Nickelore Limited (ASX:NIO) Report Significant Events During The Quarter

Nickelore Limited (ASX:NIO) report that a statutory mining proposal for a demonstration plant to test the leachability of the laterite material at the Canegrass Nickel Cobalt Project ("Canegrass") was advanced during the quarter and will be submitted next quarter.

The Company acquired a highly prospective tenement (E29/680) containing a significant laterite nickel exploration target at Lake Ballard, 120 kms north of Canegrass. The tenement contains a north-trending linear magnetic anomaly interpreted to be a strike extension of the Walter Williams Formation ("WWF")

The Company entered into an ore sale agreement in relation to the gold bearing low grade ore stockpile on it's M24/133 lease at Bardoc South, generating proceeds of $149,056.

Minara Resources Limited ("Minara") is now administering, meeting expenditure commitments and undertaking all reporting for Bardoc tenements

The Company is currently in advanced discussions with Wingstar Investments Pty Ltd ("Wingstar") in relation to the renegotiation of the Canegrass Mineral Rights Agreement ("MRA") in order to improve the cash flow position of the Company

CANEGRASS NICKEL COBALT PROJECT

During the quarter, work on the statutory mining proposal for a demonstration plant to test the leachability of the laterite material at Canegrass was advanced. The mining proposal will be submitted next quarter. The work is a key element of the strategy to establish Canegrass as a commercial heap leach nickel production and processing operation.

Subject to funding, the proposal for Stage 1 aims to mine ore from two trial pits at the 'Patch-Gulch' and SM7 areas and temporarily stockpile 50,000t of leachable ore products for subsequent crushing, agglomeration and trial heap leaching on site within an existing Tailings Storage Facility. The mining at the SM7 site is within the existing SM7 pit, while the mining at Patch- Gulch is between two existing pits.

Also during the quarter validation of the Canegrass geological database was started. While all recent drilling has been captured into a DATASHED data model, some of the historical data still needed to be incorporated and has now been assimilated into a single database. The vectorising of the WMC mapping and magnetic data is now also well advanced.

The Company is currently in advanced discussions with Wingstar in relation to the renegotiation of the MRA in order to improve the cash flow position of the Company.

LATERITE NICKEL EXPLORATION TARGET ACQUIRED AT LAKE BALLARD

The Company acquired a highly prospective tenement (E29/680) containing a significant laterite nickel exploration target at Lake Ballard, 120 kilometres north of its Canegrass and Siberia nickel laterite projects in Western Australia, during the quarter.

The recently granted tenement contains a north-trending linear magnetic anomaly interpreted to be a strike extension of the Walter Williams Formation (WWF), the ultramafic rock unit that hosts laterite nickel deposits at Nickelore's Canegrass and the Norilsk Cawse Nickel Project.

While the magnetic signature is weak probably as a result of burial by lake sediments or deep weathering, the magnetic anomaly was traceable from the mapped Walter Williams Formation south of Lake Ballard under the Lake Ballard playa lake deposits and through the Nickelore tenement (Figure 1).

Within the tenement, the Walter Williams Formation is cut by an east-west trending Proterozoic dyke. A similar litho-structural situation at Canegrass provides a locus for nickel-cobalt mineralisation with grades in excess of 2% Co.

The ground has not been actively explored since 1998 when Stockdale Prospecting Limited explored for diamonds. Stockdale observed chromite within loam samples and limited air-core drilling intersected pyroxenites confirming the presence of ultramafic rocks with the potential to form laterite nickel mineralisation.

The exploration on this ground is extreme grass roots and initially will commence with a reconnaissance surface geochemical sampling program similar to those used successfully elsewhere on the Walter Williams Formation.

RESEARCH & DEVELOPMENT GRANTS

Nickelore received an Research & Development expenditure tax refund of $45,000 (net of fees) for the 2007 financial year. A further claim for the 2008 financial year will be lodged as soon as final figures are available.

A further claim for the 2008 Financial Year will be lodged as soon as final figures are available. It is anticipated that this claim will amount to approximately $300,000 net of fees.

The claim might or might not result in an expenditure tax refund.

SALE OF NORTH TALBOT ORE STOCKPILE

The Company signed an ore sale agreement with Paddington Gold Pty Limited, a wholly owned subsidiary of Norton Gold Fields Limited ("Paddington"), for the sale of a gold bearing low grade ore stockpile on its M24/133 lease at Bardoc South. The ore was treated through the Paddington mill.

The sale of the stockpile, approximately 30,000 tonnes of gold bearing low grade ore, generated proceeds of $149,056 for Nickelore. The initial payment of $47,177 was received on in September 2008, with the balance of $101,879 received after the end of the September and as such is not included in the Quarterly Cashflow Report.

BARDOC GOLD PROJECT (100%)

Incorporated in the agreement for the sale of the Bardoc tenement nickel rights to Minara, is the responsibility for Minara to maintain the tenements in good standing, including meeting the minimum expenditure requirements. Minara is now administering, meeting minimum expenditure commitments and undertaking all reporting for the Bardoc licences where it owns the nickel rights. This will greatly reduce Nickelore's tenement expenditure commitments going forward.

Work continued on calculating the gold mineral resources estimate for the Bardoc Gold Project with the aim of producing a resource estimate. Some re-sampling of holes at Big Blow North was undertaken as part of the resource calculation program. No drilling was undertaken on the project.

Outstanding rehabilitation of drill pads and access tracks was undertaken at several sites.

MOUNT PLEASANT GOLD COPPER PROJECT

No exploration activity was undertaken during the quarter.

LAKE MARMION URANIUM PROJECT (100%)

No exploration activity was undertaken during the quarter.

GOONGARRIE EAST NICKEL PROJECT (100%)

Samples from drilling undertaken in May 2008 on E29/524 at Goongarrie East were submitted for assay. Preliminary results have been received from areas judged 'less prospective" at the time of drilling. No significant gold or nickel assays were reported.

Interpretation of drill chip petrology suggest the linear magnetic anomalies drill tested within E 29/524 are due to magnetite within sheared quartz-rich biotite granites, probably after ultramafics.

Ultramafics intersected in drilling at the southernmost anomaly are anomalous in nickel. Further drilling is required to confirm the initial interpretation that they appear to occur in a transported cover sequence derived from outcropping ultramafics east of the tenement boundary. Drilling of two other linear magnetic anomalies in adjacent tenements will be undertaken in the upcoming quarter.

About Nickelore Limited

Nickelore Limited is a Perth-based nickel company listed on Australian Securities Exchange (ASX Code: NIO). The Company’s primary focus is on exploring, realising and expanding the economic potential of the Canegrass, Mount Pleasant, Lake Marmion, Goongarrie East and Bardoc projects in Western Australia’s Eastern Goldfields. Nickelore acquired Mineral Rights to mine and extract 140,000 tonnes of nickel metal in laterite nickel products from the Canegrass Nickel Cobalt Project. The company has commenced a scoping study into a Heap Leach nickel extraction plant. Members of the Nickelore Board and management team have proven records in mineral exploration, project development and project financing.

 

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