Hannans Reward - 2nd Quarter Activities Report

ASX Announcement / Media Release

31 January 2011

2nd Quarter Activities Report § Forrestania Project – Government approvals received

and RC drill testing of nickel and gold targets scheduled to commence next week (Stormbreaker & Lucy Rocks); gold and iron targets being validated (Skeleton Rocks); new project maps attached

§ Lake Johnston Project – RC drill testing encounters gold mineralisation (Ernest & Hardcore); further RC assays pending (Hardcore); significant gold anomalism identified from data review (Mt Gordon); further auger, RAB and RC drilling for gold being planned (Hardcore & Mt Gordon); new project maps attached

§ Jigalong Project – field survey of manganese confirms excellent manganese prospectivity; approx. 25km’s of manganese formation identified/confirmed; Hill 616 considered to have economic potential; further manganese drilling at Hill 616 being planned; new manganese mineralised 3D-shell diagram attached

§ Queen Victoria Rocks Project – auger sampling and RC drilling completed; ground geophysical survey over soil anomaly and historical helicopter-borne geophysical survey anomalies in progress (Horseshoe & Spargos); data compilation of all historical exploration completed enabling thorough geological interpretation and potential target identification (Spargos); new project maps attached

§ Sunday Project – joint venture partner Triton Gold Ltd withdraws from project after meeting commitment; no interest earned by Triton

§ Exploration Geologists – Hannans is currently employing exploration geologists with 3-5 years of experience; contact Don Huntly, Exploration Manager

§ Exploration Activity Table updated and attached

§ Cash expenditure including exploration ($1.36m) and administration expenditure ($0.22m) for the Quarter totalled $1.48m; chart of Quarterly cash expenditure attached

§ Cash ($5.58m) and ASX listed equities ($19.39m) at end of Quarter totalled $24.97

Fast Facts

ASX Code: HNR

Capital Structure

Shares on issue: 131.6m

Options on issue: 7.25m (ex 20c–100c)

Market cap: $30.27m (at 23c)

Financial Position (at end of Quarter)

Cash on hand: $5.58m (Dec 2010)

Value of ASX Listed Equity Positions: $19.39m

Board of Directors

Richard Scallan Chairman

Damian Hicks Managing Director

William Hicks Non-Executive Director

Jonathan Murray Non-Executive Director

Projects (Western Australia)

Forrestania Nickel & Gold

QVR Nickel

Lake Johnston Nickel & Gold

Jigalong Manganese

2nd Quarter Activities Report 31 January 2011

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§ Hannans wholly owned subsidiary HR Equities Pty Ltd has provided a $2.5m convertible note subscribed for in ASX:SCR offering 12.5% interest pa, convertible into SCR shares at deemed issue price of 33c, repayable by 15 December 2011 with security over 100% of assets of SCR. It is currently drawn down to $845,000. HR Equities Pty Ltd has received 1,000,000 options in SCR exercisable at 20c on or before 31 October 2012 with the last sale price of SCR on 31 January 2011 being 42c

§ Twenty (20) investor presentations scheduled for 8-11 February 2011 in Sydney & Melbourne

SUMMARY & HIGHLIGHTS § Assays have been returned and the data interpreted for the auger sampling

completed at the Stormbreaker Prospect (Forrestania Project) on tenements E77/1354, E77/1406, E77/1430, P77/3607, P77/3848, and P77/3849. Both nickel and gold anomalies have been defined.

§ Government approvals have been received for the planned RC drilling at Forrestania, the drilling is targeting geochemical Ni and Au anomalies at the Stormbreaker prospect as well as potential ultramafic lithologies at the Lucy Rocks Prospect (Forrestania Project) west of the Beautiful Sunday Ni sulphide deposit (Western Areas NL), the drilling will commence during early February 2011.

§ A number of iron targets have been identified at the Skeleton Rocks Prospect (Forrestania Project), the targets have a similar geological setting to the Cazaly Resource Ltd - Parker Range Iron Project ~50 km’s to the north.

§ RC percussion drilling has been completed at the Ernest gold prospect (Lake Johnston Project), a total of 11 holes was completed during the quarter for 2,580 metres. Assays have been returned for all holes, best intervals include 4 metres @ 2.57 g/t Au, 4 metres @ 1.0 g/t Au, and 4 metres @ 0.95 g/t Au.

§ RC percussion drilling commenced at the Hardcore gold prospect (Lake Johnston Project), a total of 6 holes were completed for 1,349 metres. Assays have been returned for 5 holes, best intervals returned to date include 1 metre @ 14.4 g/t Au and 1 metre @ 1.71 g/t Au.

§ Historical data has been compiled and surface geochemical sampling interpreted for the Mt Gordon prospect (Lake Johnston Project). The surface sampling has defined significant gold anomalism in the area with a strike extent of ~2.5 km’s. The anomaly has had limited regolith and RC drilling (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). The prospect area warrants additional surface sampling as well as follow up regolith and RC drilling.

§ Infill auger sampling was completed at the Horseshoe prospect (QVR Project), assays have been returned and the data has been processed. One coincident Ni plus Cu anomaly has been generated from the sampling. Surface TEM is scheduled to commence over the prospect area during January 2011.

§ RC percussion drilling was completed at the Benari prospect (QVR Project). A total of 6 holes were completed for 1,455 metres. All assays have been received with no significant assays for Ni or Au returned.

§ A helicopter survey was completed over the Jigalong project area, targeting and evaluating manganese occurrences within the entire project area. A total of 12 manganese occurrences have been confirmed to date within the project. Rock chip samples were collected from the Hill 616 and Burranbah prospects (Jigalong Project),


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the results are listed in the table below and confirm the high grade nature of the mineralisation in the area.

Prospect SampleID MGA_East MGA_North Mn% Si% Fe% P2O5% Burranbah 79035 240423 7368218 20.9 14.87 10.24 0.29

Hill 616 79036 247178 7373946 29.4 3.64 11.89 0.12 Hill 616 79037 247112 7373886 32.5 7.74 11.43 0.14 Hill 616 79038 247143 7373841 32.2 3.74 9.51 0.13

Hannans exploration activities are aimed at identifying an economic mineral deposit (i.e. stand-alone operation) through the application of rigorous exploration processes and a multidisciplinary approach.

Field based exploration activities during the quarter have been undertaken at the Forrestania, Queen Victoria Rocks, Lake Johnston and Jigalong projects, and have included RC percussion drilling, gravity surveys, auger sampling and rock chip sampling.

Ongoing Exploration Activities § RC percussion drilling exploring for nickel and gold will commence at the

Stormbreaker and Lucy Rocks prospect areas (Forrestania Project) during early February 2011.

§ Field reconnaissance, mapping and rock chip sampling to validate the iron targets at Skeleton Rocks (Forrestania Project) will be completed during the first quarter of 2011.

§ Regolith drilling at the Lucy Rocks prospect (Forrestania Project) is planned to confirm the geological interpretation and stratigraphy in the area.

§ Infill auger sampling programs are planned for the Mt Gordon prospect (Lake Johnston Project) and Stormbreaker prospect (Forrestania Project).

§ A regional gravity survey is planned for the Mt Gordon prospect (Lake Johnston Project).

§ Surface TEM is scheduled to commence at the Horseshoe prospect (QVR Project) during January 2011 and the Spargos prospect (QVR Project) during February 2011.

§ Infill auger sampling, regolith drilling and RC percussion drilling for the Mt Gordon prospect area (Lake Johnston Project) will be scheduled the second quarter of 2011.

§ An extension gravity survey over the Mt Gordon prospect (Lake Johnston Project) will be planned and implemented during the coming quarter.

§ A detailed review of the historical drilling data within the Mt Gordon prospect (Lake Johnston) will be completed to develop a geological interpretation of the area during the coming quarter.


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FORRESTANIA PROJECT

Known nickel sulphide mineralisation within the Forrestania 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.

Hannans tenement position is situated immediately along strike, to the north of, and also to the west of the Western Areas NL nickel sulphide deposits covering what is considered to be the most prospective stratigraphy proximal to known Ni sulphide deposits in the Forrestania Greenstone belt.

It is considered by Hannans that the stratigraphy within their tenement package has similar characteristics to areas that hosts nickel sulphide deposits and occurrences elsewhere within the Forrestania Greenstone Belt (Figure 1).

Stormbreaker Prospect Area Exploration activities for the quarter included auger and rock chip sampling.

Hannans recently made a successful exploration license application to the north and along strike of the western ultramafic corridor (Figure 1).

Assays have been received for the auger sampling program completed over western ultramafic corridor. The data has been interpreted and the sampling has generated five Ni anomalies and a number of Au anomalies. Two of the Ni anomalies are discrete in nature with a limited strike extent, and are located on the western most contact of the ultramafic unit (Figure 2).

RC percussion drilling is scheduled to commence during February to test all five Ni anomalies as well as the high priority Au anomalies.

Lucy Rocks Prospect Area Recent exploration activities have identified extensive BIF outcrop in the northern part of the prospect (Figure 1) approximately 2 km’s west of the Beautiful Sunday nickel sulphide deposit. The BIF units at Lucy Rocks and the Beautiful Sunday nickel deposit are separated by a late stage granitoid body. It is interpreted that there is a strong possibility for the area to include ultramafic units associated with the BIF units, which is similar to the stratigraphy throughout the greenstone belt. These ultramafic units have also been interpreted as the same stratigraphy which is host to the nickel sulphide mineralisation to the east.

RC percussion drilling is scheduled to commence at Lucy Rocks to test the stratigraphy and possible ultramafic units (Figure 2).


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Figure 1. Leasing diagram showing geology of the Stormbreaker and Lucy Rocks prospect areas.


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Figure 2. Leasing diagram showing the Stormbreaker prospect and auger sampling Ni ppm image draped over the grey scale aeromagnetic image.


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Skeleton Rocks Prospect Area

The work completed at Skeleton Rocks by Hannans for the quarter has included additional data reviews and a preliminary targeting exercise for iron prospects. The targeting has generated a number of iron prospects coincident with large magnetic anomalies; the magnetic anomalies have been interpreted to be BIF units (Figure 3). The iron targets have similar geological characteristics to the Cazaly Resources Ltd – Parker Range project approximately 50 km’s to the north. The project is associated with BIF units which are extensive in the area.

Figure 3. Leasing diagram showing aeromagnetic image of Skelton Rocks prospect area.


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Ongoing Exploration Activities

§ RC percussion drilling exploring for nickel and gold will commence at the Stormbreaker and Lucy Rocks prospect areas during early February 2011.

§ Field reconnaissance, mapping and rock chip sampling to validate the iron targets at Skeleton Rocks will be completed during the first quarter of 2011.

§ Regolith drilling at the Lucy Rocks prospect is planned to confirm the geological interpretation and stratigraphy in the area.

§ Additional infill auger sampling programs are planned for the Stormbreaker prospect along the western ultramafic corridor.

QUEEN VICTORIA ROCKS (QVR) PROJECT Exploration for the quarter has included RC percussion drilling at the Benari Prospect area (E15/913) and infill auger sampling at the Horseshoe prospect (Figure 4).

The following table includes a summary of exploration activities completed for the Queen Victoria Rocks Project.

Activity QVR Summary RC percussion drilling

6 holes for 1,455 metres

Down hole TEM nil Surface EM nil Geochemical Sampling

1,175 auger samples 23 rock chip samples

Benari Prospect (E15/913) RC percussion drilling has been completed at the Benari Prospect. A total of 6 holes have been completed for 1,455 metres. The drilling to date has intersected mafic, komatiitic and granitic lithologies. Assays have been received for all holes with no significant assays for Ni and Au received.

The RC drilling has targeted a number of Moving Loop TEM conductors and has intersected amphibolites, granitic and komatiitic lithologies. The surface TEM anomalies have been interpreted to be the result of sulphidic shale units.

The prospect requires a review of the assay data and geology to verify the source of the surface auger geochemical anomalies.

Horseshoe Prospect (E15/755) Auger sampling was completed over the Horseshoe prospect, a total of 1,175 samples were collected using a 50 x 20 metre grid spacing. The assays have been received and interpreted, and one significant Ni plus Cu anomaly has been generated from the sampling.

Surface TEM is scheduled for January 2011 over the geochemical anomalies recently defined.


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Figure 4. Hannans Reward Ltd – Queen Victoria Rocks Project


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Spargos Prospect (P15/4964, P15/4965, P15/4966, P15/4967 and E15/971) All historical drilling data has been collated, validated and imported into a single digital database. The data will significantly improve the ability to evaluate the prospectivity for Ni sulphides in the area, as well as build a 2D and 3D geological interpretation of the prospect.

Historical drilling has intersected Ni sulphides internal to the ultramafic host unit; however no basal contact Ni sulphides have been intersected to date. A preliminary review of the drilling data has indicated that the host ultramafic unit and possible basal contact position(s) has been structurally modified by folding and/or faulting to the south. The southern extension of the ultramafic host unit has not had any surface or airborne TEM coverage and remains poorly explored by drilling.

Ongoing Exploration Activities § Surface TEM to commence at the Horseshoe prospect during January 2011.

§ Surface TEM to commence at the Spargos prospect during Feb 2011.

LAKE JOHNSTON PROJECT Hannans have put together a tenement portfolio at Lake Johnston which covers ~30 km’s of greenstone stratigraphy (Error! Reference source not found.). The granted tenure includes a number of high grade gold occurrences (Ernest, Hardcore and Mt Gordon prospects), as a result the project is considered to be highly prospective for the discovery of additional high grade gold mineralisation.

Exploration activities for the quarter included RC percussion drilling (Ernest and Hardcore prospects) and a regional gravity survey over the corridor between the Ernest and Hardcore prospects.

The following table includes a summary of exploration activities completed for the Lake Johnston Project.

Activity Lake Johnston Summary RC percussion drilling

17 holes for 3,929 metres

Down hole TEM nil Surface EM nil Gravity 1,827 stations Geochemical Sampling

8 rock chip samples

Exploration and data review activities at the Lake Johnston Project continue to strengthen the prospectivity of the area for the discovery of an economic Au deposit.


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Ernest Prospect (E63/1091 and P63/1478) RC percussion drilling was completed at the Ernest prospect, 11 holes were completed for 2,580 metres (Error! Reference source not found.). The drilling intersected mafic and felsic to intermediate intrusive lithologies. Minor gold mineralisation was intersected and is associated with quartz veining within mafic lithologies.

Best intervals returned include 4 metres @ 2.57 g/t Au, 4 metres @ 1.0 g/t Au, 4 metres @ 0.95 g/t Au and 1 metre @ 0.97 g/t Au. A number of the mineralised intervals were sampled as 4 metre composites and require re-sampling as 1 metre intervals. The 4 metres intervals listed above are composite samples, 1 metres samples have been collected for these and other intervals and submitted for re-assay, assay results are pending.

The drilling remains very wide spaced however there is no additional exploration activity planned for the prospect in the short to medium term.

Hardcore Prospect (E63/1327) RC percussion drilling commenced at the Hardcore prospect during the quarter, 6 holes were completed for 1,349 metres. The holes have intersected the targeted felsic intrusive unit as well as narrow quartz veins and associated silica plus sulphide alteration. Assays have been received for 5 holes to date; best intervals returned include 1 metre @ 14.4 g/t Au and 1 metre @ 1.71 g/t Au.

Mt Gordon Prospect (E63/1365) Recent data compilation and interpretation of the surface geochemical sampling 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 which covers an area of ~2.5 km’s in strike. The anomaly has peak values of 421 ppb Au at the Charles prospect and 327 ppb Au at the Elizabeth Anomaly (Figure 6).

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). 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.

Ongoing Exploration Activity § Detailed review of the historical drilling data at the Mt Gordon prospect to develop a

geological interpretation of the area during the coming quarter.

§ Plan and implement infill auger sampling, regolith drilling and RC percussion drilling at the Mt Gordon prospect during the second quarter of 2011.

§ Plan and implement a gravity survey over the prospect area during the coming quarter.


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Figure 5. Lake Johnston Leasing Diagram showing regional geology, prospect locations and Au ppb geochemistry image.


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Figure 6. Mt Gordon Prospect area showing Au ppb in auger sampling anomalies and prospect locations


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JIGALONG PROJECT

Exploration activities recommenced during the quarter, with an auger sampling program completed and a regional helicopter survey completed over the entire project evaluating the manganese potential of the project.

The following table includes a summary of exploration activities completed for the Jigalong Project.

Activity Jigalong Summary Geochemical Sampling

119 auger samples 4 rock chip samples

The auger sampling program was completed on tenement E46/780 using a 800 x 100 metre grid spacing over a residual terrain. Assays have recently been received for the sampling and require processing and interpretation.

A helicopter survey was completed during December 2010 targeting and evaluating manganese occurrences within the entire project area. A total of 20 field locations were visited during the survey with 12 manganese occurrences confirmed.

The regional survey targeted a number of potential high grade dolomite hosted occurrences (similar to the Woodie Woodie deposit) in the north of the project area as well the Balfour Shale hosted occurrences to the south such the Hill 616 and Burranbah deposits (Figure 7).

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

All of the manganese occurrences visited during the trip were associated with the Balfour Shale unit and appear to be of variable grade and quality. The Balfour Shale unit is very extensive within the project area and it is evident from the regional helicopter survey that there are a number of sub cropping manganese occurrences within the project that require further exploration.

It can be seen from the distribution of manganese rich occurrences that the highest concentration of higher grade manganese mineralisation is located along the Hill 616 to Burranbah corridor. Recent rock chip samples collected from the Burranbah prospect returned 20.9% Mn. A single traverse of aircore drilling has been drilled in the prospect area and has intersected manganese grades of up to 23.2% Mn. The corridor includes a large proportion of residual mangeniferous shale and covers a strike extent of approximately 25 km’s. The corridor is considered to be highly prospective for the discovery of additional high grade supergene style manganese mineralisation.


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Figure 7. Jigalong Project tenements showing regional manganese deposits and

occurrences.


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Hill 616 Prospect (E52/1819) The Hill 616 deposit is similar in style to the Booginia Hill deposit at Balfour Downs ~45km’s to the north, which is now in full production.

There are a number of types of manganese oxide deposits associated with the Balfour Shale which have resulted from supergene processes (Figure 8).

The Hill 616 mineralisation is interpreted to be a remnant mesa-form deposit which is the result of surficial or supergene enrichment (Type D).

The mineralisation is characterised by two shallow dipping zones within the shale host unit. Previous aircore drilling has defined manganese mineralisation over an area of 1.9 x 1.7 km’s with grades of up to 31.8% Mn intersected within the drilling.

It was noted during the field survey that there is manganese rich subcrop ~2.5 Km’s to the north of the Hill 616 prospect, which possibly represents the down dip extents of the deposit (Type C and Type E mineralisation). It is considered that there is significant potential to extend the known mineralised envelope further to the north. This has been confirmed by recent 3D modelling of the mineralised envelope which shows that the mineralisation is potentially open down dip toward the NNE (Figure 10).

Recent rock chip sampling at the Hill 616 prospect (Figure 9) returned encouraging grades and confirmed the high grade nature of the mineralisation. Results from sampling are included in Table 1. Table 1. Hill 616 rock chip assay results.

SampleID MGA_East MGA_North Mn% Si% Fe% P2O5% 79036 247178 7373946 29.4 3.64 11.89 0.12 79037 247112 7373886 32.5 7.74 11.43 0.14 79038 247143 7373841 32.2 3.74 9.51 0.13

Figure 8. Schematic cross-section summarising the major location of supergene

manganese oxide deposits within the Pilbara Manganese Group. These include; A - cavity fillings in dolomite (Woodie Woodie), B – infillings in chert breccia, C – dense

manganese oxide strata at the base of laterite, D – exposed mesa-form manganese oxide strata on shales (Booginia Hill), and E – lateritic, pisolitic manganese oxides.

(from Ostwald 1993).


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Figure 9. Manganese rich sample collected from the Hill 616 prospect, sample assayed 32.2% Mn, 3.74% Si and 9.51% Fe (width of view is 15cm).

Hill 616Mn > 15%

grade shell

Distribution of Mnshells > 15%

1 km

Figure 10. Hill 616 prospect showing >15% Mn grade shells and potential extensions to the mineralisation.


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Ongoing Exploration Activities § Document and rank all the manganese targets in the project area.

§ Prospect scale mapping and interpretation at Hill 616 to determine the correct geological setting and mode of deposition.

§ Additional detailed mapping and rock chip sampling along the Hill 616 to Burranbah corridor.

§ It is anticipated that the Hill 616 prospect will require additional drilling to define the limits of the mineralised outline, it will also be necessary to collect samples for further metallurgical test work. The drilling will be planned and scheduled for the 2nd or 3rd quarter of 2011.

§ Purchase a detailed DTM from Landgate to assist with the geological interpretation at Hill 616.

EXPLORATION EXPENDITURE The chart below shows the historical cash expenditure and cash on hand over the last six Quarters.

Hannans Reward Ltd is well funded with liquid assets of approximately A$25M and major strategic land positions at Forrestania, Lake Johnsotn, Queen Victoria Rocks and Jigalong.


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Project Prospect Work Completed Positive Results Proposed Activities

Schedule

Forrestania (1,153 sq km’s)

Skeleton Rocks Prospect (Ni + Au)

Preliminary targeting for Iron exploration.

Large magnetic high features targeted for iron exploration, Cazaly Resources target model of >30Mt resource.

Field Reconnaissance. Geological interpretation. Drilling program proposal.

Field reconnaissance during 1st qtr 2011. Geological interpretation during 1st qtr 2011. Surface geochemistry during 1st qtr 2011. Clearances for RC drilling during Jan/Feb 2011

Stormbreaker Prospect (Ni)

Field checking of auger anomalies completed. Flora surveys completed.

Ni and Au anomalies defined Clearances for RC drilling received from DMP.

RC Percussion drilling targeting Ni and Au anomalies. Additional infill auger sampling. Surface TEM.

RC drilling to commence Feb 2011. Infill auger sampling to commence Jan 2010. Surface TEM to commence Mar 2011.

Lucy Rocks Prospect (Ni)

Flora surveys completed.

Clearances for RC drilling received from DMP.

RC percussion drilling at Beautiful Sunday West. Reconnaissance aircore drilling to confirm geology to south.

RC drilling to commence Feb 2011. RAB/Aircore drilling to commence 1st qtr 2011.


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Queen Victoria Rocks (395 sq km’s)

Benari Prospect (Ni)

Nil Nil Geological interpretation. Aircore drilling to define geochemical anomalies.

Geological interpretation to be completed 1st qtr 2011. Aircore drilling to commence 2nd qtr 2011.

Horseshoe Prospect (Ni)

Auger sampling data received and interpreted.

One moderately strong anomaly generated from the sampling.

Surface TEM to follow up any significant Ni anomalies. RC drill test geophysical and/or geochemical anomalies.

Surface TEM to commence during Jan 2011. RC drilling to commence 2nd quarter 2011.

Spargos Prospect (Ni)

Preliminary review of TEM and drilling data.

A number of historical drill holes have intersected what appears to be disseminated Ni sulphides internal to the ultramafic host unit. Mineralisation is still open to the south. Southern ultramafic contact has been folded and/or faulted and remains poorly explored.

Geological interpretation. Process and interpret historical geochemical data. Surface TEM to over southern ultramafic contact. Technical review. RC percussion drilling of any significant anomalies along southern contact.

Technical review to be completed during Feb 2011. Surface TEM to commence Feb/March 2011. Infill geochemical sampling to commence 1st qtr 2011. Drilling to commence 2nd quarter 2011.


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Queen Victoria Rocks (395 sq km’s)

Spargos North (Ni)


A number of strong VTEM anomalies require follow up with ground TEM.

Surface TEM to follow up VTEM anomalies.

Surface TEM to commence Jan/Feb 2011.

Spargos South (Ni)


Auger anomaly and magnetic high feature along strike of the Spargos prospect has had no TEM coverage.

Surface TEM survey. RC drill test any significant anomalies.

Surface TEM to be completed during Feb 2011.

Lake Johnston (380 sq km’s)

Ernest Prospect (Au)

RC drilling has been completed. Gravity survey extended to the north, east, west and south.

Minor Au intercepts returned for RC drilling. Gravity survey has helped to map structures and lithologies.

Geological interpretation and review.

Geological review and interpretation to be completed during 1st qtr 2011.

Hardcore Prospect (Au)

RC drilling completed mid Jan 2011. Surface geochemical data processed and interpreted.

Narrow high grade Au intercepts returned from assays to date. Additional Au anomaly defined to the SW – Zambezi Anomaly

Data and geological review when all assays received.

Geological interpretation to be completed 1st quarter 2011.

Mt Gordon Prospect - E (Au)

All historical data complied. Surface geochemistry data processed and interpreted.

Extensive gold anomalism identified, high grade anomaly covers an area of 2.1 x 0.5 km’s with very little RC drilling completed in the area. Best historic RC intervals include 2m @ 6.97 g/t Au and 2m @ 3.85 g/t Au.

Geological Interpretation. Interpret historical geochemical data. Regional gravity survey. Infill auger sampling. Regolith and RC drilling.

Start gravity survey 1st quarter 2011. Infill auger sampling during 1st qtr 2011. Regolith and RC drilling during 2nd quarter 2011.


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Lake Johnston (380 sq km’s)

Maggie Hayes South Prospect (Ni + Au)

Surface geochemical data processed and interpreted.

Additional Au anomalies identified on tenement E63/1354.

Surface TEM over the southern portion of the ultramafic unit. Geological interpretation. Field reconnaissance to asses Au anomalies.

Surface TEM to commence 2nd qtr 2011.

Jigalong (2,589 sq km’s)

Hill 616 Prospect (Mn) Marumaru (Mn) Zebra Bore (Mn)

Preliminary targeting for Mn. Field trip completed, visited all Mn target areas. Auger sampling program completed over the northern portion of E46/780

Hill 616 remains the priority prospect area, it is considered there is potential to increase resource outline. Additional Mn occurrences identified during the field visit.

Detailed review of Hill 616 and work program proposal to be completed. Process and interpret recent and historical geochemical data.

Detailed review of Hill 616 and project area to be completed during 1st qtr 2011.


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Figure 11. Hannans Reward Regional Location Plan


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Figure 12. Jigalong Manganese Project Location


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HANNANS REWARD LIMITED SUMMARY Hannans Reward Ltd has developed a suite of prospective exploration projects within Australia covering nickel, gold and manganese whilst the flagship exploration is the Forrestania nickel project located in the world class Forrestania nickel belt. Hannans has joint ventures with St Barbara Ltd and Triton Gold Ltd. Hannans is a major shareholder of Atlas Iron Ltd. Hannans’ shareholders are exposed to share price appreciation through exploration success at the following projects:

· Forrestania – nickel & gold project 7km north of Western Area’s Flying Fox nickel mine, a portion of the Stormbreaker Prospect includes a Joint Venture with Cullen Resources Ltd (Hannans – 80%, Cullen – 20% free carry).

· Lake Johnston – nickel & gold project located 25km south east of Norilsk’s Maggie Hays nickel mine and 100kms west of Norseman

· Jigalong – manganese & base metals project located 150km east of Newman, WA

· Queen Victoria Rocks - nickel and gold project located 30km south-west of Coolgardie, WA

COMPETENT PERSONS STATEMENT The information in this document that relates to exploration results is based on information compiled by Mr Donald Huntly, Exploration Manager who is a Full Member of the Australian Institute of Geoscientists and a Registered Professional Geoscientist. Mr Huntly is a full-time employee with Hannans Reward Ltd. Mr Huntly has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined by the 2004 edition of the “Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Huntly consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

For further information please contact:

Damian Hicks

Hannans Reward

Tel: 9324 3388

Karen Oswald

Professional Public Relations

Tel: 9388 0944

Hannans Reward - 2nd Quarter Activities Report

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