Annual report for EL 10321 January 2009 to December 2009

Abstract

Salisbury Resources Limited entered into an Option and Farm in Joint Venture Agreement with AGL on 14 December 2007. The option expired on 31 December 2009. On 25 February 2009 a proposed two-stage exploration program comprising infill soil sampling and reverse circulation drilling was prepared for EL 10321 and the adjacent EL 10320. Exploration activities during 2009 comprised additional soil and rock chip sampling over three prospect areas, namely Cook, Fisher and Reid. The additional soil sampling provided infill data to the sampling program undertaken in October 2008. Further geological mapping and mapping of topographic features using Garmin GPS instrumentation was undertaken. A Mining Management Plan (MMP) was prepared and lodged with the Department on 6 May 2009. On the 29 May 2009 the Department of Regional Development, Primary Industry, Fisheries and Resources requested additional information. Additional information was submitted on 30 May 2009. Access tracks to the Cook, Fisher and Reid prospects were graded by the owner of Mount Ringwood station, Bruce White. This provided good access to these prospects. Due to the unprecedented Global Financial Crisis and significant downturn in the availability of exploration capital, SBY was unable to list on the ASX and raise sufficient funds to meet the drilling commitment. However, available funds were committed to a limited soil and rock chip sampling program designed to confirm the prospectivity of the Licence. Sampling undertaken by SBY in May 2009 has produced positive results and confirms the preliminary soil and rock chip sampling work carried out by the company in October 2008. Work carried out by Salisbury Resources at the Cook prospect has outlined a zone of gold anomalism over 1000m in strike length and a width of 200m associated with intense quartz veining parallel to an anticlinal axis. The anomaly is open to the north and is probably contiguous with the Fisher prospect. Gold in soil values on the northern most line range from 0.04ppm - 0.23ppm and are considered highly anomalous. The anomalous gold corresponds to highly anomalous arsenic values ranging from 98ppm - 330ppm and averaging 195ppm in samples 128312 - 128320. At the Fisher prospect gold anomalism associated with highly anomalous arsenic occurs over a strike length of 500m over the nose of a fold structure and multiple quartz veining. This prospect is open to the north and south and is thought to be contiguous with the Cook and Reid prospects. At the Reid prospect a siliceous gossan outcrops over a strike length of 250m and averages 10m in width. Surface sampling in October 2008 produced results averaging 1.44g/t Au, 22,154 ppm Pb, 1.6 g/t Ag and 42,494 ppm As. The peak lead value was 65,835 ppm (6.6%) and the peak arsenic value was 76,274 ppm (7.6%). Soil sampling undertaken in May 2009 has extended the anomaly by 200m and now covers a strike length of 600m x 100m. The southernmost line produced highly anomalous gold, lead and arsenic values and moderately anomalous copper and zinc values. The anomaly is open to the south. The northern soil line at the Reid prospect while low in gold was highly anomalous in arsenic. Exploration of EL 10321 is in the early (grass roots) stage on all prospects, although some earlier drilling by Agricola Gold Limited returned significant grades. The soil sampling undertaken by Salisbury Resources has confirmed the prospectivity and size potential of the gold mineralisation and reverse circulation drilling is considered the next stage of exploration.