Annual exploration report EL 9608 Mt Bonnie South Year ending 24 May 2005

Abstract

EL 9608 is centred 140 km SE of Darwin, NT and 18 km SE of Brocks Creek. 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 $102,000 for the three block group. The tenement encompasses a suite of metasedimentary rocks that are part of the Pine Creek Geosyncline sequence. Dark siltstone-mudstone lithologies belonging to the Koolpin Formation of the Lower Proterozoic South Alligator Group dominate the sequence. These have been intruded by concordant pre orogenic dolerite sills. The rock suite has later been subjected to strong folding and faulting that is aligned NNW. Granite of the Cullen suite is present to the south of the tenement. The tenement is contiguous with and south of the base metal and gold mineralised locality of Mt Bonnie. The area is considered prospective for gold mineralisation due to its structural preparation and stratigraphic correlation with the Cosmo Howley mine. The southern block of the licence is structurally analogous to the Golden Dyke Dome setting 4 km to the west and previous soil sampling has outlined anomalous gold values. 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. During the year 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. Work on EL 9608 has been subordinate to activity on other JV tenements as the emphasis has been on establishing gold resources at established mineralised prospects. This emphasis has been consolidated by the purchase of the Union Reefs Mill in August 2004. The acquisition has escalated reviews of advanced stage resources with a view to early re-commissioning of the plant. Expenditure during the year comprised structural interpretation and reporting. This amounted to $800.00 which falls well short of the covenant for the year. It is anticipated that in the event of a start-up of the Union Reefs mill overall exploration activity by the JV will escalate in 2006.