EL 23687 Lake Woods Project annual report 17 June 2006 to 16 June 2007

Abstract

The Lake Woods project is located 700km south of Darwin and 200km north of Tennant Creek. The project area is centred on the Ashburton Range which runs north-south along the eastern margin of Lake Woods, a large seasonal lake. The Stuart Highway passes through the centre of the area. Bedrock in the area is Middle Proterozoic Renner Group sediments, intruded by pre-Cambrian dolerite. Previous exploration within the district has focused on the potential for diamonds and base metals but has been limited due to poorly developed drainage and widespread alluvial and aeolian cover. The area was identified as conceptual target area based on proprietary methods and modelling conducted by Paradigm Geoscience Pty Ltd. Exploration conducted so far has involved the follow-up of earlier favourable results and consisted of: - Collection of 12 mineralogical samples from stream sediment for diamond/indicator mineral analysis - Collection of 28 samples from stream sediment, aeolian sand and rock for multi-element geochemical analysis. - Reconnaissance geological mapping - Additional data compilation and review of previous exploration - A review of the size, colour and morphology of the microdiamonds recovered over the broader area. - Interpretation of results and formulation of future work program, including intensive geophysical studies - Native title negotiations This work led to the conclusion that the optimum way forward for the project was to undertake a large- scale airborne EM survey to assist with targeting of drilling given the promising results and setting that is revealed by reconnaissance work. Attempts to secure the survey were unsuccessful during the term of the licences, which has resulted in under- expenditure against covenants. However, an 845 line km survey has been completed during August 2007. Results and follow- up work will be reported in the next term of the licence.