Field exploration and evaluation activities continued,  with excellent progress being made.

Drilling continues to be used where the ore body is too deep for hand pitting. To date, approximately 300 hectares of mineralisation has been drilled or test pitted on a grid spacing of 25meters x 25 meters to an average thickness of between 15 meters to 20 meters. This would indicate more than 60 million tonnes of laterite nickel mineralisation within a small footprint. This is more than sufficient for an initial direct shipping operation to be followed by value added processing on site. A JORC compliant ore resource estimate is expected to be released before year end.

Project activities are being directed towards those activities which would allow the early development of the project into a Direct Shipping Operation. These activities include detailed topographic surveys together with test pit and drill hole locations, seeking expressions of interest from engineering contractors for the scoping and costing of the infrastructure facilities, initiating the tree inventory count for the project areas likely to be mined, scoping of the marine bathymetric surveys, and preliminary ore body modelling and mine designs. Planning is being undertaken on an initial 1.5 million wet metric tons per year operation.

Metallurgical testing of the ore types is currently being undertaken in conjunction with the testing programme being performed on the Berong ore types. The ore types are expected to show characteristics suitable for acid leaching or the Chinese blast furnace process for producing nickel pig iron.

A Memorandum of Understanding (MOU) has been signed with Macroasia Corporation, a company quoted on the Philippine Stock Exchange on a study on the possible joint development of the Ipilan Nickel Project near Brooke’s Point, Palawan, Philippines. The MOU is non-binding. The study will cover possible collaboration in mine development and on-site value added processing.   The Ipilan Nickel Project covers the Celestial laterite nickel deposit. This deposit extends across the common boundary of the contiguous Mineral Production Sharing Agreement (MPSA) areas held by Toledo and Macroasia. Both Toledo and Macroasia have been drilling and test pitting their respective areas to define the extent of the nickel laterite mineralisation. To the end of June 2007, Toledo has drilled 1579 holes and dug 2883 test pits. Macroasia has drilled 229 holes.   Approximately 300 hectares of mineralisation has been drilled or test pitted on a grid spacing of 25 metres x 25 metres with an average thickness of between 15 metres to 20 metres. This would indicate more than 60 million tonnes of laterite nickel mineralisation within a small footprint. The 60 million tonnes of laterite nickel mineralisation is conceptual in nature and not a JORC compliant resource.  Further testing and evaluation is required to determine the extent of the mineralisation.

A combined resource over the two properties of over 120 million tonnes of mineralisation would be more than sufficient to justify a processing plant suited to the dominantly limonitic ore type.