pre drilling price rise, page-2

Target 2.18 a share.
Investment Highlights
 The last quarter has seen a number of very positive developments for Transit
Holdings Ltd (?Transit?) with the successful spin out of 37.6% owned Radar Iron
Limited (?Radar Iron?) on ASX raising A$6.88m. Furthermore, negotiations at
Transit?s Paradox Basin Potash Project in the in south eastern Utah, USA, are
also ongoing with a view to securing the Right of Way over Federal Land, to
access drilling sites on 4 blocks administered by the State of Utah. Following a due
diligence review the Company elected not to proceed with the acquisition of the
Columbian Coal project (ASX Announcement 21/03/2011).
 The Company is steadily making progress in paving the way for a drill program at
the Paradox Basin Potash Project (Transit earning 90%) where consultants
Agapito & Associates previously outlined a JORC compliant exploration target of
2.3 billion tonnes of potash ore @ 32.8% KCl. RM Research anticipates that the
Company may look to commence drilling prior to 30 June 2011.
 On the corporate front Radar Iron announced (17 February 2011) the acquisition
of South Cross Goldfield?s iron ore rights (A$1.5m cash, A$100k in Shares) in the
Yilgarn which are strategically located in the Yilgarn Iron Ore Province (?YIOP?).
The deal opens the door for better road/rail access together numerous
hematite/magnetite targets and a tenement package totalling around 900km2,
compared to 300km2 at IPO.
 The first batch of RC drill results and preliminary metallurgical testwork for Radar
Iron have been received from the Johnson Range and Die Hardy projects, situated
in the central YIOP, where initial exploration work in Late 2010 was focussed on
magnetite drilling at both Johnston Range (including the Beven, Clutch, Bolger and
Olger Prospects) and Die Hardy.
 RC Drilling at Lara Prospect (part of the Die Hardy Project), returned broad widths
grading 25-30% magnetite. Davis Tube Recovery (DTR) tests also returned very
encouraging iron head grades up to 70.3 % Fe and mass recoveries to 48%. RM
Research considers that this broad spaced drill program at Die Hardy confirms the
potential for a magnetite resource in excess of 400Mt with favourable metallurgical
characteristics. At Beven RC drilling on 400m line spacing returned encouraging
widths from 16-56 m with average head grades 22-32% Fe. The eastern section
returned broader widths of in excess of 50 metres downhole with DTR tests
averaging 70% Fe and mass recovery 38%. Again, RM Research considers the
grade and metallurgy to be very favourable. Based on an apparent strike of 1.2
km, Beven appears to have potential for well in excess of 50Mt.
 RC drilling is commencing this week and is targeting key magnetite and hematite
targets with a view to outlining a JORC resource by October-November 2011. Our
base case scenario of JORC Resource of >10Mt of hematite and >500Mt of
magnetite by late CY 2011 remains on track.
 Our base case scenario assuming 2.3Bt @ 32% KCI values Transit at A$2.18
assuming a modest EV/Resource tonne (Potash) of A$0.35.
Conclusion
 Transit remains a highly leverage play with Radar Iron (23 cps) and cash (7.7
cps) leaving an enterprise value of only A$7.3m or 16 cps (diluted) for the Paradox
Basin Potash. Look for exploration results from Radar Iron and the
commencement of drilling on Paradox Basin to drive the share price in the near
term. Our short-term target ahead of Paradox Basin drilling is A$1.00/share.