BUSINESS PLAN

Malachite is an ASX listed Australian resources company whose primary aim is to create shareholder wealth by the discovery and development of silver, tin, copper and gold 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, located near Inverell in northern NSW, and it is now delineating mineral resources at Conrad by detailed drilling. An interim resource estimate was published in August, 2008, and an upgraded figure is expected to be available before the end of 2008. Metallurgical test work and mining scoping studies are being conducted in parallel with the drilling. On current modelling, the minimum economic target for development at Conrad is 1 million tonnes of ore at a grade of 15oz/t silver equivalent.

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 during 2009. As it does so, the Company will strengthen its geological and engineering expertise to accommodate its transition from explorer to miner.

In parallel with the work at Conrad Malachite will continue to give considerable emphasis to opportunities to generate short term cash flow. The Inverell region has a long history of tin mining and exploration by the Company at its wholly owned Elsmore Tin Project in this region has provided strong encouragement that a small scale but significant mining operation may be possible at Elsmore. Such an operation has the potential to produce a meaningful cash flow for several years and would be within the Company’s existing technical and financial capacity. The cash flow generated from a tin mine 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. Other tin mining opportunities in the Inverell region may also be assessed as potential additional sources of cash flow.

Exploration will continue to play a key role in the Company’s growth plans, with emphasis on silver, tin, copper and gold deposits in eastern Australia. Malachite is principally targeting mineralisation associated with the intrusive rocks within the fold belts of eastern Australia, including Tooloom, where the target is intrusion-related gold deposits of “Alaskan” type, Conrad, where the silver target lies within a well mineralised granite pluton, and Elsmore, which lies within a major historic tin province underlain by granite and related rocks. For copper the main target area is the world class Mount Isa copper province in northwest Queensland, specifically the so-called Eastern Succession, which is host to many iron-oxide copper-gold deposits, including the large Ernest Henry deposit.
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 former managing director serves on the Malachite board.