WARTHOG RESOURCES (T) LTD

& NGWENA LIMITED

NACHINGWEA PROJECT

DECEMBER 2010 QUARTERLY REPORT

PL 6634/2010
(MIHUMO)

Mihumo PL6634/2010
December Quarterly Report 2010
 WARTHOG RESOURCES (T) LTD
& NGWENA LIMITED

NACHINGWEA PROJECT

MIHUMO PL 6634/2010

DECEMBER 2010 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, 2010. A further nineteen (19) PLs are currently under
application. PL 6634/2010 (Mihumo) is an integral part of the Nachingwea Property
holding.

During the period, January through December 2010, work on the license consisted of
an airborne geophysical survey, data compilation & interpretation and reporting.

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

Mihumo PL6634/2010 was granted on September 21st 2010 and covers an area of
110.42 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
on Ntaka Hill, 1km west of Nditi Village. All work activities for the Nachingwea Project

Mihumo PL6634/2010
December Quarterly Report 2010
are supported from the Ntaka Hill Base Camp. Satellite camps and local
accommodation in towns and villages are also utilized as necessary.

The Mihumo license is centered 27km NW of Ntaka Camp, 64 km NW of

Nachingwea District town and encompasses an area of 110.42 km 2. Access to the
license is through Nachingwea-Liwale town district road cutting the license at the
eastern part of the license (Figure 1). The license is drained by Nangano River a
tributary which drain its water into the Mbwemkuru River in the SW direction.

Figure 1: Mihumo PL 6634/2010 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.

Mihumo PL6634/2010
December Quarterly Report 2010
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 (2008-2010), regional geology
traverses and ground checking of EM and geochemical anomalies. In addition
ground geophysical surveys and diamond drilling (2008-2010) 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 Mihumo 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.

Mihumo PL6634/2010
December Quarterly Report 2010
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 6634/2010, 2010 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 summarizes 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 2010 PL 6634/2010 (Mihumo)

Work Type Production

Regional Airborne Radiometric and
485.9 line kms
Magnetic
External Review of Historical Analysis and report completed by
Geochemical Data Richard Carver

Airborne Radiometric and Magnetic Survey

A regional airborne geophysical survey totaling 485.9 line km was flown across the
entire license in the June quarter. Magnetic and radiometric data was collected on E-
W flight lines flown at a 250m line spacing. Data compilation and interpretation is on-
going and will focus on identifying radiometric targets to be followed up with future
surface geochemical surveys.

External Review of Historical Geochemical Data (R. Carver)

An external review of historical geochemical data for the Nachingwea Project was
completed by Richard Carver. The study comprised 4,661 soil samples and 1,461
stream sediment samples collect by BHP, IMX and CNI between 2005 and 2009 and
included samples collected on this license.

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

Expenditures

Expenditures for Mihumo PL 6634/2010 for the September and December Quarters
2010 are USD $30,246.

See attached Table.

Christopher Airo and Stanslaus William

Ngwena Limited

Mihumo PL6634/2010
December Quarterly Report 2010