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31 January 2011

QUARTERLY ACTIVITIES REPORT December 2010

Highlights

Iron Ore

Further drilling at Mt Webber planned by JV manager, Atlas Iron during 2011, which is expected to significantly increase the ore reserve estimations

Coal

Mining approvals process continues at Tabalong Coal Project.

Further assessment and planning for product coal transport and route approval continued in preparation for coal production.

Lithium

Field mapping work undertaken in the quarter in preparation for drilling in Q1 2011

A follow up drilling program commenced in January 2011 to establish the extent and the resource potential of this highly mineralised spodumene pegmatite.

Garnet

Review of mine plan and mining method to address a strengthening Australian Dollar

Altura Mining Limited – Australian Project Locations

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Altura Mining Limited – Quarterly Activities Report December 2010

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IRON ORE MT WEBBER (Pilbara – Western Australia) 30% Altura Mining Limited, 70% Atlas Iron Limited The Mt Webber Iron Ore Project is located 150 kilometres south‐southeast of Port Hedland in the world’s premier iron ore province, the Pilbara. It is approximately 40 kilometres east of the Fortescue Metals Group railway line and immediately north of Woodstock Road, which connects Marble Bar to the Great Northern Highway (see Figure 1). Altura has a 30% interest in the Mt Webber Iron Ore DSO project (and five other Pilbara tenements that form part of the joint venture agreement) in the Pilbara. Atlas Iron is Altura’s joint venture partner for this project. Under the terms of the agreement, Altura remains the owner of the Mt Webber and other tenements, totalling 333 square kilometres.

Figure 1 – Mt Webber DSO Project Location

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The project has the potential to be developed either as a stand‐alone operation, or as a satellite mine delivering run‐of‐mine ore to a central processing facility. Atlas currently operates iron ore mines at Wodgina and Pardoo and will provide expertise in the development and eventual operation of Mt Webber. Atlas as the managing partner had planned to complete (by Q4 2010) further drilling aimed at upgrading further Mineral Resources to Ore Reserves, however due to delays this work is now expected to complete by end of Q1 2011 (see Figure 2 below).

Figure 2 – Reserve, Resource and Prospect Location, Mt Webber DSO Project In December 2010 Atlas announced a recommended off‐market takeover offer for all of the shares in Giralia Resources (ASX: GIR). Giralia own 75% of the Daltons DSO Joint Venture neighbouring Mt Webber along with other Pilbara iron ore prospects. Atlas has indicated to Altura that at this stage there is no planned change to Atlas’ previously announced development schedule of commencing production at the Mt Webber Iron Ore Project in 2012.

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COAL TABALONG (South Kalimantan – Indonesia) Thermal Coal (100% AJM) The Tabalong Coal Project consists of two (2) Mining Licences (IUPs) in the province of South Kalimantan on the island of Borneo. Currently both IUPs are granted for exploration purposes and Altura is seeking the necessary approvals to have them granted for operation production status. Altura is awaiting grant of the two (2) Mining Licences in accordance with the current legislation. The pre‐requisite documentation required for grant consisting of the Environmental Impact Statement and the Government Feasibility Study has been submitted to both Regency Councillor and Mines Department. The documents have been approved in principle and now await formal submission to support operational approval, however there is no definitive timeframe for these approvals. Subsequent to operational approval the Company will be required to gain clearance from the Minister of Forestry prior to commencement however the project does not cover any protected forest areas. During the quarter further assessment and planning for product coal transport and route approval has continued in preparation for coal production. Currently two (2) options remain with the first entailing approximately 120km haul to an offload point in the Barito River, whilst the second entails an approximately 25km haul to a discharge point to another mining entity. The current cost of production estimate (FOB barge) is US$60 per tonne for the 120km haul option however a reduction of US$13 per tonne is forecast if the shorter route is chosen. Thermal coal prices have firmed in Indonesia during the quarter with price yields greater than US$90 per tonne for Tabalong grade coal being achieved. The Company aims to develop Tabalong as a stand‐alone operation initially at a planned annual production rate of 300,000 to 400,000 tonnes per annum of premium thermal grade coal. The location of the Tabalong project also lends itself to satellite development of other mining permits. The area consists of numerous other smaller resource areas that have the potential to be operated simultaneously to provide increased tonnages and blended coal products. Altura is considering a number of potential adjacent projects that could be amalgamated into the development. COAL ‐ Indonesia During the quarter, Altura continued to source and review a number of other potential coal acquisitions in Indonesia. Following an extensive review, a short list of potential targets was compiled and discussions are continuing with a number of parties. The Company will inform shareholders and the market if an agreement can be reached and remains confident that a suitable coal project can be delivered in 2011. About Thermal Coal Thermal coal forms the backbone of worldwide energy supplies with Indonesia now the world’s largest exporter of thermal coal products. Recent innovations in coal beneficiation and clean coal technology point toward a strong future for coal to remain a reliable energy generation commodity.

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LITHIUM PILGANGOORA (Western Australia) Lithium, Tantalum (100% AJM) The Pilgangoora project is located approximately 120 kilometres to the south east of Port Hedland and is readily accessible from the Port Hedland ‐ Newman Road (see Figure 1). The Talison Minerals Wodgina tantalum mine is located about 25 kilometres to the west of the project area. During mid 2010 Altura undertook a Reverse Circulation (RC) drilling program at its wholly owned Pilgangoora Lithium Project in the Pilbara region of Western Australia. The drilling comprised 28 holes for a total of 1,510 metres and targeted three (3) areas (A, B and C) that were identified by geological mapping, rock chip sampling and costeaning (see Figure 4). This initial drilling revealed relatively narrow width pegmatites in areas A and C however area B is considered to be highly prospective with significantly elevated lithium mineralisation and substantial thicknesses of spodumene pegmatite. Updated results reported during November 2010 included drill hole PRC 027 intersected 60 metres (end of hole) of an average 1.65% downhole, drill hole PRC028 assayed 51m @ 1.77% Li2O and drill hole PRC022 an aggregated 22 metres @ 1.31% Li2O. Table 1 below summarises these results.

Table 1 – Pilgangoora Drilling Results – Assays greater than 0.3% Li2O

Area Hole No. East

GDA94 (m)

North GDA94 (m)

Dip/Az (Deg.)

From (m)

To (m)

Thickness (m)

Li2O%

A PRC 011 697,232 7,669,126 ‐60/310 0 6 6 0.45%

B PRC 026 697,368 7,668,677 ‐60/340 0 5 5 1.17%

6 23 17 1.45%

Including 7 metres @ 2.13%

B PRC 027 697,380 7,668,675 ‐60/042 0 60 60 1.65%


and 11 metres @ 2.06%

B PRC 028 697,401 7,668,679 ‐60/360 5 56 51 1.77%




Following the receipt of these significant assay results Altura fast tracked its application for the adjacent tenement, Prospecting Licence PL45/2758, and this was granted on 29 October 2010. The Department of Minerals and Petroleum (DMP) also advised on 13 September 2010 that it had granted the amalgamation into E45/2287 of the dead mining tenements M45/334 and M45/335. The incorporation of these areas considerably extends the area available for exploration and possible extensions to known lithium‐bearing pegmatites.

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In December 2010 Altura completed field mapping within the area of the mineralised drill holes and identified areas of pegmatite outcrop intruded into the mafic schist greenstone rocks over an area covering 200 metres in an east‐west direction and 150 metres in a north‐south direction. In order to establish the orientation of the pegmatites and their depth extent a follow up drilling program has commenced early in January 2011. Approval for the current drilling program was received in early December 2010. Figure 3 below shows the current pegmatite target area along with a diagrammatic cross section through the initial target area.

Figure 3 – Diagrammatic Cross Section – Resource Evaluation Drilling

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Figure 4 – Pilgangoora Prospect Areas A, B and C, Planned Drill Holes January 2011 and August 2010 drill hole locations

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The results from this work will provide the basis of determining the inferred lithium resources in this one prospect area and provide a basis for extending exploration to other areas where there are comparable geological lithologies and structure. The results from the current program are expected to be announced in Q1 2011. FINNISS RANGE (Northern Territory) Lithium, Tantalum (100% AJM) Altura has undertaken regional and prospect geochemical evaluation studies and a number of areas have been identified for more detailed follow up with drilling. In June 2010 Altura submitted a Mine Management Plan (MMP) to the Northern Territory Department of Resources for the proposed drilling of the 7 Up prospect, however there were delays in getting all the pre‐requisite planning approvals and existing commitments of Altura’s drilling rig. It is planned that this drilling be included in the programs for the 2011 field season which will commence in April ‐ May 2011. About Lithium Lithium (Li) is recovered from the mineral spodumene and lithium‐rich brines. It is used in a range of products such as ceramics, glass, batteries and pharmaceuticals. Lithium use has expanded significantly in recent years due to increasing use in rechargeable batteries in portable electronic devices and in batteries and electric motors for hybrid and electric cars.

GARNET BALLINE (Western Australia) Alluvial Garnet Mineral Sands (100% AJM) The Balline Garnet mineral sands project was reviewed by the Board of Directors during the quarter with an objective of determining whether to continue to pursue development of the project. The results of the review revealed that the project could operate to produce an economically positive cashflow but the impacts of the appreciating Australian Dollar provided a considerable challenge. The Balline Project Team remain focussed on producing a suitable mine development plan and schedule to deliver a suitable grade garnet required for positive returns from the proposed operation. This will involve further mine scheduling and mining method evaluation studies to be completed as soon as practicable. Statutory approvals relating to the Mining Proposal and the 5C license application for water extraction are still outstanding but expected during Q1 2011. About Garnet Garnet is a naturally occurring material that is mined in a similar method to mineral sands. Garnet sand is a good abrasive and a common replacement for silica sand in sand blasting. Mixed with very high pressure water, garnet is used to cut steel and other materials in water jets.

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URANIUM LONG ISLAND (Mt Shoobridge – Northern Territory) Uranium (100% AJM) The permitting and ground clearance for the drilling of this Long Island uranium prospect was undertaken during the December 2010 quarter, however with the early onset of the wet season and a delay in securing the drilling rig suitable to undertake this work, Altura has reluctantly postponed the drilling until the end of the wet season. The evaluation of this exciting uranium prospect is a high priority one for Altura and will be undertaken as soon as access conditions will allow.

Figure 5 – Long Island Uranium Prospect – Uranium contours shown on satellite imagery

BASE AND PRECIOUS METALS SHOOBRIDGE (Mt Shoobridge – Northern Territory) Lead, Copper. Zinc, Silver, Gold (AJM 100%) The exploration for base and precious metals (mainly copper, lead, zinc, silver and gold) within the Mt Shoobridge project was advanced considerably in the latter part of 2009 following the completion of an airborne VTEM (Versatile Time Domain Electromagnetic) survey. The processing and imaging of this data produced a number of target areas that were interpreted to be

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prospective for base and precious metals including the Full Hand, Kultha, Phillip Greets, Shoobridge and Long Island North. A summary of the work completed to date is as follows:

Full Hand Prospect – The planned third hole was not drilled on the basis that the VTEM anomaly represented the same target and that comparable results would be obtained. No further work is planned for this prospect area. Kultha Prospect – The VTEM survey identified about seven discrete areas that were shown to have surface geochemical anomalism – particularly for copper lead and zinc. In September / October 2010 four reverse circulation drillholes were completed on two of the VTEM conductors to establish the source and base metal prospectivity. Three of the four holes intersected graphitic sediments with elevated lead, zinc, copper and arsenic values and confirmed the source of the VTEM conductor, however the tenor of the base metal values were not considered to be of significance. Shoobridge Prospect – As reported in the previous quarter one 40m hole was drilled to test a moderate VTEM conductor to the east of the main Shoobridge gold and base metal prospect. The hole intersected graphitic and pyritic meta‐sediments with assay samples recording elevated values for gold, lead, zinc and arsenic. No further work is planned for this prospect.

Figure 6 – Mt Shoobridge Project – Tenements, Geology and Prospect Locations

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MINING SERVICES The Indonesian mining services division has produced revenues of US$4.1 million for the first half of the financial year and remain on target for annual revenue of between US$8 to US$9 million. INDONESIA (PT Asiadrill Bara Utama) (100% AJM) The mining service group of Asiadrill Bara Utama (Asiadrill) and Velseis Indonesia (Velseis – 50% Altura) continued exploration support services during the quarter. The drilling operations were confined to Indonesia with a primary focus in coal exploration and development. Drill rig deployment further increased during the quarter via new contract awarding and expansion of drill units existing contracts. Asiadrill operated up to twenty (20) individual drill units consisting of track and skid mounted and man portable units during the quarter. Asiadrill has equipment deployed in South and East Kalimantan on the island of Borneo with offices in Jakarta (West Java), Balikpapan (East Kalimantan) and Tanjung (South Kalimantan). About PT Asiadrill Bara Utama

Asiadrill operates a varied fleet of truck and track mounted drills; supplemented by a fleet of heli‐lift and man‐portable units for environmentally sensitive areas. The current fleet totals sixteen (16) larger units and fifteen (15) man‐portable drills. Asiadrill’s predominantly Indonesian workforce totals 48 permanent and up to 150 contract staff.

INDONESIA (PT Velseis Indonesia) (50% AJM) Velseis Indonesia (Veleis ‐ 50% Altura) operated up to eight (8) wireline units during the quarter out of a total fleet of eleven (11) units. Velseis has operated primarily in East and South Kalimantan provinces on the island of Borneo. Velseis continues to partner Asiadrill on a number of projects to provide clients with both drilling and geophysical services on their coal exploration projects. About PT Velseis Indonesia

Velseis Indonesia is joint venture company between Altura and Velseis Pty Ltd (Brisbane based wireline and seismic service provider). Velseis operates a fleet of eleven (11) portable and vehicle mounted wireline logging units in Indonesia. The Velseis Indonesian workforce totals 24 permanent staff.

AUSTRALIA (Altura Drilling Pty Ltd) (100% AJM) Early in the quarter the Maxdrill 2000 multipurpose drill was utilised at the Mt Shoobridge Project in the Northern Territory. More recently, the rig has been redeployed to the Pilgangoora Lithium Prospect in Western Australia’s Pilbara region, and it will continue in this role during the March quarter 2011.

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About Altura Mining Limited (ASX:AJM) Altura has a diverse mineral portfolio in Australia and Indonesia coupled with cash flow positive mining services units in Indonesia. The company aims to systematically evaluate and develop the key resource projects commencing with Balline Garnet and Mt Webber JV (30% Altura / 70% Atlas Iron Limited). Key Projects and Prospects:

Iron Ore: Mt Webber DSO Joint Venture (30% Altura).

Coal: Tabalong Coal Project – South Kalimantan, Indonesia – mining approval process underway.

Garnet: Balline Mineral Sands Project WA, mining approvals in progress.

Lithium: Pilgangoora Prospect WA, Finniss Range Prospect NT – exploration stage.

Uranium: Mt Shoobridge NT, exploration stage with key uranium targets in Hayes Creek region.

Base/Precious Metals: Mt Shoobridge NT, lead, copper, zinc, gold and silver prospect at exploration stage.

For additional information about Altura, please visit the Company’s website www.alturamining.com

COMPETENT PERSONS STATEMENTS

Pilgangoora (WA) The information in this report that relates to the Pilgangoora exploration results is based on information compiled by Mr Bryan Bourke, who is a member of the Australian Institute of Geoscientists and a full‐time employee of Altura Mining Limited. Bryan Bourke has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a Competent Person in terms of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code 2004 Edition). Bryan Bourke consents to the inclusion of such information in this Report in the form and context in which it appears. Shoobridge and Finniss Range (NT) The information in this report that relates to the Shoobridge and Finniss Range exploration results is based on information compiled by Mr Bryan Bourke, who is a member of the Australian Institute of Geoscientists and a full‐time employee of Altura Mining Limited. Bryan Bourke has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a Competent Person in terms of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code 2004 Edition). Bryan Bourke consents to the inclusion of such information in this Report in the form and context in which it appears.

For further information, please contact:

James Brown, Managing Director Ph: + 61 7 3814 6900

Paul Mantell, Executive Director Ph: + 61 7 3814 6900

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For personal use only - ASX · Altura Mining Limited – Australian Project Locations For ... good abrasive and a common replacement for silica sand in sand blasting. Mixed with very