Annual report for EL 23862, EL 24328, EL 24329, EL 24330, EL 24331, EL 24332, EL 24333, EL 24334, EL 24335 and EL 24336, for the period ending 31 March 2006

Abstract

This annual report covers EL 23862 and EL 24328 to EL 24336 inclusive for which there is combined reporting status with the due date of 31 March 2006. The EL's are located on the Tiwi Islands in the Northern Territory. This report describes on-ground exploration carried out on EL 23862 (13 deposits/prospects on the northern coast of Melville Island), EL 24328 (Puwanapi deposit), EL 24329 (Wangati North, Atauini Point, Murrow Point, and Brace Point Ppospects), EL 24330 (Kili Impini Prospect), and EL 24333 (Brace Point Prospect). In EL 23862, the primary focus of exploration was to establish Ore Reserves at the Andranangoo Creek West deposit. Elsewhere in the EL, exploration comprised air core drilling at Lethbridge Bay West, Lethbridge Bay South, Cache Point, Andranangoo Creek East/Radford Point prospects; reconnaissance sampling at Goose Creek West, Goose Creek East, Andranangoo Creek East/Radford Point, Lethbridge Bay South, Lethbridge Bay East, Robinson Inlet West, Robinson Inlet East, Brenton Bay, and Point Jahleel prospects; shell augering at Andranangoo Creek West, Goose Creek West, Lethbridge Bay South, and Robinson Inlet East. Air core drilling was carried out at Puwanapi in EL 24328 and Wangati North in EL 24329. Ground magnetics was carried out in EL 24329, EL 24333, and EL 24335. Revised Ore Reserve estimates were completed for Andranangoo Creek West and Lethbridge Bay West prospects (EL 23862) and Puwanapi prospect (EL 24328). Total Reserves for the Tiwi Islands Project as at October 2005 are 4.86 million tonnes @ 4.5% HM containing 190,000 tonnes of valuable heavy mineral (ASX announcement 10 October 2005). Exploration on the Tiwi Islands focuses on heavy mineral ('HM') accumulations within the Quaternary coastal plains where previous explorers identified HM deposits unusually rich in the valuable heavy minerals zircon and rutile. These deposits are potentially valuable for a small company because of their unusually high content of zircon and rutile, low clay content and little overburden. Exploration planned for the next 12 month period comprises drilling at Andranangoo Creek West, Andranangoo Creek East/Radford Point, Lethbridge Bay South, Goose Creek West, Goose Creek East, and Robinson Inlet East; reconnaissance sampling at Brenton Bay, Point Jahleel, and the other untested targets on Melville Island at Kili Impini, Cape Van Diemen South, Cape Van Diemen North; and targets on Bathurst Island at Brace Point, Murrow Point, Atauini Point, Wangati North, and Wangati South. The second anniversary of EL 23862 occurs on 01 April 2006. Matilda has successfully applied to waive reduction of the licence area at the end of year 2. During the year two Mining Leases ML 24510 (Andranangoo) and ML 24511 (Lethbridge West) were granted on 7 September 2005 and 5 December 2005 respectively. Both ML's are located within the boundaries of EL 23862.