Combined annual report for the Southern Project Area 16 February 2009 to 15 February 2010

Abstract

Exploration Licences ('ELs'), Substitute Exploration Licences (SEL's) and Authorisations (A's) in the Southern Project Area (SPA) were acquired by Giants Reef Exploration Pty Ltd (Giants Reef) and Santexco Pty Ltd (Santexco) to search for Tennant Creek style iron oxide copper-gold deposits (IOCG deposits). Giants Reef and Santexco are wholly owned subsidiaries of Emmerson Resources Ltd (Emmerson). This combined report records the exploration work completed on these tenements during the SPA Combined Reporting period from 16 February 2009 to the 15 February 2010. Exploration activities were limited within the SPA during the reporting period, due to Emmerson's focus at higher priority areas elsewhere within the SPA. The main focus in the SPA was at the Trinity and Pinnacles North prospects within SEL 24980, although SEL 24980 doesn't form part of this combined report, a request for its inclusion into the SPA for future years was submitted to DRDPIFR in early March 2010, Emmerson awaits a response. Expenditure in SEL 24980 during the SPA Combined Reporting period is approximately $3.2M. Exploration activities conducted consisted of: Historical data validation, which involved the analysis of the historical data (acquired during Emmerson's purchase of a group of assets from Administration in August 2006), compilation into a usable database and then validation against hard copy records located at the Tennant Creek Standley Street Offices and Yard, hence resulting in a robust validated database of historical exploration for the licence area. This historical data consists of drilling data and associated wireframing, modelling and resource estimates that may been conducted on prospects within the licence area. This is an ongoing process and will continue over the next few years as resources to conduct and complete these analysis and validation tasks must also be utilised in advancing areas of focus elsewhere in the SPA, such as the Trinity and Pinnacles North prospects. Validation of this historical data is critical prior to the commencement of any inground exploration to ensure that expenditure for exploration is utilised in the most efficient manner to reap the best possible results; Worked commenced late in the reporting period on the northern half of EL 8883, where a drilling program has been proposed and awaits CLC heritage and sacred site clearances in early April. The total work program consists of approximately 500 angled RAB holes, over the northern section of EL 8883 and the south central portion of adjoining SEL 24979 (part of Emmerson's Western Project Area). This drilling will be used to provide blanket coverage over an identified gravity high, generated from the 2008 detailed ground gravity survey. All holes have a proposed drilling depth of approximately 36m. Sampling will be based on 4m composites with samples assayed for Au, Ag, Bi, Cu, Fe, Mo, Pb, Te and Zn. The program is scheduled to commence April 2010 and will take approximately 50 days (approximately 2-months) to complete. Upon success of this RAB drilling program, follow up Reverse Circulation (RC) drilling will be undertaken to further define the geological targets. Analysis, interpretation and modelling of data captured from the drilling conducted in 2008 at EL 10199, as detailed in section 6.4. Results from this work is summarised as follows; Drilling conducted at the Malbec Main Prospect (MARC207 - 213) - Several ironstone lenses were intersected however no significant assays were returned and the prospect has remained at stage 3 in the project pipeline. No further work is recommended at this prospect in the immediate future due to higher priority areas within the SPA, namely the Trinity Area and Pinnacles North. Analysis, interpretation and modelling of data captured from the drilling conducted in 2008 over EL 23284, as detailed in section 6.8. Results from this work is summarised as follows; Drilling conducted at the Traminer Prospect (TRRC031 - 038) - Although the prospect has advanced to the Target Testing stage further work will be of a low priority due to the sporadic nature of mineralization and the limited size of the ironstones intersected by drilling. A recommendation has been made for gravity modelling focused on east Traminer and for a review of the mag models to better reflect the geology at west Traminer. Drilling conducted at the Mondeuse Prospect (MORC008 - 010) - Drilling did not intersect any mineralization and only limited ironstone in MORC009. Although the drillhole effectively tested the mag model near its centre, only magnetic sediments were encountered. End of hole survey readings indicated proximity to a large magnetic source. It is strongly recommended that remodelling of the anomaly be undertaken using downhole probe data. The Mondeuse East prospect was remodelled by Emmerson's contracted geophysicist Mr. Brett Adams after the initial RC drillhole did not define the source of the anomaly. It appears the RC drillhole has drilled beneath the anomaly. Logging from 285-289m in MORC009 indicated a strong zone of chlorite-magnetite alteration within a larger zone of magnetic sediments and this may correspond to the down dip position of the larger magnetic body. Drill testing of this revised model will occur at a later date due to higher priority targets in the SPA, namely the Trinity Area and Pinnacles North. Drilling conducted at the Shiraz Prospect (SHRC001) - No ironstone was intersected in this drillhole however magnetic sediments were logged from 273m to 348m (EOH). A low priority recommendation has been made to remodel the magnetic anomaly to incorporate mag susceptibility data collected from drilling and also downhole mag probe data. Remodelling will provide a check on whether the intersected lithology can explain the observed magnetic anomaly. Drilling conducted at the Nebbiolo Prospect (NBRC001) - Although several narrow ironstone lenses were intersected by the single RC drillhole completed at the prospect no significant assays were reported. No ironstone was intersected by RAB drilling in neighbouring EL 23285 with only limited geochemical anomalism detected. A low priority recommendation has been made for remodelling of the ironstone at Nebbiolo to incorporate drill data collected. Drilling conducted at the Analytic One prospect (ANRC001 - 002) - ANRC001 was drilled to 378m and intersected several lenses of iron-oxide (haematite and magnetite) within a broad zone of chlorite-magnetite alteration. Gold mineralisation is contained within massive haematite-chlorite-magnetite ironstone, returned assays were 24m at 6.27g/t Au from 246m including 3m at 48.3g/t Au from 264m. The Analytic One ironstone body, hosting mineralization has no surface expression and is covered by 5-7m of recent alluvium. Analytic 2 (ANRC002) was drilled to 408m and intersected a wide zone of chloritic magnetic siltstone from 300 to 402m downhole. No anomalous mineralised zones were intersected; however the variation in the alteration intensity suggests the drillhole may be proximal to ironstone at depth and that we experienced a 'nearmiss'. Downhole magnetometer measurements will be collected to determine the presence of any off-hole magnetic source. Drilling conducted at West Gibbet Prospect - Drilling defined the strike, dip and plunge extents for the oxide haematite quartz ironstone which returned the significant intersection of 13m at 66.9 g/t Au from 74m including 9m at 95.5 g/t Au from 74m from RC hole WGRC024. The ironstone strikes 60m east - west, is dipping steeply to the North and has an approximate true thickness of 10m. Further assay results from West Gibbet were disappointing after the initial success of WGRC024. Modelling of the target ironstone has been completed and the drilling has closed off the prospect along strike both east and west. Following the completion of drilling, magnetic susceptibility data, string outlines and lithologies were sent to Steve Massey for remodelling of the ironstone causative bodies. These models have now being received and match the geological model indicating the ironstone continues at depth beneath the interpreted thickened hinge zone. This deep zone represents a potential target zone for gold mineralisation and may be drilled by a diamond rig in the future. The project was reviewed during the November 2008 targeting session. The shallow oxide target has been thoroughly tested by drilling earlier in 2008. A deeper target exists around historic drilling however this is a lower priority anomaly and must be refined utilizing downhole magnetic and gamma probing; Exploration drilling was conducted in EL 23284, this exploration drilling of two RC drillholes ANRC003 was proposed to target up dip from the ironstone intersection in ANRC001 while ANRC004 was proposed to target west along strike from ANRC001 and one DDH drillhole ANDD01. Downhole mag probing was completed with a modelling report written by Emmerson's contracted geophysicist Mr. Steve Massey of Western Geoscience. The drilling was conducted by McKay Drilling, between 20 - 24 April 2009 and 10 - 11 June 2009, for a total of 837m. The two follow-up RC drillholes were completed at the Analytic One prospect between 20 - 24 April for a total of 592m. Drillhole ANRC003 targeted up dip of the gold bearing ironstone drilled in 2008 (ANRC001). No ironstone was logged however a weak zone of chlorite-magnetite alteration was defined up dip of the original intersection. ANRC004 targeted along strike from ANRC001 at the same RL. A wide zone of magnetic sandstonesiltstone sediment was intersected between 114m and 335m (EOH). Within this stratigraphical horizon a zone of moderately magnetic chloritic ironstone was intersected from 226 to 236m. A strongly chloritic halo surrounded the ironstone from 218 to 240m. Interpretation of the drilling at Analytic One suggests several discontinuous ironstone lenses occur at the prospect with gold mineralization concentrated on the footwall of the larger lenses. Further potential exists at depth however gold grades would need to be high and ironstone volume significant for an economic deposit. As announced via ASX on June 4 and detailed in the above table, drillhole ANRC004 intersected 3m at 7.76ppm Au from 225m in a chlorite-magnetite zone on the northern edge of a well developed magnetite ironstone. An RC precollar was drilled to 245m on the 10 of June with a diamond tail planned to test the target below ANRC001 (3m at 48ppm Au). Diamond drilling was postponed due to the higher priority drilling elsewhere in the SPA, namely at Pinnacles North and the Trinity Area.