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Approvals

In late 2007 the West Australian Government conducted a Strategic Review into the development of iron ore projects in the Mid West region of WA.

One of the key conclusions of this review was that the Government was pre-disposed to supporting the development of iron ore mining on Gindalbie’s Karara Iron Ore Project tenements, which host the main magnetite deposit and several smaller hematite deposits.

This review was a positive development which highlights that the State Government is adopting a proactive approach towards the development of new resource projects.

Gindalbie continues to work very hard to secure the key environmental approvals required for construction and development of Karara to begin.

Magnetite Phase
The Public Environmental Review document for the Karara magnetite phase has been lodged and the Company is working closely with Government agencies to ensure the timely delivery of the approvals for Karara, which remains on track for initial production of magnetite concentrate in 2010.

Hematite Phase
The Public Environmental Review period for the hematite phase of Karara is nearing completion with the final submission of the public environmental review being made to the environmental protection agency in July 2008. The project, which is made up of deposits located on both the Karara and nearby Mungada tenements, is receiving overwhelming public support.

However, in working with the Government agencies it has become apparent that the tenements which cover the Mungada hematite deposits present significant environmental impact assessment challenges which may have a short-term effect on the hematite phase.

In light of this, Gindalbie is continuing to work with Government agencies for a positive outcome and is confident of being able to start producing hematite from Karara in 2009.

Ore from the initial hematite phase currently makes up less than 5% of the overall Karara Iron Ore Project while the magnetite phase, which the Government has already said it is pre-disposed to support, represents a company-making opportunity for Gindalbie which will deliver significant returns to shareholders.