Annual report for EL 10416, for the period 13 June 2009 to 12 June 2010

Abstract

As with the previous year, most of the work undertaken on ELI0416 during the current reporting period was aimed at identifying blocks which were not considered prospective for commercial gemstone deposits.Exploration on this tenement continues to be slower and tougher than anticipated. A fly in/fly out style of travel has been found most suited when accessing this tenement from our bases in eastern and western Austarlia. This has led to worthwhile savings in travel, wage and fuel costs. Overseas markets have deteriorated over the past year due to the Global Financial Crisis. This has affected the markets confidence and flowed through to suppliers of raw materials. Signs of improvement have begun to show in late July 2010. We are now focussed on identifying and positioning potential Mining Leases, so as to direct our limited resources on smaller, more attractive targets. This should give us better value in time and resources. Limited general prospecting work was done on the tenement during the reporting period. 2 people were involved in hand collecting samples for processing and evaluation work at our workshop in Western Australia. This was mainly focussed on the Red Chert, the Amethyst requiring expensive machinery hire to extract in any significant volumes. Cutting and polishing of samples collected has shown the material to take a very high polish with an unusual pattern. Most of the rock is relatively crack free. Several samples of the processed stone were shipped to a large gem show I attended in Tucson, Arizona. There was encouraging feedback but insufficient material to get a 4 reliable indication. Larger quantities of rough and processed material will be sent for the next show in January 2011. Further sampling and marketing will be undertaken in the following reporting period. Successful overseas trial marketing of the various stone types found on the tenement will determine our ongoing involvement in this tenement.