EL 22440 Sixth annual report for EL 22440 period ending 26 February 2010

Abstract

EL 22440, originally consisting of 25 graticular blocks was granted on the 27 February, 2004. Relinquishments have reduced the area to the current 11 blocks. The licence encompasses the abandoned McCarthy's silver-lead mine and several historical prospect areas bearing variations of that name. Early Proterozoic metasediments of the Mt Partridge, South Alligator and Finnis River Groups are exposed by asymmetrical folds along north-westerly trending axes that are abruptly truncated by the McCarthy Granite of the Cullen Batholith. Mineralisation styles being investigated are consistent with types known throughout the Pine Creek Orogen with a particular focus on copper, lead, zinc, silver and gold. At the end of the last active phase of consolidated exploration in 1995 it was concluded that the area remained prospective for base and precious metals. More recently the iron ore potential of the area has also been noted. Historical exploration has pursued extensive surface sampling and some limited drilling and costeaning. The current exploration methodology has extensively used various geophysical techniques and some targeted rock-chip sampling programs to define prospective areas. During the current reporting period a mapping and sampling program was conducted to define the extent and characteristics of the Frances Creek style hematite rich reefs of the Wildman Siltstone. A total of 90 rock-chip samples were collected along the 1300m strike length reef system which measured 200m at its widest point. XRF analysis results showed an average iron content of 57.5% with only 10.7% silica and 0.084% phosphorus. Other mapping and sampling work was conducted for base and precious metal anomalism where geophysical responses were considered favourable. Results from the 108 samples were generally of low tenor with the exception of several samples taken from close proximity to McCarthy's mine. The potential for significant iron-ore mineralisation appears favourable, and drilling, which is required to further delineate the mineralisation, will be contingent on removing the restrictions currently imposed by the AAPA Authority Certificate. Additional ground geophysical surveys and integration of existing surveys will be required to ensure features at depth can be accurately targeted for drill testing. Preliminary discussions regarding the prospectivity of the EL with various mining entities have been held and commercial options including farm-ins and JV's are being considered.