Eastern Areas Exploration Annual report EL 10115 and EL 10108 01 October 2008 to 30 September 2009

Abstract

Exploration licences were granted to GEMCO for EL 10115 and EL 10108 on the 13 October 2000 in the region of Groote Eylandt known as the Eastern Areas. In the first year, an exploration program was undertaken to collect raw data on the potential deposit. This involved aerial photography, ground reconnaissance, upgrading of access tracks, preparation of grid lines and reverse circulation drilling. The drill program intersected between 0.5-4.5m of sub-economic siliceous and medium grade lump manganese in 16 of the 30 holes drilled. From October 2001 to October 2002, the activities focussed on sample preparation and analysis of the samples generated from the RC drilling program in Year One, enabling preliminary data analysis and interpretation of the eastern areas. During 2003, a broad-based review of all available data was conducted and maps required for target generation were digitised into Vulcan. Investigation commenced on a replacement database and accompanying management system for improved validation and interpretation on the Eastern Area drilling information. In the fourth year, between October 2003 and October 2004, drill hole data in the GDHS database was converted to a new GBIS database, an outcrop mapping and sampling program was undertaken to assist in identifying potential drill targets and the 1991 GEOTEM data was re-analysed and modelled by BHBP Geophysicists in Brisbane, indicating weak to moderate conductivity of manganese ores and clays. In addition, different EM survey techniques were investigated to differentiate manganese ores from clays. From October 2004 to October 2005, activities involved compilation of all historical exploration data for review, delineation and target generation, planning of a reverse circulation drilling program, gridline clearing and drill pad preparation to provide access for the drilling rig, and site visits with the traditional land owners to define areas of sacred significance. GEMCO completed a total of 138 RC drill holes for 3,038metres during 2006. Drilling confirmed the presence of massive (lump) siliceous manganiferous material. Assay results were returned in late 2006. Additionally two diamond holes were also drilled (one in each lease). In early 2007 GEMCO completed geological modeling and a resource estimate of the exploration results. Follow-up infill drilling was planned for the 2007 drill season however, the drilling contract was cut short due to safety concerns around the operation of the drill rig. 32 (all in EL10115) of the planned 161 were completed before the drill was sent off site. 22 of these reported significant intersects of manganese ore (=1m and greater than 40% Mn). No further resource modelling was completed due to the lack of sufficient data. In 2009 GEMCO conducted threatened fauna surveys in the Eastern Leases to obtain preliminary information on the presence of the three Environment Protection and Biodiversity Conservation (EPBC) Act listed threatened fauna species. The drill plan was modified in accordance with the referral, however, the 2008-2009 drilling program is yet to commence due to access restrictions. The 2010 drill program will focus on completing the previous work plan in addition to 300 proposed infill holes totalling approximately 10,000m.