Year 5 Annual report for period 13 February 2006 to 12 February 2007, EL 9725 and EL 10136 Hammer Hill project

Abstract

This report presents the work completed during the fifth year of tenure on the Hammer Hill Project; a joint venture between Mithril Resources (manager) and Arafura Resources. The project covers granted Exploration Licences 9725 and 10136, which have joint reporting. The Hammer Hill Project area straddles the Huckitta and Illogwa Creek 250,000- scale map sheets and is centred about 180 km northeast of Alice Springs, south of the Plenty Highway. Work completed over the tenement area during the fifth year of tenure includes: Completion of 'Farm-in' agreement and transfer of operator to Mithril Resources; Collection and chemical analysis of 650 magnetic lag samples; Collection and chemical analysis of 16 rockchip samples; Collection and chemical analysis of 4 lag samples; Collection and chemical analysis of 5 soil samples; and 5 ground EM lines. Geochemical results identifed a number of areas with elevated nickel and copper in magnetic lag and rockchip samples consistent with derivation from nickel-copper sulphides associated with ultramafic magmatic units. Ground EM was conducted over three of these Ni-Cu anomalies, but no significant basement conductors were identified. However, the ground EM surveys demonstrate that airborne EM will be feasible in the area. Future work will consist of airborne EM to identify buried conductive sulphide bodies, ground EM over airborne anomalies to better characterise them and then drilling of EM anomalies.