GREENWING RESOURCES LTD — Capital/Financing Update 2007

Oct 25, 2007

ABN 31 109 933 995

26 October 2007

The Manager Companies Australian Stock Exchange 20 Bridge Street SYDNEY NSW 2000

Dear Sir

DOUBLING OF MINERAL RESOURCE AT HELLYER-QUE RIVER

Highlights

• An initial combined Mineral Resource (Indicated and Inferred) of 748,000 tonnes grading 7% zinc, 4% lead, 0.3% Cu, 87 g/t silver and 1.3 g/t gold has been estimated for the Hellyer Mine Project.

• This addition represents a doubling of the Company’s base metal resources at Hellyer-Que River to 1.5 million tonnes at 6.3% zinc, 3.5% lead, 0.7% copper, 85 g/t silver and 1.1 g/t gold which is comparable to a zinc equivalent grade of 15% at current metal prices.

• Further resource growth expected following outstanding drill intercept at the adjacent Southern Barite lens of 57 metres at 14% combined lead and zinc.

Introduction

The initial Mineral Resource estimate for the Hellyer Mine Project ( HMP ) represents a significant milestone for the Company towards expanding its base metal resources and potentially its production profile. A summary of the estimate, prepared by Coffey Mining and reported in accordance with the JORC Code, is presented in Table 1 and the location of key components illustrated schematically in Figure 1. This does not include the Southern Barite lens (SBL) where the Company recently announced a 57 metre high grade base metal intercept.

Table 1: Hellyer Mine Project Mineral Resource

	Summary of Classified Hellyer Mineral Resources as at October 2007 >5% Combined Pb + Zn Lower Cut Off	Summary of Classified Hellyer Mineral Resources as at October 2007 >5% Combined Pb + Zn Lower Cut Off	Summary of Classified Hellyer Mineral Resources as at October 2007 >5% Combined Pb + Zn Lower Cut Off	Summary of Classified Hellyer Mineral Resources as at October 2007 >5% Combined Pb + Zn Lower Cut Off	Summary of Classified Hellyer Mineral Resources as at October 2007 >5% Combined Pb + Zn Lower Cut Off	Summary of Classified Hellyer Mineral Resources as at October 2007 >5% Combined Pb + Zn Lower Cut Off	Summary of Classified Hellyer Mineral Resources as at October 2007 >5% Combined Pb + Zn Lower Cut Off
Mineralisation Type	JORC Code Category	Tonnes (000's)	Zn %	Pb %	Cu %	Ag g/t	Au g/t
Stringer Zones Base Metals Sulphide Remnant Pillar & Surrounds	Indicated Indicated Indicated	255 190 195	4.4 10.6 6.4	2.7 6.0 3.8	0.4 0.4 0.3	48 145 70	0.9 2.0 1.2
TOTAL INDICATED		641	6.8	4.0	0.4	83	1.3
Stringer Zones Base Metals Sulphide Remnant Pillar & Surrounds	Inferred Inferred Inferred	24 27 56	7.3 8.9 8.0	3.6 5.7 5.1	0.1 0.2 0.3	69 138 109	0.9 1.7 1.6
TOTAL INFERRED		107	8.1	4.9	0.2	107	1.5
TOTAL MINERAL RESOURCE		748	7.0	4.1	0.3	87	1.3
Note the above results have been rounded

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Figure 1: HMP Schematic Long Section

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Background

Coffey Mining was commissioned by Bass Metals to undertake a Mineral Resource estimate for the mineralisation occurring adjacent to the mined areas of the Hellyer deposit, referred to as the Hellyer Mine Project. This mineralisation comprises both massive base metal sulphide zones and distinct areas of strong base metal veins referred to as stringer zones, generally occurring in the footwall position to the main mined portion of the Hellyer deposit. As well, Coffey Mining was requested to assess and classify areas of potentially recoverable remnant mineralisation associated with the former mine workings.

In summary, the key points to the estimation process include:

• Historic drilling through the Hellyer deposit is predominantly on a 20 metre by 20 metre spacing with some 10 metre by 10 metre infill. The local mine grid is orientated approximately 022° AMG. A total of 957 diamond drillholes and 1,548 channel sample are present in the Hellyer database and define the Hellyer mineralisation. Diamond drilling took place over the deposit from 1983 to 2000. Of these, 453 diamond drillholes and 251 channel samples were used in the resource estimate. Specific gravity (air pycnometer) measurements were made for the bulk of the samples.

• Underground mining commenced on the Hellyer deposit in 1986 and stopped in 2000. The Base Metal Sulphide mineralised zones were defined based upon drillhole logging codes. The other mineralised zones (‘Stringer’ and ‘Remnant Pillar and Surrounds’) were modelled based upon a combination of a nominal 1% combined Pb + Zn grade and logged geology (see Figures 2 through 4).

• Statistical analyses on 1 metre composites were completed. Variography and search neighbourhood analysis were also conducted as input into grade estimation.

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• The method used to obtain grade estimates for Pb, Zn and Cu was Ordinary Kriging on accumulated grade times density, with grade back-calculated following estimation. Density, Au and Ag was estimated using Ordinary Kriging.

• The relative bulk density (specific gravity) which is assumed to be equivalent to dry insitu bulk density has been estimated by Ordinary Kriging based upon the air pycnometer measurements reported from the samples. The density used for reporting has been multiplied by a factor of 0.95 to take into account the effect of pore spaces.

• Resource classification was developed from the confidence levels of key criteria including drilling methods, geological understanding and interpretation, sampling, data density and location, grade estimation and quality. Historic mining (voids and drives) have been depleted from the resource model. The availability of good quality working plans dating back to the time of the Hellyer mine operations and discussions with several former senior technical employees at that time also contributed significantly to this process.

The resource estimation for the Hellyer deposit was performed by Hillary Wright BSc(Hons), MSc, MAusIMM and Neil Inwood BSc, MSc, who are both full time employees of Coffey Mining. Neil Inwood and Hillary Wright have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Mineral Resources and Reserves”. Neil Inwood consents to the inclusion in this report of the matters based on the work performed by Coffey Mining in the form and context in which it appears.

Discussion

Bass Metals now has now doubled its total Mineral Resource inventory in the Hellyer-Que River region to 1.5 million tonnes of polymetallic mineralisation as summarised in Table 2 below. Based on current metal prices this generates a Mineral Resource of 1.5 million tonnes at a zinc equivalent grade of 15%. The zinc equivalent grade has no metallurgical recoveries or other factors applied, it is presented only to provide a basis of comparison for these polymetallic resources and zinc has been selected as it generates approximately 50% of the payable value based on the Company’s Que River ore sales contract with Zinifex Limited.

- ** Table 2: Hellyer Que River Mineral Resource Summary

	Summary of Classified Base Metal Mineral Resources as at October 2007	Summary of Classified Base Metal Mineral Resources as at October 2007	Summary of Classified Base Metal Mineral Resources as at October 2007	Summary of Classified Base Metal Mineral Resources as at October 2007	Summary of Classified Base Metal Mineral Resources as at October 2007	Summary of Classified Base Metal Mineral Resources as at October 2007	Summary of Classified Base Metal Mineral Resources as at October 2007	Summary of Classified Base Metal Mineral Resources as at October 2007
Mineralisation Type		JORC Code Category	Tonnes (000's)	Zn %	Pb %	Cu %	Ag g/t	Au g/t
Que River Hellyer		Measured 56 Measured -		2.1 -	0.7 -	1.7 -	69.4 -	0.3 -
TOTAL MEASURED			56	2.1	0.7	1.7	69.4	0.3
Que River Hellyer		Indicated Indicated	486 641	6.2 6.8	3.1 4.0	1.1 0.4	87.1 83.0	1.0 1.3
TOTAL INDICATED			1,127	6.6	3.6	0.7	84.8	1.2
Que River Hellyer		Inferred Inferred	194 107	5.3 8.1	2.9 4.9	0.9 0.2	79 107	0.9 1.5
TOTAL INFERRED			301	6.3	3.6	0.7	88.7	1.1
TOTAL MINERAL RESOURCE			1,484	6.3	3.5	0.7	85.0	1.1
				Zn	Pb	Cu	Ag	Au
				kt	kt	kt	koz	koz
Contained Metals				94	52	11	4,055	54

Important Note

*Current metal prices assumed for Zn equivalent calculation and in ground value estimate are: zinc – US$3,000/t, lead – US$3,700/t, silver – US$13/oz, gold - US$760/oz & copper – US$7,800/t. ** Full details on Que River Mineral Resource estimates are provided in Attachment 1.

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Commentary

The completion of this initial Mineral Resource estimate for the HMP is major advance for the Company’s growth and production objectives for several reasons:

1. The combined resources comprise a substantial tonnage which doubles the Company’s exiting polymetallic resource base, with a high, zinc equivalent grade of 15%.

2. The resource areas as depicted schematically in Figure 1, generally comprise well grouped, robust “blocks”, particularly in the shallower, southern portions of the deposits which certainly warrant further evaluation as part of a HMP pre-feasibility study.

3. This initial HMP resource is adjacent to the shallower, unmined SBL where the Company has recently intersected 57 metres grading 9.2% Zn, 4.7% Pb, 94g/t Ag and 2.9g/t Au in a diamond drill hole, highlighting the excellent potential of the SBL to further increase the resource inventory. Drilling will recommence at SBL on completion of the revised geological interpretation and the availability of a drill rig - planned to be in November 2007.

This “maiden” HMP Mineral Resource estimate represents another important milestone for the Company; it is a clear demonstration of the Company’s potential to generate further base metal production in addition to the Que River operation which recently started mining and ore deliveries to Zinifex’s Rosebery operations. The doubling of the resource base means the Company now has base metal resources with an “in ground” value of approximately US$650 million at current* metal prices.

The Company has an exciting future given the promising potential of the SBL to add additional resources adjacent to the HMP resource and the close proximity of two processing facilities where this material could potentially be processed. The next phase of activity is to delineate a resource at SBL, and commence pre-feasibility level study of mining opportunities at the HMP.

I look forward to providing further updates on these, and all of the Company’s varied, mining, development and exploration activities in NW Tasmania.

Yours Sincerely

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Mike Rosenstreich Managing Director

Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Bass Metals Ltd’s planned exploration program and other statements that are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Bass Metal Ltd believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.

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Figure 2: Long Section View of HMP Mineral Resource

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Figure 3: Oblique View of HMP Mineral Resource

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Figure 4: Plan view of HMP Mineral Resource

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Suite 5/2 Richardson Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Attachment 1: Que River Mineral Estimates

A summary of the current Que River Mineral Resource is presented in Table 1. Details of the estimates for each deposit are provided below and the locations are presented schematically in Figure 1.

Table 1: Que River Mineral Resource Estimate Summary

	Summary of Classified Que River Mineral Resources as at June 2007	Summary of Classified Que River Mineral Resources as at June 2007	Summary of Classified Que River Mineral Resources as at June 2007	Summary of Classified Que River Mineral Resources as at June 2007	Summary of Classified Que River Mineral Resources as at June 2007	Summary of Classified Que River Mineral Resources as at June 2007	Summary of Classified Que River Mineral Resources as at June 2007
Ore type/area	JORC Code Category	Tonnes (000's)	Zn %	Pb %	Cu %	Ag g/t	Au g/t
QR32 Lens S-Lens PQ Lens Nico	Measured Measured Measured Measured	- 56 - -	- 2.1 - -	- 0.6 - -	- 1.7 - -	- 69 - -	0.0 0.3 0.0 0.0
TOTAL MEASURED		56	2.1	0.7	1.7	69	0.3
QR32 Lens S-Lens PQ Lens Nico	Indicated Indicated Indicated Indicated	134 286 33 33	5.9 4.6 18.7 9.0	3.5 1.8 10.3 5.4	0.2 1.8 0.4 0.3	83 66 249 130	1.1 0.4 6.3 1.0
TOTAL INDICATED		486	6.2	3.1	1.1	87	1.0
QR32 Lens S-Lens PQ Lens Nico	Inferred Inferred Inferred Inferred	54 58 13 69	4.6 0.6 13.0 8.3	2.7 0.2 7.2 4.6	0.1 2.6 0.3 0.4	72 34 185 102	1.0 0.2 4.2 0.9
TOTAL INFERRED		194	5.3	2.9	0.9	79	0.9
TOTAL MINERAL RESOURCE		736	5.7	2.9	1.1	84	0.9

A1: S-Lens Mineral Resource

The revised Mineral Resource is presented in Table 2 below. This resource is reported in accordance with the JORC code. Figure 2 illustrates the Mineral Resource outline and drill results in long section projection.

Table 1: S-lens Mineral Resource Summary

Summary of Classified S-Lens Mineral Resource

Table 1: S-lens Mineral Resource Summary	Table 1: S-lens Mineral Resource Summary	Table 1: S-lens Mineral Resource Summary	Table 1: S-lens Mineral Resource Summary	Table 1: S-lens Mineral Resource Summary	Table 1: S-lens Mineral Resource Summary	Table 1: S-lens Mineral Resource Summary	Table 1: S-lens Mineral Resource Summary	Table 1: S-lens Mineral Resource Summary
Summary of Classified S-Lens Mineral Resource
Ore type/area	JORC Code Category	Tonnes (000's)	Cu %	Pb %	Zn %	Ag g/t	Au g/t	SG T/m3
South:Cu Zone Central: Cu-Zn Zone North: Zn Zone	Measured Measured Measured	51 5 -	1.7 1.8 -	0.6 1.7 -	1.9 4.0 -	69 73 -	0.34 0.33 -	3.88 3.83 -
TOTAL MEASURED		56	1.7	0.6	2.1	69	0.34	3.88
South:Cu Zone Central: Cu-Zn Zone North: Zn Zone	Indicated Indicated Indicated	126 67 93	2.4 2.2 0.6	0.5 2.9 2.7	1.5 5.7 8.1	67 90 46	0.32 0.31 0.42	3.86 3.9 3.73
TOTAL INDICATED		286	1.8	1.8	4.6	66	0.35	3.83
South:Cu Zone Central: Cu-Zn Zone North: Zn Zone	Inferred Inferred Inferred	56 - 2	2.6 - 0.5	0.1 - 3.5	0.3 - 9.8	33 - 46	0.15 - 0.28	3.95 - 3.58
TOTAL INFERRED		58	2.6	0.2	0.6	34	0.15	3.94
TOTAL MINERAL RESOURCE		400	1.9	1.4	3.7	62	0.32	3.85

Note:

1 Rounding erors may occur

• 2 Cu Zone = >1%Cu and <5% (Zn+Pb) Cu-Zn Zone = >1%Cu and >5% (Zn+Pb)

• Zn Zone = Cu<1% and >5% (Zn+Pb)

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The resource estimate is based on a geological model compiled by consulting geologist, Mr. Steven Richardson. Tonnage and grade estimation has been undertaken by Mr. Richardson using anisotropic 2D inverse distance interpolation, the same method utilised for the previous estimate and considered appropriate for the purposes of this estimate.

The drillhole database used for this estimate comprises 25 diamond core drill holes completed by Bass Metals as well as 100 historical diamond drill holes. In addition, original 1:500 scale mine geology cross-sections, long projections and underground development surveys were available. Mined out areas were not surveyed but details were sourced from an end of mine life report and discussions with ex-Que River Mine mining personnel involved in the mining of S Lens in the late 1980’s.

Mr. Steven Richardson BSc(Hons) MAusIMM, a fulltime employee of McArthur Ore Deposit Assessments (MODA) has 26 years experience, including 10 years at Que River-Hellyer. He completed the bulk of the estimation work under the direction and supervision of Dr Gary McArthur PhD FAusIMM MICA MSEG, principal of MODA. Dr McArthur has over 35 years experience as a professional in the mining industry (including 10 years at Hellyer), with considerable involvement in the estimation of resources over a wide variety of commodities and mineralisation styles. As such, Dr McArthur meets the formal requirements as defined in the JORC Code (Joint Ore Reserves Committee, 2004) to be a Competent Person for the estimation of the Que River S Lens Mineral Resources and has consented to the inclusion of his name in this report.

Suite 5/2 Richardson Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Figure 1: Que River Mineral Resource Location Plan

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Suite 5/2 Richardson Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Figure 2: S-Lens Long Section Projection

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A2: PQ South & Central Mineral Resource estimates.

The Mineral Resource for this portion of the PQ Lens is presented in Table 3 below. This resource is reported in accordance with the JORC code. It comprises both remnant mineralisation within pillars of the former (1980-1991) mine workings and isolated shallow pods of massive sulphide mineralisation too remote from the previous mine infrastructure to be accessed in the earlier mining phase. Both types occur within 60 metres from the surface.

The drilling information on which the estimate is based comprises Bass Metals’ and historic diamond drilling on a 12.5m by 12.5m spaced pattern and mine data from the immediate area. The JORC Category classification used is considered appropriately conservative. It recognises the uncertainty associated with remnant mineralised blocks, such as the spatial extent of mining surrounding the remnant and as a consequence its final dimensions. The bulk of the remnant mineralisation comprises a series of pillars within the high-grade, southern and upper part of PQ Lens - the “Decline Stope” pillars. The Company has undertaken an exhaustive review of the historic mine records and has held discussions with several former mine employees to support the view that this remnant mineralisation is still in-situ.

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Table 3: PQ South & Central Mineral Resource

Summary of Classified PQ South-Central Mineral Resource

Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource	Table 3: PQ South & Central Mineral Resource
Summary of Classified PQ South-Central Mineral Resource
			above 60 metres vertical depth
Ore type/area	JORC Code Category	Tonnes (000's)		Cu %	Pb %	Zn %	Ag g/t	Au g/t	SG T/m3
PQ South remnants PQ Central-Surface	Inferred Inferred	10 3		0.3 0.3	7.2 7.0	13.6 10.7	194 151	4.52 3.18	3.59 3.80
Total Inferred		13		0.3	7.2	13.0	185	4.25	3.63
PQ South remnants PQ Central-Surface	Indicated Indicated	31 2		0.3 1.1	10.3 10.3	18.3 24.9	260 81	6.46 3.30	3.99 4.22
Total Indicated		33		0.4	10.3	18.7	249	6.27	4.01
TOTAL MINERAL RESOURCE		46		0.4	9.4	17.1	231	5.70	3.90

Note:

1 Rounding erors may occur 2 COG >5%(Zn+Pb)

To provide further confidence a drilling programme testing each Decline Stope pillar was undertaken. As stopes at Que River Mine were not surveyed after mining there is uncertainty in the location of each pillar, compounded by the fact that various mine long projections show the pillars in conflicting positions. All five pillars were intersected to some degree by Bass Metal’s holes. However, given the positional uncertainty, drill-hole deviation and a nominal thickness of only 4-5m, it is not surprising that some holes have only partially intersected their target pillar. The area of the resource estimate is presented in Figure 3

Figure 3: PQ South long section showing remnant resource area.

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The resource estimate is based on a geological model compiled by the Que River Mining Alliance project Manager, Mr. Tim Akerman. Tonnage and grade estimation has been undertaken by Mr. Akerman using a simple polygonal model using length weighted averages to estimate grades.

The drillhole database used for this estimate comprises the diamond core drill holes completed by Bass Metals as well as 35 historic diamond drill holes used to delineate the original PQ Ore Reserve. In addition, original detailed mine geology cross-sections and a long projection were available. Details on mined out areas were sourced from an end of mine life report and discussions with ex-Que River Mine mining personnel involved in the mining of PQ Lens in the 1980’s.

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Mr. Akerman BSc (Hons) MAusIMM has 20 years industry experience including 4 years as a production geologist at Que River from 1986. Since then he has had direct involvement in the planning and development of 5 other similar deposits in the Que River region as well as extensive resource delineation and mine planning work on many deposits in Australia and overseas. Mr. Akerman meets the formal requirements as defined in the JORC Code to be a Competent Person for the estimation of the Que River PQ Lens Mineral Resources and has consented to the inclusion of his name in this report.

A3: Nico Lens Mineral Resource Estimate.

The Nico Lens Mineral Resource estimate is reported in accordance with the 2004 JORC Code and is presented in Table 4 below.

Table 4: Nico Lens Resource Estimate

Lens- unit	Resource Category	Tonnes (000)’s	Density (g/cm3)	Horizontal Width(m)		Mean Grades	Mean Grades	Mean Grades
					Zn (%)	Pb (%)	Ag (g/t)	Au (g/t)	Cu (%)
Nico	Indicated	33	3.67	2.8	9.0	5.4	130	1.0	0.3
Nico	Inferred	57	3.66	1.9	8.7	5.2	115	1.1	0.4
Nico	Ind. + Inf.	90	3.66	2.2	8.8	5.3	120	1.0	0.4
**Nico-1 **	Inferred	12	3.47	3.5	6.6	1.8	40	0.0	0.2
**Total **	**Inf.+Ind. **	**102 **	**3.64 **	2.3	8.5	4.9	110	0.9	0.4

N.B. Small rounding errors may occur.

The estimate was undertaken by independent consultants McArthur Ore Deposit Assessments Pty Ltd (MODA) as part of the Que River mining study. The estimate was supervised by Gary McArthur PhD FAusIMM MICA MSEG, who has over 35 years mine geology and resource estimation experience including 10 years at the Hellyer Mine, a similar style deposit 3km north of Que River. As such Dr McArthur is recognised as a Competent Person as defined by the JORC Code (AusIMM, 2004) for estimation of base metal mineral resources such as the Nico Lens. Dr McArthur has given his written consent for the inclusion of the estimate in this ASX release.

An anisotropic 2D inverse method was used to interpolate grades between the 16 historic diamond core intercepts spaced on approximately 25 metre centres. A 5% combined lead plus zinc grade was used as the minimum assay cut-off.

The distribution of the drill holes with intercept values is presented as a long section in Figure 4.

A4: QR32 Lens Mineral Resource estimate.

The QR32 Lens Mineral Resource estimate is reported in accordance with the 2004 JORC Code and is presented in Table 5 below.

Table 5: Summary of Classified QR32 Lens Mineral Resource

Ore type/area	JORC Code Category	Tonnes (000's)	Zn %	Pb %	Cu %	Ag g/t	Au g/t	SG T/m3
QR32 Lens QR32 Lens	Indicated Inferred	134 54	5.9 4.6	3.5 2.7	0.2 0.1	83 72	1.1 1.0	3.3 3.3
TOTAL MINERAL RESOURCE		188	5.5	3.3	0.2	79	1.1	3.3

N.B. Small rounding errors may occur.

Mr. Steven Richardson BSc(Hons) MAusIMM, a fulltime employee of McArthur Ore Deposit Assessments (MODA) has 27 years experience, including 10 years at Que River-Hellyer. He completed the bulk of the estimation work for QR32, Nico and S-Lens under the direction and supervision of Dr Gary McArthur PhD FAusIMM MICA MSEG, principal of MODA. Dr McArthur has over 35 years experience as a professional in the mining industry (including 10 years at Hellyer), with considerable involvement in the estimation of resources over a wide variety of commodities and mineralisation styles. As such, Dr McArthur meets the formal requirements as defined in the JORC Code (Joint Ore Reserves Committee, 2004) to be a Competent Person for

Suite 5/2 Richardson Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

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the estimation of the Que River Mineral Resources. Dr McArthur has consented to the inclusion in the report of the matters based on his information in the form and context in which it appears

QR32 Lens is a zone of massive, stringer and disseminated polymetallic sulphides occurring to the north of PQ Lens at Que River. The lens extends vertically from approximately 240 metres beneath surface, where it was partially mined from underground, to near surface, as shown in the attached long projection (Figure 5) Drilling by Bass Metals, following up on the potential for openpit exploitation, has extended the resource to include a zone from about 150 metres depth to near surface.

A 3D ordinary kriging geostatistical estimation technique was used to undertake the QR32 estimate, which is summarised with more technical detail below. The grade interpolation method involved constraining assay data from 77 diamond drill holes within a series of wire frames defined by a A$70 per tonne value cut-off for the ore ( refer below for metal price details ). Highest grades were further constrained by wire frames generated from outlines of the mineralised massive sulphide lenses. This method differs to that used for the other Que River resources and was employed to better reflect current ore values and potential value of mineralisation occurring outside of the main massive sulphide mineralised lenses. It differs from previous 2D estimates where mineralised domains were more tightly constrained to higher cut-offs of combined lead and zinc grades greater than 5%, which generally define only the higher grade portions of the lenses.

The deeper portion of the Mineral Resource occurs around mined voids for which survey data is not available. To account for mined out material, stope wire frames were modelled on "estimates" of where the stopes would likely have extended to based on survey data of the underground mine development and historical records.

The estimation of Mineral Resources for QR32 Lens at Que River Mine has been undertaken using industry standard geostatistical techniques. In brief, the following procedure was adopted:

QR32 Lens Estimation Parameters

• Data validation of assays was undertaken.

• Assays were converted to a A$ dollar value, based on long term average metal prices supplied by Bass Metals in June 2006. Metal prices used are:

• Cu -US$6700 /t

• Pb- US$970 /t

• Zn – US$3,000 /t

• Ag – US$10 / oz

• Au – US$565 / oz

• US$ -$A 0.74

• No allowance was made for metallurgical recoveries.

• Log probability plots of dollar-value at Que River suggest a natural boundary at A$70, separating background mineralisation from the ore systems and could be used to define the shape of the Que River mineralized zones.

• 3D wire frames of the QR32 mineralised domain, using this A$ value, were interpreted in Datamine by snapping to drillhole sample boundaries. Geologically logged high grade Base Metal Sulphide (BMS) lenses were also wire framed.

• The resulting wire frames were filled with blocks having dimensions of 5m along strike (NS), 5m vertically (RL) and 2m across dip (E-W). No sub-cells were used.

• Using the available density data, a multiple linear regression was developed to estimate density from Cu, Pb and Zn grades. Missing densities were replaced with regressed values.

• 2m composites were computed for all available assay data using length-density weighting and honouring the interpreted ore zone boundaries.

• Continuity axes were inferred from the orientation of the lens and BMS pods. Single structure spherical variograms were prepared and modelled

• 3D ordinary kriging was undertaken, constrained by the interpreted ore zone wire frames. Each kriged estimate used at least three and up to 20 of the closest, most-influential

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composites. In areas of sparse data second and third passes were needed with an expanded search area until grade was assigned to every cell.

• No stope surveys exist for Que River mine, so a wire frame of theoretical stopes, based on an end-of-mine long projection and a nominal historical average1.7m of dilution were used. Surveyed level development wire frames were also used. To account for material already mined cells were flagged if they fell within the stope or development wire frames.

• Resources were grouped into Indicated and Inferred categories by reference to the estimation kriging variance (EKV) calculated by the kriging software for each Zn estimate and comparison of this value with the sample density. The area of greatest drilling density is in the area of the historic stopes but the lack of survey data on the stopes is considered to preclude a Measured category.

• Resources were tallied according to resource category, using a block cutoff grade of 5%(Pb+Zn)

Figure 4: Long Section Projection of Nico Lens showing distribution of dill holes.

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Suite 5/2 Richardson Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Figure 5: QR32 Long Section

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Suite 5/2 Richardson Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au