Granville Tin Project -- 21M/2003 & 9M/2006

The Granville Tin Project is located between 24 and 16 kilometres to the northwest of the township of Zeehan on the West Coast of Tasmania and is covered by mining leases 21M/2003 and 9M/2006 (Location Map). The main lease 21M/2003 consists of five separate portions totalling 68 hectares in area.

The segments of the lease are: -

• The existing Heemskirk Tin Plant located 17km NW of Zeehan;
• A 5 hectare tenement located 24km NW of Zeehan covering the Granville East open pit;
• 5.6 hectares over the Central Big H Prospect located 400m west of the plant site;
• 50 hectares covering the North Heemskirk Deep Lead Prospect located 1km N of the plant; and
• A small portion of the lease to the SE of the plant over a small dam used for water supply to the mill.

Heemskirk Tin Plant
Refurbishment of the Heemskirk gravity separation mill was completed on 19 July 2008 and wet commissioning commenced immediately treating Granville East ore blended with alluvial and tailings material stockpiled at the mill.

The plant was initially designed with a capacity to treat approximately 10 tonnes per hour of the clayey oxide ore sourced from the shallow Granville East pit. The initial commissioning process has been frustrated by material handling problems relating to feeding the wet clay ore into the plant which necessitated the blending of Granville or with low grade alluvials and tailings.

Installation of a new feed bin at the end of October 2008 improved the ore handling, however in November 2008, the Company placed the mill on care and maintenance due to ore handling problems and lower tin prices. The Company will continue to evaluate options regarding the project.

Granville East
The Granville East deposit (Location Map) is associated with an altered carbonate unit (skarn) which appears to contain economic concentrations of tin and associated magnetite. The mineralisation has been interpreted as representing the top of a weathered, primary magnetite-tin deposit however conjecture remains as to the origin of the mineralisation exposed in the Granville East open pit as to whether it is alluvial or eluvial (weathered primary mineralisation). Drilling to date has been inconclusive and detailed evaluation of the open pit and mineralisation style is warranted.

Central Big H
The Central Big H prospect (Location Map) located 400 metres to the west of the Heemskirk Mill exhibits a similar magnetic signature to the Granville East deposit and previous alluvial tin mining was carried out on the tenement. The prospectivity of the area is highlighted by the intersection of 1.25 metres grading 0.45% tin in the only drill hole on the northern boundary of the lease.

Heemskirk Alluvials
The Heemskirk alluvial lease (Heemskirk Alluvials Map) is located one kilometre north of the mill site and covers 50 hectares. Previous sampling has identified up to 0.9 kilograms of tin per cubic metre of gravels in a lead which covers most of the tenement area and is known to be up to 20 metres deep. The area has potential to host a significant alluvial tin resource.