Annual Report for Exploration Licences 23904 and 23906 'Borroloola East' and 'Borroloola West' reporting period 9th February 2004 to 8th February 2005

Abstract

Exploration Licenses (ELs) 23904 and 23906 are located along the coastal plains of the southwestern Gulf of Carpentaria region of the Northern Territory, near the town of Borroloola. The ELs were granted to Conarco Minerals Pty Ltd (Conarco) on 9 February 2004 for a period of six years. The area came to the attention Conarco during 2002 while carrying out research for onshore petroleum in the area. The research discovered a driller's report of coal being intersected in a 1992 water bore, located near Manangoora Station, about 60 km east of Borroloola. Subsequent laboratory examination of the original water bore samples obtained by Conarco suggested that the material was coal, although its rank was uncertain. Follow up research by Conarco suggested that there was some historical evidence for the existence of coal in infra-basins within Mesozoic sediments overlying the Proterozoic basement rocks that constitute the McArthur Basin, and that exploration for coal had been carried out in the district nearly a century ago. However, no other direct evidence of the existence of coal in the area is known. Following granting of the ELs, Conarco subsequently invited Core Coal (NT) Pty Ltd (Core) and Jandale Holdings Pty Ltd (Jandale) to farm-in to the project, and to manage and undertake an exploration program within the tenements. Core was appointed as operator on behalf of the JV. During the first year of tenure, Core undertook the following work on behalf of the JV: Regional geology and open-file data reviews; Re-processing and interpretation of the available geophysical survey data; Analysis of other relevant open-file data and integration of the results with the geophysics; Recommended and designed a follow-up exploration program to test the targets identified from the initial data analysis as worthy for drill testing. Commenced site clearance procedures in order to undertake the proposed drilling program during the second year of tenure. Re-processing of the gravity data in the area confirms the presence of gravity lows in the vicinity of the water bore reported to have intersected coal. These features are interpreted to be the expression of a coal measure sequence within a local infra-basin. An exploration program primarily involving drill testing of the defined gravity features has been designed in order to assess the coal potential of the area. This work is planned for implementation during the second year of tenure.