Report on blocks relinquished at the conclusion of year 3 period ending 18 August 2006 EL 23771 Mount Young

Abstract

During the first year of tenure, on the basis of encouraging diamond sampling data from nearby tenements, a Falcon(r) airborne gravity gradiometer survey was flown over a substantial part of the Mt Young tenement and also over neighbouring tenements. This included some coverage on the blocks relinquished from EL 23771. Detailed interpretation, anomaly ranking and exploration targeting from the Falcon survey by Gravity Diamonds was completed during 2004. No priority targets were identified within EL 23771 but targets in adjacent EL's currently being explored by Gravity were rated highly and raised the possibility of kimberlite pipes or alluvial diamonds occurring on EL 23771. Gravity Capital Limited changed its name to Gravity Diamonds Limited in October 2004 to reflect its exclusive focus on diamond exploration. During 2005, helicopter-supported heavy mineral sampling was carried out on ELs adjacent to EL 23771 focused on priority Falcon(r) target areas. Field reconnaissance was carried out at this time on EL 23771 but no appropriate sample sites were located. Exploration in the district during 2006 was delayed by an extraordinarily late wet season and field work is currently under way. Owing to limited encouragement during the 2005 season and a prolonged 'wet season' in the early part of 2006, 50% of the tenement area was relinquished in July 2006.