Partial relinquishment report for EL 24357, for the year ended 30 March 2008

Abstract

The Arunta Province has been explored for gold, uranium, rare earths and base metals by various companies. The province is considered prospective for a number of base metal mineralisation styles from Proterozoic stratabound Cu-Pb-Zn to skarn-related Cu-Au and Pb-Zn-Cu and acid volcanic Cu-Pb-Zn. The province hosts a number of significant base metals deposits including; Jervois 6.1Mt @ 2.1% Cu, Prospect D 3.2Mt @ 0.6% Cu & 0.2% Ni, Oonagalabi 25Mt @ 0.5% Cu & 1% Zn and Home of Bullion 0.13Mt @ 7.1% Cu, 5% Zn & 2% Pb. The area also hosts a number of sub-economic occurrences of gold, tin, tungsten, tantalum, mica, nickel, chromite and semi-precious stones. In terms of the exploration within EL 24357, Discovery acquired the licence as they interpreted the eastern strike extension of those lithologies containing the mineralised B1 target on EL 23392 to be present below the cover. In the time since Proto acquired the Arunta Project from Discovery in late 2006, Proto have reviewed the open file magnetic and geological data to confirm the prospectivity of the central southeastern oriented portion of the licence. No ground work has as yet been completed on the licence. As such, it is recommended that Proto execute a 50% reduction relinquishing those sub-blocks outside of the area of interest.