24285 Abner South McArthur River Region NT annual report on exploration activities year three of tenure period ending 23 January 2008

Abstract

EL 24285 'Abner South' was granted to Gravity Diamonds Ltd (Gravity) on 24 January 2005. Gravity, through its wholly owned subsidiary, Diamond Mines Australia Ltd (DMA), has an agreement with BHP Billiton to utilise BHP Billiton's Falcon(r) airborne gravity gradiometer system in diamond exploration in Australia and Gravity has established a number of diamond projects in northern Australia using this technique. The Falcon(r) system has proven very effective in detecting kimberlite pipes in Canada, Africa and in Australia. The BHP Billiton - DMA 'Falcon Agreement' allows DMA to conduct exploration using Falcon(r) and BHP Billiton retains certain buy-in rights to major discoveries. During 2004, Falcon(r) data was acquired over tenements controlled by DMA immediately to the north of EL 24285. The survey covered approximately 267 square kilometres with 100m spacing, north south oriented flight lines, flown at a mean terrain clearance of 80m. Gravity gradiometer, magnetics, and laser scanner data were gathered and compiled. Interpretation yielded a number of kimberlite targets and drilling of these targets in late 2004 and 2005 resulted in the discovery of the diamond-bearing ABN21 kimberlite pipe. During the initial years of tenure available prior exploration data was compiled and reviewed, new colour aerial photography at 1:25,000 was flown over the tenement which was interpreted and integrated with historic sampling data and second order Falcon targets were inspected. Four gravel samples were collected within the tenement however results were poor. Re-evaluation of airborne photography, Landsat Imagery, geophysical datasets and geology mapping in the southeast of the tenement has highlighted a broad area of Cretaceous aged cover which may be the source of the Possum Point Yard historic anomalous indicator minerals. Also a sample taken in the drainage to the east of Possum Point yards has returned several possibly kimberlitic chromites (confirming historic sampling). Track access to the area was rehabilitated and drill rigs should now be able to travel from the McArthur Pastoral Station to the tenement area. Intense sampling is planned in this area for early in the 2008 season and a possible helicopter Falcon(r) gravity gradiometer survey is also planned if access to the equipment is obtained.