Annual report for EL 22515, EL 22516 and EL 22517 for the period ended 12 January 2007

Abstract

The Huckitta Project comprises 11 tenements for 12,241 square km and is situated between 200 and 300 km east of Alice Springs. Exploration is focused on discovery of Iron Oxide Copper Gold (IOCG) mineralisation associated with the Proterozoic basement rocks beneath cover. This annual report documents the work completed on the tenement group comprising EL 22515, 22516 & 22517 for the period January 2006 to January 2007. The project is a joint venture between BHP Billiton and Sumitomo Metal Mining Oceania Pty Ltd, with BHP Billiton managing the exploration work. Work on the project during 2006-2007 included interpretation, modelling and drilling of targets generated by the FALCON- airborne gravity survey on tenement EL 22516. Owing to the lower potential of EL 22515 and EL 22517, work has been limited to geological compilation and interpretation. Prior to this reporting period a Falcon- airborne gravity survey was completed over the tenement area. The Falcon- survey was followed up with ground gravity traverses to improve resolution over prospective targets. These two surveys resulted in a number of magnetic and gravity targets in the region, two of which were deemed suitable for drill testing in this tenement package. During the reporting period two drill holes were completed on EL 22516 (HKD1/1A and HKD2) for a combined total of 432.88 m. HKD2 comprised an upper section drilled using rotary mud through Mesozoic cover sediments, switching to diamond upon refusal at the intersection of fresh Strangways basement. HKD1A (HKD1 failed at 103.34m) was cored from surface to get complete diamond coverage of the whole sequence. Two metre composite samples were collected during the rotary mud phase and 10 m composites of this material were assayed. Diamond core was logged in the field and representative/interesting sections were cut and assayed by ALS laboratories in Perth. In all a total of 24 samples have been analysed using ICP-MS for the following suite of elements Au, Al, Ca, Mg, Mn, Fe, Na, K, Ti, P, Ag, As, Ba, Bi, Cu, Co, Cr, Ni, Mo, Sb, Pb, Zn, REEs, U, Th and F. All holes were drilled vertically hence down hole surveys were not taken. Both holes drilled intersected crystalline basement prior to the modelled depth, as happened in holes drilled in the Jikki River area of the Huckitta project (EL 23997 & 24000). The crystalline basement in both holes has an SG of approximately 2.8 gm/cm3 which is not significantly elevated above crustal average, and certainly not the 3.2 gm/cm3 used to model IOCG deposits. It appears that the source of anomalous mass causing Falcon- anomalies is local highs in basement topography and that poor magnetic contrast between basement and cover contributed to uncertainty in basement depth. To assess this and ensure that given the new geological parameters no further targets had been 'missed' in the Falcon gravity (gDD) data simple VPMG models were created to test the validity of basement topography anomalies.