Relinquishment Report for EL 25422 and EL 25423

Abstract

The Victoria River Project area is located in the Northern Territory of Australia and situated about 450 kilometres south of Darwin. The project covers 7,255 square kilometres and is made up of 13 exploration licences, 4 of which have been granted and the remainder are under application. This report refers to work conducted on relinquished areas of the ELs 25422 and 25423. Vehicle access to the project area is via the Victoria, Buchanan and Buntine Highways, thence station tracks. The Proterozoic Victoria River Basin consists of a 3.5km thick stratigraphic sequence of sandstone, shale and dolomitic sediments, covering an area of 160,000sq kms, overlying the Birrindudu Basin and has the potential for sedimentary hosted zinc dominated base metal deposits similar in style to the giant McArthur River, Cannington and Century deposits. The Bullita stratigraphic succession is considered to have potential to host stratiform sedimentary, Mississippi and Irish lead-zinc styles of mineralisation. These deposits are associated with the fine grained clastic rocks (black shales) of a sedimentary package, which contains substantial dolomites and limestones, and are located near major regional structures with a halo of lead anomalism. The target size is in the order of 50-100 million tonnes at 10% combined Pb/Zn Age dating within these sequences suggest dates from 1,645my (Limbunya Group) to 1,610 - 1,570my (Bullita Group), which is within the age range of all major Australian Sedex zinc deposits. Throughout the Victoria River Basin the stratigraphy is generally flat lying or shallow dipping. However, there are a number of localised domal features adjacent to prominent faults or lineaments. Previous base metal explorers include BHP, CRA, Rio Tinto, Anaconda, plus junior companies and diamond exploration has been undertaken by Stockdale, BHP and Ashton. These exploration programs for base metals include stream sediment sampling, Geotem and aeromagnetic surveys. Limited stratigraphic diamond drilling has been undertaken by BMR, NTGS and various exploration companies. A total of about 10 stratigraphic holes have been drilled. AAR has reprocessed geochemical data and Geotem, gravity, aeromagnetics and landsat images for the whole project area. BHP previously flew Geotem over about 20 percent of the VRB project area but conducted no significant ground follow up. This data has been reviewed by Southern Geoscience geophysical consultants identifying 17 prospective Geotem conductors within the two AAR tenements forming the basis of this report. Digital capture of open file geochemical data by AAR of six 1:250,000 sheets has resulted in a VRB database consisting of 23,734 stream sediment samples, 375 rock chips, 191 soil samples and 78 drill holes for 8,014m of drilling. The majority of this drilling was by Geopeko, outside current AAR tenure, in the vicinity of the Limbunya Fault. There are only five drill holes within the existing AAR tenements that were designed to test the base metal potential. These included a stratigraphic hole by the NTGS and drilling by Australasian Minerals in 1971. During 2007, fieldwork by AAR included stream sediment, soil and rock chip sampling programs. This work has been successful in that the stream sediment samples have confirmed the robustness of previous anomalies identified and highlighted prospective areas of interest in the vicinity of the Victoria River Downs Homestead. The high level of surficial geochemical anomalism within the Victoria River Basin may represent a halo to a large base metal mineralizing system. Manganese alteration located on the western side of the AAR tenements may also represent an outer alteration halo to this system. The geochemical anomalism combined with the age of the underlying stratigraphy, unique structural settings adjacent to potential growth faults highlights the potential for a significant buried SedEx deposit within the Victoria River Basin. During 2009 AAR conducted a helicopter-supported gravity survey, consisting of 1,589 gravity readings, in two areas on granted Victoria River Downs tenure. The northern part of the survey (based on readings spaced 1 km x 1 km) was designed to target a major north south fault and associated splay faults and domes over a strike length of 50 km near Victoria River Downs Station. This area contains extensive stream sediment geochemistry zinc-lead anomalies.