Annual exploration report MLN 4, MLN 206, MLN 1020, MLN 1034, MCN 1172 and MCN 4785, for period ending 28 February 2006, Fountain Head

Abstract

The Fountain Head tenement group is centred 135km SE of Darwin, NT and 10km east of the Brocks Creek mine office, on the Ban Ban (14/3-III) and Burnside (14/2-II) 1:50,000 sheets. Gold mineralisation is hosted by units of the Mount Bonnie Formation of the South Alligator Group and is associated with quartz-pyrite-arsenopyrite veins. These occur in dilatant zones in the axis of a major SE plunging asymmetric anticlinal fold. Historically, an extended alluvial mining period was followed by trial open pit extraction under the management of Dominion Mining Limited in 1995. Modern exploration has consisted of trenching, RAB drilling, RC drilling, diamond drilling and resource estimates. Following the formation of the Burnside Joint Venture on 4th April 2002, management was placed under Burnside Operations P/L. The Fountain Head deposits were subjected to a first pass review that allowed a relative ranking of its gold potential in the context of open pit resources close to Brocks Creek. It was recognised as being at the higher end of this ranking and that warranted further drill evaluation. In the 2004 season a program of exploratory RC drilling was completed comprising 13 holes for an advance of 798m. This work was reported in last years' report, but the resource modelling had not been completed. A total undiluted resource of 604,206t averaging 2.63g/tAu for 51,025oz is calculated for the Fountainhead resource. Further drilling is planned west of the current pit shells to test for further high-grade mineralisation, and between the inferred and indicated pit shell to upgrade inferred ounces to indicated.