Annual report for EL 23395, year ended 16 November 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, including application ELA23395. Shortly afterwards Falconbridge collected GEOTEM airborne electromagnetic surveys over two adjacent 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 surveys over two newly granted areas in the project area. The JARRA EAST GEOTEM survey covered a large part of EL 23395. Interpretation of the survey data identified 11 targets for ground EM follow up. On 30th June 2006 Proto Resources and Investments Ltd signed an agreement with DNL to acquire their Arunta project including EL 23395. 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, Tanami styled Au, and REE's. During 2007 Proto Resources and investments will begin exploration in the Arunta region with specific focus on the untested EM anomalies generated from the 2004 DNL JARRA EAST GEOTEM survey.