Relinquishment report on blocks dropped at the conclusion of year six of tenure for EL 8915 Tee Dee Hill, period ended 6 June 2006

Abstract

EL 8915 forms part of a farmin agreement between Rio Tinto Exploration Pty Ltd (Rio Tinto) and Diamond Mines Australia Pty Ltd (DMA) covering numerous Rio Tintocontrolled tenements and applications in the Northern Territory. Under this agreement, DMA is conducting predominantly diamond exploration over the tenements utilising the newlydeveloped Falcon airborne gravity gradiometer system, which has been shown to be very effective in detecting kimberlite pipes. Gravity Diamonds Ltd (Gravity) is managing the farmin arrangement for Diamond Mines Australia and owns 100% of DMA. During the initial stages of the farmin arrangement, a review of historic exploration data, including considerable surface sampling focussed on diamonds, was conducted by Gravity with a number of anomalous results noted. On this basis, a Falcon survey was planned to cover the central part of EL 8915. Flying was conducted in November-December 2003 and results were received by Gravity in May 2004. Interpretation and exploration targeting were completed during 2004 and proposed field programmes were submitted to the Northern Land Council to obtain Traditional Owner approval. The NLC was not able to process Gravity's field programme proposal in 2004, but approval to proceed was received in early 2005 and field testing of kimberlite targets was scheduled for August-September 2005. During the sixth year of tenure, 16 Falcon anomalies from the TeeDee Falcon survey were assessed within EL 8915 and sampled where appropriate. A total of 6 heavy mineral samples, comprising 4 gravel samples and 2 loam samples were collected. The kimberlite potential of the majority of anomalies inspected was considered to be low, primarily due to the presence of extensive outcropping Proterozoic sandstone over these anomalies. None of the samples collected were from the area relinquished.