Bass Metals Limited ASX Announcement 21 December 2010
ORE INTERSECTED IN HELLYER MINE DEVELOPMENT
Diversified miner, Bass Metals Ltd (ASX:BSM) ("Bass" or "the Company") is pleased to provide the following update on its Hellyer Mine Project development in northwest Tasmania comprising the Fossey underground mine and the Hellyer Mill refurbishment. Underground Mine Development The Fossey underground mine development being undertaken by Bass alliance mining partner, Mancala Mining, is now within the Fossey high-grade polymetallic (Cu-Pb-Zn-Ag-Au) ore body (see Figure 1 below).

Ore is currently being hauled to the Run-of-Mine (ROM) stockpile.

Underground development work includes: advancing the decline to the lower portions of the ore body, incline development to access upper ore levels and completion of the second and final ventilation shaft. The mine development program is on schedule to meet the ore production requirements for the Mill and costs are in line with budget forecasts. Hellyer Mill Refurbishment Completed All refurbishment work on the Hellyer Mill has now been completed to enable full production to commence.

A significant quantity of waste rock has been crushed and fed into the Mill as part of the planned initial commissioning process.

A stockpile of low-grade material from Que River and Fossey is being accumulated on the ROM pad.

In early January 2011, the Mill will commence processing low-grade material, transitioning to typical high-grade Fossey ore as the circuit stabilises to achieve the key production milestone of first zinc, lead and copper-silver-gold concentrate production in January 2011 Comment "The mine development is progressing well and we are on track to become cash-flow positive in the first few months of 2011.

We believe the outlook for base and precious metal prices in 2011 is very positive and this is a great time to be bringing this project on-stream" said Bass Managing Director, Mr Mike Rosenstreich.

"In terms of growth, particularly through exploration -- we need to conserve cash at this stage in case of any delays, but once we have completed the current commissioning we plan to accelerate our exploration activities and look forward to keeping at least 2 to 3 drill rigs busy on our projects" he added.


To view the full ASX Announcement, please visit: http://esp.gewru.com/download/files/12414/1293537/ASX%2021%20Dec2010%20HMP%20Operations%20Update_Final.pdf For further information, please contact: Mike Rosenstreich Managing Director Bass Metals Ltd Tel: (+61-8) 6315 1300 Media: David Brook Professional Public Relations T: 09 9388 0944 / M: 0415 096 804 E: About Bass Metals Ltd (ASX: BSM) Bass Metals Ltd is a growth focussed and profitable Australian base and precious metal producer with a portfolio of high quality zinc, lead, copper and gold assets in the rich Mount Read Volcanic mineral belt in northwest Tasmania.

Listing in 2005, Bass delivered its maiden profit in 2008 from its profitable base metals production hub at Que River in Tasmania, which has generated $25 million in cash flow over the last two years. The Companys larger transformational Hellyer Mine Project is on track to commence production toward the end of 2010.

With an initial through-put rate of 400,000 tonnes per annum (tpa), the 1.5 million tpa capacity Hellyer Mill will produce 53,000 tpa of zinc concentrate, 27,000 tpa of lead concentrates and 4,500 tpa of copper---silver-gold concentrates.

The Company also has an active and successful exploration programme and initiatives underway to generate cash by processing remnant ore from the Hellyer mine Que River ore is currently sold to the nearby Rosebery Plant under an Ore Sales Agreement with the plants owner/operator, MMG Australia.

In January 2010 the Bass signed a committed off-take contract with leading global multi-metals business, Nyrstar, for all zinc and lead concentrates produced from the Fossey mine.
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