MAJOR EXPLORATION SUCCESS AT JACK HILLS IRON ORE PROJECT EXPLORATION TARGET OF ADDITIONAL MILLION TONNES

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1 ASX ANNOUNCEMENT ASX CODE: MMX 3 September 2009 MAJOR EXPLORATION SUCCESS AT JACK HILLS IRON ORE PROJECT EXPLORATION TARGET OF ADDITIONAL MILLION TONNES Murchison Metals Limited (Murchison) is pleased to announce that based on results from the current exploration program at the Jack Hills iron ore project Crosslands Resources Ltd (Crosslands) is targeting an additional 400 to 1,000 million tonnes of primarily beneficiation feed (BFO), with a component of direct shipping material (DSO). The $23 million 70,000m drill program with 12 drill rigs on site has reported significant early drill results that indicate the Jack Hills project will be of a significantly larger scale than previously recognised. The Jack Hills project now comprises: February 2009 Interim Resource of 991Mt at 34.1% Fe BFO and 96Mt at 58.7% DSO for a combined 1,087Mt of resources; and Additional Exploration Target of 400 1,000Mt of predominantly BFO with a component of DSO being drilled as part of the current drilling campaign. 1 If fully realised, the additional exploration target tonnages would lift the project size to between billion tonnes, with further prospective exploration targets to be tested in future drilling campaigns. Based on the latest drilling results from Crosslands, Murchison believes the expanded Jack Hills mine has the potential to be a large scale, multi-decade project yielding substantial cash flows and economic value. Murchison Executive Chairman Paul Kopejtka said the latest results were exciting and highlighted the standalone importance and emerging value of Jack Hills to Murchison. In recent months the focus has been on our 50% owned infrastructure business, OPR, which is understandable given its pivotal role in unlocking value for mid-west miners and shareholders, such as Chinese groups, that have invested more than $2.5 billion in mid-west mining companies and mining projects, said Mr Kopejtka. However, these latest results from Jack Hills underline the enduring importance and value of this major project which is developing into potentially the largest iron ore project in the mid-west region. In addition, ongoing metallurgical testwork is showing that a consistently high quality product with very low impurities is likely to be available from Jack Hills. There is high demand for this type of product from international steel mills. 1 These Exploration Targets are at this stage conceptual in nature based on surface mapping supported by limited drilling. At this stage there has been insufficient exploration to define a Mineral Resource on these targets and while it is uncertain if the further exploration will result in a Mineral Resource, early results are supportive of the Exploration Targets and as such are very encouraging.

2 We look forward to the Resource update later in the year as the drilling program and studies progress. Mr Kopejtka said it was also pleasing that there remained potential for even further exploration upside beyond the current targets. It is also significant that Crosslands has identified further prospective areas at Jack Hills in addition to the current Exploration Targets, he said. These will also be tested to ensure the project is optimised to its full economic potential. A copy of the Crosslands media release with full details of the drilling program and the results is attached to this statement. -ends- For further information, please contact: Paul Kopejtka Executive Chairman Murchison Metals Ltd John McGlue Director FD Third Person About Murchison Murchison Metals Limited ( Murchison ) is an Australian ASX listed company. Murchison is included in the S&P/ASX 200 Index. Murchison has a 50% economic interest in Oakajee Port and Rail (OPR), an independent infrastructure business established to construct new port and rail infrastructure to provide logistics services to miners (including Crosslands) and other potential customers in the mid-west region of WA. The remaining 50% economic interest in OPR is held by Mitsubishi Development Pty Ltd ( Mitsubishi ), a subsidiary of Mitsubishi Corporation, Japan s largest general trading company. Murchison is also a 50% shareholder in Crosslands Resources Ltd which is the owner of the Jack Hills iron ore project located in the mid-west region of Western Australia. The remaining 50% of Crosslands is held by Mitsubishi. In addition to its investments in Crosslands, OPR and its Rocklea iron ore project (100% Murchison) located in the Pilbara, Murchison is actively exploring growth opportunities in iron ore, coal and manganese in accordance with its approved corporate strategy.

3 Thursday 3 September CROSSLANDS EXPLORATION UPDATE: EARLY SIGNIFICANT DRILL RESULTS FROM $23M PROGRAM Crosslands Resources Ltd (Crosslands) is pleased to report promising early drill results from its Jack Hills iron ore project. Drilling commenced in April 2009 on what is one of the most significant exploration drilling programs currently underway within Australia with a $23M exploration budget over 9 months. Twelve drill rigs are currently in operation across the company s Jack Hills iron ore tenements in the mid-west region of Western Australia. The extensive drilling program has been designed to further expand Crosslands resource base and to upgrade established resources, totalling 58.7% Fe Direct Shipping Material (DSO) and 34.1% Fe Beneficiation Feed Material (BFO) (Refer to Table 1 for resource estimates by JORC categories). The 70,000m drill program along a deposit strike length of 7km will provide critical information for Crosslands Stage 2 feasibility studies. The current drilling and resource assessment programs are directed at testing the following Exploration Targets: Extensions of magnetite BFO adjacent to the established resource and projections of the established DSO/BFO resource at depth. A significant additional haematite component to the BFO within the existing drilled resource currently excluded from the resource inventory. Massive DSO lenses mapped and partially defined by drilling at the Brindal deposit located approximately 1km south of the main Jack Hills deposit. The combined Exploration Targets are considered to have the potential to deliver an additional 400 to 1000 million tonnes of predominantly BFO. These Exploration Targets are at this stage conceptual in nature based on surface mapping supported by limited drilling. At this stage there has been insufficient exploration to define a Mineral Resource on these targets and while it is uncertain if further exploration will result in a Mineral Resource, early results are supportive of the Exploration Targets and as such are very encouraging. In addition to the Exploration Targets under investigation, further prospects remain to be tested pending completion of this current program. Page 1 of 9

4 Drilling Results The BFO Exploration Targets form continuous lenses on the western and eastern flanks of the established Jack Hills resource. Testing of these lenses started close to the existing mine development. All drill holes to date have intersected broad widths of banded magnetite rocks suitable for Beneficiation Feed, providing preliminary support to the conceptual exploration target. Initial drilling intersections with down-hole widths from 16 to 316m are being recorded with consistent average grades of approximately 31% Fe (refer to Figure 1 & Table 3). Infill resource drilling underway concurrently with the testing of the new exploration targets continues to confirm and locally expand the established iron deposit. The best drill intersection to date being down hole width 63.3% Fe from hole MHDD780 (refer to Table 2).! $ %!" # & Page 2 /9 Page 2 of 9

5 " #! # $! # %& ' ' '!" # $ % & Crosslands Chief Executive Officer Stuart Hall said this latest exploration drilling program was the most significant since Crosslands commenced operations in September Recent surface geological mapping identified potentially significant additional resources, prompting this 240-hole drill program, which has involved the expansion of our exploration workforce and regional camp. We have twelve drill rigs in operation, five diamond and seven RC rigs, and are well on schedule to provide critical resource information for our Stage 2 feasibility program by the end of the year. Page 3 /9 Page 3 of 9

6 Crosslands recently exported its three millionth tonne of premium-grade iron ore from the Jack Hills mine 380km north east of Geraldton. We are very encouraged by the continuing demand for our iron ore and by the quality of ore identified across our seven mid-west tenements, Mr Hall said. As reported in our February update, Jack Hills concentrate is expected to be a high grade product with extremely low levels of alumina and other impurities. These results along with the consistent high quality of our export ore has created opportunities for Crosslands to ship samples to a broadening customer base while completing our Stage 2 feasibility program. Over the past two years Crosslands has transported its export ore by contract road haulage to the port at Geraldton from where it has been shipped to customers in China and Korea. Stage 2 feasibility studies incorporate using rail to transport ore to a new deepwater port intended to be constructed at Oakajee, 20km north of Geraldton. In March 2009, Crosslands associate Oakajee Port & Rail signed a development agreement with the Western Australian Government to develop the new Oakajee port and rail infrastructure. The Australian Federal Government demonstrated its support for the project by committing $339M in its May budget, matching a commitment by the WA Government to contribute $339M to fund the common use infrastructure at the Oakajee Port. Page 4 /9 Page 4 of 9

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8 Hole MHDD780 MHDD781 MHDD782 MHDD783 MHDD785 MHDD786 MHDD787 MHDD789 MHDD790 MHDD791 MHDD792 MHDD795 MHDD805 MHDD814 MHDD824 MHRC793 MHRC794 MHRC796 MHRC800 MHRC801 MHRC804 MHRC806 MHRC807 MHRC808 MHRC809 MHRC811 MHRC812 MHRC815 MHRC816 MHRC817 MHRC818 MHRC819 MHRC820 MHRC822 MHRC825 MHRC828 MHRC830 MHRC832 MHRC834 MHRC835 MHRC836 MHRC837 Intersections 30.6% Fe & 30.8% Fe & 39.4% Fe 32.2% Fe 29.1% Fe 34.8% Fe & 36.7% Fe & 30.8% Fe & 22.4% Fe 33.2% Fe & 36.3% Fe 28.3% Fe & 32.6% Fe 32% Fe & 29% Fe 29.1% Fe 23.8% Fe & 26.1% Fe 28.9% Fe & 31.1% Fe & 29.4% Fe 30.1% Fe 27.3% Fe & 31.1% Fe & 31.3% Fe 30.7% Fe 48.3% Fe & 30% Fe 30.8% Fe & 30.1% Fe & 32.1% Fe 30.2% Fe 31.1% Fe 37.5% Fe & 29.5% Fe 30.8% Fe & 30.1% Fe 23.9% Fe 36.6% Fe & 37.5% Fe & 22.9% Fe 30.7% Fe & 32.1% Fe & 32.3% Fe 32.3% Fe & 31.1% Fe & 28.6% Fe 33.1% Fe & 31.4% Fe 36.9% Fe & 24.3% Fe 27.6% Fe 33.4% Fe & 32.2% Fe 30.2% Fe 25.3% Fe 31.9% Fe 25.6% Fe & 28.1% Fe 31.4% Fe 29.4% Fe 32% Fe & 28.8% Fe & 28.1% Fe 23.8% Fe & 26.7% Fe 31.2% Fe & 29.3% Fe 32.2% Fe & 29.7% Fe 45.3% Fe & 34.2% Fe & 33.8% Fe 23.3% Fe & 30.4% Fe & 25.9% Fe 38% Fe & 40.3% Fe 22.5% Fe & 33.8% Fe & 32.3% Fe 28.5% Fe Page 6 /9 Page 6 of 9

9 MHRC838 MHRC839 MHRC842 MHRC844 MHRC845 MHRC846 MHRC847 MHRC849 MHRC850 MHRC851 MHRC856 MHRC856 MHRC857 MHRC858 MHRC861 MHRD797 MHRD798 MHRD802 MHRD803 MHRD829 MHRD831 MHRD % Fe & 31.6% Fe 26.3% Fe 31.6% Fe & 34.1% Fe & 28.5% Fe 31.4% Fe & 30.4% Fe 29.3% Fe & 32% Fe 43.5% Fe 26.5% Fe & 32.1% Fe 28% Fe & 28.6% Fe & 24.6% Fe 33% Fe & 35.7% Fe 32.6% Fe 26.4% Fe & 35.2% Fe 37% Fe 29.5% Fe & 29.8% Fe 29.5% Fe & 26.7% Fe 27.8% Fe & 32% Fe 34.7% Fe 31.2% Fe & 50.2% Fe & 32.9% Fe & 26.6% Fe 29.3% Fe & 32.6% Fe 30.9% Fe & 33.4% Fe & 31.6% Fe & 32.2% Fe 38.9% Fe & 30.4% Fe 27.3% Fe & 36.1% Fe & 34.1% Fe & 29.8% Fe 26.1% Fe Page 7 /9 Page 7 of 9

10 About Crosslands Crosslands Resources Ltd ( Crosslands ) is the owner of the Jack Hills iron ore project located in the mid-west region of Western Australia. Crosslands is jointly owned by ASX listed Murchison Metals Ltd ( Murchison ) and Mitsubishi Development Pty Ltd ( Mitsubishi ), a subsidiary of Mitsubishi Corporation, Japan s largest general trading company. In addition, Crosslands, Murchison and Mitsubishi have established a new independent infrastructure business, Oakajee Port and Rail (OP+R). Competent Persons Statement The information in this announcement that relates to Exploration Results and geological and mineralogical interpretations of the Mineral Resource estimate of the Jack Hills Project is based on information compiled by Mr Roland Bartsch who is a Member of the Australasian Institute of Mining & Metallurgy. Mr Bartsch is a full time employee of Crosslands Resources Ltd. The information in this announcement that relates to Mineral Resources of the Jack Hills Project is based on information compiled by Mr Chris Allen who is a Member of the Australasian Institute Geoscientists. Mr Allen is an employee of CSA Global Pty Ltd. Page 8 /9 Page 8 of 9

11 Mr Bartsch and Mr Allen have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as competent persons as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Bartsch and Mr Allen consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. -end- For further information: Claire Blatchford, Senior Advisor Communications m: +61 (0) t: e: cblatchford@crosslands.com.au Reference List Allen, C., CSA Global Pty Ltd Geological Consultants Mount Hale Iron Ore Deposit Jack Hills, Western Australia, Magnetite Resource Estimate. Page 9 /9 Page 9 of 9