Combined annual report for EL 25144, EL 25145 and EL 25213 year ending 24 November 2008

Abstract

The Company has four exploration licences in the Amadeus Basin region of the Northern Territory. Exploration of individual licences is logistically difficult and financially unsound. To this end, the Company has attempted to maximise efficiency by combining the proposed exploration program across all four permits. This inevitably leads to much more primary data being collected as excess costs are kept to a minimum. During the year, no exploration activity was undertaken on the Exploration Licences as the Company continued to wait for a land access agreement from the Central Lands Council. Red Gum Resources (the Company), originally submitted land access agreement drafts in early February 2008. These were identical to a Section 41 application under the ALRA regulations, and therefore far more onerous than a standard Native Title agreement. Despite repeated requests, no draft agreements were received from the Central Lands Council by the end of the permit year. A completed Mine Management Plan (MMP) for exploration was submitted to the NT Government and approved on 21 August 2008. Exploration for base metals within the Amadeus Basin took place over much larger timeframes (1950's onwards), although has been significantly hindered by issues of Native Title and ALRA (Aboriginal Land Rights Act) land. Historically, copper mineralisation has been found on the contact between the Goyder Formation and Pacoota Sandstone, in hydrothermal sandstone hosted deposits, or on faulted contacts that juxtapose younger sandstones against older source & host sediments (frequently shows noted as 'sedimentary Cu'). Exploration has yielded a tantalising small copper orebody in the Waterhouse structure and government drilling resulted in assays of up to 2500ppm Cu at the Ringwood prospect, where visual Malachite, Azurite and Chalcocite can be (reportedly) traced in a green dolomitic unit along a strike length of approximately 8km. In general, there has been very limited exploration for sediment hosted base metal deposits have not been properly explored for in the Amadeus Basin. There are numerous metal shows in workings, generally in the better explored northern, and eastern portions of the basin. The applicable deposit models/exploration concepts are of two main styles - Fault Controlled and Diapir associated.