Ann: Quarterly Activities Report , page-2

FUTURE DEVELOPMENTS (lots happening):

• Global iron ore resource inventory of over 132Mt

• Scoping level mining studies are being conducted on two projects (Mt Webber and Yerecoin) where infrastructure is readily apparent. The near& surface, low alumina Mt Webber discovery is within road haulage distance of Port Hedland. A Scoping Study is in progress to evaluate development options, with a Base Case of truck/ship via Port Hedland. A Scoping Study is also nearing completion for the Yerecoin magnetite project, 150 km north of Perth, and within 1 km of existing rail access. The initial Exploration Target of 200 million to 250Mt of magnetite. Exploration work to date has defined in excess of 30 km of strike of outcropping and magnetically interpreted banded iron formation (BIF) – so this will get bigger.

• 128 hole drilling program commenced at “the greenfields” (to soften the blow?) Earaheedy project, following up results from late 2008 drilling including; many of the remaining 15 untested hills of hematite outcrop.

• The company annouced announced the spinoff of their gold assets in WA into a separately funded company.

• $67 million in cash

• Helicopter supported rock sampling and mapping was carried out in areas of hematite potential selected from interpretation of air photography and aeromagnetics within the 30km of strike of known iron formation outcrop at the Daltons JV tenements. The work has identified seven new hematite zones with rock chip results in the range 57% to 62% Fe, apparently giving targets for potential growth.

• A preliminary 47 hole (3,027m) first pass RC drilling program of widely spaced holes on traverses up to 600m apart was completed in mid September to test a major zone of unexplored iron ore potential along an 8km long range at McPhee Creek. The new drilling results from the main range are considered likely to result in a substantial increase in project resources. Followup resource definition drilling is scheduled for November, and will focus on infill drilling the southern area of the maon ridge to enable a preliminary resource estimate of a portion of the 8km strike.

• A detailed aeromagnetic survey flown during the 2nd quarter over the Western Creek and Homestead prospects was interpreted, and mapping and rock chip sampling (14 samples) was completed at the “Homestead” prospect around 10 km north of the Western Creek Mineral Resource and on Channel Iron Deposit (“CID”) targets. A program of drilling to test both the central Marra Mamba hill and the CID target is now fully permitted.

• Anthiby Well iron ore project is a new discovery of channel iron (CID) mineralisation located around 100 km west of Paraburdoo - further drilling to test for resource extensions particularly around and to the west of the Western Mesas, and to conduct beneficiation testwork.

•Heathgate have reported that drilling is planned to commence in the December quarter on the southern (Wooltana) JV tenement. A ground gravity survey was completed on the northern (North Mulga) tenement (94 stations), and planning commenced for further drilling of the Yadglin prospect at North Mulga.