ELSMORE TIN PROJECT

NEWSTEAD PROSPECT

Field work at Newstead has identified a large greisen system, comparable with that at the Elsmore mine, although less intensively worked. Good grade tin mineralisation has been found in outcrop (up to 1.55% Sn) and silver is also significantly anomalous at surface (up to 66 g/t Ag). Tin occurs in areas of massive greisen as well as in prominent quartz veins. Further sampling, leading to drilling, is planned for the Newstead greisen deposits.

The recent focus of exploration activity at Newstead has been the Karaula Lead, which occurs at surface as semi-consolidated, sandy and pebbly alluvium that seems to be a blanket or sheet deposit, perhaps originally a lake bed, partly surrounding Bruce’s Hill. The alluvium is underlain by granite and greisen. Its extent has not been completely defined but it does appear to cover at least 1 sq km in area. Old workings, in the form of shallow pits and shafts, up to 8m deep, are developed in the Karaula Lead in several places and free grains of the tin mineral cassiterite are visible on surface in some areas.

Malachite has sampled the Karaula Lead in outcrop for assessment of the tin content, both quantitatively (by tin assay) and qualitatively (by treatment with a cone concentrator). The results have been highly variable but encouraging, as there are many good tin values, commonly in the 0.5 to 1kg/cu m range, but up to 3.5kg/cu m. The Company is now evaluating various treatment methods that may be applicable to the Karaula Lead material. This includes a dry processing technology, being developed in Germany, which if applicable, could offer a very low cost, low risk start up option for development of the Karaula Lead.