacent to the world largest pure lead mine, Ivernia Inc’s Magellan Lead Mine.

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Level 1, 43 Oxford Close
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West Leederville, Perth, 6007 Western Australia
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AI assistant

FENIX RESOURCES LTD Capital/Financing Update 2011

64910_rns_2011-08-22_7d443c4e-9db9-4db0-9e6a-baccd94c7654.pdf

ASX/MEDIA RELEASE

23[rd] August, 2011

EMERGENT TO PUT INCREASED EMPHASIS ON DEVELOPING GOLD ASSETS FOLLOWING ASSET REVIEW

KEY POINTS

Asset Review

- Iron Ore Development Beyondie Iron Project: (Western Australia Emergent 80%, De Grey 20%)

Significant Gold Potential

For further information please contact:

Competent Persons Statements

- Appendix Technical Analysis of Metallurgical Hematite Test Work

Metallurgical test work program:

Technical results

Table 2 – Target Composite Head Assays

Assessment and next steps

ENDS

About Emergent Resources:

AI assistant

FENIX RESOURCES LTD — Capital/Financing Update 2011

64910_rns_2011-08-22_7d443c4e-9db9-4db0-9e6a-baccd94c7654.pdf

ASX/MEDIA RELEASE

23[rd] August, 2011

EMERGENT TO PUT INCREASED EMPHASIS ON DEVELOPING GOLD ASSETS FOLLOWING ASSET REVIEW

KEY POINTS

Asset Review

- Iron Ore Development Beyondie Iron Project: (Western Australia Emergent 80%, De Grey 20%)

Significant Gold Potential

For further information please contact:

Competent Persons Statements

- Appendix Technical Analysis of Metallurgical Hematite Test Work

Metallurgical test work program:

Technical results

Table 2 – Target Composite Head Assays

Assessment and next steps

ENDS

About Emergent Resources:

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FENIX RESOURCES LTD Capital/Financing Update 2011