Minotaur Exploration Limited (MEP) –Finding the Next Prominent Hill

• Having sold Prominent Hill and its tenements for 1.85 Oxiana Resources (OXR) shares per 1 Minotaur Resources (MNR) share, the discovery team (who now operate Minotaur Exploration (MEP)) are searching for the next Prominent Hill.
• The search is based on some of the key elements that are particular to Prominent Hill, namely location near the Hiltaba or Lower Gawler suite of rocks, structure (ideally NE or NW), and gravity/IP anomalism.
• MEP have at least 14 joint ventures plus its own wholly owned projects, covering more than 50 tenements in various stages of exploration from access approval through to drilling and evaluation. The majority of the projects being in South Australia (the main location for the Hiltaba suite), and targeted areas such as in the vicinity of Broken Hill on the border with NSW and Mt Isa in Queensland.
• In the March Quarter 2005, MEP formed a new joint venture with Helix (HLX) farming-in to earn a 51% interest in HLX’s Tunkillia project, which can be increased by 24.5% to 75.5% through including OXR to complete a prefeas study with an indicated resource exceeding 1moz. Tunkillia already has a resource of 730,000oz (10.5mt at 2.2g/t), and a recently completed IP survey that (after MEP interpretation) has identified a number of drill-ready gold targets.
• MEP are able to spend A$4m to A$5m on exploration during the coming year to December 2005, and yet only ~A$1.5m is from their own funds (out of A$11.5m cash), because of the joint ventures MEP has with major companies such as BHP Billiton, the generative strategic alliance that it is forming with Oxiana to find world class copper-gold orebodies in Australia, and to some degree the SA Mines Department’s PACE initiative funding 50% of selected drillhole programmes.

Michelago Limited (MIC) – MIC Finally Receives its BioGold Approval!

• On 4 July 2005, MIC announced that it had received its BioGold SFJV approval from the Chinese Government, and expects to transfer and take over 82% of the BioGold assets within the next 30 days (by the end of July 2005). The approval process ultimately occurred, but there were more steps and time to complete the transaction than originally envisaged. MIC has consequently now received all of its approvals, for BioGold and for the acquisition of 47.5% of Gold Ridge and transfer of its ML to the Australian Solomon Gold (ASG) consortium.
• Michelago currently appears to be well undervalued in the market at 5.6Ac, and with an NPV (at 5%) of A$0.21 at a gold price of US$425/oz and A$/US$ exchange rate of 77USc. This is based on assuming that MIC exercises its option to increase its equity in BioGold to 99% by October 2005 for Rmb10m, and that the 15Ac options are converted in 2007, (which results in 864m shares in issue in 2007).
• With an attributable 70,000ozpa for 10 years from 47.5% of Gold Ridge and 99% of BioGold’s 170,000ozpa (omitting the refinery production as too marginal). MIC could attribute ~240,000ozpa of production by the end of 2006. Should the 80,000ozpa expansion of BioGold be completed in 2006, then production could increase to ~320,000ozpa, with the potential to achieve higher production levels when BioGold attains its rated capacity and/or Gold Ridge treats higher grade ore.
• The ASG consortium’s acquisition of Gold Ridge has been based on 2.3moz of resources and 1.7moz of reserves as at 30 June 2000 (at a gold price of A$450/oz), with initial production commencing in the second half of 2006 at an average production rate of 150,000ozpa for 10 years with cash costs of US$235/oz.

Independence Group NL (IGO) –Lightning Nickel Continues to Provide the Driving Force behind the Independence Group

• IGO’s Long mine of Lightning Nickel appears to be settling down as a relatively low cash cost, 9,000tpaNi operation (5,760tpaNi attributable at ~64%). IGO’s aim is to find another stand-alone Ni orebody within the Long mine, so that production could be increased to 12,000tpaNi to 15,000tpaNi (attributable : 7,700-9,600tpaNi).
• The recent discovery of the McLeay deposit south of Victor South could evolve into a stand alone orebody, being open in all directions and with a number of surfaces. Drilling is expected to establish an initial resource by September 2005.
• The Gibb-Victor lava channel is establishing a record as one of the highest grade lava channels at Kambalda, with Gibb South averaging 8.0%Ni (largely due to occasional 18% to 20% Ni zones), and Victor South averaging 4.6% to date. Both Victor South and the new McLeay deposit lie within this lava channel. Depending on the dilution at Victor South in the coming year, IGO could produce between 8,500t and 9,500t Ni based on average grades for the mine of 3.5% to 4.0% Ni .
• The lava channels shown to date are simplified schematic representations of what the orebodies within them broadly follow. The recent drillhole intersections by IGO outside of these lava channels and beyond perceived boundaries within the channel (such as the 3.4m @ 4.5%Ni below 12 Level at Long) and the spectacular 4.4m @ 16.2%Ni show that there appears to be the capability to add material resources to Long and Victor, and extend Lightning Nickel’s life.
• IGO continues to mine significant ore outside of its reserves, averaging up to 46% more nickel since IGO started in October 2002 (at 8% lower on grade), which also infers further extensions to Lightning Nickel’s life (usually based on reserves).

Consolidated Minerals Ltd (CSM) –Becoming a Mid-Tier Diversified Mining Company

• Consolidated Minerals’ operations are based in WA where it has established an ore reserve/resource life of more than 10 years at Woodie Woodie and a position in the market of consistently producing one of the highest quality manganese ores in the world, currently at 1mtpa. CSM has also been producing 250,000tpa chrome from Coobina, and is now enhancing its product range with nickel production from Reliance’s Beta-Hunt mine, followed by future copper production from Jabiru.
• CSM’s annualised manganese production has risen to 1.0mtpa and appears capable of reaching at least 1.2mtpa or so. When Coobina runs out of ore (in possibly 5 years’ time), it is expected to move the Coobina plant to Woodie Woodie South and increase production to at least 1.5mtpa of manganese.
• Production from Reliance’s Beta-Hunt mine is expected to double when East Alpha starts in MQ 2006 and builds up to 4,000tpa to 5,000tpa Ni by December 2006, increasing total mine output to a credible 9,000tpa to 10,000tpa Ni. CSM has a long-term target of producing 15,000tpa to 20,000tpa Ni which appears to be attainable, particularly when it has its own concentrator.
• CSM is able to have its own concentrator treating nickel ore from old WMC nickel mines because Reliance obtained the nickel rights from Gold Fields, and is hence capable of reaping the benefits like Jubilee (JBM). It should also receive the gold credits from its orebodies, & expects to treat orebodies such as TIR’s Armstrong.
• The market has upgraded CSM as it achieves higher profits and dividend distributions. This trend has resulted in CSM’s share price increasing by almost 7 times in the past two years from 62c to its current price of $4.00, and is expected to continue, especially as its nickel production strategy unfolds.

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.

Titan Resources Limited (TIR) –Australia’s Next Junior Nickel Producer

• Titan appears to be well advanced towards becoming Australia’s next junior nickel producer based on a number of its properties capable of producing nickel, with Armstrong capable of being treated and within a feasibility study, a scoping study in progress on Widgie Townsite, closely followed by scoping studies on Munda, 132N and Widgie 3. All the studies are scheduled to have been completed by the end of March 2006.
• Titan’s share price fell from about 30c when WMR rejected the Armstrong ore for failing to meet their specifications. It was not that the ore is untreatable, just that it is too similar to Mt Keith ore (it appears to be even better than Mt Keith ore), whereas high iron-rich Kambalda-type concentrates are required (with an Fe:MgO ratio of up to 11:1 they are higher than anything that WMR can produce), to blend with WMR nickel concentrates & prevent WMR’s nickel furnace from overheating.
• Armstrong ore can be treated to produce an acceptable product and higher recovery than WMR would allocate, and its concentrate can be sold (there are a number of expressions of interest). At this stage the most likely route appears to be CSM modifying the back end of a mothballed gold plant to result in a >1mtpa concentrator at potentially lower costs than TIR may have paid to WMR.
• CSM has the right to 50% of the Armstrong ore and in November 2005 is expected to have earnt 50% of the gold-nickel orebody at Munda. Munda contains spectacular gold intersections such as 6m @ 27g/t where the nickel and gold orebodies intersect, and separately 11m and 17m @ 17g/t in the hangingwall lode.
• Conceptually, Titan’s market cap can be theoretically derived from its net cash, 50% of Armstrong and its post AIM floated interest in BioHeap in early 2006. To which can be added 50% of Munda, plus Widgie Townsite, Widgie 3 and 132N. To this can be added possibly a re-opened Mt Edwards and the extensive kms of untested basalt / ultramafic contact that can now be explored at Widgiemooltha using techniques such as SQUID. TIR appears to have the potential to at least double its current share price and attain a market cap of A$40m to A$50m or so.
• Reed Resources (RDR) have announced that they have entered into a call option (that expires on 14 December 2005) over up to 16% of the Titan shares held by CSM’s wholly owned subsidiary Consolidated Nickel, in which Consolidated Nickel would receive 1RDR – for - 4 TIR shares. RDR’s current 3.8% (~14m shares) held in TIR appears to mainly be held by associates of RDR. RDR may only be able to swap 2m RDR (for 8m TIR) otherwise CSM appears to then hold >19.9% of RDR.