PHOSCO LTD — Interim / Quarterly Report 2012

Jun 17, 2012

18 June 2012

CHAKETMA DRILLING – TRENCHING INTERIM RESULTS

Board of Directors

Andrew Thomson (Non-executive Chairman)

David Regan (Executive Director)

Martin Broome (Non-executive Director)

Melanie Leydin (Non-executive Director)

Company Secretary

Melanie Leydin

Securities on Issue:

CNL: 151,746,177 ordinary shares

CNLO: 25,367,001 options expiring 31 March 2014

CNLCA: 15,471,296 partly paid shares

Highlights:

Drilling

• CHDD-2012-016 15.35m at 23% P2O5
• CHDD-2012-017 11.60m at 23% P2O5
• CHDD-2012-015 7.10m at 20% P2O5

Trenching

• CHT012 10.4m at 22% P2O5
• CHT022 17.00m at 23% P2O5

Celamin has commenced a program of drilling and trenching to test the Kef El Louz and Gassaat Ezzerbat prospects in the Chaketma Project area. This first pass program is designed to determine the depth of over burden and the thickness and grade of the phosphate zone, before committing to the resource definition phase of the exploration program for the Prefeasibility Study.

Background

In preparation for the Chaketma feasibility study Celamin and TMS are focused on identifying the prospect with the best combination of grade, thickness of mineralization, strip ratio and metallurgical properties. This It is intended that this project will be the site of production during the early years of any future mining operation. Initial tests on three composite samples, one each from Gassaa Kebira, Sidi Ali Ben Oum Ezzine and Kef El Louz have demonstrated that a saleable product of +30% P2O5 concentrate can be produced using existing reverse floatation technology. This metallurgical test work is continuing.

The Kef El Louz prospect is approximately 6 kilometres from north to south and covers more than 3.0 km2 . Mapping and trenching at northern end of this prospect shows the area has the potential to meet criteria set out up above. Exploration is concentrating on the north-western corner of Kef El Louz with the aim of delineating 25-30 million tonnes of phosphate mineralization which is sufficient for 10 years production.

Details

Celamin and TMS have completed a 5 diamond drill holes (Table 1 and Figure 1) and 68m of channel sampling in 11 trenches (Table 2 and Figure 2) as part of on-going exploration Chaketma. Dilling is focused on the Kef El Louz part of the Chaketma EP, with one hole drilled at Gassat Ezzerbat in the south of the EP. Drill hole placement was initially determined by access over the rugged terrain at Kef El Louz (Figure 3).

Drill Hole	From (m)	To (m)	Intercept (m)	P2O5%	CaO %
CHDD-2012-016	57.50	72.85	15.35	23.0	41.4
CHDD-2012-017	53.60	65.20	11.60	22.7	43.7
CHDD-2012-015	55.40	62.50	7.10	20.3	40.1
CHDD-2012-013	81.75	83.80	2.05	13.4	36.7
CHDD-2012-014	90.30	92.30	2.00	11.6	36.2

Table 1: Drilling Intercepts

Note: Intercepts lengths are measured down hole . The true thickness of the mineralisation is unknown.

The best results and thickest intersection from the current drilling have come from holes CHDD-015, 16 and 17. The phosphate intercepts in these holes range from 7 to 15 metres at down hole depths of 54 to 57 metres; the apparent waste to ore ratios in these holes range from less than 4:1 to approximately 8:1.

Hole CHDD14 on the western margin of Kef El Louz only intersected a narrow zone of phosphate. The unit is interpreted as having been cut off by a fault which runs down the western margin of the prospect. The thickness of phosphate in this hole is not interpreted to represent the true thickness of the unit in this area. However, further drilling is required to prove this interpretation. Mapping and channel sampling along the eastern margin of Kef El Louz shows the phosphate unit thinning in this direction. Further drilling in the south and centre of the prospect is needed to determine the resource potential of this area. A single hole (CHDD13) was drilled at Gassat Ezzerbat to the south. This hole confirmed the geological model that the phosphate horizon thins to the south near the basin margin (hole intersected 2m at 13.4% P2O5)

Trench ID	Easting UTMWGS84	Northing UTMWGS84	No. ofSamples	Length(m)	P2O5	CaO %
CHT011	499774	3942023	4	4.15	18.58	39.57
CHT012	499550	3941462	10	10.4	22.10	41.82
CHT013	500041	3941182	1	1.4	12.81	37.56
CHT014	500247	3940728	-		NSA	NSA
CHT015	500314	3940334	1	1.8	16.84	39.70
CHT016	500343	3940288	2	2.30	18.65	40.14
CHT017	500533	3939668	2	2.00	12.68	37.92
CHT018	500538	3939237	2	2.70	12.05	42.71
CHT019	500313	3939496	-		NSA	NSA
CHT020	500672	3938080	3	3.30	16.09	38.69
CHT021	500150	3939517	1	1.50	11.33	37.97
CHT022	498930	3941694	17	17.00	22.92	44.80

Table 2: Trench Results

Sampling and Assaying Procedures

Core from the drill holes was half split and sampled after geological logging generally at 1-m intervals or to lithological boundaries. The trench sampling was also generally at 1-m intervals or to lithological boundaries. The samples were crushed and riffle split, and 500g splits were sent to Al Amri Laboratory in Jeddah Saudi Arabia for determination of major oxides by XRF methods on fused "buttons. In order to reduce assay turnaround times Celamin and TMS put priority on analyses for the major element oxide. All the samples will also be assayed for a comprehensive suite of 34 trace elements in due course.

About Celamin Holdings NL

Celamin Holdings NL (ASX Code CNL) is an ASX listed company focused on the exploration and development of resource projects in North Africa initially in Tunisia and Algeria.

Celamin holds the Chaketma Phosphate exploration permit in Tunisia with TMS. This project is Celamin's current focus as it has larger target potential than Celamin's other Phosphate project Bir El Afou. The first results from channel sampling, drilling program and historic data at Chaketma have been announced. The Chaketma project would use the same rail and port infrastructure as identified in the Bir El Afou pre-feasibility studies.

Celamin continues to step up work to carry out a due diligence drilling program for its farm-in to an Exploitation Permit at the Oued El Kebir precious and base metal project in Algeria.

Celamin has also acquired rights to several base metal tailings Projects in Tunisia with TMS and is the holder of three Exploration Permits with base metal (Pb/Zn) targets on a 50/50 basis with TMS.

Table3 ‐ Drillhole ledger:

llleiHoDr	Prtospec	ingEats	hingNotr	levioEtan	hAzitm	ipD	hDetp	Size	Type
		GS8UTMW4	GS8UTMW4	RLm	(°)	(°)	()m
CHDD‐2012‐013	baGaEzttssaar	501075	3937920	784	90	65	101.5	HQ	Core
CHDD‐2012‐014	flKeELouz	499500	3939210	832	40	65	112.2	HQ	Core
CHDD‐2012‐015	flKeELouz	499426	3941208	685		90	72.9	PQ	Core
CHDD‐2012‐016	flKeELouz	499696	3940998	1095	50	75	83.6	HQ	Core
CHDD‐2012‐017	flKeELouz	499437	3940694	1021	50	75	77.6	HQ	Core

Table 4 ‐ TrenchLocations:

hTrenc	Prtospec	ingEats	hingNotr	levioEtan	Type
		GS8UTMW4	GS8UTMW4	RLm
CHT011	idiliineSABeOuEznmz	499774	3942023	1180	halCnne
CHT012	flKeELouz	499575	3941479	1092	halCnne
CHT013	flKeELouz	500041	3941182	1128	halCnne
CHT014	flKeELouz	500247	3940728	1094	halCnne
CHT015	flKeELouz	500314	3940334	1085	halCnne
CHT016	flKeELouz	500343	3940288	1072	halCnne
CHT017	flKeELouz	500533	3939668	1024	halCnne
CHT018	flKeELouz	500538	3939237	948	halCnne
CHT019	flKeELouz	500313	3939496	982	halCnne
CHT020	flKeELouz	500672	3938080	709	halCnne
CHT021	flKeELouz	500150	3939517	945	halCnne
CHT022	flKeELouz	498930	3941694	951	halCnne

Figure 1. Location of Kef El Louz and Gassat Ezarabat Drilling

Figure 2. Location of Kef El Louz Trench Sampling

Figure 3. Kef El Louz Terrain