Annual exploration report EL 23432 for the period ending 8 May 2010 Hayes Creek North, Burnside Project

Abstract

EL 23432 is located about 140km SE of Darwin, Northern Territory, and 3km north of Hayes Creek roadhouse on the Stuart Highway. The tenement was granted to Burnside Joint Venture, managed by Burnside Operations P/L comprising Territory Goldfields NL and Buffalo Creek Mines NL. These were wholly owned subsidiaries of GBS Gold Australia Pty Ltd. GBS Gold Australia went into voluntary administration on 15 September 2009 and Crocodile Gold Australia purchased all assets held by the previous owner on 6 November 2009. The tenement overlies the Burrell Creek Formation of the Finniss River Group. East of the tenement is the Hayes Creek Fault, a major north east striking fracture system. The Burrell Creek Formation that forms high ground in the tenement occupies the axial zone of the fold. This is interpreted as a refolded syncline. South-east and South-west of the tenement, deformed and metamorphosed rocks of the South Alligator and Mount Partridge Groups are present, which are inter-bedded with the Zamu Dolerite. During most of the reporting period, the tenement remained under voluntary administration. On the instructions of Several Administrators a technical review, tenement ranking and valuation was undertaken. This review identified mineral potential of the project area. TMI image of the project area shows that it is characterised by the presence magnetic anomalies in the northern part of the project area. These anomalies along with geological setting provide fertile ground for the localisation of gold, uranium and base metals mineralisation. Crocodile Gold Australia regards EL 23432 highly due to its significant potential. In the next reporting year, company plans to explore the tenement aggressively. It is expected that selected parts of the project area will be mapped in detail. Historical geophysical data will be processed and magnetic and radiometric anomalies will be identified. This will lead to rock chip/soil sampling program. Results obtained from above mentioned program will be interpreted and drill targets will be defined. This will lead to RC/RAB drilling in the project area to fully assess the geochemical and geophysical targets.