Third annual report for EL 10358 Timber Creek Diamond Project, 22 April 2004 to 23 April 2005

Abstract

During the dry season of 2002 Tawana Resources NL excavated approximately 5000 tonnes of kimberlite and overburden from the Timber Creek 01 Kimberlite (TC01) with the objective to obtain an average grade and price per carat for the diamonds from TC01. This material was screened (first at 40mm with a hydroscreen, and then at 10mm in the DMS trommel) with the minus 10mm material processed through a Dense Media Separation (DMS) plant and the plus 10mm material stockpiled for later crushing and DMS processing. The minus 1mm material was not processed and went straight to the tailings dam. The 1 to 10 mm DMS plant lights were stockpiled. The DMS heavy mineral concentrate was milled to remove the large amount of barite from the concentrate and then processed on grease tables and Ultra-Sort X-ray machines to recover diamonds. A total of 12844 diamonds weighing 660 carats were recovered. In February 2004 the program to crush the stockpiled plus 40mm material with a jaw crusher, and then to process this through a DMS plant commenced. All the DMS trommel oversize (plus 10mm) is to be reduced to minus 8mm with a secondary crusher and re-processed through the DMS plant. All the DMS concentrate is to be milled to reduced the amount of barite and iron oxide in the final concentrate. It had been intended to crush and process the stockpiled plus 10mm material during the dry season of 2003 but due to the lack of sufficient water, and availability of suitable crushers at the time, it was delayed until 2004. The objective of the program is to recover the diamonds from the stockpiled material and add these diamonds to those recovered from the previous processing so that an accurate grade and diamond value for the TC-01 kimberlite can be established. A trailer mounted 60cm jaw crusher and a 36cm Gyratory secondary crusher were transported to site from Perth. It was decided to crush Batches 3, 6 and 7 only as these were considered from the results of the previous work to be the most representative of the kimberlite, and contained the least country rock material. All the crushed material was feed into the DMS plant comprising of a vibrating automatic feed hopper with 6t capacity, this feeds by a variable speed conveyor belt into a combined scrubber and trommel fitted with 1mm bottom cut screen and 10mm upper cut screen. The 1.5 to 10mm is then pumped into the DMS plant fitted with a 6 inch FeSi cyclone and rated up to 5 tonnes per hour under optimum feed conditions. The concentrate from the crushed stockpiles of the bulk sample of TC-01 kimberlite was treated for diamond recovery during the period using the Diatech Method by Diatech Heavy Mineral Services in Perth. This involved further processing including the use of a mini-DMS, then visual examination. Processing recovered a further 4543 diamonds, weighing 179 carats, from 1121 tonnes of kimberlite. This brings the total diamond recovery from the TC-01 kimberlite to 17,387 diamonds weighing 839 carats from 3802 tonnes, representing an overall grade of 22 carats per hundred tonnes ('cpht'). The deepest section of the pipe sampled, which was at 8 meters below surface, returned a grade of 25 cpht. An increase in grade is evident with an increase in depth from surface, adding to the potential of this small pipe. This grade is based on +1.5mm fraction recovered. The actual diamond grade of the kimberltie is much higher due to the high concentration of small (less than 1.5mm) diamonds. The diamonds have been processed to remove surface contaminants and will be valued during the first quarter of 2005. Twenty two soil samples (TB-01 to TB-22) were collected around the Timber Creek kimberlites. Most samples were near Timber Creek 01. All were sent to Australian Laboratory Services in Brisbane for analysis by method code ME-MS63 (Diamond Exploration 25 elements). The elements are Al, Ba, Ca, Ce, Co, Cr, Cs, Fe, Hf, K, La, Mg, Mn, Na, Nb, Ni, P, Rb, Sr, Ti, V, W, Y, Zn, and Zr. All results are provided in the appendices, together with coordinates (in AMG66 datum) for each site. It appears that only samples very close to the kimberlite show any anomalous values. On areas with transported overburden, no anomalous values were detected. This means any soil geochemical survey will need to have close sample spacing, and is best restricted to the hilly areas. In conjunction with the heavy mineral sampling, a number of small samples (TK-01 to TK- 09) for petrology and whole rock geochemistry were also collected. The petrology samples were sent to Sydney for examination by consultant petrologist Dr Jane Barron. The geochemical samples were sent to Australian Laboratory Services (ALS) in Brisbane for all major oxide analysis by ME-ICP06, plus the trace elements Co, V, Zn, Ni, Cr, Sc, Lu, Cs, Hf, Ta, Pb, Cu, Ga, Rb, Sr, Ba, Nb, Ta, Y, Zr, U, Th, La, Ce, Pr, Nd, Sm, Eu, Gd, Tb, Dy, Ho, Er, and Yb by ME-MS81, and Li & Sc by ME-MS61. Note that other samples in the ALS report are not from the Northern Territory. The samples were from various locations, but all were around known kimberlite sites. Sample TK-07 was collected with heavy mineral sample TS04, and TK-08 with sample TS05. TK-09 was from the Timber Creek 01 pit floor center.The diamonds recovered have been cleaned and will be sent to be valued by an Independent Valuer. This will determine the extent of future work on Timber Creek 01 Kimberlite. A detailed ground gravity program will be completed over the pit area to provide both information on the gravity signal of the kimberlite, and to provide a detailed topographic base map on which to plan further work.