High Grade saprolite from Hepi Project

The project land holding is in excess 500 square kilometres hosting significant laterised ultramafic structures. The project contains a World Class nickel resource of 143 million tonnes averaging 1.0% nickel and 0.06% cobalt (0.7% nickel cut off grade). Total metal content of 1,430,000 tonnes of nickel and 85,000 tonnes cobalt has been defined by extensive drilling programs over the past three years.

Over the past year the Company has focused its attention of unlocking the value of the resources through a series a metallurgical test programs aimed at identifying ore types that are suitable to be treated by Heap Leaching.

The results from the test programs provide compelling evidence that a substantial proportion of the resource is a saprolitic ore type that responds favourably to Heap Leaching with sulphuric acid.

Metallurgical column leach test work completed on the Hepi and Mt Kilkenny resources has recorded up to 82% nickel and 99% cobalt extraction is achievable in 120 days. These resources represent only 30% of the total resources contained in the NiWest Nickel Laterite Project.

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The project, which has the potential to become a significant long term, low cost nickel producer through the development of a Heap Leach project, is located in close proximity to established infrastructure such as railway, nickel refineries, established townships, natural gas pipeline and bitumen road access. The project is sited in a predominately flat arid environment is considered to be highly conducive to the development of a Heap Leach operation.

Aker Kvaerner have completed  a Pre feasibility study on the development of a low CapEx /OpEx Heap Leach Project targeting a minimum 20 year project producing up to 15,000 tonnes of Nickel and 1000 tonnes of Cobalt per annum.

Table 1: NiWest Total Resource at Various Cut-off Grades

In August 2006 the Company commissioned a Sonic drill rig program to recover full core samples through the 1% nickel envelope. A total of sixteen drill holes were located over the Hepi and Mt Kilkenny resources to provide representative sample of the ore types in each resource.

The core samples were then cut, assayed, agglomerated and loaded into four separate four metre column. The column leach tests, which, commenced in November 2006 were undertaken at SGS Lakefield Oretest laboratories in Perth.

The first three column tests exceeded the targeted Nickel extraction rate of 70% and were decommissioned (March 2007) in preparation of Geotechnical work to confirm the strength of the agglomerates. The remaining test column, MK North #2, continues in line with the other column tests. Details of the metal extraction results from the column tests are shown in the tables below.

Throughout the test duration all columns maintained consistently high leach solution percolation rates. The percolation rates confirm that the Hepi and Mt Kilkenny agglomerates have remained stable throughout the test period, with minimal slump observed. This is a significant step forward as the stability of the agglomerate is a fundamental aspect in achieving a successful Heap Leach operation.

4 metre column tests at SGS Lakefield Laboratory Perth WA

As a result of the highly successful column tests the Company has elected to proceed with a large scale onsite trail heap leach in an effort to expedite the project development. Planning and permitting process are now underway in anticipation of work commencing in 2008.

Commitment to a bankable feasibility study for the full scale project processing 1.5 – 2.0 million tonnes per annum (12,000 – 15,000 tonnes Nickel) involving a sulphur burning acid plant and metal recovery circuits will run concurrently with the commissioning of the Demonstration project. Completion time for the acid plant would dictate full commissioning but is expected to be on line by 2011.