Synergy Metals Ltd

30 April 2008 ABN 59 005 482 904

Report for the March 2008 quarter ASX Code: SML

Issued capital:
615M ordinary shares

Highlights Directors:
Michael Sadler,
• Coffey Mining review confirms Synergy’s exploration and Chairman
development program is on track. Peter Malkin,
Operations Director
• Coffey Mining has supported the Board’s view to expand
Kit Chye,
Synergy’s exploration focus to target all minerals which have Non-Executive Director
previously been mined or are known to exist within the region Freddie Heng,
including gold, silver, tin, copper, zinc, lead, tungsten and Non-Executive Director
Paul Pupazzoni,
molybdenum.
Non-Executive Director
• The resource drill out at Glen Wills South is continuing with a
Senior Management:
target of achieving an inferred mineral resource in that area by Peter Malkin,
December 2008. Operations Director
Paul Pupazzoni,
• A mining engineer has been appointed to work with Coffey Company Secretary
Mining to develop a scoping study program for completion by
Contact:
March 2009 to assess the technical and economic viability of 152 Macleod Street
commencing production from the Glen Wills South area. Bairnsdale Victoria 3875
Tel: (+61 3) 5152 5011
• Synergy’s new underground drill rig was supplied by Boart Fax: (+61 3) 5152 5705
Longyear and is now on site. Email:
info@synergymetals.com.au
• Development of the crosscuts is continuing from the number 5 Web:
adit. www.synergymetals.com.au

• The Sunnyside exploration drilling program continues to provide high grade

intersections with visible gold in parts. Drilling is continuing to further test additional
mineralised structures.

Coffey Mining review

The full Synergy Board recently conducted one of its regular reviews with Coffey Mining Pty
Ltd and the whole Synergy exploration and development team. This was a two day session
held on site at Glen Wills and included inspections at Glen Wills South of the underground
refurbishment work of the first part of the number 5 level; the ongoing construction of the
crosscuts from that adit; the surface exploration drilling at Glen Wills and Sunnyside; and a
review of the very encouraging Merrimac soil sampling results.

The overwhelming conclusion was that Synergy’s exploration and development

program is on track.
Exploration and development pipeline
The Synergy group controls a strategic parcel of granted exploration licences and
applications in eastern Victoria covering some 2100 km2. Based on historical workings and
modern geological interpretation the tenements are highly prospective for multi-commodity
potential.

The latest review with Coffey Mining has confirmed Synergy’s exploration strategy including
the utilisation of the intrusion-related gold system model. Coffey Mining have also actively
encouraged Synergy to expand the company’s exploration focus to target all minerals
which may be found on Synergy’s tenements such as gold, silver, tin, copper, zinc, lead,
tungsten and molybdenum.

Resource drill out at Glen Wills South

The first part of the number 5 adit has recently been refurbished and is now being prepared
for the commencement of underground drilling. (See Glen Wills section below for details). A
resource drill out of about 5000 metres of drilling has commenced (with the initial drilling
from surface) to achieve an inferred mineral resource for the southern part of the Glen Wills
deposit with a target completion by December 2008.

In 2005, Synergy announced an inferred mineral resource of approximately 55,000 ounces of

gold (see attached Table 1 for details) for the combined areas of Glen Wills and Sunnyside
based on drilling to that time. In April 2007, Coffey Mining completed their first review of
Synergy’s activities and with the benefit of additional drilling results and interpretation
available at that time, established a development potential of 110,000 ounces (see Table 2
for details) – again for the combined areas of Glen Wills and Sunnyside.
The objective of the current resource drill out is to conduct approximately 5000 metres of
additional drilling which should be sufficient to establish an inferred mineral resource
specifically for the Glen Wills South area which is the area closest to the entrance portal
for the number 5 adit.

The Directors anticipate that the exploration potential numbers announced in April 2007 (see
Table 3 for details) will be re-assessed at the completion of the Glen Wills South drill out.

A second resource drill out will also be considered for the Glen Wills Central area to be
conducted to the north of the internal shaft once the drill out of the Glen Wills South area has
been completed.

Scoping study program

Synergy is now also developing a scoping study program which will be conducted in
conjunction with Coffey Mining and is expected to be completed by March 2009 after the
initial resource drill out has been completed for Glen Wills South. A mining engineer has
been appointed to work with Coffey Mining to assess the technical and economic viability of
commencing production from the Glen Wills South area.

Underground drill rig

The new Boart Longyear LM75 underground drill rig was delivered to site and is now waiting
for the completion of the first cross cut and cuddy to commence the underground portion of
the Glen Wills South resource drill out.

LM75 underground drill being fabricated in the Boart Longyear factory in Adelaide, South
Australia.
Sunnyside
Assay results from diamond drill hole SSDH040 confirmed the presence of the high-grade
gold mineralisation previously reported in a preliminary announcement made on 18
January 2008. The major assay results were as follows:

14.5 metres @ 10.13 g/t gold

including
1.15 metres @ 26.52 g/t gold
1.0 metre @ 17.68 g/t gold
and 1.65 metres @ 57.44 g/t gold

The high-grade gold mineralisation in SSDH040 further confirmed the potential of the
structure hosting the gold mineralisation encountered in drill holes SSDH017, SSDH038 and
SSDH039. Drill hole SSDH040 was drilled approximately 75 metres north east along strike
from the high-grade gold mineralisation intersected in holes SSDH017 and SSDH038.

Diamond drill hole SSDH044 has intersected sulphide mineralisation over a 2.3 metre length
(down hole). Visible gold was also seen in the core. The relationship of the structure to the
United Brothers main structure is unclear at present. Synergy is waiting for assay results for
this hole.
Merrimac
Interpretation of the very encouraging soil sample results at Merrimac is continuing with the
objective of commencing a costeaning program in the June quarter.

Exploration expenditure
The cost of direct exploration activities paid for during the quarter totalled $509,000 with the
majority of that expenditure having been incurred on the diamond drilling programs at
Sunnyside and Glen Wills South.

Michael Sadler
Chairman

For further information, please contact:

Michael Sadler Rod North - Executive Director
Chairman Bourse Communications Pty Ltd
Synergy Metals Limited Tel: + 61 3 9510 8309
Tel: + 61 3 5152 5011 Mobile: 0408 670 706
Email: rod@boursecommunications.com.au
The geological information contained within this report was compiled by Mr Peter de Vries, a consulting geologist,
on behalf of Synergy Metals Ltd. Mr de Vries is a member of the Australasian Institute of Mining and Metallurgy,
and is competent and experienced in the activity being undertaken, and consents to the publishing of the
information in this report in the form and context in which it appears.
Table 1
The inferred mineral resource reported by Synergy in October 2005 was:
Location Tonnes Grade Au g/t Ounces of gold
Glen Wills 182 500 7.79 45 700
Sunnyside 40 800 7.21 9 500
Total 223 300 7.68 55 200

Table 2
The development potential derived by Coffey Mining from their review in April 2007 of the
previously published findings from exploration work at the Glen Wills and the Sunnyside
sites (and which includes the inferred mineral resource shown in Table 1), was:
Location Tonnes Grade Au g/t Ounces of gold
Glen Wills - South and
Central blocks 350 000 6.6 74 000
Glen Wills - other 30 000 3.8 4 000
Sunnyside 160 000 6.7 32 000
Total 540 000 6.5 110 000

This development potential was estimated from lode shapes defined by Synergy based on
additional drilling since the previously reported results were first published and which were
significantly larger than the lode shapes used for estimating those prior published results.

Table 3
The mineral exploration potential assessed by Coffey Mining in April 2007 for the Glen Wills
and Sunnyside gold sites (and which includes the development potential of 110,000 ounces
of gold shown in Table 2), was:
Ounces of Ounces of Ounces of
Location Tonnes gold based on gold based on gold based on
7g/t 10g/t 15g/t
Glen Wills - South
and Central blocks 830 000 190 000 270 000 400 000
Glen Wills - other 60 000 15 000 20 000 30 000
Sunnyside 610 000 135 000 190 000 290 000
Total 1 500 000 340 000 480 000 720 000

In accordance with the ASX listing rules, the Directors note that the estimates of mineral
exploration potential shown in tables 2 and 3 above are based on tonnes and grades which
are conceptual in nature and do not represent a form of mineral resource estimate since at
this stage there has been insufficient exploration work done on the mineral exploration
potential to be able to define a mineral resource of that size compliant with the JORC Code
guidelines and it is uncertain whether further exploration work will result in the determination
of such a mineral resource.

Assumptions:
The target grade of 7g/t used the results of all drilling within the wireframes which defined
the ore lodes of the geological model.
The target grade of 10g/t used the results of only those samples where grades were greater
than 3g/t within the wireframes which defined the ore lodes of the geological model.
The target grade of 15g/t represented the lower end of the historic grades achieved from the
results based on historic production data for the project area.
About Synergy Metals Ltd
Using modern geological exploration techniques, Synergy Metals has identified a large
mineralised zone in the Glen Wills and Sunnyside area in East Gippsland, Victoria. Gold,
silver and tin were previously mined in the region. Of the numerous mines established in the
region, the two most famous were the Yellow Girl and the Maude goldmines. The company
is fortunate to be able to draw on extensive data from previous workings and past
exploration. Synergy’s granted tenements and applications cover an area of approximately
2100km2 and abut the former Benambra base metals mine.

Gold exploration and development plans

Synergy’s strategy is to prove the viability of the Glen Wills and Sunnyside gold project area
and since 2004 has conducted more than 17,000 metres of diamond core drilling at the site.
Coffey Mining Pty Ltd completed an independent review and as reported on 19 April 2007,
confirmed the mineral exploration potential for part of the area to be in the range from
340,000 to 720,000 ounces of gold.

Regional exploration targets

Some of Synergy’s granted tenements and applications in the East Gippsland region have
historically hosted many minerals such as gold, silver, tin, copper, zinc, lead, tungsten and
molybdenum. Synergy’s strategy is to conduct some preliminary geological work on its large
land holdings.

Glen Wills and Sunnyside historical background

Extensive gold mining occurred in the Glen Wills / Sunnyside area north of Omeo from the
1890s until after the First World War. Although the scale of mining was considerably
decreased after the war, it continued until the 1960s. The area was very productive with
high grades at relatively shallow depth.

The first mines were established at Glen Wills in 1888 and 1889 with the most intensive
development occurring from about 1893. Most of the old mines were relatively shallow at
barely 100 metres depth. Of the numerous workings at the Glen Wills and Sunnyside
goldfields, the two most famous were at Glen Wills: the Yellow Girl which was opened in
1892 and the Maude in 1893. Both were rich mines and produced gold until 1916 when
operations were wound down due to the First World War.

However, both mines experienced a renaissance in 1931 when the Maude and Yellow Girl
Mining Company was formed and mining continued there until about 1952. Overall, between
1891 and the 1960s, the Glen Wills goldfield produced more than 235,000 oz of gold at a
grade in excess of 15 g/t.

JORC Code compliance

In accordance with the ASX listing rules, the Directors note that the estimates of mineral
exploration potential shown above are based on tonnes and grades which are conceptual in
nature and do not represent any form of mineral resource estimate since at this stage there
has been insufficient exploration work done on the mineral exploration potential to be able to
define a mineral resource of that size compliant with the JORC Code guidelines and it is
uncertain whether further exploration work will result in the determination of such a mineral
resource.
 Appendix 5B
Mining exploration entity quarterly report

Rule 5.3

Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity
SYNERGY METALS LTD

ABN Quarter ended (“current quarter”)

59 005 482 904 31 March 2008

Consolidated statement of cash flows

Current quarter Year to date
Cash flows related to operating activities $A’000 (9 months)
$A’000
1.1 Receipts from product sales and related debtors
1.2 Payments for:
(a) exploration and evaluation -509 -1 209
(b) development
(c) production
(d) administration -172 -691
1.3 Dividends received
1.4 Interest and other items of a similar nature received 91 180
1.5 Interest and other costs of finance paid -9
1.6 Income taxes paid
1.7 Other (provide details if material)

Net Operating Cash Flows -590 -1 729

Cash flows related to investing activities

1.8 Payment for purchases of:
(a) prospects
(b) equity investments
(c) other fixed assets -299 -416
1.9 Proceeds from sale of:
(a) prospects
(b) equity investments
(c) other fixed assets 7
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material):
Net investing cash flows -299 -409

1.13 Total operating and investing cash flows

(carried forward) -889 -2 138

+ See chapter 19 for defined terms.

30/9/2001 Appendix 5B Page 1

Appendix 5B
Mining exploration entity quarterly report

1.13 Total operating and investing cash flows

(brought forward) -889 -2 138

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. 3 7 411
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings -427
1.18 Dividends paid
1.19 Expenses of capital raisings -502
3 6 482
Net financing cash flows

Net increase (decrease) in cash held -886 4 344

1.20 Cash at beginning of quarter/year to date 6 302 1 072

1.21 Exchange rate adjustments to item 1.20
1.22 Cash at end of quarter
5 416 5 416

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000

1.23 Aggregate amount of payments to the parties included in item 1.2 109

1.24 Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets
and liabilities but did not involve cash flows

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the
reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.
Amount available Amount used
$A’000 $A’000
3.1 Loan facilities - -
3.2 Credit standby arrangements - -

+ See chapter 19 for defined terms.

Appendix 5B Page 2 30/9/2001

 Appendix 5B
Mining exploration entity quarterly report

Estimated cash outflows for next quarter

$A’000
4.1 Exploration and evaluation 500
4.2 Development
Total 500

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in Current quarter Previous quarter
the consolidated statement of cash flows) to the related items $A’000 $A’000
in the accounts is as follows.
5.1 Cash on hand and at bank (interest bearing) 5 416 6 302

5.2 Deposits at call

5.3 Bank overdraft

5.4 Other (provide details)

Total: cash at end of quarter (item 1.22)

5 416 6 302

Changes in interests in mining tenements

Interest at Interest
Nature of interest beginning at end of
Tenement reference (note (2)) of quarter quarter
6.1 Interests in Western Australia PL26/3168, one of the 51% Nil
mining tenements PL26/3168 tenements in the Kalgoorlie
relinquished, Joint Venture, was released
reduced or lapsed from the joint venture and
returned to the initial
applicant, Clara Resources
Pty Ltd.

(The joint venture continues

with respect to PL26/3194,
PL26/3204, PL27/1621 and
PLA24/3854).
6.2 Interests in
mining tenements
acquired or
increased

+ See chapter 19 for defined terms.

30/9/2001 Appendix 5B Page 3

Appendix 5B
Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number quoted Issue price per Amount paid up per
security (see note 3) security (see note 3)
(cents) (cents)
7.1 Preference +securities
(description)
7.2 Changes during quarter
(a) Increases through
issues
(b) Decreases through
returns of capital, buy-
backs, redemptions
7.3 +Ordinary securities

at end of quarter 614 868 816 614 868 816

7.4 Changes during quarter
(a) Increases through
issues:
Options exercised 99 032 99 032
(b) Decreases through
returns of capital, buy-
backs
7.5 +Convertible debt

securities (description)
7.6 Changes during quarter
(a) Increases through
issues
(b) Decreases through
securities matured,
converted
7.7 Options at end of Exercise price Expiry date
quarter
Listed
SMLO 172 412 443 172 412 443 3 cents per share 31.08.2011
SMLOC 179 711 515 179 711 515 4 cents per share 31.10.2009
SMLAI 95 732 6 cents per share 31.10.2012

7.8 Issued during quarter 95 732 6 cents per share 31.10.2012

7.9 Exercised during

quarter
SMLO 3 300 3 300 3 cents per share 31.08.2011
SMLOC 95 732 95 732 4 cents per share 31.10.2012
7.10 Expired during quarter

7.11 Debentures
(totals only)
7.12 Unsecured notes
(totals only)

+ See chapter 19 for defined terms.

Appendix 5B Page 4 30/9/2001

 Appendix 5B
Mining exploration entity quarterly report

Compliance statement
1 This statement has been prepared using accounting policies which comply with accounting
standards as defined in the Corporations Act or other standards prepared under acceptable to ASX
(see note 4).

2 This statement gives a true and fair view of the matters disclosed.

Paul Pupazzoni
Director / Company Secretary

30 April 2008

Notes
1 The quarterly report provides a basis for informing the market how the entity’s activities have
been financed for the past quarter and the effect on its cash position. An entity wanting to disclose
additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining
tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a
joint venture agreement and there are conditions precedent which will change its percentage
interest in a mining tenement, it should disclose the change of percentage interest and conditions
precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities: The issue price and amount paid up is not required in items 7.1
and 7.3 for fully paid securities.

4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB
1026: Statement of Cash Flows apply to this report.

5 Accounting Standards: ASX will accept, for example, the use of International Accounting
Standards for foreign entities. If the standards used do not address a topic, the Australian standard
on that topic (if any) must be complied with.

== == == == ==

+ See chapter 19 for defined terms.

30/9/2001 Appendix 5B Page 5