Annual exploration report on MLN 4, MLN 206, MLN 1020, MLN 1034, MCN 1172 and MCN 4785 for period ending 28 February 2010 Fountain Head Burnside Project

Abstract

The Fountain Head project is centered approximately 135km SE of Darwin, NT and 10 km east of the Brocks Creek mine office. GBS Gold Australia (liquidated) acquired the project area through Burnside Joint Venture in 2005. On the liquidation of GBS Gold Australia, Crocodile Gold Australia purchased the projects along other assets in 2009. The mineralisation at Fountain Head occurs within the upper units of the Mount Bonnie Formation, the uppermost division of the South Alligator Group. This comprises cyclic siltstone, mudstone and greywacke packages that have been metamorphosed to greenschist facies. In the area, Fountain Head stratigraphy is folded along axes that strike NW-SE and plunge to the SE at shallow angles. It was reported that the Chinese miners preferentially worked thin, high grade veins in carbonaceous mudstones leaving the thicker, lower grade veins in greywacke. Sheeted quartz vein stock-works occur mainly in the axial zone with veins predominantly dipping northeast. The SSE-striking anticline has variable limb dips and the axis is faulted. Some saddle reefs occur in the axial zone. During most of the year under review, Fountain Head group of tenements remain under care and maintenance. Under the instruction of several administrators, 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 potential of the project area and indicated that resources present within the project area will play an important role in the revival of mining and processing in the region. Other activities which were conducted are data validation, reconnaissance visit, report preparation and tenement administration. Currently, planning is underway to re-commence mining operations. Important part of initiation will define the reserves which will lead to mining along with pit optimisation and other related activities in the area. In addition, further resource drilling and assaying will be undertaken particularly at depth to extend the resource base further.