METALS AUSTRALIA LTD — Capital/Financing Update 2011

Sep 7, 2011

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A S X A N N O U N C E M E N T & M E D I A R E L E A S E 8 S e p t e m b e r 2 0 1 1

NEW ASSAY RESULTS FOR CHANNEL SAMPLING AT MILE 72

• Initial channel sampling of trenches at the Mile 72 Project (EPL 3308) commenced in August 2008. Subsequent legal action and deferment of the renewal of the tenement resulted in these samples being placed in storage.

• High-grade uranium mineralisation confirmed within bedrock. All samples taken from beneath or away from the high-grade gypcrete cap zone.

• Channel samples assay up to 1,158ppm U3O8 and rock samples up to 1,686 U3O8.

• Broad intervals up to 26m of elevated U3O8 values.

1. EXPLORATION AT MILE 72

Exploration is now underway again on Metals Australia (‘Metals’) Mile 72 uranium project in Namibia (Figure 1). Over 360 samples had been collected from the trenches at Mile 72 prior to the legal action and deferment of the renewal of the tenement. Sampling was halted with only a small portion of the trenches sampled. All samples that had been collected were placed in storage pending the outcome of the legal action. These samples have now been assayed.

This release reports the analytical results of these samples and also gives a preview of the exploration work planned at Mile 72 in the coming months. This new work will follow on from the highly successful sampling programmes of 2008.

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Figure 1 - Location of the Mile 72 uranium project.

Metals Australia Ltd (ABN 38 008 982 474)

www.metalsaustralia.com.au

1[st] Floor, 8 Parliament Place, West Perth, WA 6005 ▪ PO Box 1618, West Perth, WA 6872 ▪ t: +61 8 9481 7833 ▪ f: +61 9481 7835 ▪ e: mls@metalsaustralia.com.au

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2. CHANNEL SAMPLING RESULTS

Uranium mineralisation beneath the high-grade gypcrete cap has been confirmed by channel sampling of trenches at Mile 72.

A total of 321 channel samples were collected from portions of 14 of the trenches at the Mile 72 uranium project. All channel samples were taken over 2m intervals. The samples reported here supplement earlier trench samples reported in 2008, infilling previously unsampled areas or expanding upon previously identified mineralised zones. The trenches covered a 7km strike length of the known mineralisation through the Kudu and Impala prospect areas.

The channel samples returned a number of highly anomalous and potentially economic uranium-bearing intervals. Individual samples assayed up to 1,158ppm U3O8 over a 2 metre interval, while continuous sampling returned intervals of up to 24m with values of 190ppm U3O8. This programme has only sampled a very small part of the excavated trenching (Figures 2 & 3).

It is important to note that each of the samples analysed was taken from either below or away from the high-grade gypcrete cap that has previously yielded very high grade results at Mile 72. Samples include a number of rock types, including uraniferous schist and alaskite. The values recorded here show that there is significant uranium beneath the gypcrete cap that must now be tested at depth.

Outstanding results from the programme include:

Trench U3O8 intercept	From Easting Northing	To
		Easting Northing
3 26 m @ 104 ppm including6 m @ 294 ppm 12 m @ 110 ppm 10 m @ 143 ppm including4 m @ 240 ppm 2 m @ 252 ppm	407157 7580207 407157 7580207 407209 7580158 407249 7580106 407252 7580098 406994 7580315	407178 7580189 407162 7580203 407216 7580152 407254 7580094 407254 7580094 406995 7580314
3A 24 m @ 190 ppm including2 m @ 1158 ppm and14 m @ 305 ppm 4 m @ 183 ppm	408410 7579456 408400 7579462 408410 7579456 408310 7579524	408389 7579470 408398 7579463 408396 7579465 408306 7579528
4 2 m @ 587 ppm	408507 7579761	408508 7579760
6 8 m @ 153 ppm 8 m @ 236 ppm 6 m @ 355 ppm	409092 7580663 408915 7580800 408889 7580818	409086 7580668 408909 7580804 408886 7580821

Each individual assay used in the calculation of these intervals is presented in the appendix.

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Figure 2 – Recent assay results for channel sampling at Mile 72. A total of 361 samples are plotted, though there is overlap of samples at this scale.

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Figure 3 – All assay results for channel sampling at Mile 72.

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Figure 4 - The Mile 72 uranium project showing some of the trenching at the Kudu prospect.

The 40 rock samples were largely from the Impala prospect area in the north. These samples were also taken from below the high-grade gypcrete cap and returned a number of highly anomalous and potentially economic uranium-bearing intervals. Individual samples assayed up to 1,686ppm U3O8. Highlights include the following:

Trench U3O8 (ppm)	Location
	Easting Northing
11 210 371	410891 7583052 410407 7583410
12 1,686 213 361	410788 7583782 410841 7583741 411055 7584102

Despite the extensive sampling, only a small proportion of the trenches has been analysed. Further analysis will be done directly (as reported here) as well as using other methods to identify subsurface uranium mineralisation, as detailed below.

3. EXPLORATION PROGRAMME

Metals is now recommencing exploration on the ground at Mile 72. This follows the hiatus caused by legal action against the Company and the subsequent Namibian Supreme Court's decision in November 2010 in favour of Metals’ ownership of the project. The licence was recently renewed for a 2 year period.

A number of different approaches are now planned to commence in the next month at the project.

Trench sampling will continue. Further systematic channel sampling will assist with definition of the near-surface expression of uranium mineralisation.

The area in which trenching has been utilised is in response to airborne and surface radiometric anomalies showing through in areas of thinner cover. However, much of the tenement has thicker sequences of sand and alluvial cover and consequently will not have allowed the detection of any buried channels, alaskite or other uranium mineralisation that occurs below this cover. In recognition of the fact that there may be further uranium mineralisation within the tenement and that the areas now being explored may just be part of

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a larger target, a number of other programmes are also planned to explore the covered areas of the tenement.

Plans are well underway for a radon cup survey to be deployed over the entire area of the tenement that contains sand, alluvium and gypcrete cover, starting during the next month and continuing into the fourth quarter. This work aims to detect any radon gas arising from the natural radiogenic breakdown of buried uranium mineralisation under areas of sand and gravel cover. It is thought that this cover will mostly be less than 10-20m thick, although it is possible that larger and deeper channels may also lie under the alluvial cover.

In order to better understand the depth, type and thickness of these cover areas an electromagnetic (EM) survey is also planned to be completed in conjunction with the radon cup survey. This work aims to determine the thickness of the cover sediments and examine the possibility of buried channels and other features under the sediments.

Results from the radon and EM surveys should be received in October and will then be used to design a follow up programme of further sampling, utilising trenching and drilling on the optimum targets generated.

Metals Australia considers the Mile 72 uranium project to be an exciting opportunity for the company and now looks forward to receiving the results of this active and successful ongoing exploration programme.

Norman Grafton Company Secretary Metals Australia Ltd

For further information please contact:

Norman Grafton – Company Secretary

+61 8 9481 7833

Or consult our website: www.metalsaustralia.com.au

Competent Persons Declaration

The information in this release relating to the geology and exploration results of the projects owned by Metals Australia Ltd is based on information compiled by Mr Kieron Munro, Exploration Manager for Metals Australia and a full time consultant to Metals Australia. Mr Munro is a member of The Australian Institute of Geoscientists, a Recognised Professional Organisation by the Australasian Joint Ore Reserves Committee, who has sufficient experience relevant to the style of mineralisation and types of deposits under consideration and to the activity which is being undertaken 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”. Mr Munro consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Forward-Looking Statements

This document may include forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Metals Australia Ltd’s planned exploration programme 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 Metals Australia 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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A P P E N D I X – A N A L Y T I C A L R E S U L T S

This appendix provides a listing of significant intercepts from recently analysed samples at Mile 72. All samples reported here were collected from the trenches at Mile 72 in August 2008, prior to the legal action and deferment of the renewal of the tenement. Sampling was halted with only a small portion of the trenches sampled and the samples placed in storage pending the outcome of the legal action. With renewal of the licence, these samples have now been assayed.

All coordinates are WGS Zone 33S.

Trench	Quoted interval Sample date Sample No. Easting Northing U308 (ppm)
Trench 3	26 m @ 104 ppm (including 6 m @ 294 ppm) 19-Aug-08 515563 407158 7580208 313.6 515564 407159 7580206 311.3 515565 407161 7580205 258.2 515566 407162 7580203 98.4 515567 407164 7580202 61.3 515568 407165 7580200 14.7 515569 407167 7580199 19.5 515570 407169 7580198 11.2 515571 407170 7580196 19.5 515572 407172 7580195 25.9 515573 407173 7580193 26.5 515574 407175 7580192 97.9 515575 407176 7580190 90.8
	12 m @ 110 ppm 19-Aug-08 515583 407209 7580158 140.3 515584 407211 7580157 212.2 515585 407212 7580156 53.6 515586 407214 7580155 61.3 515587 407215 7580154 115.0 515588 407217 7580152 79.6
	10 m @ 143 ppm (including 4 m @ 240 ppm) 19-Aug-08 515593 407249 7580106 117.9 515594 407250 7580103 55.4 515595 407251 7580101 62.5 515596 407252 7580099 326.6 515597 407253 7580096 153.3
	2 m @ 252 ppm 23-Aug-08 515847 406994 7580315 252.3
Trench 3A	24 m @ 190 ppm (including 2 m @ 1158 ppm & 14 m @ 305 ppm) 18-Aug-08 515501 408410 7579456 112.6 515502 408408 7579457 542.3 515503 408406 7579459 66.6 515504 408404 7579460 59.5 515505 408402 7579461 7.1 515506 408400 7579462 1157.8 515507 408399 7579464 187.5
	4 m @ 183 ppm 18-Aug-08 515517 408310 7579525 226.4 515518 408309 7579527 139.1 515599 407671 7579710 18.3

Continued overleaf

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Trench	Quoted interval Sample date Sample No. Easting_ _Northing U308 (ppm)
Trench 4	2 m @ 587 ppm 20-Aug-08 515645 408507 7579761 587.1
Trench 6	8 m @ 153 ppm 20-Aug-08 515662 409093 7580663 185.1 515663 409091 7580664 13.6 515664 409090 7580665 280.6 515665 409088 7580667 134.4
	8 m @ 236 ppm 20-Aug-08 515679 408915 7580800 205.1 515680 408913 7580801 142.7 515681 408911 7580803 10.0 515682 408909 7580804 587.1
	6 m @ 355 ppm 20-Aug-08 515690 408890 7580818 222.8 515691 408888 7580820 723.9 515692 408886 7580821 119.1

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