Annual report for AN 389 Frances Creek, Year ending 14 November 2004

Abstract

Arafura Resources - An RC drilling program has been completed over an area defined by stream sediment sampling, ground reconnaissance and rock chip sampling. The program involved the drilling of 40 RC holes for a total of 1646m to a maximum hole depth of 67 m. The drilling was completed over two prospects, Golden Slips and Golden Honcho. At both prospects narrow (1 to 5m wide) zones of gold mineralisation were intersected from essentially the surface to about 50m below surface. The Golden Slips prospect has been tested over a strike length of 225m and the Golden Honcho prospect over 150m. Both prospects are open at depth and along strike. Significantly mineralised intervals are presented in tabular form along with hole location plans and geological cross-sections. Conclusions drawn from the drilling and sampling programs are presented as are recommendations for further work. Territory Iron - During 2004 Territory Iron undertook percussion drilling and other detailed studies on a number of key deposits within AN389 with the objective of: Confirming the tonnage for these deposits to JORC Code resource status; and at the same time increasing the general level of confidence in the likelihood that the bulk of the reported global tonnage within the Project area will be in place. Work comprised: gravity survey (615 readings) and processing; historical data acquisition, validation and compilation; geological reconnaissance ironstone lodes within the tenement; re-processing and reappraisal of available aeromagnetic survey data; RAB drilling of 17 holes for a total of 656 metres; and resource modelling of the Helene % and 6/7 deposits. Of the gravity anomalies identified from the gravity survey, anomalies Gravity 3 and Gravity 20 were RAB drill tested. No iron mineralisation was intersected at Gravity 20. At Gravity 3, a gravity anomaly which in part coincides with the line of ironstone mineralisation at Helene 5, drilling intersected iron mineralisation which is on average 10m thick and extends over about 300m along strike. Best intersection was 13m in hole FCPC039 averaging 61.4% Fe and 0.07% P. An Inferred resource of 506,000 tonnes at 62% Fe and 0.05% P at 55% cut-off value was estimated for Helene 5, using the cross section end member method. For Helene 6/7, historical data was captured into a database and used to produce an Inferred Resource estimate of 1.0Mt @ 63.4% Fe and 0.05%P at 52.5% Fe cut-off value, using Minemap resource modeling software. Proposed expenditure for the next reporting year is estimated at $75,000 and will be largely directed to drilling out to Indicated Resource status a number of deposits within AN 389.