Annual report Labelle Emu Creek MCN 5092 and MCN 5093

Abstract

MCN 5092 and MCN 5093 were first applied for and granted on the 8 October 1996 for a period of ten (10) years, ending on 31st December, 2005. The Mineral Claims were then renewed for another period of 10 years, and the present expiry date is 31st December 2015. Tantalum and tin mineralisation is contained within an intrusion of pegmatite. The pegmatite is hosted by schist, carbonaceous schist, metagreywacke and perhaps metabasic rocks. The pegmatite is white coloured, soft and friable. It is composed of quartz, muscovite and clay minerals from the weathering of feldspar. The Ta occurs in tantalite and Sn in cassiterite. Ta and Sn mineralisation is restricted to the pegmatite body excluding the quartz pod, the minor zones of wall rock immediately adjacent to the pegmatite. Higher grade pods appear to occur in a number of places. Slightly higher grades occur adjacent to the pegmatite walls. The prospect was first discovered in 1984. John Walton identified the presence of pegmatite from the prominent quartz outcrop and nearby mica-rich material adjacent to goanna burrows. A programme comprised of 8 costeans totalling 460 metres in length followed in 1985. This located Ta concentrations of over 2,000ppm and Sn concentrations of up to 480ppm. In late 1986, when Henry Walker Group Ltd held an option on the mining tenements, ten drill holes totalling 425 metres in depth were completed. In 1987, Walton collected a 3,000 tonne bulk sample and drilled four percussion holes totalling 151 metres depth. The bulk sample recovered 270ppm Ta and 80ppm Sn. High Be concentrations (up to 1%) were identified by the analytical laboratory. In 1988, Nicholson (1988) presented the results of all previous exploration and estimated a Proved Ore Reserve of 115,000 tonnes above 25 metres depth grading 130ppm Ta, 70ppm Nb, 160ppm Sn and 190ppm Be. An additional 40,000 tonnes of probable reserves with similar grades was estimated to occur between 25 and 35 metres depth. John Crago carried out exploration on behalf of Corporate, including sampling and panning of exposed costeans and the trail pit to correlate published figures against his field estimates. In addition, during the course of pegging a proposed additional Mineral Claim to the South of MCN's 5092 and 5093, John Crago discovered mineralisation in the creek within the MCN (along strike to the south of the main Labelle ore body) that he believed could be an extension of the known ore body. This was made known to Julia but was not followed up by them. This extract is from the attached report 'Bynoe Tantalite Project - Northern Territory - 2001 Summary Report' by Don Horn 2001. Exploration completed by Julia Corporation Limited in 2001 resulted in the outline of preliminary tantalite resources estimated at 315,000 tonnes at an average grade of 175ppm tantalum (not JORC classified resource figures). These tonnages occur over 3 separate prospects within the Bynoe Project. This tonnage fell short of a targeted 1Mt of economic material for required by Julia to continue with the 2001 field season. The year saw a decline in tantalum price from a high of around US$300/lb to current spot prices of US$25-35/lb. A recovery in demand for tantalum is not expected until end-user stockpiles of tantalum and tantalum capacitors are either used or recycled. Access problems have hindered exploration for minable tantalite resources. There is the possibility that some key areas of the Bynoe project, such as the Angers MCN 5123 application, can be accessed for mining purposes if a freehold application is successful and extinguishes Native Title in this area, but the 1Mt tonnage target for overall resources is probably not an unrealistic target to justify setting up a process plant etc. As a result of these developments, the project has been difficult to attract a prospective 50% Joint Venture partner as a Project containing potential for a viable cash flow mining operation. Julia Corporation does not exercise the Option to Purchase the tenements on the 31st December 2001. An extension of the Option Agreement for another 12 months would have allow time for the company to complete exploration to define 1Mt of economic resources using it's own funds. A prospective JV partner can then be sought to fund development of these resources. This will also provide time for pursuit of access issues and possibly see an upturn in the overall tantalum market. MCN's 5092 and 5093 are part of a package of tenements being sold to Outback Metals. Outback propose a detailed exploration programme commencing late in 2007.