Matrix Metals | Copper Production and Exploration

The Directors of Matrix Metals Limited are pleased to announce that the initial program of drilling at the Mt Watson Prospect which was completed in late June 2001, has been highly successful with an inferred resource of 837,000 tonnes of oxide copper mineralisation estimated, grading an average 1.3% Cu at 0.5% cut-off. The northwest trending mineralisation comprises an eastern and western zone and extends continuously within the strike length of the zones for 425m and 200m respectively. The eastern zone remains open to the east, west and at depth, with the western zone remaining open at depth. This initial drilling program was limited to a depth of 25.5 m with some drill holes being mineralised over their entire length and some finishing in ore grade mineralisation.

The Mt Watson deposit, which will become a satellite open pit to the Company's Mt Cuthbert operation, is a greenfields exploration project with no mining or oxide zone exploration previously recorded. The fact that the first drilling program has resulted in the estimation of an inferred resource is highly significant in terms of the potential ultimate size and tonnage of the deposit.

As a measure of perspective, the Mt Cuthbert Operation since it's commissioning in 1996 has mined a total 1.5 million tonne of oxide ore. Mt Watson, with this initial 837,000 tonne resource, together with the untested strike and depth extensions that have been interpreted, has now demonstrated strong potential to both extend the life and enhance the performance of the Mt Cuthbert Operation.

Significant intercepts reported from the drilling include:

(Note: maximum depth of hole = 25.5m)

MWRB21	25.5m	@	2.62% Cu	from Surface
MWRB20	21.0m	@	2.60% Cu	from 4.5m
MWRB06	15.0m	@	1.63% Cu	from 6.0m
MWRB07	7.5m	@	1.97% Cu	from 3.0m
MWRB13	13.5m	@	2.22% Cu	from12.0m
MWRB14	16.5m	@	1.51% Cu	from 9.0m
MWRB24	10.5m	@	1.66% Cu	from 15.0m
MWRB25	25.5m	@	1.47% Cu	from surface
MWRB29	4.5m	@	1.80% Cu	from 6.0m
MWRB33	6.0m	@	1.67% Cu	from 19.5m
MWRB34	7.5m	@	1.55% Cu	from 18.0m
MWRB44	13.5m	@	1.16% Cu	from 10.5m
MWRB46	7.5m	@	1.81% Cu	from 12.0m
MWRB48	16.5m	@	1.00% Cu	from 9.0m
MWRB52	6.0m	@	1.23% Cu	from 3.0m
MWRB54	9.0m	@	1.17% Cu	from16.5m
MWRB55	21.0m	@	1.20% Cu	from 4.5m
MWRB56	4.5m	@	1.20% Cu	from 1.5m
MWRB82	18.0m	@	1.60% Cu	from surface
MWRB86	10.5m	@	1.32% Cu	from 15.0m

Mineralisation at Mt Watson is contained within the Surprise Creek Formation and is structurally controlled occurring along a prominent northwest fault zone in sheared and altered siltstone and carbonaceous slate. The mineralisation is located at or near the contact between the siltstone and slate with quartzite. The dip of this mineralisation is northeast.

Surface mapping and drilling have outlined two mineralised zones of copper, the first occurring between (mine grid) 9,975E and 10,400E and the second between 9,325E and 9,525E. The eastern mineralisation is open at depth and along strike to the west and east with the western mineralisation open at depth. All mineralisation recorded so far occurs in oxide material.

The drilling program comprised 87 open percussion holes totalling 2,218.5 metres and was completed in late June. Located along drill lines spaced mostly at 50m intervals, each hole was drilled to a depth of 25.5 metres and sampled at 1.5 metre intervals.

Table 1 sets out the drill hole data and Table 2 summarises the drill intersections.

The estimated resource has been classified as Inferred in accordance with the Australasian Code for Reporting Mineral Resources and Ore Reserves.

A second phase of drilling has been programmed to further evaluate the known mineralised zones and obtain geological and structural information. This program will involve RC (Reverse Circulation) drilling and will include infill drilling of the mineralised zones, together with exploration drilling along strike from the eastern zone mineralisation and down dip on both the eastern and western zones.

Yours sincerely,

Andrew Chapman
Chief Executive Officer

Click to view Mt Watson Survey Data
Click to view Mt Watson Drill Intersections

This estimate of mineral resources was prepared by Mr Phil Frank, who is a Fellow of The Australasian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists with a minimum of five years experience in this style of mineralisation and type of deposit.

The inferred resource based on the drilling results has been estimated using the following criteria:

• The polygonal method was used for estimating the resources with ore zones constructed by digitising inferred resource outlines on sections using Micromine software. Resource areas were projected half way to adjoining sections.
• A cut off grade of 0.5% copper was used for the outlines with an SG of 2.4 used for the tonnage calculations.
• Down dip projection of mineralisation was extended to a maximum of 20m.