ZENITH MINERALS LIMITED — Management Reports 2011

Oct 16, 2011

Mount Alexander iron project – development update

• Components of a pre feasibility study initiated including

• groundwater bore field search program

• environmental assessment

Activities

Mt Alexander Iron Project Earaheedy Manganese Snake Well Base Metals

• planning for a resumption of resource drilling

Details as at September 2011

Issued Shares 81.3 m Unlisted options 1.05 m Mkt Cap ($0.43) A$ 35.0 m Cash Sept 2011 A$ 2.8 m Investments A$ 0.21 m Debt Nil Directors Gary Comb Chairman Anthony Hespe Managing Director Stan Macdonald Non Exec Director Mike Joyce Non Exec Director

Zenith is pleased to announce progress on development activities at its 100% owned Mount Alexander magnetite iron project in Western Australia.

During 2011 Zenith has actively advanced the project with completion of a maiden Inferred Mineral Resource estimate (Table 1) and of a scoping study by independent external consultants (ASX release 10 May 2011). Based on the positive findings of the scoping study the Company has commissioned work which will contribute to a Pre‐feasibility Study on the project.

Ground water

Major Shareholders
HSBC Custody Nom	12.3 %
Giralia (Atlas Iron)	10.8%
Buckley RJH	3.8%
Yandal Inv. PL	3.4%

The project scoping study (ASX 10 May 2011) proposed a bore field as the preferred source of water for processing ore at Mount Alexander. In June 2011 the Company commissioned Golder Associates Pty. Ltd. to identify potential bore field sites and based on their recommendations three Miscellaneous Licences with rights to explore for water were lodged in September 2011. On grant of the tenements the Company will begin exploration to identify a water source for the project by methods including sampling of existing bores, geophysics and drilling.

Environmental assessment

The Company has commissioned consultants Ecologia to commence the environmental surveys that will be required for permitting the development of the project. Level 1 flora and fauna surveys are in progress.

==> picture [54 x 58] intentionally omitted <==

‐ 2 ‐

==> picture [337 x 37] intentionally omitted <==

==> picture [337 x 37] intentionally omitted <==

==> picture [337 x 37] intentionally omitted <==

==> picture [337 x 37] intentionally omitted <==

==> picture [337 x 37] intentionally omitted <==

==> picture [337 x 37] intentionally omitted <==

==> picture [337 x 37] intentionally omitted <==

View south west along Mt Alexander banded iron formation ridge

A report on these surveys will be completed by December 2011 and will include recommendations on the timing and scope of for Level 2 flora and fauna surveys and any additional surveys that will be required. The Company’s aim is to have these field surveys, which are a significant control on the timeline for completion of the overall environmental approval process, completed by December 2012.

Development partner selection

As indicated in the June 2011 Quarterly Report, Zenith has begun an informal process of seeking a development partner for the Mount Alexander project. Several interested parties have executed Confidentiality Agreements and are reviewing detailed project data. The Company will keep the market informed of progress.

Meanwhile the Company will continue to advance and de‐risk the project, including ongoing work on environmental surveys, groundwater search, investigation of export infrastructure options, and metallurgical testing. Preparations are in progress for a resumption of resource drilling including planning for a drill program to increase tonnage in the JORC Inferred category and upgrade existing resources to JORC Indicated category. 25 heritage cleared drill sites are available to commence this program.

‐ 3 ‐

==> picture [54 x 58] intentionally omitted <==

Zenith Minerals Limited

17 October 2011

For further information contact

Michael Joyce Director 08 9481 4440

Anthony Hespe Managing Director 08 9226 1110

Mount Alexander Project

Zenith’s 100% owned Mount Alexander project is near the port of Onslow, 260 kilometres south west of Karratha and is well located with respect to infrastructure. The North West Coastal Highway is 10 kilometres west of the project and the Dampier Bunbury gas pipeline passes to the west of the highway (Figure 1). The project consists of three exploration licenses owned 100% by Zenith Minerals.

==> picture [447 x 285] intentionally omitted <==

Mount Alexander project location and infrastructure

On 11 March 2010 Zenith Minerals announced an Exploration Target* at the Mount Alexander Prospect of 0.6 to 1.2 billion tonnes at between 25% and 35% iron. This estimation was based on results from

‐ 4 ‐

==> picture [54 x 58] intentionally omitted <==

detailed geological mapping, three diamond drill holes, metallurgical testing of core and 580 surface rock samples.

On 14 April 2011 Zenith announced a maiden Inferred Mineral Resource for the project which is summarized in the following table:

	Table 1 Mt Alexander Magnetite Project	Table 1 Mt Alexander Magnetite Project	Table 1 Mt Alexander Magnetite Project	Mineral Resource estimate	Mineral Resource estimate	Mineral Resource estimate
Classification	Tonnes (million)	Fe %	SiO2 %	Al2O3 %	P %	S %	LOI %
Inferred	392.9	29.5	48.3	2.4	0.10	0.47	‐0.7

The Mineral Resource was estimated by independent consultants CSA Global Pty Ltd.

The maiden Inferred Mineral Resource is located within an overall Exploration Target* at the Mount Alexander project of 0.75 to 1.43 billion tonnes grading 25 to 35% Fe. (ASX releases 11 March 2011 and 21 July 2011).

==> picture [387 x 49] intentionally omitted <==

==> picture [387 x 49] intentionally omitted <==

==> picture [387 x 48] intentionally omitted <==

==> picture [387 x 49] intentionally omitted <==

==> picture [387 x 49] intentionally omitted <==

Figure # Oblique view looking north east of the maiden Inferred Resource volume (yellow) overlain on Exploration Target volume (red)

On 10 May 2011 Zenith released positive findings from an independent Scoping Study by external consultants on development options for the Mount Alexander project. The study proposed production of 8 mtpa of magnetite concentrate grading 68.6% iron, with a base case of a slurry pipeline transporting concentrate to a transshipment facility at Onslow. A possible alternate export

infrastructure solution is the proposed rail line linking the API Joint Venture’s West Pilbara Iron Project to the bulk export port planned for Anketell Point.

‐ 5 ‐

==> picture [54 x 58] intentionally omitted <==

The Mount Alexander mineralisation occurs in a banded iron formation (BIF) associated with a sequence of amphibolite, dolomite, schist and quartzite of Proterozoic age in the northern Gascoyne Province. These rocks have been folded into a regional scale north east trending anticline and metamorphosed to upper greenschist and amphibolite grade. The core of the anticline is intruded by the Mortgage monzonite stock which is related to tungsten and lead zinc mineralization in the area.

*JORC statement on the use of the term “Exploration Target” in this release: “The potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource”.

Competent Persons Statements

The information in this report that relates to Exploration Results at Mount Alexander and the Exploration Target at Mount Alexander is based on information compiled by A M Hespe, who is a Member of the Australasian Institute of Geoscientists. Mr Hespe has sufficient experience which is relevant to the style of mineralisation and type of deposit 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'. Mr Hespe is a full time employee of Zenith Minerals Limited and consents to the inclusion in the report of the matters based on his information in the form and context in which it appear.

The information in this Report that relates to the Inferred Resource at Mount Alexander is based on information compiled by Grant Louw of CSA Global. Grant Louw takes overall responsibility for the estimates. He is a Member of the Australian Institute of Geoscientists and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person in terms of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2004 Edition). Grant Louw consents to the inclusion of such information in this Report in the form and context in which it appears.