Gum Flat Project – EL 3422

LML has exclusive rights to all minerals

The Gum Flat project area is prospective for a large range of polymetallic minerals including Menninnie Dam style Pb-Zn-Ag (Cu-Au) mineralisation, U mineralisation and Middleback Range iron ore (both hematite and magnetite). Previous exploration drilling is very limited with only a few holes intersecting Precambrian basement. Most of these holes have not been adequately sampled.

Extending up to 20km west from Port Lincoln and with two railway lines (one now disused) and a major highway running through the area, EL3422 is ideally located with respect to infrastructure and proximity to a major shipping port.

The aggregate length of interpreted banded iron formation (BIF) in EL3422 based on aeromagnetic data is ca. 30km. This represents a significant target for iron ore exploration and associated minerals such as base metals, gold and uranium.

In early August 2007, a Heads of Agreement was signed with diversified Indian iron ore and metals miner, Mineral Enterprises Limited (“MEL”) to form a Joint Venture on the Gum Flat Project.

In addition to magnetite targets, detailed interpretation of high resolution aeromagnetics has identified several potential hematite targets that might contain direct shipping iron ore. Possible hematite targets include zones of reduced magnetic amplitude, fault zones with clear evidence of magnetite destruction and favourable structural settings including fold hinges and complex fault patterns.

Six hematite targets (H2 to H7) were identified for aircore and/or shallow slim-hole RC drilling which began in August 2007 following an Aboriginal heritage survey.

Drilling will be followed by detailed gravity surveys and deeper RC drilling over the best opportunities for development.

In addition to iron ore, Middleback BIF horizons of the Hutchison Group are closely associated with sulphide-rich, carbonate and calcsilicate rock units that are host to numerous base metal or graphite occurrences and old mines throughout eastern Eyre Peninsula.