Company Information for Lithic Metals and Energy

AIM-LMY

www.lithicme.com

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AIM; LMY

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Company Statement

Lithic Metals and Energy’s objective is to create shareholder value through the discovery and exploitation of nickel and uranium deposits, principally in Zambia and other SADC countries.

In 2006/7 the Company signed a Memorandum of Understanding with BHP Billiton Plc for the acquisition of the Mavita Nickel Project in Mozambique and in Q2 2007 diversified its portfolio signing a Heads of Agreement with Zambezi Resources Limited for a 51% stake of the uranium rights over the Oryx prospect and additional radiometric anomalies over four granted Zambian Prospecting Licences. Lithic must subscribe for US$5 million in shares in the entity holding the uranium rights to earn 51%, and can increase this interest to 75% by funding definitive feasibility studies on Oryx and any other uranium deposit. Zambezi Resources can elect to contribute or dilute to a 2.5% NSR.

Lithic is actively following up encouraging nickel saprolite leach test results from its Mitaba project in Zambia and pursuing growth opportunities across Africa.

Current Operations

Mozambique: Mavita Nickel Project
LMY 100% (subject to BHP Billiton clawback)

On 20 September 2006 Lithic Metals and Energy entered into a Joint Venture with BHP Billiton Plc over two Prospecting Licences that comprise the Mavita nickel project, located in the Manica province of central western Mozambique. BHP Billiton has the right to re-acquire the project from Lithic if the Company defines a JORC compliant Inferred Resource containing in excess of 200,000 metric tonnes of nickel metal. The acquisition cost to BHP Billiton would be 250% of total exploration expenditure plus a 2.5% Net Smelter Return granted to LMY.

The project covers ultramafic units prospective for nickel, as evidenced by widespread nickel anomalism in stream sediment sampling across the licences and the discovery of nickel sulphide mineralization by LMY in December 2006.
Field exploration recommenced at the Mavita nickel project in Mozambique, following up on the discovery of nickel sulphides in the 2006 field season. The planned exploration programme at Mavita includes the completion of over 50 line km of IP and EM geophysical surveys, detailed geological mapping, soil and rock chip sampling.

It is envisaged that this work will generate a number of drill targets for testing in early 2008.

Zambia: Uranium Projects
The Oryx Uranium prospect is favourably located approximately 80km south east of the Zambian capital, Lusaka. Covering an area of 12km², the Oryx radiometric anomaly was discovered by Zambezi Resources in 2005 through the completion of a regional airborne magnetic and radiometric survey.

Field reconnaissance of the 6km long radiometric anomaly revealed the occurrence of davidite, which is a heavy titanium-iron oxide mineral that contains significant uranium and rare earth elements including yttrium, cerium and lanthanum.

Selected sampling of surface accumulations of uranium-rich iron oxides possibly derived from davidite, returned values of up to 6.44% U3O8

Initial exploration activities including mapping, 1.6km of trenching, soil sampling, a ground radiometric survey and rock chip sampling focused on the peak radiometric anomaly in the north eastern zone of the prospect area. Trenching identified significant uranium grades over widths of up to 50m, with a peak value of 1527ppm U3O8 (0.15% U3O8).

A high resolution airborne radiometric survey completed after this initial phase of exploration clearly shows that a larger, cohesive radiometric anomaly exists to the west of the initial exploration area. This anomaly remains untested.

Lithic has commenced exploration over Oryx and other radiometric anomalies with reconnaissance spectrometer and scintillometer traverses currently underway as well as rock chip and soil sampling

At the Mpande project located 60km from Lusaka, mapping and sampling of the Mvula prospect has delineated a 4km long radiometric “hot spot” within an 8km long uranium-channel radiometric anomaly identified in an airborne geophysical survey completed in 2006.

Uranium anomalism appears to correlate to a dolomitic schist unit of up to 150m in thickness, over 10km in strike length.
Lithic intend to progress the Mvula prospect to drill ready status before the end of the 2007 field season.

Another 9 high level uranium radiometric anomalies are known within the 6800km² of tenure in Zambia. Lithic intends to fly radiometric and aeromagnetic geophysical surveys to complete coverage over three of the four granted licences in a cost sharing programme with Zambezi Resources.

Zambia: Nickel
Mitaba Project
The Mitaba Project is 11 kilometres long and covers two identified ultramafic units 3.3 kilometres apart that are prospective for nickel.

At Mitaba Hill, the easternmost Prospect, detailed mapping has defined ultramafic lithology prospective for nickel mineralisation over a strike length of 2.7 kilometres and maximum 480 metres width. The Mitaba West Prospect has not been mapped at comparable detail but two thick, main units of prospective ultramafic lithology are exposed in an area of 2.4 kilometres length and maximum 360 metres width.

Earlier explorers in the mid 1970’s identified nickel mineralisation in trenching, with better results of 62m @ 0.70%Ni, 88m @ 0.78% Ni, 88m @ 1.23% Ni and 53m @ 1.77% Ni in Mitaba Hill and 52m @ 0.71% and 50m @ 0.76% at the Mitaba west prospect.

Lithic completed detailed geological mapping, trenching, heli-borne magnetometry and heli EM (VTEM) surveys, 5138m of diamond drilling as well as extensive ground IP surveys over both prospect areas.

Although drilling did not encounter significant nickel mineralization at depth, the widespread occurrence of nickel in the top 10 metres of the ultramafic units prompted Lithic to undertake a trial nickel leach test programme on a 50kg bulk sample of partially weathered (saprolite) ultramafic lithology from a central trench at Mitaba Hill.

Leach test work on sample material grading 0.95% Ni returned extremely rapid recovery times for nickel and cobalt. Using sulphuric acid at atmospheric pressure, 90% of nickel and 62.5% of cobalt leached into solution in just 4 days. Maximum nickel recoveries of 95% occurred after approximately 35 days’ leach time, with 84% recovery of cobalt in the same timeframe.

Lithic intends to conduct further metallurgical testwork on nickeliferous material from Mitaba Hill and Mitaba West in order to ascertain optimum leach conditions, with a view to defining economic parameters for a potential mining operation.

Business Development
Lithic are actively pursuing other opportunities within Africa.

Geographical Spread

The Company's nickel projects lie within the East African Nickel Belt, which is interpreted to extend for over 2,000 kilometres from Botswana through Zambia, Malawi, Tanzania, and Congo to Burundi. Recent nickel discoveries along this belt highlight the nickel and platinum potential of the region.

Board of Directors and Key Management

James (Jim) Kerr, Managing Director

David Ian Rawlinson, Non Exectutive Director & Chairman

Julian Ford, Non-Executive Director

Dr Geoffrey Johnson, Non-Executive Director

David Lunt, Non-Executive Director

Company Address

UK Ryder Court
14 Ryder Street
London, SW1Y 6QB


Telephone:	+61 (8) 9216 9000
Facsimile:	+61 (8) 9216 9090
Email:	info[at]lithicme.com
Website:	http://www.lithicme.com

Additional Address/Key Contact

Australia
Ground Floor
17 Ord Street
West Perth, WA 6005
Australia

Company Secretary and Registered Office
Canon's Court
22 Victoria Street
Hamilton HM 12
Bermuda

Tel:+61 (8) 9216 9000
Fax:+61 (8) 9216 9090

Laurence Read
Threadneedle Communications
Tel: +44 (0)20 7936 9696

Annual General Meeting

7 September

Year End

31 March

Nominated Brokers

W H Ireland

Nominated Advisors