EL 22440 7th Annual report for EL 22440 period ending 26 February 2011

Abstract

EL 22440, originally consisting of 25 graticular blocks was granted on the 27th February, 2004. Relinquishments have reduced the area to the current 11 blocks. The licence encompasses the abandoned McCarthy's silver-lead mine and several historical prospect areas bearing variations of that name. Early Proterozoic metasediments of the Mt Partridge, South Alligator and Finnis River Groups are exposed by asymmetrical folds along north-westerly trending axes that are abruptly truncated by the McCarthy Granite of the Cullen Batholith. Mineralisation styles being investigated are consistent with types known throughout the Pine Creek Orogen with a particular focus on copper, lead, zinc, silver and gold. At the end of the last active phase of consolidated exploration in 1995 it was concluded that the area remained prospective for base and precious metals. More recently the iron ore potential of the area has also been noted. Historical exploration has pursued extensive surface sampling and some limited drilling and costeaning. The current exploration methodology has extensively used various geophysical techniques and some targeted rock-chip sampling programs to define prospective areas. During the current reporting period the tenement holders entered into agreements with the traditional owners and Territory Resources Ltd to facilitate land access and exploration activities. As a result of the agreements extensive cultural heritage clearance surveys were conducted followed by a mapping, rock-chip sampling and RC drill program within a limited area to define the extent and characteristics of previously identified Frances Creek style high-grade hematite reefs of the Wildman Siltstone. A total of 31 reverse circulation drill holes were completed for a total of 2,610 metres along an 800m strike length of outcropping reefs to determine the significance of the mineralisation. Geological logging of the drill chips together with XRF analysis of 754 drill samples confirmed that the mineralisation is similar to that found at the Frances Creek Iron Ore Project where mineralisation is restricted to a relatively narrow brecciated zone that runs above and sub-parallel to the Lower Wildman Formation footwall. The majority of drilling only intersected thin bands of moderate grade Fe with best intersections including 6m at 60.4%Fe, 0.03%P and 5m at 58.1%Fe, 0.02%P. Detailed geological mapping at 1:1000 scale and 46 rock-chip samples taken across the area cleared for access in conjunction with some drilling results defined a complex structural setting for the mineralisation which is still not fully understood. Additional access clearances will be required to enable further exploration activities including mapping, sampling, geophysics and drilling of additional haemetite mineralisation and previously defined base and precious metal targets.