Annual report EL 25581 East Rover for the period 12 May 2009 to 11 May 2010 Year 1

Abstract

This exploration licence forms part of the Rover Joint Venture between TNG Ltd and Western Desert Resources Ltd. It is located on Aboriginal Freehold Land approximately 60km south west of Tennant Creek. EL 25581 was granted to Tennant Creek Gold Pty Ltd, a wholly owned subsidiary of TNG Ltd, on 11 May 2009. TNG had entered into a farm-in agreement with Western Desert Resources Ltd (WDR) on 27 February 2008, which would allow WDR to earn up to an 80% share in the tenement. WDR is the manager of the joint venture. The area is considered to be prospective for gold and copper mineralisation associated with ironstones similar to that found in the Tennant Creek goldfield. The area is located on the western margin of the Tennant Creek Inlier of Palaeoproterozoic age. This consists of the Warramunga Formation, which has been intruded by granitoids and is overlain by volcanic rocks and sediments of the Flynn Subgroup. The Warramunga Formation hosts gold-copper-bismuth mineralisation which is associated with ironstones. The Middle Cambrian Wiso Basin covers the basement rocks in this area. Little exploration had been previously carried out in the area. Two diamond drillholes completed by Geopeko in 1976 on magnetic anomaly Explorer 124 intersected feldspar porphyry, diorite and microdiorite with moderate to strong disseminated magnetite. The magnetite present in the basement rocks explained the magnetic anomaly. Exploration activities carried out by the joint venture partners in the first year of tenure have included a helicopter-borne airborne magnetic survey and RC percussion drilling. The airborne magnetic survey delineated a number of magnetic anomalies. Subsequent interpretation of the data led to the identification of twelve targets for further work. Seven RC percussion drillholes totalling 1692m were completed in January-February 2010. Problems were encountered with heavy ground water inflow and four of the holes were not completed to their planned depth. The basement rocks in the completed holes consisted of a sequence of volcanic and/or igneous rocks. The analytical results from these rocks were not anomalous. Phosphatic rocks were encountered at the base of the Wiso Basin succession. Exploration planned for year 2 will include completion of the initial drilling program by diamond drilling, followed by further geophysical surveys and drilling if warranted.