Overview

Ann Mason Copper Gold Molybdenum Project - Nevada USA

Description
The 100% PacMag owned Ann Mason project boasts a mineral resource of 810 million tonnes @ 0.4% copper, 0.004% molybdenum (7.1 billion pounds of contained copper metal). High grade copper and molybdenum mineralisation, such as 650 metres @ 0.67% copper including 234 metres @ 1.07% copper, 0.02% molybdenum, were intersected on the southern margin of the deposit. The Company’s current focus is on testing large gaps to the north west along trend of these higher grade copper intersections as well as to the east where the deposit remains open.

PacMag holds a commanding land position in the Ann Mason area, one of North America’s exciting resurgent copper districts. The Company was an early starter in the district and assembled a high-quality portfolio of deposits and targets prior to significant competitor activity. The district has past and current endowment of 24 billion pounds of copper and is now the focus of significant exploration and pre-development activity by numerous North American copper companies in competition with PacMag (Figure 1).

Location
Nevada, USA

Figure 1: Ann Mason Copper District 1

Project Status
Drilling is in progress at the Company’s Ann Mason project with planned drill testing of a total of nine targets including three resource/resource-extension targets and six high-grade copper skarn targets within close proximity to the Ann Mason deposit.

North West Resource Target

The first of three drill holes completed in the Ann Mason northwest resource target area by PacMag to test potential for high-grade copper mineralisation in an area of sparse previous drilling returned a massive zone of copper and molybdenum mineralisation with associated silver and gold over a 667.5 metre interval estimated to be close to true thickness. Results include 667.5 metre interval grading 0.44% copper equivalent, containing higher grade intervals such as 292.6 metres (960 feet) @ 0.57% copper equivalent. The results extend the higher grade copper trend approximately a further 100 metres north and west of previous drilling. A further two holes have been completed on this target, from which results are currently awaited.

Figure 2: Ann Mason Deposit

Ann Mason East Target

Drilling is in progress on hole (Ann07009) part of a section of three drill holes (Ann07007, 8 and 9), 300 metres east and outside the current Ann Mason resource and scoping study conceptual pit limits. These eastern holes are testing a 600 metre zone from the end of the existing resource that will, if successful in defining further copper-mineralisation potentially add additional resources as well as improve the overall ore to waste strip ratio of the deposit and impact favourably on the project economics (Figure 2). Furthermore the holes will test the eastern up dip extension of the gold rich bornite zone, that was intersected at depth in hole Ann07004 in the north west of Ann Mason.

Ludwig – Casting - Minnesota- McConnell – Ann South High-Grade Copper "Skarn" Style Targets

Recent results highlighting the potential of the Ann Mason district include high-grade copper drilling intersections such as 68.5 metres averaging 2.87% copper and 28.9 metres averaging 3.98% copper intersected by Nevada Copper Corporation (TSX-NCU) in their Lyon copper skarn deposits located approximately 10 kilometres east of PacMag's claims. This style of mineralisation and its geological setting intersected by NCU is similar to PacMag's Ludwig, Casting, Douglas Hill, McConnell, Minnesota and Ann South targets.

The average historical production grade of nearly 4% copper of the Ludwig, Douglas Hill and Castings copper mines, coupled with the fact that past production was largely restricted to near-surface oxidized ores, argue for very favourable exploration potential for high-grade sulphide copper ores. Moreover, the property is clearly under-explored, having been the subject of only one copper-directed exploration program, and none since 1968.

Tangible indications of high-grade sulphide copper mineralisation extending to depth are evident at the Ludwig Mine, both in the lower workings of the mine where a (15 to 30 metres) wide body of sulphide ore grading 2% copper was exposed at the bottom of the mine and in the 6.4% copper intercept in the single Union Pacific core hole DH-8 drilled east of and some 290 metres below the base of the historical workings. Potential down-dip extensions of mineralisation at the nearby Douglas Hill and Casting mines remain unexplored.

Three dimensional IP geophysical surveying was undertaken by PacMag over the Ludwig-Castings-Douglas Hill and Minnesota properties. The surveys have been very successful in confirming the potential strike extensions of the prospective rock sequence beneath shallow alluvium as well as providing new targets below historical underground mines, that will be tested in the current drill program.

Blue Hills Prospect

Drilling completed in early 2007 at Blue Hills confirms a new large porphyry copper system located 2km west of the Ann Mason deposit. Wide intercepts of copper sulphide mineralisation have been identified in broad spaced step-out drill holes covering around 750 metres across the system including; 46 metres @ 0.4% copper equivalent to end of hole with the last 34 metres of the hole containing strong molybdenum mineralisation (averaging 0.03%molybdenum). Follow up drilling is planned for 2008.

Blue Rose Copper Gold Molybdenum Project - South Australia (Olary JV)

Project Description
The Blue Rose copper-gold joint venture project covers 2 tenements with a total area of approximately 1,000 square kilometres. PacMag is the manager of the JV and holds a 51% interest; Giralia Resources retains a 49% contributing equity.

Drilling by former owner Giralia and more recently by PacMag has intersected significant copper and gold mineralisation within a sedimentary rock sequence adjacent to an altered Ordovician granite body (Anabama Granite) that is similar in age to the world class Cadia-Ridgeway deposits in New South Wales. Both secondary and primary mineralisation has been discovered at Blue Rose, with better intersections including 46 metres @ 2.2% copper and 0.8 g/t gold from 11 metres depth, (including 28 metres @ 3.0% copper and 0.8 g/t gold), 41 metres @ 1.62% copper from 9 metres depth, (including 24 metres at 2.14% copper, 0.12 g/t gold), 48 metres @ 0.82% copper, 1.01 g/t gold from 84 metres, 27 metres @ 1.41% copper, 0.33 g/t gold from 73 metres and 48 metres @ 1.04% copper, 0.22 g/t gold.

Preliminary metallurgical testwork indicates the copper oxide mineralisation is amenable to conventional acid leaching. Beneath the oxide zones drilling has intersected copper-gold-molybdenum sulphide mineralisation, which is open to extension along strike.

The Blue Rose Joint Venture is currently considering approaches from external parties interested in progressing development of the copper-oxide mineralisation at Blue Rose. The joint venture remains committed to the district and will continue to focus on the large highly prospective exploration acreage with drilling in progress at Netley Hill and further drilling planned of two additional targets.

Location
Olary Region South Australia, 300km north east of Adelaide

Project Status
Diamond drilling commenced in mid-January at the Netley Hill Prospect. The target has key parameters of a large porphyry copper-molybdenum mineralised system.

Induced polarisation (IP) geophysical surveying in August 2007 defined a very strong (10–30ms), large (3 km long by 1 km wide x 400 metre deep) IP chargeability anomaly below strongly anomalous copper and molybdenum results intersected in historic shallow percussion drill holes at Netley Hill.

Copper and molybdenum grades in previous drill holes increase at depth and are open at end of all holes drilled above the IP anomaly. Notably, the IP and geochemical anomalies lie at the centre of intense surface alteration within a 5 kilometre diameter (bulls-eye) magnetic anomaly in Ordovician age granite rocks intruded by porphyritic dykes.

The results from the geophysical survey integrated with the geology, previous drilling and magnetics were combined to define an outstanding drill target that will be tested in the current drill program. The Company has commenced an initial four hole diamond drilling program, with two fences of two holes to a planned depth of approximately 350 metres to test the central portion of this exciting target. The drill program will be approximately 5-6 weeks in duration

Cork Tree Copper Project - Western Australia

Project Description
Corktree is on the western edge of the Earaheedy Basin in Western Australia. The area has previously been explored by WMC and CRA, whose drilling returned samples including 24 metres @ 0.22% copper, 16 metres @ 0.26% copper, and 3 metres @ 1.6% copper.

The primary source of the widespread secondary copper mineralisation at Corktree has not yet been found, nor has the near-surface anomaly been closed off. The location of the prospect at the edge of a mid-Proterozoic sedimentary basin abutting a basement high, and the presence of metalliferous inclusions in hydrocarbons, suggest potential for large sediment hosted base metal mineralisation such as that mined at Mount Isa in Queensland.

Location
Western Australia

Project Status
Awaiting tenement grant.

Arrino Copper Project - Western Australia

Description
The Arrino prospect is located in the Irwin sub-basin, 250 kilometres north of Perth. Known copper mineralisation at Baxters has previously been subjected to exploration by MIM, BHP and CRA, including geophysics and limited drilling (better intersections include 4.5 metres @ 2.35% copper). A substantial aeromagnetic anomaly and partly coincident gravity feature east of known copper mineralisation remains unexplained and untested. A surface copper in soil anomaly is coincident with the up-dip projection of the western edge of the magnetic feature, and drilling in this area recorded native copper and malachite disseminations.

Location
Western Australia, (refer to map)

Project Status
Data compilation of previous exploration activities has commenced on the Arrino Project in order to refine drill targets.

Uranium Projects

Description
The advanced Sundance uranium project that PacMag is divesting includes major parts of the Oshoto uranium deposits in Wyoming, USA. Historical drill intersections from the area acquired include; 3.8 metres (12.5 feet) @ 0.243% eU3O8, 3.5 metres (11.5 feet) @ 0.159% eU3O8, 6.2 metres (20.5 feet) @ 0.083% eU3O8 and 9.1 metres (30 feet) @ 0.056% eU3O8 with local vertical stacking of uranium roll fronts.

The portfolio includes eight wholly owned licences and applications covering known uranium occurrences in South Australia and uranium endowed channels in the northern portion of the Yilgarn Craton located in Western Australia.

Location
Wyoming USA, South Australia and Western Australia

Project Status
PacMag Metals Limited (ASX:PMH) and Peninsula Minerals Limited (ASX:PEN) have agreed to merge their international uranium projects, spanning 3 continents.

PacMag will receive 200 million fully paid ordinary shares in PEN as consideration, and a refund of its costs to date ($200,000) in exchange for its Wyoming USA, South Australian and Western Australian uranium projects.

Subject to regulatory and shareholder approval, PacMag intends to distribute at least 80% of the PEN consideration shares in-specie (free) to holders of PMH ordinary shares at a ratio of between 1.05 and 1.55 PEN shares for each PMH share held at the record date, with the final ratio depending on the exercise of PacMag options. Holders of PacMag options (ASX:PMHOA) will need to exercise their options into ordinary PMH shares if they wish to be eligible to receive the in-specie entitlement. Post the in-specie distribution of consideration shares, PacMag will retain a share holding in PEN of approximately 4.7%.

PacMag will continue to focus on its advanced copper-molybdenum-gold assets at Ann Mason in the USA and Blue Rose in South Australia as well as continuing to assess additional advanced resource opportunities.

PacMag’s rationale is to unlock value for its shareholders by enabling a well funded (PEN held $4.5 million cash at 31/12/06), dedicated uranium exploration team provided by Peninsula to ensure rapid resource definition on the combined advanced stage uranium projects of Karoo in South Africa and Sundance in Wyoming (USA) with the simultaneous progression of PacMag’s copper-molybdenum-gold projects.

New Uranium Projects Under Review
In addition to the uranium projects recently divested to Peninsula Minerals Limited, the Company continues to review uranium resources, particularly in the USA where PacMag has established presence and a competitive advantage in acquisitions, which could if successfully secured, be stand alone projects. If the company is involved again in the uranium sector it will only be via advanced uranium resource opportunities.

Horse Spring Zinc Project - Western Australia

Description
PacMag Metals Limited has sold to Zinc Co Australia Limited (ZCA) all data and information pertaining to the Horse Spring Zinc Project in the Kimberley District Western Australia.

Subject to its successful listing on ASX of ZCA, 300,000 ordinary shares in ZCA shall be allotted to PMH. The ZCA prospectus is currently on offer and anticipated to close mid-May 2007.

The Horse Spring Zinc Project is located in the Kimberley District of Western Australia. Previous exploration drilling returned significant zinc and lead sulphide mineralisation from depths generally less than 100 metres, hosted by limestone in and adjacent to the Linder Hill Fault Zone including:

HPD1 4m @ 7.65% Zn + 0.42% Pb
HPD2 26m @ 1.5% Zn + Pb
HPD3 10m @ 3.0% Zn + Pb
HD7 4m @ 1.2% Zn + Pb and 4m @ 1.2% Zn + Pb
HD16 4m @ 3.4% Zn + Pb

Mineralisation at Horse Spring is of the Mississippi-Valley-Type and similar to that currently being mined at the Falconbridge - Teck Cominco Blendevale Deposit (20Mt @ 8.3%Zn and 2.5% Pb) and previously mined at the Cadjebut Deposit (3.2Mt @ 14% Zn and 4.8% Pb) located 35km south- west and 55km south respectively.

Location
Kimberley District Western Australia

Project Status
The project requires additional drilling to test for zinc deposits hosted within carbonate rocks cut by the Linder Hill Fault Zone. The target is well defined and warrants a significant further exploration effort.