Combined annual report for the Southern Project Area 16 February 2010 to 15 February 2011

Abstract

Exploration activities were limited within the SPA during the reporting period, due to Emmerson's focus at higher priority areas elsewhere within the SPA. The main focus in the SPA was at the Trinity, Troika and Pinnacles North prospects within SEL 24980 with some regional work, including West Gibbet and drilling on the northern boundary of EL 8883. Exploration activities conducted consisted of: Historical data validation, which involved the analysis of the historical data (acquired during Emmerson's purchase of a group of assets from Administration in August 2006), compilation into a usable database and then validation against hard copy records located at the Tennant Creek Standley Street Offices and Yard, hence resulting in a robust validated database of historical exploration for the licence area. This historical data consists of drilling data and associated wireframing, modelling and resource estimates that may been conducted on prospects within the licence area. This is an ongoing process and will continue over the next few years as resources to conduct and complete these analysis and validation tasks must also be utilised in advancing areas of focus elsewhere in the SPA. Validation of this historical data is critical prior to the commencement of any inground exploration to ensure that expenditure for exploration is utilised in the most efficient manner to reap the best possible results; Exploration drilling was conducted in EL 8883, SEL 24890 and EL 23284. A total of 130 RAB holes for 7035m, 4 Diamond holes for 1563.8 m and 1 RC hole for 354 m were drilled; Application of the Vector Residual Magnetic Intensity (VRMI) was applied to all tenure in the SPA, but only the tenure with the most clear anomalism has been assessed in detail. Further detailed analysis will be conducted as resources permit. The VRMI has proved to be highly successful to date. The Red Bluff Area was identified to contain potential ironstone packages, following drill testing this was confirmed with thick ironstone packages intersected. This success has raised the integrity of the VRMI technology and allows Emmerson to more accurately determine the prospectivity of its tenure, identify potential ironstones, with potential to lead to economic mineralisation discoveries.