EL 10199, Fourth annual report, 7 April 2003 to 6 April 2004

Abstract

Exploration Licence 10199 Lynx, covers several square kilometres to the south, east and west of the developing Chariot gold deposit in the Tennant creek region. This report records the exploration work completed on EL 10199 during its fourth year of tenure, from the 7th April 2003 to the 6th April 2004. Targets are shallow haematite-magnetite ironstone related gold deposits. Exploration Licence 10199 totally encloses the non-magnetic haematite-rich Chariot gold deposit. The Licence is centred on a magnetic structural ridge extending from The Extension mine (300t @ 19.5g/t Au) to TC8 mine (80,680t @ 18g/t Au and 1.2% Cu). Consequently the EL has been subject to much interest by Giants Reef for its potential to a host orebodies of a similar style of mineralisation as the Chariot and TC8 mines. Until January 2003, EL 10199 came under the Central Joint Venture 2, which covered the Chariot gold deposit and a number of other tenements in the Tennant Creek goldfield. The Joint Venture was between Giants Reef, (managers, holding 57% equity), Sons of Gwalia (replacing PacMin; 33%) and Newmont NFM (formerly Normandy NFM; 10%). Giants Reef purchased Sons of Gwalia's Joint Venture assets (43%) and became the sole owner of the CJV2 project, including EL 10199 in January 2003. In September 2003 a second gravity survey was undertaken completing a 8.7km gravity survey the West TC8 Project Area and including the northern portion of EL 10199. Results indicated priority gravity anomalies within the Licence and detailed geophysical modelling highlighted that apart from the well understood magnetic ironstone there was considerable haematite ironstone proximal to the Traminer ironstone, ie West Traminer. The West Traminer prospect was drill tested with 4 RC holes for an advance of 448m. No alteration was seen and no ironstone was intersected. No significant assay results were returned. Given the strength of the West Traminer gravity response, the interpreted density contrast and the vicinity to the mineralised Traminer ironstone the Traminer West target remains of high interest and will be further refined. The limited but detailed gravity survey appears to have added a new dimension to Giants Reef's understanding of the non-outcropping geology and the distribution of non-magnetic ironstone bodies within the survey area. The fact that non-magnetic ironstones, hosting gold mineralisation are known to exist (Chariot deposit), yet have not really been searched for previously in the Tennant Creek Goldfield, means that the potential for new discoveries is highly likely. Exploration will continue within EL 10199, primarily to identify strike extensions to the operating Chariot Mine. Geophysical interpretation of the Year 3/4 gravity survey data by Frank Lindeman of Lindeman Geophysics, Melbourne, continues to be refined and reprocessed. A number of shallow gravity targets remain to be drill tested.