Annual report on exploration activities for EL 5953 'Mount Lean', year five of tenure, 3 August 2004 to 2 August 2005

Abstract

EL 5953 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 is conducting predominantly diamond exploration over the tenements utilising the Falcon airborne gravity gradiometer system to detect kimberlite pipes. Gravity Diamonds Ltd is managing the farmin arrangement for Diamond Mines Australia and owns 100% of DMA. During year 4 of tenure (2003-2004), a portion of the tenement was flown with the Falcon system. The survey covered an area of approximately 75 km(2) (825 line kms) at the southern margin of the tenement with the greater part of the survey being over the neighbouring tenement to the south, which is also included in the farmin agreement between Rio Tinto and DMA. Survey results were processed in early 2004 and the interpretation / target definition activities were completed in late 2004. Field follow up was planned during the latter stages of the 2004 dry season but work and access clearances sought from Traditional Owners through the Northern Land Council were not forthcoming until February 2005. Eight target areas have been identified as warranting field testing and a helicopter-supported sampling and mapping program is scheduled for September 2005.