Batchelor Project EL 9253 Annual report for period 12 September 2002 to 11 September 2003 Eighth year of tenure

Abstract

The title is part of a number of contiguous titles which cover Lower Proterozoic rocks on the S.E. flank of the Rum Jungle Dome east of the town of Batchelor. The main effort in this district has been to evaluate and prove up the Winchester magnesite resource. Although this resource is located on the adjoining EL 9501 much of the supporting infrastructure for the Batchelor Magnesium Project would need to be located on EL 9253 within the area covered by MLN Application 1984. Unfortunately it has been necessary to shelve the proposed project due to a lack of availability of sufficient competitively priced energy in the Darwin region. Several geochemical anomalies were also followed up and tested during the previous year with RAB drilling. No significant encouragement has been obtained. A Draft Environmental Impact Statement (EIS) was prepared for the Batchelor Project and lodged in March 2002. Following public display and receipt of submissions an EIS Supplement was prepared and lodged with the Department of Infrastructure, Planning and Environment in October 2002. During the past year efforts were initially focussed on attempts to find viable solutions to the energy shortage issue. After it had been concluded that this was not feasible, a thorough review of the exploration data on gold and base metals mineralisation was conducted. This review concluded that there was significant untested potential for gold and base metals. However discussions with the Company's corporate and financial advisers indicated that further exploration work on Batchelor by the Company would not be well received in the market and could be expected to further depress the Company's share price. On the basis of the above it was decided to seek to joint venture or some other commercial arrangement with another company. Negotiations with a third party are currently well advanced. The freehold landowner has requested that some costeans dug some years ago by a previous explorer be back-filled. An MMP for this and other work on adjoining tenements has been prepared and submitted to DBIRD. Approval has not yet been received. Once approval is forthcoming arrangements are in place to complete the rehabilitation work in the current dry season.