Roper FE Project EL 24102 Mount Davidson first annual report for period 13 August 2007 to 12 August 2008

Abstract

Application for Exploration Licence 24102 was made on 03 December 2003. After extensive negotiations with the N.L.C.; agreement was reached in April 2007 and the lease was granted to Geoffrey John Fanning on the 16th August 2007. TZ Enterprises Pty Ltd, a Darwin based resource sector company, is now the designated Project Manager. The tenement covers approximately 198.9 sq km covering a portion of Roper Group stratigraphy in the Bauhinia Shelf tectonic element of the western McArthur Basin. In late December 2007 TZ Enterprises Pty Ltd (TZE) was sold to Citizen International Investments Ltd and EL 24102 was subsequently transferred into TZE by Geoff Fanning. This assignment was completed after approval was received from the N.L.C. as per the Exploration Agreement. The tenement lies wholly within the Roper River Iron Field, a part of the Maiwok Subgroup of the Roper Group and the dissected Gulf Fall physiographic division. The tenement is only partially accessible by road with the Roper River flowing east west to the North of the tenement and the north east trending Hodgson River to the South and east of the tenement The geology is dominated by sandstone of the Sherwin and Moroak Formations throughout with pisolitic and oolitic ironstones within as previously documented by Ferenzi (DME, 2001). Exploration activities on these resources are first recorded by BHP in 1955. They chose not to develop due to the discovery of their higher grade Pilbara Fe deposits. Exploration recommenced in 1991 by Roper Resources Pty Ltd and by the Northern Territory Government Department of Mines who reconfirmed an inferred resource of approximately 60 million tonnes of moderate grade iron ore at Hodgson Downs to accompany the 30 million tonnes at Sherwin Creek identified by BHP in the 1950's. The resources contained within the tenement are well explored and noted by Ferenzi (DME, 2001). In total Ferenzi inferred 'several hundred million tonnes' of available ore. The ironstones of the Roper Iron deposits are of marine sedimentary origin and occur as extensive beds of pisolite, oolite and ferruginous sandstones interbedded with shales and quartz sandstones within the Sherwin Formation of the Maiwok subgroup (Roper Group) of the McArthur Basin. Interrogation of the recently produced DBIRD diamond and diamond indicator database reveals sparsely scattered positive results but without any macro or microdiamonds located within the EL confines. The scattered indicators are considered to be secondary sourced and hard rock diamond potential is deemed low as follow-up sampling by previous explorers failed to repeat the positive results. No major intrusive on-site field work was undertaken during the past twelve months as the submitted SMMP had not yet been approved and an 'Authority to Explore' has not been issued at this stage. Several visits with prospective partners has occurred by helicopter with some small scale sampling to confirm ore grade of approx 25kg taken from Deposit W and U. A full company restructure was completed in early 2008 by the new owners and EL24102 was seen as a vital part of this company. The new owners are currently in discussions with Jianlong Steel Holdings Limited, Sinosteel Mining Company Limited, Itochu Australia Ltd, DeLong Holdings Limited, Guandong Foreign Trade Group Company Ltd, Stone Group Holdings Ltd, Yin Tong Ltd and Janfull Group Ltd to jointly develop these resources. CA's have been signed with Itochu, Stone Group and Janfull Group and several visits have been made to Darwin by these groups for discussions on methods of partnership. The Directors of TZE are confident that a joint venture/farm-in agreement will be reached in calendar year 2008 to fully develop the deposits of Iron ore contained within EL 24102. ProMet Engineers in Perth, Western Australia are TZE's nominated managers for this exercise and have assisted with the production of several studies to both mine and beneficiate this ore. This may change with a new joint development as proposed by the companies listed above. Further studies are underway on the development of the feasible use of Port Roper as an alternative method using a conveyor system to ship the beneficiated ore and the Government has been briefed on the amount of interest shown by these organisations in the use of Port Roper in the long term and also in the Roper Highway, N/S railway to Port Darwin in the short term.