Annual Report Exploration Retention License 148 Batchelor November 2006

Abstract

ERL 148 was originally applied for by Compass Resources NL and Guardian Resources Pty. Ltd on 16 April, 1996 as 14 blocks to replace EL 6640. The prospect is known as Area 55. In late 1997 MMS Mining Consultants Pty. Ltd., as consultants to Compass, calculated an indicated resource (using a cut off grade of greater than 0.5% copper and less than 0.5% copper with cobalt above 0.1%) of 4.1 million tonnes grading 0.84% copper, 0.98% lead, 0.22% cobalt, 0.22% nickel and 4.3 g/t silver. An SG of 2.0 was used for this calculation. Area 55 has grown in importance with more recent drilling. In late 1998 using a cutoff of greater than 0.5% copper and less than 0.5% copper with cobalt above 0.1% cobalt, the indicated resource as calculated by Mine Consult Pty. Ltd. increased to 7.3 million tonnes at 0.73% copper, 0.76% lead, 0.19% cobalt and 0.18% nickel. By using a cut off of greater than 0.05% cobalt for copper grades less than 0.5% copper, the indicated resource increases to 12.4 million tonnes at 0.49% copper, 0.56% lead 0.14% cobalt and 0.14% nickel. Starting in late 2005, the resource of the prospect was being re evaluated, with particular attention being paid to the various lithology types of oxide ores. Compilation of all data into a GIS database continued Additional resource studies were completed during the year. Diamond drilling for metallurgical studies was planned and commenced in December.