SEL 8665 Shark Sixth Annual Report 8 March 2004 to 7 March 2005

Abstract

Substitute Exploration Licence 8665 Shark, is located between 6 km and 20 km east and southeast of Tennant Creek. Access to the Licence area from Tennant Creek township is via the sealed road to the Peko and Nobles Nob mines, and thence along the un-sealed Gosse River road. A network of un-sealed tracks extends from these roads to provide reasonable vehicular access throughout the remainder of the tenement. Substitute Exploration Licence 8665 consists of 17 graticular blocks (55 km2) and was granted to NTC on 8th March 1999 for a period of four years, to expire 7th March 2003. A renewal was applied for and granted for two years, to expire 7th March 2005. This report records exploration undertaken by Giants Reef Mining Limited (Giants Reef) on Substitute Exploration Licence 8665 Shark for the period from 8th March 2004 to 7th March 2005. Approximately 30% of the 17 blocks of SEL 8665 is covered by Mineral Claims and Mineral Leases surrounding historical mines in the area. SEL 8665 was included within a package of tenements which were subject to a combined quantitative/qualitative ranking, based on geological, geophysical & geophysical characteristics and other parameters covering work status, target type, land status and economics. The 7300 West target and Penguin Prospect within the tenement were selected for follow-up as part of the 2005 exploration program. The area was also reviewed for oxide gold potential based upon either old gold workings and or exploration carried out on prospects generated by former explorers. This work has highlighted the potential in the area for shear zone type gold mineralisation, with only very weak geophysical responses. The exploration approach utilised detailed gravity and shallow regolith drill traverses (RAB) to define anomalies, with the aim of testing any resultant anomalies with RC drilling. The initial focus was the detection of ironstone - hosted oxide gold deposits, and any indications of primary gold deposits at depth. The majority of previous exploration in these areas has focussed on testing magnetic deep primary targets. SEL 8665 falls within the Gosse Road Project MMP and approval for exploration was by DBIRD on 18 August (Authorisation No. 0040-02). The 7300 West Target is located approximately 17km east southeast of Tennant Creek and lies close to the southwest boundary of SEL 8665.Geophysical modelling and interpretation of regional gravity data together with previous magnetic survey data was undertaken by Lindeman Geophysics Pty Ltd prepatory to design of a ground gravity survey. Modelling of the regional gravity was not possible as the data was found to be particularly noisy and is not sufficiently detailed, having a line spacing of 500 m and a station spacing of 100 m. Modelling of the 3 main magnetic anomalies suggest that that they are all deep ironstone bodies >300m below surface. A detailed ground gravity survey comprising 2 km2 was carried out over the 7300W target with the aim of detecting potential ironstone-related gold orebodies in the upper regolith zone and any gravity anomalies that may be co-incident with two prominent magnetic anomalies. The survey area contains numerous vacuum Au geochemical anomalies and two prominent magnetic anomalies lying within the prospective Nob-Line shear structure. Daishsat Geodetic Surveyors completed approximately 28 line kilometres of gravity using 40 m station centres and 80 m line spacing. In September geophysical modelling and interpretation of the newly acquired gravity data together with previous magnetic survey data was undertaken by Resource Potentials Pty Ltd. The new gravity data revealed considerable more subsurface information than the magnetic data. Four anomalous areas based on gravity highs coincident with Au in vacuum geochemical anomalies, structures and adjacent magnetic high were defined for drill testing. A reconnaissance RAB drilling program of 35 holes (total 875m) was designed to test these 4 magnetic - gravity - structural - Au vacuum geochemical targets. A RAB drilling program comprising 35 holes for approximately 868m was completed during October. Depth of drilling averaged 24.8m. The aim of the drilling was to test 4 discrete gravity anomalies that were coincident with 2 prominent magnetic anomalies and a number of Au vacuum geochemical anomalies that lie along the principal Nob Line structure. The area includes Warramunga Formation sediments which are interpreted as lying within the prospective Nob line shear structure. Geology encountered from this drilling included moderately sheared in Warramunga Formation, dominated by moderately hematic siltstones, sandstones and intercalated siltstone-sandstones. Many of these units are indurated and exhibit moderate shear textures and silicification. Results received for the RAB drilling program were disappointing and returned no significant assays. The results from the drilling suggest that the gravity highs occur in association with lithology that is either sheared or more resilient to weathering (oxidation). In contrast, gravity lows appear to be associated with units that are more deeply weathered and are best described as clay saprolite. Petrological studies from previous deep drill holes is planned to further evaluate the deeper primary potential. Access to the Penguin area is via Peko Road. Shallow vacuum holes drilled by PosGold (1993-94) in the area identified a gold anomaly (peaking at 40ppb Au and 308 ppm Cu) with strike continuity of 800m east-west and supported by Cu assays. The area consists of flat spinifex-covered alluvial and colluvial plains. Minor quartz and ferruginous sediment sub-crop is present in the centre of the drill area. Vacuum drilling was undertaken by Tracey's Drilling of Tennant Creek using a tractor mounted rig. Two north-south vacuum drilling traverses were designed and drilled to confirm and infill the original geochemical data. A total of 33 vertical vacuum drill holes (PGVC001-PGVC033) were drilled to a maximum depth of 6m (total 189m). Survey was established using GPS with drill holes pegged on a 500m x 50m grid using a chain and compass. Careful distinction was made between aeolian, colluvial cover and bedrock to aid in the interpretation of results. All bedrock lithologies were logged and a 1kg sample of cover and 2.5kg sample of bedrock was collected. These samples were submitted to NAL for low level Au (DL-1ppb), Cu (DL-1ppm), Bi (DL-2ppm), Fe (DL 0.01%) analysis. The last hole in the program (PGVC033) was a reconnaissance vacuum hole drilled into a sheared/mylonitic(?) porphyry outcrop. Encouraging low-level gold anomalism was delineated and a small, follow-up RAB drilling program has been planned.