Midas Resources - Quarterly report

FOURTH QUARTER ACTIVITIES STATEMENT

HIGHLIGHTS

•        䀂A resource update for Fortitude has been completed using the method of Multiple Indicator Kriging and this resulted in a slight reduction of contained gold due to a reduction in the estimated Global Resource gold grade from 2.0 g/t Au to 1.9 g/t Au at a 1.0 g/t cut off grade.

•        䀂The Company's Resource consultant RSG Global is continuing with the Resource estimation work with the objective of further refining the estimate in order to determine the most robust resource estimate with regard to the envisaged mining selectivity and the geology of the mineralisation.

•        䀂The results of metallurgical testwork on samples from the oxidised zone at Fortitude were very encouraging, with gold extraction of better than 95% by cyanidation.

•        䀂A diamond drill hole has been planned for testing of the Bindah geophysical target and all necessary permit approvals have been obtained.

•        䀂Encouraging results were received from the aircore drilling programme at the Intrepid magnetic anomaly, with 43m @ 0.4g/t Au from 66m in ICAC043 associated with quartz-sulphide veins in haematite altered rocks. This style of mineralisation supports the Sunrise Dam target concept and a follow up drill program has been planned.

•        䀂A systematic geochemical sampling program is proceeding at the Waitara porphyry copper-molybdenum prospect in Queensland. The objective is to define molybdenum anomalies for drill testing.

OPERATIONS

Lake Carey Gold Project (100% Midas)

Fortitude (E39/348)

Background

Midas (the "Company") is undertaking pre-feasibility work at the Fortitude gold project with the objective of completing a full feasibility study in the second half of CY2007. The Fortitude Gold Project lies 70km south of Laverton within the Laverton Tectonic Zone (LTZ), a highly prospective structural corridor which hosts several world class gold deposits including Sunrise Dam (8 Moz Au), Wallaby (7 Moz Au) and Granny Smith (1.8 Moz Au). The Company has a significant tenement holding in the Lake Carey area and is exploring a range of early and advanced stage gold targets.

Resource Estimation and Feasibility Work

Following the completion of the Resource drilling at Fortitude in the previous Quarter, RSG Global Consulting Pty Ltd carried out a Resource estimate which was released to ASX on 19 June 2007. Further work on the Resource and Pit Optimisation is proceeding, with final results expected in the next Quarter.

The Mineral Resource estimate of 19 June has utilized the assays from all drilling undertaken in the area including the final infill drilling which was completed in March 2007.

The estimate of grade has been determined by the multiple indicator kriging method (MIK) and the Resource has been reported for a range of lower grade cutoffs. For simplicity and consistency with previously reported Mineral Resource estimates at Fortitude the Resource estimate is reported below at a 1g/t gold lower grade cut off.

The updated Mineral Resource estimation results are not directly comparable with earlier Resource estimates, as the latest estimation methodology and input parameters are significantly different, but overall there is a similar tonnage but slightly lower grade resulting in an overall reduction in the total contained ounces of gold. Discontinuous or narrow mineralized zones included in the earlier estimation were excluded from the latest estimate so as to provide a realistic resource model for the pit optimization work.

The updated grade estimate was completed using the MIK method with the model constrained within geologically interpreted zones for grade determination. Extensive statistics relating to the drillhole intersections and their spatial positions has been done by RSG Global todetermine the search radius for grade estimation of individual blocks. The block sizes used in this Resource estimate were 25m north-south, 6.25m east-west and 5m in elevation. Smaller sub-blocks were used to constrain the edges of the mineralisation; these blocks were 2.5mE x 1.25mN x 2.5mRL. Individual sample assay results were composited to regular down-hole lengths of 3m and high composite values were cut to 6.5g/t Au for the main mineralised zone, and 12g/t Au for the supergene mineralization. Two separate, smaller zones were also modelled and the composite assays for these zones were cut to 5.5g/t and 6.5g/t Au.

None of the Resource is classified as Measured Resource due to the limited number of rock density measurements from the oxidised zone. The Company plans to increase the number of rock density measurements using core samples from the geotechnical drilling program to be undertaken later in 2007. A reclassification of Resources may be possible with the additional data.

A review of the parameters used in the latest Resource estimate is underway and an updated Resource estimate is planned using optimised input parameters (e.g. block size, sample composite length, search radii) in order to determine the most robust resource estimate with regard to the envisaged mining selectivity and the geology of the mineralisation.

Milling and Treatment Options for Fortitude

Midas has recently completed additional metallurgical test work undertaken at the request of Barrick Granny Smith in order to obtain more representative information on the oxide and transitional ores that will comprise the bulk of any ore treated at the BGS plant. The metallurgical test work was undertaken by AMMTEC, Perth, and key results include:

•            - Direct cyanidation leach testwork resulted in excellent gold extraction levels, being in excess of 95% for each ore composite and each grind size tested.

•            - Lime consumption levels were moderate, being in the range 3.15 to 5.65 kg/t.

•            - Sodium cyanide consumption levels were low, being less than 0.5 kg/t.

•            - The gold extraction levels for the majority of variability composites were in excess of 92%.

Other Pre feasibility Work

The Company is scheduling hydrological, geotechnical, topographic surveying and environmental baseline work for input to the Feasibility Study.

Fortitude - Plans

The Pre-feasibility work will be ongoing during the 2^nd half of 2007.

LAKE CAREY EXPLORATION

Bindah (M39/01, P39/3758, M39/286) Midas 100%

Ground Disturbance Approvals (GDA's) were obtained for construction of a new causeway that will enable deeper diamond drill testing of the Bindah geophysical target. This drilling will be carried out later in 2007 when a suitable drill rig is available. Further information on number and location of drill holes will be provided when drill rig availability has been confirmed.

Intrepid (E39/348)

A 24 hole aircore drilling program for 1,783m was recently completed over the Intrepid prospect targeting Sunrise Dam style gold mineralisation. This type of gold mineralisation is interpreted to occur at the intersection between the major regional scale structures and the highly deformed banded ironstone (BIF) units. It is characterised by significant haematite and sulphide alteration associated with mineralised quartz veins. The aircore drilling confirmed the geological interpretation and several magnetic ironstones with pervasive haematite alteration were intersected during the program.

Aircore drill hole ICAC043 (Fig 2) intersected a significant zone of gold mineralisation including 9m @ 1.1g/t Au from 78m within a broader zone of 43m @ 0.4g/t Au from 66m. This interval is open at the bottom of the drill hole. The gold mineralisation coincides with thin haematite altered ironstone units in an intermediate volcanic host rock sequence. This drill holes was drilled close to the intersection of the highly prospective Bindah shear with folded and thrust-repeated banded iron formations. Two holes, INAC042 and INAC044 were drilled 100m to the north and south of INAC043. Both of these holes contain low level gold anomalism between 10 and 100ppb gold.

The drill holes were sampled in their entirety by capturing one metre drill intervals in plastic bags, grab-sampling the bags and then compositing them into three metre composite samples. The composite samples were submitted to Ultratrace Laboratories in Perth for gold analysis by fire assay. The results are considered to be very encouraging as they are the first indication that the Intrepid magnetic target carries gold mineralisation. A follow-up drill program will first involve infill aircore drilling along strike to indicate the extent of any mineralised system prior to deeper RC or diamond core drill testing.  

Table 2: Significant intersections from Intrepid Aircore drilling, May 2007

Fortitude North Aircore Drilling

As part of the recent Intrepid program a limited five hole drilling program involving 510 metres was undertaken to the north of the Fortitude gold deposit. A re-evaluation of previous drilling at Fortitude has indicated that the strike extent of the Fortitude shear has not been thoroughly tested as all of the drill holes to the north of Fortitude are vertical, which reduces the probability of hitting mineralisation if lodes are vertically dipping. Strong shearing and quartz veining was intersected in all five drill holes at the projected location of the Fortitude Shear.

Although the best intercept was only 1m @ 0.66g/t Au from 72m in FTAC498 it is considered that the majority of the shear to the north of Fortitude is not fully tested and further drilling will be required to test the full potential of the Fortitude shear.

QUEENSLAND PROJECTS

Connors Range JV (Midas 51%) EPM11134 "Waitara" and EPM12361 "Waitara North"

The Connors Range Project is a joint venture with SmartTrans Holdings Limited and Australia Oriental Minerals NL concerning tenements located in the northern Lachlan-New England Fold Belt. The property is considered highly prospective for epithermal and porphyry style gold and base metals mineralisation. Midas' interest in the tenements has recently been rationalised with Midas withdrawing from three tenements in order to focus on the most prospective tenements. Midas is currently sole funding exploration with the further right to increase its equity if desired.

Waitara Porphyry Copper Molybdenum Prospect EPM 11134

EPM11134 includes the Waitara porphyry copper deposit drilled by Pennzoil in the 1970's involving 11 diamond drill holes and 21 Percussion holes. Results included 305 m @ 0.22%Cu and with some high molybdenum (Mo) values up to 550ppm directly correlating with higher Cu values. The Waitara porphyry intrusive complex consists of at least three phases of porphyry intrusion and the higher Mo values occur within discrete fracture zones associated with the intrusion of feldspar rich porphyry.

Despite the intersection of molybdenum in the Pennzoil drill holes the surface geochemical samples were never analysed for Mo. As a first step in the selection of drill targets for the testing of the Mo potential of this property a systematic soil geochemical survey is planned to commence in the next Quarter.

 Molybdenum is a high value speciality metal used in steel making and chemicals; current prices for molybdic-oxide (65%Mo) exceed US$30/lb and copper equivalent ratios of 10:1 are applicable i.e. 550ppm Mo is equivalent in value to approx 0.55% Cu, assuming equivalent metallurgical extraction.

Waitara Plans

The surface geochemistry is intended to define discrete zones of Mo enrichment for drill testing later in 2007. At the date of this report the geochemical soil sampling program was underway.

Mahalla Creek Project (EPM14490)

Follow-up sampling was completed. No further work is planned at present.

Ukalunda Project (EPMs11935, 11088) Midas 100%

No work. The Board of Midas has approved a farm-out or sale of the property.

P.R. CHINA

Midas is exploring for gold and base metals in China through its 85% owned subsidiary Midas Mining China Limited (MMCL). Midas has a corporate office in Shenzhen and a regional office in western Sichuan Province and the Company is seeking advanced exploration and acquisition opportunities for both nickel and gold.

Shimian Joint Venture, Sichuan Province, P.R.China

MMCL has an incorporated joint venture with Geological Brigade 405 of Sichuan Province covering a 700km² area that is considered highly prospective for Au-Cu, Pb-Zn-Ag and Platinum Group Metals (PGM's). More than 30 known gold mines and prospects are recorded in the area. MMCL has a 60% interest and it is funding the first RMB1,008,000 of expenditure (approx. AUD$180,000) after which exploration will be funded in proportion to equity.

Following the extensive geochemical sampling programs carried out by MMCL the Joint Venture has applied for two Exploration Permits covering the high priority gold and base metal targets.

Yours faithfully

MIDAS RESOURCES LIMITED

GEOFF BALFE

Managing Director/CEO

The information within this report as it relates to exploration results and geology was compiled by Mr Paul Dunbar who is a member of the Australasian Institute of Mining and Metallurgy. Mr Dunbar is a full time employee of the Company. Mr. Dunbar has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Dunbar consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information within this report as it relates to mineral resources at Fortitude was compiled by Mr Brian Wolfe who is a member of the Australasian Institute of Mining and Metallurgy. Mr Wolfe is a full time employee of RSG Global. Mr. Wolfe has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Wolfe consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.