Relinquishment report on blocks of EL 10048 'Scrutton Range' dropped at the end of the second year of tenure, 4 February 2005

Abstract

EL 10048 forms part of a farmin agreement between Rio Tinto Exploration Pty Ltd and Diamond Mines Australia Pty Ltd covering numerous Rio Tinto controlled tenements and applications in the Northern Territory. Gravity Diamonds Ltd is managing the farmin arrangement for Diamond Mines Australia and owns 100% of DMA. Gravity Diamonds conducted extensive field based programmes during the 2004 field season. These work programmes focussed on a number of targets defined by the Falcon(tm) airborne gravity gradiometer surveys, within the Tanaburs area located immediately south of EL 10048. Due to exploration prioritisation on adjacent project areas the planned exploration on EL 10048 during the first and second field seasons was postponed and subsequently unable to proceed due to the onset of an early wet season. No on-ground work was completed in the tenement during year 2. Although EL 10048 was not covered by the Falcon(tm) survey, the results obtained from that survey carried out to the south of this licence downgraded the northern section of EL 10048 and that section was relinquished from EL 10048 at the conclusion of Year 2. This report is in respect of the seventy-three (73) blocks relinquished from EL 10048 at the conclusion of Year 2.