Roper Project EL 23048 sixth annual report for period 2 December 2007 to 1 December 2008

Abstract

Exploration Licences 23047, 23048 and 23111 were granted to Exploration & Resource Development Pty Ltd (ERD) on the 2nd December 2002. ERD Pty Ltd, a Darwin based resource sector company, is designated Project Manager. EL 23047 and 23111 have been relinquished and a partial surrender of EL 23048 occurred in 2007. EL 23048 now covers 35 sub-blocks and 79.83 sq km. The tenement in conjunction with all other ERD tenement forms a collective but non contiguous Roper Project Area. Group reporting status was approved by the Department of Business, Industry and Resource Development (DBIRD) in 2007. EL 23048 abuts EL's 24986 and 24655 to form the Prospect Area 'SILL80' The Project Area overlies Roper Group stratigraphy in the Bauhinia Shelf tectonic element of the western McArthur Basin and envelopes extensively mapped eroded ilmenite-bearing source rocks with considerable potential for large tonnage insitu, eluvial, colluvial and downstream detrital heavy mineral (HM) accumulations. Titaniferous dolerite sills intrude Adelaidean Roper Group sediments at a number of exposed stratigraphic horizons. The dolerites have been subject to prolonged weathering and erosion during the Tertiary and Recent epochs through to modern day wet season cycles. Due to a company restructure EL 23047 and EL 23111 were relinquished on 03rd December 2007 and EL2 3048 was reduced from 190 to 35 sub-blocks. A Final and full relinquishment report for EL 23047 and 23111 and a partial relinquishment report for EL 23048 have previously been submitted. On 16th October 2008 the Principal Registrar advised ERD that EL 23048 had been granted for renewal until 01st December 2010. Year 1 exploration activities incorporated office studies and helicopter supported field reconnaissance, 875 metres of shallow auger drilling (EL's 23048 & 23111), eight shallow test pit excavations with collection of pit wall channel samples (EL 23048). Year 2 activities included detailed analysis of laboratory results and inferred resource estimations in EL 23048 and rigorous tenement holding rationalisation with subsequent 50% EL reductions for all three EL's. Year 3 activities focussed on the further re-analysis of the past substantial amounts of exploration and analysis over all three licence areas and in assessing technology solutions to mining and product beneficiation as well as establishing a development and engineering team. Expenditure covenants were exceeded on all three licenses and a request for a waiver of block reduction for the tenements was submitted and subsequently accepted by the Department on 14th November 2005 that will enable these technology assessments to be completed and the deposits developed if suited. Year 4 activity mainly centered around a greatly enhanced marketing regime in Australia, Asia and Europe with several parties interested to joint venture or purchase the resource and or the company and in discussions with the NLC to grant approval for ELA 23385 which abuts the main resource of BUKA within EL 22478. ERD are currently in the final stages of a joint venture/sale agreement with two of the interested parties and a sale/joint venture would result in the resources being further identified and a mining application submitted in year 5. The negotiations with the NLC still appear to ERD to have stalled and this tenement would greatly enhance the resource under the control of ERD. ERD is in discussions with two prime organisations to either joint venture or purchase the resource. It is expected that these discussions will conclude favourably within the next six months. Year 5 activities will therefore revolve around mining applications and furthering the resource on adjoining blocks. Year 5 activity has seen ERD undergoing a company restructure after purchase by Maxwealth International Invest Ltd to satisfy the requirements of the purchaser of resources contained within EL 23048 and the remaining EL's within the Roper HM Project. It is anticipated that full scale exploration will resume on this lease in early 2008 to move into a mining lease under a new company. Year 6 activity saw the companies product contained within EL 23048 and adjoining tenements taken to China and Japan as part of the strategy developed and operated by the NT Government Department of Primary Industries, Fisheries and Mines. Several visits to organisations such as Sinosteel, Stone Group, Fushun Titanium and Itochu Group were undertaken and many presentations delivered. The company entered into Confidentiality Agreements with all of these companies and has since begun final discussions with Sinosteel to enter into a Joint Venture for the mining and marketing of the minerals contained within the Roper HM Project. Geophysical work was undertaken for ERD by Geodiscovery Group in Queensland to ascertain if any anomalous ground was evident over all tenement held and 68 anomolies were discovered of which 78% are classified as Class 1 anomalies. This has provided a major interest to our joint venture partners as one anomaly visited reflected a possible Channel Iron Deposit of medium/high iron content. Three non-intrusive visits to the EL 23048 were conducted in 2007 to gain further sample and to visibly express the extent and components of SILL80 to prospective partners. This EL is the most promising of the group with a potential 8.4Mt grading 8% ilmenite for 670,000 tonnes of contained ilmenite. The tenement abuts EL 24655/24986 which are currently conservatively thought to hold between 6 and 10 million tonne ilmenite. The regional airborne survey conducted in 2004 supports this reasoning. ERD has been in discussion with a China Industrial Resources Co. Ltd, a Chinese metals producer for the use of this resource and discussions have been held with the Department in 2008 to both introduce the purchaser's requirements and to put forward their ideas and concepts for the resource within the EL. It is anticipated that a bulk sample will be requested by this organisation during 2008-2009.