The importance of the Resource being moved into the higher confidence categories is that it now leads into maiden Ore Reserves for three of the four deposits at Camel Creek.

Resources at Junction, Roscoes Reward and Little Wonder have increased to 97,000 ounces of contained gold.

The joint venture’s Little Wonder deposit and Millennium’s contiguous Little Wonder deposit will be combined and developed as one pit and currently host a combined Resource of 1.5 million tonnes at 1.34 grams per tonne (g/t) for 66,800 ounces of contained gold.

Importantly with Camel Creek, the open pit deposits are a natural fit with Millennium’s nearby Nullagine Gold Project, (where Reserves recently increased 31% to 741,000 gold ounces), due to sharing the same geology and mineralisation style as the company's existing satellite deposits located along the Camel Creek Trend.

Highlighting the already high global Resource inventory Millennium holds, the Nullagine Project hosts 1.33 million gold ounces contained within seven deposits on granted mining leases. Golden Eagle is the largest deposit, hosting almost two thirds of the resource.true

Meanwhile, at Camel Creek, the Junction deposit now contains a Resource of 314,000 tonnes at 1.48g/t for 15,000 ounces of contained gold, an 87% increase over the previous estimate.

The Resource at the Roscoes Reward deposit has increased by 195% to 1.7 million tonnes at 1.09g/t for 58,900 ounces of contained gold.

While the Little Wonder deposit now hosts a 131% increased Resource of 611,000 tonnes at 1.18g/t for 23,100 ounces of contained gold.

The new Resource estimates will now be used to prepare maiden Ore Reserve estimates for the Junction, Roscoes Rewards and combined Little Wonder deposits.


Camel Creek joint venture with Northwest Resources

Camel Creek is a 50:50 mining joint venture between Millennium and Northwest covering the initial four deposits – Junction, Roscoes Reward, Little Wonder and Round Hill.

Millennium is managing the joint venture, and all ore mined as part of the joint venture will pass through Millennium’s 1.5 million tonne per annum Golden Eagle treatment plant, which is currently under construction.

Joint venture ore sourced from the Northwest deposits, located about 6 kilometres from the Golden Eagle plant, will be blended with ore from Millennium’s Golden Eagle deposit.


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The production base target will be 100,000 gold ounces annually over a mine life of eight years or better.

The capital raising will in part fund further studies to identify the optimal mining production rate suggested by the increased Ore Reserve estimate, while assessing the process design required for a higher plant throughput and complete capital cost estimates.

Brian Rear, chief executive officer, commented on the strong investor support in the company:

"This capital raising, together with our increased debt facilities, will also provide for increased capital construction reserves and for working capital during a conservative operational ramp up schedule.

“We are well advanced in the development of our project and are on time and on budget with a target date for practical completion in August this year. We are shifting our focus to commencing pit operations in June 2012 ahead of commercial production being scheduled for the fourth calendar quarter.”

The Nullagine Gold Project hosts 1.33 million gold ounces contained within seven deposits on granted mining leases. Golden Eagle is the biggest deposit, hosting almost two thirds of the resource.


Nullagine development on time and budget

Millennium is sticking to its development plan of Nullagine with the construction of the project’s gold processing plant and associated infrastructure on schedule and within the approved $87.6 million capital cost budget.

The design construction has been enhanced and 99% of the equipment orders have been placed. Commissioning remains scheduled to start in the September quarter of 2012 with commercial production planned for the December quarter 2012.


Debt restructure breakdown

The project’s global financing facility has been restructured to increase flexibility. The net available facility has increased to $53 million, comprising:

- $40 million core construction facility (increased from $25 million);
- $8 million asset lease facility (decreased from $10 million); and
- $5 million cost overrun facility (unchanged and assumed not utilised).

Millennium will contribute $2.5 million to a cost overrun reserve that on completion will be released back to the company. The $5 million environmental bond facility remains unchanged.

Millennium will manage the joint venture, where the company has forecast that mining will commence at the deposits in early 2015.

Under the agreement, Northwest’s Camel Creek Trend gold deposits will be processed by Millennium through its Golden Eagle treatment plant, which is currently under construction, and is expected to start production later in 2012.

Importantly with Camel Creek, the open pit deposits are a natural fit with Millennium’s nearby Nullagine Gold Project, (where Reserves recently increased 31% to 741,000 gold ounces), due to sharing the same geology and mineralisation style as the company's existing satellite deposits located along the Camel Creek Trend.

The joint venture commenced a drilling campaign at Camel Creek in late 2011, comprising around 5,600 metres of reverse circulation drilling, targeting strike and dip extensions to the current resources defined at the three deposits – Junction (8,000 gold ounce resource), Roscoes Reward (20,000 gold ounce resources) and Little Wonder (10,000 gold ounce resource).

Highlights from Crow included 6 metres at 7.17 grams per tonne (g/t) gold from 48 metres, 3 metres at 2.41g/t gold from 43 metres, and 2 metres at 3.15g/t gold from 18 metres.

At Condor the best results were 9 metres at 4.77g/t gold from 75 metres, 6 metres at 3.28 g/t gold from 18 metres, and 4 metres at 4.06 g/t gold from 18 metres.

The latest intersections occur adjacent to, and immediately beneath the current proposed pit designs at Condor and Crow, and indicate potential to enlarge pit designs prior to planned gold production in 2012.

Exploration will now be ramped up at the Golden Gate area deposits, with an additional 6000 metres of reverse circulation drilling planned.

The Golden Gate area consists of six deposits known as; Golden Gate (ABCD Reef), plus the five Golden Gate satellites deposits of Falcon, Condor, Crow, Harrier and G-Reef and although the deposits are relatively small, they contain the highest grades in the whole project.

New Ore Reserve

Millennium will deliver a gold Reserve from all the Golden Gate deposits before the end of 2011, with the deposits hosted within the 1.25 million gold ounce Nullagine gold project in Western Australia.

New Mineral Resource estimates are also expected to be completed in the near future at Golden Eagle, Shearers, All Nations, Bartons, Otways and Little Wonder deposits.

Providing a boost to the potential Reserve from Golden Gate are near surface gold intersections from reverse circulation drilling at both the Crow and Condor deposits, which are open along strike and down dip.

The new ore Reserve estimates do not include the current drilling results, which are from a 15 hole program for around 1000 metres.

Millennium said that due to their high grades, the deposits at the Golden Gate area are expected to impact very strongly on anticipated project cash flow once construction of the 1.5 Mt processing facility is completed at Golden Eagle in 2012.

Golden Gate - strategically located

Condor and Crow are both located about 35 kilometres to the northeast of the 1.5 million tonne per annum CIL gold processing facility at Golden Eagle which is currently under construction.

Condor currently hosts a JORC Resource of 114,000 tonnes at 3.3g/t gold for 12,200 ounces, with Crow a JORC Resource of 39,000 tonnes at 4.5g/t gold for 5,600 ounces.

Development progress summary

In other Millennium news, currently two thirds of the plant site earthworks had been completed at the project.

The works included clearing, top soil stockpiling and cut to fill preparation of the foundations for the elution tanks area, the mill and primary crusher areas, with construction of the process water dam also completed and additionally the site road access upgrade has commenced.

By mid-November 2011, the company had made significant progress in the development of the project, including:

- On-site construction of the 140 man accommodation village was well advanced. A total of 72 en-suited rooms were delivered to site and have been installed, fit for occupation. The kitchen complex was also delivered to site and was fully operational 21 October 2011;
- 70 personnel engaged in earthworks, civil works and leach tank refurbishment;
- Plant site earthworks scheduled for completion in December 2011;
- Plant site concrete work is 23% complete;
- 25% completion of the access road upgrade; and
- 85% equipment orders placed.

A major plus is that the project is on schedule and within the capital budget as of 1 November 2011.

Millennium Minerals/Northwest Resources JV

The start of drilling follows close on the heels of the signing of a non-binding heads of agreement between Northwest and Millennium for a 50:50 joint venture.

Both companies are developing gold projects in the Nullagine Goldfield, in the eastern Pilbara region of Western Australia.

Under the joint venture, Northwest’s Camel Creek Trend gold deposits will be mined and processed by Millennium through its Golden Eagle treatment plant, which is currently under construction.

Golden Eagle is expected to start production in the September quarter of 2012, producing 80,000 ounces of gold per year over an initial 7.5 year mine life.

Northwest’s Camel Creek Trend open pit deposits are a natural fit with Millennium’s project, sharing the same geology and mineralisation style as Millennium’s satellite deposits located along the Camel Creek Trend.

Millennium will manage the joint venture which is anticipated to commence mining at the joint venture deposits in early 2015.

The one for one rights are priced at $0.017, with an attaching free option exercisable at $0.03 - which expires 15 months from the closure date of the rights.

Importantly - with the funding from the rights, Millennium anticipates that the company will now have funded the construction of the 1.25 million gold ounce Nullagine Gold Project, located in Western Australia’s East Pilbara region.

The funding in place also includes contingency provisions.

On completion of the current issue, the company will have cash of $41 million, along with $45 million in arranged debt and lease finance facilities, when financial close is achieved.

Brian Rear, chief executive officer, commented “With construction underway, the proceeds from the raising will ensure the development of the mine and construction of process plant and supporting infrastructure remains on track for completion in the third quarter of calendar 2012.

"Construction activity is focused on preparing the access road to the mine site and the early installation of the accommodation village and associated buildings.

"Detailed engineering is complete and tendering of the remaining key elements of the construction phase is well advanced.”

Patersons Securities Limited has been appointed as Lead Manager and Underwriter.

The project design

Millennium has indicated that a 14 month construction period is required for the 1.5 million tonne per annum gold processing plant, 145 person accommodation village and associated infrastructure at an estimated capital cost of $73 million - before contingencies.

Being supported by the current very strong gold price, the planned mine life is 7.5 years to produce 505,000 gold ounces.

Under the current mine plan, peak gold production in the early years will be annually around 80,000 ounces.

Millennium has also provided for expansion in the process plant design and studies are in progress to assess the early achievement of increasing gold output from commencement of commercial production.

Millennium is currently progressing the 1.25 million gold ounce Nullagine Gold Project, with RM Research noting in a research report released earlier in the month, together with A$16.5 million in cash, A$35 million syndicated debt facility and a A$10 million lease facility, Millennium requires a further A$25 million in equity to enable project construction to commence.

RM Capital said they anticipate substantial resource upgrades in the near term, and subsequently rated Millennium as a BUY with a $0.08 price target.

The Beatons Creek tenements are not integral to the company's flagship 1.25 million ounce Nullagine Gold Project.

Under the agreement Nova can earn up to a 70% interest in the gold and associated minerals, with the consideration A$500,000 in Nova shares.

Nova is also required to incur expenditures of A$500,000 in the first year, and A$1 million in the second, while procuring a Bankable Feasibility Study in respect to gold rights by the fifth year.

Ore grade intercepts identify mineralisation to 140 metres along strike to the south from the current proposed pit design limits.

The latest highlights included; 5 metres at 7.51 grams per tonne (g/t) gold from 49 metres, 4 metres at 3.60g/t gold from 13 metres, and the broader hit of 17 metres at 0.91g/t gold from 65 metres.

Brian Rear, managing director, said "The results provide Millennium with a strong impetus for additional follow‐up drilling, and, similar to our adjacent Otways deposit, demonstrates the potential for additional upside to be realised at Shearers."

The results are from a comprehensive 43 reverse circulation hole drilling program targeting near surface gold to the south of the current Shearers open pit design.

The Shearers gold deposit is within easy access and just 9 kilometres to the northeast of the proposed 1.5 Mt per annum CIL gold processing facility at Golden Eagle, allowing for easy transportation of the near surface ore.

Shearers currently has a JORC Measured, Indicated and Inferred Resource of; 1.73 million tonnes at 1.2g/t for 67,700 gold ounces, with over 3400 metres of drilling completed since this estimate - highlighting the likelihood of an increase in the short term.

Broad highlights include; 20 metres at 2.62 grams per tonne (g/t) gold from the surface, 32 metres at 1.00g/t gold from 5 metres, and 20 metres at 0.82g/t gold from 5 metres.

High grade highlights include; 2 metres at 23.0g/t gold from 23 metres, and 2 metres at 7.0g/t gold from 23 metres.

Otways is located within the 1.25 million gold ounce Nullagine Gold Project.

Most importantly, ore grade intercepts at Otways extend mineralisation along strike to the northeast by 200 metres, and the southwest by 100 metres.

Brian Rear, chief executive officer, said “The latest set of drilling results from Millennium’s Otways deposit is further demonstration of the significant upside potential of the Nullagine Gold Project."

Millennium will follow-up the positive results shortly, with a 2,000 metre extension and infill reverse circulation program.

Rear added, “More broadly, the company’s ongoing drilling program has already resulted in a 25 per cent increase in ore reserves and a subsequent 25 per cent increase in forecast gold production, as announced in January 2011.

“In tandem with our on-going exploration program, Millennium recently ordered long lead-time plant and equipment for the Nullagine Gold Project, and construction is expected to commence shortly.

“Mining is expected to commence during the first quarter of 2012 with first gold expected during the second quarter of the same year.”

Otways is located less than 10 kilometres from the proposed 1.5 Mt per annum CIL gold processing facility at Golden Eagle.

The outcome of the latest drilling program has confirmed and further extend the on-strike potential of the southwest zone 275, metres beyond the currently proposed pit design.

Millennium said that the company considers likely that this zone will increase the Mineral Resource inventory at Golden Eagle, and that the results also confirm continuity of mineralisation in the central proposed pit area.

Highlights included:

- 9 metres at 1.65 grams per tonne (g/t) gold from 55 metres;
- 3 metres at 4.70g/t gold from 73 metres; and
- 7 metres at 2.00g/t gold from 26 metres.

Millennium added that a review of the immediate surrounding area shows excellent support for further extensions, and new comparable targets.

The highly anomalous Golden Eagle mineralised corridor extends for an extensive plus 2 kilometres south west from the current reverse circulation drill tested zone.

Additional exploration has already been planned to follow up on the latest positive results, with a 5,100 metre infill rotary air-blast and up to 1,500 metres of reverse circulation drilling in the area.

The significance of the latest hits is the conformation that mineralisation holds together suggesting the south west corridor that extends for some 4 kilometres could very well yield substantial resources.

The Creasy deal gives Millennium access to the entire anomalous belt.

Boosting the Golden Eagle footprint

Golden Eagle already hosts the majority of the gold resource attributable to Nullagine, and earlier in the year Millennium through a strategic joint venture boosted the company's footprint around the deposit.

If new exploration confirms an extension to this mineralised corridor within the new tenements, then Millennium has the potential to significantly increase the company's gold inventory.

The joint venture with the Creasy Group covers the Mosquito Creek Formation, providing Millennium with an immediate 70% interest in the tenements.

Consideration for the joint venture is Millennium will issue Creasy just over 8 million shares for the stake, with Millennium sole funding all required expenditure.

Creasy is not required to provide funding until the completion of a Bankable Feasibility Study and a decision to mine.

Comment

The appearance of Mathews Capital Partners on the register of Millennium is a significant vindication for the company and its Nullagine project.

Millennium is ticking the boxes at Nullagine and appears significantly undervalued on current valuation.

The two deposits are located within the company's 1.25 million gold ounce Nullagine Gold Project in Western Australia.

Depth and strike extensions have been identified at the deposits, with highlights including:

Bartons:

- 8 metres at 9.0 grams per tonne (g/t) gold from 53 metres;
- 8 metres at 2.02g/t gold from 42 metres; and
- 3 metres at 12 g/t gold from 14 metres.

At Bartons, the results confirm gold mineralisation is open to the southeast, northeast and at depth.

The deposit is located around 23 kilometres from the proposed 1.5Mt per annum CIL gold processing facility adjacent to Golden Eagle.

Golden Eagle hosts up to 70% of the current gold resource at Nullagine.

All Nations:

- 12 metres at 4.95g/t gold from surface;
- 14 metres at 2.44g/t gold from 27 metres; and
- 16 metres at 1.78g/t gold from surface.

At All Nations, shallow, oxide, ore grade intercepts indicate resource expansion along strike to the north.

The deposit is located four kilometres from Bartons.

In total, 46 reverse circulation holes were completed across the two projects, with all results new received.

Earlier in the month Millennium announced the ordering of long lead items for project construction including camp, offices, buildings, workshop, stores and facilities, as well as a 4MW semi‐autogenous (SAG) mill.

These items define the critical path for the construction phase of the project and the timing of the orders will ensure the 14 month development period is achievable as planned.

The big Australian bank will provide $10 million in financing facilities for the project.

These new funds are in addition to the $35 million project financing facilities being provided by BNP Paribas, with the total lease facility now A$45 million between the banks.  This follows an earlier rights issue which raised $23.2 million.

The additional facility will support the expanded scope of Nullagine, following the company’s successful drilling program which has seen a 25% increase in ore reserves, and the subsequent 25% increase in forecast gold production.

The new finance facility will provide for the leasing of transportable buildings, mobile equipment and light vehicles and other elements associated with the construction and development of Nullagine.

Millennium continues to move the project forward quickly, and has already ordered long lead items for project construction including camp, offices, buildings, workshop, stores and facilities.

The facilities are being provided by the Airlec Group, as well as a 4MW semi‐autogenous mill being supplied by Autotec.

These items define the critical path for the construction phase of the project and the timing of the orders will ensure the 14 month development period is achievable as planned.

Boosting the Golden Eagle footprint

Within Nullagine, is the highly prospective Golden Eagle deposit.

Golden Eagle already hosts around 70% of the gold resource attributable to the 1.25 million gold ounce project, and in April, Millennium through a strategic joint venture  boosted the company's footprint around the deposit.

If new exploration confirms an extension to this mineralised corridor within the new tenements, then Millennium has the potential to significantly increase the company's gold inventory.

The joint venture with the Creasy Group covers the Mosquito Creek Formation, providing Millennium with an immediate 70% interest in the tenements.

Consideration for the joint venture is Millennium will issue Creasy just over 8 million shares for the stake, with Millennium sole funding all required expenditure.

Creasy is not required to provide funding until the completion of a Bankable Feasibility Study and a decision to mine.