Annual and final report for EL 23904 'Borroloola East', reporting period 9 February 2005 to 8 February 2006

Abstract

Exploration License (EL) 23904 is located along the coastal plains of the southwestern Gulf of Carpentaria region of the Northern Territory, near the town of Borroloola. The EL was granted to Conarco Minerals Pty Ltd (Conarco) on 9 February 2004 for a period of six years, in conjunction with adjacent EL 23906. Following granting of the ELs, Conarco invited Core Coal (NT) Pty Ltd and Jandale Holdings Pty Ltd to farm-in to the project, and to manage and undertake an exploration program within the tenements. The area came to the attention Conarco during 2002 based on a driller's report of coal being intersected in a 1992 water bore, located near Manangoora Station, about 60 km east of Borroloola. Subsequent laboratory examination of the original water bore samples obtained by Conarco suggested that the material was coal, although its rank was uncertain. Based largely on geophysical evidence, targets were selected that were interpreted to represent possible local basins that may host coal-bearing sequences within Mesozoic sediments beneath recent cover. During the second year of tenure, the following work was undertaken on behalf of the JV: -Additional open-file data reviews and interpretation of the available open-file data; - Designed and executed a follow-up exploration program to test a selection of targets identified from the data analysis as worthy for drill testing. - Completed site clearance and landholder access procedures in order to undertake and facilitate the drilling program. - Completed a drilling program comprising three RC drillholes totaling 226m. The results of the drilling program confirmed the presence of a grey / black sedimentary horizon in the vicinity of the water bore reported to have intersected coal, and possibly within a local infra-basin as inferred from analysis of regional gravity data. However, analysis of the black sediments indicated they had low total carbon content, and did not represent a coal horizon or target of economic interest. No other targets of potential interest were intersected in the drilling. In summary, an adequate test was carried out for the presence of coal within EL 23904, with no indications that coal has the potential to be found in commercial quantities and qualities. As a consequence of the results of this exploration program, the prospectivity for coal has therefore been downgraded in the area, and EL 23904 was recommended for relinquishment.