Exploration licence application 6903 and 6904

Abstract

The geology of the area is obscured by extensive recent soil and lateritic soil cover, which mask much of the underlying geology within the current application area. Interpretation of outcrops suggests that much of the area is underlain by sediments of the McArthur Basin. Previous sampling by CRAE and Stockdale has shown the area to be anomalous in minerals that are peculiar to kimberlitic rocks, together with microdiamonds (less than 0.5 mm in size). The diamond potential of the area has been interpreted from the airborne magnetic data, which indicates possible discrete dipole magnetic anomalies, together with anomaloue minerals. These dipole anomalies are thought to be discrete pipe-like bodies. Whether these pipe-like bodies are kimberlitic (diamond bearing pipes) remains to be established by the exploration programme discussed.Exploration Licences located directly north-east of the Tanami mining centre on the Western Australian side of the border. This exploration work was successfully concluded during the year with negative results and ACM withdrew from the area. During the course of this exploration a close working relationship was established with the local community and assistance was provided in the form of water bores at Ringers Soak and improvement of tracks etc. Late in 1989 ACM completed a drilling program within the Pilbara region of Western Australia. This was conducted successfully and resulted in a water bore being completed within the Mijijimaya community camp, together with upgrading of tracks. Three persons are nominated below who will be involved in the negotiations on behalf of ACM:- Steven Cooper Project Geologist & Wolfgang Marx Supervising Geologist. ACM Exploration Pty Limited has applied for an Exploration Licence as outlined herein for a term of 6 years. It is anticipated that a phased exploration programme over the first 3 years should provide sufficient indication of the prospectivity of the ground to determine if further detailed exploration which might lead to development is warranted during the later part of the licence period. 1st & 2nd Year Proposed Exploration Programme; (a) Initial stream and loam sampling by helicopter will be conducted at previous CRAF sites to confirm the earlier results. This would be based out of Calvert Hills and may not need any camping facilities. Sampling would involve the collection of 30-50 kg stream samples.

(b) Ground magnetic surveys to locate and define the previously surveyed CRAE magnetic anomalies of interest. This phase of exploration activity may involve; local griding (over areas of a few square kilometres) and use of pin flags and a few wooden pickets to identify the ground of interest. Collection of small soil samples of about 1 kilogram from shallow shovel holes 10-15cm deep, from the areas of interest if appropriate. Shallow reverse circulation of air core drilling using a small truck mounted rig. This phase of the exploration programme will require man power of one geologist and two field assistants and possibly occasional site visits by a contract geophysicist and senior ACM supervisory staff. Field vehicles will be required to convey personnel in the field. Access preparation may be required if a decision is made to use a small drilling rig to test the anomalies of interest. This programme is anticipated to be completed over a short interval of approximately 2 to 3 months, following which field parties will withdraw to evaluate the results. Many of the sites of interest have been previously drilled by CRAE. The second year programme will be similar in agenda and manner to that of the first year programme outlined above. As indicated earlier, this first two year phase of the exploration programme should provide sufficient data as to whether further detailed exploration is justified. Following a full review of the data generated, if any additional field work is warranted the proposed work programme will be cleared with the traditional land owners via the Northern Land Council prior to its implementation. Third Year Proposed Exploration Program - At the end of the proposed 2 year programme the following alternative scenarios may eventuate. a) At the end of our proposed programme over two years, if the results from the data generated were negative, ACM would relinquish the tenements. b) In the event of exploration results at the end of year 2 were sufficiently encouraging, ACM would continue with a low key programme during the third year term of the Licences which could be as follows; A deeper percussion/diamond drilling programme could be undertaken to obtain further information on the source of the magnetic anomalies and mineralogy of the kimberlitic body(s) intersected by drilling; This programme might require access preparation for a larger drill rig. A water source would be required to support this drilling programme. No drastic changes to manpower allocation or camp facilities would be anticipated for the above programme. Proposed Exploration after the Third Year - Following the completion of year 3 programme again two scenarios might eventuate; (a) The details of deeper drilling 4.3(b) above might outline the existence of a kimberlite pipe in the tenement, but with no significant potential for diamonds. In this situation ACM would relinquish the tenement. (b) If the results were favourable enough, ACM would retain the lease or apply for a mining lease. A more comprehensive drilling programme and/or bulk sampling programme would follow to evaluate the actual grades/tonnages of any significant (ie potential diamond bearing kimberlite(s) which may have been identified in the course of exploration stages 4.2 and 4.3 outlined above. During the early exploration phase (to end year 3) no specific compensation payments are envisaged, except legitimate compensation claims made by Traditional land owners resulting from disturbance to affected land caused by drilling, access and site preparation. The applicant also understands that a more comprehensive compensation agreement would have to be negotiated prior to the development of a major mining operation. The terms of this compensation, would be dictated by the industry standards already established, for example in the case of the Granites mine area.