Eastern areas exploration Annual report for EL 10115 and EL 10108, 13 October 2005 to 13 October 2006

Abstract

Exploration licences were granted to GEMCO for EL 10115 and EL 10108 on the 13 October 2000 in the region of Groote Eylandt known as the Eastern Areas. In the first year, an exploration program was undertaken to collect raw data on the potential deposit. This involved aerial photography, ground reconnaissance, upgrading of access tracks, preparation of grid lines and reverse circulation drilling. The drill program intersected between 0.5-4.5m of sub-economic siliceous and medium grade lump manganese in 16 of the 30 holes drilled. From October 2001 to October 2002, the activities focussed on sample preparation and analysis of the samples generated from the RC drilling program in Year One, enabling preliminary data analysis and interpretation of the eastern areas. During 2003, a broad-based review of all available data was conducted and maps required for target generation were digitised into Vulcan. Investigation commenced on a replacement database and accompanying management system for improved validation and interpretation on the Eastern Area drilling information. In the fourth year, between October 2003 and October 2004, drill hole data in the GDHS database was converted to a new GBIS database, an outcrop mapping and sampling program was undertaken to assist in identifying potential drill targets and the 1991 GEOTEM data was re-analysed and modelled by BHBP Geophysicists in Brisbane, indicating weak to moderate conductivity of manganese ores and clays. In addition, different EM survey techniques were investigated to differentiate manganese ores from clays. From October 2004 to October 2005, activities involved compilation of all historical exploration data for review, delineation and target generation, planning of a reverse circulation drilling program, gridline clearing and drill pad preparation to provide access for the drilling rig, and site visits with the traditional land owners to define areas of sacred significance. Following an aborted drill program during the 2005 dry season, GEMCO completed a total of 138 RC drill holes for 3,038 metres during this reporting period. Drilling confirmed the presence of massive (lump) siliceous manganiferous material, however no assay results have been returned at the time of reporting. Preceding the drilling re-establishment of access, grid lines and drill pads was also completed. GEMCO plan to compile assay results from the 2006 drill program and complete geological modelling and a resource estimate to determine the prospectivity of this area. A small program of diamond drilling is also planned to assist with the determination of dry bulk densities.