Relinquishment (annual and final surrender) report for ML 23292, 12 February 2009

Abstract

During the past twenty two years the Huandot Magnesite deposit at Batchelor has been the subject of intermittent exploration activities designed to define a suitable source of ore firstly for refractory grade magnesite and later for the production of magnesium metal. Magnesium Developments Limited (MDL) formerly a wholly owned subsidiary of Pima Mining Limited, now MIL Resources Limited, acquired Retention Lease (ERL) 128 and Mineral Claims MCN 4493 and 4494 from Normandy Industrial Minerals Limited (NIML) in 2001. MDL subsequently applied for Mineral Lease 23292 over the Mineral Claims and portion of ERL 128 in late 2002. SAMAG Ltd a wholly owned subsidiary of MIL Resources Ltd was at that time investigating the development of a magnesium metal production facility using the Dow patented process, at Port Pirie, South Australia, based on magnesite deposits at Leigh Creek in South Australia. The opportunity to establish the processing facility in the Northern Territory based on the high-grade and impurity free magnesite at Huandot was investigated as an alternative to Port Pirie. Mineral Lease 23292 was relinquished by MDL on 14 November 2008. The are has plantation timber planted on it. During the tenure of Mineral Lease 23292 Magnesium Developments Limited did not undertake any field exploration or mining activities. All geological mapping, rock chip sampling, drilling activities and trial mining was undertaken on ERL 128 previously held by NIML (formerly Commercial Minerals Limited). A JORC compliant mineral resource has been identified by NIML (Powell 1997) in the vicinity of the test pit using computerised block modeling and a specific gravity of 2.95. The identified resource is within 50m of the surface and is categorised as 67% inferred, 24% indicated and 9% measured. The resource outlined is 4.6 M tonnes @ 43.4% MgO, 26.17% Mg, 0.47% Ca, 0.51% Fe, 0.14% Al, 0.05% Si and 5.9% insolubles.