Testing at Gindalbie Metals" Karara Iron Ore Project in Western Australia has confirmed the presence of an extensive zone of high-grade magnetite mineralization beneath the existing hematite resource.

The testing involved Davis Tube Recovery (DTR) work on drilling under the existing BH2 hematite deposit.

The high grade magnetite material produces a Direct Reduction ('DR') quality magnetite concentrate, grading more than 70% iron at greater than 45% weight recovery.

The mineralization occurs below the level of oxidation and extends to the base of drilling at a depth of 250 metres below surface. Drilling covers a strike length of about 800 metres and defines mineralization consistently between 50 metres and 70 metres horizontal width.

The BH2 deposit is one of 10 hematite deposits which comprise the hematite resource inventory of 27.1 million tonnes at 61.7% iron at Karara.

To date 3800 metres of RC samples have been submitted to test the liberation characteristics of enriched magnetite alteration at BH2. The results were extremely encouraging with a premium quality concentrate being produced from the combined suite of samples. This highlights the potential of the magnetite mineralization located beneath the hematite resources to deliver substantial future value for Gindalbie as this material has not been included in the company's current resource estimate.

The drilling confirms the company's view that the Direct Shipping Ores (DSO) at the Karara Iron Ore Project comprise near-surface supergene ore that marks areas of high grade magnetite enrichment at depth.

Ongoing drilling is being undertaken at BH2 to test the extent of this style of mineralization to the north and south of the planned hematite open pit. The geological model identified at BH2 is also now being applied across the Karara Iron Ore Project and the company is confident that further high grade magnetite mineralization is likely to be defined. www.gindalbie.com.au