Final report on exploration activities for EL 24168, 23 September 2004 to 31 July 2006

Abstract

Exploration Licence 24168 was granted to Ashton Mining Ltd on the 23rd September 2004 for a period of 6 years. The EL application was lodged after the expiry of EL 8134 Kilgour also held by Ashton Mining (expired on 23rd November, 2003). Ashton Mining is now a wholly owned subsidiary of Rio Tinto Exploration Pty Ltd. EL 8134 was subject to a farm-in agreement between Rio Tinto Exploration Pty Ltd and Diamond Mines Australia Pty Ltd ('DMA') covering numerous Rio Tinto tenements and applications in the Northern Territory. Gravity Diamonds Ltd (formerly Gravity Capital Ltd) is managing the farm-in arrangement for Diamond Mines Australia. EL 24168 has been included in the farm-in agreement with DMA. Under the terms of the farm-in agreement, DMA is conducting predominantly diamond exploration by utilising the Falcon(tm) airborne gravity gradiometer system. The Falcon(tm) system has been shown to be effective in detecting kimberlite pipes. The area covered by EL 24168 was considered prospective for commercial sources of diamonds. Historic sampling within the EL had identified kimberlitic indicator mineral occurrences, including diamonds within the tenement. During 2003 Falcon(tm) data was acquired over all of the ground within EL 8134 (now EL 24168). The survey covering EL 8134 extended to other tenements to the south and east, which were also included in the farmin agreement between Rio Tinto and DMA. During the first year of EL 24168, 2 Falcon(tm) anomalies were field inspected and sampled if appropriate. This resulted in the collection of 1 loam sample, which returned a single chromite grain. However, probe data suggested the grain was not kimberlitic. Two Falcon(tm) anomalies remained to be field inspected within EL 24168 as vehicular access was difficult. After disappointing results from exploration activities conducted during 2004 within EL 24168 and adjacent EL 10427, a review of the project tenements was conducted during Year 2 of EL 24168. The review recommended the surrender of the majority of the Lancewood project tenements. EL 24168 was subsequently handed back to Ashton Mining by DMA in June 2006 and Ashton Mining surrendered the licence on 31 July 2006.