Release: Herald Resources: Dairi project ore reserve update

(21 December 2007)--The Directors wish to announce a minor amendment to the Ore Reserve at the Dairi Project for the Anjing Hitam orebody.

As part of ongoing refinements to mining designs at Anjing Hitam, a revised mining schedule was prepared by AMC Consultants Pty Ltd (AMC) following a decision that it would be preferable to operate a global top down mining sequence in contrast to the global bottom up mining sequence utilised in the Dairi Feasibility Study (DFS). During this process minor errors were discovered in the open stope dilution calculations and in estimates of the mining loss in cut and fill stopes.

As clearly explained in the JORC Code, Mineral Resources and thus Ore Reserves are estimates only, not exact calculations, of the tonnage and grade contained within a mineralised body. It is generally accepted within the mining industry that a Measured Mineral Resource is estimated to within a ? 10% error range.

By incorporating the above minor variations into the physical mining schedule, the amended Ore Reserve at Dairi for the Anjing Hitam orebody is 6.5Mt (rounded down from 6.53Mt) at 14.4% Zn, 8.7% Pb and l0.5g/t Ag. The previously reported Ore Reserve was 6.6Mt (rounded up from 6.57Mt) at 14.6% Zn, 8.8% Pb and 10.7g/t Ag.

As part of the overall DFS, the Underground Feasibility Study, prepared by AMC, refers to ?Potential Mining Opportunities? where they state that there are still 1.67 million tonnes of known Anjing Hitam resources that were excluded from their mine design.

It is believed that the insignificant reduction in the Ore Reserve will more than likely be compensated for by the opportunity to increase the overall extraction.

Whilst the Directors and AMC consider the minor adjustment to the Ore Reserve to be insignificant, this report is being released purely in the interests of keeping the market fully informed at this time. (end of release)