Year 2 Annual report for EL 24082 for the period 17 October 2006 to 16 October 2007

Abstract

During the reporting period NADL completed 15 large diameter drill holes that aimed to firstly identify and secondly recover a sufficient volume of palaeogravel sediments for processing through a diamond processing plant to determine the presence of commercial diamonds. The program was a first pass attempt to recover diamonds and did not aim to establish a potential resource or grade of the gravels. Gravels from all drill holes were combined and processed through a Mark III Heavy Media Separation processing plant. A total of 348 tonnes was processed. Concentrates were sized on-site then passed through an RE10 magnetic separator to remove magnetic material prior to initial hand sorting of non-magnetics for diamond recovery. The nonmagnetics were also sent to Perth for additional treatment and final diamond recovery. A total of seven diamonds were recovered from the processing of the gravels (+1mm size fraction). Three diamonds showed features indicative of stones found in alluvial deposits. The four additional stones were likely to have been unlocked from a larger grain. A portion of the fine rejects from the HMS plant (ie -1mm tailings) was sent to the Perth laboratory for diamond and kimberlite indicator mineral recovery. One additional macrodiamond, five microdiamonds and forty chromites were recovered. This result raises the possibility that the sample was contaminated and caution must therefore be used when interpreting the results.