LORENA GOLD PROJECT

The Lorena Gold Project is located about 15km east of Cloncurry in northwest Queensland, just 2km from the Flinders Highway (Figure 1). The project comprises one granted mining lease and five mining lease applications (“MLAs”) that collectively encompass approximately 2.5km², together with two small Exploration Permit for Minerals Applications (“EPM(A)s”) and one granted EPM adjoining the mining leases (Figure 2). The MLAs have all been recommended for grant and are expected to be granted very soon. Malachite acquired Lorena in early 2011 by purchasing all the shares of Volga Elderberry Pty Limited (“VEPL”), the title holder, which is now a wholly owned subsidiary of Malachite.

An interim measured resource of 177,800 tonnes grading 9.8g/t Au, containing approximately 56,000 ozs of gold, has been estimated at Lorena by the previous owners, together with an additional inferred resource of 95,000 tonnes grading 7.2g/t Au, or about 22,000ozs of contained gold. Parts of the known resource contain very high grades and there is strong evidence for extensions to the known ore grade mineralisation at depth and along strike. Significant copper mineralisation is also present at Lorena, mostly in what appear to be discrete copper-gold lodes, adjacent to but separate from the main gold lodes.

Malachite is undertaking a new program of drilling from late March, 2011, with a view to expanding the mineral resource to a level where the contained gold exceeds 150,000 ounces. Once that has been achieved economic modelling will be undertaken to assess the viability of developing an open pit gold mine to produce 50,000 ounces of gold per annum. Exploration drilling to expand the available resource will continue, together with exploration for repetitions of Lorena style mineralisation on the adjoining EPMs. It is hoped to complete a mining feasibility study by the end of 2011 and to commence gold production at Lorena by early 2013.