News 05 May 2010

Gold Exploration

Spitfire Oil Ltd (“Spitfire” or “the Company”) is pleased to announce the results of a recent gold exploration program at its Salmon Gums tenements in Western Australia.

The reconnaissance program consisted of a desktop study utilising in-house geological data of the area and a specially commissioned geophysical interpretation to define the target zone which was tested by 132 air-core holes drilled on a wide-spaced 800 x 200 metre grid for a total of 7,706 metres with an average hole depth of 58.4 metres. The deepest hole was 96 metres and the shallowest hole was 3 metres. The results are encouraging with several areas of anomalous gold delineated, three of which occur along important regional structures identified by the desktop studies. The anomalous holes lie in the west and north areas of the drill grid area, in the northern part of E63/947. All holes had their basal samples analysed for a range of 42 elements (including many regarded as pathfinders for gold) but the most coherent patterns discovered were for gold alone. Consequently 4 metre composite samples of the shallower weathered bedrock intersected in holes in the areas with anomalous basal samples were analysed just for gold.

The two structural anomalies contain values up to 23 parts per billion (ppb) gold in an area in which bedrock chips indicate a metasediment sequence occurring between two areas of granite. The largest of the two anomalies occurs along the western side of the grid over a 5.6 kilometre length and contains 32 holes with 5ppb gold or above and with a central area of 2 kilometres length and 7 holes with 10ppb gold or above and with a peak of 22ppb gold. A smaller associated and parallel anomaly above 5ppb gold occurs 300 metres to the west in 5 holes and with a peak of 20.1ppb gold. The second anomaly is 400 metres long and open to the north and occurs on the north-eastern side of the grid in 8 holes with a peak value of 23ppb gold. The gold is present at various depths in the weathered bedrock beneath younger cover sediments including some lignite. The gold values recorded in bedrock chips in each anomaly were mostly below 5ppb except for the far western anomaly which had a value of 20.1ppb gold. Some minor anomalous values were also recorded in the surrounding granite, some of which is pyritic.

Given the early stage of investigation these are encouraging results and further work is required to infill drill the anomalous zones and also to extend coverage over the remainder of the anomalous structures throughout the rest of the Spitfire exploration licences.

Chairman, Mr Mladen Ninkov, commented “The recently completed gold exploration program has covered only 6 kilometres of the interpreted 35 kilometres length of the major Mt Ida and Cundeelee Fault Systems in Spitfire’s Salmon Gums tenements. Since two significant gold anomalies have been defined within the area so far covered, there is obvious potential to discover more targets within the licences.”