Resources & Reserves

Australasian Resources Limited, through its subsidiary International Minerals Pty Ltd, plans to develop the world-class Balmoral South Iron Ore Project in the Pilbara region of Western Australia.

International Minerals has the right to mine 2 billion tonnes of magnetite iron ore from the Susan Palmer deposit within the "Southern Block" of the Balmoral resource located approximately 80km southwest of the town of Karratha.

The extensive Balmoral deposit, which is owned by private company Mineralogy Pty Ltd, is reputedly the world's largest undeveloped magnetite resource which, according to estimates by Hellman & Schofield Pty Ltd independent geological consultants, has the potential to host 60 – 100 billion tonnes of magnetic Banded Iron Formation.

The Project involves the mining and processing of magnetite ore from the Susan Palmer deposit to produce premium iron ore products for export.

The project has significant advantages over its peers including:

•  Project is already part of a State Agreement (Act of Parliament);
•  Bulk scale test programs have proven a premium Iron Ore product can be produced (68 – 71% Fe);
•  Lowest quartile of cost curve for traded pellets and HBI;
•  Close to major markets;
•  Coastal location;
•  Access to port facilities;
•  No rail infrastructure required;
•  Adjacent to major North West Gas Field;
•  All granted mining leases; and
•  Huge upside potential with Mineralogy which has defined an exploration target under section 18 of the JORC Code of between 60 and 100 million tonnes of magnetite mineralisation in the area.

The Company has completed a Feasibility Study with an emphasis on:

•  Increasing Ore Reserves;
•  Completing confirmatory metallurgical testwork;
•  Finalising Infrastructure studies (water, power, gas);
•  Completing detailed mine and process design;  and
•  Finalising environmental approvals

RESOURCES AND RESERVES

Following the completion of the 2008 phase of drilling at Balmoral South, the Company finalised an upgrade to its Mineral Resource and Ore Reserve estimates (see ASX Announcement 2 April 2009).

The Mineral Resource estimate has increased by 44% to 1,605 million tonnes while the Probable Ore Reserve estimate has increased by 26% to 859 million tonnes.

The Mineral Resource estimate is summarised below in Table 1 and is reported at a cut-off grade of 15% MagFe grade. The Mineral Resource includes an estimate of the concentrate grade based on Davis Tube metallurgical test work and is classified into Indicated and Inferred Resource categories as per the JORC guidelines.

Table 1 – Mineral Resource Estimate (Balmoral South)
as at 31 March 2009 and at a cut off of 15% MagFe

             Definitions:          MagFe – percentage of magnetically recoverable Fe in ore;
                                             DTR – Davis Tube Recovery (weight recovery of magnetite)

The Ore Reserve estimate is provided in Table 2 below, 80% of the Indicated Resource was converted to a Probable Ore Reserve; both the Mineral Resource and the Ore Reserve estimates are based on a cut-off grade of 15% MagFe.

Table 2 – Ore Reserve Estimate as at 31 March 2009
Cut off of 15% MagFe