SARINC

The Iglesiente-Sulcis province located in the south-west of Sardinia, Italy, is one of the oldest mining districts in the world, with production dating from before 1000 BC. In context of the modern era, early mining targeted for lead and silver deposits (and copper to a lesser extent) followed by zinc and barium. During its peak mining period early in the 20th century, around 60 mines existed but over the ensuing decades, ore depletion and a lack of new discoveries saw mine numbers dwindle. Low metal prices during the 1990s resulted in the last of the mines being closed.

The two main mining regions of the Montoponi/Iglesias valley and the Montovechio/Ingurtosu area have differing mineralization styles. Both regions appear to have been formed during the Paleozoic and both contain significant lead, zinc and silver deposits. They differ in mineralization styles, geological host rock setting, ore geometry and ore type mineralogy.

The Montoponi/Iglesias is classed as a “Mississippi valley” style mineralization with columnar shape swarm veins of Pb-Zn sulphide ore whilst the Montovechio/Ingurtosu area is characterized by skarn mineralization hosting large galena sphalerite veins having long continuous strike and depth extents.

The legacy of many centuries of mining is many separate tailings dams and disposal sites of sizes ranging from tens of thousands of tonnes to major ones containing millions of tonnes. The majority of the remaining dams are poorly constructed and all are known to leach heavy metals and/or acid drainage into the surrounding rural and semi-rural areas. A number of natural entrapment areas exist located within and near coastal swamps and perched valleys, which have caught and contained finer tailings material eroded from the dams or that were discharged directly into the steep valleys and waterways.

Kingsrose has been provided with various data from work undertaken on the majority of the tailings deposits by local agencies, including drill samples results and other information. It is not yet possible to accurately ascertain the quantities of metals contained within the deposits but the data received does indicate that there is potential for a large, long life operation focussed on the recovery of zinc, lead and silver. Kingsrose has carried out preliminary analysis of the data provided and has calculated a target of between 70 – 90 million tonnes of material with an overall average target grade of between 1.7 – 2.5% zinc and 0.4 – 0.6% lead with some areas grading up to 10% zinc and other areas showing grades below 1% zinc. The silver content of the deposits are not known as silver has not been assayed due to it not having been considered an environmental pollutant.

It should be noted these figures and comments are considered conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain at this stage if further exploration will result in the determination of a mineral resource.

INITIAL PROJECT OBJECTIVES

Conceptually the SARINC Zinc Tailings Project will involve the collection of contaminated soils and historic tailings dumps scattered throughout the region for re-processing at a single large processing plant. The tailings would be transported by road, slurry pipe or other means to the centrally and strategically located process plant. The site for this plant would be selected with a view that a tailings residue of volume capable for the long term storage and encapsulation of up to 100 million tonnes of residues in one position. Kingsrose will not be under any obligation to treat uneconomic sections of the deposits.

The various tailings that cover the area represent multiple ore bodies, all of which are expected to have a unique metal and mineralogical profile dictated by the ore genetic profiling when the mineral deposits were formed. Consequently, the expected retreatment process for each dump will require its own specific test-work and analysis to determine the optimum route for metal extraction.

Kingsrose will undertake the first three phases of the project evaluation process as follows:

1. Measurement and Quantification - Drilling, sampling assaying, surveying and bulk density estimation of the various tailings dumps to accurately determine tonnages and metal contents.
2. Metallurgical Test work - The profiling of data collected from individual tailings dumps into representative samples to perform mineral extraction studies and designing of metallurgical process flow-sheets.
3. Project Feasibility Studies - The physical and financial profiling of the re-mining, mineral processing, reclamation and environmental management of the project.

The first two phases are aimed to be completed by September Quarter 2010 at a cost of approximately US$2.5m with the third phase anticipated to take a further 6 – 12 months (it is not yet possible to estimate the cost of this stage). Kingsrose intend the drilling programme will provide sufficient data to enable a JORC compliant Resource to be reported.

Kingsrose will be working closely with Sardinian government agency, IGEA SpA (Interventi Geo Ambientali – Geo Environment Intervention), the organisation responsible for the management and rehabilitation of closed mine sites on Sardinia. Kingsrose has senior personnel who are experienced in operating in Sardinia and who have a strong network of governmental and corporate contacts.