Roper River Iron Ore Project EL 24102 Hodgson Downs Third annual report for period 20 August 2009 to 20 August 2010

Abstract

EL 24102 was granted on 13th August 2007 to Geoffrey John Fanning and subsequently transferred to TZ Enterprises Pty Limited (TZE), a Darwin-based resource company late in 2007 for a period of six years. On February 05th 2009 TZE changed its name to North Australian Iron Ore (NAIO). The license area of 60 sub-blocks was originally applied for to target the iron ore potential following up a series of deposits which were identified by BHP in the 1950s. Of interest also was the Heavy Mineral potential arising from the dolerite sills scattered throughout the area. NAIO had also recognised the prospectivity of the area for diamonds and uranium. In December 2009 Batavia Mining Ltd (Batavia) acquired an option from NAIO over the iron ore rights of the tenements comprising the Roper River Iron Ore Project, which includes EL 24102. The other tenements comprising the project are EL 24101, EL 26412 and ELA 27411. Batavia effectively managed exploration on the project from April 2010 and in August 2010 exercised its option to purchase the project from NAIO. Batavia changed its name to Sherwin Iron Ltd (Sherwin) in September 2010, to reflect the company's focus on this project. This report details exploration on the tenement during the 2009/2010 reporting period from 13th August 2009 to 12th August 2010. Several helicopter based geological reconnaissance visits/surveys were conducted with limited sampling. This included site visits for initial due diligence by Batavia to assess the geometry, extent and variability of the Sherwin ironstone member, a technical due diligence visit as part of a project valuation for Batavia by SRK Consulting, a field visit by Korean investor group Daewoo and another by Chinese steel producer Jiangyin Huaxi Iron and Steel Co Ltd. A data review and report was prepared summarising historic exploration (mostly by BHP in the late 1950s) existing iron ore deposits and remaining iron ore potential. Deposit W, from BHP records, was selected for initial exploration considered to have the greatest potential tonnage at high grade. A series of 1:10,000 base geology plans with topography was prepared for exploration planning. Aerial photography was flown as part of the pre-feasibility engineering requirement but also for potential geological mapping. Base control points were surveyed as were RC drill hole locations. A base camp/office was established at Flying Fox Station. Significant upgrading and maintenance of existing Station tracks was required both for initial and continuing access to EL 24102. Clearing and upgrading of old BHP tracks was needed to provide access to drill sites around Deposit W. A total of 20kms of track access was prepared within the tenement to provide access to drill sites. RC drilling and trenching were the two main exploration activities on EL 24102 during the reporting period and both are ongoing. The RC drilling is the basis of a JORC compliant resource estimate whilst trenching provides material for beneficiation testing. Up to 12 August 10 RC drilling of 229 holes for 6293 metres had been completed at Deposit W with all assay results received. As a diamond rig was not available at the commencement of the programme and in order to progress work to meet the tenement covenant an RC rig was selected in the meantime until a diamond rig became available. The use of an RC rig was also considered favourable to meeting requirements of the MMP as it resulted in a lower level of disturbance. A revised MMP was submitted subsequent to the period covered by this Annual report. In addition 10 trenches have been completed for metallurgical testing as part of the project scoping study. This amount of trenching was less than the total 25 trenches approved under the MMP. However it is noted that the trenches were extended up to 4metres maximum depth from the originally proposed 2 to 3 metres in order to obtain a more representative bulk sample of the iron ore material. Favourable results were received from initial beneficiation testing at Nagrom Laboratories in Perth of a 100kg sample of oolitic hematite from trench RTW 9. 5 An initial field inspection by Ecologia Environmental Group included both a Flora and Fauna Survey as part of the Scoping Study, and their report is in progress. Regional geological description and previous exploration history has been in part sourced from previous Annual Reports submitted by NAIO.