Annual exploration report for MLN 1109 and MLN 833, Union Reefs Gold Mine Year ending 31 December 2004

Abstract

The Union Reefs gold mining centre and associated open pits, historic workings and treatment infrastructure is located 170 km SE of Darwin, NT and 12 km north of Pine Creek. The mining centre is enclosed by MLN 1109 that totals 3,998.0 ha. The mining centre was the subject of open pit mining and treatment under the ownership of Acacia Resources Ltd and more recently by AngloGold (Ashanti) Limited. During this period the Union Reefs mill on MLN 1109 treated a total of 20,225,360t @ 1.47g/t Au for the recovery of 957,523 fine oz gold. Production ceased on 27th July 2003 and following a period of negotiations, MLN 1109, along with the mine infrastructure and satellite tenements, was purchased in August 2004 by Buffalo Creek Mines P/L and Territory Goldfields NL. The latter comprise the Burnside Joint Venture (2002) and the management entity is Burnside Operations P/L. Geologically, the mining centre is situated within a 300 m wide structural corridor trending NW. The corridor comprises tightly folded and sheared pelitic to arenitic sediments of the Lower Proterozoic Burrell Creek Formation and inliers of underlying Mt Bonnie Formation. Two sub parallel lines of historic gold workings comprise the focus for the array of open pits mined in recent years. Prior to the acquisition of the Union Reefs Project, the Burnside Joint Venture had been conducting gold exploration in the Burnside Region, centred some 50 km to the north-west. Several open pit and underground deposits have been developed by exploratory drilling and include the Cosmo Howley, Zapopan, Princess Louise, North Point and Rising Tide resources. Exploratory drilling was also recently conducted on gold resources within the Joint Venture's Pine Creek tenements. The Joint Venture has not conducted exploration within MLN 1109 during the 5 month period since purchase. Focus has been maintained on proving sufficient economic gold resources in the Burnside and Pine Creek regions to justify re starting the Union Reefs mill. The infrastructure and environment has been on care and maintenance during this period and this is expected to continue until such time as a decision to re-commence milling may be announced. Expenditure in terms of care and maintenance and technical reporting on MLN 1109 since acquisition totals $165,000.