Relinquishment report for EL 24602 Port Keats for the period ending 9 October 2010

Abstract

EL 24602 is located on the Northern Territory's west coast, approximately 200km southwest from Darwin and is being explored for salt. Previous exploration by various oil companies has defined diapiric structures, interpreted as salt domes. The tenement was granted to Minemakers Australia NL (a wholly owned subsidiary of Minemakers Limited) on 9 October 2006 for a term of 6 years and comprised 45 blocks. The tenement was transferred to Minemakers (Salt) Pty Ltd (Minemakers) on 3 September 2008. The exploration rationale for acquiring this tenement was to drill test a large seismic structure which had previously been interpreted as a salt dome. If this proves to be the case, conventional solution mining technology could enable he company to set up a major salt production facility, exporting to the Asian markets. Whilst the target lies mainly in EL 24602, the tenement is entirely covered by the sea. A key to the evaluation of the prospect and subsequent production, should the structure be proved to contain salt, is access to a land tenement so that saturated brines from solution mining may be evaporated. On 28 July 2009, the traditional owners and the NLC agreed in principle that, subject to the signing of a 'landuse' agreement and Mining Act approvals, Minemakers would be allowed to utilise a piece of land above the high water mark (outside of the boundary of EL 24602) as a temporary land base from which to drill a hole into EL 24602. Authorisation 0519-01 was granted by DRDPIFR on 28 August 2009 under section 35 of the Mining Management Act. During 2010, a review of historic seismic data over the entire tenement suggested a salt diapir located over the eastern part of the tenement and an airborne magnetic survey was completed to target a drill hole to test this possible diapir. Geophysical interpretation suggested a diapir with an apex of approximately 1km(2) and diameter of 2.0 to 2.5km. As a result, Minemakers decided to relinquish 17 blocks over the western part of the tenement and successfully applied for a waiver of 3 blocks so as to retain 24 blocks for Year 5 and aims to drill test the possible diapir in 2011 with a drill hole collared from the shore line just outside the tenement. The NLC has been requested to organise an extension of the MMP to allow the drilling to be completed during the 2011 dry season. Consequently, no work was conducted on the relinquished ground.