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MLS Quarterly June 2008

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MLS Quarterly June 2008 1st Floor, 8 Parliament Place West Perth WA 6005 PO Box 1618 West Perth WA 6872 Tel: (08) 9481-7833 Fax: (08) 9481-7835 Email: [email protected] ACN 008 982 474 Website: www.metalsaustralia.com.au 30 July 2008 The Manager Company Announcements Office Australian Securities Exchange Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir, QUARTERLY REPORT FOR THE PERIOD ENDED 30 JUNE 2008 HIGHLIGHTS MILE 72 URANIUM PROJECT - NAMIBIA · Spot sampling of the trenches at Kudu has returned assays in excess of 5,000 ppm (0.5%) uranium oxide including: Trench 2A G1624 5,251 ppm (0.525%) Uranium Oxide Trench 6 G1540 5,413 ppm (0.541%) Uranium Oxide · Limited channel sampling has been undertaken, with results including: Channel 3A-1 5 metres @ 3,351 ppm (0.335%) Uranium Oxide · Sampling shows strong mineralisation throughout the Kudu prospect area, hosted by both alaskites and basement schists. MANINDI ZINC PROJECT – WESTERN AUSTRALIA · Geological review of the Manindi Zinc project has highlighted a number of copper and zinc targets along strike from and adjacent to the known resources. · Mineralisation occurs along more than FOUR kilometres of strike, with a further TWO kilometres of strike remaining untested by exploration. · Copper mineralisation is associated with the defined resources, however several untested geochemical copper anomalies remain untested by drilling. 1 1. NAMIBIAN URANIUM PROJECTS Prior to Metals Australia Ltd (‘Metals’) involvement, Mile 72 & Engo Valley uranium projects had little or no exploration undertaken on them in the past twenty years. The projects have the potential to host near surface, pedogenic and syngenetic uranium deposits. Metals is now systematically exploring the Mile 72 uranium project. Exploration at Mile 72 during the quarter was focused on trenching of the Kudu and Impala prospects. These trenches have been geologically mapped, radiometrically surveyed and geochemically sampled. This exploration shows subsurface uraniferous alaskites and host schist with assay values of up to 5,413 ppm uranium oxide. Metals continue to seek approval from the Namibian Department of Tourism and the Environment to access and explore the Engo Valley area. A. MILE 72 (EXCLUSIVE PROSPECTING LICENSE 3308) The Mile 72 project is located on the central coast of Namibia, within the Erongo province, approximately 115 kilometres to the northwest of RTZ’s Rossing Uranium Mining Operations and 30 kilometres to the north of the coastal town of Henties Bay. The project has the potential to host both near surface, pedogenic uranium deposits and primary ‘alaskite’ style mineralisation. The Mile 72 uranium project lies within a small depression on the central Namibian coast and is largely covered by surficial aeolian sand and alluvial gravels of varying thickness. These sands and gravels partially mask the radiometric and geochemical signature of the subsurface uranium mineralisation. The results of the first and second phases of trench sampling were received during the quarter and a third phase of trenching was also completed. This third phase of trenching was designed to extend the geological mapping and sampling of the underlying stratigraphy in the prospect areas and to establish geological continuity between the Kudu and Impala prospects. TRENCH SAMPLING Metals received the results from its first and second phases of trenching at Mile 72 during the quarter. These samples are predominantly ‘spot samples’ taken within the trenches in areas of high radiometric response. Sampling shows widespread mineralisation throughout the Kudu area, with a number of samples grading over 5,000 ppm (0.5%) uranium oxide (see Figure 1). Results from the Kudu sampling include: 2 Sample No. Trench No. U3O8 ppm U3O8 % Th ppm G1616 2A 2,348 0.235 13 G1623 2A 2,425 0.242 15 G1624 2A 5,251 0.525 24 G1249 3A 2,326 0.233 18 G1239 3A 3,351 0.335 24 F1698 3 3,796 0.380 21 G1275 5 2,406 0.241 13 G1284 5 2,636 0.264 14 G1292 5 2,765 0.276 18 G1545 6 2,690 0.269 19 G1536 6 5,119 0.512 29 G1540 6 5,413 0.541 27 G1554 7 3,341 0.334 19 G1576 7 3,920 0.392 17 G1586 7 4,438 0.444 22 *A list of all samples assaying above 100 ppm uranium oxide (U3O8) are included in Appendix A. The sampling across the Kudu trenches was designed to verify the radiometric response against the geochemical assays. The majority of samples were taken in areas of high radiometric response (greater than 500 cps) although a number of samples were taken in areas of low response to test the background mineralisation levels of the area. A total of 358 samples were taken throughout the trenches, with more than 50% of those samples returning assays in excess of 100 ppm uranium oxide. Both the intrusive alaskites, and the host Damaran schist carry the uranium mineralisation at Kudu. Spot sampling shows assays of up to 1,977ppm uranium oxide within the alaskites, with the highest assay from the schist being 5,413 ppm uranium oxide. The samples also show low levels of thorium, which is also indicative of alaskitic mineralisation. In addition to the spot sampling, a limited programme of channel sampling has been undertaken. Results from the channel sampling include: Channel 2A-1 6 metres @ 150 ppm (0.015%) Uranium Oxide Channel 3A-1 5 metres @ 3,351 ppm (0.335%) Uranium Oxide Channel 4-1 8 metres @ 214 ppm (0.021%) Uranium Oxide It should be emphasised that channel sampling is at an early stage and that a more comprehensive and systematic programme of sampling will be undertaken following the renewal of the lease. The channel sampling completed to date indicates that anomalous mineralisation occurs over significant widths within both the alaskites and sediments of the Kudu prospect area. TRENCH MAPPING & RADIOMETRICS The mapping and radiometric testing of the first phase of trenching has shown a good correlation between the two methods of exploration. The radiometric sampling highlights the uraniferous alaskitic units and will assist in targeting future exploration, particularly drilling. 3 LEGEND Trench Sampling (U3O8 ppm) 7582000Trench Radiometrics mN (Total Count/ Second) 200 to 500,0007582000 (117) mN LINE 7A 100 to 200 (70) 25-50 cps Tenement Outline 50 to 100 (53) 406000 mE 407000 mE 408000 mE 409000 mE 410000 mE 50-100 cps Springbok Prospect LINE 7 100-200 cps Proposed Trenching LINE 6 >200 cps 7581000 mN 7581000 mN LINE 4 LINE 3A LINE 5 Channel 4-1 8m @ 214 ppm U3O8 LINE 3 LINE 2A Channel 2A-1 6m @ 150 ppm U3O8 LINE 2 7580000 mN 7580000 mN KUDU PROSPECT Channel 3A-1 5m @ 3351 ppm U3O8 LINE 1 METALS AUSTRALIA LTD 7579000 mN MILE 72 URANIUM7579000 PROJECT mN KUDU PROSPECT WITH Date:6/5/2008 TRENCH RADIOMETRICS & Author: TSP TRENCH SAMPLING WITH Office: Perth ASSAYS >50 ppm U3O8 FIGURE 1. Drawing: TSP Scale: 1:20000 Projection: UTM Zone 33, Southern Hemisphere (WGS 84) 0 200 400 800 metres 406000 mE 407000 mE 408000 mE 409000 mE 410000 mE A comparison between the earlier ground radiometrics, and the recent trench radiometrics (See Figure 2) highlights the effect that the gravel and sand cover has in ‘blanketing’ the mineralisation. The trench radiometrics clearly show a higher-level response than the ground radiometrics and also indicate that the mineralisation continues beneath the cover to the north of both Kudu and Impala. These target areas will be tested through both trenching and drilling as part of the continuing exploration programme. ONGOING TRENCHING & SAMPLING Metals has recently completed a third phase of trenching at Mile 72. This trenching is designed to extend the previous trenches at Kudu, and to test the zone between Kudu and Impala, which covers more than 2 kilometres of strike. The recent trenching programme included extending four of the existing trenches at Kudu and the emplacement of three new trenches in the area between Kudu and Impala. This new trenching is now being radiometrically tested and sampled. ENVIRONMENTAL SURVEY The Namibian Ministry of Environment and Tourism (‘NMET’) requested that Metals complete an environmental survey of the Mile 72 lease area during the quarter. The survey was requested due to increased exploration and the resulting ground disturbance. The survey was completed by local contractor, EnviroSolutions of Swakopmund, and submitted to the NMET in early June. The survey concluded that the only part of the tenement where ground disturbance should be kept to a minimum were the lichen fields in the northeastern tenement area. This area now largely lies outside the revised boundary of EPL 3308. All ground disturbing activities have necessarily been suspended until the NMET has reviewed the environmental survey. Clearance from the NMET to recommence field operations is expected during the current quarter. Lichen covered pebbles at Mile 72. TENEMENT RENEWAL The Mile 72 tenement, EPL 3308, was granted on 19 May 2005 for an initial three year term. In accordance with the standard requirements of the Namibian Ministry of Mines and Energy (‘NMME’), Metals has relinquished 25% of the tenement (see below) and applied for renewal of the remainder of the tenement for a further period of two years, the maximum period permitted under Namibian mining law. The 25% of the tenement relinquished was largely covered by a thick sequence of Etendeka Lavas that overlie 4 7590000 mN 7590000 mN 400000 mE 405000 mE 410000 mE EPL 3308 415000 mE 2005 AREA BEING RELINQUISHED AS EPL 3308 PER NMME REQUIREMENTS 2008 SPRINGBOKSPRINGBOK Conceptual Target Area 7585000 mN 7585000 mN IMPALAIMPALA Primary & Pedogenic Mineralisation 1970's MILE 72 URANIUM DISCOVERY Granite-hosted, Non JORC Discovered in 1970's by General Mining & Finance Corp 7580000 mN KUDUKUDU 7580000 mN Primary & Pedogenic Mineralisation METALS AUSTRALIA LTD MILE 72 URANIUM PROJECT CHANGES TO TENEMENT Date:28/4/2008 BOUNDARIES WITH PROSPECTS Author: TSP Office: Perth AND GOOGLE IMAGE Drawing: TSP (FIGURE 3.) Scale: 1:50000 Projection: UTM Zone 33, Southern Hemisphere (WGS 84) 0 0.5 1 2 kilometres 400000 mE 405000 mE 410000 mE 415000 mE basement stratigraphy (see Figure 3).
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