Cervantes Corporation Limited: Nickel - Cobalt Opportunity Identified in RAB Data

Perth - Cervantes Corporation Ltd. (ASX:CVS) (Cervantes) has assessed Rotary Air Blast geochemical data from the Primrose Project (see Figure 1 in link below) collected by the previous tenement owners, European Lithium Ltd.. This drilling had been undertaken while that company was divesting the project area to Cervantes and has never been reported.

- Shallow RAB drilling identifies significant nickel - cobalt mineralisation

- Anomalous zones clearly identified with magnetic contacts suggesting a classic ultramafic basal contact nickel setting

- Significant intercepts include (downhole widths):

o 16m at 0.37% Ni and 0.032% Co from 24m in hole PFRAB1771

o 16m at 0.21% Ni and 0.018% Co from 27m in hole PFRAB1770

o 16m at 0.19% Ni and 0.032% Co from 12m in hole PFRAB1775

o 16m at 0.23% Ni and 0.017% Co from 4m in hole PFRAB1790

o 12m at 0.25% Ni and 0.022% Co from 8m in hole PFRAB1778

- An Emily May/Maggie Hay nickel deposit analogue is postulated

A total of 113 holes for 1,404 metres was drilled. Four broad areas were covered, either in a semi random pattern or along lines. The Collar information is presented as Appendix 1 (see link below) and hole locations summarised in Figure 2 (see link below). The holes were predominantly drilled vertically, though a limited number were drilled at an incline.

Assay data is given in Appendix 2 (see link below).

RAB Geochemistry Results

Nickel assay results from the RAB drilling are shown in Figure 3 (see link below). Significant intercepts (downhole widths) include: (see link below)

Significance of results - a primary nickel target is found

The Paynes Find Greenstone belt is described as primarily an arcuate sequence of ultramafic rocks younging westward to more acid volcanic and volcanoclastic rocks. These have been intruded by later stage east west oriented dykes and numerous thin pegmatites presumably related to post deposition granitic intrusion. The belt is bounded to the east by massive granite and has been folded and faulted.

The model for nickel mineralisation is generally divided into three distinct types:

1. a layered intrusive sill of ultramafic composition;

2. extrusive flows with mineralisation as accumulates within lava flow channels, tubes and tunnels, and

3. as lateritic deposit from surficial weathering.

The extrusive model has generally been favoured in this area by previous explorers, making the basal contact of the local ultramafic units a clear target for exploration.

Extensive, thick laterites are not well developed in the area, though they have not been definitively tested. However, local laterite development is seen. Moreover, it would be expected that nickel and cobalt anomalous laterite development would be seen above primary nickel sulphide mineralisation.

The Primrose Project holds a number of mafics that are candidates for extrusive style nickel where nickel accumulates at the base of the flow. The primary exploration method for basal contact nickel mineralisation is aeromagnetic data supported by geochemical testing.

Figure 3 (see link below) shows the anomalous nickel RAB geochemistry on an image of the enhanced aeromagnetic data over the project. Target "A" shows the nickel anomalism in hole PFRAB1770 sits on the contact between a magnetic unit to the west (red shades in the image) and a nonmagnetic unit to the east (blue shades). Target "B" shows a similar setting, though the nonmagnetic unit to the east is slightly more magnetic than that seen near target "A" (having green, rather than blue shades in the image.) Both targets display classic characteristics of the extrusive style of nickel mineralisation.

Importantly, geological logging of the RAB cuttings indicate that four of the five cited anomalous holes intersected probable mafic lithologies or clays derived from mafic lithologies.

Areas tested further north returned no results that are considered significant at this time. Further work may, however, conclude otherwise.

An Emily Ann/Maggie Hay analogue?

The geological setting of these RAB results is interpreted to be very similar to that seen at the Emily May nickel deposit, west of Norseman, WA. There, "the deposit occurs in a complex geological setting, consisting dominantly of felsic volcaniclastics hosting subordinate discontinuous lenses of mineralised and barren ultramafics, which dip at between 40deg and 60deg to the east in the vicinity of the deposit. The ultramafics and associated nickel-sulphide mineralisation do not extend to the bedrock surface and are therefore totally blind." (Peters and Buck, 2000, The Maggie Hays and Emily Ann nickel deposits, Western Australia: A geophysical case history, Expl Geophys, 31, 210-221). The Emily Ann deposit contained inferred and indicated resources of 2.17 Mt at 3.71% Ni at the time of the cited publication. Figure 4 (see link below) shows the projection of that resource onto an image of the aeromagnetic data over the area, with the similarity to Target A being striking.

Going Forward

Mr Marcus Flis, Director and Exploration Manager, expressed his delight in the development of this new target on the Primrose Project, commenting, "The nickel potential of the area has always been hinted at by previous explorers. Cervantes have now developed a working geological model to follow-up on what can only be described as noteworthy nickel and cobalt geochemical results. We are now in a position to add another dimension to Cervantes' gold exploration in the area and will be formulating a follow-up programme to realise its potential."

About the Primrose Project

The Primrose Project covers in excess of 8km of the highly gold mineralised Primrose Shear in the Murchison District of the Eastern Goldfields, Western Australia. Over 37 gold mines, of various sizes, operated in this field from 1911 till 1982. Some 63,000 ounces of gold was mined at an average grade of 25g/t during this period. It is generally accepted that significantly more gold than this was won from alluvial and unreported production.

Cervantes now controls 25 mining leases, prospecting licences, and an exploration licence that cover the majority of this historic gold field. A large database of drilling, surface geochemistry, geological, and geophysical data has been assembled to allow the field to be better understood than at any time in its history.

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About Cervantes Corporation Limited:

Cervantes Corporation Ltd. (ASX:CVS) is an emerging gold explorer and aspiring gold miner. It has built up a portfolio of gold properties in well-known and historically producing gold districts with a strategy to apply novel exploration and development thinking. Cervantes has identified opportunities in those districts that were overlooked by previous explorers. The company is committed to maximizing shareholder value through the development of those opportunities.



Contact:

Cervantes Corporation Ltd.
Collin Vost Executive Chairman
T: +61-8-6436-2300
E: cvost@cervantescorp.com.au