Queensland Bauxite fast tracks resource drilling at South Johnstone Bauxite Project

Queensland Bauxite Limited provides an update on drilling and corporate activities at its flagship South Johnstone Bauxite Project in northern Queensland.

· Two drilling programs underway to fast track project development
· Additional drill samples sent to ALS Laboratory for assaying
· Current programme aimed at upgrading Indicated Mineral Resource to Measured Resource
· Mine Plan, environmental approvals and work for the mining development licence application all progressing

Drilling continues apace as two drilling teams are now on site to expand the development of the project. Results from new drill holes are progressively being sent to ALS Laboratories for assaying.

The objective of the current drilling is to upgrade the current Indicated Mineral Resource under the 2012 JORC Code to a Measured Resource and to finalise the Initial Mine Plan.

QBL expects all samples from the current Indicated Resource area to be sent to the assay laboratory by the end of June with results made available shortly thereafter. The current program is the first drilling program aimed at increasing the mine life at South Johnstone and determining the depth of the mineralisation.

The current program has drilled down to 5 metres (previous depth averaged 1.0 - 1.5 metres), and infill drilling to 50 metre spacing is being undertaken which should enable the Company to add to the bauxite resource base, identify the depth of the resource, and upgrade the classification of the Resource to a Measured Resource.

Independent bauxite industry consultant group CM Group (CM) has provided input to assist the Company with its market analysis of the bauxite from South Johnstone as analysed by ALS Laboratories.

CM Group has stated: "The South Johnstone bauxite is suitable for low temperature Bayer processing as a single source feed to a refinery or it could equally be blended with other low temperature bauxites as a feed to refineries."

"On the Total Available Alumina (TAA) and Reactive Silica (RS) figures, the South Johnstone bauxite has similar grade characteristics to the bauxites of the Darling Ranges in Western Australia, which form the basis for Western Australia's world-class alumina industry."

"The economics of South Johnstone bauxite were evaluated for both high temperature and low temperature Chinese refineries, the result being that low temperature processing is optimal for this bauxite. Being low temperature bauxite opens the market for the South Johnstone product to approximately 82% of the current Chinese merchant refinery capacity and increases the potential customer base."

According to them on a ViU-adjusted basis, relative to CBIX, South Johnston bauxite could be treated at a lower cost than Malaysian bauxite, but a higher cost than Weipa bauxite.

This assessment of QBL's bauxite by CM Group is consistent with previous assessments and gives the Board further confidence that the current Indicated Resource has the ability to provide a consistent product suitable for the Chinese market.