Annual report on EL 26904 Tarlton Downs, 9 April 2009 to 8 April 2010

Abstract

The area has had good reconnaissance exploration coverage from the Bureau of Mineral Resources (BMR) and Western Mining Corporation Limited in the mid 1980's. Recent exploration was conducted by Elkedra Diamonds NL (Elkedra) for diamonds and manganese. Elkedra drilled two vertical shallow (50 metres depth each) RC holes (ERC0030-31) to test the manganese outcrop at Loc-44. Drilling failed to intersect any significant manganese mineralisation (>10% Mn). Auvex Resources Limited (Auvex) undertook reconnaissance exploration during the reporting period on EL 26904. The main purpose of this was to assess the previous exploration by Elkedra and to formulate an exploration program to thoroughly assess the prospectivity for manganese. The fieldwork was successful in identifying some manganese and ferro-manganese outcrops as well as some ferruginous chert horizons warranting further investigation. From the period 9 April 2009 to current the following work was completed by Auvex: - Regional geophysics (BMR/NTGS) data review; - Regional geology data review; - Satellite image review; - Interpretation of radiometric and magnetic geophysical images; - Interpretation of geology from satellite images and regional NTGS mapping data; - Interpretation of potential manganese targets such as mangano-ferricrete remnant surfaces and manganese cappings on post-Cambrian palaeo-surfaces; and - Reconnaissance field visit, including helicopter traverse, and collection of 3 outcrop samples (GB030-032). - Auvex has spent $15,330 excluding tenement costs within the reporting period. The scheduled minimum expenditure requirement for EL 26904 is $110,000. Exploration activities completed so far indicate that the investigations carried out on the tenement have: - confirmed the presence of manganese outcrops; - confirmed the potential for good manganese grade and low iron content ofoutcrops on the tenement; and - confirmed the occurrence of extensive manganese layers within a lateritised and weathered oxide profile of probable Palaeozoic age. These appear to be stratigraphic and occur over a large area of the Georgina Basin. Planned future work includes: - Purchase of TM satellite images and preparation of a geological interpretation for the entire tenement; - Further reprocessing and interpretation of the existing aeromagnetics; - determine applicability of the method to manganese exploration; - Field reconnaissance with rock chip sampling of the targets identified from the geological interpretation of TM and aeromagnetics; - Field geological mapping of the outcrops with positive manganese assays from rock chip sampling; and - Electromagnetic (EM) survey potentially over the outcrops with positive manganese assays.