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Balamara Resources: Balamara Targets Further Upgrade of Monty Resource

Contributed by Fox-Davies Capital

Balamara has released further assay results from its recently completed resource in-fill and update drilling at its Montenegro Base Metals Project (“Monty"). These new results lay the foundations for a further upgrade in the JORC Mineral Resource for the Monty Project, for which Balamara has commissioned Golder Associates to commence work.

Historically drilling at Monty has focused on the main Brskovo deposit, and results have now been received from an additional six holes. Further, at Visnjica, the results of the initial six drill holes in an eleven hole programme have been received.

We like the fact that there are good, wide intercepts being reported and all the results are relatively shallow. These factors should combine to make for lower mining costs. Further, in the full drill results tables, included on the next page, gold assays are included. When we modelled the Monty project, we did not include gold, but it would appear that the copper concentrate and perhaps even the lead concentrate will have gold credits, particularly where the copper grades are high. These higher grades occur in the high grade silver zone, suggesting that there could be a significant tonnage of higher grade ore to boost cash flows in the early part of the mine life. This has the potential to significantly increase the valuation.

When the new ore resource figures are calculated, the new figures are expected at the end of March 2013, we expect to see some significant increases both in total tonnage and in the classification, with ore moving from the Inferred to the Indicated categories.

Further, at Brskovo, both the upper and lower zones are open at depth and there is some potential along strike. This suggests to us that the new ore resource figure will be expanded once deeper drilling is conducted. In the short term once the current drill programme is completed, the next target will be Zuta Prla, itself located very close to Brskovo and Visnjica.