EL 24253 Neutral Junction Project Partial surrender report 26 March 2010

Abstract

The Neutral Junction Project consists of a single exploration licence; EL 24253, located approximately 280 km north of Alice Springs. In December 2005, the registered titleholder Mithril Resources Limited entered into a joint-venture agreement with Hindmarsh Resources Limited (now Mega Hindmarsh Pty Limited). Mega Hindmarsh managed exploration on this tenement until 2009. In August 2009, Mithril Resources Limited and Mega Hindmarsh Pty Limited then entered into a second joint-venture agreement with Bowgan Minerals Limited. Exploration on EL 24153 is currently managed by Bowgan Minerals Limited. The primary mineralisation model considered was for unconformity-related uranium at the contact between the basement rocks (metasediments of the Hatches Creek Group) and the overlying sedimentary rocks of the Late Proterozoic Georgina basin sequence. Identification of a potential chemical trap, such as a cross cutting dolerite dyke or graphitic unit, was also used as a targeting criterion. An initial review of previous exploration data identified outcroppings of the target stratigraphy, Hatches Creek Group rocks within the tenement area currently being surrendered. The initial data review was followed up with a reconnaissance site visit, which confirmed the presence of steeply inclined metasediments in outcrop comprising part of the Hatches Creek Group. This outcrop identified the possibility that a suitable conductor unit, such as graphitic rock types or dolerite intrusive may occur and was designated as 'Target Area A'. Exploration conducted by Mega Hindmarsh Pty Limited of this area ('Target Area A') during the period 2007-09 failed to confirm the occurrence of target structures and/or lithologies within this part of EL 24253. Apart from an initial review of data and a preliminary reconnaissance visit during August 2006 and the detailed exploration field program conducted subsequently in the immediate area of 'Target Area A', no additional exploration field work has been conducted by Mega Hindmarsh Pty Limited, or Bowgan Minerals Limited on any other portion of EL 24253 surrendered as part of this final reduction completed in March 2010. In September 2007, an initial 50% block reduction was completed by Mega Hindmarsh. On 8 September 2008, a waiver of reduction applied for, and granted. A waiver of reduction was deferred on 21 April 2009, with a partial block reduction being completed by Mega Hindmarsh in May 2009 (granted 19 June 2009). In March 2010, a final block reduction (totalling 73 blocks) was completed by Bowgan Minerals Limited. In summary, the current active tenement area for EL 24253 consists of 67 blocks out of the original 454 blocks that were granted on the 7th April 2005. This report details all exploration work completed within the surrendered portion of EL 24253 by Mega Hindmarsh Pty Limited between September 2007 and March 2010.