EL 23578 South Mount Fitch Annual report for the year ended 29 December 2009

Abstract

Compass Resources Limited was placed in voluntary administration in January 2009 and then placed under a deed of company arrangement from 1 May 2009 for a period of 12 months. Under the terms of the JV agreement between Compass Resources Limited and HNC, a wholly owned subsidiary of HNC, named HNC (Australia) Resources Pty Ltd (HAR) will continue exploration activities in 2009/2010 on the tenement. This tenement was applied for in early 2002 following the intersecting of major base metal mineralisation in drill holes near the Mount Fitch prospect which is located about 600 metres to the northeast. The primary purpose was, and still is, to cover potential very deep down dip extensions to that mineralisation. The area is considered prospective at depth for uranium, copper, lead, zinc, cobalt and nickel mineralisation, especially as the mineralisation intersected in the adjoining tenement (ERL125) appears to dip south-westward toward this tenement. During the first year of tenure acquisition of exploration data was undertaken, previous drill data was compiled and the prospectivity reviewed. In the second year this and surrounding data was entered into a GIS database. Compilation of regional data continued in 2006. During the reporting period ending 29 December 2009, the compilation of historical data continued with the focus of building an entirely comprehensive GIS allowing for the assessment of future drilling targets. This data compilation also provided essential information for the continuing development of a regional geological model to be used in combination with the GIS for further future drill hole evaluation. This is part of the holistic regional approach being applied by JV partners to exploration within the Rum Jungle area Evaluation of previous drilling has continued with the utilisation of the developing GIS and regional geological models, though it is clear as has been identified prior, that a significant number of recent drill holes failed to reach target depth and require re-drilling before any future targets may be deemed feasible. The tenement was partially covered by a surface geological mapping campaign and this has been integrated into the GIS. In September 2009, the whole area was also covered by new high density digital aerial photography.