Financial Results

30.07.2010 4th Quarter Activity Report 2009/2010

The Directors of Carnavale Resources Limited ("Carnavale" or the "Company") are pleased to report the following activities for the June quarter:

Lambouka Oil And Gas Exploration Project (20%)

Drilling operations (Lambouka - 1 well) commenced at the Lambouka prospect on 11 July 2010 and on 27 July 2010 was drilling ahead at 922 metres. The well is planned to be drilled to a target depth of 3,000 metres.

The Lambouka prospect is located in the ADX operated Kerkouane permit offshore Tunisia. The Lambouka–1 drilling location is approximately 160km North East of Tunis in the Sicily channel. Lambouka is a large 70 square kilometre area tilted horst block which contains three potentially hydrocarbon bearing reservoirs. The goal is to drill a safe well to a total depth of 3,000 metres and to fully evaluate the three potential hydrocarbon formation objectives for the well. All three objectives are proven and producing reservoirs in the Sicily Channel and adjacent to the Gulf of Hammamet. The nearest offset well is the Dougga– 1 gas condensate discovery in the Kerkouane permit located approximately 22 km SSW of Lambouka-1.

In the event of a discovery it is predicted that the first and shallowest reservoir (Birsa sandstone) could contain oil, whereas the final and deepest reservoir (Abiod carbonate reservoir) would most likely contain gas condensate, analogous to the nearby Dougga gas condensate discovery.

Lambouka straddles two licences (the Kerkouane Permit in Tunisia and the Pantelleria License in Italy) as well as the border between Tunisia and Italy. The participants in the “Lambouka Prospect Area” which is a limited area defined over the Lambouka prospect within both the Kerkouane and Pantelleria are the same in the subset of both licenses.

Lambouka is one of the largest undrilled prospects in the Mediterranean. By bringing together the Kerkouane and Pantelleria licenses under one operator, ADX has been able for the first time to map the entire structure. This is the likely reason that Lambouka has remained undrilled until now. The prospect was originally mapped on 2D seismic then recently reconfirmed and remapped on a new 3D seismic data set. The new state of the art 3D seismic was acquired in March 2010 and a “fast-track processing cube” was completed on the 2 May 2010. The 3D data set was used to select the final drilling location for the Lambouka-1 well.

ADX has estimated the mean prospective resource for the Lambouka prospect at 270 million barrels oil equivalent (“MMBOE”). While a commercial oil discovery will likely result in an independent oil development, it is likely that a gas condensate discovery would be developed in conjunction with Dougga. Dougga has been independently assessed to contain a mean resource of 177 Bcf of sales gas, 28.4 mmbbls of condensate and 9.4 mmbbls of LPG.

It is estimated that the well will take about 35 days to drill and evaluate and cost approximately US$22 million.

Parmegiana Iron Ore Project, Brazil (100%)

Carnavale had entered into an agreement with Brazilian major Companhia Vale Do Rio Doce (Vale) with regard to the Company’s Parmegiana Iron Ore project in Brazil. Vale had been granted exclusive exploration rights over the Parmegiana property for a period of up to 44 months. In early July 2010, Vale advised that it would not exercise its option to continue with the Parmegiana Iron Ore Project. The Company, upon receipt of all technical data from work completed by Vale, will review results of the exploration work completed to date to determine the way forward for the development of the Parmegiana Iron Ore Project.

Corporate

In May 2010 the Company completed a placement of 10 million shares at 20 cents and 5 million options (CAVO) exercisable at 20 cents per share and expiring 28 February 2013.each to clients of Alto Capital to raise $2 million before costs. Funds raised will be used to contribute to the investment in the Lambouka project.

On successful completion of the placement mentioned above and for the introduction of the Lambouka project, Carnavale issued 5 million options (CAVO) to Cicero Corporate Services (Cicero). Cicero, who have established contacts throughout Australia and Europe will also assist with Investor Relations promotional activity.

The Board is continuing to review new mineral project and corporate opportunities.

The original press release contains further maps and financials which can be downloaded as a pdf below.

For further information in respect of Carnavale please contact:

Ron Gajewski
Director
Tel: +61 8 9240 6876
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Paul Jurman
Company Secretary
Tel: +61 89240 6876
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Carnavale Resources website: http://www.carnavaleresources.com.au/

Dislaimer: This document may contain forward-looking information based on management's expectations, estimates and projections. These statements are not a guarantee of future performance and involve a number of risks, uncertainties and assumptions.

 

The Australian Stock Exchange has neither approved the information contained herein nor accepts responsibility for the adequacy or accuracy of this release.

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