Press Releases

Sydney, Feb 10, 2010 (ABN Newswire) - Australian Bauxite Limited (ASX:ABZ) has 17 bauxite exploration tenements in eastern Australia covering over 5,000 sq kms. A small area of one tenement, EL 6977 at Inverell in northern NSW, has been drill tested by 118 holes totalling 1,773 metres. The drilling has only evaluated 15% to 30% of bauxite Deposit A-B which has been mapped for 4.6 kilometres to date and is open to the north and west.

Deposit A-B is only one of 4 major bauxite areas identified to date on EL 6977; the initial resource area represents less than 10% of the known major bauxite areas identified. 40% to 50% of the tenement is yet to be explored.

ABx has also recently identified additional major bauxite areas within another of its tenements - EL 7268 at Pindaroi located 10 kilometres northeast of EL 6977. Pindaroi bauxite zones appear similar in size to those in EL 6977. The potential for very large regional bauxite resources in these two tenements has been increased by these recent developments in EL 6977 and EL 7268.

Drilling in the initial resource area encountered a remarkably uniform bauxite layer typically 3.5 to 9 metres thick with less than 1 metre of overburden. Most of this very thick deposit lies at surface with no overburden.

The volume of the bauxite layer (all grades) in the drill-tested area was 24 million tonnes of raw, in-situ bauxite (all grades).

Resource estimates* after application of cut-off grades for drilled area are summarised as follows:

--------------------------------------------
Resource Category     Tonnes Thickness Al2O3
                    millions* metres     %
--------------------------------------------
Indicated Resources       6Mt   5.1m   38.8% 
Inferred Resources       16Mt   5.2m   37.8% 
Total Initial Resources  22Mt   5.2m   38.1% 
--------------------------------------------

--------------------------------------------
SiO2   Fe2O3    LOI
%        %       %
--------------------------------------------
4.4%   28.1%   22.2%
6.5%   27.7%   20.8%
5.9%   27.8%   21.2%
--------------------------------------------
* Cut-off grades applied: 2 metres minimum 
thickness, 32% minimum Al2O3 & 8% maximum SiO2.

GOOD BENEFICIATION CHARACTERISTICS

Beneficiation: Bauxites tested to date show excellent potential for simple crushing, washing and screening to produce premium-grade beneficiated bauxite at high yields. The coarse grainsize and loose structure of the bauxite is thought to be responsible for these favourable beneficiation characteristics.

Available alumina at low-temperatures is relatively high at 85% of total Al2O3.

Reactive silica proportions at low temperatures is relatively low (a good feature) at 75% of total SiO2.

Low goethite: Mineralogical studies of the bauxite suggest that abundances of the problematic iron hydroxide mineral species called goethite are very low to absent.

Iron-removal: Testwork results from a proprietary method developed by Hudson Resources Limited for lowcost removal of iron minerals from the bauxite using simple physical separation methods are progressing well. Early indications are that low-iron, high alumina bauxite can be produced which would allow some processed bauxite to be sold into higher priced bauxite markets.

DIRECT SHIPPING ORE GRADES

Direct Shipping Ore (DSO) is bauxite that is of sufficiently good quality that it can be mined and sold in its raw form after simple crushing and sizing. Approximately 75% of the deposit tested to date meets DSO grades.

POTENTIAL FOR RESOURCE EXPANSIONS

To date, the company's exploration team has investigated a small percentage of the two large bauxite tenements in the Inverell area as demonstrated by the following statistics:

--------------------------------------------
Tenement   Name    Total Area & % of area
                     explored to date
--------------------------------------------
EL 6997  Inverell  297 km2 (50-60% explored) 
EL 7268  Pindaroi  138 km2 (25-35% explored)
-------------------------------------------- 

--------------------------------------------
Bauxite Areas     Areas Drill-Tested
                         to date
--------------------------------------------
 90km2 (4 areas)   less than 2.5km2
 35km2 (3 areas)          Nil
--------------------------------------------

Deposit A-B is one of 4 major bauxite zones identified to date within Inverell project area. Recent exploration, including scout drilling suggests that deposit A-B is not the largest deposit. Prospects for a major expansion of resources to between 200 to 300 million tonnes are considered to be good but considerable drill testing is needed before estimation can be done and resources reported in accordance with the JORC Code. Until this drilling is done, estimations of total resources and the quality of those bauxite resources are uncertain.

Within the eastern Australian Bauxite Provinces, Australian Bauxite Limited has a total of 17 bauxite tenements, all containing confirmed bauxite occurrences.

Australian Bauxite Limited CEO, Ian Levy said; "This discovery of very thick, high quality bauxite is a good start for a rapidly growing small company that aspires to prove-up large bauxite resources over the next 2 years. Drilling during 2010 is expected to expand the drill tested area of deposit A-B substantially and will commence testing the other 3 major deposits already indentified at Inverell. We should also make headway in evaluating nearby Pindaroi which has indications of extensive bauxite zones. We hope to upgrade resource estimations in the Inverell-Pindaroi areas during the year.

"Thanks to the dedicated and disciplined work by our exploration team led by Jacob Rebek since 2006, we clearly control the core of major new bauxite provinces in Eastern Australia - better bauxite than most bauxites world-wide. This means that these new better bauxite resources will become available to the aluminium industry at large."

For the complete Australian Bauxite ASX Announcment, please click the link below:

http://www.abnnewswire.net/media/en/docs/62252-ASX-ABZ-582090.pdf

Contact

Investor Relations Henry Kinstlinger Australian Bauxite Limited Telephone: +61-2-9251-7177