WARTHOG RESOURCES (T) LIMITED

& NGWENA LIMITED

NACHINGWEA PROJECT

DECEMBER 2011 QUARTERLY REPORT

PL 5447/2008
(Noli SE)

Noli SE PL 5447/2008
December 2011 Quarterly Report 2011
 WARTHOG RESOURCES (T) LTD
& NGWENA LIMITED

NACHINGWEA PROJECT

Noli SE PL 5447/2008

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 5447/2008 (Noli SE) is an integral part of the Nachingwea Property
holding.

During the period, January through December 2011, work on the license consisted of
geochemical soil sampling, Structural interpretation and geology by SRK consulting,
and reporting.
No significant anomalous results were reported from XRF NITON analyses.

Ngwena Limited has spent ~ $17.5 million USD on exploration on the Nachingwea
Project during the period January 2007 to December 2011. 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

Noli SE PL 5447/2008 was offered to Warthog Resources (T) Ltd in June 2008 and
officially granted on December 31, 2008. The license covers an area of 174.36 km2.
Transfer of the PL from Warthog Resources (T) Ltd to Ngwena Limited is in progress.
In December 2011, an application for the renewal was filed and the licence was
reduced to 87.05 sq km.

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.

Noli SE PL 5447/2008
December 2011 Quarterly Report 2011
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
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 Noli SE license is centered 45 km SW from Ntaka Camp and 17 km SW from the
village of Mtua and encompasses an area of 174.36 km 2. Upon the second renewal
in April 2011, the license was reduced to 87.07 sq km, with the northern half of the
license being retained. Access to and across the license is provided by regional dirt
roads and local tracks.

Figure 1: Noli SE PL5447/2008 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

Noli SE PL 5447/2008
December 2011 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 2011 over
the entire Nachingwea Project in order to accelerate the definition of exploration
targets.

The current exploration objective on the Noli SE 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.

Noli SE PL 5447/2008
December 2011 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 at Ntaka Hill. However regional geological
traverses, grid mapping and drilling are started to add to the geological database.

Summary of Work – PL 5447/2008, 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 geochemical soil sampling and data compilation & interpretation. Table 1
and Figure 2 summarize the total exploration work completed on the license in 2011.
Details and results of the 2011 exploration program are given below.

Table 1
Summary of Work Completed in 2011 PL 5447/2008 (Noli SE)

Work Type Production

Soil sampling 155 samples for NITON analysis
Structural interpretation and geology by
The entire PL
SRK

2011 Soil Sampling and Results

Two soil grids were planned in the license to test for the geochemical response of the
VTEM targets (NAC08-127, NAC08-176, NAC08-177 and NAC08-131). The program
was completed in the third week of November 2011. A total of thirty seven soil
samples were collected for Niton XRF analysis.

The Noli SE D soil grid was established to follow-up VTEM targets NAC08-127,
NAC08-176 and NAC08-177, located in the center of the license. It consisted of a
single, east-west oriented line, 2700m long with 100m sample spacing. Twenty eight
samples were collected for XRF NITON instrument analysis. No significant
anomalous results were received. The highest values returned 59ppm Ni, <LOD Cu
and 117ppm Cr. No samples were sent to the lab for further analyses.

The Noli SE E soil grid was planned to cover VTEM target NAC08-131 in the west
part of the license. The program was completed in the 4th week of November 2011.
The grid consisted of a single, east-west oriented line, 400m long, with 50m sample
intervals. Nine soil samples were collected for XRF NITON instrument analysis. No
significant anomalous values were reported and the maximum values received from
Niton data are <LOD Ni, <LOD Cu and 155ppm Cr.

Noli SE PL 5447/2008
December 2011 Quarterly Report 2011
Figure 2: A map showing exploration work completed in 2011 on the License
PL 5447/2008 (Noli SE).

Structural interpretation and geology (by SRK Consulting)

The structural interpretation and geology was carried out and completed by SRK
Consulting (Canada) Inc. in December.

No significant anomalies were identified in the Noli SE license by this study.

Expenditures

Expenditures claimed for Noli SE PL 5447/2008 for the December 2011 Quarter are
USD $15,252.

See attached Table.

Christopher Airo and Stanslaus William

Noli SE PL 5447/2008
December 2011 Quarterly Report 2011
Ngwena Limited

Noli SE PL 5447/2008
December 2011 Quarterly Report 2011