Annual Report ML 23812 Spring Hill for the period 16 January 2011 to 15 January 2012

Abstract

The Mining Lease was held by Tennant Creek Gold (NT) Pty Ltd until it was acquired by Western Desert Resources Ltd in July 2007. The tenement covers the historic Spring Hill gold mining centre. The mining lease is underlain by sediments of the South Alligator Group and the Finniss Group of Palaeoproterozoic age. These rocks have been folded along NW trending axes and the folds are tight to isoclinal. A major anticline, the Spring Hill Anticline, occurs in the project area and plunges to the south. Gold was discovered in the area in the 1870's. Mining activities at Spring Hill took place between 1880 and 1905, and then intermittently until 1966. Total recorded production was about 22,000 oz of gold which was mainly derived before 1900. Mining mainly took place on the Main and Middle lodes with the oxidised ore being worked to depths in excess of 100m. Exploration carried out by BHP Billiton during 1988 and 1992 delineated a low-grade sheeted quartz vein system to the west of the main historical workings, named the Hong Kong Zone. An ore reserve estimation completed in 2003 showed that the Hong Kong Zone and the Main, Middle, and East Lode zones had an Indicated Resource of 3.6Mt at 2.34g/t Au, for 274,000oz of contained gold, at a 1g/t Au assay cut-off grade. In 2008, Western Desert Resources Ltd completed an airborne EM survey as well as scoping and ore reserve estimation studies over the tenement. Preliminary interpretation of the airborne EM data shows that no anomalous conductive zones occur within the mining lease. During the reporting period, Western Desert Resources undertook further geophysical interpretation of the EM data. Western Desert Resources intends to farm-out the project early in the next reporting period.