MIN 5412 is a 364.18 ha Mining Licence held by Nagambie Mining Limited (Nagambie) which contains the old Nagambie Gold Mine deposit located 6 km east of the Nagambie Township,120km north of Melbourne, Victoria in Central Victoria and is located predominantly on freehold property (187 ha) owned by Nagambie Development Pty Ltd (a wholly owned subsidiary of Nagambie) known as 648 Ballantynes Road, Nagambie 3608.

The Nagambie Gold deposit is hosted by Devonian Waranga Formation sediments protruding through flat lying Quaternary sediments of the Shepparton Formation. The gold mineralisation occurs in ferruginous quartz-antimony lodes and disseminated pyritearsenopyrite - stibnite fault and shear breccia, and stockwork zones near the crest of the asymmetric, east trending and doubly plunging Hill Mine Anticline.

The Nagambie mine was worked as an open cut mine from 1990 to 1997 recovering over 134,000 ounces of gold from over 7.3 million tonnes of ore at an average head grade of 0.78 g/t gold.

OXIDE GOLD POTENTIAL ON MIN 5412

The move to 100% of MIN5412 has allowed the Company to continue, in the light of the very encouraging current gold price, its investigation into the potential for near-surface oxide gold mineralisation between, along strike and to the north of the two open pits with a view to recommencing mining and heap leaching operations.

Resource evaluation work to identify a further area of oxide mineralisation was commenced in 2008 between the West and East Pits and their westerly strike extension. The existing drill database of 917 holes was used as a base for investigation and this was followed by an A horizon soil geochemical survey and an aircore program was designed to test for oxide gold with the aim of establishing further resources of similar size and gold tenor to that initially contained in the West Pit.

The program commenced on 13^th October 2009, and was completed on the 23^rd October, with 2407 metres drilled in 65 holes. Of the 65 holes drilled, 46 intersected basement. Basement rocks occur from 5 metres in the east, to 54 metres depth in the west.

185 samples of basement and near-basement material were submitted for assay. Gold values to 0.73 ppm, arsenic to 553 ppm and antimony to 435 ppm were returned. Four samples returned gold values of > 0.4 ppm.

Currently the results are being interpreted prior to a second stage drilling program. As shown in the accompanying Arsenic (As) indicator plot (refer Figure 1), results indicate that mineralisation extends to the west and north of the present West Pit and tie into the initial interpreted structure.
Aircore drill rig in action on MIN 5412

Further evaluation work will be required possibly involving some re stripping work to gain better drill access for better bed rock testing.

The company is in the process of putting together an investigation into the establishment of a new pit to the west of the present west pit.

This pit investigation is based on previous drill hole intersections some 130 metres and 160 metres to the west of 27 metres at 1.04 g/t gold (including 6 metres at 2.2 g/t) and 8 metres at 1.6 g/t respectively along with recent soil sampling and air core results clearly indicates that mineralisation extends to the west under alluvial cover.

MIN 5412 as a Regional Ore Treatment Location

The acquisition of 100% of MIN 5412 was also a key component to Nagambie's regional strategy of exploring other compelling oxide gold targets within economic trucking distance of MIN 5412.

The Company's objective is to establish significant oxide gold resources, typically averaging 1 to 2 g/t gold that could be mined and trucked to MIN 5412 for heap leaching along with oxide ore from MIN 5412. Together with the oxide targets on MIN 5412, Nagambie is targeting total heap-leachable gold of at least 100,000 to 200,000 ounces.

Heap-leach operations can be developed quickly and are much lower cost than conventional gold treatment operations, both in terms of capital cost and operating cost per tonne.

The following areas have been targeted. Information on their potential can be found in Operations - Exploration.

Redcastle Project (EL 3316) - 35 km west of MIN 5412
Most advanced with six prospects and a second costean program to be carried out following very encouraging results from earlier drilling and costean work.

Nagambie Nth Project (ELs 4887 & 5023) - 3 km north of MIN 5412
Encouraging gold/arsenic anomalies from recent soil sampling to be tested by aircore drilling later this year.

Nagambie Sth Project (ELs 4718 & 4887) - 3 - 4 km SE of MIN 5412
Re-evaluated anomaly areas from previous soil sampling.

Rushworth Project (EL 4723) - 25 - 30 km NW of MIN 5412
Historic mining and company exploration data identified four prospects for costeaning later in year.