QUARTERLY REPORT for the Quarter Ended 31 March 2009 Magnetic Resources NL ABN 34 121 370 232 SUMMARY ASX Code: MAU 35 Outram Street West Perth WA 6005 T +61 8 9226 1777 F +61 8 9485 2840 E info@magres.com.au PO Box 1388 West Perth WA 6872 Issued Capital: 39,296,742 fully paid shares - Quoted 18,945,572 contributing shares - Unquoted 2km uranium zone with grades up to 0.03% U 3 O 8 at Lake Seabrook. Progress on an iron ore target identified at Jubuk near Corrigin. Gold anomaly at Dourdi near Lake King extended, full extent not yet defined. Further tenure acquired along a gold anomalous corridor at Holland Rock near Lake Grace, along strike from known mineralisation Cash: $0.8 million Directors: Peter Thomas Non Executive Chairman George Sakalidis Managing Director Roger Thomson Technical Director Magnetic Resources is continuing to test gold, iron, nickel and uranium targets on its extensive holdings in the wheatbelt (southern Yilgarn Craton) region of WA. Magnetic has substantially reduced these holdings as it focuses on the best targets and further tenement rationalisation is expected. Efforts are being made to farm out a number of projects as this process continues. 1
URANIUM Lake Seabrook (Magnetic 80%, earning up to 100%) Soil and auger sampling over a radiometric anomaly at Magnetic Resources Lake Seabrook uranium project has identified a 2km-long uranium anomaly with values up to 293ppm (0.03%) U 3 O 8 in shallow salt lake sediments. The Lake Seabrook project comprises two exploration licences totalling 95sq km in which Magnetic has earned an 80% interest, with the right to earn up to a 100% interest. The tenements cover airborne radiometric anomalies associated with the Lake Seabrook and Lake Eva drainage systems. Soil sampling and a ground radiometric survey were carried out over a 1.4km-long radiometric anomaly associated with an arm of Lake Seabrook, a dry salt lake. On completion of the ground radiometric survey, areas of strong uranium response were auger sampled to obtain shallow subsurface samples. The soil sampling traversed the lake edges and across the dry lake bed with the maximum result being 32.8ppm U. Using a 20ppm U threshold, the sampling defines an anomalous zone up to 350m wide and 2km long following the drainage pattern. Lake Seabrook Radiometrics with Sample Locations A single hand auger hole within this anomalous zone averaged 179ppm U (211ppm U 3 O 8 ) from four samples over a 1.5m depth, with a maximum sample result of 249ppm U (293ppm U 3 O 8 ). The samples were taken from grey-brown silty clay. The hand auger hole is adjacent to a soil sample containing 28.8ppm U collected at a depth of 20-30cm, indicating a degree of stratification of the uranium values within the lake sediments. Associated elements showing elevated responses include Cu, Co, Pb and Ce. This suggests that uranium and base metals may have been precipitated from oxidised groundwater by a reducing environment within the lake system drainage channels in a setting similar to the high grade Mulga Rock uranium deposits in the Officer Basin north east of Kalgoorlie. Further exploration is being planned in order to test the extent and thickness of the uranium mineralisation within the extensive Lake Seabrook drainage system. Yerritup (Magnetic 80%, earning up to 100%) Mapping and sampling of a strong 1km-long uranium radiometric anomaly failed to identify anomalous or significant results, with a maximum value of 8.4ppm U and the tenement has been relinquished. 2
Boydells (Magnetic 80%, earning up to 100%) The Boydells tenement covers a pronounced and isolated radiometric anomaly some 400m in diameter situated 50km northwest of Esperance. A ground radiometric survey identified a small area (approximately 100m x 50m) with highly anomalous uranium readings coincident with the airborne radiometric anomaly. However analytical results of sampling were low and it was concluded that the anomalous response is derived from uranium decay or daughter products resulting from uranium disequilibrium. The tenement has been relinquished. IRON Dampling Spring (Magnetic 100%) As previously reported (ASX release 11 September 2008), anomalous iron values up to 22%Fe have been obtained in laterite samples on a 10km-long aeromagnetic target, interpreted to be banded iron formation or magnetite-rich gneiss. A ground magnetic survey and lag sampling programme has been completed, with assay results awaited and assessment of the ground magnetics in progress. Harris (Magnetic 100%) A 40sq km exploration licence has been applied for over a strong 3km-long aeromagnetic anomaly prospective for weathered iron formation. A ground magnetic survey has been completed with assessment of results in progress. The area is soil covered and lacks outcrop. Mt Vernon (Magnetic 100%) A 132sq km exploration licence has been applied for over multiple intense magnetic anomalies prospective for weathered iron formation. A ground magnetic survey has been completed over the western anomaly and small outcrops of magnetite bearing granite gneiss have been located with assay results pending. Dragon Rocks (Magnetic 100%) Two areas of strong magnetic anomalism occur on the Dragon Rocks tenement north of Newdegate. The main anomaly may be related to a structurally complex banded iron formation and represents an attractive target for iron ore. A ground magnetic survey over the main anomaly area is scheduled to commence in the June quarter. Mt Vernon Aeromagnetic Image 3
Jubuk (Magnetic 100%) As recently announced (MAU ASX releases 9 March and 11 March 2009), Magnetic Resources has identified a 35km-long aeromagnetic trend near Corrigin, WA, considered to be prospective for iron ore. Two railway lines occur within 25km of the Jubuk tenements. Sampling of a coarse grained recystallised banded iron formation (BIF) over an 800m strike length returned iron values up to 53.2%Fe ranging from 34.3%Fe to 53.2%Fe, averaging 39.6%Fe from 9 samples. Several rock chip sampling traverses have been completed over the outcrop areas and the sample material submitted for preliminary Davis Tube testwork in order to assess likely magnetite recoveries. Jubuk Sample Locations and Magnetic Profiles Based on the sampling and ground magnetic surveying completed to date, Magnetic is encouraged by the results and is preparing a submission to drill these targets under the WA Government co-funded drilling Exploration Incentive Scheme. Koonadgin (Magnetic 80%, earning up to 100%) Ground magnetic traverses (400m line spacing) over a 4km strike length have confirmed up to three anomalous trends obscured by soil cover. Sampling of ferruginous lag over these anomalies has returned values up to 44.4%Fe (average 4
28.6%Fe from 13 samples). The surface lag is interpreted to be derived from iron-rich rocks whose character is yet to be determined by drilling of the magnetic anomalies. Norpa (Magnetic earning up to 90%) Preliminary sampling has identified weathered iron formation close to a railway line with a maximum iron value of 43.7%Fe (average 32.8%Fe from seven samples). Shallow RAB drilling has been carried out to assess this occurrence which parallels the extension of the gold-bearing Tampia Shear Zone. GOLD Tampia North (Magnetic 80%, earning up to 100%) Geochemical sampling to complete first-pass coverage of a 60km strike length of the Tampia Shear Zone has been completed following completion of cropping on farm land. Shallow geochemical drilling of aeromagnetic targets for gold and iron returned up to 124ppb gold (0.12g/t Au) in weathered metasediments adjacent to an interpreted granite stock to the north of the previously identified gold anomalies. Access negotiations are in progress and initial RAB testing of geochemical targets is planned in the June quarter. Dourdi (Magnetic 80% earning up to 100%) Geochemical sampling has identified anomalous gold values up to 15x background coincident with an interpreted shear zone near Lake King. Mapping of this area has been completed but did not identify any specific source of the anomalism and further sampling has extended the anomalism to the north and south along this interpreted structure which extends for some 10km within the Magnetic tenement. The anomaly appears to be irregular and, subject to access agreements, further sampling is planned in the next quarter in order to fully define the extent of the anomaly and outline targets for drill testing. Dourdi Gold Geochemistry 5
Holland Rock (Magnetic 100%) As reported in the September 2008 quarterly report, Magnetic has identified an 11kmlong gold-anomalous corridor coinciding with an interpreted shear zone. This previously unrecognised anomaly is situated along strike from Dominion s Lake Magenta gold prospect some 11km to the south-east. An additional tenement has been acquired to the south east covering the northern extension of the Lake Magenta gold prospect NICKEL Gibb Rock (Magnetic 80%, earning up to 100%) Preliminary geochemical drilling did not return any significant results and the tenement has been relinquished. For more information on the company visit www.magres.com.au George Sakalidis Roger Thomson Managing Director Technical Director Phone (08) 9226 1777 Phone (08) 9226 1777 Mobile 0411 640 337 Mobile 0419 969 183 Email george@magres.com.au Email roger@magres.com.au The information in this report is based on information compiled or reviewed by Roger Thomson BSc, ARSM, MAIG who is a member of the Australasian Institute of Mining and Metallurgy. Roger Thomson is a director of Magnetic Resources NL. Roger Thomson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Roger Thomson consents to the inclusion of this information in the form and context in which it appears in this report. 6