Combined annual report EL 10121, 24349, 24373, 24374, 24401, 24402, 24714, 24664, 24700, 24946, 24778, 24943, 24996, 24997, 25070, 24942, 25328, 25312, 25590, 25591, 25592, 25462, 25647 11 April 2007 to 10 April 2008 Borroloola Project

Abstract

This report details work conducted on Borroloola Project exploration licences during the period 11 April 2007 to 10 April 2008. Sandfire considers the title area to be prospective for base metals, manganese and diamonds. Much open-filed data has been reviewed and in some cases reprocessed. Specifically, open-filed Airborne Electro-magnetic (AEM) data and Airborne Magnetic data were reprocessed and a 'worming' study of the reprocessed airborne magnetic and NTGS open file gravity data sets was carried out by CSIRO. Comprehensive review and compilation of open-filed geochemical data continues. In June 2007 areas within the project were re-flown with over 4176.5 line kilometres of AEM using the TEMPEST system. Targets produced are still being assessed for follow-up. Additional Induced Polarisation surveys and processing were conducted with approximately 12 line km at the Copper Mine Creek prospect and 12 line km at the Apollo prospect. Brief helicopter reconnaissance was conducted in May 2007, during which eight rockchip samples were collected. Four samples returned weakly anomalous zinc values upto 255 ppm and one of these also assayed 292 ppm Cu. 13 additional samples were collected on various other occasions during the reporting period. Of these, seven samples from a gossanous horizon at West Yalco returned assays up to 409 ppm Pb, 3220 ppm Zn, 41.2% Fe and 7.26% Mn. The horizon has been traced for 2.5 km of strike and will be tested with RC drilling in 2008, as well as the potential for repetition at depth. A structural and geological interpretation of 1:50,000 scale stereoscopic ALOS/ASTER satellite imagery and imaged 500 m line-spacing aeromagnetic data covering some 15,000 km2 of Sandfire's tenements was completed by Colin Nash & Associates Pty Ltd, between September and November 2007. The study has taken into account, and advanced, new concepts in regard to structures with the Batten Fault Zone of the McArthur Basin, generated from a 2002 seismic survey. Prospect diamond drilling during September and October 2007 comprised 3 holes (BD12, 13 and 14) at Copper Mine Creek , 1 hole (BD15) at Apollo and 6 holes (BD16 to BD 21) at Yalco; a total of 10 holes for 3196.9 metres. All holes were testing either IP or AEM geophysical targets. 886 drill core intervals were submitted for Cu, Pb, Zn, Au, Ag, Ni, Co, Cr, As, Fe, Mn, Ba and Sb analyses. The only significant geochemically anomalous result was from Copper Mine Creek hole BD-13 which intersected three intervals with Pb values up to 1.14%, weak Cu up to 780 ppm, and intermittent Ba up to 1672 ppm, within hydrothermal fault breccia. However five of the holes at Yalco intersected favourable Barney Creek Formation, adjacent stratigraphy and debris breccias; akin to ore hosting stratigraphy at the McArthur River HYC deposit. Holes BD-17, 18, 19, 20 and 21 tested roughly 4km strike of a northeast trending AEM feature, exhibiting similarities to one encompassing the 'HYC' deposit to the southeast. While no obvious occurrences of bedded Pb-Zn mineralization were observed, the program has successfully intersected the favoured Barney Creek horizon and adjacent stratigraphic units in all the holes. It is important to note that the thicknesses and interbedded/interfinguring characteristics of the units vary markedly between each hole and will provide a vector towards a more prospective area or areas. Hole BD-19 has the most complete respresentation of all units, including >50 metres of the black pyritic BCF horizon. Petrology was completed on 11 drill core samples and 3 rock samples. Down-hole conductivity and gamma surveys were conducted at five drill sites and petrophysical work on three Yalco drill core samples showed that hydrothermally altered zones have a higher porosity and thus an elevated EM response when saturated with groundwater.