Clonecurry Metals Limited entered into MoU with BHP Billiton Limited

Cloncurry Metals Limited (CLU) recently entered into a Memorandum of Understanding (MoU) with BHP Billiton Limited (BHPB) regarding the Pegmont Project. Due diligence carried out to date by BHPB has recommended a preliminary close spaced drilling program to provide further comfort to BHPB before moving forward to a more detailed resource definition program.
The preliminary drilling program designed by BHPB has now commenced at Pegmont. The program, to be managed by CLU and paid for by BHP Billiton, is made up of 45 very closely spaced holes on two sections, all vertical down to a maximum of 160m, for an expected 4,500m in total. The results of the program are expected to give essential information as to the continuity
and grade distribution of the mineralisation allowing, in the longer term, for the design of a resource definition drilling program. Assuming a positive outcome of this initial program it is anticipated that BHPB will commence the resource definition program at Pegmont in calendar year 2009.
To allow for the initial drilling to commence CLU and BHPB have entered a short term agreement confirming responsibilities of the respective parties, including CLU managing the drilling program and with BHPB committing to reimburse all direct costs of the program. The parties continue to negotiate a longer term agreement to replace the current MoU which will take into account the
resource definition stage, any further due diligence required, and ultimately confirming the development stage of the project. Presuming that agreement is reached on key issues, it is anticipated that this more detailed agreement will be finalised by the end of calendar year 2008.
To provide for the additional time now required by BHBP's due diligence activities, and for the negotiations with BHPB to progress, CLU has agreed with Pegmont Mines Limited (PMI) the terms on which CLU may extend the date of exercise of the option by a further 18 months