Acquisition of Donegal Resources Pty Ltd

On May 25^th, 2006, Brilliant Mining Corp closed the acquisition of Donegal Resources Pty Ltd, a private Australian company. Donegal held a 25% interest in the Tramways Tenements, host to the producing Lanfranchi Nickel Mine, located in the world-class Kambalda Nickel District in Western Australia.

The terms of the deal are as follows:

• C $5.0 million cash
• 10,500,000 units at $0.80 per unit
  (Unit = 1 share and 1/2 share purchase warrant at  $1.00/share for 2 years)
• C $5.0 million convertible debenture
  (3 yr term with 10% coupon, convertible at $1.00/share in first 2 years, $1.10 in 3rd year)
• C $3.6 million bank debt (Now repaid)
• C $1.0 million in Donegal bank account

Total Consideration  = CDN $21.0 million 

Produced Nickel Versus Payable Nickel

• Delivered Ni = Contained Ni metal delivered to the BHP Concentrator in Kambalda for milling
• Concentrator/Milling Fee = Currently AUD $34.78 (USD ~$27.50) per tonne delivered
• Produced Ni = Contained Ni metal produced before recovery losses and smelter fees
• Recoveries vary between 88 - 92%
• Smelting Fee = Smelter retains 35% of recovered Ni
• Payable Ni = Post milling Ni the Lanfranchi JV actually receives payment for
• Total Ni Delivered x Recovery Rate x (100% - smelter fee) = 100% x (88 - 92%) x 65% = ~58% of delivered Ni payable to the Lanfranchi JV
• Brilliant receives payment for 25% of the Total Payable Ni

Tramways Tenements Ownership Structure