Kimberley Metals has reached an agreement with TNG Resources by which the Sorby Hills Joint Venture of Kimberley and Henan Yuguang Gold & Lead Co may earn up to an 80% interest in TNG's Manbarrum Project.

Manbarrum is a 30km-long zinc-lead-silver mineralized trend in the Northern Territory, 30km east of the joint venture's Sorby Hills project in Western Australia. Manbarrum contains indicated and inferred resources at Sandy Creek of 24 million tonnes @ 1.8% zinc, 0.5% lead and 4.6 grams/tonne silver, and inferred resources at Djibitgan of 9.5 million tonnes @ 20 grams/tonne silver and 0.6% zinc.

TNG has spent more than Aus$15 million spent on exploration in the last 4 years with Manbarrum hosting the same style of MVT type lead-zinc-silver mineralization in carbonate rocks as at Sorby Hills.

The initial focus of the farm-in arrangement will be on shallow high grade sections for early addition to proposed Sorby Hills development. The Combined Sorby Hills and Manbarrum trend represents a large mineralized district of more than 60km strike length.

The agreement involves an initial cash payment of Aus$500,000 followed by Aus$2 million expenditure and Aus$2 million cash payment before December 30, 2013, to earn a 51% interest. Funding to a decision to mine will earn an additional 29% interest.

Upon the JV earning an 80% interest, TNG may maintain its 20% interest or sell it to the JV for Aus$3 million with a 2% NSR or convert its 20% interest to a 3% NSR.

The Sandy Creek resource is within 200 metres of the surface and is zinc dominant. However, there are high-grade lead and zinc sections of the deposit and these will be targeted by Kimberley for detailed evaluation with the aim of establishing resources within 50-60 metres of the surface as early stage open cut additions for the proposed Sorby Hills development, a trucking distance of less than 40km.

The Djibitgan deposit is about 25km north-east of Sandy Creek and contains oxide silver and oxide zinc resources. The deposit remains open ended. Other areas of mineralization have been identified along the trend but have yet to be adequately drill tested.

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