iron project

The Company's tenements include areas that have known iron occurrences and are prospective for Clinton style oolitic iron mineralisation.

Recent geological mapping by the Northern Territory Geological Survey ("NTGS") has identified outcrop and sub-crop of iron-bearing formations on the Company's tenements that lie within the South Nicholson Group. NTGS confirmed that one of these formations is equivalent to the host unit for the Constance Range iron ore deposits that lie just over the border in Queensland. The style of mineralisation has been described as Clinton type oolitic ironstones.

Iron ore exploration was conducted in the Constance Range area in Queensland in the early 1960s. Results for this exploration are based upon historical data that was prepared before the introduction of the JORC Code and as such is not able to be included in this Prospectus.

Since the discontinuation of the Constance Range iron ore project in the early 1960s, iron ore industry economics have changed considerably. The massive stratiform oolitic ironstones for which the Company's South Nicholson Basin tenements are prospective and has known occurrences, make it an excellent iron ore exploration target.

The Company's tenements in the South Nicholson Basin are under explored for iron ore and have considerable potential to convert known iron occurrences into commercial tonnages and grades. From recent mapping and site visits the Company has defined target areas for follow up.

It is the intention of the Company to follow up these targets with field mapping and sampling.

Oolitic Iron Mineralisation

Phosphate Australia Limited Chairman Jim Richards and Technical Director Lisa Wells Inspect Oolitic Iron Mineralisation on the Company’s Tenements in the South Nicholson Basin

Iron Mineralisation Targets with Aeromagnetic Image

Figure 1: Iron Mineralisation Targets with Aeromagnetic Image

Clinton Type Oolitic Iron Conceptual Model />

Figure 2: Clinton Type Oolitic Iron Conceptual Model for the Company's Iron Project