Auzex Resources; Kingsgate Molybdenum-Bismuth (Mo-Bi) Project Scoping Study

Brisbane, June 20, 2007 AEST (ABN Newswire) - Kingsgate Molybdenum-Bismuth (Mo-Bi) Project Scoping Study provides pathway to feasibility study. A Scoping Study has been completed at the Auzex Resources' 100% owned Kingsgate Molybdenum-Bismuth project, located 20km east of Glen Innes, NSW, Australia. This Study confirms that Kingsgate will be a high grade, low cost operation, and provides the Company with clear recommendations of the requirements necessary to achieve Feasibility Study status for the project within a six to nine month timeframe.

The Scoping Study's Project Team comprised twelve separate consultant groups. Independent expert reports based on the Company's extensive exploration work, including an extensive Trial Mining / Bulk sampling program, were produced with information forming part of the final document which is summarised in this release.

Study reveals robust project

The Scoping Study has highlighted a lower than expected operating cost of $60.33 per tonne of ore processed. However, capital expenditure and infrastructure related to development came in higher than anticipated at $39.76M. A conservative diluted head grade of 0.23% Mo and 0.23% Bi has been used, although the Company is still targeting a grade of 0.3% Mo and 0.3% Bi. Based on a 250,000 tpa processing operation, a total of 911 tonnes of Mo in concentrate and 698 tonnes of Bi in concentrate would be produced annually.

This represents revenue of $158.12 per tonne of ore processed, using the study's long term assumptions of a US$22/lb Mo concentrate price, US$13/lb Bi concentrate price and a US$0.80 exchange rate. These price assumptions are more than 30% below the current market price of both metals.*

Overall project targets on track

Recent exploration results and interpretation of data from independent consultants confirm that the Company's initial long-term target of 10,000 - 20,000 tonnes each of contained molybdenum and bismuth is likely to be significantly upgraded. These metal targets equate to between 2.5M and 5M tonnes of ore at a target grade of 0.3% Mo and 0.3% Bi.

Resource conversion program

Discussions have commenced with regard to funding the development of the project. It has become clear that a resource compliant with the JORC Code** is vital to ensure fund raising costs and shareholder dilution are minimised. The Company is confident a JORC resource can be achieved at Kingsgate and is currently planning a detailed program of resource conversion. This is expected to commence early next month. The methodology has been approved by independent consultants. The aim is to report a JORC compliant resource for an initial 5 year mine life based on an annual processing rate of 250,000 tonnes.

Drilling targeting an initial five year mine life JORC resource

Resource drilling will focus on gaining information on grade and continuity of mineralisation to allow a global resource to be calculated for the project. A recently completed Induced Polarisation (IP) program identified a number of new geophysical anomalies within a 38 hectare area adjacent to the previous IP survey area. The Company is now confident that a resource for an initial five year mine life can be indicated from the area covered by the geophysics.

* As at 14 June 2007, MoO (57% concentrate) was trading at US$33.50 lb and Bi (90 day 99.99%) was trading at US$18.75 lb. The exchange rate was US$0.8418.

** JORC Code:- Guidelines prepared by the Joint Ore Reserves Committee (established 1971) of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia. This Code sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The Code has been adopted by and included in the listing rules of the Australian and New Zealand Stock Exchanges.

Key Parameters

Diluted Head Grade Assumption   0.23% Mo; 0.23% BiProcessing Rate                 250,000 tpaForecast Annual Production      911 tonnes Mo in concentrate                                & 698 tonnes Bi in concentrateCapital Expenditure (incl. infrastructure)          A$39.76MMetal Price Assumption*         US$22/lb Mo (A$60,626 tonne);                                 US$13/lb Bi (A$35,825 tonne) Forecast Revenue                A$158.12 per tonne of ore processed Forecast Operating Costs        A$60.33 per tonne of ore processed**

* Assuming exchange rate of US$0.80
** Assuming waste:ore ratio of 3:1

Contact