LionOre’s Waterloo anything but (April 29, 2002)

Drilling at the southern end of the Waterloo discovery on the Wildara property in Western Australia continues to return high nickel grades for LionOre Mining International (LIM-T).Highlights from the recent drilling campaign include:

• hole 498 — 4 metres grading 6.42% nickel;
• hole 499 — 2.4 metres of 7.2% nickel;
• hole 502 — 2 metres of 6.8% nickel;
• hole 503 — 7.35 metres running 10% nickel, including 4.9 metres of 13.9% nickel, and 2.6 metres of 8.6% nickel; and
• hole 504 — 2.8 metres averaging 7% nickel.

LionOre also reports encouraging platinum group element values from previously drilled holes farther north on the zone. Selected results include:

• hole 462 — 4 metres grading 0.64 gram platinum and 1.7 grams palladium in a hangingwall zone of nickel mineralization;
• hole 470 — 2.2 metres of 0.56 gram platinum and 1.6 gram palladium and 1.3 metres of 0.19 gram platinum and 1.15 gram palladium;
• hole 484 — 0.6 metre running 1.7 grams platinum and 1 gram palladium.

At the southern end of Waterloo, hole 502 returned 2 metres grading 0.14 gram platinum and 1.2 grams palladium.

So far, nickel mineralization has an indicated strike length of 500 metres. The discovery remains open both to the north and south, as well as downdip. The western edge of the deposit is truncated by a steep parallel fault. The recent drilling indicates that the fault continues southwards along the entire strike length of the mineralization.

LionOre, believing the block west of the fault has been faulted downward, will drill-test for mineralization at depth in the near future. Ongoing drilling is aimed at testing for possible extensions along strike and downdip, as well as at depth.

Mineralization at Waterloo is dominated by high-grade matrix to disseminated sulphides, with associated zones of structurally controlled massive sulphides. Disseminated sulphides typically have grades of up to 3% nickel; the matrix sulphides grade between 3% and 9% nickel; and the massive sulphides run between 9% and 15% nickel.

Preliminary metallurgical tests on the three styles of mineralization has indicated recovery rates of 92-98%, with concentrate grades running 9-15% nickel. Massive sulphide samples have yielded recoveries of 97-98% with concentrate grades of 18-21% nickel. Platinum group element recoveries are between 78 and 92%.

Waterloo is just 6 km from LionOre’s 60%-owned, 2-million-oz. Thunderbox gold resource. Discovered in 1999, Thunderbox is in the midst of the construction phase, which comes with a US$33-million price tag. Production at the open-pit operation is to increase in the fourth quarter and reach 220,000 oz. in its first full year of operation. Over the subsequent four years, ouput is to average 150,000 oz. annually. Life-of-mine cash operating costs are pegged at US$164 per oz.; first-year costs, at US$112 per oz.

Thunderbox contains reserves of 10.9 million tonnes grading 2.43 grams gold per tonne, equivalent to 849,000 contained ounces, based on a gold price of US$254 per oz.Australian-listed Dalrymple Resources holds the remaining 40% of the project.