Summary Previous testing completed on mineralised material from the Jales-Gralheira Deposit indicates that best recovery method for gold and silver was considered to be bulk sulphide flotation followed by leaching of the flotation concentrate. Past testwork completed by RTZ (Rio Tinto Zinc) and COGEMA (Compagnie Générale des Matières Nucléaires of France) indicated that bulk sulphide flotation recovers of gold between 90.0% and 97%. Recovery of gold by leaching from sulphide concentrates has been reported as being between 93.8% to 96.1% by COGEMA and in excess of 60% by RTZ.

WAI were requested to produce a gold rich “base metal” concentrate, a “bulk sulphide” concentrate and an “arsenopyrite” rich concentrate. The “bulk concentrate” and “arsenopyrite” rich concentrates were then subject to regrinding and cyanide leaching. A further cyanide leach test was conducted on a composite sample of the material prior to flotation but after grinding. The sample was selected from a series of cores from drill hole intersections in the Central portion of the deposit.

The two flotation tests conducted in the recent work by WAI show recoveries of gold in bulk sulphide concentrates as 98.5% and 99%. In addition a separate gold-rich base metal concentrate and arsenopyrite concentrate were successfully produced by froth flotation.

The overall recovery of gold following flotation and cyanide leaching of the bulk concentrate was 59.6%. Leaching of a composite head sample recovered 62.5% of the gold.

Mr. Matthews stated:

“The results from the flotation testing are extremely encouraging and confirm the data generated by past workers. We are particularly pleased at being able to have the option of producing a base metal concentrate separate from an arsenopyrite concentrate. More work will be required to upgrade the base metal concentrate to a saleable form. However this will give the option of different treatment methods to minimise environmental impacts and enhance the project economics.

Further studies need to be undertaken to determine if the arsenopyrite concentrate can be successfully treated using bio-oxidation so as to enable the gold associated with the arsenopyrite to be recovered.

Earlier in the year the metallurgical testing showed up to 30% of the gold in the samples tested from the deposit can be recovered by gravity (See News Release dated 13 May, 2008). If the results are repeatable from other portions of the deposit the incorporation of an early gravity circuit into the recovery circuit may have a favourable impact on plant design.

A combination of gravity, flotation and bio-oxidation may prove to provide a solution to attaining gold recoveries in excess of 90%.”

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