🕐13.01.11 - 03:54 Uhr

New exploration licence granted with JORC Kaolin reosurce of 65Mt at AMMGs Meckering Project



Australia Minerals & Mining Group ASX Announcement / Media Release 13 January 2011 NEW EXPLORATION LICENCE GRANTED WITH JORC KAOLIN RESOURCE OF 65 MT AT AMMGS MECKERING PROJECT (COMPRISING 16.77MT INDICATED 48.28MT INFERRED) HIGHLIGHTS - AMMG granted exploration licence E70/3923 with JORC-compliant kaolin resource of 65Mt comprising 16.77Mt indicated and 48.28Mt inferred at its Meckering Project, Western Australia. - Tenement area covers 100% private land - Native Title extinguished. - AMMG has access to substantial historical work undertaken by CRA and Minerals Corporation Ltd. - Advanced project with near-term production potential in close proximity to existing logistics infrastructure. - Exploration activities to commence Q1 2011. AMMG carrying out a technical marketing study for potential customers and joint venture partners -- China and South-East Asia. Australian diversified resources company, Australia Minerals and Mining Group Limited (ASX: AKA) ("AMMG" or "the Company"), is pleased to announce that it has been granted an exploration licence E70/3923 at its advanced Meckering Kaolin Project in Western Australia and confirms previously defined JORC-compliant resources. The 100% owned tenement is located adjacent to the small Wheatbelt town of Meckering in Western Australia (see Figure 1 below).

The exploration licence covers known kaolin deposits and carries a previously defined JORC-compliant mineral resource of 65Mt comprising 16.77Mt of indicated resource and 48.28Mt of inferred resource, as detailed in the resource estimation below. The granted exploration licence E70/3923 is a 63 sub-block licence covering approximately 184 km2 and is located 30 km to the east of the major Wheatbelt service town of Northam.

The tenement is bisected by the Great Eastern Highway and the Trans-Australia standard gauge railway, providing potential main road and rail access to the major ports of Albany, Fremantle, Kwinana and Bunbury.

The licence is also within close proximity to Western Powers SWIS transmission line and traversed by the Goldfields water pipeline. Exploration program planned for Q1 2011 AMMG continues to review existing Meckering open-file exploration, pilot plant, and marketing data to progress with a kaolin resource upgrade program. The Company plans to undertake bulk sampling and metallurgical studies in conjunction with the potential market evaluation.

Subject to the outcome of those studies, AMMG anticipates that exploration work will include an air-core drill program with associated kaolin chemical and physical property analysis, followed by resource modelling and metallurgical characterisation studies. The exploration licence covers private freehold cleared farmland, therefore, extinguishing native title constraints.

Land access and mining is subject to landowner consent, as WA exploration licences on freehold land exclude surface rights.

Landowner discussions in relation to negotiating access to the Meckering project area are underway and an update will be provided to the market upon completion. A review of the previous JORC-compliant resource statement identified by previous explorer, Swan River Kaolin (SRK), has been evaluated, on behalf of AMMG, by Sydney-based minerals consultants, Geos Mining. Background and Exploration History CRA Exploration Pty Ltd (CRAE), WA Kaolin Pty Ltd (WAK) and Minerals Corporation Ltd subsidiary, SRK, previously explored and evaluated the Meckering area for kaolinite and kaolin products in the 1980s and 1990s. The kaolinite is a residual weathering product of granite and granitic-gneiss of the Western Gneiss Terrane.

In the Meckering area the weathering profile is unusually thick and well developed.

Kaolin is found under overburden of laterite and mottled clays, with overburden thickness ranging from 2 to over 20m.

High brightness kaolin ranges from 3 to 37m thick. In the 1990s, CRAE identified a number of localities throughout the Wheatbelt as being highly prospective for high-brightness kaolin.

E70/3923 covers part of CRAEs Jacobs Well project and its Bulgin prospect. SRK evaluated these prospects from 2003 to 2010, undertaking mapping, air-core drilling (128 holes for 3502 metres), test pitting, bulk sampling and laboratory testing of the kaolin chemical and physical properties.

To determine economic production scenarios and assess product markets, SRK established a pilot plant test facility at the government funded Avon Valley Industrial Park, east of Northam.

Kaolin taken from a major test-pit in the Bulgin and Kelly prospect (see Figure 2 for aerial photograph of test-pit) was batch processed and produced kaolin to a range of specifications, with a focus on High Brightness Filler (HBF) grade.

SRK employed minerals consultants, Geos Mining, to undertake modelling and mineral resource estimation work in 2005 and again in 2007. Resource Estimation Resources were estimated by SRK in 2007 using all available results from CRAEs and SRKs drilling, with the majority of holes within the resource drilled by SRK.

Geos Mining is not aware of any further drilling or test work on this deposit, which would have made any material alteration to this estimate. Samples from SRKs drilling were tested at in-house company laboratories for a range of kaolin parameters, plus limited chemical and other analyses at external laboratories.

Geos Mining staff, on behalf of AMMG, has reviewed SRKs internal laboratory quality control and procedures, and consider them appropriate for estimation of indicated and inferred resources. Particle size distributions of the kaolin are typical of "primary style" kaolins produced from weathered granites. The resource is based on information from 157 reverse circulation drill-holes and three bulk sample pits.

Holes are from 50 to 200m apart. All resources are within 50m of the surface.

The resource volumes were estimated by wire-framing a geological model using Gemcom software.

The resource was estimated using a minimum cut-off of 80% brightness. Average kaolin percentage and brightness was estimated using ordinary kriging. The dry bulk density used is 1.6t/m3, which is considered conservative, based on test work on similar deposits.

No bulk density test work is known to have been completed on this deposit. A minimum thickness of 1.5m was used.

Apart from this, no mining or processing factors have been applied to the resources.

The resource location is indicated on Figure 3 below. Potential Products This resource is potentially suitable for use as both filler clay for the paper industry, and as high quality ceramic clay.

Laboratory and SRK pilot plant test work shows simple sizing can produce a sized product with low abrasion and defined brightness from this resource. Laboratory tests also indicate that the resource may be suitable for delamination and other processing techniques to produce a range of other products, including paper coating grades. Parameters of the final product will vary depending on customer requirements and processing undertaken.

For example, finer sized fractions have higher brightness, but the potential product yield will decrease, unless both a coarser and a finer product can be sold. The Company is also currently carrying out a technical marketing study as to potential customers and joint venture partners with particular emphasis on China and South-East Asia. To view the full ASX Announcement please click here: http://esp.gewru.com/download/files/12414/1297901/ASX%20Announcement%20-%20Exploration%20Meckering%20Update%20FINAL.pdf For further information please contact: Ric Dawson Managing Director T: +61 8 9389 5557
Karen Oswald Professional Public Relations T: (08) 9388 0944 M: 0423 602 353 E:
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