EL 29008 First annual and final report for the period 15 May 2012 to 20 May 2013

Abstract

The rationale for applying for EL 29008 and other Red Dog tenements are coal seams intercepted in Permian age Bonaparte Basin Kulshill Group sediments from drilling for coal and petroleum. Global Ore Discovery (GOD) reports that multiple coal intersections >0.4 metres are reported with the greatest net coal thickness from historic drilling of 4 metres. The latter result was coal seams intercepted in drill hole Keep River-1 within EL 29010. Intercepts of coal seams are concentrated to the northeast of the Red Dog Project. The geological target is at least 100 million tonnes of thermal coal resources amenable to open pit mining. Red Dog Project is favourably located less than 100 kilometres from the deep-water port of Wyndham. The location in Northern Australian offers a competitive advantage for shipping costs compared with thermal coal shipped to Asian destinations from the Port of Newcastle in New South Wales. The work program for the year was restricted to a desktop risk/reward evaluation of EL 29008. Most of EL 29008 is covered by Proterozoic basement rocks and is not prospective for coal. However, a conceptual Permian sub-basin is inferred and trends northeast across the tenement; this geological feature is 80km southeast of historical coal intersections within EL 29010. Basement cover increases geological risk in a southeast direction from EL 29010 towards EL 29008. Junior explorers are finding it difficult to raise new equity capital to fund exploration. The current state of affairs necessitates continuous review of the portfolio of tenements that comprise the Red Dog Project. On a risk/reward basis, EL 29008 is considered to have too high risk because the prospectivity is conceptual in nature. EL 29008 was relinquished to preserve funds that are better allocated towards exploring what are considered the most prospective Red Dog tenements.