MLC 15-16 and MLC 528-529 Cat's Whiskers Annual report 31 December 2001 to 31 December 2003

Abstract

This report records the work completed on ML C15-C16 and C528-C529 Cat's Whiskers during the period from the 31 December 2001 to the 30 December 2003. Exploration targets are shallow haematite-ironstone related gold deposits and deeper extensions to the currently defined ore reserve at Cat's Whiskers. Work conducted over the Cat's Whiskers Leases ML C15-C16 and C528-C529 during the reporting period has included a literature, data and internal tenement review, CLC work program and Mine Management Plan (MMP) approval, CLC site clearance, drill site clearance and RC drilling, CLC post-drilling site visit and an independent assessment of drill results. Additionally a Small Mines Development Agreement was entered into to enable the development of the Cat's Whiskers gold mineralisation. A literature review and data compilation revealed the potential for further exploration and development of the Cat's Whiskers ironstone, being a typical shallow high-grade ironstone with mineralisation confined to a narrow ironstone - chlorite footwall zone. A MMP was completed for Giants Reef's proposed drill holes at the site, and an authorisation (Authorisation 0031-01) was issued by DBIRD. The proposed drill sites were submitted to the CLC as a work program and a site clearance was conducted. The CLC cleared the drill sites, however instructed Giants Reef that no exploration activities were to be carried out within an area of 50m from the base of outcrop which contains the historical Cat's Whiskers workings. In October 2003, Giants Reef drilled 9 RC holes for an advance of 1,820m. The drilling at Cat's Whiskers upgraded the gold zone within the ironstone which appears constrained to the footwall position and remains open down plunge and to the east. An independent resource geologist was contracted to review the drill data and to assess the potential of advancing the Cat's Whiskers project to an underground operation. Negotiations between Giants Reef Mining Limited and Craigs Mining Services (CMS) were entered into late 2003, in respect of a Small Mines Development Agreement (SMDA). The Cat's Whiskers Lease ML C529 was listed in Schedule 1 List of Small Resources in the Agreement. This agreement will effectively enable early and concurrent development of potentially small mines such as Cat's Whiskers. Drill sites for the pilot and ventilation RC holes were proposed and subsequently approved by the CLC. An attempt to drill the holes in late December 2003 was postponed due to the inaccessibility of the site as a consequence of the wet season. Giants Reef intends to work with CMS under the terms of the SMDA to develop a small underground mine at Cats Whiskers in 2004. A Mine Management Plan will be submitted to DBIRD in 2004 outlining the methods of operation. During the course of underground mining, potential remains for further exploratory drilling to the east and at depth.