Annual report MLN's 164, 165, 463, 465, 466, 467 and 546 Mount Wells Northern Territory December 31 2006 to December 31 2007

Abstract

Mt Wells is located approximately 200km south of Darwin via the Stuart Highway. The Mining Claims listed above are located at Mount Wells, near the township of Pine Creek in the Northern Territory. (Latitude 13.30.03 S and Longitude 131.43.10 E) The ore body is found on a substantially elevated hill containing en-echelon lodes of copper and tin ore. The area has been historically mined since 1879 with a recorded production of 1555t of cassiterite concentrate from ore with an average grade of 1% tin. More recently copper and wolfram resources have been identified on these mining tenements. Softwood Plantations Pty Ltd bought the mining tenements on the 4th of July, 1994 when the previous owners, Territory Resources Ltd went into receivership. Softwood also purchased the adjacent land surrounding these tenements and the disused processing plant and infrastructure at the site. It is anticipated that Outback Metals Ltd will acquire Softwood Plantations in early 2008, and will then proceed to develop the site in to a producing mine. The Mt. Wells area is located within the central portion of the Pine Creek Geosyncline, a Palaeoproterozoic structure containing fluvial and basing sediments. Mt Wells is dominated by structurally complex suite siltstones, sandy siltstones, phyllites, slates, greywacke, pebble conglomerates of the Burrell Creek Formation (Finniss River Group). Rare carbonates and fine-grained felsic igneous rocks are also present. In the north east portion the Mount Bonnie Formation outcrops which are mainly composed of interbedded carbonaceous sericitic and commonly pyritic or chloritic slate, phyllite, mudstone and siltstone; fine to coarse felspathic metagreywacke; ferruginous phyllite (metasiltstone) with chert bands, lenses and nodules (prospective for Vein Au, Polymetallic Cu, Pb, Zn, Ag veins). Mt. Wells is located on a substantially elevated hill containing en-echelon lodes of copper & tin ore. The elevated nature of the orebodies should assist in economical disposal of overburden & waste in adjacent valleys. At Mt. Wells there are six tin-quartz lodes namely 1. East Lode, 2. No 1 Copper Lode 3, No 2 Copper lode, 4. Main Lode, West Lode, 6. Northwest Lode. These lodes are essentially tension fill quartz veins, striking 015 - 025, dipping 75- 85 east and have a strike length of up to 1km. The host rocks are siltstone, greywacke of the Burrell Creek Formation forming a north trending anticline. The width of the individual lodes averages 2 metres (0.5m - 5m) arranged in an enechelon pattern. Contacts with the host rock are sharp and there is no evidence of displacement or movement. Lode occurring near the contact is brecciated. Branching of lodes into 3 or 4 narrow veins is common. Cassiterite (SnO2) occurs as single coarse crystals or as aggregates along the hanging wall of most lodes. The coarseness of the tin mineralisation within the quartz lode combined with its erratic distribution, contribute to the inherent spotty nature of the mineralisation producing a high-nugget effect inducing contrast between adjacent lode sample assay results of near zero to several percent tin respectively. The centre of the lodes is generally barren while the footwall is marked by hematite (oxidised sulphides) quartz breccia which also contains cassiterite. The above breccia zone also occurs on the hanging wall in No 2 and No 3 levels possibly representing late stage sulphide-rich mineralisation. Sulphides are more common to the north side of the lode. In primary ore, pyrite, chalcopyrite, arsenopyrite and pyrrhotite are common. Rare wolframite and molybdenite are also present. Common gangue minerals are quartz, muscovite, tourmaline, feldspar and chlorite. Within the oxidised zone, extending to a depth of at least 50 metres the lode comprises quartz, hematite, limonite, cassiterite, malachite, chalcocite, bornite, covellite and scorodite. Diamond drillcores have intersected lodes to a depth of 200 metres also intersecting a cupola of greisenised biotite / muscovite granite at depths of 150 - 200metres. Most lode does not continue into the granite however minor quartz-cassiterite veins are present within the granite and one such vein has been correlated with the Main Lode. Geochemistry by Mookhey (1971) indicates an increase in tin and Cu values going away from the granite. The greisenised granite (intersected in drillholes) is equigranular; medium grained and contains muscovite, microcline, perthite, quartz and traces of biotite. Accessory minerals include fluorite, sphene, apatite, rutile, hornblende, pyrite, pyrrhotite, arsenopyrite, cassiterite and chalcopyrite. Tin was found in the Mt Wells area in 1880, and in 1884 there was the construction of infrastructure including the linking of the 2 main ore bodies by a tunnel, an ore tramway, 2 dams and a 10 head stamp battery, which was subsequently upgraded to a 20 head stamp battery by 1895. The area was worked mostly by Chinese from 1901 to 1929 when the mine was shut down due to a shortage of labor. In the 1960's the Commonwealth Govt. constructed a battery and gravity treatment plant at the Mt Wells site to promote mining in the Pine Creek area. Other buildings including accommodation and tailings dams were also constructed around this time. Jingellic Minerals became interested in the Mt Wells site in the 1970's, opening the east lode underground workings. Further drilling was carried out by and the Northern Territory Mines Dept, between 1971 and 1977. Approximately 100t of ore was removed in 1978 by Millwood and Murray (Murray Millwood). Alluvial mining was carried out between 1978 and 1980 by Territory Mining. They excavated approximately 300,000 cubic m of regolith from the watercourse between bottom dam and the McKinley River. In 1980 Jingellic Minerals upgraded the government battery and replaced the gravity stamp with a rod mill. The mill processed ore until 1983 when the mill was closed, but was reopened to process ore between 1985 and 1986. Territory Resources then acquired the tenements and commenced a prefeasibility report. A drilling program was developed to assess mining the West Lode as an open cut prospect. In 1989 RC drilling by Territory Resources commenced. Territory Resources carried out substantial deep drilling, analysis, and sampling and extended the drive and tramway to the east lode. The records for 20 of the drill holes are available, as well as the assay results. Cross sections of the drill holes and maps of the site are also available. In 1994 Territory resources sold the Mt Wells site to Softwood Plantations. Previous exploration on Mt Wells area has estimated a possible underground estimate of 737 000 t of ore averaging 1.38 % Sn, and a further open cut estimate of 400 000t of ore grading 0.4%Sn. Furthermore an estimate of 971 000 t of ore grading 1.5% Cu plus wolfram credits has been located at the Mt Wells site. At present a plan exists to open cut the combined Copper/Tin/ Wolfram resources at Mt Wells. Softwood Plantations Pty Ltd proposed to commence open cut mining tin from the West Lode and Main/Intermediate lodes located at Mt Wells. Previous drill programs at this site focussed on the potential of deeper ore which would be accessed by underground methods. 'Softwood' carried out a drilling and sampling program to target shallower ore. Several areas of high grade tin ore were discovered during the surface sampling. Following assays of the drill and rock chip sampling, a plan was developed for the surface of the Mt Wells tenements and all data compiled from Territory and Softwood and then plotted using computer modelling techniques. The increase in tin prices over the last year, however, has warranted the renewal of detailed feasibility studies to commence. As part of the desktop studies completed by Softwood Plantations a review was made of the resource estimates in 2000. This review was relevant to determine the accuracy of previous estimates as the accuracy of information will affect the mining widths, which will be a factor of the current metal prices and mining processes. During 2007 a proposal was made by Outback Metals Ltd to acquire Softwood Plantations Pty Ltd. In anticipation of this transaction being completed a decision was made to suspend all exploration activities. Since the above mentioned transaction was proposed, an audit of the current possible ore statements has been made, as well as the development of an infill drilling program. The purpose of this infill drilling program will be to prove up the possible ore statements to a JORC compliant resource statement and then to develop the Mt Wells site into production. This program is scheduled to begin in February 2008 using a RC drill. All other associated work in this site has been associated with the business side of the transaction including acquiring independent geologist report which was carried out by Al Maynard and Associates Consulting Geologists. A tenement review of the holdings was also carried out by Hetherington Exploration and Mining Title services.