Mt Pleasant Project

Background

The Mount Pleasant Project is located 32 kilometres north west of Kalgoorlie. Previous mining yielded 84.3 tonnes @ 7.6% Copper in 1960-62 from the Old Mt. Pleasant Copper Mine and then a bulk sample was collected in 1973/74 from an underground shaft called the New Mt. Pleasant Copper Mine with over 250 tonnes stockpiled and assaying up to 8.6% Copper & 100g/t Silver. The Copper-Silver mineralisation is associated with silica rich pods within black shales and metasediments at the contact between major gabbro and basalt rock units. The gabbro unit to the west contains historic gold workings (Golden Buckle) that produced 78.6 tonnes @ 85.4g/t Gold prior to the Second World War (see attached geology map).

The Copper mineralisation was delineated in the early 1970s through percussion (49 holes) and diamond (17 holes) drilling by Great Boulder Mines Ltd (owners at the time of the Scotia Nickel Sulphide Mine 10kms north of Bardoc) with such intersections as 9.1 meters @ 19.69% Copper & 233 g/t Silver from 59.4 metres (which equates to 9.1m @ 70.5g/t Gold using US$623/oz), 4.6 metres @ 7.73% Copper & 75g/t Silver from 51.8 metres, 3.7 metres @ 5.33% Copper & 108g/t Silver from 70.4 metres and 2.4 metres @ 10.88% Copper & 13g/t Silver from 85.0 metres.

Gold mineralisation was intersected at Golden Buckle within the gabbro unit by Coopers Resources NL in the 1980s with results such as 1 metre @ 15.2g/t from 31 metres, 2 metres @ 6.55g/t from 22 metres and 3 metres @ 3.66g/t from 19 metres.

Metallurgical Studies were commissioned on the surface ore samples in 1994/95 with results indicating that the material could be processed using conventional techniques of gravity concentration, flotation, acid leaching of the tailings and cyanide leaching, which should result in high copper recoveries (+90%) and the recovery of gold and silver (+70%).

Exploration Potential

The current area of Copper mineralisation has potential to host sulphide mineralisation at depth with intersections such as 1.3 meters @ 4.45% Copper, 53g/t Silver & 0.28% Zinc from 84.1 metres and 0.8 metres @ 1.57% Copper, 22g/t Silver & 1.03% Zinc from 117.4 metres. These results are open at depth and with no drilling beyond 130 metres within the mineralised zone, the potential to extend remains. This would be further enhanced by electromagnetic surveys providing coincidental conductors for drill targeting.

The potential for Zinc mineralisation is evident from the above results at depth and is further confirmed by the highest result to date of 0.6 metres @ 1.83% Copper, 17g/t Silver & 3.63% Zinc from 77.4 metres. This may indicate a separate but adjacent Zinc rich zone which is a common scenario amongst a number of different styles of Base Metal deposits. A large untested Copper/Zinc soil anomaly sits just to the north and may provide for a repeat of the mineralisation identified so far on this project.

The original Copper workings mined in the 1960s have only been drill tested by less than five holes and therefore opportunities exist for discovering further high grade shoots near surface and along strike based on the existing soil anomaly.

The Golden Buckle prospect still has good potential to provide a significant gold resource. Drilling has been restricted to 60 metre deep holes with one drill hole ending in mineralisation (3.89g/t Gold). The gabbroic host rock at Golden Buckle contains the nearby Golden Kilometre Deposit which produced 2.45 Million tonnes @ 4.2 g/t for 330,000 ounces of Gold from 1986 through to 1994.

Further opportunities have already been identified by Nickelore’s own work through resampling that has shown that significant gold mineralisation maybe associated with the Copper Zone. This was shown by a gold-targeted drillhole within the Copper Zone containing 3 meters @ 3.66g/t Gold from 19 metres was re-sampled and returned 1g/t Silver & 2.26% Copper over the same interval. Therefore it has been planned that all drillholes with Copper mineralisation should be systematically assayed for Gold. Similarly not all Copper rich intervals have been systematically assayed for Silver, yet assays of over 200g/t of Silver do exist. Such an exercise may add value to the Copper deposit if significant credits from Gold and Silver can be realised.

Strategy Going Forward

The plan is for the Company to fully define the shallow high grade Copper resource that has already been identified at Mount Pleasant. Upon the completion of a favourable feasibility study Nickelore would seek to develop a low capital cost Stage One operation with the capacity to extend beyond, as ongoing exploration delineated further economic resources. Initial recent scoping studies support the use of open-cut mining methods as the mineralisation is less than 100 metres deep, and a processing route of crushing, grinding and gravity concentration, leaching of gravity tailings, solvent extraction and then the crystallization and bagging of a Copper Sulphate product. The remainder of the Silver and Gold credits would be recovered through a cyanide leach process.

The Company’s recently completed drill program has confirmed High Grade Copper (Cu) mineralisation now with previously untested Gold (Au) credits at the Mount Pleasant Copper Project with results such as:

• 2m @ 7.64%Cu, 36.5g/t Silver (Ag) & 1.15g/t Au from 52 metres(Gold Equivalent value of 30.8g/t Au) within 3m @ 5.57%Cu, 25.7g/tAg & 0.79g/tAu from 52 metres(Gold Equivalent value of 22.4g/t Au) and,
• 1m @ 9.64%Cu & 17g/t Ag from 53 metres (Gold Equivalent value of 36.9g/t Au) within 6m @ 2.71% Cu & 3.5g/t Ag(Gold Equivalent value of 10.3g/t Au) and,
• 2m @ 3.54%Cu, 65.0g/t Ag & 0.23g/t A from 70 metres(Gold Equivalent value of 14.9g/t Au) within 4m @ 2.30%Cu, 37.6g/tAg & 0.14g/tAu from 69 metres(Gold Equivalent value of 9.57g/t Au).

Other highlights included:

• Rock chip sampling of the surface extension for the mineralised zone has returned values of up to 3.56g/t Gold and 0.56% Copper outside of the previous resource area and,
• High grade mineralisation was intersected much closer to surface then previously identified with 2m @ 1.70% Cu, 1.3g/t Ag & 0.71g/t Au from 15 metres (again outside of the previous resource area) and,
• High grade Silver mineralisation was confirmed with values of up to 233g/t being returned.

The confirmation drilling program was extended as the Company gained confidence in drilling the deposit, as it intersected zones of Copper mineralisation represented by native (pure-100%) Copper, which was noted in 8 of the 16 holes, drilled in this campaign.

After considering all of the results, the Company has decided to push forward with drilling towards achieving a JORC compliant Measured Resource status for the deposit over the next 3 months before going into Feasibility Studies. It is important to note that the decision to acquire the project was based on a price that was almost half of what it is today and therefore considerable upside still exists at Mount Pleasant.

Mount Pleasant Copper Project Highlights:

• 1997 Non-JORC resource of 134,200 tonnes @ 4.32% Cu (~5,800 tonnes of Copper Metal) based on 49 percussion drill holes and 17 diamond drill holes for 4,600 metres of drilling.
• Record Copper Prices around US$7,900/t (up 39% since acquisition) or ~A$10,500/t.
• In-situ ground value could be around A$65 Million with Gold & Silver credits.
• Deposit is close to surface (<90 metres deep) and therefore amenable to open pit mining.
• Well located near infrastructure, 32 kilometres northwest of Kalgoorlie in Western Australia.
• Gold equivalent value is approx 17.5g/t (using commodity prices as of May 23, 2006).

• Better previous drill intersections include:
  • 9.1m @ 19.69% Cu & 233g/t Silver which equates to 9.1m @ 79.0g/t Gold from 59.4 metres,
  • 4.6m @ 7.73% Cu & 75g/t Silver which equates to 4.6m @ 30.7g/t Gold from 51.8 metres and
  • 2.4m @ 10.88% Cu & 13g/t Silver which equates to 2.4m @ 41.5g/t Gold from 85.0 metres.

 Table 1: Mount Pleasant Project Significant Drill Results

Note: All RC intersections are derived from 1 metre splits that have been riffled split down to 2-3kgs and are analysed by Aqua Regia, if >0.4%Cu and/or >40g/tAg then the sample is re-analysed by a Total Acid Digest Method used for Ore Grade Analyses. All holes were designed to be drilled vertical.

* denotes that native Copper was sighted in this interval.