Roper project EL's 23047, 23048 and 23111 fourth group annual report for period 02-12-2005 to 01-12-2006

Abstract

Exploration Licences 23047, 23048 and 23111 were granted to Resource Development Pty Ltd (ERD) on the 2nd December 2002. ERD Pty Ltd, a Darwin based resource sector company, is the designated Project Manager. The three tenements cover approximately 874.25 sq km and abut and complement an existing large tenure holding (EL's 22478-480; 2,231 sq km) to form a collective but non contiguous Roper Project Area. Group reporting status was approved by the Department of Business, Industry & Resource Development (DBIRD). The Project Area overlies Roper Group stratigraphy in the Bauhinia Shelf tectonic element of the western McArthur Basin and envelopes extensively mapped eroded ilmenite-bearing source rocks with considerable potential for large tonnage 'in situ', eluvial, colluvial and downstream detrital heavy mineral (HM) accumulations. 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 1 exploration activities incorporated office studies and helicopter supported field reconnaissance, 875 metres of shallow auger drilling (EL's 23048 & 23111), eight shallow test pit excavations with collection of pit wall channel samples (EL 23048). Year 2 activities included detailed analysis of laboratory results and inferred resource estimations in EL 23048 and rigorous tenement holding rationalisation with subsequent 50% EL reductions for all three EL's. Year 3 activities focused on the further re-analysis of the past substantial amounts of exploration and analysis over all three licence areas and in assessing technology solutions to mining and product beneficiation as well as establishing a development and engineering team. Expenditure covenants were exceeded on all three licenses and a request for a waiver of block reduction for the tenements was submitted and subsequently accepted by the Department on 14th November 2005 that will enable these technology assessments to be completed and the deposits developed if suited. Year 4 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 and or the company and in discussions with the NLC to grant approval for ELA 23385 which abuts the main resource of BUKA within EL22478. 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 5. 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. ERD is in discussions with two prime organisations to either joint venture or purchase the resource. It is expected that these discussions will conclude around mining applications and furthering the resource on adjoining blocks. In terms of EL 23047, no field work was undertaken on the tenement during tenure Year 4. The comprehensive geological and data reviews that resulted in a 50% rationalisation of tenure from an original 119 sub-blocks to 59 retained sub-blocks in Year 2 has been further added to with new technologies emanating from Germany. The majority of effort has been to consolidate the current resource estimates within all blocks in the locality to enable a successful joint venture/sale to be finalised. ERD is in discussions with two prime organisations to either joint venture or purchase the resource. It is expected that these discussions will conclude favourably within the next six months. Year 5 activities will therefore revolve around mining applications and furthering the resource on adjoining blocks. In terms of EL 23048, no field work was undertaken on the tenement during tenure Year 4. The comprehensive geological and data reviews that resulted in a 50% rationalisation of tenure from an original 119 sub-blocks to 59 retained sub-blocks in Year 2 has been further added to with new technologies emanating from Germany. This EL is the most promising of the group with a potential 8.4Mt grading 8% ilmenite for 670,000 tonnes of contained ilmenite. The tenement abuts EL 24655 that is currently conservatively thought to hold between 6 and 10 million tonne ilmenite. The regional airborne survey conducted in 2004 supports this reasoning. ERD is in discussions with two prime organisations to either joint venture or purchase the resource. It is expected that these discussions will conclude favourably within the next six months. Year 5 activities will therefore revolve around mining applications and furthering the resource on adjoining blocks. In terms of EL 23111, no field work was undertaken on the tenement during tenure Year 4. The comprehensive geological and data reviews that resulted in a 50% rationalisation of tenure from an original 58 sub-blocks to 29 retained sub-blocks in Year 2 has been further added to with new technologies emanating from Germany. ERD is in discussions with two prime organisations to either joint venture or purchase the resource. It is expected that these discussions will conclude favourably within the next six months. Year 5 activities will therefore revolve around mining applications and furthering the resource on adjoining blocks.