Copper, Zinc, Gold & Silver - Albania

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Message: HIGHLIGHTS - MD & A - filed December 17, 2008

HIGHLIGHTS - MD & A - filed December 17, 2008

posted on Feb 03, 2009 07:39AM

TIREX RESOURCES LTD. ("Tirex" or "the Company") FORM 51-102F1 MANAGEMENT DISCUSSION AND ANALYSIS FOR THE SIX MONTH PERIOD ENDED OCTOBER 31, 2008

The following discussion and analysis, prepared as of December 17, 2008

Performance Summary

The following is a summary of significant events and transactions that occurred during the quarter ended October 31, 2008:

1. Tirex announced that it has arranged a €6 Million Convertible Loan financing with the European Bank for Reconstruction and Development ("EBRD"). The €6 Million (approximately $9 million in Canadian funds) will be advanced to Tirex in three equal tranches as requested by Tirex and will require equal matching equity investments for tranche two and tranche three from the commercial sector, thereby bringing the combined financing to a total of €10 Million (approximately $15 million in Canadian funds). The proceeds of the financing will be used to continue work on the Mirdita Project (see Tirex news release dated October 9, 2008 for details).

2. Tirex announced the first drill assays from the Gurthi South No. 2 Zone on the Mirdita Project in Albania. The drill hole intersected a wide high grade 13.85 metre (45.4 ft) section grading 3.5% Copper and 1.3g/t Gold including 3.65 metres grading 10.6% Copper and 2.9g/t Gold and including 1.10m grading 13.6% Copper and 7.4g/t Gold. The intersections are interpreted to be close to true width (see Tirex news release dated October 23, 2008 for details).

3. Tirex announced the discovery of a large new area of highly prospective territory within the Mirdita Property. The new area was hidden from previous exploration programs by a limestone cap that covers the area. Tirex discovered this new area through the use of modern deep penetrating geophysics, geochemistry and mapping with modern geological concepts. This discovery more than doubles the prospective Volcanogenic Massive Sulphide ("VMS") exploration target area to four Noranda-type VMS exploration trends over an area 11km long by 6 km wide within this key part of the property (see Tirex news release dated August 20, 2008 for details).

4. Tirex announced the start of drilling in the Old Man Mountain Anomaly area on various geophysical and geological drill targets. Three holes have been completed to date. Assays are pending (see Tirex news release dated September 10, 2008 for details).

5. Subsequent to quarter end, Tirex announced the second set of drill assays from the Gurthi South No. 2 Zone on the Mirdita Project. That drill hole, located 50m southwest of the first, intersected a wide high grade 7.10 metre (23.3 ft) section grading 5.9% Copper, 3.4g/t Gold and 37.5g/t Silver including 4.70 metres grading 7.0% Copper, 3.9g/t Gold and 40.8g/t Silver. The intersection is interpreted to be close to true width.

Exploration Summary

Introduction The 344km2 Mirdita Project covers the heart of the traditional Albanian copper mining district. There are 17 known historic deposits on the Tirex property of which nine reported past production of over 10 million tonnes of unspecified copper and gold grades. Other deposits were zinc-rich and were not mined due to lack of zinc processing facilities.

They are all Volcanogenic Massive Sulphide ("VMS") deposits and the principle ones are classified as Noranda-type (Bimodal Mafic) VMS deposits similar to those found in some of the large mining districts in Canada. Tirex work on the Mirdita Project is based on recognition that it has the potential to develop into a major VMS mining district.

In early 2007, the Company began exploration of the property with reconnaissance examination of many of the historically known mineralized zones and flying the first airborne geophysical survey in the history of Albania over the property. The 2,520 km survey produced high quality data and outlined VMS exploration targets by identifying electromagnetic anomalies associated with most of the known VMS deposits, extending these anomalies into covered areas and discovering new anomalies. Details of the results of this work and other technical information can be found in the NI43-101 technical report posted on the Company website at www.TirexResources.com.

The success of this first phase of work led the Company to complete its initial public offering on the TSX Venture Exchange where it began trading with the symbol TXX on October 19, 2007. Since then Tirex has been carrying out an aggressive exploration program. The Company has three drills on the property, one large drill for deep holes and two smaller highly portable and environmentally friendly drills for shorter holes. Drilling has begun to define several high grade deposits in the northern part of the property as well as testing newly developed exploration targets.

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Koshaj Deposit The Koshaj Deposit is located in the northern part of the property. Earlier in 2008, Tirex drilled a grid of nine holes on the Koshaj Deposit over a strike length of 75m with a number of wide high grade intersections. Highlights from this drilling included the following: - Drill hole MR08-01: 0.6% Copper, 9.0% Zinc, 0.3% Lead, 48.4g/t Silver and 2.7g/t Gold over 65.0m (True Width 35m) including 0.8% Copper, 12.5% Zinc, 0.1% Lead, 13.0g/t Silver and 2.2g/t Gold over 27.5m (see Tirex news release dated March 3, 2008 for details). - Drill hole M08-02: 1.1% Copper, 6.7% Zinc, 0.1% Lead, 17.7g/t Silver and 1.6g/t Gold over 60.4m (True Width 25m) including 2.4% Copper, 33.2% Zinc, 1.1% Lead, 172g/t Silver and 8.6 g/t Gold over 3.7m (see Tirex news release dated May 1, 2008 for details). - Drill hole M08-03: 0.5% Copper, 4.4% Zinc, 0.6% Lead, 44.5g/t Silver and 1.7g/t Gold over 12.9m True Width including 2.9% Copper, 14.5% Zinc, 0.8% Lead, 107g/t Silver and 4.2 g/t Gold over 1.7m (see Tirex news release dated May 1, 2008 for details). - Drill hole M08-05: 1.0% Copper, 5.2% Zinc, 11 g/t Silver and 1.7g/t Gold over 16.0m (True Width 13m) including 1.8% Copper, 18.1% Zinc, 41g/t Silver and 4.1g/t Gold over 1.1m (see Tirex news release dated June 11, 2008 for details). Further drilling is planned at Koshaj to infill and expand the zone. Gurthi South Gurthi South is located about 2.5km south of Koshaj. It is an area of multiple zones of mineralization that have not been fully explored in the past.

To date Tirex has begun drill testing two zones in the area, Gurthi South No. 1 and Gurthi South No. 2. Drilling to date on Gurthi South No. 2 has intersected wide zones of high grade mineralization. During the quarter, Tirex announced the first drill assays from the zone. The drill hole intersected a 13.85m (45.4 ft) section grading 3.5% Copper and 1.3g/t Gold including 3.65 metres grading 10.6% Copper and 2.9g/t Gold and including 1.10m grading 13.6% Copper and 7.4g/t Gold. Subsequent to quarter end, Tirex announced the second set of drill assays from the Gurthi South No. 2 Zone. That drill hole, located 50m southwest of the first, intersected a 7.10m (23.3 ft) section grading 5.9% Copper, 3.4g/t Gold and 37.5g/t Silver including 4.70m grading 7.0% Copper, 3.9g/t Gold and 40.8g/t Silver.

The intersections are interpreted to be close to true width. Since then additional holes have been completed in the area. Assays are pending. Four holes drilled in the Gurthi South No. 1 Zone intersected narrow mineralization. The best intersection (DH M08-10) assayed 2.75% copper, 1.27% zinc, 25.7g/t silver and 1.3g/t gold across 0.45m. Other Areas of Drilling During the quarter several other target areas were drill tested.

Three deep holes have been completed on the downdip extension of the Gurthi Central No. 1 Deposit located 1km south of Koshaj. Gurthi Central was the last historical producer in the Mirdita VMS District.

The Gurthi Central mine workings are not currently accessible but recently compiled data indicate that the mining encountered two Noranda-type Volcanogenic Massive Sulphide deposits with significant values in copper, zinc, gold and silver. The Albanian Geological Survey reports that Gurthi Central produced 772,200 tonnes of copper bearing rock of unspecified grade mainly from the Gurthi Central No. 1 Deposit. Assays from the Tirex drill hole are pending (see Tirex news release dated July 9, 2008 for details).

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Tirex announced the start of drilling in the Old Man Mountain Anomaly area on various geophysical and geological drill targets.

Three holes have been completed to date. Assays are pending (see Tirex news release dated September 10, 2008 for details). Subsequent to quarter end, Tirex announced the results from two holes drilled at Shebe North located 18km south of Koshaj. The holes were drilled to test a historic geophysical anomaly.

The first hole intersected a pyrite silica alteration zone with low metal grades. Such alteration zones are known to occur in peripheral areas around copper, zinc and gold mineralization. The second hole intersected 1.1% Copper across 0.75m and 4.0g/t Gold across 1.25m further down the hole. This occurrence of significant gold values in a pyrite silica alteration zone indicates potential for larger zones of gold mineralization associated with similar alteration elsewhere.

Tirex has recently completed geophysics work in the area to better define drill targets. In the course of this work several copper bearing boulders were found which give further weight to the geological potential of the area. Based on these new data, a drill was mobilized back to this area to test the newly developed drill targets and has started drilling (see Tirex news release dated November 6, 2008 for details). Two wildcat holes have been completed on geophysical targets north of Koshaj and east of Gurthi South respectively. Assays are pending. Field Work In addition to the drilling, Tirex has been carrying out extensive field work including ground geophysics, geochemistry and geological mapping by an expert team of Canadian and Albanian technical personnel.

The work is mainly carried out of a modern 40 man field camp located near the Koshaj Deposit. The ground geophysical surveys utilize both state of the art University of Toronto Electromagnetics ("UTEM") and Induced Polarization ("IP") methods. This geophysical work began with successful orientation lines over the known Koshaj Deposit and has been proceeding over a large grid to the north, south and east over areas indicated to have high potential from the 2007 airborne geophysical survey.

Computer inversion and interpretation of the geophysical data is carried out in Canada from which anomalies are selected for drilling. Stream sediment and rock geochemical sampling was carried out over many areas throughout the property.

Anomalies detected indicate potential for additional zones of mineralization in areas not explored before. Geological mapping has been proceeding steadily to better understand the geology and the controls on the mineralization to better focus continuing exploration and drilling.

Computer data compilation of historic technical information is also continuing. During the quarter and as a result of this field work, Tirex announced the discovery of a large new area of highly prospective territory within the Mirdita Property.

The new area was hidden from previous exploration programs by a limestone cap that covers the area. Tirex discovered this new area through the use of modern deep penetrating geophysics, geochemistry and mapping with modern geological concepts. This discovery more than doubles the prospective VMS exploration target area to four Noranda-type VMS exploration trends over an area 11km long by 6 km wide within this key part of the property (see Tirex news release dated August 20, 2008 for details).

Additional technical information including reports, maps and photographs can be found on the Company website at www.TirexResources.com .

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Future Exploration Plans

Plans for future work are balanced between near term exploration on extensions of known zones of mineralization and longer term exploration for new zones. On the near term targets, work will focus on some of the 17 VMS deposits known from past work of which nine are reported to have historically been mined for copper and gold. In the longer term vision, drilling is testing new exploration targets generated by Tirex exploration work and never before mined or drilled.

During the three month period ended October 31, 2008 the Company showed a decrease in working capital as a result of continued significant exploration expenditure.

During the three month period ended July 31, 2008 the Company completed a non-brokered private placement and issued an aggregate of 1,159,610 shares at a price of $2.10 per share and 630,000 shares at $2.125 per share, net of 150000 common shares subsequently returned to treasury and cancelled. Gross proceeds received on the private placement were $3,773,931. Various 6% percent finders’ fees totaling

Liquidity

The Company has financed its operations to date primarily through the issuance of common shares. The Company will continue to seek capital through the issuance of common shares. The Financial Statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company’s continuing operations rely on the ability of the Company to continue to raise capital. The Company does not generate cash from operating activities.

Net cash used for investing activities for the six month period ended October 31, 2008 was $5,917,573. Cash used during the period primarily consists of $5,556,105 spent on mineral properties and $266,755 on equipment acquisition in Albania. During the six month period ended October 31, 2008, the Company completed a $3,773,931 financing (1,159,610 at $2.10 per share and 630,000 at $2.13 per share), completed an unsecured convertible debenture first tranche of $3,064,200, and grossed total $108,210 in warrants and options exercised. Net cash provided by financing activities for the period ended October 31, 2008 was $6,652,878. Except as described herein or in the Company’s interim financial statements at October 31, 2008, the Company had no material financial commitments or no off-balance sheet arrangements.

Capital Resources

The Company had $408,193 cash as of December 17, 2008. The Company will continue to seek capital through public markets by issuing common shares pursuant to private placements.

Outstanding Share Data

As at December 17, 2008, the Company had 37,208,315 common shares issued and outstanding. 40,125,315 Fully diluted, Dec. 17 2008

During the period ended October 31, 2008, the Company paid or accrued management fees to Shoni Bernard of $31,905 (October 31, 2007 - $20,440) an officer of the Company. These transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Subsequent Events

Subsequent to quarter end, Tirex announced the second set of drill assays from the Gurthi South No. 2 Zone on the Mirdita Project in Albania. The drill hole intersected a wide high grade 7.10 metre (23.3 ft) section grading 5.9% Copper, 3.4g/t Gold and 37.5g/t Silver including 4.70 metres grading 7.0% Copper, 3.9g/t Gold and 40.8g/t Silver.

The intersection is interpreted to be close to true width (see Tirex news release dated November 6, 2008 for details). Subsequent to quarter end, Tirex announced the results from two holes drilled at Shebe North located 16km south of Gurthi South No. 2. The holes were drilled to test a historic geophysical anomaly.

The first hole intersected a pyrite silica alteration zone with low metal grades. Such alteration zones are known to occur in peripheral areas around copper, zinc and gold mineralization. The second hole intersected 1.1% Copper across 0.75m and 4.0g/t Gold across 1.25m further down the hole.

This occurrence of significant gold values in a pyrite silica alteration zone indicates potential for larger zones of gold mineralization associated with similar alteration elsewhere.

Tirex has recently completed geophysics work in the area to better define drill targets. In the course of this work several copper bearing boulders were found which give further weight to the geological potential of the area.

Based on these new data, a drill was mobilized back to this area to test the newly developed drill targets (see Tirex news release dated November 6, 2008 for details). Tirex also announced on November 6, 2008 that the first tranche of the financing with the European Bank for Reconstruction and Development (EBRD) closed in accordance with the terms previously described (see above, Performance Summary (3), for details).

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