Annual exploration report EL 23541 Howley East Year ending 16 February 2010

Abstract

EL 23541 is located 130km SE of Darwin, NT and 15km west of Brocks Creek Mining Centre. It was granted on 17 February 2007 to Territory Goldfields NL (50%) and Buffalo Creek Mines NL (50%) which were wholly owned subsidiaries of GBS Gold Australia Pty Ltd. GBS Gold Australia went into voluntary receivership on 15 September 2009. Crocodile Gold Australia purchased all assets held by GBS Gold Australia (liquidated) and EL 23541 was transferred to the former on 6 November 2009. The tenement comprises a sequence of South Alligator and Finniss Fiver Group sediments that in broad terms lie on the north-eastern flank of the Howley Anticline, a regional upright arcuate fold with the eastern limb generally steeper than the western. Interpretations of airborne magnetics and SPOT imagery suggest that in the centre of the tenement a parasitic NW striking anticlinal axis is the site of a SW dipping? reverse fault. Within the tenement the South Alligator Group is represented by sparse outcrops of Mount Bonnie Formation in the south west and Burrell Creek Formation (Finniss River Group) in the north east. The contact between the two strikes about 40 degrees magnetic. During the reporting period, GBS Gold Australia remained under voluntary administration. The main activity has been to prepare assets for sale. For this purpose, a technical review, tenement ranking and valuation was undertaken. In addition, reconnaissance visits were also undertaken. This exercise established the mineral potential of the tenement for gold and uranium. EL 23541 is a small but strategic asset due to its close proximity to the Howley project area. This tenement could play an important in adding significant resource to the inventory base, or infrastructure building. During the next reporting period, an exploration program for the tenement has been designed. It will include ground-truthing, soil/rock chip sampling, and if encouraging results received, this will lead to RC/RAB drilling.