(Nagambie 100%)

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.

The mining of the two open pits also produced substantial tonnages of waste rock both as treated ore and untreated overburden waste rock. This material has been sold for road works and other general purposes.

OXIDE GOLD POTENTIAL PROJECT

Oxide Gold Potential on MIN 5412

The move to 100% of MIN 5412 will allow 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 (refer accompany plan) was used as a base for investigation and this was followed by an A horizon soil geochemical survey.

Plan of MIN 5412 with drill pattern

Showing all drilling with hole traces. Pits below ground surface in yellows and greens, dumps above surface in orange colours. Map datum GDA94, Zone 55.

Soil geochemistry north of the West Pit points to two possible parallel mineralised structures, the existence of which is also supported by earlier scout drilling.

The best potential however lies west of the West Pit, along the strike extension of the mineralised structure previously mined by PSV which is largely untested by drilling. Encouragingly, a 2007 drill hole, NRP026, intersected 24m of 1.0 g/t Au of oxide mineralisation (including 6m at 2.2 g/t gold) west of the West Pit.

Plan of MIN5412 with Aircore and RC drill proposals

The company has received Department of Primary Industry approval to commence a program of infill and extension drilling to test these identified oxide gold targets to the north-west and west of the West Pit. An air core drilling program is currently underway and a Reverse Circulation drill program will follow to test for oxide gold have been designed with the aim of establishing further resources of similar size and gold tenor to that initially contained in the West Pit.

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 advance 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.

Construction Materials Project

Heap Leach Dump

East Dump

The Nagambie Bypass

The move to 100% of MIN 5412 also presents Nagambie with the opportunity to focus on utilising the products of the 1990’s mining and treatment operations, particularly waste rock for road making, as part of the rehabilitation process.

Before gold mining commenced at Nagambie, the site was a quarry supplying the local region.

As a result of the gold mining and heap-leach treatment operations, around 6 million tonnes of crushed rock and 10 million tonnes of uncrushed rock were placed in four surface stockpiles on MIN 5412.

Since 1997, approximately 200,000 tonnes of the crushed rock and 160,000 tonnes of the uncrushed rock have been sold for local road works.

The two main waste rock stockpiles existing on the site which the company is currently looking to utilise have the following estimates:

• Heap Leach Stockpile (Crushed) 4 million tonnes
• Heap Leach Stockpile (Uncrushed) 1.5 million tonnes
• East Dump Stockpile Uncrushed 2 million tonnes

The dominant rock types in the stockpiles are Devonian sandstones and siltstones. The majority of the material on the Heap Leach stockpile is sandstone and the majority of the rock on the East Dump stockpile dumps is siltstone

A well recognised and accredited company, Coffey Information has prepared for the Company a report on the stockpile material available for use in road construction. The report concluded:

"The materials tested from the Nagambie Mining Stockpiles can be marketed as is, as Type A or Type B fill according to the tests conducted by Coffey Information."

"With minor modifications the materials can be improved to comply with the specifications for Class 3 and Class 4 crushed rock. With proper screening and/or washing this can be achieved quite easily."

In addition sand and clay can also be recovered from the site and investigations into this potential will be carried out. The two rock stockpiles are discussed below:

The Heap Leach Dump (Document also available as a PDF File - 280K)

• Nagambie Mining Limited owns the Nagambie Mine (MIN 5412) located at 648 Ballantynes Road, Nagambie 3608 and is 7 kms to the east of the township of Nagambie in Central Victoria and approximately 120 km north of Melbourne via the Hume and Goulburn Valley Highways.
  
  
• No quarrying is required and the dump contains the following estimated amounts of easily loaded and/or treatable onsite material:

• The company considers that the crushed material whose properties are summarised from a 2009 sampling program overleaf will meet the required specifications for Type A engineering fill, Type B fill and select backfill and also be suitable for concrete and asphalt use. The uncrushed material could possibly be treated to produce a Class 4 or maybe even Class 3 material. It has been used in the construction of the Goulburn Valley Highway.
  
  
• The crushed heap leach rock has been classified by EPA as a notifiable chemical due to its arsenic content but approval has been given for its use if suitably capped or in concrete or asphalt mix. It should be noted that the original country rock at Nagambie has elevated arsenic values and the cyanide residuals in the heap leach are 1/50th, or less of the EPA requirement for cyanide allowable in clean fill.
  
  
• Nagambie believes it can provide this material at competitive prices within a 50 km radius of the mine and invites any enquiries from interested parties.

The East Dump (Document also available as a PDF File - 264K)

• Nagambie Mining Limited owns the Nagambie Mine (MIN 5412) located at 648 Ballantynes Road, Nagambie 3608 and is 7 kms to the east of the township of Nagambie in Central Victoria and approximately 120 km north of Melbourne via the Hume and Goulburn Valley Highways.
  
  
• No quarrying is required and the dump contains the following estimated amounts of easily loaded and/or treatable onsite material:

• Rock from the untreated, uncrushed East Dump stockpile has been crushed and used in the past on Shire roads and by local farmers and contractors for various purposes
  
  
• The East Dump overburden was not subject to leaching with cyanide and the EPA has declared that the overburden is not mine tailings and is thus not a notifiable chemical product.
  
  
• The company considers that the East Waste Dump Stockpile material whose properties are summarised from a 2009 sampling program overleaf will meet the required specifications for Type A engineering fill, Type B fill and select backfill and with minimal work, this material can be made to comply with the requirements of a Class 4 material

The Nagambie Bypass

Construction will commence in late 2009 on the $270 million Bypass and is due for completion in late 2012.

The project will be constructed in two sections:

Northern duplication - a 3.5 km duplication of the existing highway north of Nagambie

Main bypass - a new 13.5 km freeway-standard deviation to the east of the town.

The company lodged an "Expression of Interest" in January in response to a VicRoads advertisement in January 2009 to provide 2,000,000 cubic metres of fill material and 500ML of non-potable water for the Nagambie Bypass project.

Seven contractors tendered for the Stage 1 work which closed in July and four for Stage 2 which closes on 15 October . The company was approached by all of these and was able to submit competitive quotes for supply of rock and water as the appropriate licences for both had been issued in the year by the appropriate authorities (DPI, EPA and GMW) to enable supply.

At this time no award has been made for Stage 1 but that is thought to be imminent. Stage 2 should be awarded by Vicroads before the end of 2009.