Mincor Resources NL (MCR) – Ramping Up Production by 40% to 14,000tpa Nickel from March Quarter 2006

• Mincor Resources (MCR) commissioned its two “new” re-opened nickel mines of Redross and Mariners, and extension of Miitel into North Miitel during 2004/2005 and expects to produce ~13,000t of Ni during 2005/2006 inferring that it could produce 14,000tpa Ni from MQ2006.
• While Wannaway is expected to continue as long as it profitably can, Miitel remains the mainstay of MCR’s operations at Widgiemooltha (south of Kambalda in WA), and with the increased exploration, extensions both north & south of Miitel have already been discovered lengthening Miitel’s probable life beyond 5 years.
• MCR is a relatively conservative company, only including remnant pillars in resources if there is an MCR approved plan to mine them, which has resulted in a very high resource to reserve conversion rate of >90%. Resources were 68,000t Ni as at 30 June 2005 having increased by a net 12% (8,800t Ni) since June 2004, and a further upgrade is expected within the next 6 months (by MQ 2006), based on the new discoveries and extensions to ore boundaries since late June 2005.
• There is a market perception that the Widgiemooltha Dome’s Ni grades and orebody sizes are lower than Kambalda’s and it is less prospective. However, the average Ni grades are in fact similar, with high tenor >10%Ni also present, such that the eastern side of the Widgiemooltha Dome appears to be just as prospective with potentially material upside since it has been explored to a lesser degree.
• While the Widgiemooltha area is littered with old gold workings, the north-south striking Lake Zot dolerite (mainly under the salt lake) has not been drilled for gold, despite its host rock similarities to Gold Fields’ St Ives and Avoca’s Higginsvile, and its proximity to WA’s renowned gold mineralisation-feeding structures. MCR have a programme to RC drill the Lake Zot dolerite starting in October 2005.

Sally Malay Mining Limited (SMY) –Extending SMY’s Life Beyond 8 Years

• Sally Malay is currently increasing production at both of its nickel mines, being the 100% owned Kimberley Nickel Mines (KNM) in northern WA and 75% owned Lanfranchi Nickel Mines (LNM) south of Kambalda, to ~8,000t Ni pa in 2006.
• Based mainly on the existing ore reserves of the central orebody at KNM, SMY’s life is about 5 years. However, so far, there has been an ~24% positive reconciliation in contained nickel in the upper orebody (mined essentially from the open-cut). Also, the initial underground levels are exposing significantly greater widths than expected such that the first stoping block indicates a 50% increase in tonnes or 43% increase in contained nickel.
• Drilling is also extending the Sally Malay orebody further west, with the intersection of 3.6m at 3.1% Ni (and 0.95%Cu) in drillhole KUD56 ~40m from the western boundary inferring further extensions to reserves and resources. When combined with the 11 drillholes already having intersected the lower orebody (below the 500 fault), SMY’s life at KNM could be at least 10 years, at possibly a higher grade than current ore reserves.
• The initial exposures of Helmut South at Lanfranchi are reminiscent of the thick widths of Helmut with a 16m true width (35m intersected) @ 4.1% Ni containing an 8.1m true width (17.4m intersected) higher grade zone at 5.4%Ni. Some of the Lanfranchi mines were renowned for their thick widths and high grades such as the 6m to 8m thick massive sulphide at 10% to 12%Ni in Schmitz, and the 13,680tNi mined from Skinner in 2000, consisting of 260,000t at 5.3%Ni.
• Lanfranchi also has the potential to realise a significantly longer life following the discovery that a complete host sequence and contact boundary exists on the northern overturned side of the east-west striking dome. Theoretically the lava channels/embayments that have been mined to-date across the southern side of the dome could recur along the northern side of the dome too.

Michelago Limited (MIC) – A Leveraged Gold Play

• On 19 September 2005, MIC announced that (subject to shareholder approval) it had made a placement of A$8.2m in the form of 164m shares at 5Ac to settle A$2.1m associated with the purchase of 82% of BioGold in outstanding loans (apart from the concentrate credit facility), purchase the remaining 17% of BioGold for A$1.6m (to increase MIC’s holding to 99%), pay A$1.3m for the BioGold Technology Licence and other financing fees, and have A$3.2m to cover working cap and the completion of the BioGold expansion.
• Michelago represents a classic leveraged play on the gold price because its profits are based directly on marginal percentages of the gold price, accruing up to ~20% of spot gold revenue from the gold ores that it treats, less treatment costs. MIC’s NPV appears to increase by about 1.6Ac per US$25/oz increase in the gold price.
• No further funds are being provided to the ASG (Australian Solomon Gold) consortium to complete the feasibility study on Gold Ridge and any required finance before ASG’s expected IPO in perhaps March - June 2006. Consequently MIC are diluting down their holding in ASG and depending on ASG’s required finance, before its IPO, and the IPO itself, MIC could have possibly 29% to 30% post IPO.
• MIC intends to decide post ASG’s IPO whether to continue to hold its position in ASG, make an in-specie distribution of its holding to MIC shareholders, or make a combination of the two namely, part held, partly distributed. Theoretically MIC’s post IPO 30% holding could be worth ~A$30m or so.
• The expansion of BioGold’s Bacox© circuit from 100tpd to 200tpd (currently equivalent to 50,000ozpa to 120,000ozpa) is expected to be completed by December 2006 and should gradually increase the current production (including ~100,000ozpa or so from the cyanide leach) to a capacity of ~230,000ozpa by 2007/2008.