OMI Holdings Limited ACN 091 192 871 Level 4, 450 Victoria Road Gladesville NSW 2111 4 September 2012 UPDATE ON PROPOSED ACQUISITION OF KOREAN GRAPHITE PROJECTS AND INDEPENDENT GEOLOGIST’S REPORT Further to its announcement of 6 June 2012, OMI Holdings Limited (ASX: OMI or the Company) is pleased to advise that Mr Leslie Davis of Veronica Webster Pty Limited has completed an Independent Geologist’s Report in respect of the Korean Graphite projects it proposes to acquire. The Independent Geologist’s Report will be included in a prospectus that the Company intends to release over the coming days. OMI is pleased to announce that the Independent Geologist’s Report defines a maiden inferred graphite resource in accordance with the JORC Code. Further information regarding the inferred graphite resource is detailed in the enclosed Independent Geologist’s Report. Yours faithfully, Gary Stewart Company Secretary For personal use only 1 VERONICA WEBSTER PTY. LIMITED (Incorporated in Queensland; ACN 010 299 224) Brisbane Office Consultants to the Mining Industry 7 O’Quinn Street Les W Davis - Minerals Exploration Consultant Nudgee Beach QLD. 4014 Telephone & Fax: 07 3267 3355 L Davis 0411 484 295 V Davis 0407 596 301 Email [email protected] POSTAL ADDRESS: P O Box 619, Hamilton QLD 4007 4 September 2012 Directors OMI Holdings Limited, C/- Level 10, 8-10 Loftus Street, Sydney, NSW 2000 Dear Directors RE: INDEPENDENT GEOLOGIST’S REPORT ON THE MINERAL PROPERTIES OF OPIRUS MINERALS PTY LTD IN THE REPUBLIC OF KOREA. 1.0 INTRODUCTION OMI Holdings Limited (ASX code “OMI”) requested Veronica Webster Pty. Limited ("VWPL") to provide an Independent Geologist’s Report (“IGR”) on the mineral properties of Opirus Minerals Pty Ltd (“Opirus”) in the Republic of Korea (“South Korea”). These consist of several graphite projects located in South Korea, acquired by Opirus, with either granted or applied for exploration tenements. Opirus is operating in South Korea through a wholly owned local subsidiary Won Kwang Mines Inc (“Won Kwang”). For convenience, these are sometimes referred to as the OMI tenements or the OMI projects. Mr. L W Davis, who is a duly authorised representative and director of VWPL, has supervised the preparation of the Report. Mr Davis has had over 40 years experience in the minerals industry, is a registered Chartered Professional (Geology) and is affiliated with The Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. He specialises in mineral resource/reserve estimations, advanced project assessment and exploration management. For personal use only The exploration projects of OMI are all easily accessible, refer to Figure 1. There are three prospects: Geumam, Samcheok and Taewha deposits. Mr Davis visited all the main project areas in June 2012. 2 Figure 1. OMI project areas in South Korea From May to June 2012, Mr Davis was supplied exploration information by Opirus, which warrants that the supplied information is accurate and complete. On 19th June 2012, Les Davis had a meeting with Chris Sennitt of Senlac Geological Services Pty Ltd (“Senlac”) who has generated all the Opirus graphite initiatives. Mr Sennitt has been operating in South Korea since 1994 and has extensive geological knowledge of the country with exploration on uranium, tungsten-molybdenum, base metals, rare earths and gold-silver as well as graphite. During 2012, Senlac reviewed and appraised numerous graphite deposits in South Korea and visited 14 graphite prospects. For personal use only Geological data and exploration results were obtained from the Korean Resources Corporation and the Korean Mining Promotion Corporation (“KMPC”) as it was previously known. The KMPC sampled trenches, adits and drives but did not drill L Davis of VWPL is satisfied after studying the reporting and on the basis of previous 3 exploration results that Inferred Resources may be estimated in accordance with the JORC (2004) Code on each of the deposits: Geumam, Samcheok and Taewha deposits. Mr Davis has also prepared Inferred Resources and information for exploration targets for each of the three graphite deposits. The information in this report that relates to Exploration Results, Mineral Resources, Ore Reserves and Exploration Targets is based on information compiled by Leslie William Davis who is a Fellow of the Australasian Institute of Mining and Metallurgy and a Fellow of the Australian Institute of Geoscientists. Leslie William Davis is a Director of Veronica Webster Pty Limited. Leslie William Davis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Leslie William Davis consents to the inclusion in the report of the matters based on his information in the form and context which it appears. All references to mineral resources are consistent with the most recent Australasian Code (and Guidelines to the Code) for Reporting of Exploration Results, Mineral Resources and Ore Reserves and Exploration Targets: Reports prepared by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia -JORC. Mr Davis has at his own discretion relied on the observations and interpretations of previous explorers, exploration consultants and Senlac. Independent checking at other organisations which may have been previously involved in exploration and mining activities in the area of the OMI tenements was not carried out. The views and conclusions expressed in this Report are solely those of VWPL and L W Davis. An appraisal of all the above mentioned information forms the basis of this Report. VWPL affirms that L Davis is both a Fellow of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists, with a minimum of five years experience in the estimation, assessment and evaluation of mineral resources and ore reserves that is relevant to the styles of mineralisation and the types of deposits under consideration. All references to previous geological sources of information fairly represent the contents of the previous geological reports. Reports and publications attributed to organisations and persons are referenced only to support the technical (scientific) aspects within the Independent Geologist’s Report and are not used for promotional reasons. Consent for the use of any public domain information has not been sought. In accordance with Corporations Regulation 7.6.01 (1) (u), the independent report is not financial product advice but is intended to provide investors with expert opinion on matters relevant to an investment in OMI. L Davis and VWPL are not operating under an Australian financial services licence and the advice in the independent report is an For personal use only opinion on matters other than financial products and does not include advice on a financial product. Neither VWPL nor L Davis has any direct or indirect interest in OMI or Opirus, any of their related bodies corporate, their assets or the outcome of the proposed capital raising. VWPL will receive standard consulting fees for the preparation of this report. 4 2.0 SUMMARY Pursuant to an option to acquire the issued capital of Opirus, OMI has the opportunity to secure three historic graphite deposits in South Korea at a time when this commodity is gaining traction in both new and diverse commercial uses and also traditional uses. In consequence graphite prices are strong. However, there is no graphite world spot price or equivalent. Sales involve an individual agreement between producer and purchaser based on quality, type and volume. So, the economics of graphite are basically determined by the consumer and the end application. There is rarely a usage that cannot be satisfied by several different types of graphite. OMI’s ultimate plan is to principally produce graphite products to satisfy the significant local demand in South Korea; including the major steel producers and electronic industries. South Korea was historically the largest producer of graphite in the world during the 1960s to early 1990s with a graphite production of about 77 000 tonnes per annum Three graphite prospects, Geumam, Samcheok and Taewha deposits have been acquired. There is evidence of mining at all three deposits but no individual production records. Mr Davis of VWPL has estimated the following inferred resources based on previous exploration results: • Geumam deposit; Inferred Resource of 200 000 tonnes grading 10% graphitic carbon under the JORC (2004) Code. This amounts to 20 000 tonnes of contained graphite. • Samcheok deposit; Inferred Resource of 200 000 tonnes grading 5% graphitic carbon under the JORC (2004) Code. This amounts to 10 000 tonnes of contained graphite. • Taewha deposit; Inferred Resources of 170 000 tonnes grading 7% graphitic carbon under the JORC (2004) Code. This amounts to 12 000 tonnes of contained graphite. OMI has determined notionally that prior to economic scoping studies, within these wide zones, it would hope to achieve an aspirational exploration target for each of the deposits and the details are provided in the relevant Sections below. All these exploration targets will be different because of the Inferred Resources existing on each deposit. The potential