Strangways Project EL 10364 Mud Tank, EL 22443 Strangways, EL 22446 Alcoota, EL 22623 Phlogopite and EL 23592 Jonnies Reward, Second combined annual report for the period 20 December 2002 to 19 December 2003

Abstract

The 2003 Strangways Project exploration program concentrated on the Bleechmore Vermiculite Project and particularly the evaluation of the Dykes North prospect, within EL 22446. Work included ground geophysical surveys, airborne hyperspectral TM scanning, bedrock vacuum drilling, costeaning, Aircore, RAB and Diamond drilling. A potentially commercial vermiculite resource 380 m long by 40 m wide by 50 m deep was delineated underlying a thin soil and colluvium-covered flood plain. A total of 235 Aircore and RAB drill spoil samples were Particle Size Distribution (PSD) tested by screening to determine vermiculite flake size distribution. PSD testing showed only 12.4 weight percent of the >40% vermiculite flake samples exceeded a particle size of greater than 1.0 mm which is considerably less than the expected commercial benchmark for viable vermiculite deposits of at least 30 wt% of greater than 1.0mm flake size. Optical flake size estimation by Pontifex of one 30 mm piece of vermiculite (>70%) carbonatite aircore gives different PSD results to those over a larger intersection i.e. 60% of vermiculite flakes are greater than 1.0 mm. Work in progress by Amdel on the disaggregation of vermiculite (>70%) carbonatite drillcore suitable for PSD testing by screening will hopefully counteract the comminution effects of abrasive drill bits on fragile vermiculite flakes and provide a more reliable measure of the current resource?s potentially commercial vermiculite flake size. The exploration potential for additional vermiculite is excellent in the Bleechmore Project area and also on a regional basis. An elliptical 15 km x 5 km potassium depletion zone is apparent on the Alcoota Regional 400 metre line space radiometrics located about 5 km west of the Bleechmore Dyke prospects. A similar potassium depletion zone exists around the Mud Tank carbonatite 19km to the south southeast. The abovementioned depletion zone may be indicative of a large alkaline intrusive or carbonatite containing significant rare earths, vermiculite and basemetals. Observation of 12 heavy mineral concentrate samples resulted in two positive kimberlitic indicator results in the Muller Dam area of EL 22443. Followup drainage samples were taken and results are pending. Multiple occurrences of gahnite (zinc spinel) also observed in the above samples have delineated a zone of interest for base metal mineralisation over a sample length of some 20 km commencing from near Pinnacles Bore and trending to the northwest. The project area includes a number of other basemetal/gold prospects, namely Edwards Creek and Utnalanama Zn-Cu-Au metamorphosed VMS deposits and also the Johnnies Reward Cu-Au (iron oxide) metamorphogenic skarn deposit.