Ann: Kurnalpi Nickel Project Update, page-33

Kurnalpi will have follow up diamond drilling to the main Nickel target as well as seperate follow ups to the southern copper cobalt target and the KURA50 intercept which the company showed on figure 3 in the recent announcement.

The company will clearly be deciding right now on the timing of this and may end up opting to do some EM over other targets to try and define further drill targets and then just drill the lot in one go for some economies of scale relative cost savings. This would be prudent and jolt the project back in to full speed ahead. The consideration of cash on hand and budgets are a primary and rational decision the company will employ in the near term.

There remains a genuine nickel sulphide occurrence as shown by the coincident copper and PGE's. Further drilling will likely show this in more detail.

A 350m diamond drill hole to test that main target is around $50k and the EM another $50k. Less for those other two specified. Not a lot. $500,000 cash or more was projected for qtrs end before failed main target due to tough ground.

Next capital raise will likely be $1/2m minimum but that depends on results ahead following further drilling and EM work. It could be more if stock price rallies on grear news. The EGM needs to agree next placement ability. On the 19th Sep. This will be positive. There will not be a SPP for 12 months legally following recent so will be a rights issue early next year presumably.

An update will likely be coming on projects. And there are a few...

Billy Hills Zinc
Bangemall Base Metal
Limestone Vandium JV

The quarterly report coming up will likely cover updates on what doesn't get discussed in next announcement.

I personally think as soon as the dates to EM and diamond drill get announced the positives will flow back in sentiment. In the meantine my powders dry and I will see if offers sub 0.8c come whilst fear is having a field day.

JFI