Annual report for EL 24357, for the year ended 30 March 2007

Abstract

The Arunta Project is located approximately 250km NNW of Alice Springs in the Northern Territory. The North Arunta Province is dominated by a series of sulphidic Palaeoproterozoic sedimentary sequences intruded by granite plutons and mafic sills. Quaternary and Tertiary cover conceals large areas of bedrock in the area however the region has seen exploration for a variety of commodities including gold, base metals, iron ore, uranium and diamonds. Modern exploration in the project area includes a variety of exploration methods dominated by geophysics such as airborne magnetic, radiometric and GEOTEM surveys in conjunction with surface sampling and limited percussion drilling. In terms of the exploration within the project area, Falconbridge completed airborne electromagnetic ('EM') GEOTEM surveys on EL 23392, EL 23393 and EL 23629 then vended the tenements into Discovery Nickel Ltd ('Discovery'). Discovery drill tested two conductive targets identified during the Falconbridge surveys and encountered weakly disseminated sulphides at the B1 prospect in EL 23392. At this point Discovery applied for tenement EL 24357 believed to contain the strike extension of the stratigraphy hosting the B1 sulphide mineralisation. EL 24357 was not granted until March 2005 and in the meantime Discovery flew two further GEOTEM surveys over EL 23395 and EL 23391 which defined a further 16 conductive targets. In the brief time since Proto acquired the Arunta Project from Discovery in October 2006 they have completed an initial review of available data relating to the licence area.