EL 24654 Exploration activities report for the 12 month period to 4 December 2009

Abstract

EL 24654 (Copperado), is one of the granted leases within the Redbank Copper Operations. The Copperado tenement is currently under Joint Venture arrangement with Glencore, whom are currently halfway their obligations of a $0.75M spend to earn 50% of the tenement. Haines Surveys commenced ground gravity survey of southern portion of Copperado tenement on 400m x 400m spacing in mid-June 2009, concluding in late July. 1370 data points were collected, with the interior of area being inaccessible to the ground crew due to topography issues. Helicopter gravity infill of this interior was subsequently undertaken by Atlas geophysics, and completed over 2.5 days in late September, and a 282 further data points were received and merged, and forwarded to Southern Geoscience Consultants for interpretation. SGC are currently awaiting the availability of the 4km x 4km AGSO gravity data for more detail to complete a comprehensive geophysical interpretation of the lease. Access was completed for drilling of GC1 at Copperado, where 2 holes were drilled for 312m advance. Results were disappointing, with no significant copper anomalism encountered (max value 1217ppm Cu from Niton XRF), and only moderate sporadic cobalt anomalism (max value 1190ppm from Niton XRF). Further planned drilling was abandoned and further review of targets in the vicinity continued. Field work in the immediate area of GC1 failed to find any further copper anomalism, though an isolated spot value of 378 ppm Tellurium was encountered in some surface sampling. A 100m x 100m soil grid was planned for the immediate area, and west of GC1. Subsequently, the GC2 prospect outcrop was identified during the soil sampling program supported by portable Niton XRF, when rockchip samples returned initial values to 8.6% Cu. Further sampling returned samples to a maximum of 29.7% Cu and 7.5% Cobalt, along with highly anomalous levels of Tellurium. The poor result from GC1 resulted in significantly less drilling expenditure than planned, and contributed to the shortfall in covenant. The company has applied and received a further 12 month waiver of the 3rd year 50% reduction as it better defines targets generated out of the current work programme.