Exploration licence EL8189 third annual reporting ending 6th Octover 2006

Abstract

EL 8189 is situated within the highly prospective Proterozoic McArthur Basin, host to the world class McArthur River (HYC) zinc-lead-silver deposit. The application for EL 8189 was first submitted by Mount Isa Mines Ltd on 28th April 1993 over MLN's 1121, 1122, 1123 and 1124 held by McArthur River Mining Pty Ltd. The application was lodged because of concerns over: i) The adoption of the geodetic datum GDA94 leaving a 200m wide vacant strip of land between the Mineral Leases and adjoining MIM exploration licence EL 8078. ii) The validity of the Mineral leases post Mabo High Court decision in 1992. The remaining blocks are still covered by McArthur River Mining's MLN's 1123 and 1124 which are tenured until 2018. With the total relinquishment of EL 8078 and the continued MLN tenure, the requirement for EL 8189 has been somewhat academic even though previous reporting has duly recorded any exploration activities within the lease. This comprised exploration diamond drilling and any sub-surface activities centred on site investigations for the proposed expansion of the McArthur River zinc-lead deposit from the existing underground mine to a large scale open cut operation. No exploration work or subsurface testing through the drilling of water bores or test pits was conducted over the 19 remaining blocks during the reporting period. The majority of mine expansion activity centred on MLN's 1121 and 1122 to the east of the remaining EL 8189 blocks. The 2006 statutory 50% reduction of EL 8189 has resulted in dropping most of the fragmented blocks to the south of the original licence area, leaving just 7.5 blocks directly to the north of the McArthur River Mine. All of this area is still covered by MLN 1124 and it is likely that a single deep directional diamond hole will be drilled on MLN 1124 in the 2007 dry season just to the east of the remaining EL 8189 blocks. The target here is an enigmatic 1995 MIMEX intersection of 34 metres at 10% Zn, 0.98% Pb in coarse-grained sulphides in drill hole P44/19S, possibly related to the E-W trending Bald Hills fault. This will involve the drilling of a 550 metre deep, directionally drilled diamond hole to test the P44/19S intersection. The necessity to test this intersection sooner rather than later is because the target sits on the eastern edge of the proposed northern overburden emplacement facility which will eventually sterilise any exploration targets immediately north of the mine. It is unlikely that significant exploration expenditure will be recorded specifically against EL8189 in 2007. Civil's activities that will be coincident with the reduced EL 8189 footprint in 2007 will be confined to the construction stages L1 and L2 of the north western side of the Overburden Emplacement Facility.