The Company owns the Bekisopa iron-ore-deposit properties (Beki-East and Beki-West) in Madagascar. The BRGM, Madagascar government and U.N. early data base reports original Beki-East iron deposit at between 25 per cent and 65 per cent averaging 45 per cent, resource 96. Cline 2007 airborne survey analysis and on-ground geophysical gravity investigations identifies substantial additional iron resource potential at Beki-East and the new Cline Beki-West iron property.

The Beki-East iron ore property located in south central Madagascar was earlier acquired by Cline based on data generated by the earlier owner BRGM of France. Additional work, data, studies and reports were carried out and generated by the United Nations and the Government of Madagascar. The data and reports recorded the elluvial lateritic surface part of the deposit reported at grades of between 40 per cent and 65 per cent iron. The results reported include extractions in the order of 70 per cent by magnetic separation with an additional flotation unit.

Tokyo May 29, 2008 Cline Mining Madagascar Mine Project Meetings Mr. Andry Ralijaona, General Secretary MAP, Madagascar. Mr. S. Yonezawa, President of Mitsui Matsima Co. Ltd., Japan Mr. Ken Bates, President of Cline Mining Corporation, Canada

The United Nations reports two types of mineral present, primary and lateritic. The primary mineralization consists essentially of magnetite as fine-grained disseminations that develop into layers, lenses and more concentrated intervals. The lateritic material consists of magnetite partially converted to martite and secondary iron minerals. The mineralization is reported to be of excellent quality with only low to traces of phosphorus and sulphur. The United Nations Data indicates that the resource tonnage of the deposit could approach 150 million tonnes. Following two phases of study on the property in 1976 and 1977, the resource tonnage was estimated at 98.6 million tonnes.

The BRGM exploration work reports 564 wells (1,862 metres), 4,000 metres of trenches and 2,581 samples analyzed. The UN-Madagascar work included 897 metres of pits, 59 magnetic profiles as well as drilling, petrographic studies and analysis. The Bekisopa iron-ore deposit would be amenable to extraction by open-pit-mining methods. It appears that the grade of the mineralization could be easily upgraded. The UN further concludes that the available data indicates that the iron deposit is of considerable economic interest and requires further evaluation.

Tectonically, the iron-bearing units have been overthrust by the substratum gneise so that on surface the gneise occurs as scattered remnants from the overthrust plate. This indicates that the iron formation should be present at depth.

In 2007 Cline commenced its exploration program in the area. The objective being to increase the known Bekisopa iron deposits to world scale dimension with additional discoveries, if present. The program commened with a detailed analysis of the airborne survey flown across an extensive area over and around the Cline Bekisopa iron ore property. The airborne analysis work identified extensive iron ore anomalies over a large area immediately west of the Bekisopa iron deposit. The airborne data work was followed up by Cline during the year with an on-ground geophysical gravity investigation of the airborne iron anomalies discovered. In addition the geophysical gravity ground work was extended to the known Cline Bekisopa magnetite iron deposit to examine the possibility of the presence of hematite iron, a non-magnetic iron, in addition to the existing Bekisopa magnetic deposit (magnetite). The airborne analysis and ground geophysical work was carried out for the Company by Dr. Allan Spector of Allan Spector and Associates Ltd. of Toronto. Dr. Spector carried out 21 detailed gravity and magnetometer surveys on approximately 60 km of lines. Dr. Spector is a Qualified Person for the purposes of Canadian Instrument 43 101.

Cline, based on its exploration work, acquired the exclusive AERP exploration rights (Autorisation Exclusive De Reservation De Perimetre Minier) from the Madagascar Government covering the additional prospective area of approximately 2,900 square kilometres to the west and south of the existing Bekisopa iron deposit. The AERP’s were then converted to full scale Exploration Licenses over the important anomalous areas.

Four prospective anomalies were located in the Spector work. Beki 2 and Beki 3 are in the neighbourhood, parallel to, but separated from the historic Bekisopa iron deposit (Beki 1).

The Spector Report states that “The results shown (in Figure 5) demonstrate that the observed gravity features can be attributed to 3 high density zones, Beki 1, Beki 2 and Beki 3 each having a density contrast of 1.5gm/cc (iron formation versus quartzite) and each having a thickness of 50m. The bodies may be composed of varying blends of magnetite and non-magnetic hematite. Beki 3 is blind, iron formation is not evident at surface. The bodies are structurally controlled by a synformal structure. The gravity data was used to estimate total mass;

Beki 1 = 575 million tons
Beki 2 = 575 million tons (assuming strike length of 5000m)
Beki 3 = 575 million tons (assuming strike length of 5000m) ........ 1,725 million tons

Adopting the 150m level as the cut-off for open pit mining, the estimated total mass of the combined deposits is estimated to be 560 million tons.

The other geophysical prospects, zones C and F which lie 20 and 25 km southwest of Bekisopa, are described
as follows:

“2.9 Zone C
The data shown in Figure 4.9 appears to indicate a prospective iron zone, 3000nT magnetic relief and 1 mgal gravity anomaly. Thin bedded iron formation is observed in outcrop.”

“2.10 Zone F
A very prospective zone is indicated by the data in Figure 4.10; a 3 mgal gravity anomaly associated with 4500 nT relief. The geophysical features are strikingly similar to that observed over Bekisopa, i.e. a synformal structure.”

Click here for the summary and recommendations of the Spector Report.