Annual report EL 25581 East Rover for the period 12 May 2010 to 11 May 2011 Year 2

Abstract

This exploration licence forms part of the Rover Joint Venture between TNG Ltd and Western Desert Resources Ltd. It is located on Aboriginal Freehold Land approximately 60km south west of Tennant Creek. EL 25581 was granted to Tennant Creek Gold Pty Ltd, a wholly owned subsidiary of TNG Ltd, on 11th May 2009. TNG had entered into a farm-in agreement with Western Desert Resources Ltd (WDR) on 27th February 2008, which would allow WDR to earn up to an 80% share in the tenement. WDR is the manager of the joint venture. The area is considered to be prospective for gold and copper mineralisation associated with ironstones similar to that found in the Tennant Creek goldfield. The area is located on the western margin of the Tennant Creek Inlier of Palaeoproterozoic age. This consists of the Warramunga Formation, which has been intruded by granitoids and is overlain by volcanic rocks and sediments of the Flynn Subgroup. The Warramunga Formation hosts gold-copperbismuth mineralisation which is associated with ironstones. The Middle Cambrian Wiso Basin covers the basement rocks in this area. Little exploration had been previously carried out in the area. Two diamond drillholes completed by Geopeko in 1976 on magnetic anomaly Explorer 124 intersected feldspar porphyry, diorite and microdiorite with moderate to strong disseminated magnetite. The magnetite present in the basement rocks explained the magnetic anomaly. Exploration activities carried out by the joint venture partners in the first year of tenure have included a helicopter-borne airborne magnetic survey and RC percussion drilling. Work in the second year has included the completion of three diamond tails for 695.5 m of NQ2 core on three of the 2009-2010 RC holes. The cored sections were not assayed as it was interpreted at the time that the drill holes had failed to intersect the targeted Warramunga Formation. Re-interpretation in 2010-2011 indicates that the cored sequences are in fact Warramunga Formation. Sampling for assay is under way. Exploration planned for year 3 will include airborne electromagnetic surveys and modelling, ground gravity surveys and modelling, re-logging and assaying of the 2010 drill core and further drilling.