Annual report for EL 25422, EL 25423, EL 25728 for the period 7 March 2008 to 6 March 2009

Abstract

The Victoria River Project area is located in the Northern Territory of Australia and situated about 450 kilometres south of Darwin. The project covers 10,009 square kilometres and is made up of 15 exploration licences, three of which have been granted and the remainder are under application. Two of the granted ELs 25422 and 25423 form the basis of this report however compilation work was completed over the whole project area including EL 25728. Half the project area is within the Gregory National Park, which is in the process of being converted to Aboriginal Freehold Land. Vehicle access to the project area is via the Victoria, Buchanan and Buntine Highways, thence station tracks. The Proterozoic Victoria River Basin (VRB) consists of a 3.5km thick stratigraphic sequence of sandstone, shale and dolomitic sediments, covering an area of 160,000sq kms, overlying the Birrindudu Basin and has the potential for sedimentary hosted zinc dominated base metal deposits similar in style to the giant McArthur River, Cannington and Century deposits. The Bullita stratigraphic succession is considered to have potential to host stratiform sedimentary, Mississippi and Irish lead-zinc styles of mineralisation. These deposits are associated with the fine grained clastic rocks (black shales) of a sedimentary package, which contains substantial dolomites and limestones, and are located near major regional structures with a halo of lead anomalism. The target size is in the order of 50-100 million tonnes at 10% combined Pb/Zn Age dating within these sequences suggest dates from 1,645my (Limbunya Group) to 1,610 - 1,570my (Bullita Group), which is within the age range of all major Australian Sedex zinc deposits. Throughout the Victoria River Basin the stratigraphy is generally flat lying or shallow dipping. However, there are a number of localised domal features adjacent to prominent faults or lineaments. Previous base metal explorers include BHP, CRA, Rio Tinto, Anaconda, plus junior companies and diamond exploration has been undertaken by Stockdale, BHP and Ashton. These exploration programs for base metals include stream sediment sampling, Geotem and aeromagnetic surveys. Limited stratigraphic diamond drilling has been undertaken by BMR, NTGS and various exploration companies. A total of about 10 stratigraphic holes have been drilled. AAR has reprocessed geochemical data and Geotem, gravity, aeromagnetics and landsat images for the whole project area. BHP previously flew Geotem over about 20 percent of the VRB project area but conducted no significant ground follow up. This data has been reviewed by Southern Geoscience geophysical consultants identifying 17 prospective Geotem conductors within the two AAR tenements forming the basis of this report. A significant late-time channel EM conductor is located at the triple point intersection of major lineaments in an area dominated by transported cover. The remaining anomalies are equally divided between those located adjacent to major lineaments and those distal to major lineaments probably associated with particular stratigraphic units. In addition, interpretation of the Geotem images has identified major structures not previously recognized and this includes a 5km wide by 50km long corridor of structural complexity, along which major domal structures have been developed. This structural corridor is intersected and offset by major cross faults. Digital capture of open file geochemical data by AAR of six 1:250,000 sheets has resulted in a VRB database consisting of 23,734 stream sediment samples, 375 rock chips, 191 soil samples and 78 drill holes for 8,014m of drilling. The majority of this drilling was by Geopeko, outside current AAR tenure, in the vicinity of the Limbunya Fault. There are only five drill holes within the existing AAR tenements that were designed to test the base metal potential. These included a stratigraphic hole by the NTGS and drilling by Australasian Minerals in 1971. Statistical processing of the base metal stream sediment assays generated lead-zinc anomalies within the VRB area. This work highlighted a distinct zinccopper domain along the western and southern margins of the VRB. By contrast lead-copper anomalism dominates the central-eastern portion of the VRB. Areas of strong base metal anomalism are generally associated with the calcareous sediments of the Bullita Group and major structural corridors. During 2007, fieldwork by AAR included stream sediment, soil and rock chip sampling programs. This work has been successful in that the stream sediment samples have confirmed the robustness of previous anomalies identified and highlighted prospective areas of interest in the vicinity of the Victoria River Downs Homestead. The most anomalous stream sediments from the recent program reported 5,700ppm Pb and 130ppm Zn and rock chips reported 3,300ppm Pb from the Skull Ck Formation and 1180ppm Zn from the Bynoe Formation. The high level of surficial geochemical anomalism within the Victoria River Basin may represent a halo to a large base metal mineralizing system. Manganese alteration located on the western side of the AAR tenements may also represent an outer alteration halo to this system. The geochemical anomalism combined with the age of the underlying stratigraphy, unique structural settings adjacent to potential growth faults highlights the potential for a significant buried SedEx deposit within the Victoria River Basin. Based on this model, thirty six litho-structural exploration targets including eight high priority targets were derived from a combination of geological, Geotem, landsat, gravity and magnetic data. It is concluded that the lowest part of the Bullita Group i.e. the Timber Creek Formation is probably the most prospective unit for SedEx deposits. This unit contains abundant fine grained terrestrial sediments, including black shales and does not outcrop on the two granted tenements but underlies the whole granted tenement area. To the south, where the Timber Creek Formation outcrops on ungranted tenements, stream sediment sampling has returned anomalous zinc. In addition the Bynoe Formation located in the upper part of the Bullita Group represents a secondary target. The formation contains abundant siltstones and stream sediments sourced from this unit are anomalous in lead and zinc. The Skull Creek Formation which contains disseminated galena also represents a secondary target. Fine grained terrestrial sediment in the Limbunya Formation may also have potential to host SedEx style mineralisation, but have not been examined in any detail to date.