Relinquishment report for EL 10430, period ended 9 September 2004

Abstract

EL 10430 forms part of a farmin agreement between Rio Tinto Exploration Pty Ltd ('Rio Tinto') and Diamond Mines Australia Pty Ltd ('DMA') covering numerous Rio Tinto controlled tenements and applications in the Northern Territory. Under this agreement, DMA will conduct predominantly diamond exploration over the tenements utilising the newly-developed Falcon(tm) airborne gravity gradiometer system to detect kimberlite pipes. Gravity Diamonds Ltd (formerly Gravity Capital Limited) is managing the farmin arrangement for Diamond Mines Australia and owns 40% of DMA. During the first year of tenure, a review of historic exploration data, including considerable surface sampling focussed on diamonds, was conducted by Gravity and numerous anomalous results were noted in and around EL 10430. Owing to the timing of the exploration agreement between DMA and Rio Tinto (late July 2003) and prioritisation of field exploration on other tenements in the McArthur River project field based exploration did not extend to EL 10430 during the 2003/04 field season. Field work is planned to commence in late 2005 field season. This report is in respect of the one hundred and sixty-nine (169) blocks relinquished from EL 10430 at the conclusion of Year 2.