Indiana Project EL 24194, EL 24427 and EL 24739, Annual technical report for 1 February 2008 to 30 January 2009

Abstract

Work completed over the tenement area during the reporting period includes the following: Ground electromagnetic surveys, Heritage surveys, Track access construction, Diamond drilling, Rehabilitation. Results from the VTEM survey indicate multiple high quality targets. Many of these were field checked and rock samples taken where outcrop was present. Elevated nickel, copper and cobalt analysis were returned from a number of samples at a number of locations. Modelling of the ground EM completed over a number of the VTEM targets suggests basement conductors are present and are worthy of drill testing. Further work will consist of a heritage survey followed by drill testing of geophysical and geochemical anomalies. Ground Electromagnetics - An extension to the ground EM surveys conducted in November and December of 2007 and January of 2008 was completed during the reporting period to follow-up some of the remaining high priority VTEM targets. A total of seven VTEM and one magnetic target were followed up with ground EM. Heritage Surveys - Two heritage surveys were completed during the reporting period over the project. Although the priority areas were cleared for drilling a very large Exclusion Zone was determined by the traditional owners, largely within EL24427. This has limited exploration within this licence area. Diamond Drilling - Two diamond drillholes were completed for a total of 360.3m over anomaly IVT040 targeting two of three ground electromagnetic anomalies identified during the last reporting period. Both drillholes intersected significant intervals of up to 50% pyrrhotite > pyrite > chalcopyrite mineralisation associated with amphibolites and calc-silicate rocktypes with grades averaging 0.2%Cu. These sulphide abundances adequately explain the anomalies. INDD-001 This hole was drilled to 183.3m with the top 4 m comprising aeolian-colluvial sand and gravel. Bedrock geology comprises quartz-biotite-feldspar gneiss with lesser garnet-chlorite-kyanite and layered quartz-epidote-hornblende-calcite calc-silicate units. All of these units are interpreted to be metamorphosed sediments indicating an original package of interbedded siltstone, mudstone and carbonates. Stringer to blebby pyrrhotite-pyrite-chalcopyrite is best developed in and around a dark green, foliated hornblende-chlorite-rich unit between 149.8-160.4 m. The chalcopyrite content is up to 2 % between 155.0-155.5 m, but is typically <1 %. The main host unit was initially interpreted as a metamorphosed mafic magmatic unit, but similar units in INDD002 are more consistent with a sedimentary origin, which is now the preferred interpretation. Sulphide stringers are folded in adjacent psammopelitic gneiss (eg 145.5 and 163 m) and mineralisation is interpreted to be pre-metamorphic. Some unusual units around this main mineralised zone are probably metamorphosed alteration associated with mineralisation. Mineralisation is also associated with magnetite. INDD-002 This hole was drilled to 177m with the top 5 m comprising aeolian-colluvial sand overlying alluvial-colluvial gravel. Bedrock geology comprises quartz-biotite-feldspar-garnet gneiss and green to white layered calc-silicate units. There is a fault zone between 83.75-97.2 m. The stratigraphy is mirrored across this fault zone and the gross geometry is interpreted to be a broken through very tight antiform. Stringer to blebby pyrrhotite-pyrite-chalcopyrite is best developed in and around a dark green, foliated hornblende-chlorite-rich units between 62.5-66.7 and 100.9-113.9 m. The chalcopyrite content is up to 2 % between 113.5-114.0 m, but is typically <1 %. There is significant fine-grained pink garnet alteration around both mineralised units with 80% replacement between 103.0-107.0. Mineralisation is interpreted to be pre-metamorphic and developed around sedimentary carbonate units. There is some magnetite developed with the mineralisation. It is currently thought that the mineralisation is related to some sort of skarn type of system given the variable, complex nature of the silicate minerals. Petrography - Four samples from INDD-001 were submitted for petrographic description and the interpretation form these samples is that the mineralisation is derived from a magmatic source. Given the lack of nickel / chrome and PGEs in the analysis it is highly unlikely that a magmatic nickel sulphide origin is possible. The author believes the magmatic interpretation could be product of alteration associated with skarn mineralisation. Rockchip and Stream Sediment Sampling - A total of 12 rockchips and one stream sediment sample (with 5 screen sizes) was taken over the project area. These samples were taken in two areas within the project. The western samples were taken over iron and silicified caprocks some of which returned highly elevated nickel and chrome indicating an ultramafic origin for these samples in an area where there is no reported ultramafics. The other group of samples were taken over an iron rich outcrop that contained silicified material and up to 50% magnetite. A stream sediment sample was also taken at the confluence of a number of small streams draining this body. No elevated base metal values were returned from this sampling.