MACMIN SILVER LTD - kitco.com · Construction and installation of the first module of Merrill Crowe silver extraction capacity was completed and commissioning commenced. Construction

Mineral Resources : Concept to Development

ASX Announcement 31 July 2008

REPORT ON ACTIVITIES – QUARTER ENDED 30th JUNE 2008

(AND CURRENT UPDATE) 1.0 SUMMARY Mining Silver leaching and powder production increased with approximately

131,000oz of silver contained in powder produced during the quarter. 73,000oz of silver was sold during the quarter.

Construction and installation of the first module of Merrill Crowe silver extraction capacity was completed and commissioning commenced.

Construction of footings for the installation of the first stage upgrade to the crushing circuit was undertaken in readiness for the arrival of components in July with commissioning expected in August.

A contract crusher mobilized to site and commenced crushing 100,000 tonnes of stockpiled ore to <20mm over about four months as feed for the existing final stage crusher.

Exploration An initial Inferred Mineral Resource for the Tally Ho Prospect has

been estimated at 733,000 tonnes at 49g/t silver, 0.06g/t gold, 0.1% copper, 0.09% lead and 0.83% zinc (ASX Release 28th July).

Assays recently received from diamond drilling on the western flank of the Mt Gunyan prospect have improved the western bulk tonnage mineralisation and extended the higher grade northern pod. Highlights of the drill holes are as follows:

MGD017 6m (70-76m) @ 103g/t Ag and 0.12%Zn Including 2m @ 235g/t Ag MGD022 20.35 (6.25-26.6m) @ 102/t Ag, Including 2m @ 541g/t Ag and 0.28 g/t Au Corporate The Company has elected to make the first repayment of the

Convertible Note Loan (due date 5 May 2008) by the issue of shares in five tranches.

MACMIN SILVER LTD

(A.B.N. 53 056 776 160)

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2. 0 TEXAS SILVER MINES PTY LTD

The Texas Project (EPMs 8854, 11455, and 12858; ML 5932 and ML 50161) is located 100km west of Stanthorpe. Texas Silver Mines Pty Ltd is a wholly owned subsidiary of Macmin Silver Ltd. 2.1 Twin Hills (ML 50161) - Development & Production Activities Summary 2.1.1 Silver Production & Sales

Silver production increased significantly during the quarter to approximately 130,000oz. Sales of 73,000oz silver were made during the quarter. At quarter end the Company had 82,000oz of silver bullion in a metal account ready for sale.

2.1.2 Improvements to operating procedures and throughput continued in the Crushing Circuit pending the Stage 1 upgrade. A very experienced crushing and maintenance manager was recruited from an expatriate position during the quarter and commenced duties in July.

2.1.3 Commissioning of the first module of Merrill Crowe silver extraction capacity commenced and a sample of product has been sent for analysis to determine the required operating parameters and to provide information for marketing.

2.1.4 Loading of the initial leach pad area was completed and it contains 240,000 tonnes

of crushed ore. Stacking commenced on the next leach pad which will hold approximately twice that amount of ore. Plans for the third pad area (southern extension of Pad 2), were prepared and earthworks will commence in August.

2.1.5 Electrowinning

Replacement anodes have been sourced and fitted as required and the plant has continued to satisfactorily produce silver powder.

The mine production statistics for the quarter are as follows:

Quarter Ended Silver leached

from ore oz

Powder produced (silver content)

oz

Silver Sold oz

March 2008 95,000 77,000 18,000 June 2008 109,000 131,000 73,000

A total of 265,000 tonnes was mined as follows:

Ore 120,000 tonnes (47,000 March Qtr) Low grade stockpile 48,000 tonnes (28,000 March Qtr) Waste 96,000 tonnes (57,000 March Qtr)

Fiscal year to date mining figures were incorrectly included in the previous quarterly report

instead of figures for the quarter. The correct mining figures for March quarter are shown above. There is approximately 100,000 tonnes of ore on the stockpile ready for crushing. 3.0 CURRENT UPDATE

3.1 Crushing Although it is behind schedule, components for the stage one crushing circuit upgrade have begun arriving on site. Pad preparation and footings are complete and assembly of steelwork and conveyors has commenced. The contractor has experienced delays in delivery of components typical of those throughout the industry at present. It is now expected that the upgraded circuit will commence operation during August and the impact of additional crushing capacity should effect silver production from October.

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3.2 Silver Sales

43,000oz have been sold in July. 4.0 EXPLORATION

4.1 Mt Gunyan Prospect

Macmin Silver Ltd has recently received assay results for 4 drill holes of our on going drilling programme at Mt Gunyan, which commenced last year. The Mt Gunyan prospect is situated within 3km of the Twin Hills Silver mine, near Texas in SE QLD.

Diamond drilling on the western flank of the Mt Gunyan prospect has improved the western bulk tonnage mineralisation and extended the higher grade northern pod. Highlights of the drill holes are as follows:

MGD017 6m (70-76m) @ 103g/t Ag and 0.12%Zn Including 2m @ 235g/t Ag MGD022 20.35 (6.25-26.6m) @ 102/t Ag, Including 2m @ 541g/t Ag and 0.28 g/t Au

The mineralisation in MGD022 has extended the higher grade Northern Pod to the south 40m. MGD017 has bolstered the lower grade bulk tonnage mineralisation with an intercept of 20.35m @ 102g/t Ag, while MGD018 has restricted this mineralisation to the south-west.

TABLE 1 –Drill Results.

Hole No Interval Length Silver Au Lead Zinc From To (m) (m) g/t g/t (%) (%)

MGD017 46 - 54 8 40 - 0.14 0.19 70 - 76 6 103 - - 0.13 Including 74 -76m 2 235 - - -

MGD018 NSI MGD021 151.37 – 151.86 2 72 0.07 0.55 1.72 MGD022 6.25 – 26.6 20.35 102 - - -

Including 9.52 –

11.05 1.53 541 0.28 - -

TABLE 2 – Hole locations for Table 1 data. Hole No Northing Easting Easting Northing RL Depth DIP AZI AZI

Local Grid Local Grid MGA MGA (m) MAG

Local Grid

MGD017 5125.47 5877.68 332983 6809681 540.6 89.6 -90 0 0 MGD018 5107.53 5853.91 332968 6809655 540.6 80.3 -90 0 0 MGD021 5053.67 5700 332932.5 6809500 556.17 176.2 -63 60 75 MGD022 5208.12 5899.42 333063 6809713 553.8 100.3 -90 0 0

Sampling & Assaying Details Sampling of percussion holes was undertaken over the full length of each hole on a 2 metre interval basis. Sampling of Diamond Core was undertaken over mineralised and altered zones, sample intervals were determined from geological intervals. In broad zones of alteration 2 metre intervals were selected. As part of the Company’s quality control programme, a duplicate sample is collected about every 20 samples and submitted under a different sample number providing a check on repeatability. Assaying is carried out by ALS Chemex in Brisbane using the ICP technique for silver, copper, lead, zinc, arsenic and antimony. Gold is assayed by the ICPMS technique. Drill holes Collars have been located with a hand-held Garmin GPS unit. Down hole surveys are recorded with an Eastman style single shot camera.

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4.2 Tally Ho Prospect An initial Inferred Mineral Resource for the Tally Ho Prospect has been estimated at

733,000 tonnes at 49g/t silver, 0.06g/t gold, 0.1% copper, 0.09% lead and 0.83% zinc. Approximately 1,500m of the current Reverse Circulation drill program of 3,000m

including 28 holes is completed. This program is intended to test adjacent prospective areas to the above mineral Resource with the objective of increasing the Resource.

The attached ASX Release of 28th July provides an update on the Tally Ho Prospect.

Drill Sampling & Assaying Details Sampling of percussion holes was undertaken over the full length of each hole on a 2 metre interval basis. Sampling of Diamond Core was undertaken over mineralised and altered zones, sample intervals were determined from geological intervals. In broad zones of alteration 2 metre intervals were selected. As part of the Company’s quality control programme, a duplicate sample is collected about every 20 samples and submitted under a different sample number providing a check on repeatability. Assaying is carried out by ALS Chemex in Brisbane using the ICP technique for silver, copper, lead, zinc, arsenic and antimony. Gold is assayed by the ICPMS technique. Drill holes Collars have been located with a hand-held Garmin GPS unit. Down hole surveys are recorded with an Eastman style single shot camera. Stream, Soil & Rock Sampling & Assaying Details Stream sediment samples consist of approximately 100g of 180µm collected from the fine silt fraction of the active drainage. Soil samples consist of approximately 100g of -2mm (Texas Project), -1mm (Rivertree Project) or -180µm (Tally Ho Project) material collected from below the humic layer. Rock samples are typically 1-2kg in size. Assaying is carried out by ALS Chemex in Brisbane using an aqua regia digest which is analysed with the ICP technique for silver, copper, lead, zinc, arsenic and antimony and analysed by the ICPMS technique for Gold.

5.0 CORPORATE

The Company has exercised its right to make the first repayment of US$1.5M in respect of the Convertible note loan by the issue of shares in five tranches. The repayment due date was 5 May 2008 and a total of 2,647,375 shares were issued in the quarter to 30 June, representing a repayment of US$300,000 (AUD$321,251). A further US$300,000 was repaid after the end of the quarter by the issue of shares in July.

No directors have any Macmin shares exposed by way of margin accounts or financing arrangements.

6.0 INVESTMENTS Macmin maintains equity investments in the following public companies with exposure to the

precious and base metals sectors. Information and releases about these companies’ activities can be found on each company’s website.

Company Shares Market Value

30 June 2008 New Guinea Gold Corporation (TSX) www.newguineagold.ca 17,847,020 $8.4M Malachite Resources NL www.malachite.com.au 1,500,000 $0.3M Frontier Resources Ltd www.frontierresources.com.au 5,425,000 $0.2M

7.0 NEW GUINEA GOLD New Guinea Gold Corporation (11.4% Macmin) continued with exploration, mine development

and gold production during the quarter. Press releases by NGG are available at www.newguineagold.ca.

A list of the most significant press releases from NGG since the last quarterly report are

attached at Appendix B.

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Macmin Silver Ltd (Macmin) is a silver focused company whose primary projects are the Texas Silver Project, S.E. Queensland, Australia where the Twin Hills Silver Mine is located and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. Macmin has exposure to gold by way of an 11.4% equity in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd.

R.D. McNeil CHIEF EXECUTIVE OFFICER & CHAIRMAN The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Denis O’Neill, who is a Member of The Australasian Institute of Mining and Metallurgy. Denis O’Neill is employed by Macmin Silver Ltd.

Denis O’Neill has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Denis O’Neill consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Macmin Silver Ltd Appendix A Technical Report Quarter Ended 30 June 2008

SELECTED ASX RELEASES SINCE LAST QUARTERLY REPORT

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28th July 2008

TALLY HO PROSPECT UPDATE • An initial Inferred Mineral Resource for the Tally Ho Prospect has been estimated at 733,000

tonnes at 49g/t silver, 0.06g/t gold, 0.1% copper, 0.09% lead and 0.83% zinc (101g/t silver equivalent*, see explanation under Metal Equivalents), using a 40g/t silver equivalent* cut-off – (see below for explanation).

• Approximately 1,500m of the current Reverse Circulation drill program of 3,000m including 28

holes is completed. This program is intended to test adjacent prospective areas to the above mineral Resource with the objective of increasing the Resource.

• The area of the Resource and its location, relative to targets now being tested is illustrated in

Figures 1 and 2. Figure 1 also illustrates the extent of extrapolation of results from individual drill holes.

Metal Equivalents In the case of a polymetallic deposit such as Tally Ho, where, in the event mining occurs, the value of the product produced is the sum of individual metals values, management considers that metal equivalents are appropriate for both cut-offs and in reporting average grades for the resource. In this instance, as silver is the predominant metal, the metal equivalents are expressed in silver equivalents*. The metal equivalents were calculated using metal equivalent calculations as illustrated in the table below. Management cautions that silver equivalent* values will change as metal prices change.

Metal (assay results) Metal Price 25/06/2008 Factors Metal value

A B C

Value Calculation

1 Silver Ag g/t 17.00 A$/oz 31.103 g/oz 1A x (1B/1C) M 2 Gold Au g/t 929.00 A$/oz 31.103 g/oz 2A x (2B/2C) N 3 Copper Cu ppm 4.02 A$/lb 454 ppm/lb 3A x (3B/3C) O 4 Lead Pb ppm 0.85 A$/lb 454 ppm/lb 4A x (4B/4C) P 5 Zinc Zn ppm 0.89 A$/lb 454 ppm/b 5A x (5B/5C) Q

Sum of metal values S M+N+O+P+Q Metal equivalent in Silver g/t AgEq S / 1B x 1C

No metallurgical studies have been completed but initial petrological studies show the metals are hosted within the following sulphide species; tetrahedrite, sphalerite, chalcopyrite, galena and pyrite. These sulphide species are all relatively course grained and as such should be able to be liberated easily by comparison to other similar deposits, attaining recoveries of plus 90%. The Resource is currently classified as Inferred for the following reasons:

• There is insufficient information as yet available to adequately estimate density, both for individual rock types/domains, and with weathering changes with depth. No density information is available to estimate tonnage within the blocks which are currently being included in the Inferred Resource. Density is an average value based on available information from five drillholes.

• The Resource was derived using 1m downhole composites from 58 drillholes. Total composites used were 9,693m. Assay results have been obtained from samples derived



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from different drilling phases, consisting of NQ diamond drilling, diamond drilling with Reverse Circulation (RC) precollars, and holes drilled by RC from surface to end. Routine statistical analysis of assays from the different drilling types has highlighted an apparent sample bias between assays from the RC holes, and assays from samples of the RC precollars. This anomaly needs to be investigated by further drilling and/or resampling to resolve this issue. All available assays, both diamond and RC, were used in this Resource determination.

• Classification was determined based on a number of factors, and utilised models created for actual distance to the closest point, number of points used to krige a block, kriging variance and slope of regression. It should be possible to upgrade the classification of part of the Resource to Indicated once the sampling issues have been resolved.

• The Resource is estimated to an R.L. of 140 or approximately 165m to 110m below ground

surface. Variography was carried out on all elements within all domains where there were sufficient data points to get a meaningful variogram. Both absolute and median indicator variograms were investigated, with final modelling parameters being determined from the median indicator variograms. Each element was modelled with its own unique set of parameters within the main geological and geochemical domains. FJ Hughes and Associates used GEMS software to undertake 3D block modelling of the resource using Ordinary Kriging techniques with a 98.5% top-cut to minimise the effects of high-grade outliers. Block models were created for the following elements: Silver (Ag), Gold (Au), Copper (Cu), Lead (Pb) and Zinc (Zn). All elements were coded for specific geological and geochemical domains, and interpolated within these individual domains. The Resource is visually depicted in the diagram below:



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Current RC Drilling Program Our latest program of RC (reverse circulation) drilling at the Tally Ho prospect commenced on 20 June 2008. This program will allow the initial drill testing of seven target areas which have been identified by a combination of soil sampling, rock chip sampling and field mapping in the area surrounding the central Tally Ho prospect (Figure 2 – target numbers do not represent a relative prospectivity / priority). To date 1,500m of drilling in 16 holes has been completed. All assays will be reported at the conclusion of the program. These target areas all fall within a regional scale NE-SW trending structural corridor, observable on the regional aeromagnetic data and satellite imagery of the greater Tally Ho Project. This structural corridor is interpreted to be a long lived, deep seated feature which has seen various episodes of activation, making it a favourable location for the emplacement of young metal rich intrusive bodies and associated mineralising systems (Intrusion Related Mineralising Systems) which have the potential to form economic metal concentrations. The central Tally Ho prospect/breccia unit has a current strike extent of approximately 200m which also trends NE-SW. The targets to be tested by our current RC drilling programme represent areas which are along strike of or parallel to, the central Tally Ho prospect.



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The current seven targets to be drilled fall within the 1.5 x 1.5 km (2.25 sq km) area covered by our soil sampling results within the greater Tally Ho Project area which comprises a total of 147 sq km. There are at least three further target areas within the area covered by the soil sampling which warrant drill testing, but are not planned to be tested at this stage due to budgetary constraints. The Inferred Resource at Tally Ho was estimated by Ms Felicity Hughes BSc(Hons) MAusIMM, MAIG, a fulltime employee of F Hughes & Associates, under the supervision of R. McNeil, D. O’Neill and Paul Abbott (CEO/Chairman, Exploration Director and Exploration Manager of Macmin Silver Ltd respectively), using GEMS geological modelling software. Ms. Hughes has considerable experience in the estimation of resources over a wide variety of commodities. Yours faithfully, MACMIN SILVER LTD

R.D. McNeil CEO/CHAIRMAN The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by, or compiled under the supervision of Robert D. McNeil Fellow of AustIMM and Denis O’Neill, Member of the AustIMM. Robert McNeil and Denis O’Neill are employed by Macmin Silver Ltd and have sufficient experience which is relevant to the type of mineralisation and type of deposit under consideration to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code of Reporting Exploration Results, Mineral Resources and Ore Resources. Robert McNeil and Denis O’Neill consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. Notes: • *Silver Equivalent is the contained silver, copper, gold, lead and zinc that are converted to an equal

amount of pure silver and summed (based on assays of mineralised rock and actual metal prices). It is used to allow interpretation of the possible theoretical ‘value’ of mineralised rock, without consideration of the ultimate extractability of any of the metals.

• Silver Equivalent* herein is based upon metal prices of A$17.00/oz Ag, A$4.02/lb Cu, A$929/oz Au,

A$0.85/lb Pb, and A$0.89/lb Zn. The formula used is as shown on page 1. • The ASX requires a metallurgical recovery be specified for each metal, however, no testwork has

ever been undertaken at Tally Ho and recoveries can only be assumed to be typical for silver, lead, zinc sulphide deposits.

• It is the Company’s opinion that each of the elements included in the metal equivalents calculation

has good potential to be recovered if the project proceeds to mining.



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Figure 1



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Figure 2

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20th May 2008

TWIN HILLS MINE UPDATE – TEXAS SILVER PROJECT The Twin Hills Silver Mine continues to progress towards increased silver production. A second crusher is now installed and operating. This contract crushing circuit is additional to the previously announced upgrade of Macmin’s existing crushing circuit. At present this contract crusher is crushing 100,000t medium grade ore which is on stockpile, to a size grade of 100% minus 20mm. When the upgraded Macmin crushing circuit is completed this product will be fed into the upgraded circuit, with the minus 4mm material being directly screened out and placed on the heaps and the remaining product will be further crushed to 100% minus 4mm and then placed on the heaps. The Macmin crusher upgrade is proceeding, but as previously announced this will not be completed until the end of June and it is unlikely that full capacity will be reached until late July or early August. The Macmin crushing circuit is presently crushing in excess of 20,000t/month to the required minus 4mm. Planning is proceeding to move to extended crushing hours, probably two eight hour shifts, but is still restricted by difficulty in hiring suitable personnel. The initial batch of silver powder has been upgraded by removing impurities and is presently being converted to silver dore bars. Further batches of silver powder will be upgraded on a regular/semi continuous basis. Heap Leach Pad One is now effectively completed with approximately 220,000 tonnes of ore stacked to an average height of 8 metres. This pad is approximately 55% under cyanide irrigation and is expected to progress to 100% under irrigation over the next few weeks. This should result in a substantial increase in silver leaching and subsequent silver powder production. Although this pad has been under construction for more than 12 months and has been partially leached of silver, irrigation and leaching, for various reasons, has not been continuous. To achieve continuous and complete irrigation of Pad One is a significant milestone. Heap Leach Pad Two is approximately four weeks behind schedule and is presently being covered with a protective layer of fine material and a coarse drainage layer. Stacking of crushed ore will commence in the near future. This pad has a capacity to an 8 metre height of approximately 440,000 tonnes of ore. Irrigation and leaching of this pad cannot commence until a significant part of the pad has been built to the 8 meter height which may take two months. The Merrill Crowe plant is presently being commissioned and initially will produce approximately one tonne of silver as a commissioning exercise to determine quality and characteristics of the product. Bob McNeil Chairman and CEO commented: “Firstly I would like to welcome Ian Gibson to the position of Chief Operating Officer. I am sure that Ian, together with other dedicated staff including John Magnussen, Warren Beynon, Mark Morrison and all the supervisors and employees at the Twin Hills site are making every effort to increase silver production at the mine. I thank them for their efforts and dedication. We have had numerous requests by phone and email for details of the Twin Hills progress. Although these have been reported before we have described all aspects of the progress at the mine and the process including problems that have developed during commissioning, below. Firstly a brief description of heap leaching is probably appropriate.



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Heap leaching was introduced in the 1970’s as a means to drastically reduce gold recovery costs. It is also effective with silver in certain circumstances. This process has literally made many mines by taking low grade resources and transforming them into a viable mine. Heap leaching involves placing crushed or run of mine ore in a pile built upon an impervious liner. Cyanide solution is distributed across the top of the pile and the solution percolates down through the pile and leaches out the silver/gold. The silver/gold laden pregnant solution drains out from the bottom of the pile and is collected for recovery by either carbon adsorption, zinc precipitation (Merrill Crowe), or in Macmin’s case by Electrowinning. The barren solution is then recycled to the pile. Heap leaching generally requires 60 to 150 days for processing ore that could be leached in 24 hours in a conventional agitated leach process. Recovery is typically about 70% as compared with 90% in an agitated leach plant. Even with this lower recovery performance, the process has found wide favour, due to the vastly reduced processing costs compared with agitated leaching.” 1. Resources/Grade Control

Resources were defined by earlier drilling and were used as part of the feasibility study. Grade Control drilling is/has been carried out to guide the accurate mining of silver ore. In some projects there are significant differences between original resources and mined ore. In the case of Twin Hills grade control drilling and mining has confirmed the original estimates of silver content of the ore. No problems have been identified with the resource.

2. Mining

Mining is carried out using hired equipment operated, supervised and directed by Macmin Staff. Mining of ore and waste is proceeding to plan and there are no problems in this department.

3. Crushing, Agglomerating and Stacking

To achieve satisfactory leaching/recovery of silver from the rock, the ore must be crushed or converted to size fractions of 100% minus 4mm size, including 50% minus 1mm size, either by crushing or during blasting of the ore prior to mining. At this ore sizing, feasibility studies suggested that 70/72% of the silver would be recovered. The minus 4mm fraction is then agglomerated or mixed with cement and lime to achieve a better product for leach solution percolation and the required pH of 10. It is then stacked on the heap or heaps for leaching.

The commissioning showed that the crushing circuit as specified by the feasibility study, and operated on a single shift basis was inadequate to achieve sufficient crushed material. The reasons were: maintenance problems with the crushing circuit; the inability to hire sufficient trained operators to run more than a single day shift; and inadequate screens to remove the fine fraction early in the crushing process. For example, when blasted, the ore contains 15 to 30% of the required size (i.e. less than 4mm) which does not require further crushing. However, the present circuit required all that material to traverse the crushing circuit as the size screens incorporated in the current circuit were inadequate to remove the fines at an early stage in crushing. This resulted in “clogging up” of the circuit and maintenance problems. Alternatively, if crushing could have been maintained on a 24 hour basis this problem could have been partly offset. Because of intense competition for trained operators in the mining industry at present, we can not hire sufficient trained personnel and consequently we have had to train our own operators. This is time consuming. A further unanticipated problem is that the ore is harder and more abrasive than predicted.

These problems have been resolved in several ways:

• a Macmin crusher upgrade is underway whereby major additional screening capacity has

been incorporated into the circuit. Unfortunately it has taken more than 6 months from when



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a decision to proceed with the upgrade was taken, to completion due to the general shortage of equipment for the mining industry.

• a second contract crusher has been added to the circuit to provide an initial crush size of

100% minus 20mm.

• closer drill and blast patterns have been incorporated in the mine plan to produce as much minus 4mm product as possible without crushing.

• initially move to a 10/12 hour day crushing shift, and to two by 8/10 hour shifts in the near

future.

• install a contract crushing supervisor on site from contract crushing organisation Pacrim. Our initial target is to place 60,000 tonnes of minus 4mm material on heaps/month, moving to 100,000/120,000 tonnes/month as ore grades decrease. This latter target may require further crushing capacity.

The timing of achieving the initial objective of 60,000 tonnes/month on to the heaps is difficult to predict, but unlikely to occur before August 2008.

Stacking of ore on the heaps using conveyers and “grasshoppers” was found to be unsatisfactory, and we have moved to stacking by trucks. This does not appear to impede solution circulation.

4. Heap Leaching

After being placed on heaps 8 metres high, the ore is saturated with cyanide leaching solution which dissolves the silver. The solution (pregnant solution) with the dissolved silver is collected and stored in specially constructed and covered ponds. To date, leaching has not been continuous. This was caused by several factors: the fact that Leach Pad One is only now being completed; because of experimentation with various ways of applying the leach solution such as sprinklers and drippers; use of different volumes of solution; accumulation of silt in the ponds caused by early rain events; and other minor factors. All these factors have now been remedied and we will commence complete and continuous leaching of Pad One within the next two weeks. Leach rates are still uncertain because of the irregular irrigation of parts of Heap One, however, tests suggest that leaching rates will be slower than predicted in the feasibility study and it may take more than the six months predicted in the Feasibility Study to extract the predicted 70/72% silver from the heaps. At this stage we have no evidence to suggest that recoveries of 70/72% will not be ultimately achieved. The problem in slower leach rates is that we will not be able to proceed with a second lift to the pads, as originally planned, as early as anticipated (to a height of say 16 metres). Thus additional leach pads may need to be constructed for continued silver production.

5. Silver Powder Production

The silver is extracted from pregnant solutions using an electrowinning process. This EMEW plant contains 180 cells, is modular, and can be relatively easily increased in capacity. The EMEW plant is now running on a 24 hour/7day schedule. Each cell in the plant has not produced at the rate specified by the manufacturers, Electrometals Ltd, but by experimentation, its capacity is gradually being increased. Problems have also arisen with the coatings on some anodes and these have now been replaced. As the plant was designed with at least 50% overcapacity, the



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reduced capacity of each individual EMEW cell is not expected to be a problem with production in the near term, but could restrict expansion. The leaching solutions from the heap carry 60 to 90g/t silver. The EMEW plant has shown to be inefficient in extracting or reducing the silver in leach solutions below 40g/t silver. These “barren” solutions which still contain 40g/t silver are then recycled to the heap, with further dissolved silver rebuilding the solutions to 60 to 90g/t silver. There is a concern that it is inefficient to recycle solutions with as much as 40g/t contained silver. Consequently a Merrill Crowe plant has been installed to remove further silver to much lower concentrations. The intent is that silver will be reduced to 40g/t by electrowinning, then pass through the Merrill Crow which will reduce silver content to less than 10g/t. This “barren” solution will then be recirculated to the heaps. Alternatively, at present, as we ramp up irrigation, the barren solution is diluted with additional fresh water to reduce the silver content to acceptable levels. The Merrill Crowe plant is presently being commissioned and should be “on line” in the near future. 6. Marketing

The silver powder produced is very fine grained with a size range of 72% less than 20 microns. Some of the silver powder is presently being sold “as is” for specific applications. However an unexpected side effect of the EMEW plant is that it also extracts some other metals and the silver powder produced to date contains contaminants which are unacceptable to some buyers. These are removed before smelting and this being done successfully in Melbourne, Australia. The silver powder can then be smelted, refined and sold. Alternatively we are still discussing offers to purchase the powder “as is”. In this matter we are attempting to maximise the return to the Company. Yours faithfully, MACMIN SILVER LTD

R.D. McNeil CEO/CHAIRMAN

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Macmin Silver Ltd Appendix B Technical Report Quarter Ended 30 June 2008

NEW GUINEA GOLD CORPORATION – TSX RELEASES SINCE LAST QUARTERLY REPORT

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10th July 2008

DUAL TRACK STRATEGY FOR IMWAUNA PROJECT, PAPUA NEW GUINEA

New Guinea Gold Corporation (NGG), on 13th June 2008 released an Inferred Resource for its 100% owned Imwauna Project of 1,800,000 tonnes at 12.2g/t gold and 20g/t silver for contained metal of 706,000 ozs gold and 1,160,000 ozs silver. The resource commences at ground surface and has been defined to varying depths from between 50 and 150 metres below ground surface. It is open in most directions and in addition, in the event that further studies show the resource can be developed, a large part would be “open pittable”. Preliminary metallurgical and mineralogical studies suggest that the gold can be extracted by conventional cyanide leach and/or inpart by gravity. Exploration results from elsewhere in the Normanby Property, but excluding the Imwauna Project, indicate several additional prospects that individually have potential for moderate sized gold deposits and require further exploration. NGG has developed a dual track strategy for the Imwauna Project as follows: 1. Complete a Preliminary Assessment Study to determine broad economic parameters for the

development of the Project; upgrade all or part of the Inferred Resource to higher categories; apply for a mining lease from the Papua New Guinea Government (expected to take nine months); complete financing and commence construction by 2010 and gold production by 2011.

2. While the Preliminary assessment is proceeding, increase the rate of drilling/trenching with the

objective of substantially increasing the present resource. It is anticipated that a substantial increase in resources at Imwauna would place NGG as an attractive acquisition target for a major gold producer.

An Independent Technical Report titled “Independent Resource Report on the Imwauna Prospect, Normanby Property- Milne Bay Province, Papua New Guinea” prepared by Ralph N. Stagg of Project Geosience Pty Ltd” was filed on Sedar and at www.newguineagold.ca on 10th July 2008. This report has been prepared following the format and guidelines of Form 43-101 F1, Technical Report for National Instrument 43-101 Standards of Disclosure for Mineral Projects and Companies Policy 43-101 CP as amended on 23rd December 2005. The principal author, Ralph Stagg B Sc, M Sc, DIC, FAusIMM, MIMMM, C Eng. Is a “qualified person” and is independent of NGG. The Report supports the principals behind the above strategy. The Conclusions and Recommendations of the report are as follows: “An Inferred Resource, a part of which has potential to be extracted using open pit mining methods has been estimated at the Imwauna Prospect. The mineralised system is open in most directions. In addition other prospects and anomalies, considered to have moderate size potential, remain to be fully explored. Gold is widespread in surface rock samples, trenches and drill holes. A Preliminary Assessment is recommended for the Imwauna Resource to determine economic parameters for possible development in Year 1. Continued exploration is also recommended to determine the full potential of Imwauna as well as other prospects and anomalies subject to available finance. • Drilling should continue on a two or three drill rig basis for the next twelve months (~15,000m) at

an estimated budget cost, including associated costs such as assay, support etc of C$3M. • Trenching associated with the drilling program at a budget cost of C$400,000. • A preliminary assessment including environmental studies and metallurgical testing at a budget

cost of C$400,000.



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• Capital Items budget - $C500,000. • Administration/Contingency budget - C$500,000. Total budget cost for program in year one is C$4.8M. The second year program is contingent on the results of the first year program including the Preliminary Assessment. Such a program could include further drilling leading to a Feasibility Study and a development decision. It is not possible at this stage to estimate accurately the cost of such a program, but it could range from C$3M to as high as C$10M depending on program details.

The writer is of the opinion that the recommended programs are warranted and the project is of sufficient merit to justify the investment in exploration/pre-development.”

Mr Stagg also makes the following relevant comments in his summary in the above report. “New Guinea Gold Corporation (NGG) has been actively exploring at its Normanby Property and Imwauna Prospect since 1996, initially in joint venture with Macmin Silver Ltd and since 2002 as the sole owner of the property. Minimal exploration only took place between 1998 and 2003, with exploration activity gradually increasing after 2003. At present, NGG has two company owned and operated diamond drills, a 14t excavator and D6 bulldozer active on the site. The Normanby Property has been the subject of three earlier independent technical reports, in 1996, 1998 and 2002 by Peter Christopher and Associates Inc. The report in 2002 was prepared to NI 43-101 guidelines and filed on SEDAR. The Imwauna Prospect is a part of an 8 to 10 sq km area which hosts numerous quartz veins, often with high grade gold, and disseminated gold mineralisation associated with Recent/Pleistocene volcanics. Only a small part of this large prospective area has been tested by drill holes and there is potential to locate additional moderate sized resources at other prospects in addition to Imwauna. An Inferred Resource of 1,800,000t at 12.2 g/t gold and 20.0 g/t silver has been estimated for the Imwauna Prospect. The resource has been estimated from extensive surface trenching and approximately 137 drill holes. This report described the work that was undertaken. The mineralisation is low sulphidation, epithermal mineralisation, and consists of relatively narrow, steeply dipping quartz veins, from a few mms to 10m width. The main vein averages of the order of 1m, with relatively high gold grades and extensive visible gold. The mineralisation has been defined by drilling over a strike length of 1,500 – 1,600m, is open both to the north and south and to depth. The drilled depth extent of the mineralisation varies from 50 to 200m below surface. There is potential for bonanza zones. One trench bulk sample of 82 kg returned an assay of 424.0 g/t Au. Similar grades have been noted in some drill holes as summarised below. The full results are listed in Table 19 of the Technical Report.

Hole Number

From (m)

To (m)

Interval (m)

Gold g/t

Silver g/t

IMH 067 120.20 126.20 6.00 68.0 68.0 Including 123.20 126.20 3.00 106.0 95.0 IMH 068 39.80 42.20 2.40 13.7 65.0 IMH 069 99.10 109.10 10.00 18.1 31.0 Including 105.40 107.60 2.20 32.5 49.0 IMH 074 63.00 69.45 6.45 20.9 49.0 IMH 082 80.80 86.40 5.60 36.2 44.0 IMH 091 8.30 12.10 3.80 21.1 44.0



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The drilling has demonstrated continuity of mineralisation within the known deposit to the extent which allows categorisation of the estimate as an Inferred Mineral Resource. Some parts of the drilling has been undertaken on sufficiently close spaced sections which could allow that part of the resource to be categorised as Indicated. Because of the quality of the downhole surveying data, the bulk density data, and the core recovery along the known zone of mineralisation it is appropriate to use the Inferred category for the entire resource until further data is gathered that verifies the validity of the data used. This work is currently in progress.” New Guinea Gold is the premier junior explorer and miner in Papua New Guinea, with interests in ten gold and two porphyry copper-gold-molybdenum properties. With 75,000 + metres of drilling completed, extensive gold or copper-gold-molybdenum mineralisation has been discovered at 11 of the properties while the 12th contains widespread and extensive alluvial gold. The Company’s outstanding shares are traded on the TSX-Venture, Frankfurt, and Berlin Stock Exchanges. In addition to the Imwauna Project the Company has commenced gold production at its Sinivit Gold Mine, in East New Britain, Papua New Guinea. The Company also owns an approximate direct 46% interest in Australian Securities Exchange listed company, Coppermoly Ltd and 30% in Pacific Kanon Gold Corporation (after proposed IPO) which is intended to list on the TSX-V in the near future.

Full details of the Sinivit Project are described in an Independent N1 43-101 report dated January 2006 which is available at www.newguineagold.ca .

The information in this release was prepared under the direction of Robert D. McNeil (F Aus IMM) a “qualified person” as defined by National Instrument 43-101. NGG follows a rigorous QA/QC protocol on all of its exploration projects. This news release may contain forward-looking statements, which are subject to certain risks, uncertainties and assumptions. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such forward-looking statements are made as at the date of this news release, and the company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law. For further information on this release or on other NGG projects such as the Sinivit Gold Mine, contact Forbes West toll free at 888 655 5532, email [email protected] or Judith O’Quinn at 604 662 3598, email [email protected] or access our website – www.newguineagold.ca ON BEHALF OF THE BOARD R.D.McNeil CHAIRMAN & CEO The TSX Venture Exchange has not reviewed and does not accept the responsibility of the adequacy of this release. The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company’s expectations. Certain risk factors may also affect the actual results achieved by the Company.

**********



Page 19 of 26

12th June 2008

NEW GUINEA GOLD ANNOUNCES INFERRED MINERAL RESOURCE AT 100% OWNED IMWAUNA PROJECT

Highlights An Inferred Mineral Resource of 1.8 million tonnes at 12.2 g/t gold and 20 g/t silver for contained metal of 706,000 ozs gold and 1,160,000 ozs silver has been estimated for the Imwauna Project, Normanby Property, Papua New Guinea • Resource is open along strike and to depth; defined over a strike length of 1,500m to date and to

depths below surface varying from 50 to 150 meters. • Resource commences at surface; has been defined by numerous excavator trenches and 137

drill holes. Drilling is continuing with two diamond core rigs. • As indicated and illustrated in our Press Release dated 23 April 2008, drill target areas have

been defined at depth below the limit of present drill holes. These areas will be explored in the near future

• Potential for bonanza zones is suggested by trench bulk samples such as 82kgs averaging

424g/t gold (12.37ozs/ton) and 63kgs averaging 70g/t gold (2.04 ozs/ton), supported by drill results such as 3m at 109g/t gold, (3.18 ozs/ton); 5.6m at 36g/t gold (1.05 ozs/ton) and 0.4m at 438g/t gold (12.78 ozs/ton).

• Deposit is within 3 to 4kms of the Coast of Normanby Island with relatively good access. • A Technical Report in compliance with the requirements of NI 43-101 on the Imwauna Project is

being prepared by Independent Geological Consulting firm, Project Geoscience Pty Ltd (PG) and will be filed on SEDAR within 45 days. PG has read and reviewed this Press Release and consents to its disclosure.

Chairman and CEO of New Guinea Gold Corporation (NGG) Bob McNeil commented: “We are pleased to report this initial NI 43-101 compliant resource which represents an important first step in the exploration and possible future development of this core New Guinea Gold project. At the present time we have two rigs, a 14t excavator and D6 bulldozer working on the property, and we plan to add a third drill rig later this year. The results of exploration to date are very exciting, particularly the high grade bonanza zones. The results continue to expand our knowledge of this large gold system.” The Imwauna Project is a part of an 8 to 10 sq km gold mineralised area as defined by gold in geochemistry and trenching (see map in Press Release dated 23 April 2008). Mineralisation varies from quartz hosted gold mineralisation, often of high grades at Imwauna itself to disseminated gold mineralisation associated with Recent/Pleistocene volcanics at the Knob Prospect (3 to 4 kilometers north of the Resource area, near the Coast – for map location see Press Release dated 23 April 2008). Only a small part of this large prospective area has been tested by drill holes and the PG notes that there is potential to locate additional resources at other nearby gold prospects in addition to at depth and along strike at Imwauna. The mineralisation at Imwauna is low sulphidation, epithermal mineralisation, and consists of multiple, steeply dipping quartz veins, from a few mms width to 10m width with the main Imwauna vein defined to date averaging of the order of 1m, with relatively high gold grades and often visible gold. Average width of all veining within the mineral resource estimate is approximately 2.1meters. The mineralisation has been defined by drilling over a strike length of 1,500m, is open both to the



Page 20 of 26

north and south and to depth. The drilled depth extent of the mineralisation varies from 50 to 150m below surface. History and Exploration completed NGG has been actively exploring at its Normanby Property and Imwauna Project since 1996, initially in Joint Venture with Macmin Silver Ltd and since 2002 as the sole owner of the property. Macmin Silver retains a 1% NSR royalty on any production from the property. Exploration completed at the Imwauna Project as at the date of this Release (not including exploration elsewhere on the Normanby Property) includes:. • Approximately 150 drill holes (including 18 drilled prior to acquisition in 1991/1992 by Ingold

Holdings Pty Ltd, a subsidiary of Inco). • Over 250 excavator trenches to depths of 2 to 4 meters. • Geochemical sampling - stream, soil and rock chip, over approximately 15sq kms. • Airborne magnetic and radiometric geophysical surveys • AIRSAR (airborne radar) survey. • CSAMT (controlled source audio – magnetic telluride) ground geophysical survey to define

possible gold bearing quartz zones such as the main Imwauna Zone • Trial mining pit or slot to study mineralisation characteristics, possible open pit mining techniques

and to collect a 30t bulk sample for grade comparison purposes. • Preliminary bottle roll and column cyanide leach metallurgical testing. • Mineragraphic and petrographic studies • Bulk sampling (over two tonnes of samples) from trenches to check gold grades and

reproducibility of assays. Bob McNeil CEO and Chairman commented: “the above exploration has been previously reported in Press Releases and is described fully in the NI 43-101 report to be filed on SEDAR. It confirms the presence of gold mineralisation over the 8 to 10 sq km area and suggests that only a small part of that area has been intensively explored to date. With further drilling it is likely that additional resources will be defined. The metallurgical testing showed that the gold in surface mineralisation can be easily extracted by cyanide leach with 90% to 95% recovery reported. Visible gold in some samples suggests that some of the gold may be recoverable by simple gravity treatment. No testwork has yet been undertaken on gravity extraction” Mineral Resource Estimate The mineral resource estimate is dated 11th June 2008 and was prepared in accordance with NI 43-101 guidelines by the NGG technical team in consultation with Independent geological consulting firm, Project Geoscience Pty Ltd (PG). PG has monitored the project for the past two years and In PG’s opinion the data and results fairly and accurately support the disclosure of the mineral resource estimate of the Imwauna Project.. In PG’s opinion the mineral resource model and estimation conform to NI 43-101 guidelines. PG has reviewed this release and grant their permission to release the data and resource estimate in this Press Release. In PG’s opinion the exploration completed to



Page 21 of 26

date confirms the resource as Inferred but with additional exploration and data compilation, the resource may be upgraded to Indicated and/or Measured. The resource is based on 137 drill holes drilled on nominal 50m by 25m spacings but with some spacings as close as 12.5m by 25m, or at the strike extremities of the resource, at 100m by 50m spacings (see Figures 1 and 2 in Press Release dated 23 April 2008 for drill location plans) All drill assay results from the Imwauna Project, with location co-ordinates, up until the resource cut off at hole IMD 122 are shown in Table 1 Modeling and resource estimation was carried out using Surpac Vision software by NGG VP Exploration Jack Drzymulski, QP, in consultation with Independent QP Ralph Stagg M.Sc, DIC, F AusIMM, MIMMM QP of Project Geoscience. Cross-sectional interpretations were used to create a 3D wireframe model from which a block model was developed. Gold and silver grades were estimated using an inverse distance to the power of three interpolations with an isotropic search radius of 125m. The block model has cell dimensions of 10m x 1m x 2m (northing, easting and elevation respectively) and its orientation is sub-parallel to the overall orientation of the main vein. The informing data was 1m vein composites of the main and east veins only. Variography was tested but no reasonable correlations were found. Interpolation parameters were bearing 012º, plunge -5º and dip -80º to the east. All drill hole co-ordinates and levels, and a contour plan were prepared from ground surveys. The Bulk Density used in the resource estimate was 2.65 Selective check sampling, bulk sampling, and assay standards show reasonable reproducibility and correlation with original results as expected from high grade vein gold deposits. PG has verified the data disclosed including sampling, analytical and test data. PG has also verified the sources of data and in PG’s opinion the satisfactory replication of data in a number of verification programs by different entities confirms the overall reliability of the data set. All presently required environmental permits are in place and NGG holds current title to the mineral resource area under Exploration License 1091, Normanby, granted by the Papua New Guinea Government. The mineral resource estimate is not known to be materially affected by any environmental, legal, title, taxation, socio-political, marketing or other relevant issues except as may be required from time to time by the Papua New Guinea Mining, Environmental and Taxation Acts. Drill core is currently logged and split (all by diamond saw) on site with half core being dispatched to, and assayed by accredited laboratory ALS–Chemex in Townsville, Australia. In house and laboratory standards are used for quality control plus regular check sample assaying. Trench samples are usually continuous channel samples, in lengths dependent on geology or in one or two metre intersects. Some samples were panel samples over a face of mineralisation or bulk samples. Usually about 3kg is collected and prepared and assayed at ALS – Chemex in Townsville, Australia. Other Information The Normanby Property has been the subject of three earlier Independent Technical Reports on behalf of NGG, in 1996, 1998, and 2002 by Peter Christopher, PhD, P.Eng of Peter Christopher & Associates. The report in 2002 was compliant with NI 43-101 guidelines, is filed on Sedar and at www.newguineagold.ca. New Guinea Gold is the premier junior explorer and miner in Papua New Guinea, with interests in ten gold and two porphyry copper-gold-molybdenum properties. With 75,000 + metres of drilling completed, extensive gold or copper-gold-molybdenum mineralisation has been discovered at 11 of the properties while the 12th contains widespread and extensive alluvial gold. The Company’s outstanding shares are traded on the TSX-Venture, Frankfurt, and Berlin Stock Exchanges. In addition to the Imwauna Project the Company has commenced gold production at its Sinivit Gold Mine, in East New Britain, Papua New Guinea. The Company also owns an approximate direct 46%



Page 22 of 26

interest in Australian Securities Exchange listed company, Coppermoly Ltd and 30% in Pacific Kanon Gold Corporation which is intended to list on the TSX-V in the near future.


The information in this release was prepared under the direction of Robert D. McNeil (F Aus IMM) a “qualified person” as defined by National Instrument 43-101. NGG follows a rigorous QA/QC protocol on all of its exploration projects. This news release may contain forward-looking statements, which are subject to certain risks, uncertainties and assumptions. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such forward-looking statements are made as at the date of this news release, and the company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law. For further information on this release or on other NGG projects such as the Sinivit Gold Mine, contact Forbes West toll free at 888 655 5532, email [email protected] or Judith O’Quinn at 604 662 3598, email [email protected] or access our website – www.newguineagold.ca ON BEHALF OF THE BOARD “R.D.McNeil” CHAIRMAN & CEO The TSX Venture Exchange has not reviewed and does not accept the responsibility of the adequacy of this release. The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company’s expectations. Certain risk factors may also affect the actual results achieved by the Company.

ngg/rel/imwaunainferredmineralresource15june’08



Page 23 of 26

Summary Assay Results Used in Resource Estimate

Hole No Northing Easting EOH Azi Dip From To Interval Au Ag(amg) (amg) (m) (mag) (deg) (m) (m) (m) g/t ppm

IMD001 8887180 289151 64.5 100 -60 No results used in resource estimate IMD002 8887185 289110 77.5 100 -60 No results used in resource estimate IMD003 8887271 289175 66.4 100 -60 No results used in resource estimate IMD004 8887263 289203 73.2 100 -60 No results used in resource estimate IMD005 8887164 289173 72.2 100 -60 48.30 48.90 0.6 1.43 IMD006 8887139 289141 70 100 -60 38.47 48.80 10.3 32.45

50.55 60.00 9.5 13.28 IMD007 8887116 289131 51.1 100 -60 36.80 46.34 9.5 6.12 IMD008 8887088 289142 60 100 -60 13.60 14.00 0.4 3.24 IMD009 8887063 289138 40 100 -60 13.80 15.30 1.5 7.60 21 IMD010 8887112 289185 74.9 280 -50 No results used in resource estimate IMD011 8887078 289168 83.55 280 -60 No results used in resource estimate IMD012 8887067 289182 95.45 280 -60 67.05 68.85 1.8 3.96 IMD013 8887150 289198 51 280 -60 0.00 4.35 4.4 1.14

43.70 44.35 0.6 4.63 4 IMD014 8887105 289204 66 280 -50 No results used in resource estimate IMD015 8886936 289091 102 280 -60 No results used in resource estimate IMD015a 8886936 289092 6 280 -60 2.75 4.50 1.8 7.08 IMD016 8887268 289244 85.6 280 -60 No results used in resource estimate IMD017 8887203 289218 64.3 280 -50 24.00 25.50 1.5 16.90 17 IMH001 8887138 289140 75 100 -60 64.30 68.10 3.8 36.11 70 IMH002 8887138 289141 72.6 100 -60 32.00 39.20 7.2 16.51 18 IMH003 8886539 288908 54 280 -50 42.90 50.00 7.1 0.98 2 IMH004 8886588 288890 82.6 100 -60 48.00 54.00 6.0 6.39 10 IMH005 8886600 288841 130 100 -60 No results used in resource estimate IMH006 8886359 288874 139.2 280 -45 126.10 128.90 2.8 4.82 16 IMH007 8886438 288906 126.2 290 -45 112.90 114.20 1.3 6.47 10 IMH008 8886679 288959 42 100 -45 16.00 18.00 2.0 7.06 22 IMH009 8886679 288957 56.5 100 -80 29.00 34.00 5.0 1.69 8 IMH010 8886780 289025 60 100 -55 23.00 27.00 4.0 1.26 4 IMH011 8886780 289024 75 100 -80 35.00 41.00 6.0 3.52 9 IMH012 8886863 289086 75 280 -45 51.00 57.00 6.0 3.64 18 IMH013 8886933 289058 55.6 100 -60 43.00 45.00 2.0 3.34 4 IMH014 8887234 289201 33.1 100 -45 22.60 25.60 3.0 5.65 4 IMH015 8887115 289130 43.6 100 -45 19.20 23.00 3.8 1.46 4 IMH016 8887115 289131 55 100 -60 35.00 44.00 9.0 12.87 17 IMH017 8887114 289131 124.6 100 -70 No results used in resource estimate IMH018 8887258 288870 150.1 310 -45 No results used in resource estimate IMH019 8887111 289141 55.7 100 -85 No results used in resource estimate IMH020 8887110 289141 42.7 100 -65 No results used in resource estimate IMH021 8887110 289141 39.7 100 -65 14.00 16.00 2.0 5.97 11 IMH022 8887136 289142 71.4 100 -65 No results used in resource estimate IMH023 8887136 289142 37.4 100 -75 No results used in resource estimate IMH024 8887135 289144 45.8 100 -45 14.00 18.00 4.0 7.93 9 IMH025 8887147 289182 69.6 280 -65 No results used in resource estimate IMH026 8887148 289181 48.8 280 -45 21.00 23.00 2.0 1.74 4 IMH027 8887170 289189 69.6 280 -65 No results used in resource estimate IMH028 8887171 289188 37.6 280 -45 18.00 19.00 1.0 6.02 18 IMH029 8887195 289195 61 280 -65 17.50 20.00 2.5 8.47 15 IMH030 8887195 289194 37.6 280 -45 11.00 12.00 1.0 26.50 56 IMH031 8887217 289206 60.7 280 -65 17.00 22.00 5.0 5.86 5 IMH032 8887218 289205 34.8 280 -45 12.00 13.00 1.0 10.50 6 IMH033 8887248 289196 79.3 106 -65 No results used in resource estimate IMH034 8887248 289197 49.1 106 -50 21.00 26.00 5.0 5.55 14 IMH035 8887271 289207 82.8 100 -70 48.00 60.00 12.0 5.53 7

Note: No results used in resource estimation means all results less than 0.5g/t gold or narrow intersections usually less than one metre and 1g/t gold which appear not to have continuity.



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63.00 65.00 2.0 4.68 24 IMH036 8887270 289208 43.8 100 -55 20.00 21.00 1.0 4.04 23 IMH037 8887295 289213 73.9 100 -65 No results used in resource estimate IMH037A 8887294 289213 60.2 100 -65 48.30 49.40 1.1 2.78 14 IMH038 8887294 289214 43.1 100 -55 26.70 29.80 3.1 1.40 6 IMH039 8887190 289170 71.2 100 -80 No results used in resource estimate IMH040 8887190 289172 30.7 100 -50 13.40 17.00 3.6 6.83 15 IMH040A 8887191 289172 40 100 -50 12.30 15.30 3.0 5.56 31 IMH041 8887293 289214 41 100 -50 No results used in resource estimate IMH042 8887209 289184 34.9 100 -50 16.35 19.30 3.0 8.85 14 IMH043 8887122 289144 49.7 100 -50 14.30 15.50 1.2 13.26 23 IMH044 8887083 289162 46.7 280 -50 30.60 32.20 1.6 6.24 15 IMH045 8887083 289163 63.1 280 -65 44.50 46.20 1.7 5.25 13 IMH046 8887235 289191 64.7 100 -65 44.10 44.95 0.9 8.99 20 IMH047 8886969 289112 35.3 280 -50 No results used in resource estimate IMH048 8886792 289034 50.1 100 -65 6.50 8.50 2.0 4.67 15 IMH049 8886710 289007 50.8 280 -50 No results used in resource estimate IMH050 8886653 288951 34.9 100 -60 15.90 17.55 1.7 16.66 35 IMH051 8886654 288951 47.1 100 -80 24.00 26.10 2.1 22.46 45 IMH052 8886603 288924 100 100 -55 No results used in resource estimate IMH053 8886627 288963 35.75 280 -50 22.80 25.20 2.4 4.78 48 IMH054 8886771 289012 55.9 100 -55 30.88 32.85 2.0 3.03 17 IMH055 8887182 289196 52.9 280 -65 27.50 30.25 2.8 34.49 44 IMH056 8886843 289032 54.9 100 -65 34.50 35.50 1.0 23.67 72 IMH057 8887147 289186 55.9 280 -60 No results used in resource estimate IMH058 8887170 289193 48 280 -60 No results used in resource estimate IMH059 8887078 289176 82.60 278 -50 51.40 52.60 1.20 14.65 31 IMH060 8887052 289171 91.00 275 -50 60.60 61.50 0.90 15.93 32 IMH061 8886965 289126 82.50 278 -51 No results used in resource estimate IMH062 8886960 289141 160.00 279 -51.5 14.90 16.70 1.80 8.65 91

31.40 33.20 1.80 9.16 20 IMH063 8887083 289048 160.90 96 -58 No results used in resource estimate IMH064 8887037 289051 160.20 103 -71.3 No results used in resource estimate IMH065 8887026 289086 90.10 101 -63 66.1 70.8 4.70 0.92 2

70.8 71.1 0.30 13.80 1371.9 74.1 2.20 9.16 1874.1 75.1 1.00 0.51 1

IMH066 8887019 289107 66.10 102 -64.7 No results used in resource estimate IMH067 8886668 288897 171.20 92 -67 120.20 126.20 6.00 67.98 69 IMH068 8886608 288905 60.00 98 -62 39.80 42.20 2.40 13.68 66 IMH069 8886610 288870 130.80 85 -65 99.10 109.10 10.00 18.10 31 IMH070 8886588 288903 55.70 100 -60 22.40 22.90 0.50 2.63 6 IMH071 8886596 288880 81.30 100 -60 59.65 60.30 0.65 6.08 31 IMH072 8886577 288871 95.00 100 -50 37.45 38.50 1.05 3.87 5

55.90 57.00 1.10 8.33 57 IMH073 8886581 288860 135.30 100 -60 77.40 78.50 1.10 6.22 12 IMH074 8886624 288976 100.00 280 -50 63.00 69.45 6.45 20.87 50 IMH075 8886668 288909 180.20 100 -59 57.20 57.70 0.50 82.90 146

79.70 80.20 0.50 5.52 8 IMH076 8886688 288931 162.60 104 -66 56.20 57.10 0.90 20.50 50 IMH077 8886715 288965 109.70 97.5 -61 52.30 53.50 1.20 2.57 14 IMH078 8886715 288965 110.00 100 -70 58.70 59.60 0.90 10.75 27 IMH079 8886768 288975 100.7 100.5 -61 64.25 65.40 1.15 14.55 20 IMH080 8886776 288951 165.2 99 -62 No results used in resource estimate IMH081 8886684 288860 250 94 -62.5 186.90 187.80 0.90 2.64 16 IMH082 8886653 288889 130.7 97 -61 80.80 86.40 5.60 36.16 45



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IMH083 8886634 288825 230 97 -61.5 210.90 213.55 2.65 1.73 2 IMH084 8886601 288855 150 89 -61.5 106.20 108.50 2.30 10.64 30 IMH085 8886666 288848 200 96 -59 165.30 168.40 3.10 7.22 8 IMH086 8886611 288811 180 95 -50 155.6 157.2 1.6 3.91 6 IMH087 8886590 288824 180 100 -60 150.3 153.4 3.1 5.19 7 IMH088 8886654 288888 91.3 102 -63 No results used in resource estimate IMH089 8886735 288925 130 94 -62 118.5 122.05 2.05 2.71 10 IMH090 8886705 288883 250.5 100 -60 No results used in resource estimate IMH091 8886652 288956 75 100 -60 8.30 12.1 3.8 21.10 44

27.10 28.60 1.50 7.78 44 IMH092 8887160 289150 42.3 100 -65 34.90 35.8 0.9 6.45 22 IMH093 8887169 289123 70.8 100 -65 No results used in resource estimate IMH094 8886921 289092 120.1 100 -60 9.10 13.7 4.6 9.50 15

34.40 36.1 1.7 13.36 16 IMH095 8886603.1 288924.3 151.6 100 -60 32.60 33.60 1.0 8.40 27 IMH096 8886852.6 289001 201.4 100 -70 41.80 42.50 0.7 2.20 10

72.40 73.90 1.5 10.43 11 IMH097 8886844 289011 130.7 100 -60 No results used in resource estimate IMH098 8886796 289010 115 100 -60 45.00 46.00 1.0 8.72 34 IMH099 8886796 289010 130.9 100 -70 51.80 52.60 0.8 9.60 33 IMH100 8886876 289024 130.6 100 -50 49.90 50.45 0.55 19.88 9 IMH101 8886884 289012 153.4 100 -60 119.10 125.00 5.9 4.92 9 IMH102 8887590 289304 90.1 280 -55 15.00 16.70 1.7 23.30 10 IMH103 8887585 289320 94.8 280 -65 No results used in resource estimate IMH104 8887490 289310 96.1 280 -50 6.10 8.10 2.0 2.77 2 IMH105 8887478 289331 93.1 280 -50 No results used in resource estimate IMH106 8887402 289233 90.1 100 -50 18.20 19.10 0.9 6.08 14 IMH107 8887402 289233 130.4 100 -75 49.90 50.40 0.5 5.22 17 IMH108 8887272 289259 100.1 100 -50 No results used in resource estimate IMH109 8887272 289259 280 -60 No results used in resource estimate IMH110 8887182 289339 213.3 280 -55 No results used in resource estimate IMH111 8887197 289263 100.7 280 -55 No results used in resource estimate IMH112 8887039 289260 106.6 100 -50 No results used in resource estimate IMH113 8887170 289248 100.7 280 -50 79.70 80.50 0.8 3.65 4 IMH114 8887257 289271 102.3 280 -50 No results used in resource estimate IMH115 8887257 289271 81 100 -50 No results used in resource estimate IMH116 8887327 289372 100 100 -70 Not drilled yet IMH117 8887327 289372 140 280 -55 Not drilled yet IMH118 8886486 288801 121.9 100 -70 48.80 49.10 0.3 3.49 7 IMH119 8886412 288756 101 100 -75 48.00 49.90 1.9 21.01 29

92.00 97.10 5.1 6.55 10 IMH120 8886412 288756 96.1 100 -50 No results used in resource estimate IMH121 8886314 288744 100.6 100 -50 48.00 49.50 1.5 7.59 30 IMH122 8886314 288744 126.9 100 -70 82.10 84.50 2.4 13.17 17

********** 3rd June 2008

NEW GUINEA GOLD POURS 1,060 OZS OF GOLD IN MAY 2008 • New Guinea Gold (NGG) poured and sold 1,060 ozs of gold and 117 ozs of silver in May 2008 at the

Sinivit Project in Papua New Guinea. • At the end of May approximately 30,000 tonnes of ore at a grade of between 5 and 6g/t gold was

leaching in Vats at Sinivit. • NGG expects to have 50,000 tonnes leaching at the end of June 2008.



Page 26 of 26

Bob McNeil CEO and Chairman noted: “May was our first significant month of gold production for Sinivit and all aspects of the project are on schedule to increase production in June to 1,500/2,000 ozs, and in July to 2,000/2,500 ozs. We expect to add approximately 20,000 tonnes of ore per month to the vats in each month in the future to reach our target production rate of 35,000 ounces annually. “In addition to our progress at Sinivit, the new resource estimate for the Imwauna Project, at the Normanby Property is still on schedule for release in mid June. Drilling is continuing at both the Sinivit and Imwauna Projects. NGG’s 45% owned, and associate company Coppermoly Ltd, is also drilling ahead at its Simuku copper, gold, molybdenum system and has commenced exploration at its Mt Nakru copper, gold molybdenum property. Excavator trenching has also commenced at Pacific Kanon Gold’s (presently 50% owned by NGG and 50% by Vangold) Fergusson property. An update on the status of the Pacific Kanon Gold IPO will be issued in the near future”. NGG is beginning its annual Investor Relations Roadshow. RD McNeil will be meeting current and prospective investors in London, June 3-6, in Toronto June 9 and 10th, and in Vancouver form June 11 to 18th.

New Guinea Gold’s Annual Meeting will be held: Wednesday, June 18th, 2008 at 11 a.m. (Vancouver time)

in The Terrace Room Third floor, Fairmont Waterfront Hotel, 900 Canada Place Way, Vancouver, BC

A photo slide presentation and projects update will be offered to shareholders and guests immediately following the meeting.

Investors are cautioned that the development of Sinivit is proceeding in the absence of a full feasibility study. These evaluations are preliminary in nature and are based entirely on indicated mineral resources, which have not been categorized as mineral reserves. There is no assurance that the operating and financial projections in the preliminary assessment will be realized. Mineral resources that are not reserves do not have demonstrated economic viability. Measured and indicated mineral resources are that part of a mineral resource of which quantity and grade can be estimated with a level of confidence sufficient to allow the application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit.


For further information contact Forbes West toll free at Telephone: 888 655 5532, email [email protected] or Judith O’Quinn at 604 662 3598, email [email protected] The technical data in this release was prepared by or under the supervision of Robert D. McNeil, CEO of New Guinea Gold Corporation. Mr McNeil has an MSc in Geology, 44 years mining industry experience, is a Fellow of the Australian Institute of Mining and Metallurgy, and meets the requirements of NI 43-101 for a qualified person.

ON BEHALF OF THE BOARD

R.D.McNeil CHAIRMAN & CEO The TSX Venture Exchange has not reviewed and does not accept the responsibility of the adequacy of this release. The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company’s expectations. Certain risk factors may also affect the actual results achieved by the Company.

**********

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