Annual report for EL 27348 for the period ending 3 November 2010

Abstract

This Annual Report for Exploration Tenure 27348 provides a summary of the activities undertaken on the permit since November 2009, including any results produced by these activities. This licence has recently been joined to a group of licences that were assembled to create a large area that could feasibly be exploited as a coal producing area. The area covered by the group licences will be referred to as the Project Area. Tri-Star Energy Company anticipates that it this Project Area will ultimately create a large economic mining project. EL 27348 was granted on 6 November 2009, for a term of six (6) years and is set to expire on 3 November 2015. Tri-Star Energy Company is the sole titleholder of EL 27348 and Tri-Star Coal Operations LLC is the sole operator of EL 27348 and the Project Area. The work program for EL 27348 during its first year required a geological and geophysical review of existing data and information towards determining the location of Permian coals within the Purni Formation and specifically, their depth, thickness, lateral extent and quality. lt also required mapping activities and the determination of a drilling and/or seismic program moving forward. Tri-Star spent considerable time in investigating and re-analysing the seismic data, water bores and other geological and geophysical data over EL 27348 and the surrounding tenures. The data was highly promising and has therefore caused Tri-Star to revise and improve the original drilling program for the Project Area, to incorporate an ironstone deposit. The ironstone formation, located in between the De Souza and Crown Point Formation, is believed to be temporally contemporaneous with the deeper Permian Purni coals to the east, which are also of great interest to Tri-Star. Officebased studies have determined that it is unlikely that the coal seams extend to the Southern area of EL 27348 and therefore, Tri-Star has voluntarily relinquished approximately 90 per cent (%) of EL 27348. The expenditure commitment for EL 27348 for its first year required an expenditure of 565,000.00. Tri-Star Energy Company has met all work and expenditure commitments for EL 27348 for the term of the licence. The second year of the term will focus on an expanded seismic program over the Project Area and gathering core data through a revised drilling program over the Project area that focuses on both the coal and iron formations to assess their potential mine ability and commerciality.