Annual report on EL 24150 AuQuest Project for period ending 24 January 2010

Abstract

EL 24150 is situated about 80 km east of Darwin and 28 km northwest of the Toms Gully Gold Mine. It is an important tenement within Crocodile Gold Australia's portfolio. The EL is part of tenement package which the company acquired by purchasing liquidated assets of GBS Gold Australia. It was granted on 25 January 2005 for a period of 6 years. The tenement comprises 22 blocks and covers 47.7 km2. EL 24150 is located within the Pine Creek Orogen, which has been interpreted as an intra-cratonic basin lying on an Archaean basement, and containing a 14 km thick sequence of Palaeoproterozoic sediments, accompanied by lesser volcanics, granitic plutons and dolerite intrusions. Predominant rocks exposed in the project area belong to the Wildman Siltstone, Koolpin Formation and Burrell Creek Formation. In places sills of the Zamu Dolerite may also be present. Much of the bed rock geology is obscured by thick black soil cover. During the year under review, a technical review, tenement ranking and valuation was undertaken in order to prepare assets for sale. TMI image of the project area shows a deep-seated structure which could be an important feature for gold mineralisation. A number of uranium anomalies have also been identified from radiometric data which require further field testing. During the reporting period, JV partner, Rum Jungle Uranium Limited flew the area with high resolution TEMPEST geophysical survey. The aim of the survey was to try and map graphitic and sulphide conductors near the base of the Koolpin Formation, where black shales are in contact with carbonate units and also in the Wildman Siltstone Formation. High resolution geophysical survey has identified several gold and uranium anomalous areas which require follow-up. During 2010-11, ground-truthing of the project area will take place with an aim of checking the gold and uranium anomalies. This will lead to a program of soil/rock chip sampling and may also include detail mapping of selected areas. If encouraging results received, it will lead to drilling.