Group annual report for EL 22478, EL 22479 and EL 22480, 10 August 2005 to 09 August 2006

Abstract

Exploration Licences 22478, 22479 and 22480 were granted on 9th August 2001 to Mr G Fanning under an Agreement with Exploration & Resource Development Pty Ltd (ERD), a Darwin based resource sector company. ERD Pty Ltd is the designated Project Manager. The tenements, after the reductions in Year 4 covered approximately 2231 sq km of Roper Group stratigraphy in the Bauhinia Shelf / Arnhem Shelf tectonic elements of the western McArthur Basin, envelope extensively mapped eroded ilmenite-bearing source rocks with considerable potential for large tonnage 'insitu', eluvial and colluvial heavy mineral accumulations. A request for a waiver of reduction at end of year 5 was submitted to the Department as negotiations on the joint venture/sale of ERD and these resources are not fully concluded. Titaniferous dolerite sills intrude Adelaidean Roper Group sediments at a number of exposed stratigraphic horizons. The dolerites have been subject to prolonged weathering and erosion during the Tertiary and Recent epochs through to modern day wet season cycles. Year one and two activities included: orientation soil and lag sampling of a number of these sills followed by a comprehensive auger drilling campaign testing the heavy mineral potential of three selected target areas; geological mapping; flora and fauna surveys; airborne and ground based topographic surveys; macro-sampling at BMC and Buka Prospects and commencement of channel sampling of shallow test pit walls on regolithic soils developed on regional dolerite sills. Year three activities were predominantly based on infill drilling, resource estimation by trenching, further sampling of outlying areas. Year 4 activities were dedicated to in-house studies to increase the resource, beneficiation studies to convert the resource to a more saleable product and marketing of the resource to prospective joint venture partners. Year 5 activity mainly centered around a greatly enhanced marketing regime in Australia, Asia and Europe with several parties interested to joint venture or purchase the resource/company and in discussions with the NLC to grant approval for ELA 23385 which abuts the main resource of BUKA. ERD are currently in the final stages of a joint venture/sale agreement with two of the interested parties and a sale/joint venture would result in the resources being further identified and a mining application submitted in year 6. The negotiations with the NLC still appear to ERD to have stalled and this tenement would greatly enhance the resource under the control of ERD.