kimberley metals

Enclosed with this letter is a notice for the first Annual General Meeting of Kimberley Metals
Limited to be held on Thursday, 27 August 2009 at 10.00 am. I do hope you can attend the
Meeting.
It is now some 15 months since Kimberley Metals was spun out of CBH Resources Limited and I
take this opportunity to set out what has been done in that period. The plan at the time of the
spinout was to list Kimberley Metals on an internationally recognised stock exchange within 4 to 6
months. This was likely to be the ASX, subject to market conditions, which were encouraging at
the time.
Unfortunately the global financial crisis hit as we were working towards the float. Just prior to the
crisis, shareholders had approved a remuneration and funding package for Directors which
involved funding by KML Directors of $1 million equity at an issue price of 20 cents per share. The
crisis made this approach untenable and it did not proceed. The market conditions also made any
listing unattractive as shareholder value would be essentially destroyed by the ensuing bear
market.
To safeguard the Company, the Directors then put all but essential expenditure on hold to preserve
cash and efforts were made to find a new shareholder to give the Company breathing space
before seeking an ASX listing. In December 2008 Jinji Australia, a Japanese funded resource
investor, took a $1 million share placement in the Company to acquire a 19% interest.
Subsequently, additional small placements were made to institutional investors. This has allowed
the Company to keep its two employees but no payments have been made to Directors. Critically
these funds provided for a drilling programme at Mineral Hill that focused on testing near surface
mineralisation suitable for an early restart of operations.
This programme was successful and resulted in the discovery of shallow high grade gold
mineralisation at the Pearse Prospect, with one of the better intersections being 21 metres @ 14.5
g/t Au from 9 metres followed by 14 metres @ 16.7g/t Au from 53 metres in hole KMHRC025. To
date gold mineralisation has been intersected in two 100 metre long zones that occur within an 800
metre long coincident gold and arsenic geochemical anomaly. This is a new type of mineralisation
for Mineral Hill, containing both high grade gold and silver values. The area has not previously
been mined and is located approximately one kilometre north of the processing plant.
Shallow drilling at the Parkers Hill deposit was also successful, outlining a coherent zone of high
grade silver oxide mineralisation that could provide the start up ore for the development of an open
cut. A new Resource estimate of 160,000 tonnes @ 208 g/t Ag and 4.7% Pb has been calculated
for this zone.
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At the Company’s Sorby Hills Project, high grade silver-lead mineralisation within open cut depths
has been the focus of technical evaluations. Initial development plans are based on the capacity to
produce 35-40,000 tonnes of lead per year and 1.7-2 million ounces silver per year. This is a large
project with estimated capital costs of up to $150 million. Discussions have been held with a select
number of overseas parties to find a suitable JV partner as a means of funding the project through
to production. These discussions are on going and there is considerable international interest in
the project.
In the light of the work which has upgraded the Mineral Hill and Sorby Hills assets, together with
improvement in the stock markets, the Company has resumed its work towards a stock exchange
listing. Directors are optimistic this will be achieved late this year or early in 2010.
Further details of the Company’s operations during the past year are available in the Financial
Report for 2008/9 which is being sent to you separately.
The Directors are conscious of the need to achieve a listing for Kimberley Metals to give
shareholders value and liquidity for their investment and this is now the prime focus of the Board.
We are confident that shareholder’s patience will be rewarded in the coming year.