21 June 2007

ASX Announcement

EXCITING UNDERGOUND DRILLING RESULTS AT BLAIR
NICKEL MINE, W.A

 

Australian Mines Limited (ASX: AUZ) is pleased to announce further exciting results from underground resource definition drilling at its 100% owned Blair nickel mine near Kalgoorlie. Commenting on the latest drilling results, Australian Mines Chief Operating Officer Mr Brett Young said, “These drilling results are significant and add further to the results announced May 21. “The results will add high grade nickel tonnes to the ore reserve which is due for release in the June quarterly report. “The confidence in the future of the mine is giving the Directors the opportunity to put in place longer term strategies. Capital development is planned to continue unabated to access these lower levels of the mine. “Also further changes are planned at the mine including additional equipment to assist the performance going forward.” Results detailed below indicate significant nickel intersections on E03C and C01C shoots at Blair Deeps below the current workings.

E03C Shoot:
Five additional diamond holes to those announced on May 21 were drilled to define the orebody below the 400mRL to the 350mRL, and have returned the following downhole intercepts:
• AMUG 225 : 5.7m @ 4.70 % Ni from 385m RL.
• AMUG 226 : 3.1m @ 2.62 % Ni from 365m RL
• AMUG 227 : 5.0m @ 3.24 % Ni from 378m RL
• AMUG 228 : 5.9m @ 7.67 % Ni from 375m RL
• AMUG 229 : 7.6m @ 8.83 % Ni from 360m RL
The company is confident that the deepest hole (7.6m @ 8.83% Ni) confirms that the traditional highest nickel producing Shoot in the mine is continuing strongly at depth.

C01C Shoot:
A second diamond hole targeting 350m RL below the current workings has returned the following high grade down hole intercept:
• AMUG 224 : 7.0m @ 7.15% Ni from 350 m RL
This result supports the high grade and continuous ore trend seen in previously reported holes. Further drilling will target the 300 m RL as soon as a suitable drill site becomes available.

N03C Shoot:
The programme targeting E03C shoot has also intersected the N03C shoot in a number of the holes with encouraging downhole intersections: Results include;
• AMUG 225 : 10.0m @ 1.78 % Ni from 402m RL
• AMUG 226 : 2.2m @ 2.55 % Ni from 400m RL
• AMUG 227 : 17.8m @ 2.04 % Ni from 396m RL
• AMUG 228 : 2.0m @ 1.03 % Ni from 400m RL
• AMUG 229 : 5.0m @ 1.96 % Ni from 383m RL

Resource Calculations

Further resource definition drilling is continuing on the nickel shoots at Blair Deeps as the Company targets the 300m RL (100m below the current deepest operating level). Results will be released as they become available.

For further information contact:
Brett Young
Chief Operating Officer
Australian Mines Limited
Tel: 08 9481 5811
For media enquiries contact:
Lou Caruana
Farrington National
Tel: 0413 486 155

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr M Elias who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Elias is employed by CSA Australia Pty Ltd and is a Non-Executive Director of AUZ. Mr Elias has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Reserves and Ore Reserves'.