2nd Quarter Activities Report 30 January 2009

Highlights Manganese Jigalong Project, east of Newman in the Pilbara region of Western Australia

• Hill 616 prospect (Priority 1)

o Manganese rock chip assays up to 45 % Mn recently received

o Surface enrichment estimated to cover an area 3km by 3km

o No drill testing completed to date

• Zebra Bore prospect (Priority 2)

o Manganese rock chip assays up to 30% Mn recently received

o Surface enrichment estimated to cover an area 6km by 2km

o No drill testing completed to date

• Marumaru prospect (Priority 3)

o Surface enrichment (up to 34% Mn) estimated to cover an area 3 ½km by ½ km

o 1st phase of reverse circulation (RC) drill testing completed

o Highest grade manganese intersection 4m @ 11.12% Mn

• Detailed assessment of colluvium (scree) manganese potential of Hill 616, Zebra Bore and Marumaru to commence 3rd Quarter with completion by end of 4th Quarter

Iron Jigalong Project

o Excellent iron results from the Mijimiji iron prospect with high grade results returned including 28m @ 58.1% Fe & 18m @ 59.2% Fe.

Continued.....

2nd Quarter Activities Report 30 January 2009

Base Metals Forrestania project, 80km south of Southern Cross in the Yilgarn region of Western Australia

o Continuing review of previous exploration at the Forrestania nickel sulphide project identified well located strong bedrock conductor coincident with a very subtle magnetic anomaly (approx 30km north of the Spotted Quoll nickel sulphide resource owned by Western Areas NL)

Queen Victoria Rocks project, 30km south-west of Coolgardie in the Goldfields region of Western Australia

o Planning meeting completed with Companhia Vale do Rio Doce (Vale) enabling commencement of exploration related activities by Vale

Jigalong project

• Strongly anomalous lead, zinc, silver and copper assays returned from RC drilling, warranting further investigation of the base metals potential within the vicinity of Marumaru prospect

Gold Sunday project, 10kms east of Leonora in the North-Eastern Goldfields region of Western Australia

o Gold focussed explorer Australian Mineral Fields Ltd granted an extension by Hannans through to 22 July 2008 to complete RC drill testing of gold targets

Forrestania project

o Potential of the known gold mineralisation at North Ironcap to be reassessed in future Quarters

Continued...

2nd Quarter Activities Report 30 January 2009

Corporate

o Successful completion of Share Purchase Plan (SPP)

o Annual General Meeting resolutions passed on a show of hands

Jigalong Manganese Hill 616 Prospect New manganese rock chip assays were returned from Hill 616 during the 2nd Quarter with better results including 33.35% Mn (JIG078), 27.27% Mn (JIG080), 34.62% Mn (JIG082), 38.96% Mn (JIG083), 45.15% Mn (JIG084) and 33.92% Mn (JIG085). Previous rock chip samples (JIG017-019 and JIG031-052) collected from Hill 616 were assayed during the 4th Quarter 07/08 using the semi quantitative pressed powder XRF method and these results were subsequently released to ASX on 28 May 2008. During the 2nd Quarter 08/09 they were re-assayed using the ore grade fusion XRF method. The re-assaying substantially upgraded the initial results (refer Table 1 below). This surface manganese enrichment has now been traced over several kilometres along Hill 616 and represents the highest priority prospect to assess whether:

• primary manganese mineralisation exists beneath the surface (requires drill testing); and / or

• colluvium (scree) and enriched duricrust represents a potentially economic source of manganese.

An assessment of this potential of the surface material will commence during the current Quarter and is likely to be completed mid 4th Quarter.

Hannans Reward Ltd 30 January 2009  

 

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Sample ID Northing (GDA51)

Easting (GDA51) Mn% Al2O3% Fe2O3% P2O5% SiO2%

JIG017 7373896 247106 34.00 4.6 15.9 0.18 20

JIG018 7373886 247148 36.25 4.73 20.4 0.23 9.11

JIG019 7373875 247155 17.81 12.5 31.4 0.23 16

JIG031 7373724 247307 37.49 4.15 15.9 0.91 13.3

JIG032 7373735 247338 1.67 4.7 58.7 2.82 21

JIG033 7373741 247355 33.30 5.56 19 0.21 15.3

JIG034 7373753 247392 20.99 4.12 34.6 0.64 20.2

JIG035 7373815 247379 36.09 6.87 19.7 0.28 6.6

JIG036 7373811 247359 32.99 3.72 18.7 0.47 18.8

JIG037 7373746 247213 23.00 4.06 23.3 0.42 29.2

JIG038 7373757 247205 1.23 3.41 58.9 1.87 24.9

JIG039 7373832 247154 30.98 4.33 21.2 0.5 17.7

JIG040 7373861 247147 25.64 4.27 34.1 0.42 12.1

JIG041 7373913 247151 40.27 4.18 7.17 0.18 19.5

JIG042 7373947 247166 33.38 3.28 14.1 0.11 23.8

JIG043 7373960 247174 30.83 5.01 28.9 0.29 7.74

JIG044 7373993 247170 28.97 4.79 18.3 0.22 24

JIG045 7374022 247166 25.87 4.18 22.2 0.2 25.8

JIG046 7374154 247220 32.45 5.62 14.6 0.3 19.9

JIG047 7374134 247225 28.27 5.1 16.9 0.3 25.4

JIG048 7374118 247236 36.71 5.72 17.6 0.27 8.71

JIG049 7374094 247233 33.38 4.48 29.4 0.37 4.73

JIG050 7374201 247267 27.88 3.8 22.8 0.31 21.2

JIG051 7374183 247286 31.60 4.47 19.7 0.24 18.3

JIG052 7374256 247307 30.05 3.53 18.4 0.22 23.8

JIG078 7373948 247562 33.35 5.6 19.32 0.23 5.2

JIG079 7373924 247575 23.99 4.91 19.29 0.27 24.85

JIG080 7373891 247591 27.27 4.65 14.67 0.24 24.91

JIG082 7374939 247577 34.62 5.38 16.1 0.19 16.7

JIG083 7374843 247639 38.96 5.09 19.1 0.22 4.83

JIG084 7374747 247631 45.15 6.76 4.86 0.08 8.85

JIG085 7374691 247623 33.92 7 11.7 0.15 20.1 Table 1: Hill 616 Rock Chip Samples (XRF Fusion) 

Hannans Reward Ltd 30 January 2009  

 

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The figure below shows the location of the rock chip samples at Hill 616 overlaid on Landsat imagery; the purpose of the figure is to highlight the black and dark brown areas (low reflectance) which represent manganese and iron oxide enriched stratigraphy.

Figure 5: Hill 616 Rock Chip Samples on Landsat (Brovey 457) Imagery

Hannans Reward Ltd 30 January 2009  

 

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Zebra Bore Prospect At Zebra Bore, 13km to the south of Hill 616, multiple zones of surficial manganese enrichment were also sampled in broadly folded Proterozoic stratigraphy; the best rock chip assay result was 30.2% Mn (JIG102). Marumaru Prospect During the 1st Quarter Hannans announced it had completed fourteen RC drill holes (1,417m) testing manganese targets at the Marumaru Prospect. The drill holes were designed to test conceptual manganese targets along a deep seated fault within prospective Balfour Formation stratigraphy. The drill holes were collared into enriched surficial accumulations of manganese coincident with a strong gravity signature along the length of the fault. At this early reconnaissance stage the RC drilling results from Marumaru are considered to be inconclusive in terms of locating primary manganese ore even though rock chips (up to 34% Mn (JIG111)) collected by Hannans indicate there is considerable secondary enrichment of manganese at Marumaru within the near-surface environment. The abovementioned fault was interpreted to have focused fluids rich in manganese derived from the manganiferous shales within the Balfour Formation. Initial visual estimates of manganese enrichment within the drill chips announced to ASX on 23 September 2008 were considered to be highly encouraging however the highest grade intersections from all assays received were 3m at 12.62% Mn from 0-3m (JMRC005) and 4m at 11.12% Mn from 13 to 17m (JMRC007).

 Figure 2: RC drilling at Marumaru Prospect 

Figure 3: Outcropping manganese at Marumaru Prospect 

Hannans Reward Ltd 30 January 2009  

 

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Figure 4: Jigalong Manganese Prospects Location Map

Hannans Reward Ltd 30 January 2009  

 

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Iron Mijimiji Prospect During the 1st Quarter a high grade iron discovery was made at the Mijimiji iron prospect. Forty five reverse circulation (RC) drill holes (5,642m) were completed testing iron targets generated through extensive soil sampling, aeromagnetic and gravity surveys completed by Hannans. During the 2nd Quarter the balance of the iron assays results were received (refer ASX announcement 10 December 2008-“Jigalong Project High Grade Iron”) highlighting the high grade nature of the discovery. This first pass drill programme has been deemed an outstanding success given the lack of outcrop and limited stratigraphic knowledge of the project area. The proactive assistance provided by the Brian Samson (Senior Jigalong Elder) and Fred Taylor (CEO, Jigalong Community Inc) and the Jigalong Community, enabling this comprehensive reconnaissance drill program to be completed, was greatly appreciated. Hannans is currently reviewing the most appropriate way to take this iron discovery to the next stage, whilst considering the need to provide a return on the shareholder funds spent to date.

Figure 5: Assay Summary‐Mijimiji Iron Prospect

Hannans Reward Ltd 30 January 2009  

 

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Base Metals Anomalism Highly anomalous base metal values were intersected in RC drill hole JMRC010 (2m@0.26% Pb+Zn) and JMRC011 (4m@0.26% Pb+Zn) (refer Figure 6 below). A consistently mineralised base metal horizon containing anomalous lead, zinc, copper and silver mineralisation was encountered. The mineralised horizon dips moderately north westwards away from the main fault structure at Marumaru; it is open along strike and down dip. Several rock chips from the Marumaru prospect have also anomalous base metal values including JIG105 (13ppb Au, 583ppm Pb) and JIG106 (13ppb Au, 0.1%Zn). XRD analysis of the drill samples showed an iron-manganese-carbonate-pyrite mineral composition; the manganese carbonates rhodochrosite and kutnahorite were both identified in the analysis and are commonly found in SEDEX base metal deposits. Drill hole JMRC008 intersected lamprophyre suggesting that the fault may be a deep basinal structure sourcing metal at depth. Such structures have acted as feeder structures for large base metal deposits within the Mt Isa Province of NW Queensland (e.g. Cannington, HYC and Century). Further investigation of the base metals potential within the vicinity of Marumaru prospect is warranted.

Figure 6: Marumaru Cross Section

Hannans Reward Ltd 30 January 2009  

 

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Queen Victoria Rocks The following summary has been provided to Hannans by our joint venture partner Vale. “In October 2008, Vale Inco, a wholly owned subsidiary of Companhia Vale do Rio Doce (Vale) agreed to a farm-in and joint venture agreement over Hannans Reward’s Queen Victoria Rocks (QVR) nickel sulphide project. The QVR project is located 50km southwest of Coolgardie, Western Australia. The project area, 463km2, lies within the southern extension of the Bullabulling Greenstone Belt, which consists of ultramafic and mafic units intercalated with sedimentary rocks and BIF. Hannans has completed a substantial amount of nickel sulphide exploration at QVR confirming the potential for the project to host a nickel sulphide deposit. Within the first year Vale plans to complete a detailed review of all previous exploration after which Vale plans to undertake the following exploration activities:

• At the Spargos Prospect Area, drill about 7 RC drill holes into both the western and eastern dunite contact to the basal contact and follow-up “potential” VTEM anomalies with MLEM within the dunite body and along strike. Drill any conductors encountered from the ground EM survey.

• At the Prince of Wales Prospect, a regional RAB or aircore drilling program will be

completed to obtain a better understanding of the lithology and structures in the area. Ground EM follow-up will be completed over prospective litho-geochemical stratigraphy.

• In the Northern Tenement area, regional mapping and sampling will be completed

followed by ground EM over VTEM anomalism and any EM conductors followed up with RC drilling.”

Forrestania Nickel and Gold The Project comprises tenure in joint venture (JV) with Cullen Resources Ltd and wholly owned tenure. Exploration activities at the Forrestania Project were limited to office studies and data review during the 2nd Quarter. An infill auger soil sampling programme has been planned for the JV ground to follow up on an isolated auger sample located to the south of an interpreted Proterozoic dyke which returned high nickel (960ppm) and copper (2,920ppm) values during a 2008 auger soil sampling programme. This portion of the project is approximately 30km north of the Spotted Quoll nickel sulphide resource (2,021,600 tonnes at an average grade of 6.2% nickel for 125,460 tonnes contained nickel) owned by Western Areas NL.

Hannans Reward Ltd 30 January 2009  

 

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Figure 7: Auger Soil Sampling on Magnetic Imagery

Hannans Reward Ltd 30 January 2009  

 

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As reported in Hannans’ 1st Quarter Report 08/09 a geophysical conductor target was generated by previous explorers through a moving loop geophysical survey (MLTEM) in 2004 which was subsequently followed up by a fixed loop survey (FLTEM) in 2005. Re-modelling by Southern Geoscience Consultants for Hannans in 2008 confirmed that “a strong bedrock conductor was clearly defined on all survey lines, and modelling indicated a source with dimensions of around 400m x 400m dipping moderately to the east (~30°) and at a depth of around 100–120m. Modelled conductance was high enough (~2000 S) to be consistent with a massive sulphide source (or other highly conductive unit such as sulphidic chert, shale or banded iron formation). There is a very subtle magnetic anomaly coincident with the top of this model. A single test drill hole has been recommended with expected source intersection at 160-190m down hole”. On completion of permitting (expected July 2009) this target will be tested with RC drilling.

Figure 8: East Ironcap FLTEM Conductor Target on Magnetic Imagery

Hannans Reward Ltd 30 January 2009  

 

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Sunday Project Gold

Gold focussed explorer Australian Mineral Fields Ltd (www.australianmf.com) was granted an extension by Hannans through to 22 July 2008 to complete RC drill testing of gold targets at the Mt Stewart prospect within the Sunday gold project.

Mt Stewart Exploration Targets

Image courtesy of Australian Mineral Fields Ltd

Key:

• Red zones: 500ppb Au in drill holes contour • Orange zones: 50ppm As contour • Inverted diamonds: planned RC drill holes • Stars: Hannans Reward drill holes

Hannans Reward Ltd 30 January 2009  

 

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Maggie Hays South Copper-molybdenum-gold A brief field trip is scheduled for the 3rd Quarter to systematically sample an outcropping unit of gabbroic pyroxenite which returned anomalous values of palladium (up to 0.3g/t Pd) in 2008. Share Purchase Plan Hannans Reward Ltd successfully completed a Share Purchase Plan (SPP) and placement to sub-underwriters during the 2nd Quarter. Change of Registered Office During the 2nd Quarter Hannans Reward Ltd relocated office to Ground Floor, 28 Ord St, West Perth. All other details remain the same. If you have any questions in relation to this announcement please do not hesitate to contact me on +61 8 9324 3388. Yours sincerely,

Damian Hicks Managing Director

Hannans Reward Ltd 30 January 2009  

 

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Summary Hannans Reward Ltd has developed a suite of prospective exploration projects within Australia covering iron, manganese, nickel and gold. Hannans Reward Ltd is well funded with shareholders exposed to share price appreciation through exploration success.

· Forrestania - nickel project 12km north of Western Area’s Flying Fox nickel mine · Jigalong - iron, manganese & base metals located 150km east of Newman, WA · Queen Victoria Rocks - joint venture with Companhia Vale do Rio Doce (Vale), 30km south-west of Coolgardie, WA · Maggie Hays South - located 25km south east of Norilsk’s Maggie Hays nickel mine · Sunday - joint venture with Australian Mineral Fields Ltd, 10kms east of Leonora, WA

Company contacts: Telephone: (08) 9324 3388 Fax: (08) 9324 3366 Email: admin@hannansreward.com Website: www.hannansreward.com Address: Suite 1,Ground Floor, 28 Ord St, West Perth, WA

Board of Directors Chairman Richard Scallan Managing Director Damian Hicks Non-Executive Directors Bill Hicks, Terry Grammer & Frank Cannavo

The information in this document that related to exploration results is based on information compiled by Mrs Amanda Arrowsmith, Exploration Manager, Hannans Reward Ltd who is a Member of the Australian Institute of Geoscientists. Mrs Arrowsmith is a full-time employee of Hannans Reward Ltd. Mrs Arrowsmith has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined by the 2004 edition of the “Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mrs Arrowsmith consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.