Annual report on exploration activities for EL 23995 'Tanaburs SW' year 1 of tenure, 8 September 2004 to 7 September 2005

Abstract

EL 23995 'Tanaburs SW' was granted to Gravity Diamonds Ltd ('Gravity') on 8 September 2004. The EL lies within a general area where Gravity is operating a large diamond exploration program, much of which is under an exploration agreement with Rio Tinto group companies and Diamond Mines Australia (DMA), which is a 100%-owned subsidiary of Gravity. During 2003 and 2004, DMA had an exclusive arrangement with BHP Billiton to deploy the Falcon airborne gravity gradiometer system in diamond exploration in Australia. The Falcon system has proved very effective in diamond exploration since its development by BHP Billiton in the late 1990's. During the first year of tenure a review of prior work in the region and an appraisal of regional geoscientific data sets was conducted. Falcon survey data was also acquired over tenement areas controlled by Gravity Diamonds to the north east of EL 23995. The Falcon system includes airborne gravity gradient data, high resolution magnetics and accurate elevation data derived from on-board differential GPS and laser scanner devices. Survey results have been processed and the initial interpretation / target definition process is complete. The results indicate a number of target areas in the tenements adjacent to EL 23995 and several of these have been subjected to initial sampling. Field sampling on EL 23995 is planned during the 2006 dry season.