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Allegiance Mining 1st Quarter Activities

  1. 121 Posts.
    First Quarter Activities
    30-04 1618


    HIGHLIGHTS

    Highlights of the March quarter were:

    - encouraging results from a shallow drilling program into the
    Burbank nickel prospect

    - commencement of drilling at the Melba Flats nickel-copper-platinum
    group metals-gold project

    - completion of detailed planning and permitting of a resource
    definition drilling program to commence at Avebury in the June
    quarter

    - acquisition of additional tenements in western Tasmania which are
    considered prospective for Avebury style nickel sulphide deposits

    - $750,000 raised to much accelerate the resource and exploration
    drilling at Avebury, Melba Flats, East Avebury and Burbank

    COMMENTS

    Over the quarter, sentiment continued to improve with nickel now
    trading above US$7,000, some 55% above the September 2001 low. The
    prognosis for the future is bright with shortages in sulphide nickel
    seen for at least the next five years.

    In late March to mid April, Allegiance placed 16,656,555 shares and
    366,667 December 2003 options to raise $749,544.96. This will enable
    a much accelerated resource drilling and exploration programme at
    Avebury, Melba Flats and our other promising projects at East Avebury
    and Burbank. This programme has commenced and will continue through
    the current quarter.

    BURBANK - EL 22/97 and EL 28/88:
    (Allegiance 100%, Rio Tinto 2% net smelter royalty)

    In February, the Company announced the detailed results of a shallow
    core drilling program on the Burbank prospect, four kilometres west
    of Avebury.

    Six short holes totaling 130 metres were completed into a substantial
    nickel anomaly located by previous mapping and geochemical programs.
    Results of the drilling were most encouraging with all six holes
    intersecting significant nickel mineralisation.

    All cores sampled (41 discontinuous samples totaling 92m) were
    strongly nickel anomalous, generally in the range 1.1-1.5% Ni with a
    highest value of 1.78% Ni and a lowest value of 0.5% Ni.

    Zinc values were also anomalous in the range 0.2-0.4% Zn, which is
    closely analogous to surface sampling over the Avebury and East
    Avebury deposits.

    Petrological studies suggest the nickel and zinc are present in clays
    and iron oxides possibly developed from oxidised sulphides within an
    altered ultramafic host.

    Encouraged by these early results, Allegiance plans to further drill
    test the Burbank prospect at greater depths with a larger helicopter
    supported rig in the 2002-03 summer period.

    A table of the drilling results follows:

    HOLE COLLAR DRILL WIDTH % NI
    DETAILS INTERSECTION

    B1 350949E 2.5 15.0 12.5 1.06
    5355237N
    2045 RL
    34deg AMG brg
    -45deg dip
    15m length

    B2 350976E 2.0 9.6 7.6 1.00
    5355247N 13.0 20.6 7.6 0.98
    2055 RL
    37deg AMG brg
    -55deg dip
    25.1m length

    B3 350975E 3.5 10.5 7.0 1.14
    5355247N 13.2 14.0 0.8 1.18
    2055 RL 15.8 19.1 3.3 1.04
    217deg AMG brg 21.1 22.6 1.5 1.12
    -55deg dip
    22.6m length

    B4 350948E 1.0 8.6 7.6 1.10
    5355252N 9.3 16.9 7.6 0.70
    2050 RL 17.3 18.4 1.1 1.00
    35deg AMG brg
    -60deg dip
    18.4 m length

    B5 350948E 8.6 17.6 9.0 0.85
    5355252N
    2050 RL
    222deg AMG brg
    -55deg dip
    17.6m length

    B6 350974E 3.0 20.3 17.3 1.06
    5355234N 23.0 27.7 4.7 1.20
    2050 RL
    57deg AMG brg
    -55deg dip
    30.7m length

    AVEBURY EL 28/88:
    (Allegiance 100%, Rio Tinto 2% net smelter royalty)

    Detailed planning and permitting of a 3,500 metre core drilling
    program at Avebury were completed. Drilling is due to commence in
    late May and be completed by mid-September 2002.

    The program is designed to firstly improve the definition of the
    South Avebury resource and secondly test for shallow extensions of
    Central Avebury and North Avebury.

    Results of the program will lead to a re-estimation of the identified
    Avebury resources ahead of the design of an underground decline
    development which is seen as the next logical step in the detailed
    evaluation of Avebury.

    MELBA - EL 43/92:
    (Allegiance 100%, Rio Tinto 2% net smelter royalty)

    In late March 2002, Allegiance announced that it had recommenced
    drilling at Melba Flats. A program of five cored holes totaling 600
    metres is planned to further test the Nickel Reward sulphide deposit
    where previous drilling and trenching intersected high grade
    nickel-copper-gold-platinum group metal mineralisation in a series
    of gabbro dikes.

    It is anticipated that the drilling will be completed in early May
    and results will be available by late May 2002.

    NEW TENEMENTS:
    (Allegiance 100%)

    In the previous quarter, Allegiance announced that it had acquired EL
    14/2001 in the Heazlewood area. In the current quarter, a further two
    tenements were applied for in the Renison-Rosebery area, east of
    Melba Flats.

    One of these, EL 5/2002, has subsequently been granted and the other,
    ELA14/2002, is still in the application stage.

    All three tenements are considered prospective for nickel sulfide
    deposits of the Avebury-Melba styles, and their acquisition reflects
    the Company's belief firstly in the future strength of the nickel
    market, and secondly in the prospectivity potential of this area of
    western Tasmania.

    All three areas have recently been covered by airborne magnetic,
    electromagnetic and radiometric surveys flown by Mineral Resources
    Tasmania. The direction of future work by Allegiance will be strongly
    influenced by the results of these surveys.

    A Howland-Rose
    MSc, DIC, FGS, FIMM, FAusIMM, FAIG, CEng
    CHAIRMAN

    The information contained in this report is based on information
    compiled by Lindsay Newnham and Anthony W Howland-Rose who are
    corporate members of the Australasian Institute of Mining and
    Metallurgy and/or Australian Institute of Geoscientists and who have
    individually more than five years experience in the field of activity
    being reported on. This report accurately reflects the information
    compiled by these members.

    ends - AAP
 
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