Relinquishment report on the blocks dropped at the conclusion of year 3 of tenure for EL 23931 'Batten', period ending 2 February 2007

Abstract

EL 23931 'Batten' was granted to Gravity Diamonds Ltd ('Gravity') on 03 February 2004. The EL lies within a general area where Gravity is operating a diamond exploration program, much of which is under an exploration agreement with Rio Tinto group companies and Diamond Mines Australia (DMA), which is a 100%-owned subsidiary of Gravity. During 2003 and 2004, DMA had an exclusive arrangement with BHP Billiton to deploy the Falcon airborne gravity gradiometer system in diamond exploration in Australia. The Falcon system has proved very effective in diamond exploration since its development by BHP Billiton in the late 1990's. During the first year of tenure Falcon data was acquired over the entire area of EL 23931. The system included airborne gravity gradient data, high resolution magnetics and accurate elevation data derived from on-board differential GPS and laser scanner devices. Coverage was obtained over the entire tenement, an area of some 23 km(2). Survey results yielded no priority targets, but it was noted that previous exploration within the area now covered by EL 23931 had reported numerous chromite and attendant microdiamonds within a tributary in the headwaters of Ten Mile Creek. Owing to other field deployment priorities only limited field reconnaissance was conducted during Year 2 of tenure and the tenement scheduled for priority sampling in 2006 (Year 3). At the conclusion of Year 3 the north-western section of EL 23931 comprising three (3) blocks was relinquished from the licence. There was no work carried out on the relinquished blocks during Year 3.