Kimber Resources Inc. WKN 157 066 CA49435N1015 KBR

    KBR.TO KBRRF.PK (KIMBER RESOURCES)
    http://www.kimberresources.com
    info@kimberresources.com (604) 669-2251
    33.5 mil shares fully diluted (Sept 2004)
    http://www.kimberresources.com/sharestructure.html
    @ $1.80/share Cdn x .80 US/Cdn = US $1.44
    $48 mil MC
    See press release dated Sept 28, 2004: Kimber Enlarges and Upgrades Carmen Deposit
    Measured, Indicated, & Inferred Silver Resources: 42 mil oz.
    Measured, Indicated, & Inferred Gold Resources: 552,500 oz. or 5.5 mil silver equiv.
    Total: 47.5 mil oz. silver equiv.
    540,000 oz. gold x 10 = 5.4 mil "silver equiv."
    $48 mil MC / 47.5 mil oz.. = $1.02/oz.
    You get "approx" 6.97 ounces in the ground for 1 oz. silver's worth of stock.


    Additional comments: A one property company. The Carmen gold-silver deposit on their Monterde property in the Sierra Madre belt of Chihuahua State, Mexico. Lower grades than originally thought. "At these grades, the value of recovered silver is expected to match, perhaps exceed, the value of gold." 75 g/t silver, 1 g/t gold. The value of these grades by tonne, is as follows:
    75 g/t silver x .03125g/oz = 2.34 oz/tonne x $6.70/oz. = $15.67/tonne
    1 g/t gold x .03125g/oz = .031 oz/tonne x $415 = $12.97/tonne
    Total = $28.64/tonne.


    This project was once thought to have high grades. But today, the grades are lower than the grades for Mines Management, which is a lot cheaper (about $.30/oz. not $1.24/oz.) when considering cost per ounce in the ground for shareholders. But Kimber is a silver/gold property, and Mines Management is a silver/copper property, and that might help to account for the difference in price. Also, Kimber may be cheaper to start as an open pit project, whereas Mines Management is underground and thus may have higher start up costs proportionally. There certainly are a lot of factors to consider.

    NEWSLETTER FOR SEPTEMBER


    The main event in September was completion and publication of Resource Estimate "K". This, the fourth resource estimate since we became a public company, brought the Carmen deposit to a new level and a significant step closer to the production-ready status we aim for.


    Nature of Estimate


    Resource Estimate "K" is based on the 170 holes drilled into the deposit by the end of August this year. The previous estimate ("J"), published in March 2004, was based on 90 holes. Like those which preceded it, this was a manual estimate prepared by calculating the volume, tonnage and grade of mineralized polygons on cross sections. Two cut-off grades (0.5 g/t gold and 35 g/t silver) were used because we were uncomfortable with the uncertainties which a gold-equivalent cut-off grade might have introduced. As reported in the September 28 news release, this approach led to one tonnage at a superior grade and another at a lesser grade, the value of the latter lying mostly in silver. In most parts of the deposit, the relationship between these two tonnages is of relatively high grades of gold and silver enclosed in a sandwich of lower silver grades with little gold. Current prices make it important to recover this silver.


    Importance of Estimate "K"


    Estimate "K" delivered not only a resource containing approximately 604,000 of Measured & Indicated gold-equivalent ounces and 370,000 in the Inferred category, but it also delivered increases in several key measures: the quantity of gold, the quantity of silver, and the proportion of the deposit in the Measured and Indicated resource categories. We now have a sufficient number of drill holes to carry out a reliable block model estimate on which a pre-feasibility study can be based.


    Next Estimate


    The next estimate will be prepared by Micon International Limited, engineering consultants based in Toronto, Ontario, who have been engaged to prepare the feasibility study. This block model estimate will eliminate the dual cut-off grades and will present tonnage and grade figures at a series of different cut-offs, each with a different strip ratio. It will also permit year-by-year variations in tonnage, grade, and strip ratio to be estimated.


    Size of the Carmen Deposit


    Long before Kimber became a public company our expectations for the Carmen deposit was one million gold-equivalent ounces. Now, if Inferred resources are included, we have 602,000 ounces of gold and 42 million of silver. Depending on how the silver equivalence of gold is calculated, we have just under or just over this initial objective. But of possibly greater significance than the tonnage and grade of the estimate itself, are revisions to our understanding of the boundaries of the Carmen deposit. The extent of the mineralized area is larger than first observed. Our initial interpretation was that the north end of the Carmen structure terminated as it merged with the Dome structure. Recent drilling has indicated that the two structures intersect and the Carmen structure extends beyond the Dome. In the southeast the Carmen structure is thinner than elsewhere, but recent drilling has established some of the structures which run parallel to the Carmen have significant widths. To the east, there are additional gold-bearing structures which have yet to be drilled. One example is the gold-bearing structure intersected in a hole drilled to determine water levels. Accordingly, the 17 million tonne Carmen deposit, as now outlined, is still "open" (i.e. not closed-off) to the north, south and east.


    Further Drilling


    Our policy is to drill where the chance of finding additional ounces is greatest. At present, the best places to drill are in the vicinity of the Carmen deposit where the last 80 drill holes added an average of 3000 gold-equivalent ounces per hole. Beyond the Carmen, reconnaissance exploration has expanded the area of hydrothermal alteration surrounding the Carmen deposit by at least one kilometre towards the east.


    The Cocos zone


    Trenching on the recently-exposed Cocos zone, which lies 250 metres to the east of the Carmen deposit, has produced six metres grading 1.1g/t gold. The importance of this result is that it indicates the structure is gold-bearing and that drilling is now justified. Any drilling success on this structure will increases the priority to be applied to a broad zone of favourable alteration to the east of the Carmen deposit.


    Next steps


    Drilling, along with metallurgical and environmental studies, will continue and a pre-feasibility study has been started. We are now reviewing the allocation of funds between increasing the proportion of the resources in the Measured & Indicated categories, expanding the Carmen, and exploring the outlying targets.


    Robert Longe
    P.Eng., President

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