6th Annual report for EL 9742, year ending 14 May 2007

Abstract

Previous soil and rock chip sampling gave a gold assay high of 24ppm / tonne. The high gold result was from a single rock chip sample, the location of which unfortunately was not recorded by GPS. Subsequently reconnaissance surveys over the area of approximately 6 sq km using a 50 metre grid on east / west lines, and north / south lines, both on foot and by helicopter failed to find the small hematite outcrop from which the high gold sample came from. A soil sampling programme over a large area also failed to highlight any significant anomalous areas. It is believed that as a result of this one high gold result being contained in hematite indicates the possibility of a rich gold zone of unknown size, therefore the partners wish to continue searching until the source is found again. Both the partners and Flinders Diamonds Ltd have carried out three small soil sampling programmes, specifically seeking diamond indicators. The results on two separate occasions returned in each case one single G9 garnet. The area is considered by the partners to be prospective for diamonds, based on photo anomaly interpretation. An aerial survey on 50m line spacings recorded no anomalous magnetic response. Work carried out during the sixth year consisted of the following: . It was not possible to get a drill rig on site at a suitable time during this years exploration period due to the small nature of our programme, and the heavy work load of all drilling companies across Australia, therefore it was decided to further ground searches to try and locate the 'Lost Gold Prospect'. . Two field trips were carried out, each with a party of three over a gridded area on a 50 metre spacing. The first grid was carried out on east / west lines over an area of 6 square kilometres. The second grid was on a north / south grid over the same 6 square kilometres. Both efforts proved fruitless, part of the problem being the small nature of the ironstone outcrop, and the lack of outcrop in this area which is largely soil and sand covered with areas of dense scrub. . It is still the intention of the group to now move to drilling in the next field season whereby five RAB or RC holes will be drilled along the central axis of the photo anomaly and a further programme of shallow auger drilling will be carried out to try to pinpoint the ironstone gold location. The auger drilling will be carried out on a grid over an area yet to be selected. It is envisaged to progressively auger drill an area of approximately 3 square kilometres. . Area (A) contains a depressed area which possibly could indicate the presence of a pipe structure? This area will be soil sampled, possibly by auger drilling, for diamond indicator minerals.