WARTHOG RESOURCES (T) LTD

& NGWENA LIMITED

NACHINGWEA PROJECT

DECEMBER 2011 QUARTERLY REPORT

PL 4486/2007
(Nanyindwa)

Nanyindwa PL 4486/2007
December Quarterly Report 2011
 WARTHOG RESOURCES (T) LTD
& NGWENA LIMITED
NACHINGWEA PROJECT

Nanyindwa PL 4486/2007

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, 2011. A further nineteen (19) PLs are currently under
application. PL 4486/2007 (Nanyindwa) is an integral part of the Nachingwea
Property holding.

During the period, October through December 2011, work on the license consisted of
an geochemical soil sampling, regional traverse mapping, Rock sampling for niton
analysis, Structural data analysis and compilation & interpretation and reporting. Lab
assay results showed weakly elevated Ni anomaly that remains opens to the east,
with the highest value of 97 ppm Ni, 52 ppm Cu and 309 ppm Cr.

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.

License Details

Nanyindwa PL 4486/2007 was granted on June 12, 2007 and covered an area of
171.8 km2. The PL was originally granted to Warthog Resources (T) Ltd and is in the
process of being transferred to Ngwena Limited. On June 10, 2009, an application for
first renewal was filed and the area of the license was reduced to 84.66 sq km. In
June 2011, an application for the second renewal was filed and the licence was
reduced to 41.86 sq km.

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

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December Quarterly Report 2011
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 Nanyindwa license is centered 63 km ESE of Ntaka Camp, 18 km NW of Masasi

District town. This “L-shaped” license covered an original area of 171.8 km 2. Upon
renewal in June, the license was reduced to 84.66 sq km, with the northeastern
portion of the license being retained. Upon second renewal in June 2011, the license
was reduced to 84.66 sq km, with the northeastern portion of the license being
retained (Figure 1). Access to this license is provided by 3 main roads and other local
tracks.

Figure 1: Nanyindwa PL4486/2007 location map. Black lines are roads/tracks, fine
blue lines are creeks, red lines are license boundaries and green lines are

Nanyindwa PL 4486/2007
December Quarterly Report 2011
National/District Game/Forest reserves. Ntaka Camp and local villages are also
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
(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 Nanyindwa 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

Nanyindwa PL 4486/2007
December Quarterly Report 2011
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 information to date has been
gathered from mapping and drilling predominantly at Ntaka Hill. However regional
geological traverses, grid mapping and drilling are started to add to the geological
database.

Summary of Work – PL 4486/2007, 2011 Exploration Program

Regional exploration program was in progress during the December quarter and was
based out of the Ntaka Hill camp. Work completed in the December Quarter included
geochemical soil sampling and data compilation & interpretation. Table 1 and Figure 2
summarize the total exploration work completed on the license in 2011. Details and
results of the 2011 exploration program are given below.

Table 1
Summary of Work Completed in 2011 PL 4486/2007 (Nanyindwa)

Work Type Production

389 samples for NITON analysis
Soil Sampling
57 samples sent to the lab
Rock Sampling 3 Rock samples for Niton Analyses
Regional Geology Traverse 0.85 km
Structural Data Analysis by SRK The entire PL

2011 Soil Sampling and Results

The soil sampling program completed in the December quarter was designed to test
elevated Ni and Cu geochem anomalies completed by previous explorers IMX and
BHP soils in south-western half of the license. Four soil grids were completed during
the program. A total of 45 geochemical samples were collected for XRF Niton
instrument analysis.

Nanyindwa A soil grid was established to follow-up elevated Ni & Cu in several IMX &
BHP stream samples with best sample assaying 211 ppm Ni and 136 ppm Cu. Two
survey lines 300m apart with 100m sample centers was completed and 14 samples
were collected for Niton analyses. Nanyindwa A soils NITON analyses result showed
elevated Ni & Cu that increase to the east and with the highest values of 287 ppm Ni,
67 ppm Cu and 542 ppm Cr occurring at the east end of the northern line. Five
samples with highest elevated Ni and Cu values were sent to the ALS Chemex lab in
Canada for assaying. Lab results showed that Ni values are generally lower by 70%
compared to NITON Ni values. The highest lab results were 97 ppm Ni, 52 ppm Cu
and 309 ppm Cr.

Nanyindwa B soil grid aimed at following up 2004 IMX soil samples with elevated Ni
and Cu over more than 6km along a road. IMX values are up to 306 ppm Ni and 169
ppm Cu. A total of 18 soil samples were collected at 200m sample spacing. NITON

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December Quarterly Report 2011
soil results showed elevated Ni over 4 soil samples which correlate to the highest Ni
in IMX samples. The highest values were 136 ppm Ni, 48 ppm Cu and 431 ppm Cr.
No Nanyindwa B soil samples were sent to the lab for further analysis.

Nanyindwa C soil grid consisted of a single survey line with 100m sample spacing.
The aim of the grid was to follow-up an 2004 IMX soil sample with 120 ppm and 89
ppm Cu. Six samples were collected from this grid and the maximum Niton values
returned were Ni <LOD, Cu <LOD and 46 ppm Cr. No samples were sent to the lab.

Nanyindwa D soil grid was aimed at testing the geochemical response of the 2011
radiometric anomaly RAD-155. A single survey line was planned over the target and
7 soil samples were collected for analysis. Samples showed no significant
anomalous values. The highest values were 63 ppm Ni, Cu<LOD and 70 ppm Cr.
No samples were sent to the lab.

Rock sampling for Niton Analysis

Regional Geology Traverse

Structural Data Analysis (by SRK)

An external review of historical geochemical data for the Nachingwea Project was
completed by Richard Carver. The study comprised 4,661 soil samples and 1,461
stream sediment samples collect by BHP, IMX and CNI between 2005 and 2009 and
included samples collected on the current Ntaka license.

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December Quarterly Report 2011
Figure 2: A map showing exploration work completed in 2011 on the License
PL 4486/2007 (Nanyindwa).

Expenditures

Expenditures for Nanyindwa PL 4486/2007 for the December Quarter 2011 are
USD $7,698.

See attached Table.

Christopher Airo and Stanslaus William

Ngwena Limited

Nanyindwa PL 4486/2007
December Quarterly Report 2011