Hodgson Diamond Project Combined annual report on exploration activities, year four of tenure, 24 July 2003 to 23 July 2004

Abstract

An agreement covering much of the Rio Tinto-controlled diamond exploration tenements in northern Australia was finalised in July 2003 between Rio Tinto and DMA. Review of available geophysical and sample data was carried out by Gravity (managing the project on behalf of DMA) during the current reporting period and this confirmed the potential for diamondiferous kimberlites to be located within the Arnold River tenement block. On this basis, a Falcon airborne gravity gradiometer survey was planned and acquired in August and September, 2003. Field survey work was done by Fugro Airborne Surveys under a contract with BHP Billiton, with whom Gravity Capital has the Falcon deployment agreement. The Falcon system was developed by BHP Billiton in the late 1990s and is considered to have the ability to detect kimberlite pipes. The Falcon system records gravity gradient data via a system of accelerometers. This gradient data is transformed to produce the vertical gravity gradient ('Gdd') which approximates the first vertical derivative of the vertical component of the gravity field. An integral transformation on Gdd is applied to generate Gd, which approximates the vertical component of the gravity field itself. Conventional total magnetic intensity is also acquired as is laser scanner data, which is used to construct a very accurate (1m vertical resolution) digital elevation model. The survey was flown on east-west oriented lines, 100m apart at a height of 80m above ground level. Falcon coverage was obtained over an area of approximately 240 km2 within EL 7970. Data was processed by BHP Billiton's Falcon Operations Group and delivered to Gravity Capital in November 2003. Interpretation and exploration targeting from the Falcon data is nearing completion, with target areas defined for follow-up work. Statutory requirements for field access and approvals for work programs are currently being finalised and it is envisaged that testing of these targets will commence during the current field season. The digital data and acquisition/processing report will be lodged with DBIRD in due course.