Bardoc Project - Nickel

Due to a strong performance in the nickel price, Nickelore decided to review the potential for nickel sulphide occurrences in the Bardoc and Bardoc South areas. A review of previous exploration activities identified a total of six target areas along the basal contact of the Komatiite unit that hosts the Scotia Nickel Mine some 10 kilometres along strike.

Nickelore completed a geophysical program consisting of a ground based Electro Magnetic (EM) survey aimed at further defining the targets. The survey identified three anomalies that could potentially represent nickel sulphide mineralisation. A second follow-up program of EM was initiated in mid 2004 to finalise these targets for drill testing.

In addition to the geophysical surveys, Nickelore engaged the services of an ex-CSIRO scientist to assist in on-going target generation and prioritisation. This renowned specialist in sulphide nickel mineralisation was involved in several major discoveries including the nearby Silver Swan Nickel Mine (115,000 tonnes of Nickel Meal – approximate value of $2 billion). The results from the combined exploration efforts have realised six new target areas that are scheduled to be infilled during the third EM program later this year.

Soon after completion of the initial Nickel Sulphide drill program, the $3 million Nickel Joint Venture with Minara was formed. Nickelore, as manager, then commissioned and completed a geophysical program consisting of a ground based EM survey over the entire 15kms of the basal contact of the prospective Komatiite unit. This unit hosts the Scotia Nickel Deposit less than 10 kilometres along strike to the north of the project.

The EM survey confirmed previous targets and yielded new targets for at otal of 16 Nickel Sulphide target areas that are still being drill tested (a total of 6.106 metres of reverse circulation (RC) and 138 metres of diamond core drilling was completed last year), with the best results to date listed in Table 1. Each drillhole in the program was also Down-Hole EM surveyed to provide the capacity to outline relatively stronger more conductive bodies within the target areas which may represent increased concentrations of sulphidic mineralisation as seen in the Western Zone drilling.

The priority Nickel Sulphide Target Areas in the project to date are the Western Zone and the Number One Target Area prospects. The former is highlighted by historic and current drill intersections whilst the latter is based on the most conducive geological setting for hosting a repeat of the Scotia Nickel Deposit. Currently, both are the main subject of a project review by a senior research scientist from CSIRO to generate target vectors to more rapidly lead to the discovery of economic mineralisation.

Table 1: Significant Nickel, Copper and Cobalt results from drilling at the Bardoc Project for the year ended 30 June 2005

Note: All RC intersections are derived from 1 metre samples that have been riffled split and analysed by fire assay, except for HNIC022 where the samples were done by the Leachwell method using a 1kg change.