Company Information for Vital Metals Ltd

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Company Statement

Vital Metals Ltd is a specialist tungsten and tungsten/molybdenum explorer and aspiring mine operator. Tungsten is a specialty material used predominantly as a “hard metal” for various applications.

The demand for these metals has risen sharply along with the price and a strong future is forecast for tungsten in particular.

Vital is concentrating its activities and expenditure on its flagship Watershed deposit in North Queensland, and has also commenced field work at Mt Mulgine and Mt Alexander.

Vital Metals Ltd is a specialist tungsten and tungsten/molybdenum explorer and aspiring mine operator. Tungsten is a specialty material used predominantly as a “hard metal” for various applications.

The demand for these metals has risen sharply along with the price and a strong future is forecast for tungsten in particular.

Vital is concentrating its activities and expenditure on its flagship Watershed deposit in North Queensland, and has also commenced field work at Mt Mulgine and Mt Alexander within Australia at this stage.

World tungsten production has been dominated by China, which has produced more than 85 per cent of primary tungsten output in recent years. This continues to be the case but, as with many other metals, the price and marketing structure is undergoing changes. The tungsten price has risen very substantially over the past year and the projections appear strong. For more information see the 'Metals Market Overview' within this site.

Vital Metals has acquired an outstanding tungsten property in far North Queensland known as Watershed. Watershed was discovered in 1978 by the Utah Development Company which carried out extensive drilling and other work leading to an Inferred Resource estimate of 13.9 million tonnes at an average grade of 0.35% WO3  .

Vital's principal activity since listing has been to conduct the work which is required to develop a substantial tungsten mine at Watershed. This includes drilling, metallurgical studies and the like.

A new resource estimate was received for the Watershed deposit. The global resource figure, at a cut-off grade of 0.15% WO3 , is 15.2 million tonnes at an overall grade of 0.29% WO3 for a contained WO3 content of 44,100 tonnes (63% of this total falls under the Measured and Indicated categories).

Current Operations

Watershed (100 per cent Vital owned)
The Watershed scheelite (calcium tungstate) Project, situated in far North Queensland, 150 kilometres north-west of Cairns, is the company’s flagship venture. Watershed is at the pre-feasibility stage; with a program of in-fill drilling, bulk sampling and metallurgical development in progress.

A resource estimate has been received for the Watershed deposit. The global resource figure, at a cut-off grade of 0.15% WO3 , is 15.2 million tonnes at an overall average grade of 0.29% WO3 for a contained WO3 content of 44,100 tonnes. The mineralisation at Watershed is open at depth and along strike in both directions.

The deposit outcrops on a hill and is suited for open cut mining at an apparently modest waste-to-ore ratio. The scheelite-bearing material fluoresces in ultra violet light and is amenable to simple pre-concentration utilizing this characteristic.

Mt Alexander (100 per cent Vital owned)
The Mt Alexander Project is located near Nanutarra, 1250 kilometres north of Perth, Vital holds tenements covering tungsten mineralisation, present as scheelite, at Moodang Well, Mt Alexander and Love’s Find.

The area is endowed with significant tungsten mineralization in a number of zones. Drilling has encountered some high-grade intercepts including 17.2 per cent WO3 over 0.9 metres. Further mapping and investigatory drilling is planned to define the limits of the mineralization in various zones.

Drilling is planned in the December quarter of 2008.

Mt Mulgine (Vital earning 70 per cent)
At Mt Mulgine, 350 kilometres north-north-east of Perth, tungsten and molybdenum occur in skarns surrounding the large Mulgine Granite intrusion.

Previous exploration by a number of companies in the period between 1965 and 1980 defined two large deposits of low-grade tungsten with significant molybdenum credits. These are known as the ‘Hill deposit and the Trench deposit.

Work on the area has commenced with the start of digitising all previous data (320 drill holes), a detailed assessment of the characteristics of all rock types and a high resolution geophysical (gravity) survey. Drilling for tungsten and molybdenum targets occurred in the beginning of 2008 and further drilling is planned in the December quarter of 2008.

Geographical Spread

Australia

Board of Directors and Key Management

Major Shareholders

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