PROTO RESOURCES & INVESTMENTS LIMITED - ASX: PRW

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Description

Proto Resources' flagship is the Barnes Hill nickel-cobalt-iron project located in northern Tasmania, which is steadily advancing towards production. Subject to a successful feasibility outcome, Barnes Hill is slated to commence mining in early 2013 with a potential 26 year mine life at 250,000t per annum.

Barnes Hill is endowed with highly lucrative economics which are set to be enhanced further through the application of unique nickel laterite processing technology. The successful deployment of this technology promises to slash OPEX and CAPEX costs by ‘recycling’ sulphuric acid and turning minor metals into saleable products.

On the exploration front, Proto Resources is exploring its Lindeman's Bore, Wave Hill and Waterloo projects for the possibility that the Antrim Plateau Volcanics of the Northern Territory could host a Norilsk Style ‘super-system.’

In addition, the company has recently acquired a suite of projects in the Doolgunna region of Western Australia to explore for potential volcanogenic massive sulphide targets. This complements nickel sulphide targets including an acquired historical mine at Clara Hill.

BARNES HILL, TASMANIA - 100% OWNED - JV WITH METALS FINANCE CORPORATION – NICKEL LATERITE, COBALT AND IRON ORE

Barnes Hill - Proto Resource's flagship project - is the 100% owned former Allegiance Mining NL Barnes Hill Nickel Deposit in Tasmania ("Barnes Hill") which is projected to yield Proto annual net profits of more than AUD$15 million in addition to, following a potential ramp up in production more than AUD$30 million.

On 18 October 2010 Proto Resources announced an independent resource statement compiled by Snowden Mining Industry Consultants (“Snowden”) on the Barnes Hill deposit.

A total resource for the Barnes Hill portion of the overall deposit (the Barnes Hill project contains three interconnected but separately defined laterite deposits that are defined at Barnes Hill, Mt Vulcan and Scott’s Hill) of 6.6Mt at 0.82% Ni and 0.06% Co at a 0.5% Ni cut-off has been estimated. Of this resource, more than 5.6Mt now falls within the Indicated category of the JORC Code. At a proposed mining rate of 250,000t per annum the currently defined resource (as calculated only on the Barnes Hill portion of the deposit) represents a potential mine life of 26 years.

The resource includes 2.8Mt at 1.01% Ni and 0.06% Co using a 0.8% nickel cut off grade. This higher grade portion of the resource will be targeted during the first ten years of mining and will be the area in which metallurgical testwork and the feasibility study will be initially focussed.

The Barnes Hill resource has been estimated using data from the recently completed 50m by 50m spaced drilling program (641 drill holes), in addition to pre-existing historic drill hole data (73 drill holes). Drilling was completed predominantly by RC drilling techniques, however 16 additional diamond drill holes were completed for density testwork and QA/QC purposes.

The Barnes Hill Mining Licence (application 1872P/M) is expected to be granted prior to the end of 2010. Proto is in the process of finalising the documentation and bond arrangements to allow grant of this Mining Licence. The lodgement of the Development Proposal and Environmental Management Plan is scheduled for mid December 2010.

BARNES HILL WEST, TASMANIA - 100% OWNED – NICKEL LATERITE, NICKEL SULPHIDE, COPPER AND GOLD

Proto Resources also holds the adjacent tenement to Barnes Hill, EL53/2008 at Barnes Hill West, providing additional coverage of the Andersons Creek Ultramafic Complex. Three separate prospect areas have been identified: (1) the Barnes Hill Extension prospect located west of the Barnes Hill nickel deposit, (2) the Pandora prospect situated at the historic Pandora Copper Mine and coincident with a northwest striking fault interpreted to have acted as a controlling structure to copper mineralisation at the mine, and (3) the Kelly’s Lookout prospect associated with mapped small scale gold diggings located 12km to the South of the operating Beaconsfield Gold Mine.

Proto Resources recently undertook rock chip sampling at the historic Pandora copper mine at Barnes Hill West. This sampling program was kighly successful and demonstrated the promising remnant copper prospects of the area returning copper mineralisation up to 1.7% Cu.

WAITE KAURI NORTH, WA – 100% OWNED – NICKEL LATERITE

The Waite Kauri North project lies in the Western Australian goldfields north of Kalgoorlie. Proto Resources owns the granted mining lease (M37/1189) 100%. A JORC compliant Inferred Mineral Resource of 3.9Mt at 1.04% Ni and 0.04% Co, (representing 40,541 tonnes of contained nickel and 1,448 tonnes of contained cobalt) has previously been estimated for the project using a 0.7% Ni cut-off grade.

CLARA HILLS – 80% FARM-IN - NICKEL SULPHIDE, COPPER AND PGES

On 22 September 2010, Proto Resources announced its agreement to earn an 80% interest in mining tenements E04/1533 (granted) and E04/2026 (in application) in the West Kimberley of Western Australia, named the Clara Hill Project. The Clara Hill project area includes a high-grade nickel, copper, platinum and palladium (“Ni-Cu-PGE”) gossan which has historically supported a small mining operation. The source of the high-grade Ni-Cu-PGE gossan is unknown and Proto is actively exploring for it.

Exploration is set to begin with an advanced airborne survey giving detailed magnetic data on the area, followed by ground exploration including soil sampling and drilling.The acquisition agreement also provides Proto with an option to purchase the remaining 20% interest in the project.

METAL ROCKS, WA – 100% OWNED – URANIUM AND GOLD

During the FY09-10 year Proto Resources applied for an exploration licence covering an area of 321.9km2 located 250km northeast of Kalgoorlie in Western Australia. The application area (ELA39/1559) is located on the edge of the Yilgarn Craton in the vicinity of known uranium and gold mineral deposits and is known as the Metal Rocks project as shown in Figure 17. Nearby deposits include the Ambassador Uranium Deposit (Inferred Mineral Resource of 16.53Mt @ 630ppm U3O8) owned by Energy and Minerals Australia Limited and located 10km southwest of the Metal Rocks project area while the Tropicana Gold Deposit (Measured, Indicated and Inferred Mineral Resource of 75Mt @ 2.07g/t Au) owned by AngloGold Ashanti Limited is located 65km to the northeast.

The Metal Rocks project is in a very prospective region of Western Australia and complements Proto Resources' strategy of advancing its flagship Barnes Hill nickel-cobalt project in Tasmania to ensure strong future cash-flows which will allow the company to ‘self-fund’ its suite of quality exploration projects into the medium term.

DOLGUNNA PROJECTS – 100% PROTO - NICKEL SULPHIDE, COPPER AND PGES

On 11 October 2010, Proto Resources announced its applications over four new exploration licences covering a combined area of 357km2 located in the Doolgunna Region northeast of Meekatharra and north and northwest of Wiluna in Western Australia. The new application ground is in a region of Western Australia which hosts known mineralisation at Sandfire Resources NL’s DeGrussa Deposit (Indicated & Inferred Mineral Resource of 10.67Mt @ 5.6% Cu, 1.9g/t Au and 15g/t Ag) and Ivernia Inc’s Magellan Lead Mine (Measured & Indicated Resource of 22.1Mt @ 4.8% Pb).The Doolgunna Region is made up of the Bryah, Padbury and Yerrida Basins. This area of Western Australia is almost covered in its entirety by active mineral licences and applications.

LINDEMAN’S BORE, NT – 60% OWNED – JV WITH NORTH WEST DISCOVERY LTD – NICKEL SULPHIDE, COPPER AND PGES

The Lindeman's Bore project includes granted exploration licence EL 25307. This licence covers a circular bulls-eye magnetic anomaly located at Lindeman's Bore itself. This is complemented by a second project area located to the south of the Lindeman’s Bore Project area (EL27413) and two additional licences nearby at Wave Hill (EL27617 and EL27618). Proto also has an additional exploration licence application (ELA27414) pending near Lindeman’s Bore. The location of these licences and that of and Proto Resource's other Northern Territory project at Waterloo. The Lindeman's Bore licences are located 380km south-west of Katherine, on the Limbunya Cattle Station near the community of Kalkarindji. The project area is interpreted to contain a portion of the regionally extensive Cambrian age Kalkarindji Continental Flood Basalts. Proto holds 60% of EL25307, with 20% held by private individuals and 20% held by Sydney-based unlisted public company Northwest Discovery Ltd (“NWD”). Proto Resources earned its interest through the completion of two deep diamond drill holes in the vicinity of an identified bulls-eye magnetic anomaly.

WATERLOO – 100% OWNED - NICKEL SULPHIDE, COPPER AND PGES

The Waterloo Project is located in the NT approximately 350km Southwest of Katherine, NT and 75km Southeast of Kununurra, WA. The Waterloo project consists of two exploration licences (EL27416 and EL27420) covering a combined 2,369 km2. The Antrim Plateau Basalts are widespread in this area. It is in the vents and feeders to these basalts that the geological concept suggests that there may be potential for the "Norilsk-style" Ni-Cu-PGE targets that Proto Resources is exploring for. The Company’s Waterloo project covers the majority of the strike extent of the Blackfellow Creek fault in the Northern Territory. Access to the project area from Katherine is via the Victoria Highway which passes through the top of EL 27416. Further access through the area can be gained via Duncan Road and numerous station tracks. The Rosewood, Waterloo and Newry Stations are the main cattle properties in the area.

Mine For

gold, nickel, copper, platinum, platinum group elements, gold, palladium, cobalt, iron ore, uranium

Location of operation(s)

Tasmania, New South Wales, Northern Territory, Western Australia

Address

Suite 1906 , Level 19 , 109 Pitt Street
SYDNEY, NSW, AUSTRALIA

Phone

(61 2) 8225 4000

Email

Website

http://www.protoresources.com.au

Last Updated

21/02/2010