Australian Mines Ltd holds a number of under explored and highly prospective tenements which it continues to explore aggressively.

BLAIR PROJECT AREA

The project area is located approximately 35km to the ESE of Kalgoorlie along the Mt Monger Road. The tenement package covers 191 km² of greenstone belt which is considered highly prospective for Kambalda-style nickel sulphide deposits such as the Blair Mine. The tenement package is also considered highly prospective for mesothermal gold deposits such as the historic 500,000 ounce Golden Ridge Deposit, which straddles the Woolibar and Mt. Monger regional fault structures in a similar geological setting to gold anomalies on the Blair Leases.

Blair Project Tenements (tenements in grey acquired May 2007)

Australian Mines is continuing to explore within the Blair Underground Nickel Mine, and in JV with Pioneer Nickel is actively exploring for nickel on the regional tenements around the Blair Mine.

Golden Ridge Joint Venture (GRJV) with Pioneer Nickel (AUZ 49%)

The Project provides Pioneer with access to 100 km² of tenements that cover the very prospective Golden Ridge Ultramafic Unit, host to the Blair Nickel Mine and nickel mineralisation at Blair South, Area 20A, Marshall and Duplex Hill.  The Blair Mine is excluded from the JV.

Reconnaissance Drilling

Following several programs of reconnaissance RAB and aircore drilling, a thorough review of the data generated is being undertaken. The overall work program included some 450 new holes for 26,000m drilled.

Key outcomes of the program include:

• Generation of a working geological map, including areas under alluvial cover;
• Recognition of a major structural repeat of the fertile Blair South ultramafic sequence, referred to as the Central Unit.  This is currently identified over a 5km strike, but remains open to the north;

• Identification of high magnesian “lava channels” at the base of the Central Unit. Thinning and truncation of lower stratigraphic sedimentary beds may be indicative of thermally eroded channels at the base of the Central Unit;
• Anomalous Ni-Cu-PGE mineralisation associated with the basal contact.

Three targets at the basal contact of the Central Unit, which meet the key criteria, will be the priority focus for forthcoming programs of work. Two other targets meet some of the criteria and also warrant testing.

Golden Ridge Joint Venture - Exploration Progress

Location 45 (100% AUZ)

Goodyear

The Goodyear nickel sulphide system is currently defined by 9 surface RC holes and 15 surface diamond holes, but large portions of the mineralised system are untested  and the company believes there is potential for a significant resource upgrade at shallow depths.

Current Goodyear Resource

Goodyear currently has an Inferred Resource of 387,000 tonnes at 4.1% Ni for 16,000 contained nickel tonnes.

The resource is located on or near the contact between the footwall basalt and the bottom of the first komatiite flow, and is currently contained within four discrete ore pods as tabled below:                                  

                                                Table 1: Goodyear - Current Inferred Resource 

Drill Program

A surface diamond drilling program commenced in early June 2008 and is designed to test for extensions to the existing shallow Contact 1, Contact 2, and Contact 3 resources, which are currently modelled as discrete ore pods within a broadly mineralised trough which extends down plunge from the Dunlop Deposit.

Further to the drilling the company’s drilling contractor will re-enter and ream out 6 historic drill holes and leave them cased and ready for down hole electromagnetic (DHEM) and directional gyro surveys. The directional gyro surveys when completed will provide accurate spatial positioning of the ore intercepts, which will mean that a healthy portion of the inferred resource at Goodyear may then be upgraded to the indicated category in preparation for mine planning.

Marriott’s Nickel Project (AUZ 100%)

The Marriott’s Nickel Project is located 65 km from BHP Billiton’s Leinster nickel operation and is Australian Mines’ most advanced nickel project outside of the Blair nickel mine.

Resource

Marriott’s has a current combined indicated and inferred resource of 830,000 tonnes @ 1.13 % nickel for 9,400 nickel tonnes

A mining scoping study is currently underway to determine the best approach of mining at Marriott’s. Results of this study are expected in the second half 2008.

Marriott's Geological Section

Bounty (AUZ 100%)

The Bounty Tenement Package lies over the northern portion of the Forrestania Greenstone Belt which is approximately 300km long, and up to 40km wide. The region is very prospective for nickel with three operating mines lying on the belt in close proximity to the project, Flying Fox, Cosmic Boy and Digger Rocks (all owned by Western Areas NL), with the nearest being Flying Fox 40kms to the south.

Bounty Location Plan

Gold Exploration

Woodline 1 (AUZ 100%)

The Woodline 1 gold deposit is located on granted mining lease M26/782 in the south west corner of the 100% owned Blair Project area. The north east striking reef system has been modelled over a strike length of 215 metres. The gold mineralisation is masked by 10 metres of transported soils, and the base of weathering is approximately 50 to 60 metres below surface.

Woodline Geological Section

Current Woodline 1 Resource

Current combined indicated and inferred resource at Woodline 1 is 132,366 tonnes at 2.88 g/t  for 12,245 ounces of gold.

Woodline 1 Resource by category -

Pit optimisation and environmental studies have been completed at Woodline. The site is ready for mining pending development of a haul road.