Annual exploration report year ending 31 December 2003 Mount Bonnie Group MLN's 342, 346, 405, 459, 811, 1033 and 1039 MCN's 504, 505 and 3161

Abstract

The Mt Bonnie Project tenements are located 145km SE of Darwin. NT The area covers the vicinity of the Mount Bonnie Mine, south of the Yam Creek gold mining centre, Historically exploration was focused on a linear gossanous outcrop enriched in base metals. Underground exploration and development was carried out in the early part of the 20th century and several exploratory diamond core holes were commissioned by the NT Government. From the mid 1970s Horizon Exploration, Jingellic Minerals, Geopeko and BP Minerals carried out several drilling programs to test the extent and grade of the base metal deposit. A polymetallic resource was outlined and estimated at 480,000t at 7.67% Zn, 1.8% Pb, 0.4% Cu, 186.0g Ag/t, and 1.5g Au/t. With the increase in gold price the deposit was re-assessed and the gold-silver enriched oxide zone was open pit mined by Henry and Walker in 1983. A reported 110,000t at 7.0g Au/t and 286g Ag/t was mined and treated. Territory Goldfields NL acquired the prospect in the mid nineties and conducted several literature reviews, rankings and rehabilitation of the prospect up to the end of 2001. During 2002 Territory Goldfields NL (parent Northern Gold NL) entered into a joint venture agreement with Buffalo Creek Mines NL (owned by Harmony Gold (Australia) Ltd. This agreement (Burnside Joint Venture) jointly managed certain gold mining tenements of each party and included the treatment plant at Brocks Creek. The gold component of the Mt Bonnie deposit is included in the joint venture agreement, but potential base metal resources are presently excluded. The net present value of the Mt Bonnie prospect is closely tied with the gold component of the polymetallic deposit. The base metal potential, while significant, requires a strong upgrade in terms of sulphide tonnage to become viable in its own right. During much of 2003 the market for both base metals and gold were relatively depressed in Australian dollar terms. This led to the prospect being ranked lower than other gold opportunities held by Northern Gold NL in the Burnside JV and exploration expenditure was focused on more immediately mineable resources in the Brocks Creek region. During 2003 work was confined to geological reporting and maintaining a review of base metal and gold relativities as affecting Mt Bonnie.