Annual exploration report EL 24018 Hayes Creek East Year ending 9 August 2005

Abstract

EL 24018 is located 140 km SE of Darwin, NT and 4 km east of the Hayes Creek Inn. It is part of the Burnside Joint Venture, managed by Burnside Operations P/L comprising Territory Goldfields NL and Buffalo Creek Mines NL. The latter are subsidiaries of Northern Gold NL and Harmony Gold (Australia) P/L respectively. This is the first year of the licence following grant and the annual expenditure covenant was set at $8,000 for the 7 block group. The WNW trending contact between the McMinns Bluff granite and folded and faulted Lower Proterozoic sedimentary sequences of the Pine Cree Geosyncline cross the northern sector of the tenement. The regionally important Hayes Creek Fault crosses the NW extremity of the tenement. Six of the seven blocks of the tenement are underlain by the granite and sandstones of the Mid Proterozoic Tolmer Formation. Only one or possibly two of the northern blocks are considered to have any gold potential. The tenement is contiguous with and south of the Golden Dyke Dome (covered by EL 10347). This domal structure in Koolpin Formation anoxic metasediments and concordant dolerite sills, hosts several gold deposits that were open pit mined in the mid 1980s. During August 2004 the joint venture purchased the Union Reefs mill and tenement package, at the same time selling the Brocks Creek mill to Tanami Gold NL. It is anticipated that this acquisition will bring forward the development of known resources in the region and a higher level of exploration activity should ensue in parallel with this. The joint venture has been actively exploring the Burnside region since its formation in April 2002. Work to date has been focused on establishing open pit resources through RC drilling at Yam Creek-North Point, Mottrams, Chinese South Extension, and Woolwonga. Underground resources have been developed by decline access at the Zapopan Mine. At the Cosmopolitan Howley mine, campaigns of diamond drilling have established a resource containing 1 million ounces of gold. Early in the year, an interpretation and review of EL 24018 showed that only two blocks had a rock suite compatible with known regional gold models, and these blocks were at the lower end of the ranking scale. A review of previous soil sampling work showed a lack of anomalous results in these areas. Expenditure during the year comprised structural interpretation and reporting. This amounted to $1,040.00 which is less than the covenant for the year. It will be recommended that the EL be surrendered, however in the event further finishing work is needed in 2005-2006 a small budget allocation for EL 24018 will be made. A short program of geological reconnaissance and reporting is estimated to cost $1,100.00.