RIVERTREE

The Rivertree project comprises an exploration licence (EL 5714) of 21 units, covering about 63 km², located in north eastern NSW, 55 km northeast of Tenterfield and just to the west of Tooloom. The licence is held by Malachite and incorporates numerous old mines and prospects. Historic production took place prior to 1925 and ceased due to ore processing difficulties with the technology of the day and lack of interest at the time in zinc.

In November 2004 Malachite entered into a joint venture agreement with Macmin Silver Limited under which Macmin purchased an initial 60% interest in Rivertree, together with a similar interest in Malachite’s nearby Boonoo Boonoo project. Under that joint venture, Macmin has now earned a further 15% interest in Rivertree and Boonoo Boonoo by funding $500,000 of exploration expenditure on the two projects.

Sampling of dumps at Rivertree by Malachite has tended to confirm the high grade, polymetallic nature of mineralisation, with substantial values in silver (100-2500 g/t Ag), gold (0.5-8.5 g/t Au) and zinc (up to 20% Zn), and accessory to significant values in lead, copper and tin.

Very little modern exploration has been conducted at Rivertree and Malachite's early 2003 program was the first drilling in the area. That program comprised twelve reconnaissance holes (1346 m in total) and tested only four of the more than forty identified prospects. Most holes intersected mineralised veining and/or alteration in discrete lode structures up to 4 m wide and two holes intersected potentially economic grades of silver mineralisation. Prospects tested are shown on the drill hole location plan.

At Wongabah a high grade, massive base metal sulphide vein, assaying 755 g/t silver (= 24.3 oz/t Ag) and 3.0 g/t gold, was intercepted in the first hole, although at this point the vein was only 15 cm wide, much narrower than in the near surface old workings. The other three holes at Wongabah did not produce significant assays and it is thought that the Wongabah mineralisation occurs in discontinuous massive sulphide lenses, ranging from 15 cm to 2 m in width (see cross section of Wongabah in diagram above). Further detailed drilling will be required to delineate ore shoots at Wongabah.

Four holes were drilled at the Silver King mine, each of which intersected the main previously mined lode, which was up to 3 m wide. The most southerly hole produced a relatively high grade assay of 1.0 m of 291 g/t silver (9.4 oz/t Ag) and 0.17 g/t gold. Two other holes intersected well developed lode but with low silver values. Given the extent of old workings, the size of the dumps and the fact that a smelter was constructed at Silver King in the early days, these intercepts are clearly not representative of the material that was mined historically, and more detailed drilling is needed to enhance the Company's understanding of the Silver King vein system.

Two holes were drilled beneath old workings at Dunlop, both penetrating a 4m wide zone of strong quartz-sericite alteration, pyritic mineralisation and quartz-carbonate veining, correlating well with the overlying workings. However, only minor base metal sulphide, principally sphalerite, was present in this part of the lode and silver and gold values were relatively low. It appears that the Dunlop lode is well developed but that the silver mineralisation may be quite patchy within the lode structure. Neither of the two holes drilled at Boulder intersected significant mineralisation.

The Spring Gully prospect consists of three discrete parallel lodes, each of the order of 1 m in width, within a 30-50 m wide alteration zone that is at least 750 m long. Eleven samples of oxidized and sulphide-bearing dump material and oxidized surface outcrops along the Spring Gully structure averaged 302 g/t silver (range 7 to 1370 g/t Ag) and 1.44 g/t gold (range 0.05 to 3.98 g/t Au). Four RC percussion holes were drilled into the Spring Gully lode in December 2003, intersecting silver values up to about 65 g/t Ag over 2m, but with gold values all below 1 g/t Au. Macmin plans to follow up on the results obtained so far by Malachite, both by further work on the high grade, narrow lodes and by exploring for bulk tonnage silver mineralisation like that it plans to mine at Texas in southern Queensland, about 100 km from Rivertree. Success at Rivertree could see it become a satellite producer for the new operation currently under development at Texas.

In 2006 Macmin completed nearly 3,000m of RC drilling in 38 holes at Silver King, Spring Gully and Big Block.

The best intercepts recorded at each prospect are as follows:

• Spring Gully, 2m at 250.5 g/t silver, 0.35 g/t gold, 0.32% zinc and 0.45% lead in hole SGRC14 from 26m down-hole.
• Silver King, 1m at 147 g/t silver in hole SKRC12 from 17m down-hole;
• Big Block, 3m at 78 g/t silver, 0.56% zinc, 0.79% lead in hole BLRC2 from 192m down-hole.

For more information about this drilling please see the Company’s June 2006 Quarterly Report.