Annual reports for EL 10137 and EL 22270, year ending 9 July 2004 - incorporating results of stream sediment sampling program over EL 10137, 22269, 22270 and AN 389 Frances Creek

Abstract

This report was submitted in three parts; annual reports for EL 10137 and EL 22270 and a technical report giving the results of a stream sediment survey that covered both these and other adjacent leases held by the operator. Exploration in EL 10137 during the year consisted of a literature review and data compilation, reconnaissance visits, mapping of the ironstone lode, a gravity survey, and percussion drilling. There were two main objectives for this year; a) To evaluate the known deposits by examining available historical data, and; b) To find new iron ore resources (in addition to those mined during the 1970's). The literature review and acquisition of digital data covered a regional area that included the tenement, and is part of a regional exploration programme to evaluate the economic potential of the ironstones of the Frances Creek district by Territory Iron Pty Ltd. Historic drill data from Thelma Rosemary, Rosemary, and Jasmine East deposits were sourced from the NT Archives, and relevant maps and sections were scanned and copied. Digital databases of the historic drilling at Thelma Rosemary and Jasmine East are complete and the Rosemary database is in the process of being validated. Haines Surveys conducted a gravity survey in October 2003, which also covered adjacent tenements. Gravity readings were taken at 50 m spacings along 250 m spaced lines oriented perpendicular to the strike of the lithology. A total of 313 readings were taken within the tenement boundary. Residual Bouguer anomalies were produced using a specific gravity value of 2.67. Vector Research Pty Ltd processed the gravity data and produced a series of images showing residual gravity anomalies. Further processing corrected the effects of terrain on the readings. Several gravity anomalies were highlighted during processing of the gravity data by Vector Research. The gravity anomaly between Rosemary Extended and Rosemary was considered prospective, especially after field-checking of the ironstone. Arnhem Geological and Exploration Services field-checked the ironstone lodes within the tenement in May, 2004. The Rosemary - Rosemary Extended area was considered interesting, with a line of nearly continuous hematite outcrop extending east from the Rosemary mine to a large synclinal hinge, then northwest to Rosemary Extended for approximately 700 m. The hematite is described as massive, fine-medium grained material with patches of dark pink to purple clay. The clay content increases around the synclinal hinge area. Drill testing was recommended based on field observations, especially around the synclinal hinge (where historic drilling had not adequately tested), and along the NW strike to Rosemary Extended. Open hole percussion drilling of Rosemary Extended, plus the extension of Thelma 3, took place between 22 - 24th June 2004. Nine RAB holes totalling 239 m were drilled on the tenement as part of a regional drilling programme. The second part of the report deals with exploration activities for iron mineralisation conducted by Territory Iron Pty Ltd within EL 22270 (Frances Creek) during the year ended 9th July 2004. This report is part of an annual report submitted by Arafura Resources NL, and deals only with iron ore exploration. Work comprised data compilation, a gravity survey, and geological field checking of ironstone lodes. The geological mapping of the ironstone unit along strike targeted areas for drill testing, but historic data showed that the area had already been extensively drilled, and that other prospective areas to the southeast lie just outside the tenement. Preliminary results from the gravity survey delineated several small gravity anomalies within the tenement, which may require field checking. Future work will be planned after analysing the results of exploration in adjacent tenements. The third part of the report is a stream sediment survey. Paired -2.5 millimetre and -80# stream sediment samples were collected from 257 sites in EL's 10137, 22269 and 22270 in May-June, 2004. Duplicate paired samples were collected from 13 of the sites. The coarser samples were analysed for Au and Ag by the BLEG method and the finer samples were analysed for Cu, Pb, Zn, Ni and Co by AAS. Broader variation in the results for all elements clearly reflect the distribution of major basement rock types but some real anomalism does appear to exist for some of the elements analysed. In particular, results of 2-3 ppb Au from three adjacent sites in the southwest of the survey area originate from the eastern side of a major ridge of Mundogie Sandstone. Elevated Au results (up to 15 ppb Au) were obtained along the western side of the same ridge in similar geochemical surveys conducted by Homestake in the period 1996-1998. The Golden Slips, Golden Gulf, Golden Auserian and Golden Amigo gold prospects are situated further north along the NNW extension of this ridge and as a consequence further investigation in the vicinity of the 2004 samples is required. The highest gold result obtained in the 2004 survey was 7.1 ppb from a site on the boundary of the Wildman Siltstone and Mundogie Sandstone in the far northwest of the survey area. Several other results in the same area are between 2-5 ppb Au and while all of these could simply reflect higher background levels in the underlying Wildman Siltstone, additional investigation is justified. Peak results for other elements were: Ag - 203 ppb, (background <20 ppb); Cu - 115 ppm (background < 40 ppm), Pb - 575 ppm (background < 100 ppm), Zn - 699 ppm (background < 100 ppm), Ni - 65 ppm (background < 30 ppm), Co - 41ppm (background < 10 ppm).