HANNANS REWARD LTD (HNR)

Next Phase of Drilling to Commence at Prospective Nickel Project

SPECULATIVE
4 February 2011
Share Trading Info ASX Code Current Share Price (cps) Trading Low /High (Rolling Year) Mkt Captalisation (undiluted) $m Net Cash Dec 2010 $m Value of Listed Investments $m Issued Capital Total Ordinary Shares Unlisted Options* Total Diluted Securities HNR 26.0 15.5c - 28.5c 34.2 5.6 24.3 (m ) 131.6 7.3 138.9

INVESTMENT HIGHLIGHTS
Hannans Reward (ASX Code: HNR) is a WA-based nickel and gold explorer, with three projects at an advanced stage of exploration. These are the Forrestania Project, the Lake Johnston Project and the Queen Victoria Rocks Project. In addition, the companys Jigalong Project has potential to host economic deposits of manganese and is located in the East Pilbara Manganese Province. The flagship project, Forrestania, contains a number of greenfield tenements that are highly prospective for nickel and are adjacent to projects owned by Western Areas NL and Kagara Ltd. The companys exploration activities at Forrestania are aimed at identifying an economic nickel deposit of >30kt (internally-generated target) of contained nickel characterised by nickel sulphides. Nickel sulphides are highly sought after because they do not require intensive processing, unlike nickel laterites. HNR retain a high-quality exploration team, is well funded and its shareholding in Atlas Iron provides the company with a valuation base. At present, the market is attributing little value to HNRs exploration portfolio; at under 4 cents per share (HNRs current cash level plus its shareholding in Atlas Iron Ltd equates to 22.1 cps compared to the current share price of 26 cps), which does not appear to adequately reflect the quality of HNRs exploration assets, especially the discovery of a high-grade nickel sulphide deposit at Forrestania. Forrestania Project in Highly Prospective Nickel Area The discovery of Western Areas Spotted Quoll deposit in October 2007 reflects the potential for discovery of an additional highgrade nickel sulphide deposit at Forrestania. At the time of the Spotted Quoll discovery, results from a 4.6 metre zone of primary sulphides produced an average grade of 4% nickel with values up to 9% nickel. There has already been over 25 nickel occurrences discovered in the Forrestania region. The primary discovery at Forrestania, Flying Fox, is one of the highest grade nickel deposits in the world and has now been in production for two years. Western Areas plans to develop five mines at the Flying Fox project from 2011, for a targeted production around 35ktpa of nickel. Flying Fox mine is now in full production. In its first full year of production it

* 4.95m of these options are out-of-the-money Board of Directors* Richard Scallan Damian Hicks William Hicks Jonathan Murray Non Executive Chairman Managing Director Non Executive Director Non Executive Director

* Further details on Page 21 Major Shareholders Mr William Hicks JP Morgan Nominees Ltd Project Sum m ary Forrestania Nickel & Gold Lake Johnston Gold Queen Victoria Rocks Nickel Jigalong Manganese 9.2% 8.5% Area 1,153km2 380km2 395km2 2,589km2

HNR 6-month Price Chart

Volume ('000) 2,500
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Price (cps) 29.0

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produced 200,597 tonnes at 4.05%, containing 8,118 tonnes of nickel in concentrate. HNR have received Government approval for the next phase of RC drilling (4,200 metres, 16 holes) at Stormbreaker (10 holes to test nickel sulphide and gold targets) and Lucy Rocks (six holes to test a conceptual ultramafic target). Lake Johnston Project HNR believe that the Lake Johnston Project has the potential to include a 300,000 oz (yet to be confirmed) gold deposit. The aim of the recently-completed drilling program was to confirm the presence of high-grade gold mineralization at the Hardcore Prospect and to increase the potential resource. The project now includes over 25 kilometres of granted tenements with high grade gold occurrences recorded at a number of prospects within the project. Exploration for gold within the project remains sparse and HNR considers the project area to be highly prospective for the discovery of additional high grade gold mineralisation. Highly Experienced Exploration Team In July 2010, HNR appointed Mr Don Huntly as Exploration Manager, an experienced Geologist having previously held senior exploration positions with Xstrata Nickel (Chief Exploration Geologist), Jubilee Mines (Regional Exploration Manager), Goldfields - South Africa (Exploration Project Manager) and WMC Resources (Leinster Nickel operation). Mr Huntly is seen as the driving force behind HNRs nickel sulphide exploration projects at Forrestania, Lake Johnston and Queen Victoria Rocks. Prior to his appointment, he had been consulting to the company since January 2010 on its nickel exploration strategy and part of an Exploration team with senior technical experience. Atlas Iron Ltd Shareholding a Major Asset HNR retains a shareholding in ASX-listed company Atlas Iron Ltd (ASX Code: AGO), with 6.4 million shares that are currently valued at $23.5 million (or 17.8 cents per share in value for HNR). The value of HNRs investment in Atlas Iron accounts for ~70% of HNRs current market capitalisation and has risen significantly in recent times, as AGOs share price has risen from around $2.09 to $3.67 over the last six months. Over this timeframe, HNR has not significantly reduced its holding in AGO. (HNR sold 598,000 AGO shares in the September 2010 quarter and more shares in the December quarter as part of a selldown that has now halted). In addition to its investment in AGO, the company has listed investments currently worth ~$0.8 million. Adequate Funding HNR is very well funded to advance its exploration activities, with $5.583 million in cash as at 31 December 2010. The balance sheet is debt free. As such, there is no requirement for a capital raising in the short to medium term to help fund its exploration activities. Capital Structure HNR retains a tight capital structure. The share register is not widely dispersed. As at 28 September 2010, the top 20 shareholders accounted for ~40% of the ordinary shares on issue. In addition, HNR has 1,701 shareholders, of which 200 held an Hannans Reward (HNR) Page 2 of 22

unmarketable parcel of shares, representing less than 340,000 shares. Notably, there is a strong alignment of interests with the companys directors and shareholders, with directors collectively holding over 12% of the ordinary share on issue.
Table 1: HNR Capital Structure
Shares/Options on Issue Total Ordinary Shares Unlis ted Options - Exercis e Price 80c - Exercis e Price 20c - Exercis e Price 80c - Exercis e Price 40c - Exercis e Price 80c - Exercis e Price 20c - Exercis e Price 75c - Exercis e Price $1.00 Total Unlisted Options** Total Issued Securities ** Out-of-the-m oney options Million 131.6 2.25 2.00 1.00 0.10 1.00 0.30 0.30 0.30 7.25 138.9 4.95 30-Jun-11 30-Jun-11 30-Jun-12 30-Jun-12 30-Jun-13 20-Jul-13 20-Jul-13 20-Jul-13 Expiry Date

HNR Projects

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1. KEY PROJECTS
1.1
1.1.1

Forrestania Nickel and Gold Project

Overview
The Forrestania Project comprises ground in JV and wholly owned tenements. Part of the project is owned 100% by HNR and part is in JV with Cullen Resources Ltd, where HNR owns 80% and is freecarrying Cullen at 20%. The Project is located in the Forrestania nickel belt and adjoins ground owned by Western Areas and Kagara. The company has steadily increased its ground holding from 14.3km2 in 2006 when it first entered the area, to 1,153km2 presently. Known nickel sulphide mineralisation within the Forrestania nickel belt occurs in a variety of geological settings above and below BIF horizons, as well as on mafic (Digger Rocks and Cosmic Boy) and felsic (Flying Fox, Spotted Quoll, Beautiful Sunday) substrates. HNR have classified the Forrestania Project into three different prospects: Stormbreaker, Skeleton Rocks and Lucy Rocks. All three are at different stages of the exploration cycle, with Stormbreaker the most advanced.

Table 2: Summary of Forrestania Prospects

Forrestania Prospects (1,153km 2) Prospect Product/s Key Features Storm breaker Nickel 8km of strike similar in geology to Flying Fox, New Morning & Daybreak (Western Areas tenements) RC drilling, geochemical sampling (tw o high-priority targets identified from VTEM data interpretation) Lucy Rocks Nickel Area includes Beautiful Sunday to the north Skeleton Rocks Nickel & Gold Trends NNW tow ards Edna May Gold Project (know n to have nickel sulphide mineralisation) Data compilation & review . New gold prospect identified and secured to NW Field reconnaissance, geological interpretation & surface geochemistry in 1Q2011. Clearances for RC drilling expected in Feb 2011

Work Com pleted

VTEM processing (tw o anomalies identified); soil & auger survey

Upcom ing Activities

In-fill auger sampling; RC drilling RC drilling (6 holes) ~2km (10 holes) targeting northern w est of Beautiful Sunday to extension to Western Areas commence in early Feb 2011; Nickel Deposits to commence in RAB/AC drilling to commence early Feb 2011; Surface TEM 1Q2011 (March 2011)

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Figure 1: Outline of Forrestania Projects

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1.1.2

Stormbreaker Prospect
The Stormbreaker Nickel Sulphide Prospect is located in the Forrestania region of WA, approximately seven kilometres north of Western Areas Flying Fox nickel sulphide deposit and immediately along strike from existing high-grade nickel sulphide mines. The company has significantly increased its tenement holding over the northern extension of the prospective stratigraphy which is host to the Flying Fox and Spotted Quoll nickel deposits. The Stormbreaker Prospect is interpreted to contain over an eight kilometres strike length of the same ultramafic units that host Western Areas NLs Flying Fox, New Morning and Daybreak Nickel Deposits, approx. 12 kilometres to the south. Both the commissioning of the Spotted Quoll nickel deposit and the discovery of extensions to the New Morning nickel deposit by Western Areas highlights the opportunity for discovery of high-grade nickel sulphide deposits within the Forrestania region.

1.1.3

Lucy Rocks Prospect

The Lucy Rocks Prospect covers an area of approximately 25km2 of greenstone which has not been previously explored for nickel sulphides. The area also contains the conceptual target referred to as Beautiful Sunday West. The aim of HNRs exploration activities at Lucy Rocks is to determine whether the unit hosting Western Areas Beautiful Sunday nickel deposit folds to the west and continues in a southern direction through the Lucy Rocks Prospect, approximately two kilometres west of the Beautiful Sunday nickel sulphide deposit. Work completed at Lucy Rocks includes final VTEM processing and the completion of orientation soil and auger surveys and gravity surveys. Recent exploration has identified extensive BIF outcrop in the northern part of the prospect.

1.1.4

Skeleton Rocks Prospect

The Skeleton Rocks Prospect trends NNW towards the Edna May gold project, which is known to have nickel sulphide mineralisation in the ultramafic units proximal to the gold. The work completed at Skeleton Rocks by HNR includes a partial VTEM coverage and historical data reviews that confirm the presence of ultramafic lithologies on the NE flank of the Skeleton Rocks Prospect. Planned activities in the 1st qtr of 2011 include field reconnaissance, geological interpretation and surface geochemistry. In addition, the company recently generated iron targets in the area with geological characteristics similar to the Cazaly Resources-Parker Range iron projects located approximately 50 kilometres to the north. HNR hope to advance these targets in the first half of 2011.

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Figure 2: Geology of Skeleton Rocks Prospect

1.1.5

Acceleration of Exploration Activities

In early 2010, HNR assembled an expanded technical team that enabled the company to advance exploration activities at Forrestania, including a RC drilling program that commenced in March 2010 and additional surface/regolith sampling planned to identify areas of interest. The expanded team included Geologist Don Huntly (employed as a consultant prior to his appointment as Exploration Manager in July 2010), Ben Jones (Geophysicist) and Dr Nigel Brand (Geochemist). Both Mr Huntly and Mr Jones were previously employed by Xstrata and prior to that, both worked with Dr Brand in his role as consultant to Xstrata and Jubilee. The first notable outcome by the new exploration team was the identification of 10 new EM anomalies at Forrestania1, including:

Subsequently referred to as the Phase Two EM Targets. These 10 EM targets were in addition to 13 EM targets (Phase One Targets) identified in December 2009.

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1. Four EM anomalies at Stormbreaker, identified from a review of historical ground EM surveys and two high-priority targets from the VTEM data interpretation. 2. Two new EM anomalies at both Skeleton Rocks and Lucy Rocks were identified from VTEM data interpretation RC drilling of Phase One Targets (nickel) commenced in May 2010 and tested discrete nickel sulphide targets approximately eight kilometres north of the high-grade Flying Fox/Lounge Lizard nickel sulphide mines. An RC drilling program (2,446 metres; 12 holes) was completed in July 2010, targeting coincident VTEM and surface TEM anomalies known to be BIF units. At the Stormbreaker Prospect: RC drilling tested a number of priority targets that ultimately proved to be conductive BIF and chert units. Drilling confirmed that the stratigraphy over the western ultramafic corridor is complex and similar to that which is host to the Digger Rocks and Cosmic Boy nickel sulphide deposits within the eastern ultramafic corridor. The historical surface geochemical sampling has been processed over the central ultramafic unit, generating a number of anomalies. Moving loop TEM traverses have been completed over the geochemical anomalies within the central ultramafic corridor. 1.1.5.1 Next Phase of Drilling - Stormbreaker and Lucy Rocks Prospects HNR have received Government approval for the next phase of RC drilling (4,200 metres, 16 holes) at Stormbreaker (10 holes to test nickel sulphide and gold targets) and Lucy Rocks (six holes to test a conceptual ultramafic target). Drilling is scheduled to commence in early February 2011 and will include: 10 drill holes at Stormbreaker along the western ultramafic corridor. Drilling is targeting the northern extension of the prospective stratigraphy north of the Western Areas nickel sulphide deposits more specifically some geochemical anomalies along the western ultramafic corridor that were generated from a recent in-fill auger sampling program. Assay results received from this program generated five nickel anomalies and a number of gold anomalies. Two of the five nickel anomalies are discrete with a limited strike extent and are located on the western most contact of the ultramafic unit. Six drill holes at Lucy Rocks approximately two kilometres west of Western Areas Beautiful Sunday nickel deposit. At present, this is purely a conceptual drilling program undertaken with a view to increasing the nickel prospectivity of the Lucy Rocks Prospect. Specifically, the drilling is designed to assess whether the ultramafic unit folds around Beautiful Sunday West.

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Figure 3: Proposed Drilling at Stormbreaker and Lucy Rocks Prospects

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1.2
1.2.1

Lake Johnston Project

Overview
The Lake Johnston Project (formerly Maggie Hays South) is located in the Lake Johnston region, approximately 100 kilometres west of Norseman, WA. The site adjoins ground owned by Russian mining giant, Norilsk, and is approximately 50 kilometres south of the Emily Ann and Maggie Hays nickel mines. The project has potential for a gold and nickel sulphide styles of mineralisation. All tenements and applications are 100% owned by Hannans Reward Ltd or are in joint venture (90% HNR). HNRs current activities at Lake Johnston are focused on three gold Prospects: Ernest, Hardcore and Richard. High grade gold mineralisation has been identified in rock chip sampling at Ernest, in RC percussion drilling at Hardcore and in RAB drilling at the Richard Prospect. The Project area (illustrated in Figure 4 below) has the potential to host significant narrow, high-grade gold mineralisation along a 25 kilometre corridor of prospective ground, located along a large-scale NW to SW trending structure. There is a major structure (15 kilometres in length) covering the three Prospects, with minimal exploration undertaken in between.

Table 3: Summary of Lake Johnston Prospects

Lake Johnston Prospects (380km 2) Prospect Product/s Key Features Ernest Gold Gold & silver mineralisation open to the north Hardcore Gold Mineralisation associated w ith flatdipping shear and a felsic porphyry unit 10 holes drilled assays received for 5 holes (best intervals include 1m @ 14.4g/t Au and 1m @ 1.71g/t Au) Richard Gold High-grade gold mineralisation intersected in historical RAB drilling Data compilation Mt Gordon Gold Significant anomaly (~2.5km in strike) generated from historic geochemical sampling Data compilation; geochemical sampling

Work Com pleted

Follow -up RC drilling; in-fill gravity survey

Upcom ing Activities

Geological & technical Geological & technical RC drilling to Gravity survey & infill review from drilling review from drilling commence in 2Q2010 auger sampling during 1Q 2011; RC drilling 2Q 2011

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Figure 4: Lake Johnston Project Outline

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1.2.2

Ernest Prospect
Assay results from earlier RC drilling at the Ernest Prospect returned high-grade, coincident gold and silver mineralisation within a narrow (<8 metres) fine-grained felsic porphyry unit. Wide silver mineralisation (>80 metres) was also encountered within a quartzsericite schist unit. Gold and silver mineralisation at Ernest is open to the north. During the December 2010 quarter, RC drilling at Ernest (2,580 metres; 11 holes) was completed to test possible extensions to the north of gold mineralisation intersected in previous drilling by HNR in 2009. Best intervals returned include 4m @ 2.57g/t Au, 4m @ 1.0g/t Au, 4m @ 0.95g/t Au and 1m @ 0.97g/t Au. An in-fill gravity survey between the Ernest and Hardcore Prospects has also been completed and has highlighted areas along strike of known mineralisation that require follow-up geochemical sampling and drilling. While the drilling remains wide-spaced, there is no additional exploration activity planned for the Ernest Prospect in the short to medium term.

1.2.3

Hardcore Prospect
Some of the most significant mineralisation identified at Lake Johnston has been at the Hardcore Prospect. Best historical results include: 8m @ 5.09 g/t Au from 106 metres 5m @ 3.2 g/t Au from 112 metres 3.5m @ 11.06 g/t Au from 127 metres 3m @ 5.08 g/t Au from 127 metres 3m @ 17.69 g/t Au from 124 metres The mineralisation at Hardcore is associated with a flat-dipping shear and a felsic porphyry unit sitting above the shear. Previous drilling has been relatively shallow (to a maximum depth of 200 metres below surface) and has not closed off mineralisation down dip or to the north. In November 2010, RC drilling commenced at Hardcore (1,349 metres; six holes) to test potential extensions to the Hardcore mineralisation down dip and along strike, as well as test high-grade mineralisation intersected in previous exploration. This drilling program has recently concluded. Out of the 10 holes drilled, HNR have received assays for five holes and the best intervals returned to date include 1m @ 14.4g/t Au and 1m @ 1.71g/t Au.

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Figure 5: Cross Section of Hardcore Prospect (looking NE)

1.2.4

Current Focus

1. Following the completion of the RC drilling programs at both the Ernest and Hardcore Prospects, HNR is expected to progress towards undertaking a drilling program (RAB and aircore) at the Mt Gordon Prospect further to the south-east, with a gravity survey and geochemical sampling being planned.

2.

Significant high-grade gold mineralisation has been intersected in historical RAB drilling at the Richard prospect as well as RC drilling at the Charles Prospect.

3. Recent data compilation and interpretation of the surface geochemical sampling at the Mt Gordon Prospect area has confirmed the prospective nature of the area for the discovery of economic gold mineralisation. Historical geochemical sampling was completed on a 400 x 100 metre grid spacing and has generated a significant anomaly over an area of 2.5 kms in strike with peak values of 421 ppb Au at the Charles prospect and 327 ppb Au at the Elizabeth Anomaly (See Figure 6 below). The large anomaly has had wide spaced regolith drilling and very limited RC percussion (8 holes) completed to date. Best historical gold intervals from RC drilling include 2m @ 6.97 g/t Au and 2 metres @ 3.85 g/t Au (Charles prospect).

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4. It is considered that there is significant potential to discover additional high grade gold mineralisation in the area, and the prospect area warrants additional surface sampling as well as follow up regolith and RC drilling at the Mt Gordon Prospect, HNR intend to undertake a detailed review of the historical drilling data as well as a gravity survey in order to develop a geological interpretation ahead of in-fill auger sampling and drilling planned during the 2nd quarter of 2011.
Figure 6: Gold Geochemistry at Mt Gordon Area

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1.3

Queen Victoria Rocks Nickel Project

Queen Victoria Rocks Prospects (395km 2)

Table 4: Summary of Queen Victoria Rocks Prospects

Prospect Product/s Key Features

Benari Nickel TEM conductors intersected in drilling; ultramafic lithologies confirmed

Horseshoe Nickel -

Spargos Nickel Focus of historical nickel exploration by Vale in 2009 as part of JV w ith HNR Surface TEM survey, drilling (3 percussion holes & 3 diamond holes)

Work Com pleted

RC drilling (6 holes); 1,175 auger samples assays received for collected; assays all holes (no significant pending Ni and Au assays received as yet) Aircore drilling to Surface TEM and follow up geochemical commencement of RC anomalies to drilling (2Q 2011) commence 2Q2011

Upcom ing Activities

Surface TEM and infill geochemical sampling in 1Q2011; Drilling to commence in 2Q2011

1.3.1

Overview
The Queen Victoria Rocks (QVR) Project is located 30 kilometres SW of Coolgardie, in the Goldfields region of WA. The project adjoins ground in joint venture with Mincor Resources NL. All tenements are 100% owned by HNR. Historically, nearly all of the nickel exploration completed by HNR and others has focused on an area less than 5km2 known as the Spargos Prospect. Exploration undertaken by Vale Exploration Australia in 2009 involved a surface TEM survey, drilling (three RC percussion holes and three diamond holes) north of the Spargos Prospect. This work was undertaken by Vale as part of a JV agreement with HNR. HNR now have 100% equity in the QVR project, as Vale has since returned the project to HNR. Results from a ground electromagnetic survey undertaken last year have confirmed the presence of coincident geophysical, geochemical and geological anomalies prospective for nickel sulphide mineralisation. Previous exploration in the area has outlined a number of coincident nickel and copper anomalies from auger sampling and regolith drilling. An RC drilling program subsequently commenced in September 2010 within the Benari Prospect area to test 12 nickel sulphide targets that were selected following i) RAB and aircore drilling by previous explorers as well as ii) airborne and ground geophysics conducted by HNR. Previous RC drilling had not effectively tested the ultramafic unit, the auger anomalies or historical TEM anomalies.

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Figure 7: Queen Victoria Rocks Project Outline

A total of six holes were RC drilled at the Benari Prospect for 1,455 metres. RC drilling targeted a number of Moving Loop TEM conductors and intersected mafic, komatitic and granitic lithologies. Assays have been received for all holes, with no significant assays for nickel and gold received. In Figure 8 below, the RC drill holes labeled 6,8,9 & 10 intersected sulphidic sedimentary units which have been interpreted to be the source of the TEM anomalies.

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Figure 8: Auger, VTEM and Moving TEM Anomalies at Benari Prospect

Follow up work at other prospects with QVR include: Surface TEM and commencement of RC drilling at the Horseshoe Prospect (expected in 1st half of 2011) to follow up and test any significant Nickel anomalies. To date, 1,175 auger samples have been collected using a 50x20 metre grid spacing. The assays have been received, with one significant nickel-copper anomaly generated from the sampling Surface TEM and in-fill geochemical sampling within the Spargos Prospect (and further to the north) to commence in February 2011, to be followed by drilling.

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1.4
1.4.1

JIGALONG PROJECT
Overview
The Jigalong Project has potential to host economic manganese deposits. HNR retain all non-iron rights (which are owned by Atlas Iron Ltd). There is significant potential for a manganese resource at the Hill 616 Prospect, however further exploration and technical studies are required. The project area is located in the East Pilbara Manganese Province, in proximity to the Balfour Downs Manganese Project (~45 kilometres to the north) and further south of a cluster of manganese projects situated in the northern area of the East Pilbara Manganese Province. Please refer to Figure 9. The Hill 616 Prospect is similar in style to the Booginia Hill Prospect at Balfour Downs, which is now in full production. Recent rock chip sampling at Hill 616 returned encouraging manganese grades (ranging from 29.4% Mn to 32.5% Mn) and confirmed the high grade nature of the mineralisation. Aside from manganese, there is the potential for the Jigalong project to host a diverse range of minerals, as the project area is located on the eastern edge of the Sylvania Dome, an area known to host iron, gold and copper-lead-zinc. HNR has commenced a detailed technical review of the known manganese mineralisation in the area and has also commenced field reconnaissance.

1.4.2

Recent Work Completed

An auger sampling program was recently completed in tenement E46/780 using a 800 x 100 metre grid spacing. Assays have also been recently received for the sampling and will require processing and interpretation. In addition, 12 manganese occurrences were confirmed by a helicopter survey completed in December 2010. All of the manganese occurrences were associated with an extensive Balfour Shale2 unit within the project area, and appeared to be of variable grade and quality. The highest concentration of higher-grade manganese mineralisation is located along the Hill 616 to Burranbah corridor (20.9% Mn @ surface; max 23.2% Mn in aircore at the Burranbah Prospect). This corridor includes a large proportion of residual mangeniferous shale and covers a strike extent of approximately 25 kilometres.

The Balfour Shale is a member of the Manganese Group of sediments in the region and has the highest potential to host manganese deposits. It is also host to the Booginia Hill deposit at Balfour Downs to the North.

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Figure 9: Jigalong Project Tenements showing Regional Manganese Deposits and Occurrences

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Figure 10: Location of Manganese Projects in the Pilbara

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2. BOARD OF DIRECTORS
DIRECTOR INTEREST IN HNR BACKGROUND

Richard Scallan Non Exec Chairman

0.25m unlisted options

Mr Scallan is a Mining Engineer extensive experience in underground and open cut mining, and exploration in South Africa, Zimbabwe (Rhodesia) and Australia. Dick was employed by the Anglo American Corporation of South Africa Limited for 26 years before immigrating to Australia and joining Renison Goldfields Limited in 1981 where he was employed for 21 years. Mr Scallan held positions as General Manager, Kundana Gold Pty Ltd and Paddington Gold Pty Ltd (both owned by Goldfields Limited) in Kalgoorlie, Western Australia and General Manager, RGC Limited Renison Tin Division in Zeehan, Tasmania and Eneabba Mineral Sands, Western Australia. Damian Hicks was appointed to the Board on 11 March 2002 and was a founding Director of Hannans Reward Limited.

Damian Hicks Managing Director

~4.165m ord shares; 3m unlisted options @ 80c, exp 30 June 2011

Mr Hicks, who holds a Bachelor of Commerce (Accounting and Finance) from the University of WA, is admitted as a Barrister and Solicitor of the Supreme Court of WA and holds a Graduate Diploma in Applied Finance & Investment from FINSIA as well as a Graduate Diploma in Company Secretarial Practice from Chartered Secretaries in Australia and is a Graduate Member of the Australian Institute of Company Directors. William Hicks was appointed to the Board on 11 March 2002 and was a founding Director of Hannans Reward Limited. Mr Hicks has been actively involved in the progress and development of a number of well-known exploration companies. He was a director and secretary of Spargos Reward Gold Mines NL and was instrumental in the listing on the ASX of both Central Kalgoorlie Gold Mines NL and Maritana Gold NL. Mr Murray, appointed to the Board on 22 January 2010, is a partner at a Perth-based law firm (Steinepreis Paganin) and has significant experience in advising on initial public offers & secondary market capital raisings, all forms of commercial acquisitions and divestments and providing general corporate and strategic advice. He has practiced as a corporate lawyer since 1996 having graduated from Murdoch University. Mr Murray, who is also a member of FINSIA, joined Steinepreis Paganin in December 1997 and was appointed as a partner in July 2001.

William Hicks Non Exec Director

~12.063m ord shares; 0.25m unlisted options @ 80c, exp 30 June 2011

Jonathan Murray Non Exec Director

391,775 ord shares;

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DIRECTORY ALPHA SECURITIES

Corporate George Karantzias george@alphasecurities.com.au 0401 670 620 Research Analyst John Haddad john@alphasecurities.com.au 0407 219 222

Disclaimer
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