Annual report on EL 23391, for the year ended 28 August 2006

Abstract

In the Late 1990's, 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. 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. In October 2003 Discovery Nickel Limited (DNL) acquired the Arunta Project from Falconbridge and proceeded to test EM anomalies generated from the GEOTEM surveys. Drilling by DNL in 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. One of these surveys being the Willowra GEOTEM survey covering EL 23391. Interpretation of the survey data identified 7 targets for ground EM follow up. On 30th June 2006 Proto Resources and Investments Ltd signed an agreement with DNL to acquire their Arunta tenements including 23391. Preliminary assessment has revolved around refining Geotem targets for not only Ni Sulphides, but also a range of other commodity styles including Mt Isa styled Ag Pb Zn Cu and Tanami styled Au.