Annual report MLN 1109, MLN 833, AN 398, AN 399, AN 400, AN 401 and AN 402 Burnside Project - Union Reefs Gold Mine 1 January 2010 to 31 December 2010

Abstract

The Union Reefs Group comprises 7 tenements (MLN 1109, MLN 833, ANs 398-402) and is located about 170 km SE of Darwin, NT and 12 km north of Pine Creek. On 15 September 2008, GBS Gold Australia went into voluntary administration and all assets including Union Reefs gold processing site was placed under care and maintenance. In 2009, Crocodile Gold Australia purchased all assets held by GBS Gold Australia (liquidated) and secured the ownership of the Union Reefs project area on 9 November 2009. The geology of the Union Reefs mining centre is dominated by the NW striking Pine Creek Shear zone, a 300m wide corridor of folded and sheared metasediment package that largely comprises Burrell Creek Formation and structural inliers of Mt Bonnie Formation. The host sequence including the Pine Creek Shear Zone is confined to the east by the Allamber Springs Granite and to the west by the Tabletop and McCarthys Granites. Rocks within this zone have been tightly folded and in high strain areas, subjected to fold limb failure. Gold mineralisation extends over a length of 3.5km, 400 meters width and to a vertical depth of 300 metres. Numerous historical workings have been developed over the northwest striking Pine Creek Shear Zone and associated Union and Lady Alice Lines. The Lady Alice Line follows the axis of the Lady Alice Anticline. Mineralisation is associated with quartz-sulphide veining, compromising 1mm to 2 metre thick lode-style viens in sheared pelites, stockwork veins in greywacke and sheeted vein systems in thinly interbedded pelites and psammites. Exploration activities during the reporting period included a review and update of the Union Reefs resource models (Lady Alice, Union North, Union South, Millars/Big Tree Prospect, Esmeralda and Orinoco deposits). During the 2011 exploration year, exploration activities will include drilling of the Millars/Big Tree, Union North, Union South and Prospect deposits to increase confidence within the resource models. Approximately 16 diamond holes and 22 RC holes have been planned for the Union Reefs group of tenements. Results from the drilling programs will be used to further update the resource models.