Horse Well Project

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). During the December 2010 quarter this was upgraded by 26% on previous estimates, attributed to the inclusion of recent drilling data from an RC drilling program undertaken by the Company combined with the use of a higher gold price in estimating resource envelopes.

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.

Mustang Prospect

Previous reconnaissance air-core drilling in the Horse Well project area identified a new gold anomalous area, which was named the Mustang Prospect.

Previous drilling has indicated broad mineralised structures steeply dipping to the east, however there is insufficient drilling information on this new prospect to define it further at this stage. The next lines of air-core drilling were done 400m to the north and 400m to the south.

Recent Results:

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

• December 2010 Quarterly Activities Report

 

Future Exploration Activities

Alloy is planning to commence an air core drilling program in the March 2011 quarter at Horse Well. These holes will follow up anomalous gold intersections from previous drilling at the Mustang prospect, in other gold trends and near the main gold deposits. (See Figure 2 in the December 2010 Quarterly Activities Report). These holes aim to expand the gold resources by discovering new deposits and extensions to known mineralisation.