Harts Range Project Annual technical report for Exploration Licence Group GR132/09 EL 24552, EL 25063 and EL 25430 for the year ending 21 February 2011

Abstract

EL 24552, EL 25063 and EL 25430 comprise Barfuss Corporation's Harts Range Project, covering more than 700 square kilometres. Underlying geology through most of the area consists of high-grade metamorphic rocks of the Arunta Block, including the Harts Range Group (part of the Late Proterozoic to Cambrian Irindina Province), with older Aileron Province rocks in the east (Entia Dome) and west (Strangways Metamorphic Complex, including younger deformation in the Gough Dam Schist Zone). Field activity to date has included reconnaissance mapping, extensive rock-chip sampling and detailed ground spectrometer surveying in a number of areas of interest. Detailed air-borne geophysical surveying is planned. A significant number of prospects have been identified. These include: rare earth element (REE) prospects (+thorium, +/-uranium), principally the Spinifex Gully group of prospects in EL 25430, extending into EL 24552 (assays up to 11.9 % REE, 1140 ppm uranium, 4.72 % thorium); the extensive Copper Queen group of copper-gold prospects, investigated previously by Tanami Gold NL, mostly in EL 24552 but extending into EL 25430; two meta-ultramafic bodies (Plug 1 and Plug 2) in the west of EL 24552, with indications of nickel-chrome (+/- platinum-palladium) anomalism (reconnaissance assays 0.2-0.27 % nickel over 125 metres); and several pegmatite dykes in the east of EL 24552 and EL 25063 with very strong uranium-niobium-yttrium-tantalum(-REE) mineral enrichment ('Bobs', 'Cusp', 'Malex', 'Pearly Gates' prospects) (assays over 7 % uranium). Prospectivity for other minerals is indicated by, for example, the Harts Range Ruby Mine and a near-by vermiculite prospect (surrounded by EL 25764 and EL 25063) and the Oonagalabi copper-zinc prospect, a couple of kilometres south of EL 24552. Barfuss was subject to a protracted legal dispute, involving the freezing of funds earmarked for exploration, from 2007 to late 2009, which was finally concluded, primarily in Barfuss? favour, a few months prior to this reporting period. A subsequent agreement was signed with a South Korean corporation which was to invest $12m on exploration of this and the other Barfuss Harts Range projects, but this cash flow has not yet materialised. Barfuss has been in on-going negotiations with a number of other companies also, including D'Aguilar Gold Ltd, Commissioners Gold Ltd, the Merck Group (Germany), BOA Advisors Trust LLC (Indiana, USA), and a Chinese group (via a third party). Pending the results of these investment and joint venture discussions - and the delays related to the South Korean interest - very little in the way of numerical outcomes can be shown for this period. Field work has been primarily reconnaissance prospecting and siting/planning access to prospects for planned work (e.g. drilling, locating water supplies, etc.). The company regards the project as highly prospective and is keen to resume significant exploration activity on it.