29.10.08 - 09:03 Uhr


Dear Shareholders and Investors,

You will be aware that the world capital and commodity marketshave recently changed for the worse. It is the Company"s view thatsuch times offer both difficulties and opportunities. Managementhas taken prudent steps to reduce its cash outlays whilst stillensuring that adequate exploration progresses on its projects inorder to increase their value and maintain statutory expenditurerequirements to protect them from forfeiture.The underlying demand for commodities, whilst softening in theshort term, will continue to grow and therefore the downturn is anopportunity to acquire good quality projects. Therefore we areincreasing our efforts to evaluate other advanced projects thatcould offer the potential of near term production.The Company intends to gain as much leverage as possible in thisprocess from its relationships with larger companies.Impact will continue to focus on its core commodities of uraniumand nickel, which offer exposure to future energy demands andgrowth in the emerging economies, as well as gold which, inAustralian dollars, continues to perform well. The uranium spotprice is also largely unaffected in Australian dollars; rather it isenhanced.Despite recent events Impact"s shareholders have been verysupportive and much of the decrease in share price has been theresult of small trades and minimal volume. As a result theCompany, which has a good cash balance of $2.17 M and anongoing funding relationship with Impala Platinum Limited, stillremains very leveraged to success either through directexploration or by acquisition.We thank you for your on‐ going support.Please contact us if you require further information.Dr Michael G Jones

Managing DirectorMarket Cap(29 October 2008)A$3,636,000 ($0.05p/s)Issued Capital72,735,002DirectorsPeter UnsworthChairmanMichael JonesManaging DirectorRodney FrippExecutive DirectorMark PittsCompany SecretarytelfaxemailSEPTEMBER 2008 QUARTERLY REPORTSUMMARY

Nickel• Strategic Alliance with Impala Platinum Limited to explore fornickel and platinum group metals in southern Africa. Impala to fundUS$800,000 over a two year period;• Yarrabubba Nickel JV Project (WA, Impact 20%): Major regionalMMI soil geochemistry programme of 4,500 samples completed. Finalassays awaited; and• Junction South Nickel and Gold Project (WA, Impact 40%): GroundEM survey completed. Results awaited.Uranium• Quinns Lake Project (WA, Impact 100%): Election of new stateLiberal‐National Government supportive of uranium mining inWestern Australia. Strategy being formulated to progress theexploration and development of the Nowthanna uranium deposit;• Yarrabubba JV Project (WA, Impact 20%): Major regional MMI soilgeochemistry programme completed. Assays awaited; and• Botswana (Africa, Impact 100%): Three prime targets identified insurface calcrete and lake sediments. Field work and data collation on‐going.Gold• Drummond Basin Projects (QLD): Discussions continuing to JointVenture the projects.Corporate and Business Development• Project Generation and Evaluation work continuing in Australia andAfrica;• Assessment of corporate priorities in progress in view of changedmarket circumstances; and• Good cash position of $2.17 million, plus Impala Alliance income.

1. Alliance with Impala Platinum Limited to Explore for and DevelopNickel‐Platinum Deposits in Southern AfricaDuring the Quarter the company entered into a Strategic Alliance to explore for and developdeposits containing nickel and platinum group metals (PGM"s) with Impala PlatinumLimited, the World"s second largest platinum producer.The Alliance, which recently commenced, will operate for a minimum period of two yearsand Impala Platinum will fund project generation work by Impact up to US$400,000 per yearand in return will have the first right to earn equity in any projects identified.Projects in which Impala Platinum elects to earn an interest will require a minimumexpenditure by Impala of US$1 million before withdrawal, and a further US$1 millionexpenditure to earn 50%. Any projects generated by the Alliance which Impala Platinumdoes not elect to progress with can be retained 100% by Impact.

Impala Platinum has major interests in and operates six platinum mines together with awholly‐owned smelting and refining service near Johannesburg. Annual attributableproduction is more than 1 million ounces of platinum, 0.8 million ounces of other PGM"sincluding palladium, rhodium, ruthenium, iridium and gold, and 7,000 t of nickel with by‐product copper and cobalt.The Impala Platinum ‐ Impact Minerals Nickel‐PGE Alliance will operate in a number ofcountries including Botswana, Madagascar, Malawi, Mozambique, Namibia, and Zambia.The Alliance will be managed by Mr John Blaine who was recently appointed as ChiefOperating Officer for Impact"s exploration and business development in Africa.Mr Blaine was Managing Director of Falconbridge Group Companies in Africa, and has ledteams responsible for important discoveries of gold and diamonds, and projects withpotential for nickel, copper, zinc and platinum group metals. More information about MrBlaine is contained in Impact"s announcement of 17 December 2007.Impala Platinum"s recognition of Impact"s technical skills in both project generation andexploration is a rewarding endorsement of, and a key part of, Impact"s strategy in Africa.2. Quinns Lake (Impact 100%) and Yarrabubba (Impact 20%)Uranium and Nickel Projects, Western AustraliaThe Quinns Lake (E51/1075) and Yarrabubba projects (E51/1072‐1073, E20/563‐567) arelocated 70 km south east of Meekatharra in Western Australia and comprise adjacenttenement holdings with different ownership structures and with common explorationpotential for deposits of calcrete‐hosted uranium oxide and Sudbury‐style World Classnickel‐copper‐PGM deposits. The Nowthanna calcrete‐hosted uranium deposit occurs in partin both the Quinns Lake Project and in the Yarrabubba Project which is in Joint Venture withCITIC Nickel Australia Pty Ltd, part of the CITIC Group (60%), as well as a syndicate ofinvestors (20%).

Impact Minerals owns approximately 40% of the Inferred Resource of uranium oxideresource (JORC 2004) within the Nowthanna deposit. At a cut‐off grade of 0.2 kg/t(200 ppm) uranium oxide Impact"s 40% share of the deposit is about 3.92 Mt at an averagegrade of 0.45 kg/t (450 ppm), for a contained 1,800 t or 4 million pounds of uranium oxide.The Quinns Lake‐Yarrabubba area has most of the geological characteristics of the WorldClass Sudbury nickel mining camp in Canada. An extremely large sub‐circular magnetic lowin regional magnetic data and outcrops with distinctive geological structures are interpretedto be the signature of a structure caused by a major meteorite impact. It is generally acceptedthat such an impact occurred at Sudbury and that this gave rise to the many large nickel‐copper‐PGM deposits in that area.Uranium ExplorationIn the recent state election in Western Australia a new Liberal‐National coalitionGovernment was elected and this has resulted in a positive attitude towards uranium miningalthough legislation regarding the mining and transport of radioactive minerals has yet to beenacted.

Impact welcomes this development for the uranium industry in Western Australia and willnow vigorously pursue the options for the exploration and possible development of theNowthanna uranium deposit near Meekatharra. This is particularly relevant in the light ofthe high grade drill results for uranium oxide announced by the Company earlier this year.Uranium and Nickel Exploration on the Yarrabubba Project (Impact 20%)MMI Soil Geochemistry SurveyPrevious exploration by the YB Joint Venture has identified modest nickel‐in‐soil responsesover one strong magnetic anomaly and over one weak electromagnetic conductor, as well astwo other modest nickel‐in‐soil responses.During the Quarter a major MMI soil sampling programme of about 4,200 samples wascompleted. This covered about 80% of the licence areas of E51/1073 and E20/563 to 567. TheMMI technique permits testing of both the uranium and nickel potential of the ground aswell as other commodity metals that could be present in the large hydrothermal alterationsystem identified in magnetic data and reported previously.Final assays are still pending because of delays at the Laboratory. Results and interpretationof the survey will be completed during the next Quarter.2. Botswana Uranium Project (Impact 100%)The Botswana Uranium Project comprises approximately 21,000 sq km of licences that coverabout 350 km of the strike extensions of rocks that host uranium deposits and prospects nearthe town of Serule, where ACAP Resources Ltd has the Letlhakane uranium projectcontaining three deposits hosted by near surface calcrete and by Karoo Group sedimentaryrocks. ACAP have reported a combined inferred resource of 98 million lbs of U3O8 at anaverage grade of 158 ppm at a cut‐off grade of 100 ppm. The recently released scoping studyfor the project suggests that ACAP will progress the project further.Initial interpretation ofGovernment airborneradiometric data that coversabout three quarters of theProspecting Licences, locatedin eastern Botswana,identified about 20 areaswith elevated surfaceuranium responses andother targets.During the Quarterfieldwork identified 10priority targets, three ofwhch are high priority withwidespread surface uraniumanomalism in calcretes andsandstones.To the north of Serule thefield work has identifiedwidespread modestlyelevated uraniumanomalism in Karoosedimentary rocks and in thesediments of the Sua Pan,supporting the interpretationof the airborne radiometricdata. There is potential herefor deposits similar toMokobaesi and Nowthanna.Impact"s licences are variably prospective for three types of uranium deposits:

• deposits such as at Letlhakane, hosted by Karoo sedimentary rocks and which hosturanium deposits in many places in southern Africa;• uranium hosted by calcrete in palaeochannels, a style of mineralisation well knownin Australia and Namibia. In Botswana the palaeochannels form part of theKalahari Group sediments that are extensive within the Impact licences; and• areas of salt lakes which, in Australia, are known to host uranium deposits,including the Nowthanna deposit near Meekatharra that is 40% owned by Impact.

Data compilation and interpretation work is on‐going with a view to further field workincluding soil geochemistry and trenching in the next Quarter.On 19 August shareholders approved the purchase of the 15% of the Botswana project it didnot own for a consideration of 2 million ordinary shares, to be voluntarily held in escrow for12 months, to be granted to Mr Blaine.3. Junction South Nickel and Gold Project, Western Australia(M15/655‐656 and E15/148; Impact 40%)The Junction South Project is located 45 km south east of the major gold and nickel miningcamp of Kambalda in Western Australia. The tenements (M15/655‐656, E15/148) have been inJoint Venture with and managed by Liontown Resources Limited to explore for nickel andgold. During the Quarter Liontown sold it"s 60% interest in the Junction South Project toPanoramic Resources Limited (formerly Sally Malay Mining Ltd).The ultramafic rocks in the Project Area are interpreted to be structural repetitions of therock units that host the nickel deposits at the nearby Schmitz and Lanfranchi Mines (ownedby Panoramic Resources Ltd and Brilliant Mines Ltd) about 15 km to the north west and arealong strike from the nickel resource discovered at Stockwell recently announced by MincorLimited.Towards the end of the Quarter a ground EM survey covering about 10 sq km wascompleted in the northern part of the project area to test ultramafic rocks adjacent to a majorstructure about 5 km north of the significant off‐hole conductor identified in drillingcompleted earlier this year.The results of the survey are awaited and will be reported in the next Quarter.4. Gold Exploration in Queensland (Impact 100%)Impact owns 100% of eight exploration licences in the Drummond Basin called DrummondEast (EPMs 14927‐929), Drummond West (EPMs 14932‐934) and Clermont (EPMs 14116‐117).The Drummond Basin is one of Australia"s most prospective areas for large and World Classepithermal vein and stockwork style gold deposits and for bulk‐tonnage disseminated goldand gold‐copper deposits. It contains the 4 million ounce Vera‐Nancy‐Pajingo mining centreand dormant mines at Twin Hills, Yandan, Mt. Coolon and Wirralie.Zamia Resources Ltd continues to report significant results from the Anthony porphyry‐hosted molybdenum deposit located about 50 km south of and along strike from theDrummond West Project. This discovery is the first of such a mineralisation style in theDrummond Basin and is a significant development in that it supports Impact"s long‐standingview that that the Drummond Basin is very prospective for mineralised porphyry systems.Major target generation exercises have been completed over the project areas. All previousexploration results were considered, together with conceptual models for epithermal goldand porphyry‐style copper‐gold‐molybdenum mineralisation.More than 60 targets have been identified, of which 18 are ranked as high priority and 25 arefor porphyry systems.Discussions with a number of parties, with a view to a Joint Venture on the projects, are inprogress.5. Corporate and Business DevelopmentThe company has increased its efforts in evaluating numerous advanced projects prospectivefor its core commodity group of nickel, uranium and gold.Dr Michael G JonesManaging DirectorThe review of exploration activities and results contained in this report is based on informationcompiled by Dr Mike Jones, a Member of the Australian Institute of Geoscientists. He is a director ofthe company and a full time employee of Impact Minerals Limited. He has sufficient experience whichis relevant to the style of mineralisation and types of deposits under consideration and to the activitywhich he is undertaking to qualify as a Competent Person as defined in the December 2004 edition ofthe Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves (theJORC Code). Mike Jones has consented to the inclusion in the report of the matters based on hisinformation in the form and context in which it appears.Appendix 5BMining exploration entity quarterly report+ See chapter 19 for defined terms.30/9/2001 Appendix 5B Page 1Rule 5.3Appendix 5BMining exploration entity quarterly reportIntroduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.Name of entityIMPACT MINERALS LIMITEDABN Quarter ended ("current quarter")52 119 062 261 30 SEPT 2008Consolidated statement of cash flowsCash flows related to operating activitiesCurrent quarter$A"000Year to date(3 months)$A"0001.1 Receipts from product sales and related debtors- -1.2 Payments for (a) exploration andevaluation(b) development(c) production(d) administration(233)--(140)(233)--(140)1.3 Dividends received - -1.4 Interest and other items of a similar naturereceived 10 101.5 Interest and other costs of finance paid - -1.6 Income taxes paid - -1.7 Other (provide details if material) - -Net Operating Cash Flows (363) (363)Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects(b) equityinvestments(c) other fixedassets(d) environmentalbonds----------1.9 Proceeds from sale of: (a) prospects(b) equityinvestments(c) other fixedassets------1.10 Loans to other entities - -1.11 Loans repaid from other entities - -1.12 Other (provide details if material) - -Net investing cash flows - -Appendix 5BMining exploration entity quarterly report+ See chapter 19 for defined terms.Appendix 5B Page 2 30/9/20011.13 Total operating and investing cash flows(brought forward) (363) (363)Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc. - -1.15 Proceeds from sale of forfeited shares - -1.16 Proceeds from borrowings - -1.17 Repayment of borrowings (2) (2)1.18 Dividends paid - -1.19 Other - Share Issue costs (5) (5)Net financing cash flows (7) (7)Net increase (decrease) in cash held(370) (370)1.20 Cash at beginning of quarter/year to date 2,537 2,5371.21 Exchange rate adjustments to item 1.20 - -1.22 Cash at end of quarter 2,167 2,167Payments to directors of the entity and associates of the directorsPayments to related entities of the entity and associates of the related entitiesCurrent quarter$A"0001.23Aggregate amount of payments to the parties included in item 1.2941.24Aggregate amount of loans to the parties included in item 1.10-1.25Explanation necessary for an understanding of the transactionsNon-cash financing and investing activities2.1 Details of financing and investing transactions which have had a material effect on consolidatedassets and liabilities but did not involve cash flows2.2 Details of outlays made by other entities to establish or increase their share in projects in which thereporting entity has an interestNILAppendix 5BMining exploration entity quarterly report+ See chapter 19 for defined terms.30/9/2001 Appendix 5B Page 3Financing facilities availableAdd notes as necessary for an understanding of the position.Amount available$A"000Amount used$A"0003.1 Loan facilitiesN/A3.2 Credit standby arrangementsN/AEstimated cash outflows for next quarter$A"0004.1 Exploration and evaluation2504.2 Development-Total250Reconciliation of cashReconciliation of cash at the end of the quarter (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows.Current quarter$A"000Previous quarter$A"0005.1 Cash on hand and at bank 84 275.2 Deposits at call 100 1,5155.3 Bank overdraft - -5.4 Other (Commercial Bills) 1,983 995Total: cash at end of quarter (item 1.22)2,1682,537Changes in interests in mining tenementsTenementreferenceNature of interest(note (2))Interest atbeginning ofquarterInterest atend ofquarter6.1 Interests in miningtenements relinquished,reduced or lapsedNIL6.2 Interests in miningtenements acquired orincreasedNILAppendix 5BMining exploration entity quarterly report+ See chapter 19 for defined terms.Appendix 5B Page 4 30/9/2001Issued and quoted securities at end of current quarterDescription includes rate of interest and any redemption or conversion rights together with prices and dates.Total number Number quoted Issue price persecurity (see note3) (cents)Amount paid up persecurity (see note 3)(cents)7.1 Preference+securities(description)7.2 Changes duringquarter(a) Increasesthrough issues(b) Decreasesthrough returns ofcapital, buy-backs,redemptions7.3 +Ordinarysecurities74,735,002 51,562,5027.4 Changes duringquarter(a) Increasesthrough issues(b) Decreasesthrough returns ofcapital, buy-backs2,000,000-2,000,000-NILNIL7.5 +Convertible debtsecurities(description)NIL7.6 Changes duringquarter(a) Increasesthrough issues(b) Decreasesthrough securitiesmatured, converted7.7 Options (Issuedto Employees andContractors)200,0001,000,0003,100,000150,0001,000,0002,600,000------25 cents20 cents25 cents15 cents25 cents30 cents31/12/201031/07/201131/07/201131/07/201231/07/201231/07/20127.8 Issued duringquarter1,000,0003,100,000150,0001,000,0002,600,000-----20 cents25 cents15 cents25 cents30 cents31/07/201131/07/201131/07/201231/07/201231/07/20127.9 Exercised duringquarter7.10 Expired duringquarter7.11 Debentures(totals only)NIL7.12 Unsecured notes(totals only)NILAppendix 5BMining exploration entity quarterly report+ See chapter 19 for defined terms.Compliance statement1 This statement has been prepared under accounting policies which comply withaccounting standards as defined in the Corporations Act or other standards acceptableto ASX (see note 4).2 This statement does give a true and fair view of the matters disclosed.29 October 2008Sign here: ............................................................ Date: ............................(Company secretary)Mark PittsPrint name: .........................................Notes1 The quarterly report provides a basis for informing the market how the entity"sactivities 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 noteor notes attached to this report.2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests inmining tenements acquired, exercised or lapsed during the reporting period. If theentity is involved in a joint venture agreement and there are conditions precedentwhich will change its percentage interest in a mining tenement, it should disclose thechange of percentage interest and conditions precedent in the list required for items6.1 and 6.2.3 Issued and quoted securities The issue price and amount paid up is not required initems 7.1 and 7.3 for fully paid securities.4 The definitions in, and provisions of, AASB 1022: Accounting for ExtractiveIndustries and AASB 1026: Statement of Cash Flows apply to this report.5 Accounting Standards ASX will accept, for example, the use of InternationalAccounting 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.== == == == ==30/9/2001 Appendix 5B Page 5


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