Mt Bundey EL 23791 Annual report for the period 21 January 2006 to 20 January 2007

Abstract

This report details exploration activities conducted by Territory Iron Limited for Mt Bundey style haematite/magnetite mineralisation within EL 23791 during Year 3 ending 20th January 2007. Exploration activities during the reporting year comprised: location and inspection of the magnetic anomalies #3, 7 and 23, and pegging of 12 drill sites on these anomalies; preparation of access tracks and 8 drill pads; drilling of 2 RC holes (MBRC001 to 002 for 100m) on Anomaly #3; multi-scan analysis of mineralised one metre intervals from these holes for a range of elements. The two drillholes were sited on the northern end of Anomaly #3 - a 550m long, NNW trending magnetic feature. No haematite or magnetite was intersected in the holes as was anticipated from the holes' siting close to and along projected strike from the ferricrete outcrops. This suggests that mineralisation is fairly discontinuous along strike. Both holes intersected strongly magnetic pyrrhotite and pyrite mineralisation associated with elevated copper values in a very hard, fine-grained, siliceous hornfelsed, pyritic mudstone between 21-28m depth in MBRC001, and between 25- 28m and 33-37m depth in MBRC002. The strongly magnetic pyrrhotite associated with the hornfelsed mudstone appears to be the source of the aeromagnetic response characterising Anomaly #3. The programme was discontinued prior to drill testing of Anomalies #7 and 23 due to poor ground conditions and the requirement for the rig at another project. Field exploration activities proposed for Year 4 aims to complete testing of the remaining anomalies within the tenement and will comprise: mapping, soil sampling of anomalies; 600m of scout RC drilling, and if appropriate; 500m of follow-up RC drilling of a number of the more promising anomalies.