Annual report for EL 23391, for the year ended 28 August 2005

Abstract

Through compilation efforts, Falconbridge (Australia) Pty Limited identified the north-central Arunta as being favourable to host Proterozoic, intrusive related, magmatic Ni-Cu-PGE sulphide mineralisation, such as Voisey's Bay. The area has seen little historic work and has not been the focus of dedicated nickel sulphide exploration in recent years. In October 2003, Discovery Nickel Limited acquired a 100% interest in Falconbridge (Australia) Pty Ltd Arunta tenements through a Heads of Agreement document. Falconbridge had previously identified the north-central Arunta as being favourable to host Proterozoic, intrusive related, magmatic Ni-Cu-PGE sulphide mineralization. The Arunta area has seen little historic work and has not been the focus of dedicated nickel exploration in recent years. After identifying favourable targets through open file review, compilation and interpretation of regional datasets, which including landsat, aeromagnetics and gravity. Falconbridge took a strategic tenement position in the region in 2003 Falconbridge collected GEOTEM airborne electromagnetic surveys over two Arunta tenements. Targets from these surveys were detailed using ground EM in 2004, drilling in late 2004 intersected an interesting sulfide bearing shale with minor Pb Zn and Ag mineralization. In late 2004 Discovery Nickel Ltd commissioned Fugro to collect GEOTEM data over two new areas in the Arunta project area. The Willowra GEOTEM survey covered EL 23391. Interpretation of the survey data has identified 7 targets for ground EM follow up during 2006.