Annual exploration report EL 23541 Howley East Year ending 16 February 2005

Abstract

EL 23541 is located 130 km SE of Darwin, NT and 5 km west of Brocks Creek siding on the Darwin-Adelaide railway. The tenement is subject to 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. The licence encompasses a suite of metasedimentary rocks that are part of the Pine Creek Geosyncline sequence and lies between the gold mining centres of Brocks Creek and Cosmo Howley. This is the second year following grant of the licence and the annual expenditure was set at $700.00. The joint venture has been actively exploring the Burnside region since its formation on 4th April 2002. Work to date has been focused on establishing open pit resources through RC drilling at Princess Louise, North Point, (Yam Creek), Mottrams, Chinese South, and Woolwonga. Underground development and diamond drilling was carried out in 2003 at the Zapopan Mine. At Cosmo Howley the 'Deeps' resource beneath the open pit was tested in 2004 by 12 diamond core holes followed by resource modelling that indicates a mineral resource containing 1 million ounces of gold is present. Work on EL 23541 has been subordinate to activity on other JV tenements as the emphasis has been on establishing gold resources at established mineralised prospects. The purchase of the Union Reefs mill in 2004 has given priority to the development of trucking ore with a view to possible start up in 2005. Expenditure on EL 23541 during 2004 was related to geochemical database validation which is still in progress. Hard copy archive material at Brocks Creek office is being unpacked, sorted and shelved for review purposes. This work with reporting costs amounted to $850.00. In terms of a forward program, work will continue on cleansing and validating the historic geochemical and drilling database covering the regional Burnside JV tenements. Work on EL 23541 will comprise part of this objective and will enable a better understanding of the prospectivity of the ground using GIS software.