Allegiance Mining has received further encouraging drill intersections from recent core drilling on the Melba Flats project, 10km north of Zeehan in Western Tasmania.

 Drill hole MF 75, designed to test for extensions of the identified copper-nickel-gold-PGM resource at Nickel Reward, intersected two zones of coarse grained sulfide mineralization interpreted as two branches of a single gabbro dike.

MF 75 plots 15 metres east of MF 12, which intersected 5 metres wide of  0.7% nickel, 0.5 % copper.

Drilling of the gabbro dike which hosts the nickel reward deposit has been constrained to date by access to suitable drill sites. This issue is currently being addressed.

 Deeper and more systematic drilling should be possible when drilling restarts in March-April.

 At Melba Flats, nickel-copper sulfides were historically mined along a series of gabbro dikes over an intermittent strike length of 3km.

 Allegiance has now identified modest resources at Nickel Reward and North Cuni on the southern and northern ends respectively of these dikes.

 Allegiance mining chairman Tony Howland-Rose says, "It is envisaged that these shallow resources could be developed by small open-cut mines, and crushed ore transported to either the Avebury Mill (scheduled for completion in late 2007) or

another suitable milling facility in the district. Mining could then be extended underground to any deeper extensions identified by future drilling."

 In response to the encouraging results to date, Allegiance plans to apply in the near future for a Mining Lease over the Melba Flats resource areas, and start the necessary technical and environmental studies ahead of development.

 "The results from Melba Flats continue to show promise. As Avebury progresses towards production more emphasis will be able to be placed on unravelling the complex geology at Melba," Tony Howland-Rose says.

 "Duplications, depth and strike extensions of the shallow deposits identified at Nickel Reward and North Cuni will be thoroughly investigated. We are confident that a viable mining operation is possible at Melba, now we have our own facility at Avebury.

 "The Application for a mining lease over the Melba Flats deposits will commence that process."