WARTHOG RESOURCES (T) LTD

& NGWENA LIMITED

NACHINGWEA PROJECT

DECEMBER 2010 QUARTERLY REPORT

PL 6412/2010
(MUJIRA)

Mujira PL6412/2010
December Quarterly Report 2011
 WARTHOG RESOURCES (T) LTD
& NGWENA LIMITED

NACHINGWEA PROJECT

MUJIRA PL 6412/2010

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 6412/2010 (MUJIRA) is an integral part of the Nachingwea Property
holding.

During the period, January through December 2011, work on the license consisted of
an airborne geophysical survey, geochemical soil sampling, Structural Data analy
data compilation & interpretation and reporting. The highlight of the stream
sediment sampling was a sample that returned 38 ppm Ni, 96 ppm Cu and 92
ppm Cr.

Ngwena Limited has spent ~ $17.5 million USD on exploration on the Nachingwea
Project during the period January 2007 to December 2010. 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

Mujira PL6412/2010 was granted on May 5th 2010 and covers an area of 171.21 km2.
The PL was originally granted to Warthog Resources (T) Ltd and is in the process of
being transferred to Ngwena Limited.

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

Mujira PL6412/2010
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 Mujira license is centered 71km SSW of Ntaka Camp, 52 km southwest of

Nachingwea District town and encompasses an area of 171.21 km 2 (Figure 1).
Access to the license is provided by regional dirt roads and local tracks. The license
is drained by two small rivers which unite to form one main river within the license
that drain their water into the SE of the license.

Figure 1: Mujira PL 6412/2010 location map. Black lines are roads/tracks, fine blue
lines are creeks, red lines are license boundaries and green lines are
National/District Game/Forest reserves. Ntaka Camp and local villages are also
shown for reference.

Mujira PL6412/2010
December Quarterly Report 2011
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 2010 over
the entire Nachingwea Project in order to accelerate the definition of exploration
targets.

The current exploration objective on the Mujira 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
deformed and metamorphosed to amphibolite and granulite facies and occur in
blocks bounded by major NW, EW and NE fault zones.

Mujira PL6412/2010
December Quarterly Report 2011
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 6412/2010, 2011 Exploration Program

A 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 data compilation and interpretation. Table 1 and Figure 2 summarize the
total exploration work completed on the license in 2010. Details and results of the
2010 exploration program are given below.

Table 1
Summary of Work Completed in 2011, PL 6412/2010 (Mujira)

Work Type Production

Soil sampling 66 samples for NITON analysis
Structural Data Analysis by SRK The Entire PL

2011 Soil Sampling and Results

A soil sampling program was established in the SE part of the license in the
December quarter 2011 with samples collected at approximately 400m intervals. A
total of 13 samples were collected including 4 samples from Mujira license and 9
samples from Mjembe license. The samples were collected along a NE-SW trending
stream running across the eastern boundary of the license through the southwestern
part of Mjembe license. The objective of the program was to follow-up elevated Cu
over 3km in 1998 BHP streams, with values of up to 126 ppm Cu.

The samples were analyzed by XRF NITON instrument prior to sending anomalous
soils to ALS Chemex lab for assaying.

The samples from Mujira and Mjembe licenses stream sediment returned weakly
elevated Cu, up to 92ppm anomalous values by XRF NITON instrument analyses. 5
samples out of 13 samples were sent to ALS Chemex lab for assaying, including 2
samples from Mujira. The laboratory results showed that Ni values are generally 50%
lower than XRF Niton results whereby the maximum lab values received were
38ppm Ni, 96ppm Cu and 92ppm Cr. The highest copper is seen in a sample
collected in the Mujira license.

Mujira PL6412/2010
December Quarterly Report 2011
Figure 2: A map showing exploration work completed on the License
(PL 6412/2007) in 2011.

Structural Data Analysis (SRK)

No significant anomalies were identified on the Mujira license by this study.

Expenditures

Mujira PL6412/2010
December Quarterly Report 2011
Expenditures for Mujira PL 6412/2010 for the December Quarter 2010 are
USD $14,627.

See attached Table.

Christopher Airo and Stanslaus William

Ngwena Limited

Mujira PL6412/2010
December Quarterly Report 2011