Black Fire to acquire iron ore deposits in Nigeria

May 28, 2008

May 28 (Mineweb) – Transaction Highlights:

· Black Fire Energy to acquire advanced package of iron deposits in Kogi State, Nigeria.

· Package contains six projects containing magnetite style mineralisation. Potential for hematite mineralisation also exists.

· The Company’s exploration target is 400-600 million tonnes of potential iron mineralisation grading between 15-65% averaging 30-36%. The potential quantity and grade is conceptual in nature. There has been insufficient exploration to define a Mineral Resource under the JORC Code and it is uncertain if further exploration will result in the determination of a Mineral Resource.

· Potential access to existing beneficiation facilities at Itakpe as well as transportation via an existing railway to Warri Terminus, 24km from the port.

· Project proximity to existing rail, road and power infrastructure to limit CAPEX requirements and fast track project development.

· Availability of substantial historical geological data generated by the Geological Survey of Nigeria and National Steel Raw Materials Exploration Agency (NSRMEA).

· Alliance with the Sovereign Ruler of Ebira Kingdom, Kogi State, Nigeria, HM King Dr Ado Ibrahim, provides access to further mineral opportunities within Kogi State.

· Favourable political and regulatory environment for foreign investment. New Minerals and Mining Act introduced in February 2007.

· Development of limestone and dolomite resources as feedstock to the Ajaokuta Steel complex and extension as feedstock to existing cement production.

The Directors of Black Fire Energy Ltd (Black Fire Energy) (ASX:BFE, BFEO) are pleased to announce that they have entered into a conditional Heads of Agreement to acquire a 100% interest in AICO Ado Ibrahim Mining Company Ltd (AICO). AICO is the beneficial owner of a package of exploration and mining licences in Kogi State, Nigeria as follows:

Project Name Commodity Licence Details

Ebiya 1 & 2 Iron Ore EL 786 & 787 (granted)

Ajabanoko Iron Ore EL 764 (granted)

Chocochoco Iron Ore ELA 3683 & 3684 (pending)

Agbaja Iron Ore ELA 5360 (pending)

KotonKarfi Iron Ore ELA 5358 (pending)

Basse Nge Iron Ore ELA 5359 (pending)

Oguda Marble ML 788 & 2541 (granted)

Osara Dolomite/Feldspar ML 725 & 727 (granted)

On completion, Black Fire Energy will have an exclusive Alliance Deed with the Sovereign Ruler of Ebira Kingdom, Kogi State, HM King Dr Ado Ibrahim, to securitise mineral exploration opportunities in Kogi State and through this transaction he will become a major shareholder of Black Fire Energy.

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