Adelaide, Dec 22, 2006 (ABN Newswire) - Proto Resources & Investments Limited (ASX: PRW) today announced the purchase of the Barnes Hill nickel project in Tasmania and will immediately commence studies of possible development options.

Proto has acquired the advanced project outright from Discovery Metals Limited (formerly Discovery Nickel Limited), which is actively rationalising its Australian assets in line with commitments in Botswana.

Discovery Metals will, under the sale agreement, receive one million fully paid shares in Proto along with a one-for-one attaching option, exercisable for 20 cents on or before 31 August 2011.

Located near Beaconsfield in northern Tasmania, the Barnes Hill nickel deposit contains a 12.1 million tonne (Mt) Australasian Joint Ore Reserves Committee (JORC) compliant Indicated resource of 0.83% nickel and 0.07% cobalt - equating to 120,000 tonnes of in-ground nickel metal and 840 tonnes of in-ground cobalt.

Proto Chairman, Mr Andrew Mortimer, said the Barnes Hill tenement (EL 17/2006) covers 76 square kilometres and has "a very reasonable minimum exploration commitment of $57,000 over the first two years".

"Future nickel production is a key part of Proto's growth strategy, the company already having secured advanced exploration ground for nickel in the Northern Territory (Arunta) and Western Australia (Mt Vetters)," Mr Mortimer said.

"Recent advances in pressure leaching techniques along with the current high nickel price make the Barnes Hill project a valuable addition to Proto's asset register with an in-ground value in excess of US $4 billion, based on the current nickel price of supra US$35,000 per tonne," he said.

"Proto plans to quickly assess the historical databases available and embark on scoping work including new metallogenic studies to define an appropriate processing technique.

"The Barnes Hill area also has the potential for additional nickel to be found through exploration using geophysics and geochemistry as targeting tools.

"The company feels that the Barnes Hill project acquisition is a very significant step forward in Proto's bid to become a nickel producer in the long term. The company is particularly pleased with the grade of the nickel, its surface and near-surface location, and its proximity to port and engineering facilities. More than this, Proto feels that nickel has a strong demand future to look forward to."

Project Review

Review of historical work at Barnes Hill confirms a JORC indicated resource of 12.1 Mt at a combined nickel grade of 1.04%. In addition extensive metallogenic, geoscientific and environmental studies have been completed. The metallogenic studies indicate the potential for excellent recoveries using high pressure leach techniques and also good recoveries using low pressure hydrochloric acid based techniques.

Proto plans to quickly assess the historical databases available and embark on scoping work including new metallogenic studies to define an appropriate processing technique.

The Barnes Hill area has excellent infrastructure being only 20km from port facilities of Tamar River. Bell Bay power station, the Temco smelter and other major industrial sites can all be found close by, a reflection of the development and engineering expertise in the area.

The Barnes Hill area also has the potential for additional nickel to be found through exploration using geophysics and geochemistry as targeting tools.

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