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Good call Sally1,

 

Announcement released this evening, includes:

 

Metals Australia Ltd (`Metals') is pleased to announce that it has concluded an agreement with Fox Resources Ltd (`Fox') and Australasian Resources Ltd (`Australasian') to acquire a 30% `free-carried' interest in the Sherlock Bay Nickel Extended Project, which surrounds

Australasian's Sherlock Bay Nickel project in the Eastern Pilbara region of Western Australia.

 

The Sherlock bay Nickel project has a current resource in excess of 100,000 tonnes of contained nickel metal, with an in-ground value of more than $4 billion, at current nickel prices.

 

The Sherlock Bay Extended project is highly prospective for nickel, gold and other base metals, with a number of exploration targets having already been defined.

 

A further advantage to Metals, of the new joint venture agreement is that Australasian will make available to the joint venture any treatment facility that it constructs to service its Sherlock Bay Nickel project, at standard industry treatment charges, and at no capital cost to Metals.

 

The transaction is an excellent outcome for Metals Australia. Australasian are committed to developing their Sherlock Bay Nickel project, and their interest in the project will accelerate the exploration programme and any potential production from the Sherlock Bay Extended tenements.

 

The new joint venture terms also allows Metals to concentrate on bringing its Manindi Zinc

project into production.

 

End.

 

 

 

 

Add to that BBY's following report (released before todays's announcement):

 

 

Metals Australia Limited

 

Excellent Zinc Discovery with Great Upside Potential

 

25 January 2007

 

We have commenced coverage of Metals Australia Ltd (MLS) with a BUY recommendation for its exposure to the Manindi Zinc Project which sits on a granted mining lease, located 500km NE of Perth in the East Murchison region of WA. The current resource base of 1.05Mt @ 7.64% Zn is forecast to increase based on a successful drilling programme. In addition new EM exploration targets within the project area have been identified for evaluation and drilling. Project development options are being investigated including bioheap leaching and electrowinning Zn metal from solution.

The trials achieved excellent results recovering 97% of contained zinc within solution after leaching for 73 days. We are of the view that MLS has significant potential to grow its resource base and develop a medium sized mining operation.

 

 

Tomorrow may well see it fly!

 

Holding and watching. http://www.sharescene.com/html/emoticons/cool.gif

 

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In reply to: serpie on Monday 29/01/07 06:11pm

From Rice at HC,

Notice top ten share holders Anne-Maree Rice 9,880,323 1.48 some one in the know imo!! http://www.sharescene.com/html/emoticons/wink.gif

Here you go looking good imo. Quite a lot to read, but well worth it! the management have been getting a bit of flack here of late, when you look at what they are paid I'm not at all bothered by the options! The more motivated they are the better I say and you'll know when they sell them!

 

Regards

 

 

 

Metals Australia Limited

 

Excellent Zinc Discovery with Great Upside Potential

 

25 January 2007

 

We have commenced coverage of Metals Australia Ltd (MLS) with a BUY recommendation for its exposure to the Manindi Zinc Project which sits on a granted mining lease, located 500km NE of Perth in the East Murchison region of WA. The current resource base of 1.05Mt @ 7.64% Zn is forecast to increase based on a successful drilling programme. In addition new EM exploration targets within the project area have been identified for evaluation and drilling. Project development options are being investigated including bioheap leaching and electrowinning Zn metal from solution.

The trials achieved excellent results recovering 97% of

contained zinc within solution after leaching for 73 days. We are of the view that MLS has significant potential to grow its resource base and develop a medium sized mining operation.

 

Key Corporate & Financial Highlights

 

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Company name ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ changes its name to Metals Australia Ltd from Australian United Gold on 24 Sept.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢06.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Cash ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ $6.6M as at 30 September 2006.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Value ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ resource valued at A$400M at current zinc prices.

Key Project Highlights

 

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Manindi ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ located 500km NE of Perth and 20km SW of the closed Youanmi Gold Mine. Project area covers 1580Ha.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Resources ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ 1.05Mt @ 7.64% Zn, hosted within four

mineralised zones: (i) Warabi (Zone A); (ii) Mulgara (Zone B);

(iii) Kowari (Zone D Sth); and (iv) Kultarr (Zone D Nth).

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Deposits ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ are shallow and amenable to open-pit mining methods.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Mineralisation ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Volcanogenic Massive Sulphides (VMS), similar to Golden Grove and Jaguar deposits owned by OXR and JML respectively.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Drill targets ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ 9 EM targets to be tested close to existing deposits.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Drill results ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Warabi zone MNRC008 ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ 5m @11.80%Zn

from 44m & MNRC014 ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ 18m @ 14.96% Zn from 43m.

Mulgara zone MNRC012 ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ 5m @ 7.40% Zn and MNRC013

3m @ 16.90% Zn from 89m. Kultarr zone MND005 ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ 10.2m @ 12.6% Zn from 172m. These results are not part of the existing resource base. Upgrade in resources is forecast.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Ore treatment ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ options include: (i) bio-heap leaching of crushed ore; (ii) conventional sulphide concentrate

production; (iii) toll treatment; and (iv) selling ore to a third party for processing. Bio-heap trials recovered 97% of Zn metal within 73 days of leaching.

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ CAPEX ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ project development cost forecast at A$25-30M.

MLS $0.08 BUY

 

John Veldhuizen

+612 9226 0043

jxv@bby.com.au

 

Company Data

Number of shares 669.6M

Market capitalisation $50.9M

12 month high/low $0.10 / $0.02

Average monthly turnover $14.8M

All Ordinaries Index 5626

 

Directors / Company Secretary

Chairman (Executive) Mr Hersh Solomon Majteles

Director Mr Alexander Clemen

Director Mr David Nathan Zukerman

Company Secretary Mr Norman Grafton

 

Top 10 Shareholders (30 October 2006)

Shareholder Shares %

Pan Pacific Mining Pty Ltd 35,000,000 5.23

Icerig Nominees Pty Ltd 30,383,551 4.54

D & D Nominees Pty Ltd 25,000,000 3.73

Heaver Group Limited 19,750,000 2.95

Pio Services Limited 18,750,000 2.80

I-CAN Limited 17,000,000 2.54

L C Asia Limited 14,220,000 2.12

Corridor Nominees Pty Ltd 12,500,000 1.87

ANZ Nominees Limited 9,940,992 1.48

Anne-Maree Rice 9,880,323 1.48

Total 192,424,866 29.0

 

MLS versus ALL ORDINARIES Index

$A/share

 

0.20

 

0.15

 

0.10

 

0.05

 

0.00

Jan 06 Mar 06 May 06

MLS (LHS)

 

 

%

580

460

340

220

100

Jul 06 Sep 06 Nov 06 Jan 07

MLS Rel to ALL ORDINARIES (RHS)

 

This report may contain general securities advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. Before acting on any advice or recommendations, a person should contact a BBY adviser to determine whether or not the recommendations are appropriate; or should form his/her own view given the personÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s investment objectives, financial situation and particular needs. Although every attempt has been made to verify the

accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by BBY, its associates, officers, directors, employees and agents. A full international disclaimer is contained on the final page of this report.

 

 

METALS AUSTRALIA LIMITED

b

 

 

Old discovery with excellent resource upside

 

Significant EM targets identified for drill evaluation

 

Excellent drilling results achieved around all known

zones of mineralisation

 

Manindi zinc project (MLS 80% interest)

 

Project geological setting is excellent for further discoveries

 

Manindi Zinc project is located 500km NE of Perth in the Murchison District of WA, 20km SE of the closed

Youanmi gold mine. The project comprises a series of VMS deposits. Geological characteristics are

similar to other deposits found in the Yilgarn Craton of WA including Golden Grove located to the SW of

Manindi and Yalgoo and the Teutonic Bore / Jaguar deposits in the Eastern Goldfields. The Manindi

deposit was previously discovered by CRA Exploration in the late 1970ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s and was named Freddie Well.

The geological setting in the region bodes well for further discoveries.

 

Current resource base is forecast to be expanded

 

Recent drilling of EM targets has been very successful which is forecast to lead to an upgrade in the

resource base which currently sits at 1.05Mt @ 7.64% Zn. Resources lie within 4 zones of mineralisation

to a maximum depth of only 200 metres (Table 2). Considerable scope exists to find additional resources

along strike and depth as confirmed by downhole EM studies which indicate the presence of further

mineralisation at depth.

 

Excellent results achieved from recent drilling

 

Recent diamond drilling results highlight the potential to expand the resource base. Two drill holes

facilitating the down hole EM programme at Kultarr - Zone D North intersected the ore body at depth

(Table 2). At Kultarr South Deeps a hole drilled between the South and North lodes intersected

previously unknown zone of mineralisation (Table 2). At Warabi ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Zone A, a hole drilled to the north of

the known resource to test a surface EM target extended the zone of mineralisation by 25 metres

(Table 2). Mulgara ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Zone B holes were drilled into the known orebody to test the presence of high grade

mineralisation at shallow depths which was confirmed (Table 2). A diamond drilling programme is planned

for January / February 2007. A long drill hole section for Warabi & Mulgara (Figure 1) & Kowari & Kultarr

(Figure 2) is shown below.

 

TABLE 1: MLS ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ MANINDI JORC RESOURCES

 

Deposit - zone Category tonnes

Warabi Measured 45,600 @ 8.91% Zn

Indicated 52,390 @ 8.76% Zn

Inferred 21,900t @ 6.58% Zn

Sub-total 119,350 @ 8.42% Zn

Mulgara (Zone B) Measured 116,570 @ 7.76% Zn

Indicated 92,850 @ 7.65% Zn

Inferred 8,820 @ 9.17% Zn

Sub-total 218,240 @ 7.77% Zn

Kultarr (Zone D Nth) Measured 155,710 @ 7.63% Zn

Indicated 212,180 @ 7.69% Zn

Inferred 235,820 @ 7.66% Zn

Sub-total 603,130 @ 7.66% Zn

Kowari (Zone D Sth) Measured 17,570 @ 5.45% Zn

Indicated 37,340 @ 6.24% Zn

Inferred 57,010 @ 6.86% Zn

Sub-total 111,930 @ 6.43% Zn

Total Measured 334,910 @ 7.73% Zn

Total Indicated 394,760 @ 7.68% Zn

Total Inferred 322,970 @ 7.49% Zn

Grand Total 1,052,640 @ 7.64% Zn

 

Source: MLS September quarterly report.

 

BBY Limited 25 January 2007

 

 

bMETALS AUSTRALIA LIMITED

TABLE 2: MLS ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ LATEST DRILL INTERSECTIONS

 

Hole Intersection Comment

 

Kultarr Deeps

 

MND005 2.4m @ 12.75% Zn from 163m 25m to the north and 25m below the current resource

MND005 10.2m @ 12.60% Zn from 172m

 

Kultarr South Deeps

 

MND001 1.6m @ 4.1% Zn from 254m New mineralisation previously not drilled

 

Warabi -Zone A

 

MND008 5m @ 13.3% Zn from 44m Extends ore body by 25m along strike. Also contains 0.78% Cu

MND014 13m @ 19.82% Zn from 48m Extends ore body at depth. Also contains 0.58% Cu

 

Mulgara - Zone B

 

MNDRC012 16m @ 7.49% Zn from 23m Confirms high grade mineralisation

MNDRC013 3m @ 15.13% Zn from 89m Confirms mineralisation grade. Contains 0.58% Cu

 

Source: MLS September quarterly report.

 

FIGURE 1: MLS ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ LONG SECTION AT WARABI & MULGARA SHOWING DRILL HOLE LOCATIONS

 

 

Source: MLS Release November 2006

 

BBY Limited 25 January 2007

 

 

METALS AUSTRALIA LIMITED

b

 

 

Bio-heap leaching looks attractive given success of trials

 

Simple flowsheet from mined ore to metal all on sites

 

Conventional ore treatment options also being considered

 

Metallurgical test work has been encouraging

 

In September 2005 MLS commissioned BioHeap Ltd to undertake metallurgical testwork to ascertain the

viability of heap leaching the ore using bacteria technology. Ore leaching proved to be very successful

achieving 97.1% zinc recovery in solution after 73 days. Australian Metallurgical and Mineral Testing

Consultants (AMMTEC) were commissioned to study down stream processing routes for the production of

zinc metal using an electrowinning circuit. Study results have been sent to Outokumpu and Ecotec in

Canada for conceptual design and Opex and Capex costs for an ion exchange circuit. AMMTEC is

currently evaluating work completed by Outokumpu and Ecotec. Study results were also sent to

manufacturers for conceptual design and calculation of Opex and Capex for an on-site electrowinning

plant.

 

Conceptual flow sheet design incorporates three circuits

 

The first circuit requires Zinc ore to be crushed and placed on heap leach pads for bacterial leaching.

The second circuit, requires zinc liquor to undergo ferric reduction and ion exchange to produce a pure

zinc sulphate solution and final circuit is an electrowinning circuit transforming zinc sulphate solution into a zinc cathode or powder for sale on the market.

 

Conventional ore treatment options are also being considered

 

Conventional ore treating options including: (i) mining and processing on site using conventional sulphide

concentrate circuit to produce a zinc concentrate for shipping and sale to a smelter, (ii) mining and toll

treatment to produce a concentrate for shipping and sale; and (iii) mining and selling ore to a third party

for processing.

 

FIGURE 2: MLS ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ LONG SECTION AT KOWARI & KULTARR SHOWING DRILL HOLE LOCATIONS

 

 

Source: MLS Release November 2006

 

BBY Limited 25 January 2007

 

 

bMETALS AUSTRALIA LIMITED

This document has been prepared (in Australia) by BBY Limited ABN 80 006 707 777 (BBY), a Participant of Australian Stock Exchange Group and regulated by the

Financial Services Authority (FSA) of the United Kingdom.

 

Analyst Certification

 

I, John Veldhuizen, research analyst and the author of this report, hereby certify that all of the views expressed in this research report accurately reflect my personal

views about any and all of the subject issuer(s) or securities. I also certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation(s) in this report.

 

Disclosure

 

BBY and its associates (as defined in Chapter 7 of the Corporations Law), officers, directors, employees and agents, from time to time, may hold securities in any of the companies to which this document refers and may trade in the securities mentioned either as principal or agent.

 

BBY does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

 

Contact with MLS has been made during the preparation of this report for assistance with verification of facts.

 

Disclaimer

 

This report may contain general securities advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. Before acting on any advice or recommendations, a person should contact a BBY adviser to determine whether or not the recommendations are appropriate; or should form his/her own view given the personÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s investment objectives, financial situation and particular needs. Although every attempt has been made

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under the U.S. Investment Advisers Act of 1940) that owns or controls (or in the case of an investment adviser, has under management) in excess of US$100 million in

aggregate financial assets (i.e. cash, money-market instruments, securities of unaffiliated issuers, futures and options on futures and other derivative instruments).

Transactions by or on behalf of any US person in any security mentioned in this document may only be effected through Jefferies & Company, Inc. (ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“JefferiesÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ), a U.S.

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agent or principal for their own account.

 

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This document may be distributed in the United Kingdom by BBY or Jefferies International Limited (regulated by FSA). None of the investments or investment services

referred to in this document are available in the United Kingdom to private customers, as defined by the rules of the FSA. This document is not to be provided to private

customers in the United Kingdom.

 

The investments or investment services referred to in this document are available in Canada only to ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Designated InstitutionsÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ, as defined by the Securities Act

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International investors outside the US, UK or Canada are encouraged to contact their local regulatory authorities to determine whether any restrictions apply to their

ability to purchase this investment.

 

Approved for release by BBY Limited

 

BBY Limited 25 January 2007

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