Relinquishment report on blocks relinquished at the end of year 4 of tenure

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 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 which included gravity gradient data, high resolution magnetics and accurate elevation data. Coverage was obtained over the entire tenement, an area of 23 km(2). Reconnaissance mapping within the tenement indicated that historic samples containing indicator minerals reported by Ashton Mining and Rio Tinto were derived from mafic volcanics and of no prospectivity for kimberlites. No sampling has taken place within the relinquished portions of the tenement.