2 May 2012 ASX: MGK

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MIL RESOURCES ACQUIRES OPTION TO PURCHASE 100% OF AMAZON BAY IRON

SANDS PROJECT

MIL acquires three year Option to purchase remaining 50% share of Amazon Bay
Project;

Project occurs over 100km length of coast line to the south east of Port Moresby, with
(1)
an exploration target of 3 to 4 billion tonnes of iron sands;

Exercise price of Option is $10million cash plus 1.5% net smelter royalty (on vendors
50%) plus 25 million Shares;

Option agreement implies a value exceeding $20million for 100% of Project;

Transaction facilitates negotiations with interested parties for investment and product
off-take and allows the Company to focus on defining the appropriate development
strategy for the Project;

The agreement highlights the Companys confidence in the Project and the scope for
Shareholder value creation;

MIL Resources Limited (MIL or the Company) is pleased to announce that it has executed
a Heads of Agreement with the other shareholders in the holding company of the Amazon
Bay Iron Sands Project (Project) to acquire a three (3) year Option over their 50% interest,
such that MIL may, subject to Shareholder approval, increase its holding in the Project to
100%.

To exercise the Option at any time during the three year term, the Company will pay the
vendors $10million and a 1.5% net smelter royalty on their 50% share of future Project
production; plus issue 25million Shares in the Company, implying a value for 100% of the
Project of well in excess of $20million. This value represents a significant discount to the
value of other undeveloped iron sands deposits in Australia and Indonesia, held by ASX
listed companies.
 The Project occurs over a 100km section of coastline, 170km south east of Port Moresby in
PNG. The exploration target(1) of 3 to 4 billion tonnes of iron sands extends up to 5km inland.

The logistics of the Project are attractive to development, as the iron sands are covered by
minimal overburden and could be recovered by dredging. A concentrate could be produced,
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without the need for any chemicals, by screening and gravity separation, and pumped to
ships standing offshore. The reject sands could be pumped back for placement and surface
rehabilitation.

Discussions with the PNG Government and the local communities in the Amazon Bay area
indicate strong support for the Project, with minimal environmental impact and regional
development being key factors. Representatives of the Company and the PNG Mineral
Resources department are meeting with the local community in the period of 14- 17 May to
discuss the development options for the Project.

Previous work conducted on the Project has determined that more than 200million tonnes of
concentrate grading over 52% iron and containing vanadium and titanium could be produced.

The Company now plans to investigate recent metallurgical developments in processing such
mineralized material, which indicates that it may be feasible to separate the titanium and
vanadium from the iron concentrate, which would add significant value to this Project. A
number of other ASX listed companies, with projects containing similar mineralization in both
hard rock and mineral sands, are also adding value to their projects by pursuing
improvements to the process flow sheet and the resulting product mix.

To facilitate this investigation, MIL has appointed an experienced mineral sands consultant to
design an extensive drilling and sampling program for the Project. This program will define
the most prospective areas to be subsequently drilled and sampled to produce a JORC
compliant resource and it will also assess the spacial and depth variability of the
mineralization.

The program will obtain bulk samples of the mineralization for metallurgical testing. The
Company is currently evaluating several proposals from experienced metallurgical
consultants to undertake the evaluation of different flow sheet options to maximize the
Project revenue.

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 The existing ownership status of the Project is that MIL holds a 50% interest in Titan Mines
Ltd (Titan), which holds the tenements that cover the Project, and the original vendors of
the tenements hold the other 50% interest.
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The key aspects of the Option agreement reached with the original vendors, which includes
current MIL Director, Mr John Haggman are as follows;

Three year Option term to acquire the balance of Titan, such that the Company owns
100% of the Project;

Option agreement supersedes current farm-in agreement between MIL and original
vendors;

Option payments due every six months following Shareholder approval, and payable
only until the Company exercises the Option;

Option payments are dependent on time of conversion; for the initial two 6 month
terms, Option payments are $100,000 each; then $150,000 each for the next two 6
month terms; and $200,000 each for last two 6 month terms for a maximum
commitment to Option payments of $900,000;

Should the Company not exercise the Option in the three year term, MIL will retain its
50% ownership;

The Company may exercise the Option at any time during the three year term by;
 Issuing twenty five million shares;and
 Paying $10million; and
 Granting the vendors a 1.5% net smelter royalty on their 50% interest in the Project

Due to the related party nature of the proposed transaction, the Company will have an
independent assessment made of the Option agreement and Shareholders will have the
opportunity to review this assessment and approve the transaction at a General Meeting of
the Company, to be held within three months of this announcement. Further details of the
independent assessment and the General Meeting to approve the Option agreement will be
provided to Shareholders in the coming weeks.

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 The new CEO of MIL, Mr Michael Palmer commented that:

The Company is very pleased to be able to control 100% of the Amazon Bay Project when
dealing with prospective development partners. The Project contains a major resource and
the Board wishes to maximize the value of this asset for the benefit of all Shareholders. This
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is an exciting time for the Shareholders of the Company, when this Project opportunity is
combined with the extensive exploration program to occur in PNG on the copper/gold hard
rock prospects over the next six months.

FOR FURTHER INFORMATION CONTACT:

Mike Palmer, CEO +61 2 89202300/ +61 (0)418 950694

Michael Brown, Pegasus Securities +61 2 92406607/ +61 (0)400 248 080

ABOUT MIL RESOURCES LIMITED

MIL Resources Limited (ASX: MGK) is focussed on mineral resources opportunities in

Papua New Guinea. The Company holds a 50% interest in a major iron
sands/vanadium/titanium exploration target(1) at Amazon Bay located on the coast,
approximately 170km south east of Port Moresby , and is currently assessing development
options for this Project. The Company is also exploring for gold and copper in 100%
owned licence areas, covering over 8,000 square kilometres, and currently has a diamond
drilling program underway on a major copper porphyry system at Atui, in south New
Britain.

(1)
To the extent that there is information included regarding any potential quantity and grade, this is
conceptual in nature, as there has been insufficient exploration completed to define a mineral resource under
the JORC Code and it is uncertain if further exploration will result in the determination of a mineral resource
under the JORC Code.