Annual report for EL 9058 Nimue, 16 May 2005 to 15 May 2006

Abstract

In late September 2003, North Australian Diamonds Limted (formerly Striker Resources NL (Striker)) entered into a 'Letter of Intent' with Rio Tinto Exploration Pty Ltd (RTE) with respect to the Merlin Orbit Exploration Tenements, which surround the decommissioned Merlin Diamond Mine in the Batten region of the Northern Territory. The Merlin Orbit properties consist of seven granted tenements, namely EL9058, 9768, 9840, 9893, 10189, 22101 and 24192 totalling approximately 1,800km2. The tenements were held by Ashton Mining Limited (Ashton) (a wholly owned subsidiary of the Rio Tinto Group 'Rio Tinto'). On the 28th June 2004, the tenements, including EL9058, were transferred to Bulgurri Diamonds Pty Ltd (a wholly owned subsidiary of NADL). NADL acquired a 100% interest in the licences. NADL is now the operator of the licences. NADL has agreed with RTE to honour all existing commitments and arrangements that RTE has entered into with respect to the exploration licences. No field-based diamond exploration was conducted during the reporting period between 16th May 2005 and 15th May 2006, for diamond-bearing kimberlite intrusives. The license has now expired and will be surrendered.