November 21, 2008

Gindalbie hits environmental hurdles for Karara project

Mr Garrett Dixon MD of Gindalbie Metals Ltd in an Open Briefing lodged with the Australian Securities Exchange said the Karara project was largely on track for initial production of magnetite concentrate in 2010 but disclosed that the company is facing environmental issues with the Karara project's start up phase, which involves mining direct shipping ore from a series of hematite orebodies on the Karara and nearby Mungada tenements.

Mr Dixon said that "That DSO phase has been out to public environmental review for a period of time and has received overwhelming public support. However, in working with the Government agencies it has become apparent that the tenements which cover the Mungada Ridge present significant environmental impact assessment challenges which may have a short-term effect on the DSO phase. In light of this we are continuing to work with the Government agencies for a positive outcome and remain confident of being able to start producing hematite from the Karara Iron Ore Project in 2009. However, it may be a case of reaching some sort of compromise regarding those hematite deposits contained within the Mungada Ridge, at least while further studies of the biodiversity of the region are conducted."

Mr Dixon said the initial DSO phase makes up less than 5% of the Karara Iron Ore Project while the magnetite phase, which the Government has already said it is pre-disposed to support, is going to be the company maker for Gindalbie and deliver significant returns to shareholders.