Annual exploration report on MLN 4, MLN 206, MLN 1020, MLN 1034, MCN 1172 and MCN 4785, Fountain Head, period ending 28 February 2007

Abstract

During the reporting period, a total of 167 RC, 13 diamond and 1 RC with diamond tail were drilled for 15 171 metres (RC drilling; 12 685 metres and Diamond drilling; 2 486 metres). 16201 composite geochemical samples retrieved during drilling were analysed for Au. In addition to extending the resource base, new lodes striking sub-parallel to the Fountain Head anticline have delineated. These are named the Tally Ho Lodes of Fountain Head. The ore zones appear to be separated and offset by normal faulting parallel to the quartz vein dip angle. To date, a strike length of 160m has been defined; the width of each lode being approximately 18m wide and an average depth of 60m from surface, plunging to a depth of 100m. High grade gold mineralisation was intersected in many holes such as FHRC005, FHRC008 and FHRC013 ranging from 4 to 8.6 g/t at various depths. FHRC002 contained gold mineralisation of 3.00 metres interval @ 2.54 g/t. In the same hole another intersection of 7 metres (from 36 - 43 metres) @ 3.18 g/t was encountered. Another significant gold concentration was encountered in drill hole FHRC7 of 6 metres @ 2.85 g/t. The new lodes striking sub-parallel to the Fountain Head anticline have been named the Tally Ho Lodes of Fountain Head. In combination with the FHRC040, FHRC041, FHRC044, FHRC050 and FHRD057, have defined two parallel ore zones with striking grid SE-NW and plunging grid SE. Significant gold intersections from Tally Ho loads are documented and a resource estimate is given.