LADY LORETTA ZINC PROJECT

Company Facts

Mineral Securities ownership interest:  25% interest in joint venture

Project Facts

• High grade zinc project at feasibility stage
• Country of operation – Queensland, Australia

More Information

Lady Loretta is a substantial, high grade zinc project, located 140 kilometres north of the major mining centre of Mount Isa in forth-west Queensland.  The area around Mount Isa hosts a number of the world’s largest deposits of zinc (Century, Mount Isa, Dugald River, George Fisher), copper (Mount Isa, Ernest Henry) and silver (Cannington, Mount Isa).

Minsec retains its 25% joint venture interest in the Lady Loretta project.  At the end of 2006, through its takeover of Falconbridge Limited, Xstrata plc acquired Scarborough’s Minerals plc 75% partner in the joint venture, Noranda Pacific Pty Ltd.

Mineral Resources

Updated Mineral Resources for the project, as of July 2006 and classified according to the JORC Code are set out below.  Lady Loretta is a high grade, undeveloped zinc resource containing more than 2.3 million tonnes of zinc.

Calculated above a US$35 per tonne Net Smelter Return

Zinc Market Conditions

Since the latter part of 2004, we have seen a major turnaround in the world zinc market. After four years of supply surpluses, the 2004 and 2005 calendar years each saw supply deficit exceeding 200,000 tonnes of zinc metal. This has, in turn, seen a substantial increase in zinc prices to the current levels of more than US$1.00/lb, with some market analysts projecting prices to remain high for several years.

This substantial high grade zinc resource at Lady Loretta suggests that the project has the potential to be a significant source of new zinc production to meet the rising world demand for this metal.

Feasibility Study

The joint venture partners are currently progressing a Feasibility Study with a view to making a project decision in calendar 2008.