Desert Metals : Significant Shallow Nickel Results at Innouendy

Significant Shallow Nickel Results from Aircore Drilling at the Innouendy Project

Highlights

• • Reconnaissance aircore drilling at the Innouendy Project has returned a number of significant nickel intercepts close to surface which could indicate a potential deeper sulphide source

• • Newly identified Cattle Yard Nickel prospect returns:

  • • 32m @ 0.65% Ni from 16m to EOH, including:

    • • 4m @ 1.76% Ni and 0.11% Co (believed to be highest grade nickel intercept recorded in the Narryer Terrane to date)

  • • 46m @ 0.25% Ni from 16m to EOH, including:

    • • 20m @ 0.35% Ni and 0.07% Co

• • Mineralisation at the Cattle Yard Prospect extends over 100m along section and remains open along strike, to the southeast and at depth.

• • Separate untested conductor returns:

  • • 4m @ 0.585% Ni from surface to EOH (Unweathered, possible sulphide source which is adjacent to large untested magnetic anomaly)

• • A large follow up drilling program is planned to define the extent of the shallow mineralisation and target any associated sulphides

• • Additional Innouendy aircore traverse also returns 500m of highly anomalous PGEs.

• • Rare earth (REE) mineral Cerium (Ce) analysed above maximum limits (>500ppm) associated with elevated lanthanum (La) in multiple samples across 10 holes in lateritic clays

• • Samples were not originally assayed for the full rare earth suite and are now pending re-assays results

• • Drill Rig currently mobilising to Dingo Pass. Drilling of the high-conductance Dome anomalies due to begin this week.

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Figure 1. Maximum downhole Ni (ppm) over magnetics

Ni (ppm)

4m @ 0.585% Ni. Surface to EOH

INAC027

INAC019

Innouendy

INAC018

INAC013

Untested Conductor

INAC012

INAC001

Untested Magnetic Anomaly

Cattle Yard Prospect

INAC032

INAC028

Background image RTP magnetics

4m @ 1.76% Ni

Within a vertical zone 32m @ 0.65% Ni

>0.5% Ni mineralisation over >100m along section and open along strike, to SE and at depth. Eastern most hole failed to penetrate shallow hardpan

New Nickel prospects at Innouendy

Desert Metals Ltd is pleased to report that reconnaissance aircore drilling has uncovered two highly prospective new nickel prospects at the Company's 100% owned Innouendy Project. (See Table 1, Figures 1,2)

The Cattle Yard Prospect was first targeted through airborne EM and a semi-coincident historical nickel intercept. 4m @ 1.76% in hole INAC036 is believed to be the highest-grade nickel yet intersected by anyone in the Narryer Terrane. The mineralisation is coincident with anomalous cobalt and chrome and occurs within a broader zone of 32m @ 0.65% Ni extending to the end of hole at 47m. Holes across a section > 100m width ended in mineralisation which is open along strike, at depth and to the southeast. Follow up drilling traverses will both define the extent of the shallow mineralisation and target a potential sulphide source.

Figure 2. Maximum downhole Ni (ppm) over conductivity

A second prospect has also been identified approximately 3km to the northeast of the Cattle Yard (Figures 1,2). 4m @ 0.585% Ni was intersected from surface to EOH in fresh rock in hole INAC017. This traverse was targeting an inductive response in airborne EM data that appeared to be superimposed on a chargeable anomaly. Aircore drilling was unable to penetrate more than ~4-10m in this and neighbouring holes due to the very shallow cover. The high nickel grade in fresh rock suggests a sulphide source and the extent of the conductor and adjacent magnetic anomaly will now be tested with further drilling.

Figure 3. Maximum downhole PGE (Pt+Pd) (ppm)

Innouendy 500m of highly anomalous PGEs

Original diamond hole with anomalous PGEs

Cattle Yard Prospect

PGEs

The northern traverse of aircore drilling at Innouendy (holes INAC019 to INAC027) has defined a section >500m wide of highly anomalous PGE (Pt + Pd) within the regolith (Figure 3). Interestingly the southern line, closest to the original diamond hole which intersected anomalous PGEs, did not record significant intercepts. Further drilling is planned to better define the extent and source of this highly anomalous zone.

Hole ID	m From	m To	Interval m	Ni %	Cr %	Pt+Pd g/t	Co ppm	Comments
INAC017	0	4	4	0.585	0.55	-	228	Fresh rock - Nickel is too high to be in silicate minerals - sulphides presumed to be present
INAC019	0	60 (EOH)	60	0.06	0.3	0.05	122
INAC020	0	45 (EOH)	45	0.09	0.33	0.08	178
incl.	4	24	20	0.12	0.36	0.11	256
INAC021	0	53 (EOH)	53	0.12	0.33	0.1	158
incl.	0	24	24	0.11	0.44	0.16	169
INAC022	0	16 (EOH)	16	0.06	0.52	0.17	152
incl.	0	8	8	0.07	0.56	0.21	175
INAC023	0	26 (EOH)	26	0.17	0.47	0.1	218
INAC023A	0	24 (EOH)	24	0.15	0.48	0.09	235	450m wide zone of anomalous PGEs
INAC024	0	32 (EOH)	32	0.15	0.41	0.13	272
incl.	0	8	8	0.11	0.4	0.28	409
INAC025	0	56 (EOH)	56	0.16	0.39	0.12	182
incl.	0	8	8	0.08	0.42	0.33	75
incl.	16	28	12	0.34	0.42	0.08	332
INAC026	0	27 (EOH)	27	0.06	0.17	0.08	76
incl.	8	16	8	0.08	0.18	0.1	85
INAC035	28	37 (EOH)	9	0.58	>1%*	-	539	ore grade Ni-Co for laterite Ni
INAC036	16	47 (EOH)	31	0.65	>1%*	-	370	ore grade Ni-Co for laterite Ni
incl.	28	32	4	1.76	>1%*	-	1100	high grade for laterite - sulphide source?
INAC037	16	62 (EOH)	46	0.25	>1%*	-	368
incl.	32	52	20	0.35	>1%*	-	667
INAC041	68	72	4	0.055	0.22	0.1	65.6	10.7km from other PGE anomalies

Table 1. Significant interceptions - nickel and PGEs.

(* includes samples above detection limit)