Frances Creek EL 10137 Annual report for the period 10 July 2004 to 9 July 2005

Abstract

This report details exploration activities for iron mineralisation conducted by Territory Iron Pty Ltd within EL10137 (Frances Creek) during the year ended 9th July 2005. This report forms part of an annual report submitted by Arafura Resources NL, holders of the tenement. These activities were conducted under a joint venture agreement with Arafura relating to iron ore mineralisation only within the tenement. During the period Territory Iron undertook RAB and RC drilling on a number of deposits and geophysical (gravity) survey over the Thelma Rosemary deposit within EL10137 with the main objectives of: confirming tonnages to Indicated Resource status for Thelma Rosemary and Ochre Hill and Inferred Resource status for Rosemary; determining at Thelma Rosemary, where the flat plateau terrain is conducive to gravity survey, whether iron mineralisation could be detected by this technique. The work comprised: 55 RAB & RC drill holes for a total of 2,509 metres at Thelma Rosemary, Rosemaryand Ochre Hill; 768 drill samples submitted for analysis. Drill assay results are not yet available for drilling completed in calendar 2005, as this work has just been completed; gravity survey: 25m spaced stations on 50m line separations for 450 readings, and associated data processing; Reconnaissance survey in an area in the south of the tenement mapped as being underlain by iron prospective Masson Formation sediments. Seven rock grab samples were collected.