Highland Plains Project and phosphate/iron exploration targets exploration licences EL 25068 EL 25600 and EL 25972 group annual geological report for the period ended August 2008

Abstract

Tenements EL 25068, EL 25600 and EL 25972 occur within the Barkly Tablelands of the Northern Territory on the Mount Drummond, Alroy, Ranken and Brunette Downs 1:250,000 map sheets. The area undergoes a sub-tropical climate with the wet season occurring from November to February every year. During this time, the area may be difficult to access by vehicle because the access roads may become flooded. In the dry season, the area is accessible by 4WD vehicle via pastoral tracks from the western and eastern sides of the tenements. Phosphate Australia Limited acquired the tenements through precursor companies between November 2005 and March 2007 further to a target analysis of the area using publicly available remotely sensed data. The ground was chosen because of its numerous Uranium channel radiometric anomalies coupled with the existence of published phosphate and iron occurrences. All granted tenements are 100 percent owned by Phosphate Australia Limited. Work conducted on the tenements has included a total of three field trips to the tenements for the reporting period. The first field trip was a helicopter-assisted reconnaissance and target ground truthing trip in January 2008. A second trip was conducted between late June and July in 2008 to inspect the project for the purpose of understanding field logistics for the forthcoming drilling program and to build relationships with local communities. In addition to this, the western occurrences of Alexandria, Alroy and Buchanan Dam occurring on tenement EL 25600 were visited to analyse their potential phosphate prospectivity and to plan for a future exploration program. The final trip was conducted towards the end of the reporting period between late July and August in order to begin mobilisation of drilling equipment to the Highland Plains project and included helicopter support to further the work of a prospectivity analysis carried out by a geomorphological consultant on the tenements for phosphate and iron. The Highland Plains project has an historical estimate for phosphate mineralization (an exploration target) of between 80 and 85 Million Tonnes at 20 percent P2O5. This estimate has been gained from past drilling in the late 1960s. The work conducted to date by Phosphate Australia Limited has been planning work towards a drilling program aimed at bringing the historical estimate up to a JORC compliant resource.