Partial relinquishment report for EL 22961, Litchfield Project

Abstract

This relinquishment report summarises all exploration work conducted by Discovery Nickel Ltd (DNL) on relinquished areas of EL 22961, Northern Territory up the period ending 06 December 2005. Through compilation efforts, Falconbridge (Australia) Pty Limited identified the Litchfield/Batchlor area of the Northern Territory as being favourable to host Proterozoic, intrusive related, magmatic Ni-Cu-PGE sulphide mineralization, such as Thompson or Voiseys Bay in Canada. The area has seen little historic work and has not been the focus of dedicated nickel sulphide exploration in recent years. In December 2003, Discovery Nickel Limited acquired 100% interest in EL22961 and other Falconbridge tenements following the successful listing of Discovery Nickel on the Australian Stock Exchange. The tenement area lies in the western parts of the Pine Creek Inlier (Litchfield Province) and is considered to have excellent potential for magmatic Cu-Ni mineralisation related to the Proterozoic Wangi Basics. The Litchfield Province is the continuation of the prospective Halls Creek Province of the Kimberley's, a known significant magmatic Cu-Ni province (e.g. Sally Malay Deposit). Most significant nickel-copper massive sulphide deposits are extremely good conductors. Discovery Nickel's exploration approach relies heavily on airborne electromagnetic (AEM) surveying, followed up by ground EM to define targets. Plus where appropriate DNL conciders regional soil geochemistry an excellent technique to identify areas of mafics for further exploration. Exploration completed to date on relinquished areas of EL 22961 includes: - review and compilation of open file reports, published literature and data; - interpretation of the aeromagnetic, gravity and land-sat data; Unfortunately there is little evidence for Wangi basics in either regional geology or magnetics on the areas of relinquished ground, hence the decision was made to drop these areas. The Core of EL 22961 has been retained for further work during 2006.