MANGANESE. Manganese (Mn) mineralisation on Waddikee is a significant asset in Monax s portfolio

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1 MANGANESE Exploration Licence (EL) 3357 Waddikee Located on the central Eyre Peninsula Tenement covers 1,004 km 2 Good existing road and rail infrastructure Farmin agreement with OM Manganese Joint venture with Marmota Energy Limited to earn up to 70% interest in the uranium rights Highlights Manganese (Mn) mineralisation on Waddikee is a significant asset in Monax s portfolio Samples up to 54.1% Mn at Jamieson Tank, Pollinga and Hodgins prospects suggest prospective horizons spanning over 40km in strike length Tenement position covers 1004 km 2 comprising prospective banded iron formation in the same geology as the OneSteel and Centrex Metals hematite deposits Completion of first stage drilling program totaling 2955m with manganese mineralisation (up to 34% Mn) intersected in all nine traverses at the Jamieson Tank Prospect and in one drill hole at the Pollinga Prospect Beneficiation test work reports upgrading to 42.4% Mn product with 88% recovery Manganese one of the next performing metals markets Manganese is a non substitutable component of the steel making process. It acts as the glue to harden iron, to make it less brittle and remove impurities. A worldwide shortage for manganese is developing, in line with projected iron ore demand for steel production, coupled with supply constraints in South Africa and China. There are currently 3 producers of manganese ore in Australia (Groote Eylandt GEMCO, Woodie Woodie Consolidated Minerals, Bootu Creek OM Holdings) Figure 1. Waddikee Project, Eyre Peninsula, South Australia 1

2 Location and infrastructure Waddikee is located 45km north east and along strike from Centrex s Wilgerup hematite project and 55km west of OneSteel s iron ore mines Iron Duke, Iron Baron and Iron Monarch, on the eastern Eyre Peninsula, South Australia (Figure 1). The tenement is well serviced by existing rail and road infrastructure, connected to a number of deep water ports along the coast. In addition OneSteel s steel making operations are 100km to the east at Whyalla. Geology and mineralisation Basement geology within the Waddikee Project consists of the Middleback Subgroup, which is part of the Palaeoproterozoic Hutchison Group metasediments. The Middleback Subgroup comprises the Warrow Quartzite, Katunga Dolomite, Lower and Upper Middleback Jaspilite and Cook Gap Schist, all of which is variably intruded by sills of the Burrawing Amphibolite. More than 80km of strike of the host sequence, including banded iron formation (BIF), occur within the Waddikee tenement. The BIF sequences are clearly evident as long curvi linear highs within the 100m line spaced aeromagnetic data acquired over the entire tenement (Figure2). This is also reflected as gravity highs in the 1x1km gravity data, predominantly in the western half of the tenement where basement is shallowly covered to outcropping. Figure 2. Detailed aeromagnetic (top) and gravity_1vd (bottom) data over Waddikee Project, South Australia 2

3 Manganese Prospects Jamieson Tank Prospect The Jamieson Tank Prospect in the south west of the tenement consists of 8km strike length of BIF of the Lower Middleback Jaspilite. Manganese mineralisation occurs along strike parallel bands on either side of the BIF sequence. Mapping of the Jamieson Tank Prospect has identified scattered float of highly manganiferous ironstone over a strike length of 3.5km. The manganese occurs as massive, dense, blue black cobble sized float. Historic regional sampling at Jamieson Tank by Western Mining Corporation (WMC) had identified anomalous manganese. Monax s new mapping traced near surface manganese mineralisation over a strike length of more than 3.5km. Rock chip assays from manganese outcrops returned maximum values of up to 54.1% Mn. Pollinga Prospect Mapping at the Pollinga Manganese Prospect has identified manganese mineralisation over an area of approximately 900m by 300m. The manganese occurs both adjacent to and within a demagnetised zone of banded iron formation. In late March 2008, 9 reconnaissance rock chip samples were taken over sporadically outcropping manganese mineralisation at the Pollinga Prospect. The samples have returned highly encouraging manganese results with maximum values of 41.9% Mn. Hodgins Prospect Manganese oxide has been mapped and sampled at the Hodgins Prospect, 40 km to the north of the Jamieson Tank Prospect. Outcrop of massive manganiferous rocks occurs adjacent to a manganiferous chert outcrop just to the south of the Eyre Highway, 20km to the west of the township of Kimba. One rock chip sample from the manganese outcrops returned a value of 37.2% Mn. Jamieson Tank Prospect Pollinga Prospect Hodgins Prospect Figure 3. Pictures of massive manganese boulders 3

4 Exploration Program Geophysical review An independent study of the magnetic and gravity data has been completed, highlighting geophysical targets with potentially economic significance. A detailed airborne electromagnetic (EM) survey has been completed with results currently being processed. Monax plans to conduct detailed ground based geophysical surveys over the identified prospects. These surveys will include ground magnetic, micro gravity and induced polarisation surveys, aimed at better defining prospective and mineralised horizons for follow up exploration and drill testing. Manganese Drilling Program Eight traverses were drilled at the Jamieson Tank Prospect in mid Monax is pleased to confirm that all traverses intersected manganese mineralisation at depth underlying the surface mineralisation mapped in previous ground surveys. Monax has interpreted intersections of manganese mineralisation varying from 2 to 15m down hole based on preliminary logging of the drill holes. Mineralisation appears to be dominated by inter layered massive manganese oxides near surface grading to powdery manganese wad at depth. The target zone appears to be dipping approximately 45 o to the east. The majority of holes have been drilled 60 o to the west to intersect this horizon (Figure 4). Figure 4. Cross section of Greg s Special #1 drill traverse at the Jamieson Tank Prospect, showing down hole manganese mineralisation (grey histogram) and magnetic susceptibility (blue line) 4

5 At the Pollinga Prospect, 8km to the north of the main Jamieson Tank Prospect, one drill hole has intersected a 10m down hole zone of manganese mineralisation beneath mapped surface mineralisation (Figure 4). Further detailed mapping and sampling combined with geophysical surveys and diamond drilling will be required. This will greatly enhance Monax s understanding of the lithological and structural complexity throughout the area. Monax received higher than expected assay results for iron. A summary of significant intersections of manganese and iron are presented in Table 1. Figure 5. Pollinga RC drillhole PRC003 showing intersection of black manganese mineralisation (1m per pile) Table 1 Significant Manganese Results Drillhole Interval (m) Mn % JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC PRC Significant Iron Results Drillhole Interval (m) Fe % JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC JTRC PRC

6 Manganese Sighter Beneficiation Testwork Monax is highly encouraged by the drilling results and has subsequently completed Manganese Sighter Beneficiation Testwork on four bulk samples from selected manganese intersections. The aim of the beneficiation was to use gravity to separate the heavy manganese and iron component from lighter impurities such as silica and aluminum. The heavy component is then passed through a magnetic separation test to remove any iron in the form of magnetite. The resultant assays will provide key metallurgical information on the potential grades and yields of manganese and iron. Quantitative XRD analysis was initially undertaken on a homogenous sub sample. The main manganese oxide constituent was identified as Cryptomelane, a potassium manganese oxide (KMn 8 O 16 ). Whilst the magnetic separation proved to be relatively unsuccessful, the heavy liquids separation conducted at SG 3.32 reported significant upgrading with satisfactory recoveries. Samples JTRC034 and JTRC036 gave the best results and are summarised in Table 2. Table 2. Results from the bulk head sample and beneficiated heavy liquid separate (HLS) including recovery. Assays Recovery Sample Mn % Fe % SiO 2 % S % P % Al 2 O 3 % MnO % JTRC036 Assay Head (8m to 13m) HLS Upgrade JTRC034 Assay Head (14m to 21m) HLS Upgrade Monax will now move towards converting its exploration target of 4 6 million tonnes at >20% Mn* (based on a strike length of 1km, thickness of 10m, depth of 150m and specific gravity of approximately 3) to a JORC compliant inferred resource with further resource definition drilling. * (the potential quantity and grade is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource). Farmin Agreement Monax has recently signed a $2 million Farmin Agreement with OM (Manganese) Limited. Under the terms set out in the agreement, OMM has the right to earn a 60% interest in all ferrous minerals (manganese and iron ore) by funding expenditure to the value of $2 million over a 4 year period. OMM must expend a minimum of $250,000 in the first year before the right to withdraw. During the farmin period, Monax will remain exploration operator according to the program and budget mutually agreed between both parties. Monax retains the right to all non ferrous minerals within the tenement, giving OMM the first right of refusal. Should OMM withdraw prior to expending $2 million, it will have earned no interest in the tenement. This agreement is conditional upon the completion of due diligence enquiries by OMM within 90 days. 6

7 Upon OMM earning its farmin interest, OMM and Monax will enter into a Joint Venture Agreement (JVA). Under the terms set out to be included in the JVA, Monax may elect to contribute in proportion to its 40% interest, or transfer a further 20% interest to OMM by OMM funding a further $2 million of expenditure. Should OMM make a decision to mine, Monax may elect to contribute in proportion to its remaining participating interest, or relinquish its interest and withdraw from the JVA in exchange for a net revenue FOB royalty at a rate of 1% for each 10% of participating interest retained at the time of OMM s decision to mine. For further information please contact: Greg Swain Duncan Gordon Senior Geologist, Monax Mining Investor Relations Ph: Ph: info@monaxmining.com.au The Company expressly warns readers not to rely on the information herein for investment or other related purposes. Accordingly, any use of this information is at your own risk and without liability to the Company. The information contained herein is not, and under no circumstances is to be construed as either a public or a private offer or solicitation to purchase securities in the capital stock of Monax Mining Limited. The reader is referred to his/her professional investment advisor regarding investment or related decisions respecting the securities of the Company. 7