MALACHITE’S KEY COMMODITIES

Malachite’s business is focused on the exploration for precious metal and base metal deposits in eastern Australia, which is well endowed with these metals. It is intended that successful discovery will lead to the development of new mines producing one or more of

GOLD, SILVER, TIN, COPPER, LEAD and ZINC

The reasons we focus on these metals are summarised below.

GOLD

Gold is an essential part of Malachite’s exploration portfolio because it is the most generally favoured store of wealth, it has a very high unit value and it generally offers relatively simple mining and metallurgy. Eastern Australia is well endowed with gold and the yellow metal can be found in a wide variety of deposit types within this region.

In US dollar terms the gold price has enjoyed a strong rise over the past ten years, from under $300 per ounce to over $1100 per ounce. In Australian dollar terms the gold price has varied even more dramatically, due to the exchange rate effects. Recent gold prices, whether in USD or AUD terms, are very attractive for Australian miners.

Malachite’s principal exposure to gold is through its wholly owned Tooloom Gold Project, located in northeast New South Wales.

For more information on gold please see www.kitco.com

SILVER

Malachite targets silver firstly because it is a precious metal and store of wealth. As such, silver tends to follow gold as a “safe haven” in troubled times, although because the total silver market is much smaller than that of gold, silver tends to display more volatility than gold.

Silver is also attractive to Malachite because it is a critical modern industrial metal, with very wide application and new uses appearing all the time. Silver is not toxic and its use in bio-medical applications, particularly as a bactericide and fungicide, represents a key area for future consumption growth.

Eastern Australia is very well endowed with silver, ranging from very large silver-rich deposits like Broken Hill (in NSW) and Cannington (in Queensland) to smaller deposits and occurrences in historic silver fields such as northern NSW and north Queensland.

The Company’s principal exposure to silver is at the Conrad Silver Mine project, located about 25km south of Inverell in northern New South Wales.

For more information on silver please see www.kitcosilver.com or www.silverinstitute.org

TIN

Tin is a metal that has undergone a renaissance in recent years, driven mainly by its use in electronic solder, where its low melting point and non-toxic properties allow safe substitution for lead, which has traditionally been the main component of solder but is toxic and for that reason is being phased out of most solder applications. Today more than 50% of all tin consumption is for solder alone.

The demand outlook for tin is very positive, not only for solder and the more traditional use in tin-plate, but also for other technology uses, such as plasma TV screens. At the same time, tin is in short supply and likely to remain so for the foreseeable future, sustaining a relatively high metal price for the long term.

There is a long history of tin mining in eastern Australia, particularly in northern NSW, northeast Queensland and Tasmania. We also like tin because is generally has favourable metallurgy, involving simple gravity-based processing. Furthermore, in some mineral deposits, in both northern NSW and north Queensland, there is a significant association of silver with tin, as is true at Conrad.

Malachite’s key tin project is in northern NSW at Elsmore, 20km east of Inverell. Tin is also a major value component of the Conrad multi-metal deposit.

COPPER, LEAD AND ZINC

Malachite does not currently have a copper-specific exploration program, although copper is a significant component of the multi-metal mix at Conrad. However, we like copper as a commodity for the long term because it is a fundamental building block of modern living and it will continue to play a key role in the economic growth of China and other economies around the world. Malachite continues to review copper exploration opportunities, targeting both the Lachlan Fold Belt of NSW and the Mount Isa region of Queensland as prime target areas.

Lead and zinc deposits are not being targeted as such, but the reality is that silver is almost universally associated with lead and zinc, as it is at Conrad, so the company is gaining exposure to lead and zinc as commodities in the course of its work at Conrad.

[BACK]