Horse Well Project
Western Australia

Horse Well is located in the Warburton Mineral Field of Western Australia and is approximately 85 kilometres northeast of the town of Wiluna. The Horse Well Project occurs in the northern most part of the Yandal/Millrose Greenstone belt that hosts a number of multi-million ounce gold projects, such as Bronzewing, Jundee, Wiluna and Darlot-Centenary gold mines.

The Horse Well portion of the greenstone belt has only been explored along the southern part, where the Company and previous explorers have identified 98,700 ounces of JORC gold resources in near surface deposits to date.

Exploration in the region is relatively immature, with the northern end of the Yandal greenstone belt having been largely ignored until the discovery of significant gold deposits at Bronzewing and Jundee in the 1990s. Work to date has consisted of geological and regolith mapping, surface geochemical sampling programs (rock, soil and deflation lag), various geophysical surveys, target-definition drilling (RAB, aircore, vacuum), RC and some diamond drilling.

Alloy’s 100% owned gold resource at Horse Well currently stands at 1,054,100t @ 2.91g/t for 98,700ozs (Table 1 below).

Table 1: Horse Well Gold Resources

Prospect	JORC Category	Tonnes	Grade (g/t)	Ounces Gold
Palomino	Indicated	656,000	2.52	53,150
	Inferred	105,000	3.71	12,525
Bronco	Indicated	41,400	1.59	2,117
Filly	Indicated	161,300	1.56	8,091
Filly SW	Indicated	90,400	7.85	22,817
Total		1,054,100	2.91	98,700

Palomino Deposit

Gold mineralisation at Palomino starts at or near the surface. Mineralisation is hosted in a shear zone up to 100m wide, with gold occurring in white quartz veins and silicified domains within mafic and ultramafic rocks. The main ore shoot is sub-vertical and higher grade zones plunge at 45° to the north northwest.

Filly Deposit

The Filly prospect is located 1.4 kms south-southeast of the Palomino. Filly is a broad zone of gold mineralisation and related alteration about 1.5 km long by 300 m wide. The area consists of a number of deposits: Filly NE, Filly Central and Filly SW (See Figure "Horse Well Gold Prospects"). Resources for Filly Central and Filly SW are listed in Table 1, and Filly NE has had no resources calculated.

The broad zones of low grade gold mineralisation and intense silica plus pyrite alteration observed in drilling suggest that this prospect has the potential to contain wider zones of high grade gold mineralization and further infill and deep drilling is required to explore in the key target areas at Filly.

Warmblood Prospect

In mid-2011 two lines of close spaced vertical air-core drilling was completed adjacent to an encouraging rock chip sample and intersected up to;

• 32m @ 3.9 g/t Au from surface (AHWA353), and
• 40m @3.4g/t Au from surface (AHWR 356)
  Including 12m @9.03 g/t from 32 metres

This new discovery was named the Warmblood Prospect. It is located south of the Filly SW deposit and remains open in all directions. The proximity of a Registered Heritage Site has stalled follow-up drilling here and negotiations with Native Title claimants for access for exploration is currently underway.

A re-interpretation of mineralisation in this southern area indicated that Warmblood may have been related to the Filly SW prospect, and two programs of drilling were completed in late 2011 to test this possibility. The initial program of air-core drilling for 250 metres south of Filly SW yielded potentially economic results.

This area was followed-up by RC drilling with results being disappointing or inconclusive. In addition a second air-core drill program tested for mineralisation for 400 metres north of Filly SW, and returned a number of interesting results.

The Figure to the right shows this recent drilling.

Recent Results

For more information including drilling results, figures and tables, please see:

• March 2012 Quarterly activities and cashflow report
• 25 January 2012 "Horsewell Drilling Results" announcement

Future Exploration Activities

Alloy is planning to commence a drilling program in the September Quarter 2012 at the Warmblood prospect once access is approved by Native Title claimants and relevant authorities. Should results be encouraging then further regional exploration would also be justified on the broader project area.