Combined Annual Report for period ending 31 December 2011 McKinlay Mine

Abstract

The mine site was visited on a number of occasions during 2010 and 2011 to inspect any changes to the site. The site remains geologically and environmentally stable. A meeting with Amdel metallurgists re further gravity recovery testing of the McKinley ore after grinding to P100 75 um and P100 50um took place in Darwin. Two 50 kilogram samples were collected from the stockpile. One sample primarily consisted of quartz which generally returns an assay of 2-6 grams per tonne. The second sample was primarily gossanous-ferruginous material which generally returns an assay of 5-20grams per tonne. Further testing was not carried out at the request of Tom Starr for the following reasons: An extensive search of United States literature on gravity gold recovery from hard rock ore has shown that recovery of less than 50 micron gold by gravity separation is extremely difficult at best and some authors report it as being impossible. (references); A major shareholder Eric Gardiner has developed Dementia and can no longer partake in discussions regarding the mine. His affairs are being handled by NT Guardianship Services with no clear pathway being decided as yet. A meeting was held with Betty Gardiner re the future of the mine and how Eric's share and responsibilities should be handled. Again as there was no clear-cut response from the guardians, conclusive decisions could not be made.