Kagara Limited (ASX: KZL)

KAGARA ANNOUNCES RECORD 76.5m

NICKEL SULPHIDE INTERSECTION AT LOUNGE LIZARD

Diversified resources group Kagara Ltd (ASX: KZL ? ?Kagara?) has added further momentum to its pipeline of emerging exploration and development projects after today announcing a record intersection spanning 76.5 metres of massive, semi-massive and disseminated sulphides at its 100%-owned Lounge Lizard Nickel Project in the Forrestania region of Western Australia.

Kagara said today (Friday) that the intersection is comprised of three zones of massive sulphides with an aggregate drilled width of 33.46 metres.

While final assay results are awaited, hand-held Niton XRF analysis based on spot sampling of the Diamond drill core (on approximately 25cm spacing), has returned high-grade results including 8.00 metres at 6.10% nickel from 828 metres and 7.40 metres at 8.9% nickel from 885 metres.

The spectacular intersection lies approximately 150 metres up-dip of the previously announced Indicated Resource of 5.7 million tonnes at 1.08% nickel, which includes an Indicated high-grade resource of 263,000 tonnes at 6.42% nickel. The intersection lies just 60 metres south of the tenement boundary with Western Areas? Flying Fox deposit in the T4 position.

?This is an outstanding intersection which, to our knowledge, is the best in terms of contained nickel drilled either historically, or in recent times in the Forrestania region,? said Kagara?s Executive Chairman, Mr Kim Robinson.

?Lounge Lizard is shaping up as a very exciting project with significant potential for Kagara,? he added. ?We are confident that this intersection will substantially increase the current resource estimate and, with ongoing drilling, we expect to delineate a project of considerable size and grade moving forward.?

Kagara acquired the Lounge Lizard Project, which comprises a package of highly prospective tenements within the Forrestania Greenstone Belt, for A$25.0 million from LionOre Mining International. Since commencing Diamond drilling last year, Kagara has delineated a substantial and growing accumulation of nickel sulphides at Lounge Lizard

The outstanding result from Lounge Lizard further reinforces Kagara?s strong pipeline of emerging resource projects, following the recent announcement of an initial Inferred Resource of 72 million tonnes at a grade of 3.1% zinc, 2.9% lead, 18g/t silver and 11% barium for the Admiral Bay Project near Broome in Western Australia.

ENDS

Released by:                                                                                                                                       On behalf of:

Nicholas Read                                                                                                                                   Mr Kim Robinson

Read Corporate                                                                                                                                                 Executive Chairman

Telephone: (+61-8) 9388-1474                                                                                                      Kagara Ltd

Mobile: 0419 929 046                                                                                                                     Telephone: (+61-8) 9481-1211

www.readcorporate.com.au                                                                                                             Kim Robinson Mobile: 0427 440 045

  www.kagara.com.au

About Kagara

Kagara Ltd (ASX: KZL) is a diversified ASX S&P 200 resources group whose vision is to be a world-leader in the low-cost production of copper, zinc, nickel and precious metals, delivering superior returns to shareholders.  Kagara?s medium term objective is to increase copper production to 35-40,000tpa of copper metal and zinc production to 100,000tpa of zinc metal by the end of this decade.

In addition to its flagship North Queensland base metal operations, Kagara also has an outstanding pipeline of exploration/development projects including the Admiral Bay Zinc Project in Western Australia, the Red Dome Copper-Gold Project in Queensland and the Lounge Lizard Nickel Project in Western Australia.

Kagara has a total of 216.4 million shares on issue and 14.6 million unlisted options. The Company holds an 18.2% interest in Metallica Minerals Ltd and a 19.8% interest in Glengarry Resources NL.

Forward-Looking Statements

This release may include forward-looking statements. These forward-looking statements are based on management?s expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control Kagara Limited, which could cause actual results to differ materially from such statements. Kagara Limited makes no undertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the date of this release.

READ CORPORATE
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T: (+61-8) 9388-1474 | F: (+61-8) 9388-1472 | E: info@readcorporate.com.au | Web: www.readcorporate.com.au 

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