High Grade Drilling Results From Melba Flats Project

    SYDNEY, Jan. 10 /CNW/ -

    Intersection of sulfides assaying 10.8% Nickel and 3.81% Copper

    Allegiance Mining (ASX Code: AGM) today announced high grade drilling
results from the Melba Flats project in Western Tasmania, including
encouraging results from the Nickel Reward Project and the Devereaux Prospect.
A full copy of the report is available at
    Drilling results at the Nickel Reward Project revealed a .7m (drill hole
width) intersection of massive sulfides assaying 10.8% Nickel and 3.81%
Copper, at twice the depth of previously drill-tested mineralisation. Drilling
results from the Devereaux Prospect, 800 metres west of Nickel Reward Project,
identified a significant new zone of Nickel-Copper mineralisation with the
best intersection being 4.7m (drill hole width) of 1.3% Nickel, 0.94% Copper.
The mineralisation type bears similarity to that recorded from large magmatic
Nickel, Copper, Cobalt, Platinum and Palladium deposits, such as to those
found at Voisey Bay.
    In August 2007, a 269 ha Mining Lease (ML 2M/2007) was granted to
Allegiance over the principal resource areas at Melba Flats to facilitate mine
development. Based on the drilling results, Allegiance has commenced the
planning and permitting of shallow open-cut and underground mining operations
at Nickel Reward and North Cuni-Genets within the recently granted Mining
Lease. Quotations for metallurgical test-work have been received.
    Commenting on the drilling results from the Melba Flats project, Tony
Howland-Rose, Chairman of Allegiance Mining, said:
    "Allegiance has for some time been of the view that the Melba Flats area
is highly prospective for deeper substantial Nickel-Copper-Gold-Platinum
deposits. These drilling results confirm Melba Flats possesses many of the
important key geological features of large magmatic Nickel-Copper sulfide
deposits, and nickel skarn deposits, such as at Voisey Bay and gives me
enormous confidence in the potential for the area to deliver long-term value
for Allegiance shareholders.
    "With Avebury now close to production, it is the intention of the Company
to direct an increased exploration and development effort onto Melba. A
substantial program of core drilling is scheduled to commence this month
(January 2008) to follow up on the encouraging drilling results and pursue the
long held view that the Melba Flats area is highly prospective for larger
Nickel-Copper deposits at depth below the current level of shallow drilling.
Also in 2008 we will commence deeper drilling at Nickel Reward, follow-up
drilling at Devereaux, metallurgical test work, mine planning and Development
Plan and Environmental Plan studies, and technical studies of Melba
mineralisation to guide deeper exploration.
    "We expect that short-term production from Melba will substantially
enhance economic outcomes from the Avebury mill, and realisation of the deeper
prospectivity opportunities will afford the Company a major platform for
long-term growth," he said.

    To register for immediate email updates and for electronic copies of this
and other reports please visit our Website www.allegiance-mining.com.au.

For further information:

For further information: Media: Ross Thornton, Third Person, +61418 233
062; Stuart Carson, Third Person, +61403 527 755; Shareholders: Information
line on 1300 135 871 (Within Australia); Foreign holders please dial +61 3
9415 4395

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