Mt Thirsty Cobalt-Nickel Joint Venture Infill Drilling Results

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1 31 January 2007 ASX ANNOUNCEMENT. Mt Thirsty Cobalt-Nickel Joint Venture Infill Drilling Results The Company is pleased to announce results of infill drilling at the Mt Thirsty Cobalt Nickel Project, strategically located 20 kilometres north-northwest of Norseman, Western Australia (see Figure 1). Barra Resources Ltd ( Barra ) recently entered into a 50/50 joint venture with private company Select Minerals Ltd ( Select ), holder of the high grade Mt Thirsty Cobalt- Nickel Deposit. Results comprise: 74 metres grading 0.3% Cobalt and 1.0% Nickel (including 11 metres grading 1.1% Cobalt and 1.3% Nickel) Infill Drilling Results 13 metres grading 0.2% Cobalt and 1.1% Nickel 13 metres grading 0.4% Cobalt and 1.1% Nickel 19 metres grading 0.4% Cobalt and 0.8% Nickel (including 4 metres grading 1.0% Cobalt and 1.5% Nickel) 6 metres grading 0.7% Cobalt and 1.1% Nickel Drilling was undertaken late 2006 to evaluate the reliability of previous holes completed by Resolute Limited during 1996 and The objective of the program was to infill previous drilling, drill deeper holes where previous holes ended in mineralisation and to provide representative samples for metallurgical testwork. Results are presented in Table 1. The program was highly successful showing excellent geological and assay continuity between Barra s holes and Resolute s previous holes. Intersections are virtually true width as all holes were drilled vertically into the near horizontal blanket like ore zone. Mineralisation was substantially thicker in those parts of the deposit tested where Resolute s drilling stopped in ore (see Figure 3). Further areas require depth extensional drilling. Results from current metallurgical testwork are expected this quarter and will be utilized to set parameters for the existing pilot plant testing facility. Barra Resources Limited (ABN ) Mercury House, Level 3, 33 Richardson Street, West Perth, Western Australia 6005 Telephone: (08) Facsimile: (08)

2 Table 1: Mt Thirsty Significant Aircore Drill Intersections Mt Thirsty Significant Aircore Drill Intersections Hole North East Dip/Az From To Width Cobalt Nickel (m) (m) (m) (%) (%) MTAC vertical MTAC vertical MTAC vertical MTAC004* vertical Including and MTAC vertical Including and MTAC vertical Including MTAC vertical Including MTAC vertical Including MTAC009* vertical MTAC010* vertical Including MTAC vertical MTAC012 Including vertical MTAC013* Including vertical Note: * denotes hole ending in mineralisation Yours sincerely Dean Goodwin Managing Director Barra Resources Ltd The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dean Goodwin who is a Member of the Australian Institute of Geoscientists. Dean Goodwin is a full-time employee of the Company. Dean Goodwin has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2005 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dean Goodwin consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

3 Background on the Mt Thirsty Cobalt Nickel Project Highlights of the Project are: The high grade presence of cobalt is up to 8 times greater than other nickel-cobalt operations where cobalt is a by-product. Based on present metallurgical recovery rates, the total inferred and indicated resource produces approximately 13,000 tonnes of cobalt metal and 27,000 tonnes of nickel metal. The mineralogy of the deposit allows rapid high leaching recoveries (80% cobalt/50% nickel) at room temperature and normal atmospheric pressure utilizing weak acidic reagents. Advanced metallurgical testwork at finer grind sizes, currently underway, is expected to increase nickel recoveries significantly. Low mining costs are anticipated due to the soft nature of the deposit, its thin overburden and shallow depth. Relatively low capital costs of treatment plant construction estimated at between million dollars. All metallurgical operations envisaged within the treatment process exist and have been operating in other processes worldwide over many years. No new technology is required; a combination of time-proven technologies will form the basis of the treatment plant. The end concentrate is a simple product highly amenable to world smelters. Existing resource is currently open along strike with scope for significant expansion. The Project is within 4 kilometres of existing infrastructure including road, rail, water and gas pipelines with ready access to the deep sea export port of Esperance. Extent of Current Resource The Project contains an existing JORC compliant internal high grade indicated cobalt and nickel oxide resource of 700,000 tonnes grading 0.50% cobalt and 1.20% nickel within a much larger inferred and indicated envelope of 8.4 million tonnes grading 0.20% cobalt and 0.65% nickel. Barra infill drilling has confirmed the continuity of this resource. Resources are currently open along strike. The soft nature of the ore profile renders conversion of inferred and indicated resources to mineable reserves at relatively low cost and will result in lower mining costs. Extraction Process The mineralogical characteristics of the deposit allow for a rapid leaching technique at room temperature and normal atmospheric pressure utilizing an extraction process using acidic reagents. The extraction process relies on a sulphite leaching process able to extract nickel, cobalt and manganese metals from highly oxidized limonites at atmospheric temperature and pressure. These processes are extensively used in the electrolytic manganese dioxide industry and have been specifically refined by Select s Managing Director, Mr Jack Andreazza (BSc FAusIMM) in conjunction with Murdoch University and CSIRO to be used on ore from the Mt Thirsty deposit. The envisaged extraction process is also similar to two successful oxide cobalt and nickel mining operations in Southern Africa.

4 Figure 1: Mt Thirsty Project Location

5 Figure 2: Mt Thirsty Drill Hole Location Plan

6 Figure 3: Mt Thirsty Cross Section