WARTHOG RESOURCES (T) LTD

& NGWENA LIMITED

NACHINGWEA PROJECT

DECEMBER 2011 QUARTERLY REPORT

PL 4415/2007
(Nachihangi)

Nachihangi PL 4415/2007
December Quarterly Report 2011
 WARTHOG RESOURCES (T) LTD
& NGWENA LIMITED
NACHINGWEA PROJECT

Nachihangi PL 4415/2007

DECEMBER 2011 QUARTERLY REPORT

Introduction

Ngwena Limited (“Ngwena”) has been carrying out an extensive on-going nickel-
copper sulphide exploration program on its prospecting licenses comprising the
Nachingwea Project in SE Tanzania since 2007. Ngwena is a Tanzanian joint
venture corporation owned 75% by Continental Nickel Limited (“CNI”) of Canada and
25% by IMX Resources NL (formerly Goldstream Mining) of Australia.

The Nachingwea Project is comprised of forty (40) granted Prospecting Licenses

(PLs) as of December 31, 2009. A further nineteen (19) PLs are currently under
application. PL 4415/2007 (Nachihangi) is an integral part of the Nachingwea
Property holding.

During the period October through December 2011, a regional exploration

program was in progress which included the Nachihangi license. The
December quarter work program included geochemical soil sampling, Line
cutting, DGPS Survey, TDEM Survey and data compilation & interpretation and
reporting.

The highlight of the soil geochemical program is seen on the Nachihangi L grid,
where Niton analyses returned elevated nickel of >200ppm Ni over a 200m wide
area on the EM axes. The highest lab value received was 202ppm Ni.

Reverse Circulation drilling highlights included the intersection of ultramafic rocks in

two areas where they were not previously known to occur. Lab values returned
650ppm Ni associated with ultramafic over 1m (78-79m) from drill hole NRC10-042
and 0.31%Ni in oxidized ultramafic from 12-13m and 495ppm Cu associated with
amphibole gneiss (39-40m) from drill hole NRC10-045.

Ngwena Limited has spent ~ $17.5 million USD on exploration on the Nachingwea
Project during the period January 2007 to December 2011. Results have been
encouraging in the Ntaka Hill area, but full evaluation of the entire project area will
require considerably more time and expenditures. Land tenure is critical to successful
and comprehensive exploration efforts.

Licence Details

Nachihangi PL 4415/2007 was granted on April 7, 2007 and covered an area of

198.4 km2. The PL was originally granted to Warthog Resources (T) Ltd and is in the
process of being transferred to Ngwena Limited. On April 3, 2009, an application for
first renewal was filed and the area of the license was reduced to 97.82 sq km. On
the 2nd of March 2011, an application for the second renewal was filed and the lcence
was reduced to 48.37 sq km.

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Nachihangi PL 4415/2007
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Location

The Nachingwea Nickel-Copper Project is located in southeastern Tanzania and is

centered 100 km north of the Mozambique border, approximately 180 km west of the
coastal port city of Mtwara and 400 km south of Dar es Salaam. The property holding
straddles portions of Nachingwea, Liwali, and Lindi Districts in Lindi Region and the
Masasi District in Mtwara Region.

Ntaka Hill is situated 47 km NW of Nachingwea District town and 12km NW of Mnero

village. All exploration is carried out from a semi-permanent tented camp established
on Ntaka Hill, 1km west of Nditi Village. All work activities for the Nachingwea Project
are supported from the Ntaka Hill Base Camp. Satellite camps and local
accommodation in towns and villages are also utilized as necessary.

The Nachihangi license is centered 21 km SW from the Ntaka Camp and 11 km SW

from the village of Lihonja and encompassed an original area of 198.4 km 2 (Figure 1).
Upon renewal in April, the license was reduced to 97.82 sq km, with the eastern
portion of the license being retained. Access to the license is provided by regional dirt
and occasionally sealed roads and local access is gained from tracks which are cut
when required.

Nachihangi PL 4415/2007
December Quarterly Report 2011
Figure 1: Nachihangi PL4415/2007 location map. Fine blue lines are creeks, black
lines roads/tracks, red lines are license boundaries and green lines are
National/District Game/Forest reserves. Ntaka Hill camp and local villages are shown
for reference.

Project Exploration History and Current Exploration Objective

The project area has been sporadically explored since the 1950’s for base and
precious metals and PGE’s. Current exploration work being conducted is focused on
discovering economic nickel-copper mineralization similar to the recent discoveries
currently being evaluated in the Ntaka Hill area.

Work to date on the Nachingwea Project has consisted of interpretation of historical

geochemical and geophysical datasets, regional airborne EM and magnetic surveys

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December Quarterly Report 2011
(2007 &2008), soil and stream sampling programs (2008-2011) ), regional geology
traverses and ground checking of EM and geochemical anomalies. In addition
ground geophysical surveys and diamond drilling (2008-2011) have been carried out
on selected licenses, particularly in the Ntaka Hill area.

A large regional radiometric and magnetic survey was also completed in 2011 over
the entire Nachingwea Project in order to accelerate the definition of exploration
targets.

The current exploration objective on the Nachihangi license is to identify prospective

geological areas that can be further evaluated using geological, geochemical and
geophysical methods. The prospective areas are typically identified by interpretation
of airborne geophysical surveys and existing geochemical data. The selected areas
are then field checked by a geologist and additional geochemical and/or ground
geophysical data may be obtained with the objective of defining a drill target.

Geological Setting

The Nachingwea Project lies within the late Proterozoic Mozambique Belt of
southeastern Tanzania. The Mozambique Belt ("MB") comprises a dominantly north-
south trending domain of highly deformed and metamorphosed rocks which formed
during oblique collision of east and west Gondwana and are part of the Pan African
Orogenic System. The MB includes lithologies that have been affected by both the
Usagaran (1.8-2.0 Ga) and the Pan-African (650-580 Ma) orogenic events.

The first stages of the MB formation occurred at 1,000-700 Ma. This initial stage was
marked by large-scale magmatic intrusive activity, which may include the ultramafic-
mafic intrusions observed on the Nachingwea property. This was followed with two
collisional phases recorded at 640-620 Ma and 580-530 Ma, which are largely
responsible for the regionally observed complexly deformed tight fold structures
dominant across the project area. Peak metamorphic conditions to granulite facies
are dated at 640 Ma.

In the general Nachingwea Project area, MB lithologies consist of a mixed

assemblage of mafic to felsic granulites, gneisses and migmatites (interpreted to
represent volcanic protoliths) interlayered with amphibolites and metasedimentary
rocks, including quartzites, banded magnetic quartzites, pelites, graphitic schists and
marbles. These lithologies are cross-cut by poorly documented mafic to ultramafic
intrusions of unknown age and include the Ntaka ultramafic intrusion which hosts
considerable nickel-copper-cobalt sulfide mineralisation. All units are complexly
deformed and metamorphosed to amphibolite and granulite facies and occur in
blocks bounded by major NW, EW and NE fault zones.

As outcrop is non-existent to rare across most of the licenses little detail is known of
the local geology on the licenses. The majority of geological information to date has
been gathered from mapping and drilling at Ntaka Hill. However regional geological
traverses, grid mapping and drilling are started to add to the geological database.

Summary of Work – PL 4415/2007, 2011 Exploration Program

A regional exploration program was in progress during the quarter and was based
out of the Ntaka Hill camp. Work completed in the December quarter included

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geochemical sampling and Reverse Circulation drilling of selected airborne EM
anomalies. Table 1 and Figure 2 summarize the work completed on the license
during 2011. Details and results of the 2011 exploration program are given below.

Table 1
Summary of Work Completed in 2011 on PL 4415/2007 (Nachihangi)

Work Type Production

Soil Sampling 48 samples for NITON analysis
Line cutting/Grids 21.7 km /2 Grids
DGPS Survey 21.7 km
TDEM Survey 10.35
Structural Data Analysis by SRK The Entire PL

A total of 223 geochemical soil samples were collected for analysis in 2011 regional
exploration work programs including 36 geochemical soil samples collected during
the December quarter. Samples were collected at 50m spaced intervals from 10 soil
survey grids and at 100m spacing along one survey grid to test for the geochemical
response of the VTEM and soil geochemical anomalies. All of the samples were
analyzed using a portable XRF NITON instrument. 21 samples were sent to the lab
for assay.

The Nachihangi E soil grid was designed to test the geochemical response of VTEM
target NAC07-195. The program was completed in November 2011. The grid
consisted of a single survey line with 50m sample intervals. A total of 8 samples were
collected for Niton analysis. Results returned nickel and copper below the detection
limit of the Niton instrument. No samples were sent to the lab.

The Nachihangi F soil grid was planned to test the geochemical response of VTEM
target NAC-196. It consisted of a single survey line at 50m sample spacing. 10
samples were collected for Niton instrument analysis. Niton analyses returned a
single sample with elevated nickel and copper. The maximum values received are
284ppm Ni, 84ppm Cu and 304ppm Cr. No samples were sent to the lab and the
target has been downgraded.

The Nachihangi G soil grid was planned to test the geochemical response of VTEM
target NAC-194. The program was completed on the November 4th. It consisted of a
single survey line at 50m sample spacing. 8 samples were collected for Niton
instrument analysis. Niton analyses returned a single sample with elevated copper.
The maximum values received are <LOD Ni, 38ppm Cu and 71ppm Cr. No samples
were sent to the lab and the target has been downgraded.

Nachihangi H Soil Grid

The Nachihangi H soil grid was planned to test the geochemical response of VTEM
target NAC07-193. The work was completed on the November 5 th 2011. This grid
consisted of a single survey line with 50m sample intervals. Ten samples were
collected for Niton instrument analysis. Niton analyses returned one elevated nickel

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value with highest values of 106ppm Ni, 59ppm Cu and 234ppm Cr. No samples
were sent to the lab and the target has been downgraded.

The Nachihangi I soil grid was planned to test the geochemical response of VTEM
target NAC07-077. The program was completed on the Sept 7th 2011. This grid
consisted of three survey lines spaced 100m apart with 50m sample intervals. 21
samples were collected for Niton instrument analysis. Niton analyses returned one
elevated copper value with highest values of <LOD Ni, 109ppm Cu and 151ppm Cr.
No samples were sent to the lab and the target has been downgraded.

Nachihangi J Soil grid

Nachihangi J soil grid was planned to test the geochemical response of VTEM target
NAC07-162. The program was completed on the Sept 13 th 2011. This grid consisted
of three survey lines spaced 200m apart with 50m sample intervals. 27 samples were
collected for Niton instrument analysis. Niton analyses returned elevated nickel over
a width of 200m along EM axes. The highest values are 313ppm Ni, 48ppm Cu and
514ppm Cr. Five samples were sent to the lab for assay. The lab values shows that
nickel values are 50% lower than the Niton values and copper values are similar. The
highest lab values received are 168ppm Ni, 61ppm Cu and 428ppm Cr. This target
was drill tested by NRC10-42.

Nachihangi K Soil grid

The Nachihangi K soil grid was planned to test the geochemical response of VTEM
target NAC07-021, located on radiometric target RAD-62, and associated with
elevated Ni (~100ppm) in nearby soil and streams. The program was completed on
the Sept 19th 2011. This grid consisted of two survey lines 300m apart with 100m
sample intervals. 30 samples were collected for Niton instrument analysis. Niton
analyses returned elevated nickel of approximately 100m Ni over a 300m wide area.
The highest values received from this grid are 109ppm Ni, 49ppm Cu and 77ppm
Cr. 2 samples were sent to the lab for assay because they tested high in Co. The
maximum lab values received was 53ppm Co. The target has been downgraded.

Nachihangi L Soil grid

The Nachihangi L soil grid was planned to test the geochemical response of VTEM
target NAC08-022. The program was completed on the Sept 20 th 2011. This grid
consisted of three survey lines 200m apart with 50m sample intervals. 36 samples
were collected for Niton instrument analysis. Niton analyses returned elevated nickel
of >200ppm Ni on the EM axes over a 200m wide area. The highest values received
from this grid are 480ppm Ni, 38ppm Cu and 911ppm Cr. Thirteen samples were
sent to the lab for assay because this area is known to be underlain by ultramafic
rock, and results could be used to better evaluate other anomalies. The lab values
shows that nickel values are 50% lower than the Niton values and copper values are
similar. The highest lab values received are 202ppm Ni, 40ppm Cu and 559ppm Cr.
This anomaly was targeted by NRC10-45.

Nachihangi M Soil grid

The Nachihangi M soil grid was designed to test the geochemical response of VTEM
target NAC08-184. The program was completed on the Sept 24th 2011. This grid
consisted of three survey lines 300m apart with 50m sample intervals. 24 samples
were collected for Niton instrument analysis. Niton results returned one sample with
elevated copper. Highest values on the grid were <LOD Ni, 199ppm Cu and
217ppm Cr. The one sample with elevated Cu was sent to the lab, and the lab
values received was 13ppm Cu.

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Nachihangi N Soil Grid
The Nachihangi N soil grid was designed to test the geochemical response of VTEM
target NAC08-023. The sampling program was completed on the 24th September
2011. The grid consisted of two survey lines, 600m apart with 50m sample spacing.
27 soil samples were collected for Niton instrument analysis. Niton instrument
analyses returned one elevated Ni value. The highest values received on the grid
were 499ppm Ni, 40ppm Cu and 700ppm Cr. The sample with elevated Ni was re-
analyzed using the Niton instrument, and the high values did not repeat when
checked. No samples were sent to the lab for additional assay. The area has been
downgraded.

Nachihangi O Soil Grid.

The Nachihangi N soil grid consisted of a single line with 50m sample spacing. The
grid was designed to test the geochemical response of VTEM target NAC08-185 and
it was completed on the 25th September 2011. 12 samples were collected for Niton
instrument analysis. Niton assay results returned nickel and copper values below
detection limit of the instrument. No samples were sent to the lab for additional assay
and the target has been downgraded.

Nachihangi P Soil Grid

The Nachihangi P soil grid was planned to test the geochemical response of VTEM
target NAC08-186. The work program was completed on the 25th September 2011.
10 samples were collected from a single survey line at 50m sample spacing. Niton
assay results returned nickel and copper values below detection limit of the
instrument. No samples were sent to the lab for additional assay

TDEM Survey

Structural Data Analysis (by SRK)

No significant anomalies were identified in Nachihangi license by this study.

Expenditures

Expenditures for PL4415/2007 (Nachihangi) for the December 2011 Quarter are
USD $26,227.

See attached Table.

Christopher Airo and Stanslaus William

Nachihangi PL 4415/2007
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Ngwena Limited

Nachihangi PL 4415/2007
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