Hi there House broker Xcap has published a note on Black Mountain Resources, the US focussed silver developer, following encouraging maiden drill results at the Conjecture Silver Project in Idaho last week which confirm the high grade silver zones and also identifies new mineralisation structures for further test work.

The Company is currently trading at 15.25p. XCap commented: "These are very encouraging results announced by the Company following its dual-listing on AIM and recent fundraising.

The completion of this successful drill program on the previously producing mine is the first exploration drilling undertaken on the project since the 1980s and confirms the potential for not only high grade, but also the scale of the Conjecture Project in Idaho, Montana.

Of particular interest are the interceptions at the Rainbow Pad, an area previously untested and with no known historic resource, with mineralisation structure identified much closer to the surface than anticipated (depths from 17m to 40m).

In addition, further potential drilling targets have been identified for testing by recently completed geophysical work which should only further increase the size of the mineralisation structure. "The Company is confident that it can mine Conjecture and the New Departure project profitably, even with a silver price at half the current level.

With a current silver price of $33 the potential looks very good indeed.

Factor in the increased size of the resource and with higher grades intercepted than targeted, the potential for these projects and the company is clear. "With further results still pending from the drill program, together with other drill targets that have been identified, we look forward to the Company releasing positive news flow in the short term to confirm the size and scale of their projects as they move into production." Please see the full release below and the note attached. Best Lizzie [cid:image001.png@01CDB1CF.34859A10] 17 October 2012 Manager of Company Announcements Australian Securities Exchange Level 6, 20 Bridge Street Sydney NSW 2000 Further Drill Results Confirm High Grade Silver Zones and Identifies New Mineralisation Structure at Conjecture Silver Project in Idaho
* 715g/t Ag and Ag equivalent intercept over 1.38m (depth of 101m) * 363g/t Ag and Ag equivalent intercept over 3.91m (depth of 38m) * 340g/t Ag and Ag equivalent intercept over 0.73m (depth of 17m) * 157g/t Ag and Ag equivalent intercept over 3.04m (depth of 40m)
* Further high grade intercepts from additional four holes highlight the potential scale of Conjecture * Results confirm the presence of historic ore blocks outlined in 1981 reserve report * New mineralisation structure also identified with high grades close to surface on Conjecture Shear Zone * Further anomaly targets identified by geophysical work program for further test work * Management team strengthened with the appointment of Shannon Robinson as Executive Director Black Mountain Resources Limited (ASX | AIM: BMZ) (the "Company"), the silver focused development company with interests in the US, is pleased to announce positive assay results from a further six holes and initial results from geophysical work at its maiden drill program at the Conjecture Silver Project in the prolific Lakeview Mining District in Idaho. Conjecture Silver Project The Company recently completed a 16 hole diamond core drill program (1,800m) at the previously producing mine.

The drilling was undertaken from 3 drill pad locations, Drill Pad 1, Drill Pad 2 and the Rainbow Pad, each location drilled into the hanging wall through the vein structure into the footwall material.

The vein structures encountered showed mineralisation and the assays results returned have confirmed high concentrations of silver with gold that correspond with historical values of mineralisation and correlate to mapping and underground structures seen in the historical Conjecture workings.

The decision was made to extend the program from 10 holes to 16 due to positive results from drilling undertaken at the Rainbow Pad, where shallow mineralisation was intercepted in an area previously untested. The program, which was the first exploration drilling undertaken at the Conjecture Silver Project since the 1980s, successfully confirmed the grades and the presence of historic mining blocks identified by previous sampling, exploration and mining undertaken at the property.

Significantly, each hole drilled encountered mineralisation structures, although some of the samples are still being processed with final assay results anticipated to be available in the next fortnight.

This new data, combined with the wealth of historic reports and information, will be integral to the Company as it focusses on the successful development of the project with an objective of achieving first production in Q1 2013.
Conjecture Silver Project Assay Results Hole Northing Easting Azimuth Angle >From (m) To (m) Width (m) Grade Drill Pad 1 1 530691 542283 S45E -85 NRI 2 530691 542283 S45E -70 94.17 1.27 0.6 85.5g/t Ag, 0.72g/t Au, 0.07% Pb, 0.38% Zn (123g/t Ag-eq) 2 530691 542283 S45E -70 101.36 102.74 1.38 692g/t Ag, 0.43g/t Au, 5.66% Pb, 0.39% Zn (715g/t Ag-eq) 3 Assay results pending Drill Pad 2 4* 5,306,846 542,231 -112.9 -51.7 100.41 101.00 0.59m 1,106g/t Ag, 0.81g/t Au, 0.65% Pb, 0.23% Zn (1,149g/t Ag-eq) 5* 5,306,846 542,231 119.4 -67.7 122.00 122.32 0.32m 1,060g/t Ag, 0.72g/t Au, 0.56% Pb, 0.53% Zn (1,098g/t Ag-eq) 6* 5,306,846 542,231 -273.3 -88.1 236.46 236.82 0.36m 898g/t Ag, 0.47g/t Au, 0.89% Pb, 1.77% Zn (923g/t Ag-eq) 7 Assay results pending Rainbow Drill Pad 8 5307178 542561 S46E -50 36.70 39.73 3.04 90.6g/t Ag, 1.25g/t Au, 0.19% Pb, 0.24% Zn (157g/t Ag-eq) 9 5307178 542561 S46E -70 NRI 10 5307178 542561 S46E -85 NRI 11 Assay results pending 12 Assay results pending 13 Assay results pending 14 5307178 542561 S71E -50 17.58 18.31 0.73 320g/t Ag, 0.37g/t Au, 0.26% Pb, 0.43% Zn (340g/t Ag-eq) 14 5307178 542561 S71E -50 38.41 42.32 3.91 264g/t Ag, 1.87g/t Au, 0.31% Pb, 0.39% Zn (363g/t Ag-eq) 15 Assay results pending 16 Assay results pending * Assay results previously disclosed 1.

Intersections were calculated using minimum criteria of 100g/t Ag and Ag equivalent 2.

NRI = no reportable intersection 3.

Ag-eq (equivalent) grades in this release are gross value equivalents utilising the following metal prices US$33/oz silver price and US$1,740/oz gold price. 4.

These are calculated by gross $ value of any Ag and Au in drill intersections, For the purposes of this release, values have not be attributed to Pb and Zn content. 5.

It should be noted that AgEQ is for the purpose of illustrating gross comparative values compared as a ratio to other metals in the drill intersection.
Holes 1-7 targeted the historic "31" mining block, where high grade silver mineralisation was delineated in the early 1980s.

This is depicted on Diagram 1 as the ore shoot from the Spider Adit.

The assay results from holes 1 and 2 (Drill Pad 1) are set out below together with the results from holes 4 to 6 (Drill Pad 2), previously announced on 24 August 2012.
These results are consistent with the historic data for mining block 31 identified in the 1981 Reserve Report on the Conjecture Silver Project which estimated the block to contain 50,000 - 60,000 tons1 of silver at an estimated grade of 350 - 375 grams Ag per ton1. A further 8 holes were then drilled from the Rainbow Pad targeting the Conjecture Shear Zone, an area which has not previously been explored or tested to the east of the historic ore shoot, as depicted on Diagram 1.

The mineralised structure identified by results from holes 8 and 14 is much closer to the surface than anticipated, with results of almost 320g/t Ag at only 17.6m from the surface (refer to results for hole 14).

The results from drill hole numbers 7, 11 - 13, 15 and 16 are anticipated to be available in the next fortnight. The Company is encouraged by the results of the drill program with the confirmation and identification of mineralisation structures at the Conjecture Silver Project.

Importantly the results also highlight the high gold, lead and zinc content of the structures.

The credit for these minerals further improves the economics and enhances the potential of the Conjecture Silver Project. Black Mountain CEO John Ryan, commented: "The exciting results from drilling and geophysical work at Conjecture continue to demonstrate the exceptional prospectivity and the potential scale of Conjecture.

Not only have we confirmed the presence of previously known areas of high grade silver mineralisation, thereby strengthening our confidence in the accuracy of previous work but we have also identified very promising new targets within our patented claims.

With this in mind, we look forward to receiving the results from the remaining five holes over the coming weeks, which we already know have encountered mineralisation, in tandem with advancing development as we move towards initial production in H1 2013." [Description: Description: Description: Conjecture Zoom final 21] Diagram 1: Conjecture Drill Program - Plan View 1.

This estimated mineralisation is an Exploration Target only and does not represent JORC Code compliant Mineral Resources.

The potential quantity and grade of the Conjecture Exploration Target is conceptual in nature.

There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. Geophysical Work In preparation for the geophysical work program at the Conjecture Silver Project, further field geological reconnaissance was undertaken with the assistance of Dr Steve Reynolds which identified an area of intense brecciation and silicification accompanied by relic sulphide box works. Having commenced the geophysical program in September 2012, the Company recently completed an initial Induced Polarity ("IP") survey strike line along the Conjecture Shear Zone of approximately 6 kilometres.

The strike identified a number of target anomalies along the zone which will require further test work.

Further desktop modelling and mapping is being undertaken on these results and a program involving cross lines across prospective areas is being developed.

The IP work continues to develop new potential drilling targets and will require geochemical and structural geology work to be done on the new targets for further development. Corporate The Company is also please to advise that Ms Shannon Robinson has been appointed to the Board as an Executive Director, effective immediately.

Shannon is a former corporate lawyer and corporate advisor with significant experience in providing corporate, capital raising, transaction and strategic advice to numerous public companies.

Shannon has been involved with Black Mountain since its incorporation and is also currently a director of Kaboko Mining Limited.
For and on behalf of the Board [cid:image007.png@01CDB1CF.7361FA80] Peter Landau Executive Director Competent Persons Statement The information included in this release that relates to historical mining data and exploration results is based on information compiled by Mr.

Gregory Schifrin, a technical consultant to the Company.

Mr.

Schifrin has worked as a geologist in exploration and mine development for 29 years in precious and base metal exploration and is a professional member (SME Registered Member) of the Society of Mining, Metallurgy and Exploration (SME) #4053449, a Recognized Overseas Professional Organization (ROPO) included in a list promulgated by the ASX from time to time.

Mr.

Schifrin has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Mr.

Schifrin has reviewed this release and consents to the inclusion in the release of the matters based on his information in the form and context in which it appears.
For further information please visit www.blackmountainresources.com.au or contact: Black Mountain Resources Limited Shannon Robinson Executive Director E: T: +61 (8) 9488 5220
Black Mountain Resources Limited Eva Bezruchko Investor Relations E: T: +44 (0) 207 025 7040
Broker (Australia) 708 Capital Matthew Lumb T: +61 (2) 9112 2550
Broker (UK) Xcap Securities Jon Belliss T: +44 (0) 20 32162630
Media (Australia) PPR David Tasker T: +61 (8) 9388 0944
Media (UK) St Brides Media & Finance Limited Elisabeth Cowell T: +44 (0) 20 7236 1177
Nominated Advisor RFC Ambrian Limited Stuart Laing T: +61 (8) 9480 2500
About Black Mountain Resources Limited Black Mountain Resources Limited is a dual listed (ASX | AIM: BMZ) silver and gold focused development company focussed on the advancement of three highly prospective previously operating assets located in two of the worlds most developed and proven silver and gold mining regions of Idaho and Montana, USA. The Company holds a 70% interest in the New Departure Silver Project, the Conjecture Silver Project and the Tabor Gold and Silver Project.

It plans to implement low cost production and development programmes across all three assets, targeting first production from New Departure and Conjecture for Q1 2013.

It is also implementing exploration programmes to capitalise on the exploration upside potential apparent across its portfolio. Black Mountain Resources Limited was incorporated on 29 October 2010 and is listed on the Australian Securities Exchange and Londons AIM Market (BMZ).
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