Annual report on EL 10382 AuQuest Project period ending 22 October 2010

Abstract

Exploration Licence 10382 is located about 80 km SE of Darwin in a close proximity to the Toms Gully Gold mine. The tenement was granted to Renison Consolidated Mines NL on 23 October 2003 and will expire on 22 October 2009. It comprises 49 blocks covering 124 km2. The tenement was acquired by Crocodile Gold Australia on 6 November 2009 along other assets in the Northern Territory after voluntary administration/liquidation declaration by previous owner GBS Gold Australia. The Northern portions of the project area contain the oldest sediments of the Wildman Siltstone which belong to the Mt Partridge Group. Here, the Mount Partridge Group that is unconformably overlain by the South Alligator Group (Mt Bonnie Formation Koolpin Formation and Gerowie Tuff), and comprises most of the tenement areas. The southern portion of the Project area is comprised of the Burrell Creek Formation, which conformably overlies the South Alligator Group. Tertiary and Quaternary soils and gravel's unconformably overlie all the lower lying portions of the tenement areas, generally referred to as 'Black Soils Regions'. During the year under review, a total of 344 RC chip samples collected in the previous drilling program, reported in 2008-09 annual report, were assayed for Au, Co, Fe, Cu and Ni. In addition, 76 soil samples were collected during oriented geochemical sampling program mainly targeting the VTEMP anomalies. These samples were assayed for Au, Ag, As, Bi, Cu, Pb, Zn, U, Th, Co, Mo, Ni, Be, Ce, Dy, Er, Eu, GD, Ho, La, Lu, Nb, Nd, Pd, Pr, Pt, Re, S, Sb, Sm, Sn, Ta, Tb, Ti, Tm, W, V, Yb. These results are characterised by elevated levels of lead copper, cobalt, uranium and Arsenic, and provide encouragement to pursue exploration further. In the next reporting year, work will focus on VTEM conductors and anomalous soil results surrounding Anniversary Breccia. RC drilling will be used at Anniversary Breccia to test soil and VTEM targets. Structural interpretation is required to work out the nature of structure or structures controlling mineralisation and if these structures can be traced to areas not yet drilled.