Annual exploration report EL 23432 Hayes Creek North Year ending 8 May 2005

Abstract

This is the second year following grant of the licence. Three of the six blocks were nominated for surrender before the anniversary of year two. 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, Mottrams, Chinese South and Woolwonga. Underground development and diamond drilling has been carried out at the Zapopan Mine and diamond drilling of deep resources at the Cosmo Howley Mine. Work on EL 23432 has been subordinate to activity on other JV tenements as the emphasis has been on establishing gold resources at established mineralised prospects. Expenditure during 2004-05 was related to updating the regional remote sensing lineament study, geochemical database work and reporting. The tenement has been shown by previous work and interpretation to have low exploration potential for gold. Three of the southernmost blocks have been recommended to DBIRD for surrender. Since the acquisition of the Union Reefs mill during August 2004 a reevaluation of all the high priority resource-bearing tenements in the joint venture has been on-going. This work has of necessity been at the expense of the more grass roots activity. During the coming year development and analysis of the historic geochemical database is expected to resolve the prospectivity of the remaining northern blocks.