Murchison Metals Limited (ASX:MMX) Scoping Study Indicates Robust Rocklea Iron Ore Project

Perth, Feb 12, 2010 AEST (ABN Newswire) - Murchison Metals Limited (ASX:MMX) (PINK:MUMTF) is pleased to report the results of a scoping study for its 100% owned Rocklea Iron Ore Project, located about 30km from the town of Tom Price in Western Australia's Pilbara Region.

The results of the scoping study have shown that an economically robust project is possible at Rocklea, with resources sufficient to support potential production rates of up to 10Mtpa.

Other highlights of the study include:

- Test work confirms that the Resource can be upgraded by simple scrubbing and jigging

- Marketable product specifications have been selected

- Initial capital expenditure estimate of A$370m including A$44M contingency

- Delivered mine gate operating cost estimate of A$21/t

Murchison will now explore infrastructure options for the project to secure a viable transportation solution that would take product to port for export.

Selection of the export infrastructure route remains the key consideration for the project. There are three existing or planned rail and port infrastructure operators between 20km and 100km from Rocklea.

Murchison is also watching with interest the emerging new regulatory framework for third party access to resource infrastructure assets in the Pilbara.

The base input to the study was Murchison's Rocklea Mineral Resource as summarised in table 1.

-----------------------------------------------------------Category   Million Cut Off CaFe   Fe    P   SiO2  Al2O3 LOI           Tonnes   % Fe    %     %     %     %    %     %            (Wet)-----------------------------------------------------------Indicated    15     50    60.0  53.2  0.04  7.7  4.0  11.4Inferred     74     50    59.9  53.2  0.03  8.3  3.4  11.2Total        89     50    59.9  53.2  0.03  8.2  3.5  11.2-----------------------------------------------------------Including a higher grade zone of:-----------------------------------------------------------Indicated     8     53    61.6  54.6  0.04  6.6  3.1  11.3Inferred     38     53    61.5  54.6  0.03  7.2  2.6  11.1Total        46     53    61.5  54.6  0.03  7.1  2.7  11.1-----------------------------------------------------------Table 1 - Rocklea CID Recoverable Resource Estimate(1)

Metallurgical test work on samples from large diameter drill cores has shown that the Rocklea lump and fines products can be upgraded using simple scrubbing and lump jigging processes. A product specification of 55% Fe for both lump and fines with acceptable contaminant levels is targeted.

Mining studies applied the beneficiation algorithms from the metallurgical test work to the Mineral Resource block model and selected blocks for processing to achieve the product specifications. The whittle optimisation resulted in a near total-extraction pit at a strip ratio of 2.4:1.

The processing plant was designed to produce up to 10 Mtpa of Lump and Fines product2. Promet Engineers have estimated a capital cost of A$370M including A$44M of contingency. Delivered mine gate operating costs are estimated at A$21/t. These estimates include a 40km long conveyor, although alternative conveyor lengths of 20 to 100km were also considered, depending on access to infrastructure. The level of accuracy of the estimates is +/- 25%.

The study brought together expertise from within Murchison and also from the following specialist consultants:

------------------------------------------------------------Discipline                                  Consultant------------------------------------------------------------Marketing                                   LFJ ConsultingMineral Resource Estimate and Mining        SRK ConsultingMetallurgical Test Work and Infrastructure  Promet EngineersApprovals                                   Ecologia------------------------------------------------------------

Murchison Executive Chairman Paul Kopejtka said that Rocklea represented an important opportunity for the Company to expand and diversify future iron ore production.

"Rocklea gives us a good footprint in the Pilbara and is backed by the substantial expertise we have gained through the development of stage 1 of the Jack Hills mine in the mid-west," said Mr Kopejtka.

"This scoping study has shown that Rocklea can contribute significant additional future iron production to the Company as we build Murchison's portfolio of bulk commodity assets.

"Our next step is to assess infrastructure options for the project to identify how best to get product to market."

(1) Resource tonnes are wet metric tonnes, grades are dry mass percent. Refer to ASX announcement of 30 September 2009 for full details of the Mineral Resource.

(2) Production tonnes and operating costs are for dry metric tonnes.

Contact

Paul Kopejtka Executive Chairman Murchison Metals Ltd Tel: +61-8-9492-2600