Final report on exploration activities for EL 9964 'Depot Creek' Victoria River Region, NT

Abstract

EL 9964 forms part of a farmin agreement between Rio Tinto Exploration Pty Ltd ('Rio Tinto') and Diamond Mines Australia Pty Ltd ('DMA') covering numerous Rio Tintocontrolled tenements and applications in the Northern Territory. Under this agreement, DMA will conduct predominantly diamond exploration over the tenements and will utilise the newly-developed Falcon(tm) airborne gravity gradiometer system, which has been shown to be very effective in detecting kimberlite pipes. Gravity Diamonds Ltd (Gravity) is managing the farmin arrangement for Diamond Mines Australia and owns 100% of DMA. During the first year of tenure, Rio Tinto conducted a thorough a review of historic exploration data, including considerable surface sampling focussed on diamonds, and recommended divestment of the tenement. The timing of the divestment arrangement with DMA during year two of tenure precluded the instigation of field exploration activities during 2003. Gravity completed an assessment of the compilation work carried by Rio Tinto and concluded that the area was not of sufficient priority to warrant a Falcon(tm) survey in the initial stages of the DMA-Rio Tinto farmin arrangement. No field work was carried out and the area was reviewed following the results from the Falcon(tm) survey completed some 75 kilometres to the northwest. Gravity handed back the licence to Rio Tinto at the end of September 2004 and the licence was subsequently surrendered on 23 February 2005. There was no further work undertaken by Rio Tinto from the time the licence was handed back at the end of September 2004 and the date of surrender on 23 February 2005.