Wingellina Nickel

The Wingellina deposit hosts a global resource of over 180Mt at 1% nickel and 0.07% cobalt which includes 167Mt as Measured and Indicated while additional known mineralised areas within the tenement holdings have the potential to add significant tonnage to this resource.

Metals X completed its Phase One Feasibility Study in September 2008 which determined a project development strategy that builds a High Pressure Acid Leach (“HPAL”) plant on site to produce a mixed nickel-cobalt hydroxide concentrate for shipping to third party refineries. The project has a nameplate annual production of 40,000 tonnes of nickel and 3,000 tonnes of cobalt metal and a mine life of 39 years at an operating cost of US$3.50/lb after cobalt credits.

Wingellina is distinguished from other operating nickel laterite deposits in Australia on the basis of the ore style being a limonite or tropical laterite, having an iron oxide content averaging 47% and magnesium content of less than 2% making it ideally suited to the HPAL process with high recoveries and low acid consumption rates The Wingellina ore shows very similar processing characteristics to those of Moa Bay in Cuba which has been successfully producing since the 1950’s.

The Wingellina ore deposit is much more concentrated than most other laterite deposits. The ore is exposed at surface, with ore thicknesses of up to 200m and an average thickness of 80m which compares favourably with average laterite deposits which have thickness of only 15m. The deposit also has a very low strip ratio (ore to waste) and can be excavated without blasting. Overall this results in minimal dilution and very low mining costs, which together with the low processing costs results in a very robust project.

Metals X holds tenements over approximately 80 kilometres of contact zone of the layered intrusive which has the same stratigraphy, subjected to the same weathering processes and which exhibits the same surface expression. Only a handful of holes have been drilled in these other areas with excellent results and the potential for Wingellina to be significantly larger is very real.

A landmark mining agreement for the Wingellina project was signed on 15 July 2010 with the Traditional Owners of the Yarnangu Ngaanyatjarra Lands through their representative bodies. This is a major milestone for the development of the project. The agreement provides the right to mine and develop infrastructure within the agreement area subject to regulatory approvals and for the grant of a mining lease over whole of the tenement EL69/535 which hosts the Wingellina deposit. In addition, the agreement allows for the granting of additional project titles for water, pipelines, roads and other infrastructure over a much larger area.

Metals X has submitted its Environmental Referral for Wingellina including a comprehensive Scoping Document required as part of the Western Australian approvals process to the Environmental Protection Authority (EPA).

The EPA has set the level of assessment for the Wingellina project at Public Environmental Review (PER) with an 8 week review period. The PER level of assessment met the Company’s expectations, and allows progression of final studies in order for the company to complete the Environmental Impact Assessment required for approval to construct and operate the project. Metals X is progressing final environmental studies with a view to submitting its final PER documentation in mid 2011.

Claude Hills Prospect

Metals X completed a significant drilling campaign at the Claude Hills deposit during the second half of 2008, which is located approximately 30Kms to the East of Wingellina. A total of 141 holes were drilled which outlined a second substantial deposit within the area. To date a strike length of approximately 1.6km has been drilled with an average width of approximately 200m. The average thickness of the ore is approximately 30 to 40 meters deep below remobililised cover of 5m to 10m. The grades obtained are similar to Wingellina for both Nickel and Cobalt and it is anticipated that the metallurgical behaviour of the ore will be as favourable as Wingellina as a result of the low Magnesium and Alumina grades.

Metals X anticipates that the Claude Hills area will add a significant amount of additional resources to the feed-stock of Wingellina, none of which was included in the Wingellina feasibility which already contains 40 years of production at 40,000t of Nickel pa.

The delineation of the Claude Hills deposit is an exciting development in the understanding of the Giles Complex, and the Company is continuing to seek access to additional areas, both within and outside of its existing leases. The likelihood of further developing additional resources outside of the Wingellina deposit is considered to be high.

Mt Davies Joint Venture

Metals X has secured a farm-in and joint venture agreement with Rio Tinto Exploration over the Mt Davies tenement. The tenement is wholly encapsulated within the tenement E3555 which is 100% owned by Metals X.

TThe Earn In and Joint Venture Agreement requires a minimum expenditure of $500,000 within the first two years, and $2,000,000 within four years, to earn a 51% interest in the Mt Davies exploration licence. This can be increased to 70% ownership by sole funding exploration and development expenditure to the completion of a pre-feasibility study. Rio Tinto can elect to contribute following the earn-in phase to retain a 49% interest and can elect to earn-back up to 70% after the delivery of the pre-feasibility study, through the sole funding of a bankable feasibility study.

Access to this tenement provides an excellent opportunity for the delineation of further nickel limonite mineralisation including extensions to the Claude Hills deposit which Metals X believes will be of significant tonnage.

As shown on the diagram above, the lease also hosts a number of other know lateritic nickel occurrences to be followed up with further exploration, and there is also potential to discover sulphide mineralisation.

Metals X believes that the Claude Hills and Rio JV areas will add significant tonnages to the Wingellina project increasing production well beyond the currently proposed 40 years production of 40,000 tonnes of Nickel and 3,500 tonnes of cobalt per year.

Drilling was undertaken in the Mt Davies tenement during from June to August 2010. The drilling program is targeted the extensions of the known mineralisation of the Claude Hills deposit that lies within the Mt Davies tenement. Drilling to date has identified well developed additional Limonite mineralisation.