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Benagerie Project

Summary

The Benagerie copper-gold-moybdenum project includes a significant deposit of oxidised copper ore at North Portia and a high grade gold deposit at Portia. A feasibility study in progress is defining the metallurgy and size of the copper resource at North Portia, which appears extremely analogous to Kalkaroo. It is likely that the Benagerie project will provide appreciable additional copper, gold and molybdenum production for Havilah in the region.

History

The Benagerie Project, comprising the Portia gold and North Portia copper-gold–molybdenum deposits, is covered by up to 80 metres of younger sediments and hence has no surface expression. Copper mineralisation was first discovered in the area in a deep drillhole completed by Marathon Petroleum in the 1980s.

The Pasminco-Werrie Gold joint venture followed up the Marathon copper hit in the mid-to late 1990s and discovered extensive copper, gold, molybdenum, lead and zinc mineralisation in the Benagerie Dome. They completed a considerable amount of high quality drilling and geophysical work and outlined numerous promising prospects, including Portia and North Portia.

Havilah acquired Pasminco’s 70% interest in the joint venture from the receivers of Pasminco, and subsequently purchased the remaining 30% to give it 100% ownership of the entire area.

Havilah Exploration

The Pasminco-Werrie joint venture found the Portia gold prospect hard to define on account of abundant coarse-grained gold, which made conventional sampling and assaying techniques unreliable. Havilah resolved this problem by washing certain drill samples in a trommel / Knelson concentrator and obtaining a gravity concentrate, from which gold was picked under a binocular microscope and weighed on a precision analytical balance.

To date Havilah has completed almost 200 drillholes at Portia targeting both a rich eluvial or detrital gold layer that rests on weathered bedrock, and the primary gold source in the bedrock itself. High gold grades have been obtained by washing weathered bedrock drill samples, such as:

• 26 metres of 15.4 g/t Au in drillhole PTAC 191
• 13 metres of 33.5 g/t Au in drillhole PTAC 193

In addition, samples of large diameter diamond drill core through the proposed trial pit floor has
returned a confirmatory intersection of 56 metres of 4 g/t in drillhole PTDD 206.

The North Portia deposit lies several hundred metres north of Portia, and according to the Pasminco- Werrie Gold joint venture holds potential for a resource of 20 million tonnes of 1% copper and 0.5 g/t gold.
Havilah’s drilling and 3D modelling so far is supportive, with eleven of its thirteen percussion holes within the potential resource envelope returning ore grade intersections, including high grades of copper and significant gold and molybdenum in the oxidised zone such as:

• 38 metres of 3.01% Cu, 0.66 g/t Au and 261 pp m Mo in NPAC003
• 36 metres of 1.55% Cu, 1.0 g/t Au and 558 ppm Mo in NPAC015

and wide zones of primary copper sulphide mineralisation down dip beneath, such as :

• 74 metres of 1.06% Cu, 1.2g/t Au and 238 ppm Mo

2008 Feasibility Study

Feasibility study resource delineation drilling and metallurgical studies are expected to be completed on the Benagerie Project by the end of 2008. The immediate focus is on the North Portia deposit, primarily to firm up an oxide copper resource and to determine its metallurgical characteristics. Based on information to date it appears that the oxide and sulphide ore is very similar to that at Kalkaroo and will require similar treatment. Earlier metallurgical studies carried out by Pasminco indicate that treatment of the ore presents no difficulties and will follow a conventional processing route.

At this stage, it is envisaged that the North Portia and Portia deposits will be mined in conjunction with each other from a single access ramp. This will reduce the cost in comparison with having two separate open pits.

A native title agreement has been concluded for the area, and a detailed aboriginal heritage survey completed over the proposed mine site. Permitting to obtain a mining lease from PIRSA over the Benagerie project, including preparation of a mining and rehabilitation plan (MARP) is in process.