Annual and relinquishment (surrender) report on EL 26433, year ending 28 April 2010

Abstract

During the year, no exploration activity was undertaken on the Exploration Licences as the Company struggled to stay out of administration during the Global Financial Crisis. The unlisted status of the Company meant that all standard avenues for raising funds for exploration were totally closed off. As recently as 15 November 2009, the Company was faced with the real prospect of a firesale of its assets and or immediate relinquishment of 100% of all tenements held. The board of the Company was able to navigate these treacherous waters and the outlook is now considerably more positive. The Company is now negotiating with various financial groups to raise significant new capital, likely via a listing on the Australian Stock Exchange (ASX). With renewed vigour the Company intends to explore its tenements in 2010 as it will have complete funding available, and recent good co-operation with the CLC has resulted in a land access (draft) agreement presented to Red Gum Resources. As a result, the updated Mine Management Plan (MMP), submitted on 4 November 2009, will able to be undertaken. During the previous year, no exploration was possible due to this major issue. The Company lodged a security payment to the NT Government of $18,000 during the previous permit year, and incurred total costs (excluding rentals), of $5860.46. Delays in moving forward with the IPO have forced some hard decisions and this has resulted in the relinquishment of the entire area of EL 26433. 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.