BUSINESS PLAN

Malachite is an ASX listed Australian resources company whose primary aim is to create shareholder wealth by the discovery and development of a gold, silver and base metal ore deposits in eastern Australia.

When the Company listed on the ASX in November 2002 it was purely an exploration play, focused on the steepest part of the mining industry value curve – the discovery phase. Since then, Malachite has made a very promising silver/base metal discovery, known as Conrad, and it is now part way through a program of delineating mineral resources at Conrad by detailed drilling. Metallurgical and conceptual mining studies are being conducted in parallel with the drilling. By mid 2008 Malachite hopes to have defined a resource large enough to justify development of a new mine at Conrad.

Malachite believes that Conrad will prove to be a company-making discovery and the project is expected to move on to the pre-development stage before the end of 2008. As it does so, the Company will strengthen its geological and engineering expertise to accommodate its transition from explorer to miner.

While the development of Conrad will continue to be Malachite’s primary objective throughout 2008 and beyond, the Company also has a number of other projects that have the potential to produce economic discoveries of a smaller scale in the near term. These activities will be advanced in parallel, with the aim of discovering an ore deposit that is amenable to more rapid evaluation, permitting and development, allowing the Company to generate a cash flow in the medium term. Development and mining of such a deposit is expected to be within the Company’s existing technical and financial capacity. The cash flow generated from such an operation would be used to fund future growth and finance the Company’s primary objective, at the same time minimising the need for new capital issues and dilution of existing shareholders.

Exploration will continue to play a key role in the Company’s growth plans, with emphasis on gold, silver, copper and tin deposits in eastern Australia. Malachite is targeting mineralisation associated with the intrusive rocks within the fold belts of eastern Australia (e.g. Tooloom, where the target is intrusion-related gold deposits of “Alaskan” type, and Conrad, where the silver target lies within a well mineralised granite province). The northern part of NSW is also a major historic producer of tin and the Company believes there is excellent scope for discovery in this region of a modest tin resource that could be developed quickly and cheaply to generate cash flow. For copper the main target area is the world class Mount Isa copper province in northwest Queensland.

It is the company's intention to remain unhedged to the fullest extent possible, so as to retain maximum leverage to the prices of gold, silver, copper and tin. In the longer term, Malachite envisages paying dividends to its shareholders.

A key strategy with which Malachite is implementing its business plan is the concept of “strategic alliance”, whereby the Company forms business links with other mining companies that offer technical, financial or mineral resources complimentary to Malachite’s. The Company currently enjoys such a relationship with Macmin Silver Limited and Straits Resources Limited, both listed Australian mining companies with interests in the same metals and regions as Malachite. Macmin and Straits are both shareholders in Malachite Resources and a Malachite holds shares in Macmin. Malachite’s managing director serves on the boards of both Macmin and Straits, while Macmin’s managing director serves on the Malachite board.