Harts Range Project annual report for EL 24552 for the period ending 25 August 2008

Abstract

Barfuss Corporation's Harts Range Project is comprised of EL 24552, ELs 25063 and 25430, EL application 25764, and a number of Mineral Claims within the area of ELs 25063 and 25764. The total area under title or application is approximately 677 square kilometres, of which EL 24552 comprises the bulk, at 642 square kilometres. The Harts Range Project lies in the southeast of the Northern Territory, roughly 100 to 140 kilometres northeast of Alice Springs (170 to 260 km by road, via the Plenty Highway). The project covers much of the central Harts Range, which is dominated by the Riddock Amphibolite Member of the Proterozoic Arunta Block. The geology includes other high-grade metamorphics, predominantly gneisses, of Divisions 1 and 2 of the Arunta Block. Topography is frequently rugged. The Harts Range was a major area of pegmatite-related mica mining in the early 20th century. Other mining in the lease area has generally been very small scale, targeting semi-precious gem minerals. High-grade copper-gold mineralisation was investigated by Tanami Gold NL at its Copper Queen group of prospects in 2001-2005, and Power Nuclear Corporation of Japan ('PNC') explored the area for uranium in the 1990s. The Oonagalabi copper-lead-zinc deposit, just south of EL 24552, was extensively investigated in the 1970s. The Jervois copper deposit(s), more than 100 km to the northeast, occurs in similar or related rocks to those in some parts of the tenement area and were mined intermittently from the 1960s to 1980s. The Harts Range ruby deposit was found in the late 1970s and mined from then into the early 1980s by Hillrise Properties and Mistral Mines. Barfuss Corporation has mineral claim coverage of the ruby mine, which is surrounded by EL 25764, and has its site office and camp located there. During its first two years of tenure of EL 24552 (2005 to 2007), Barfuss Corporation conducted a substantial amount of non-invasive work, pending the results of discussions with the Central Lands Council regarding the establishment of an ILUA covering all of the company's Harts Range Project leases. Several prospect areas were identified in different areas of the licence. Investigations included analysis of available geophysical data, geological mapping, rock-chip sampling and ground spectrometer surveys. Several areas were identified as significantly prospective, requiring further investigation. Rock-chip assays include some highly anomalous results. This work is documented in detail in previous Annual Reports. Very little work was conducted in the current reporting period. Since early in the period (circa September 2007), the company has been in a protracted legal dispute with its principal financial backer, a company based the USA. All funds intended for the current year's expenditure were legally 'frozen' at the start of this dispute, which effectively halted all proposed field operations and other exploration targeted work until the dispute was resolved. Legal and contractual details have prevented Barfuss Corporation spending its own funds on the project or seeking other funding or partners. This matter is to be discussed elsewhere between Barfuss Corporation and the Northern Territory Government Department's Titles Division, and is not the subject of this report. At the time of this report's preparation, the other party in this dispute appears to have resiled from the prospect of taking the matter to court and is seeking a commercial settlement. It is hoped that the matter will be resolved within the next few months, permitting a resumption of active exploration of the Project.