WARTHOG RESOURCES (T) LTD

& NGWENA LIMITED

NACHINGWEA PROJECT

DECEMBER 2011 QUARTERLY REPORT

PL 5977/2009
(Naujombo)

Naujombo PL5977/2009
December Quarterly Report 2011
 WARTHOG RESOURCES (T) LTD
& NGWENA LIMITED

NACHINGWEA PROJECT

Naujombo PL 5977/2009

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 5977/2009 (Naujombo) is an integral part of the Nachingwea Property
holding.

During the period, January through December 2011, work on the license consisted of
Structural data analysis by SRK consultants, 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 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

Naujombo PL5977/2009 was granted on December 4th 2009 and covers an area of
198.11 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

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December Quarterly Report 2011
are supported from the Ntaka Hill Base Camp. Satellite camps and local
accommodation in towns and villages are also utilized as necessary.

The Naujombo license is centered 33 km north of Ntaka Camp, 69 km NNW of

Nachingwea District town and encompasses an area of 198.11 km 2 at the northen
edge of the property (Figure 1). Access to the license is via a secondary road cutting
diagonally across the center of the license. The license is drained by Mirui River and
its tributaries which drain their water into the Mbwemkuru River.

Figure 1: Naujombo PL 5977/2009 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.

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

Naujombo PL5977/2009
December Quarterly Report 2011
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 Naujombo 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.

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.

Naujombo PL5977/2009
December Quarterly Report 2011
Summary of Work – PL 5977/2009, 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 data compilation and 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 5977/2009 (Naujombo)

Work Type Production

Structural data analysis by SRK
The entire PL
consultants

Structural data analysis by SRK.

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 the current Naujombo license.

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December Quarterly Report 2011
Figure 2: A map showing exploration work completed in 2011 on the License
PL 5977/2009 (Naujombo).

Expenditures

Expenditures for Naujombo PL 5977/2009 for the December 2011 Quarter are
USD $17,492.

See attached Table.

Christopher Airo and Stanslaus William

Ngwena Limited

Naujombo PL5977/2009
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Naujombo PL5977/2009
December Quarterly Report 2011