Annual report for EL 22732, year two of tenure, 26th September 2003 to 25th September 2004

Abstract

EL 22732 'Mt Young' was acquired by Gravity Capital Limited from BHP Billiton soon after it was granted, as part of a diamond exploration venture involving Gravity, Gravity's 40% associated company, Diamond Mines Australia Pty Ltd and BHP Billiton. These companies also have a diamond exploration arrangement with Rio Tinto Exploration covering a large number of Rio Tinto-controlled tenements in the Northern Territory. During the first year of tenure, on the basis of encouraging diamond sampling data from nearby tenements, a Falcon(tm) airborne gravity gradiometer survey was flown over a substantial part of the Mt Young tenement. The survey was completed on September 27th, 2003 and acquired a total of 5153 linear kilometres of gravity gradiometer, magnetics, and laser scanner data. Approximately 25% of this survey was contained within EL 22732. Data was processed by BHP Billiton's Falcon Operations Group and delivered to Gravity Capital in November 2003. BHP Billiton's Falcon Operations Group has identified a number of gravity gradient and magnetic anomalies that may indicate the presence of kimberlite pipes. The majority of the anomalies are gravity gradient lows. No coincident magnetic and gravity gradient anomalies have been identified Detailed interpretation, anomaly ranking and exploration targeting from the Falcon(tm) data by Gravity Capital is nearing completion, with several target areas already identified for followup work. Statutory requirements for field access and approvals for work programs are currently being finalised and it is envisaged that testing of these targets will commence during the current field season.