Board and management Capital structure by hjkuiw354


									             Board and management
                          Kevin C Moriarty                      Executive Chairman
                                                                BSc (Hons), PhD, MAusIMM
                          David A Paterson                      Director
                                                                BAppSc, GradDip Bus Admin., MAusIMM
                          Michael H Kennedy                     Director
                                                                BCommerce (Economics)
                          Steve Bonett                          Director
                                                                BCommerce, LLB (Hons), AICD, SIA, ACLA
                          Bob Jones                             Chief Operating Officer
                                                                BAppSc (Prim Met)
                          Martin Janes                          Chief Financial Officer
                                                                BEcon, MAICD

             Capital structure
                         Shares on issue at 31 October 2006                                                          77,219,691

                         Unlisted options
                               20 cents exercise price                                                                   400,000
                               25 cents exercise price                                                                   200,000
                               45 cents exercise price                                                                   250,000
                               52 cents exercise price                                                                   930,000
                               60 cents exercise price                                                                 1,480,000
                              126 cents exercise price                                                                   745,000
                              142 cents exercise price                                                                   350,000
                              144 cents exercise price                                                                   150,000
                              157 cents exercise price                                                                 1,500,000
                              188 cents exercise price                                                                 1,500,000

                                                                                     Total options                     7,505,000
                         Unlisted convertible/redeemable notes                                                  (US$)5,050,000

The information in this report that relates to exploration activity is compiled by Dr K Moriarty PhD, M AusIMM who is a Competent Person
as defined by the JORC code. Dr Moriarty is Executive Chairman of Terramin. Unless stated otherwise, resource and reserve estimates referred to
in this release use the guidelines in the 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Ore
Reserves Committee (JORC). Mr Jonathon Trewartha, a full time employee and Competent Person as defined by the Code, prepared the reserve
estimate for Angas. Dr Moriarty and Mr Trewartha consent to the release of the information complied in this report in the form and context in which it
Angas zinc project (100% interest)
•    Mining Lease 6229 granted for 10 years effective 17 August 2006.
•    Mining and Rehabilitation Plan (MARP) submitted for approval.
•    Bank financing due diligence near completion.
•    Long lead time plant items secured - SAG Mill arrived Strathalbyn 26 September.
•    Capital cost estimate of $63.3 million has been revised down to $57.7 million.

Menninnie zinc-lead-copper project (100% - Zinifex earning 70% interest)
•    Menninnie Central returns additional broad mineralised intercepts. MD 56 intersected 55.9 metres @10.39% Pb+Zn
     including 14.12 metres @ 27.34% Pb+Zn.
•    Exploration over the next 3 months will include follow up of Induced Polarisation (IP) Survey targets. IP data
     collection commenced at the end of the quarter.
•    Drilling will stop in mid December for data assessment. Drilling is expected to resume by the second quarter 2007.

Oued Amizour zinc project
•    An infill diamond drill programme on the Tala Hamza deposit commenced in July. Two more rigs are enroute.
•    The first complete hole, TH002, intersected 187.7 metres (321.1 – 508.8) of sulphide mineralisation.
     Core is being prepared for assay in Australia.
•    Scoping study has commenced.

•    Martin Janes commenced as CFO on 7 August 2006 bringing to the company extensive experience from a financial
     career that includes banking, Newmont Australia and Normandy Mining.
•    Zinc price sets new records and looks to be going higher.

                                                                                                                      Page 2 of 17
Chairman’s Review

Recently Michael Kennedy and I attended the annual London Metal Exchange (LME)
and International Zinc Association events in London. Not surprisingly the outlook
for zinc producers was very bullish, with several predictions of zinc prices at US$6000
as stockpiles plunged to few days supply. Our main purpose at the events
was to introduce our upcoming Oued Amizour zinc project. We described the potential
for the project at 200,000 tpa increasing to some 400,000 of zinc concentrates,
and the response was very positive from European smelters. Industry representatives
remarked that the project is well situated to supply that market, which currently source
concentrates from Peru and Alaska. Several smelter representatives and traders
expressed interest in negotiating for a share in the offtake of lead and zinc
and we will progress these during the LME Downunder in Melbourne in early November.
Drilling is proceeding at all three active projects. The rig drilling the Tala Hamza deposit in the Oued Amizour
project is to be supplemented by two powerful rigs out of Turkey. These are capable of drilling wide diameter
core right through the deposit, and continuing on to test the strata at depth. These sorts of base metal deposits
occur in clusters and it is likely that further mineralisation occurs at depth as well as laterally. We have completed
the first hole in the deposit since the early 1990’s, intersecting over 180 metres of mineralisation.
This was expected since it was drilled between older holes with up to 119m of high grade (15% Zn/Pb)
intersections. The months ahead promise to be very exciting as we confirm the resources in this major zinc
project and proceed to bankable feasibility.
The Angas mine is on track for production in 2007, however the regulatory process is continuing to be slow.
Some of this can be attributed to Angas’ status as the first mine in decades in this populated mining belt,
and therefore it is something of a trail blazer. Our team of engineers have used their decades of experience
in mining and processing of zinc to develop a world class facility, so there is no sustainable technical basis
for delay to the approval.
Late in October we recommenced near mine exploration at Angas, focussing on extensions to the Rankine
deposit and soon hope to test the large Jettner anomaly parallel to Rankine. The aim is to extend mine life
and access to high grade zinc. Regionally Terramin’s geologists have identified several targets on our Fleurieu
tenements that could develop into more mines like Angas.
The Menninnie team continue to evaluate this large project with Zinifex funding. The current phase of drilling
will end in December and all data will be integrated into a new model of the mineralisation.
Next quarter, I expect to be able to report the start of development at Angas and probably the first JORC
standard estimate on Tala Hamza.

Kevin Moriarty
Executive Chairman

                                                                                                              Page 3 of 17

ANGAS ZINC PROJECT – Mining Lease 6229
(Terramin 100%)
The Angas Zinc project is located 2 km outside the small town
of Strathalbyn, 60 km from Adelaide. The orebody outcrops
under a limestone quarry in a rural zone containing two waste landfill
dumps and effluent treatment ponds. Current zinc resources in three
shoots are 3.04 million tonnes. Mining Reserves are currently
2.2 million tonnes. Feasibility studies and a financial model
for a 400,000 tpa underground operation were completed
in July 2006. The model shows competitive cash flow margins
for zinc prices of US$1.00 / lb in 2008 decreasing to $0.55 in 2011.
Current zinc prices are substantially above this level (US$1.80/lb
or US$3970 / tonne on 20 Oct 06) and many industry participants
are predicting even higher prices for the next few years. All long lead
time capital items have been secured. A short 44 week construction
period is programmed. A fixed price lump sum process plant contract
is ready for execution.

Angas Mine Operations
Title, licensing and community
Mining Lease ML6229 was granted on 17 August 2006. The lease contained six conditions in the First Schedule
and seventy seven conditions in the Second Schedule. The MARP was amended to reflect the methods
that Terramin will employ to address each condition, and re-submitted for approval to PIRSA. EPA licences
were applied for during the quarter. Community Consultation, which is an important part of the Angas Mine
operation, continues.
The main activities for the quarter centred on mining lease approval issues with respect to the Mining
and Rehabilitation Program. Other activities progressed during the quarter and on-going at the period end
    •    Ground water modelling
    •    Detailed tailings storage facility final designs – Australian Tailings Consultants
    •    Detailed boxcut designs
    •    Contract negotiation for power supply – ETSA
    •    Detailed site layout for infrastructure – Abesque Engineering & Construction Ltd
    •    Negotiations with a range of financial institutions for financing the project and the subsequent project
         due diligence audits by their specialist technical auditors
    •    Discussions on land acquisitions are proceeding
    •    The acquisition of waivers is proceeding.

                                                                                                            Page 4 of 17
Environmental Issues
Baseline monitoring pertaining to dust and water emissions from areas surrounding the proposed mine site
continue to be carried out on a monthly basis in order to establish a background database prior to the mine
commencing operation.

Capital cost
The June 2006 pre-production capital construction cost was updated and refreshed in-line with the NAB Limited
debt finance mandate timetable.
The prior capital cost estimate of $63.3 million has been revised down to $57.7 million primarily reflecting
the replacement of conservative contingencies with fixed prices or hard estimates. With long lead time items
secured (the 4.2m diameter by 6.8m long 1,250kW drive SAG mill was delivered to site mid-September)
the impact of equipment price increases was negligible.
The Company continues to refine the capital ahead of financing completion. In particular, the four original
earthmoving contracts (box cut, ROM pad, plant site and tailings storage facility) have been merged into one
contract with expected cost benefits arising from economies of scale and an overall reduction in mobilisation
and de-mobilisation costs. Tenders close on 10 November 2006.
The overall pre-production capital construction cost, Environmental Bonds plus working capital and owner’s cost
to post first shipment revenues is estimated at $67.2 million.

Test work has continued, post completion of the feasibility study, to further refine the process flow sheet.
In particular, locked cycle laboratory flotation tests have confirmed forecast copper-lead concentrate grades
and recoveries and have provided evidence for an increase in forecast gold recoveries from 72 percent
                                                          to 80 percent at higher payable levels.
                                                       The test work also confirmed that zinc flotation in simple
                                                       open circuit (rather than closed circuit) is beneficial
                                                       in minimising iron into final (52 per cent Zn) concentrate.

                                                       Angas SAG Mill onsite Strathalbyn Sept 06

                                                                                                               Page 5 of 17
Angas Mine Financing
The National Australia Bank was appointed on an exclusive basis to arrange an $87 million debt facility
for the development of the Angas Zinc Project. Negotiations as to the final structure of the facility
and due diligence of the project are continuing.
During the quarter, the project financial model was adjusted for prevailing metal prices. The results indicate
higher cash flows from the mine in 2007 and 2008, compared with those estimated in the feasibility study.
The results are reported here, but it should be noted that zinc and lead prices have increased and cash flows
based on current prices would be higher again. Modelling assumed production started in the last quarter of 2007.

      -    IRR (pre tax)                                                    126%
      -    Payback period (pre tax)                                         15 months
      -    initial capital (pre-production                                  $63.3 million
          plus six months of underground development)
      -    maximum cash outflow                                             $70.5 million
      -    NPV at 8 percent discount rate (pre tax)                         $124.8 million
      -    Net cash (after finance before tax)                              $121.1 million
      -    EBITDA 2007 (y/e Dec.)                                           $20.8 million
      -    EBITDA 2008                                                      $77.1 million
      Assumptions: zinc 50%, lead 70% hedged at current forward price (Zn 3720, Pb 1343) $A/US: 76c;
      gold flat $653; Ag flat $13

                                                                                                          Page 6 of 17
Angas Resources and Reserves
The previously announced Indicated Resource of 3.04 million tonnes and reserve of 2.17 million tonnes
have not yet been revised to include the most recent drilling results. The Resource figures, estimated
using JORC code guidelines, remains as shown below:

         Angas Zinc Project Indicated Resource               Zn %    Pb %     Ag g/t   Au g/t   Cu %

         Rankine Deposit                           2.34      7.2      3.1      35       0.6      0.3
         Hangingwall Shoot                         0.56      8.9      2.0      20       0.3      0.2
         Garwood Shoot                             0.14      18.7     6.3      79       1.0      0.4
         Total Angas Resource                      3.04      8.0      3.1      34       0.5      0.3

         Probable Reserves                         2.17      8.3      3.1      33       0.5      0.3

                             N-S Long section showing Angas Orebody and Mine Plan

                                                                                                         Page 7 of 17
Exploration – Diamond Drill Programme
During the quarter drilling focussed on geotechnical operations such as soil testing for mine plant footings,
on-going hydrogeological investigations, and the grouting and rehabilitation of old drill holes in preparation
for mining start-up.
Three exploration diamond drill holes were completed and assay results are awaited.
  TABLE 1: Exploration drilling
                      Collar Coordinates MGA94-54                          Azimuth   Hole   Depth
  Hole ID                                               RL (m)       Dip                            Target
                      North            East                                (°MN)     Type   (m)
  AN150               6096150          311312           82           -67   090       NQ2    291.3   Dawson anomaly
  AN151               6096758          310967           73           -65   269       NQ2    216.3   Eastern zone
  AN155               6096607          311007           66           -70   262       NQ2    288.3   Eastern zone

The Dawson anomaly is located just outside the south-east corner of the ML. The anomaly is defined
by an elevated EM response. AN150 is the third hole drilled to test the anomaly. All three holes intersected minor
sulphide mineralisation that warrants additional follow-up exploration.
The Eastern zone lies parallel to the main Rankine zone. Previous drilling has intersected significant but patchy
mineralisation. AN151 (up plunge) and AN155 (down plunge) defined the limits without extending the resource.
The Eastern zone strikes northwards where it remains largely untested by drilling.
Assay results were received for hole AN139 drilled in the previous quarter. Those results shown in table below
confirm the continuity between the high-grade Garwood Shoot and the main Rankine Shoot. An estimate
of the additional resource has not yet been completed.

 TABLE 2: Garwood/Rankine zone — assay results
                                    From         To          Interval
            Hole ID                                                        % Zn      % Pb   % Cu      g/t Ag       g/t Au
                                     (m)         (m)           (m)
 AN139                              240.3       246.0          5.7         0.54      0.26    0.10        4         0.08
                      including     240.3       242.7          2.4         1.19      0.54    0.04       12         0.01
                              and   242.1       242.7          0.7         4.10      1.74    0.08       24         0.14

Additional Resource Potential
There is good potential to add significant additional resources to the Rankine orebody, which remains open at
depth. There is also a large untested down-hole EM conductor, the Jettner anomaly, about 200 m west and
beneath the Rankine orebody. Planned drilling will test extensions to the Rankine Shoot down-plunge and down-
dip, and the Jettner anomaly. An attempt will be made to re-enter AN21 to test the EM anomaly.

                                                                                                                    Page 8 of 17

Bremer – EL 3641
Currency Creek – EL 3128,
Langhorne Creek – EL 3310,
Hartley – ELA 417/06
(Terramin 100%)

The Fleurieu tenements are in the G2
Corridor and prospective for significant
deposits of three principal local ore
types, small to medium Angas-style
Zn-Pb-Ag deposits, Kanmantoo-style
Cu (–Au) and hydrothermal Au.

Terramin’s Fleurieu Project exploration
licences cover an area of ~1,000 km2
of prospective stratigraphy
and geological structures. Terramin’s ELs in the Fleurieu Peninsula were taken
up to encompass Kanmantoo Group rocks that host zinc and lead as massive sulphides.

The new Hartley exploration licence application covers a 126 sq km area between and to the south
of the Bremer and Langhorne Creek EL’s.

Terramin’s understanding of the area has been enhanced with the acquisition of regional airborne geophysical
data. Interpretation of the airborne geophysics data has identified six areas with Angas-like signatures
within Terramin’s ELs. Ground geophysical surveys during the next quarter will better define these new
encouraging targets.

No new field work was conducted on the Currency Creek and Langhorne Creek tenements during the quarter
due to the major programme on the Angas prospect in the Bremer tenement.

                                                                                                       Page 9 of 17
(Terramin 65%)

The Oued Amizour zinc project is based
on a 50 million tonne VHMS type Zn+Pb deposit
with a high grade core. It is located in northern
Algeria, only 12km from an international airport
and shipping terminal in the western Mediterranean,
and is close to Europe and zinc smelters in Spain
and Sardinia. Infrastructure includes power, water,
roads and labour force on site. Published resources
by ORGM are 30Mt at 6.9% Zn+Pb (6% cut-off and
98m thick) with a high grade core of 11Mt at 13.9%
Zn+Pb. This deposit has been named Tala Hamza.
Terramin’s interest is held via a shareholding in an
incorporated Algerian company Western
Mediterranean Zinc SpA (WMZ). Terramin will spend at least US$6.5m up to decision to mine expected in early

         Important Note
         The resource estimates for the Tala Hamza deposit were prepared by ORGM, the Algerian Government
         exploration agency, and widely published. (Le nouveau gisement de Zinc-Plomb de Oued Amizour (Wilaya de
         Bejaia) - Presentation, Reserves et traitement DETP Juillet 1996). The estimates used the Soviet system that is
         not able to be directly compared to JORC categories. While it is possible that the resource will not become JORC
         compliant the ORGM estimate is believed reliable since it is backed by more than 40 diamond drill holes,
         thousands of analyses and detailed geological logging and interpretation by well trained geologists. The addition
         of recent data from one or more holes being drilled now may be sufficient to estimate a JORC resource. Terramin
         has engaged Golder Associates to advise on measures required to meet JORC requirements. Terramin is
         undertaking a major infill drill programme that will enable estimation of JORC compliant indicated resource and
         reserves early in 2007.

Exploration Permit 5221 PE was granted to WMZ on 21st May 2006 for a term of 3 years.
Due to an administrative error, the title was re-issued on 27th August 2006 and is now Exploration Permit 5225
PE also for a term of 3 years. The new permit covers 122.76 square kilometres and can be renewed
at the end of the initial term (August 2009).

WMZ Operations
WMZ established an administrative office in Béjaia and an operating base in Oued Amizour. The company
hired an administrative and financial manager, a technical manager, three geologists and two support workers
to carry out the exploration programme at Oued Amizour.

                                                                                                                 Page 10 of 17
The programme comprises three phases: a confirmation phase to proving that the existing data is reliable,
an infill phase to transform the published resource into an indicated JORC resource and an expansion phase to
explore for extensions of the known mineralisation to the south. ORGM, the Algerian geological survey, started
drilling operations. WMZ has also signed a contract for two drill rigs and crews from SPEKTRA JEOTEK As, to
carry out the drilling from November onward. One SPEKTRA drill rig has arrived in Algiers.

Tala Hamza Deposit
Immediate Exploration Programme
TH001 commenced on 17 July 2006 using the rig contracted from ORGM. The drill hole was planned to test the
validity of the existing data in the high grade zone as well as providing new material for assays and metallurgical
tests. It first intersected low temperature hydrothermal mineralisation at 340m within 5 metres of the predicted
depth ( see figure below). Due to technical problems the drill hole was temporarily stopped at 409m, in massive
sulphide mineralisation. Drill hole TH001 will be deepened pending the arrival of SPEKTRA more powerful rig.
TH002 intersected the mineralisation from 321.10 to 508.8m also within metres of the expected intersection -see
Figure below for location.
TH003 is in progress to test the thickness and grade of the lower grade mineralisation.

                                                                                                           Page 11 of 17
The results of the first two holes are very encouraging,
as they confirm the reported geological data. Assaying
and metallurgical tests will be carried out in Australia.
Shipping is being organised for early November 2006.

The mineralisation is associated with a moderate to strong
pervasive chloritic and sericitic alteration, pervasive sericite,
quartz and pyrite alteration and pervasive felspathic alteration.
The mineralisation textures include incomplete fracture filling,
layered infill textures in veins and open spaces, as well as
breccia matrix. The photo right shows mineralisation from
TH001 at 342 metres illustrating the above description.

Infill Exploration Programme
Infill drilling is designed to define an indicated JORC resource by the end of the second quarter of 2007. The
planning has taken into account the need for regularly spaced intersections of the mineralization as well as
topographical and ecological constraints. Most drilling will take place from existing drill pads and tracks (see
figure below).

                                                                                                            Page 12 of 17
Exploration Permit – Regional potential
ORGM carried out an extensive programme of regional exploration from 1974 to 2000. WMZ has now gathered
the available data and will commence compilation and interpretation. It consists of:
         ⋅   About 150 drill hole logs and sections (including the 50 holes around Tala Hamza),
         ⋅   Geological, geophysical and geochemical maps,
         ⋅   Thin sections,
         ⋅   Reports,
         ⋅   Original data on assays, geophysical logging, geochemical analysis, surveys.
WMZ is also acquiring new geophysical data, including very high resolution satellite imagery for geological
and geochemical processing.

                              Figure above shows Oued Amizour Regional Areas
8 areas fully enclosed in the EP 5225 have been studied in detail (geochemistry, geophysics, and drilling):
         Ait Dali          8 drill holes confirmed, an extra 5 probable,
         Ait Ayad          6 drill holes and 9 to the east,
         Bouzenan          16 drill holes,
         Iheddaden         24 drill holes and South Oued Amizour: 12 drill holes,
         Ait Allaoua
          &Ait Ouyahia     6 drill holes,
         Manzekouane       2 drill holes,
         Amaden            5 drill holes.

                                                                                                         Page 13 of 17
Menninnie Metals Ltd (Terramin 80% and Zinifex Ltd 20%)

Menninnie Zinc Project – EL 3640
(Menninnie Metals Ltd 100%; Zinifex Australia
Ltd earning up to 70%)

The Menninnie Zinc Project, EL 3640, is
located on northern Eyre Peninsula South
Australia, about 160km west of the lead
smelter at Port Pirie. The project
encompasses the largest known lead-zinc and
silver deposit in South Australia.
A joint venture between Menninnie Metals and Melbourne-based Zinifex Australia Limited will see up to A$8
million injected by Zinifex – one of the world’s largest integrated lead and zinc companies - into the Menninnie
Zinc Project.

Induced Polarisation Survey
The Search Exploration IP crew arrived Menninnie Camp on the 30th of September and the survey commenced
the following day.
The programme has been extended to the south of Menninnie Central zone with 8 additional lines, each 2
kilometres in length and 400 metres apart. Total line kilometers planned is approximately 38.
An initial report and interpretation of the results is expected by mid November.

Drill Program
Drilling during this quarter focused on strike extensions to the Menninnie Central zone where previous
exploration had outlined significant zinc-lead-silver mineralisation. During the quarter diamond drillhole MD52
was completed and an additional 9 diamond drillholes were completed, MD53 to MD61 for a total of 4,528m.
Drillhole MD52 intersected significant void space (natural caves) within the weathered mineralized marble.

                                                                                                          Page 14 of 17
DH ID   Prospect     Easting       Northing    Total    Collar    Collar              Comments
                                               Depth     Dip     Azimuth
                                                                           An average of 80% core loss/void
MD52    MD Central   633238        6386645       534     -50       270     space between 312.3 and 377m.
MD53    MD Central   633236        6386648     627.16    -65       250          Southern MD Central
MD54    MD Central   633317        6387146      618.1    -62       270           Northern MD Central
MD55    MD Central   633045        6386793      507.2    -67       270
MD56    MD Central   633075        6386897      393.5    -75       270
                                                                            Approximately 1km north of MD
MD57    MD North     633544        6387945     857.4     -60       270                  Central
                                                                            Abandoned due to poor drilling
MD58    MD South     633151        6386141     179.3     -67       270                 conditions
MD59    MD Central   633383        6387244     783.2     -60       270           Northern MD Central
MD60     A1 North    634130        6389145     288.4     -60       270     Approx. 2.5km north of MD Central
MD61    MD Central   633255        6387045     186.5     -62       270           Northern MD Central

                               MD 56 high grade core – 320 to 326 metres

                                                                                                   Page 15 of 17
     Significant assays and mineralisation to date, including assays from holes drilled but not assayed during the
     previous quarters, are:

  DH ID       Prospect      Drilled      From        To        Interval    Au        Ag       Cu       Pb       Zn         Pb+Zn
                                           m         m            m       ppm       ppm       %        %        %            %
   MD40       MD Central     Q1-06      439.63     449.42        9.79     0.00      13.0     0.06     0.09     2.31         2.40
   MD40       MD Central     Q1-06      458.56     465.00        6.44     0.00      12.8     0.04     0.62     1.81         2.44
   MD40       MD Central     Q1-06      469.00     476.90        7.90     0.06      49.6     0.11     2.00     2.08         4.08
   MD41       MD Central     Q1-06      218.00     221.00        3.00     0.01      10.7     0.01     1.28     1.83         3.11
   MD41       MD Central     Q1-06      235.59     238.26        2.67     0.00      16.3     0.04     3.59     2.15         5.74
   MD41       MD Central     Q1-06      453.70     458.60        4.90     0.07      34.6     0.08     2.24     2.18         4.42
   MD42       MD Central     Q1-06      373.69     384.00       10.31     0.01       9.7     0.01     0.50     0.92         1.42
   MD44       MD Central     Q1-06      275.70     304.00       28.30     0.01      14.0     0.06     2.49     2.55         5.04
incl. MD44    MD Central     Q1-06      291.83     304.00       12.17     0.01      23.1     0.11     3.26     4.13         7.39
   MD44       MD Central     Q1-06      466.70     470.80        4.10     0.03      70.7     0.05     1.29     1.09         2.38
  MD50W       MD Central     Q3-06      Assays       in       Progress.
   MD51       MD Central     Q2-06      156.00     165.40        9.40     0.02      15.7     0.01     1.63     2.81        4.43
              MD Central
  MD52          South        Q2-06      229.00     231.04       2.04      0.01      45.9     0.08    12.06    19.66        31.71
              MD Central
 MD52*          South        Q2-06       312.3     384.96      72.66      0.02     16.34     0.03     2.01     1.73        3.75
              MD Central
incl MD52       South        Q2-06       312.3      348.3        36       0.00      8.70     0.01     2.58     2.75        5.34
              MD Central
incl MD52       South        Q2-06        368       373.1        5.1      0.08     15.29     0.02     2.13     2.01        4.14
              MD Central
  MD53          South        Q3-06      Assays       in       Progress.
              MD Central
  MD54          North        Q3-06      Assays        in      Progress.
  MD55        MD Central     Q3-06      Assays        in      Progress.
  MD56        MD Central     Q3-06       275        330.9        55.9      .01     32.21     .05      4.57     5.82        10.39
incl MD56     MD Central     Q3-06       275         282          7        .05     28.27     .06      4.97     8.74        13.71
incl MD56     MD Central     Q3-06      298.17     299.37        1.2        0      72.00      0       8.78    17.00        25.78
incl MD56     MD Central     Q3-06      316.78      330.9       14.12      .02     84.96     .12     12.80    14.54        27.34
              MD Central
  MD57          North        Q3-06      Assays       in       Progress.
  MD58        MD South       Q3-06      Assays       in       Progress.
              MD Central
  MD59          North        Q3-06      Assays       in       Progress.
  MD60         A1 North      Q3-06      Assays       in       Progress.
              MD Central
  MD61          North        Q3-06      Assays       in       Progress.
                                      * Significant core loss and void spaces intersected.

     Exploration next 3 months

     The current phase of drilling will end in December and all data will then be integrated into a detailed and updated
     Vulcan mineralisation model. RC drilling of targets north of the Menninnie Central zone is planned. Drilling of IP
     Survey anomalies will also take place following receipt of our consultant geophysicists initial interpretation and
     report. Drilling is expected to recommence by the second quarter of 2007.

                                                                                                               Page 16 of 17
Ingomar – EL 2969
National Trig – EL 3039
Phar Lap – EL 2987
(Menninnie Metals Ltd 100%)

The potential for discovery of both Cu-Au-Ag-U-REE
deposits associated with iron oxides and Pb-Zn-Ag
mineral deposits within these tenements
is considered to be highly favourable.
There is also considerable potential for sedimentary
uranium, gold and precious metal deposits.

There was no exploration expenditure on these tenements during the quarter.


                                                                              Page 17 of 17

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