Annual report on EL 22206 AuQuest Project period ending 21 October 2010

Abstract

EL 22206 is a significant asset within Crocodile Gold Australia's portfolio which is situated about 90 km south-east of Darwin in the vicinity of the Toms Gully gold mine. The tenement was granted on 22 October 2003 to Renison Consolidated Mines Limited and expires on 21 October 2011. It comprises 2 graticular blocks that comprises 6.5 km2. On 25 July 2007, GBS Gold Australia Pty Ltd acquired all tenements and Toms Gully gold mine held by Renison Consolidated Mines NL, including EL 22206. However, GBS Gold Australia went into voluntary administration on 15 September 2008 and in November 2009, Crocodile Gold Australia purchased all assets held by GBS Gold Australia (liquidated). EL 22206 is located within the Pine Creek Orogen, which has been interpreted as an intracratonic basin lying on an Archaean basement, and containing a 14 km thick sequence of Palaeoproterozoic sediments, accompanied by lesser volcanics, granite plutons and dolerite intrusions. The sequence was deformed and metamorphosed during the Top End Orogeny (~1870 - 1780 Ma. Cullen Batholith and satellite plutons intruded the Palaeoproterozoic meta-sedimentary sequence dated at 1850 - 1780 Ma). During the year under review, new owner acquired the control of the tenement and commenced a thorough review of the project area. EL 22206 is situated in a close proximity to the Toms Gully gold mine and has similar geological setting, which points towards mineral potential of the project area. Interpretation of high resolution geophysical data obtained in 2008-09 showed a number of magnetic and radiometric anomalies which require field checking. However, much attention remained focused in bringing on-line mining and assets with a multi-million dollars budget. Other activities included reconnaissance visits, tenement administration and report writing. In the next reporting year, selective parts of the project area will be mapped in detail and identified radiometric and magnetic anomalies will be examined in the field. Soil/rock chip sampling of the areas of interest will be undertaken, and if encouraging results received, it will lead to RC drilling.