EL 22307 Abner Project Combined annual and final surrender report for the period 6 August 2002 to 5 August 2010

Abstract

The EL 22307 was granted to Rio Tinto Exploration Pty Ltd. The tenement has been a part of farmin agreement between Rio Tinto and Diamond Mines Australia (DMA), originally covering numerous Rio Tinto tenements and applications in the Northern Territory. Gravity Diamonds Limited (formerly Gravity Capital Limited) managed the exploration agreement for DMA for its first 7 years. In early 2009, Gravity Diamonds signed a contract with Legend International Holdings (Legend) for the sale of all of its Australian based properties and rights to tenements held by third parties including EL 22307. Prior to its sale to the Legend, the EL was part of McArthur River Region tenements. However, after acquisition, Legend placed it in Abner Project. The Abner Project holds high priority in Legend's diamond exploration endeavours and currently actively explored. During the first year (2002-2003) of tenure, a review of historic exploration data and rock chip sampling program was conducted. Based on anomalous diamond and base metal results, a FalconTM airborne gravity gradiometer survey was planned. The FalconTM survey was flown during the second year (2003-2004) of tenure. Data processing and preliminary interpretation defined target areas for first pass field investigation. During 2004-2005, identified FalconTM anomalies were field inspected and sampled. A total of 29 surface samples comprising 3 loam, 2 gravel and 24 soil samples were collected. Adverse weather conditions and unavailability of drilling contractor resulted limited work during 2005-2006 period. However, a single loam sample for recovery of kimberlite indicator minerals (KIM) was collected from geophysical TAN016 anomaly. During the fifth year (2006-2007) of tenure, initially two gravel samples and one loam sample was collected. The loam sample was a repeat sample on TAN016 anomaly. However, encouraged by positive results from known historic negative sites elsewhere in the surrounding region, Gravity collected further 10 gravel samples within EL 22307. Heavy mineral results from 10 samples collected during the fifth year became available in 2007-2008. Further six samples were collected for kimberlite indicator mineral (KIM) analysis during the same year. No field based exploration activity was conducted in 2008-2009 except reevaluation of past 7 years of data. The cutback in exploration work on the tenement was trigger by change in the parent company's circumstances severely affected by the impact of global financial crisis. Consequently complete tenement package including EL 22307 was sold to the Legend International Holdings Inc. After acquiring EL 22307, Legend completed compilation and review of historic geophysical and sample data sourced from Gravity Diamonds and other private and public entities. This task resulted in identifying high priority old and generation of new targets for further investigation. Field based exploration activities started in 2010 with the collection of heavy mineral analysis (HMA) and MMI samples and ground EM-34 survey. EL 22307 remains an important part of the exploration effort being conducted by the Legend International Holdings in the Northern Territory. The EL is considered prospective for commercial source of diamonds. An SEL application has been lodge with the Department over EL 22307 and neighboring EL 239321 to gain sufficient time to follow up encouraging results to a successful conclusion.