MEDIA RELEASE

28 August 2007

Matilda increases production capacity by 30%

·            New feeder increases plant capacity by 30%

·            Second shipment this week

·            Mineral sands quality above test work expectations

·            Stockpile finance in place for wet season working capital

Matilda Minerals (ASX:MAL), Australia’s only mid-tier Mineral Sands producer, is ramping up production at its primary Tiwi Islands mineral sands project, with improvements to the plant delivering a material increase to production capacity.

Matilda Managing Director Bruce Maluish said the introduction of the new feeder system to the processing plant was expected to increase production by 30%.

“The new front end to the plant will enable production to increase from 90 tonnes per hour to 120 tonnes per hour with expected better availability – an immediate 30% increase in capacity,” Mr Maluish said.

The addition includes a high capacity apron feeder and wet trommel to the existing concentrator.

Mr Maluish said the additional capacity would allow Matilda to capitalise on the considerable minerals sands potential in the region.

“These improvements have been funded from cashflow, and with additional processing potential will add direct value for shareholders,” he said.

Matilda commenced production on the Tiwi Islands late last year, and sailed its first shipment of over 7,000 tonnes of high grade zircon concentrate to China in June 2007.

Market results from its first shipment have been positive, with the quality testing delivering higher than expected results.

“Quality results from the first shipment have shown that this is a premium quality zircon and rutile concentrate. The better than expected quality means that the production value is increased,” Mr Maluish said.

“We are also encouraged by the demand outlook for our high grade zircon product, with demand from China and India expected to see a steady growth in demand over the next five years.”

Demand for zircon will also be driven by an expected increase in demand for high quality ceramics, refractories and castings.

Matilda’s second shipment to China has left the Tiwi Islands this week, and the company has scheduled a shipment of high grade concentrate approximately every six weeks.

Mr Maluish said the Company had also take steps to maintain cashflow for the company through the wet season.

“We have negotiated “stockpile finance” which means we can continue to readily fund the Tiwi Islands project operations and development work during the wet season, and drive value for shareholders,” Mr Maluish said.

With the certainty of the plant now consistently achieving production throughput, the Company is now in a position to introduce some accuracy with hedging and is taking advantage of the recent drop in the Australian / US exchange rate.

“We have engaged Oakvale Capital as currency and risk advisors, and introduced a hedging approach that will allow us to cover sales at opportunistic exchange rates,” he said. 

For further information contact:               Bruce Maluish – Managing Director

                                                                        Matilda Minerals Ltd

                                                                        Tel: (08) 9481 1444 or 0418 940 417

                                                                        Warrick Hazeldine

                                                                        Investor Relations

                                                                        Tel: (08) 9485 1254 or 0417 944 616

Background 

ASX Code                        MAL

Issued Capital                 62m

Unlisted Options            11.5m

Closing price                  0.51

Market cap                      $31m

Matilda Minerals is focused on developing high-value zircon and rutile-rich mineral sands deposits on its flagship Tiwi Islands project. 

Low capital and operating costs distinguish Matilda from traditional mineral sands companies where lower‑priced ilmenite is the primary product.

Its Tiwi Islands mineral sands project is situated on Bathurst and Melville (Tiwi) Islands north of Darwin, Northern Territory, and is in full production for the next 4 years on the Andranangoo project on Melville Island.

Increased worldwide demand for zircon has led to the price exceeding US$800 per tonne.

Matilda has compiled an impressive portfolio of exploration tenements that covers the highly prospective far north Queensland region on the west of Cape York including Urquhart Point and more recently, Mapoon.  

Matilda also has other projects in Western Australia at Pender Bay (north of Broome), Anson Bay (north Western Australia) and Carnarvon.

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