Annual exploration report ERL 97 Western Arm year ending 18 September 2003

Abstract

ERL 97 is located approximately 25km southeast of Adelaide River, N.T. Exploration Retention Licence 97 was granted to Northern Gold N.L. on 19th of September, 1989, for a period of five years. The licence was previously held by Northern Gold N.L. as part of EL 4737. Renewals were granted on the 31st of October, 1994, and again on the 13th of September 1999, for periods expiring on the 18th of September 2004. The Western Arm deposit was located by Northern Gold NL using geochemical surveys and RC drilling and has been digitally interpreted using flitch plans and resource modelling. Pit optimisation studies have been completed. The covenant for the 2000/01 year was $0 and expenditure totalled $28,975. Mineral lease applications, MLN 1135A and MLN 1144A that cover the resource area have been submitted for approval and a decision on these applications is pending. Subject to approval of the mineral leases, further RC drilling and resource optimisation studies are proposed. The Burnside Joint Venture, comprising Territory Goldfields NL and Buffalo Creek Mines Pty Ltd was formed in April 2002 with the principal objective of merging their tenement and mill assets so as to bring all viable gold resources in the region into production. ERL 97 is included in the joint venture schedule and as such the Western Arm deposit was included in regional gold resource reviews in 2002-2003. Burnside Operations P/L is the management vehicle of the joint venture. In mid 2003, following the completion of underground decline access to the Zapopan gold deposit at Brocks Creek, the joint venturers resolved to suspend exploration activity in the Burnside region pending an improvement in economic conditions. The joint venture also needed time to fully evaluate the economics of the Zapopan deposit and to await a turn around in economic conditions. It is anticipated that conditions will have improved by 2004 and more regional exploration work will be resumed. At the same time, the joint venture recognises that the Western Arm gold deposit ranks lower than several of its other deposits in the Burnside region.