The Munglinup area comprises Archean to Paleoproterozoic, metamorphosed granitic and other metamorphic rocks of the Albany–Fraser Orogen, typically hornblende (± garnet) gneiss and migmatite.

Within the gneissic rock mass, rocks containing the Munglinup graphite deposits consist of a succession of tightly folded metasedimentary rocks with a consistent dip to the southeast.

The Munglinup deposit can be characterised as a type 1, disseminated flake graphite in silica- rich meta-sediments deposit.

The Munglinup graphite deposits occur in a zone of graphitic schists within a sequence of hornblende and hornblende-garnet gneisses. The rocks have been broadly folded about a WNWESE axis. General strike of foliation is NE-SW, with a dip of 30°SE, although locally may be steeper (40° to 60°). Complex small-scale folding and faulting is common in the relatively incompetent graphitic rocks and the enclosing competent hornblendic gneisses appears to be less deformed.

Graphite occurs in layered zones in metamorphosed carbonaceous schists and gneisses. All known intersections of graphitic material occur within saprolite, consisting of clays, quartz graphite (up to 25% flake) and goethite. Weathering extends down to at least 60m. Individual graphite horizons vary in thickness up to a maximum of 14m. The graphite content in the zones is variable both vertically and horizontally.

Five areas/prospects of graphite mineralisation have been identified within the Lease namely Halberts Main Zone, White’s, McCarthy’s, Harris and Halberts South Zone.

The mineralised zones consist of numerous thin (2-20m wide) steeply dipping folded zones reflecting a cover nappe system with late stage granite and pegmatite intrusions.

• Halberts Main Zone:
- Length: 730m
- Width: 90-130m
- Depth: surface to -90m
- Dip: 45°
- Dip Azimuth: 77°
- Pitch: 0.2°

• Halberts South Zone:
- Length: 560m
- Width: 20-50m
- Depth: surface to -60m
- Dip: 38°
- Dip Azimuth: 60°
- Pitch: 0.2°

• Harris Area:
- Length: 435m
- Width: 30-70m
- Depth: surface to -35m
- Dip: 37°
- Dip Azimuth: 143°
- Pitch: 0.1°

• McCarthy West Area:
- Length: 290m
- Width: 100-110m
- Depth: surface to -55m
- Dip: 45°
- Dip Azimuth: 160°
- Pitch: 0°

• McCarthy East Area:
- Length: 260m
- Width: 12-20m
- Depth: surface to -30m
- Dip: 45°
- Dip Azimuth: 137°
- Pitch: 0°.

The deposit is a small, oxidised, high grade Graphite deposit. The planned mining method is conventional open pit truck and shovel using small, 60t to 90t excavators (e.g. Komatsu PC600 or equivalent) and 45t all-terrain dump trucks (Caterpillar 745 or equivalent). Trucks will comprise the main load and haul fleet with auxiliary bulldozers, graders, rollers, and loaders. At this stage no drill and blast activities are anticipated with exploration drilling showing the mineralisation and host rock to the modelled depth is free dig.

In terms of overall pit slopes, those chosen for Halberts Main Zone and other, smaller satellite pits are reasonably conservative by comparison with similar depth pits in oxidised rock elsewhere in Western Australia. The west wall (footwall) which includes the haul ramp, slopes 45° overall, whereas the east wall is at 36° overall slope angle.

Recent drilling has indicated a potential for significant pit water inflows. This will require pit wall drainage and boundary wells to reduce the phreatic zone along with in-pit dewatering.

A pit by pit analysis was undertaken and a specified case developed for each pit, with Halberts Main having a 5-bench fixed lead. Pushbacks were manually set based on the Pit by Pit graph and final pit shells selected.

Detailed pit designs were then created for each pit. Ramps were built into the footwalls with a dual lane ramp in Halberts Main and single width ramps in all the other pits due to their small size.

Processing will be via a reasonably standard flotation circuit with a trommel front end, a rougher and 5 cleaner flotation stages with attritioning between stages. Tailings will be thickened and sent to a conventional tailings storage facility.

The project processing plant is designed to treat 400ktpa of ore. The ROM ore will be scrubbed, followed by grinding, with graphite recovered by flotation. The process includes inter-stage re- grind milling of flotation cleaners’ concentrates to improve liberation and hence product purity. The flotation concentrate is then dewatered, dried and bagged.

The scrubbing and crushing plant will reduce ROM ore to P80 10mm and will operate 24hr/day with an operating time to match the processing plant. The circuit will comprise a ROM bin with discharge feeding a drum scrubber/screen assembly. Undersize material is pumped to the milling circuit with oversize material crushed by impact crusher.

Crusher product reports to t ........