Aphrodite Gold Project

Company Background

The  Aphrodite Gold Project is located 65 kilometres north of Kalgoorlie in the Eastern Goldfields of Western Australia. The 1.033,000 Ounce JORC Resource at the Aphrodite Gold Project was classified  as a resource on 24 March 2011. The resource comprises 10.06Mt averaging 3.19g/t Au for a total of 1,033,000 Ounces in JORC compliant Indicated (451,000 Ounces) and Inferred (582,000 Ounces) Resource categories.

Kalgoorlie is the premier gold producing region of Australia with a long history of mining and discovery of substantial gold deposits. The Golden Mile alone has produced over 50 million ounces of gold and KCGM's Super Pit continues to produce about 800,000 ounces of gold each year.

The Paddington Gold Mine and Kanowna Belle gold operations, which are near the Aphrodite Gold Project are producing or expected to produce about 250,000 ounces of gold per annum for the next 5-10 years.

The Company acquired the advanced Aphrodite Gold Project from Apex Minerals NL in November 2009 following Apex's decision to focus on its Wiluna gold mining operation. The purchase price of $7.2 million in cash and scrip paid for 100% of the Aphrodite Gold Project equates to less than A$8 per in-situ Ounce based on the 983,000 Ounce JORC Resource.

In return for the financial and technical support provided by Eagle Eye Metals Aphrodite Gold has granted Eagle Eye an option to purchase a 20% contributing interest in the Aphrodite Gold Project at any time until 30 June 2011. The consideration payable on the exercise of the option is 20% of the total purchase price of $7.2 million, plus 20% of the direct exploration and development expenditure incurred by Aphrodite on the Aphrodite Gold Project to the date of exercise. From the date of acquisition of its interest Eagle Eye will be required to contribute 20% of all ongoing exploration and development costs.

Aphrodite Gold Project

Gold mineralisation within the Aphrodite Gold Project was discovered in 1996 when Goldfields Limited drill tested a 1,200 metre long supergene gold anomaly identified during the previous year's calcrete sampling program. The first significant intersection returned from the 1996 drilling was 10 m @ 8.6 g/t gold from within the weathered bedrock (saprolite) above what was subsequently labelled the Alpha zone.

Follow-up drilling campaigns in 1998 and 1999 testing the primary gold mineralisation in the fresh bedrock within, and around, the Alpha zone discovered two gold lodes, termed Alpha and Phi, whose initial intersections included 16 m @ 10.94 g/t gold and 30 m @ 5.5 g/t gold respectively.

The Independent Geologist has estimated the 1,033,000 Ounce JORC Resource of gold at the Aphrodite Gold Project.

In addition to the 1,033,000 Ounce JORC Resource, a significant inventory of unclassified gold mineralisation exists within and adjacent to the Alpha and Phi deposits.

(a) Alpha lode
The Alpha lode occurs along a sediment-porphyry contact and is controlled by a north-northwest-trending fault zone that acted as the primary conduit for fluid flow and, thus, mineralisation. The result is a zone of mineralisation with average width within the porphyry unit of 5 metres and which increases significantly to 20 metres within the sedimentary unit. Drilling has confirmed that the gold mineralisation at Alpha continues for at least 650 metres below the surface, opening up the potential for an underground operation of the Alpha lode following any open pit mining.

Previous work on the Alpha lode, including historic drilling, assumed the strike length of this gold lode was limited to 430 metres. However the Independent Geologist states "that the Alpha lode may have a total strike length of up to 1,400 metres."

(b) Phi lode
The Phi lode is located only 200 metres west of the Alpha lode and comprises three parallel zones of gold mineralisation within a sediment package. Each mineralised zone within the Phi lode has an average width of 6 metres and extends to a depth of at least 400 metres. These zones are yet to be closed off by drilling thus remaining open at depth.

Primary mineralisation at Phi extends for at least 450 metres along strike and recent modelling indicates the strike length of the Phi zone may be approximately 1,800 metres.


Exploration Potential within the Alpha-Phi System

Exploration to date has primarily focussed mostly on the Alpha and Phi lodes within the Aphrodite Gold Project area. The Alpha-Phi system, however, hosts other known gold mineralisation lodes that have been identified through previous drilling. These include mineralisation at the Epsilon, Gamma and Omega lodes, which have the potential to host new gold deposits.

(a) Epsilon lode
The Epsilon lode is situated between the Alpha and Phi lodes (the two lodes containing Aphrodite's current 1,033,000 Ounce JORC Resource). Gold mineralisation at Epsilon is similar in style to the adjacent Alpha lode and is interpreted as a northeast-striking lode that joins the Alpha and Phi lodes. It is best considered as a component of the Alpha-Phi system.

(b) Gamma lode
The Gamma lode has likewise seen very little exploration despite being situated only 200 metres east of the main Alpha lode and having returned encouraging assay results from the limited drilling undertaken over this lode to date.

(c) Omega lode
The Omega lode is located 40 metres west of the Phi lode and is hosted within a sedimentary unit. The Independent Geologist reports that this gold lode has a strike length of up to 1,000 metres and continues at depth for 200 metres (refer to Independent Geologists' Report Section 2.4.2). Some of the Omega lode has been modelled by the Independent Geologist and incorporated in its resource estimate.


Exploration Targets identified across the Aphrodite Gold Project

Reconnaissance exploration programmes have identified a number of exploration targets outside the Alpha-Phi gold system that could potentially become new gold deposits within the Aphrodite Gold Project. These regional targets include the North Menelaus and Hera Prospects located 4 kilometres north and 2 kilometres northeast of the Alpha-Phi lodes respectively.

(a) North Menelaus Prospect
Drilling at the North Menelaus Prospect has previously returned intersections that include 4 m @ 11.42 g/t gold and 9 m @ 1.52 g/t gold. This mineralisation is controlled by a structure that runs sub-parallel to the structure hosting the Alpha-Phi lodes. Encouragingly, gold mineralisation at the North Menelaus Prospect was intersected near the sediment-dolerite contact and appears to have similar alteration to that associated with 'bonanza' (>10 g/t gold) and 'high grade' (5 — 10 g/t gold) mineralisation at the Alpha and Phi lodes.

(b) Hera Prospect
The Hera Prospect sits along strike of the Chameleon Prospect, which occurs just beyond the boundary of the Aphrodite Gold Project. Recent drilling over the neighbouring Chameleon Prospect returned intersections including 32 m @ 3.78 g/t gold, 22 m @ 5.43 g/t gold and 5 m @ 5.08 g/t gold. While no significant drill intersections have been recorded at the Hera Prospect to date, soil sampling and RAB drilling have identified gold anomalism within this Prospect that warrant further investigation.


Gold Mineralisation and Processing

The primary gold mineralisation at the Aphrodite Gold Project is classed as refractory, meaning the gold is associated with sulphides and not easily liberated. Refractory gold is not uncommon within the Kalgoorlie Terrane of the Yilgarn Craton.

Gold mineralisation at KCGM's SuperPit and Barrick's Kanowna Belle gold mines to the south of the Aphrodite Gold Project, both contain (and process) refractory gold mineralisation.

A number of methods are currently available to extract refractory gold from its host rock. Previous testwork on samples of mineralised material from the Alpha and Phi gold lodes demonstrated that a recovery rate of up to 96% is achievable for gold contained within fresh bedrock.


Proposed Expenditure

Aphrodite raised $9.3 million though its mid 2010 IPO. These funds are progressing exploration and development of the Aphrodite Gold Project and will fund the expected pre feasibility mining study within two years of the IPO.

A $5.5 million exploration and development program has been proposed by the Independent Geologist in the first two years.

In summary it includes:

a.  20,000 metres of mostly reverse circulation (RC) drilling to identify new deposits and increase the current

     near surface resource inventory.
b.  10,000 metres of infill RC drilling to upgrade the classification/category of the resource.
c.  Metallurgical and geotechnical sampling and testwork (including diamond drilling), hydrological studies and

     environmental impact assessments.
d.  A mine feasibility study including a revised resource estimate, modelling an open pit for surface mining operations,

     design of a proposed process flow sheet, project infrastructure requirements and operating and capital cost estimates.

Aphrodite will also receive further cash funds from Eagle Eye if Eagle Eye exercises its option to purchase a 20% interest in the Aphrodite Gold Project by 30 June 2011. These funds would be $1.44 million plus reimbursement of 20% of the total amount expended on direct exploration and development on the Project to the date of exercise of the option. Eagle Eye would then also contribute 20% of all ongoing costs.

Proposed exploration and development programm and budget

Aphrodite plans to implement a focused and cost effective exploration and development program over a two-year timeframe summaried in the following table:



The above exploration activities and budget will be subject to modification on an ongoing basis

Aphrodite also intends to exploit other opportunities which may result in costs incurred that are not in these estimates.

Mr Warren Staude BSc MSc MAusIMM FFin
Non-Executive Chairman

Sydney-based Warren has long term professional experience in mining and mineral exploration, resource investment and portfolio investment management.

He currently sits on the Joint Ore Reserves Committee (JORC) in Australia.

Over the past 20 years Warren has been engaged in institutional investment management and research, at AMP and GIO. Following AMP's takeover of GIO he assumed a leading role in establishing a specialist international resource equity investment fund and in providing corporate advise and assisting fund raising

Previously he has worked as a consulting geologist in Government and industry, and on the academic staff at Macquarie University.

Warren is a director of minerals explorers Malachite Resources NL, Central West Gold NL, Frontier Resources Limited, Stonehenge Metals Limited, Atom Energy Limited and Eagle Eye Metals Limited.

He is a Graduate of the University of Sydney (BSc, Geology), Macquarie University (MSc, Mineral Economics), is a Member of the Australasian Institute of Mining and Metallurgy and holds a Graduate Diploma from the Securities Institute of Australia.


Wayne Ryder FCA FAICD MSME
Executive Director, Finance and Administration, and Company Secretary

Wayne has been involved in the mining resources sector for many years. He has worked on ASX and NASDAQ listings of several of mining companies and has associations with US-based exploration groups as well as key US capital market resources investors.

Wayne has held directorships with a number of explorers and producers in an executive and non-executive roles and is currently executive chairman of ASX listed Eagle Eye Metals Limited. He has also acted as the company secretary of a number of ASX listed public companies including mining and exploration companies in Western Australia and manufacturing companies with operations in Australia and China.

Perth based Wayne is a Fellow of the Institute of Chartered Accountants in Australia, a Fellow of the Australian Institute of Company Directors and a Member of the Society for Mining, Metallurgy and Exploration in the United States.


Leon Reisgys BSc(Hons) Grad Dipl FAusIMM MAIG
Executive Director, Exploration and Development

Leon based in Perth in his vital role as the manager of the Aphrodite Gold Project and leader of technical teams in Perth and Kalgoorlie.

He has extensive experience in the successful exploration and/or development of gold and other precious metals projects, base metals, uranium and mineral sand deposits in Australia and internationally. He has previously served as managing director and chief executive officer of several ASX listed companies.

Leon holds a Bachelor of Science (Honours) degree in Applied Geology from the University of New South Wales and a Graduate Diploma in Mineral Economics from Macquarie University. He is a Fellow and Chartered Professional of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists.


Ken Jackson FCA
Non-Executive Director

As a Chartered Accountant and the former managing director of Montagu Stockbrokers, Ken has been involved in the public company arena for many years. His experience includes involvement with a large number of new listings on the ASX, many of in the minerals industry.

He is currently a director of corporate advisory company Equity Finance & Securities Pty Ltd

He is a Fellow of the Institute of Chartered Accountants in Australia.


Heath Sandercock BE(Mining)(Hons) FAusIMM MMICA MSME
Non-Executive Director

Heath is a mining engineer and the principal of Sandercock and Associates Pty Ltd. He has over 35 years experience in metaliferous, gold and other precious commodities mining projects, including operations management, mine development and construction, management of feasibility studies, project financing and mine closure and rehabilitation. This experiance spans Australia, Southeast Asia and the Pacific.

Sydney based, he holds a Bachelor of Engineering in Mining from the University of New South Wales, is a Fellow of the Australasian Institute of Mining and Metallurgy, a Member of the Mining Industry Consultants Association and a Member of the Society for Mining, Metallurgy and Exploration in the US.