Prospectus - Kingsrose Mining

Section 5
Company and Project Overview
Reed Resources Ltd will extend to the Company a first right of refusal over all the Comet Vale Tenements to
form a joint venture in similar nature to that formed over the Initial Tenements.
This right is subject to the following:
• The rights are to be over gold and silver.
• The rights exclude any open pitable ore down to a depth of 50 metres from the surface.
• Kingsrose Mining Ltd must complete at least 500 metres of level development on level 4 or level 5 of
the Sand Queen Gold Mine by 31 May 2009 to earn this right. No development on these levels have
been completed to date.
• Kingsrose Mining Ltd earns no right to equity in the title of any tenements other than the Initial
Tenements.
Reed Resources Ltd has also agreed that it will not commence open pit operation at any place that would
jeopardise or limit underground mining reasonably expected to occur given the underground resources
identified at the time of commencing any open pit mine.
Details of the material contracts and their terms are set out in Schedule 2 to the Solicitor’s Report in section 10
and section 11.
Development to date
The Kingsrose Unit Trust commenced the development program in May 2005. Since then it has rehabilitated
the Sand King and the Sand Queen shaft to level 3, just above the water table and pushed out development
faces along level 2 (about 487 metres) and along level 3 (about 392 metres along strike).
The Kingsrose Unit Trust has established a Return Airway/Secondary Means of Exit from surface down to
the 2 level, near the old Sand King workings. The shaft has been rehabilitated down to level 3 with the water
being held 10m below level 3 (i.e a total of 110m below surface). All surface infrastructure is in place.
An operational hoist - (A 25kW Robbins MAN-09) and service hoist is in place. The winder is capable of
moving a large amount of ore under continuous operation, but mining constraints mean the shaft is limited
to a calculated maximum capacity of 192t of material a day or 5,800t per month. The mine development plan
takes into account these restraints, and reflects an anticipated production capacity of 5,500t per month when
level 4 comes on line with a second haulage winder established over the central shaft compartment.
The Company currently employs 6 to 7 miners on site, and expects to stay on 2 shifts once level 3 production
comes on line. Mining is conducted using pneumatic airleg drilling tools. The mine is a fully mechanized mine
using battery powered locomotives hauling ore cars on a rail network throughout the Sand Queen Gold Mine.
The current working level has 120m of rail development in ore along with 90m of sublevel development ready
for stoping. This opens the mine to potentially bring online a 10,500 tonne gallery stope. The further 90m
of rail development scheduled for completion in November means two further 10,000 tonne stopes can be
developed to come online. Current sampling of the orebody indicates potential upside to the block modelled
grade.
Investors are referred to the Independent Geologist’s Report for a geological overview of the Comet Vale Joint
Venture.
Royalty
MTAB Pty Ltd holds a 2% gross revenue royalty over the gold production of the Joint Venture area. MTAB Pty
Ltd is a company related to certain directors of Reed Resources Ltd. The board and management of Kingsrose
Mining Limited have no interest in MTAB Pty Ltd. Kingsrose Mining Limited will be required to pay its
proportion of royalty costs from gold credited to its account by the Joint Venture.
Personnel
The successful exploitation of the mine to full capacity will require sourcing additional skilled miners. The
Company has already sourced a number of overseas miners and they are scheduled to arrive in January 2008.
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