HIGHLIGHTS

A co-operation designed to build:

• One of the world's great base metals mines
• One of the top 4 lead producers
• A major cobalt producer +10% of world production
• A mid-size copper producer
• A producer of significant silver and nickel by-products

Details of the Co-opoeration Structure

Compass (CMR) commenced discussions with Hunan Non-ferrous Metals Corporation (HNC) began in late 2005 with a view to forming a strategic partnership to develop the company's base metal assets in the Northern Territory.

In July 2006 CMR issued 12 million ordinary shares to HNC at a price of A$2.50 per share to raise $30M. This equity investment was insisted upon by CMR as a demonstration of good faith on the part of HNC and to ensure that CMR would have sufficient funds to build its oxide base metals project in the NT in the event no agreement was reached with HNC.

To develop the CMR base metals deposits in the Northern Territory CMR and HNC have agreed to form three Joint Ventures each with a 50/50 interest. Formal implementation of these agreed JV's is only awaiting NT stamp duty rulings.

1.Oxide Joint Venture
2.Sulphide Joint Venture
3.Exploration Joint Venture

Oxide Joint Venture - HNC is providing A$72 million to the capital cost of the oxide base metals production plant with CMR providing the balance (estimated at less than $20M). All working capital, sustaining capital, first fills and operating costs are to be shared 50/50. Production will be split equally and each party will be responsible for its own sales and marketing.

Sulphide Joint Venture - HNC is to fund 100% of the cost of a detailed feasibility study of the development of CMR's Northern Territory base metals sulphide resources. Thereafter, if HNC wishes to continue in the Sulphide JV HNC has to fund 100% of capital cost until a production plant with an annual capacity of 4 million tonne per year of mined ore is reached. Production will be split equally and each party will be responsible for its own sales and marketing.

Exploration Joint Venture - HNC has to pay CMR A$11 million for past exploration and is to fund 70% of continued exploration for five years from the formal implementation of the JV. Thereafter exploration expenditure will be borne equally. These JV's apply only to tenements held by CMR at the time of execution of the agreements.

Management - CMR has formed a wholly owned subsidiary, which will act as the manager of all three JV's. Each JV will have an operating committee comprising 3 members from CMR and 3 from HNC. The chairman of each committee shall be a CMR appointee and shall have the casting vote except on certain matters requiring a unanimous decision.

HNC has no right or title to CMR's uranium resources whatsoever!

Significantly for CMR shareholders, most financial risk of developing the company's large base metals resources has been removed and shareholders will suffer no dilution as a consequence of these developments. The company will not be required to undertake any debt or hedging obligations and will have approximately $60M available in addition to the free cash-flow that will be immediately available from the oxide mining operations.

Note: The HNC agreement covers CMR base metals assets in the NT as of the date of the Co-operation contract with HNC only. CMR retains exclusive title on mineral projects for commodities excluding base metals in the NT subject to the HNC Congtract, and all other mineral projects worldwide, subject to Joint Venture agreements with other parties.