EL 23579 West 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 located to the east. It is considered prospective for uranium, copper, lead, zinc, cobalt and nickel mineralisation, especially as the mineralisation intersected in the adjoining tenement (ERL 125) dips westward toward this tenement. During the first two years of exploration, previous exploration and drill data was compiled and the prospectivity reviewed. During the reporting period ending 29 December 2009, the compilation of historical data continued with the focus of building an entirely comprehensive GIS which would allow for the assessment of future drilling targets. This data compilation also provided essential information for the continuing development of a regional 3D geological model to be used in combination with the GIS for future drill target 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. Part of the tenement was covered by a surface geology mapping campaign and this has been integrated into the GIS. Due largely to the impact of vegetation coverage on the feasibility of mapping in some areas this remains an ongoing project and will continue next year. In September 2009, the whole area was also covered by new high density digital aerial photography.