Bielsdown EL6388 – north of Dorrigo, NSW


* 100% owned by Anchor Resources

* Wild Cattle Creek is an advanced antimony project with tungsten and gold credits
* Ten hole drilling program completed in August 2009 to expand the resource at depth and along strike
* 2009 JORC resource upgrade 880,000t at 2.0% Sb using a 0.5% Sb cutoff grade (contained metal 17,500t Sb) by SRK Consulting
* A further 12 hole drilling program was completed in the first half of 2010 to extend known mineralisation
* A resource update is currently underway
* Program to assess metallurgy and quantify demonstrated gold and tungsten credits
* A scoping study has commenced to evaluate the potential for a commercial mining operation

In 2009, a combined program of reverse circulation and diamond drilling successfully tested extensions to the shear/vein-hosted Wild Cattle Creek antimony mineralisation, both down dip and along strike, that were identified during the 2007 resource modeling and evaluation process. Anchor geologists have interpreted the mineralisation to have a shallow westerly plunge.

The initial program consisted of five holes designed to provide confidence in the existing resource geology and geochemistry, and more importantly, to test extensions of the mineralisation. Following the exceptional early results from the initial holes, the program was expanded to 10 holes. Holes consisted of a combination of reverse circulation pre-collars with diamond drillhole tails through the zone of mineralisation. Approximately 1800m of drilling was completed in these ten holes.

In early 2010, a second successful drilling program was completed at the Wild Cattle Creek deposit. Twelve holes incorporated a combination of reverse circulation and diamond drilling methods, testing the main deposit as well as a new target zone – the Jezebel target (2 holes) – some 400m further to the east. The objectives of the 2010 drilling included: expansion of the antimony resource, confirmation of results from drilling in high grade areas undertaken in the 1960s/1990s and further assessing the potential of tungsten and gold associated with the antimony mineralisation.

Background

The antimony focus has returned to the New England region (NSW) over recent years as Straits Resources commenced development of its Hillgrove underground antimony-gold mine late in 2008.

Anchor holds 100% of the Bielsdown Project (EL 6388), located 40km west of Coffs Harbour, which includes the old Wild Cattle Creek antimony mine. First production from the mine was in the late 1800s, with mining and exploration undertaken intermittently since that time. Historically, drill testing has been carried out in two phases, firstly during the 1960s (Dundee), with further drilling in the mid 1990s (Allegiance).

In early 2007, Anchor completed a compilation of historical exploration data to provide a resource estimate compliant with guidelines as setout in the JORC Code (2004) for the Wild Cattle Creek antimony (Sb) deposit. The study estimated a combined Inferred and Indicated resource, using a 1.0% Sb cutoff, of 459,000t at 3.0% Sb (13,900t contained Sb metal) contained primarily within the first 100m below surface:

Following Anchor’s successful drilling program of 2009, the resource was expanded to 880,000t at 2.0% Sb (17,500t contained Sb metal), using a 0.5% Sb cutoff grade. This resource was categorised by SRK Consulting as Inferred using guidelines as setout in the JORC Code (2004).

A second successful drilling campaign was completed in 2010, with a new updated resource estimate by SRK Consulting expected to be completed in the third quarter of 2010.

Antimony Price

Anchor’s belief in the long term prospects for the antimony market is supported by surging global antimony prices.

The antimony price has surged to record levels to August 2010 as traders report a shortage of available material from the largest producing country – China. Since early April prices have leapt from around US$7,000/t with some recent reported trades around $10,000/t, equivalent to ~US$4.50/lb. This is up a staggering 55% since the start of the year.

The graph below shows the price history for antimony over recent years.

What is antimony?

Stibnite (Sb2S3) is the main ore mineral of the element antimony (Sb). Antimony ores are beneficiated and processed into antimony metal or oxide. Antimony mine production is concentrated very heavily in China (91% of world output in 2008 – USGS). Antimony is primarily used as an enhancer of flame retardants or a hardening and strengthening agent for lead and zinc alloys. These alloys are used in lead storage batteries, solder, sheet and pipe metal, bearings, castings, ammunition and pewter, particularly for use in wet-cell batteries.

· The recent strength in antimony pricing is shown in the graph below from Metalprices.com