8th Annual Report for EL 22440 period ending 26 February 2012 McCarthy's

Abstract

EL 22440, originally consisting of 25 graticular blocks was granted on the 27 February, 2004. Relinquishments have reduced the area to the current 11 blocks. The licence encompasses the abandoned McCarthy's silver-lead mine and several historical prospect areas bearing variations of that name. Early Proterozoic metasediments of the Mt Partridge, South Alligator and Finnis River Groups are exposed by asymmetrical folds along north-westerly trending axes that are abruptly truncated by the McCarthy Granite of the Cullen Batholith. Mineralisation styles being investigated are consistent with types known throughout the Pine Creek Orogen with a particular focus on copper, lead, zinc, silver and gold. At the end of the last active phase of consolidated exploration in 1995 it was concluded that the area remained prospective for base and precious metals. More recently the iron ore potential of the area has also been noted. Historical exploration has pursued extensive surface sampling and some limited drilling and costeaning. The current exploration methodology has extensively used various geophysical techniques and some targeted rock-chip sampling programs to define prospective areas. Access issues due to the existence of a large sacred site continue to hold back exploration progress due to a 'no-access' restriction, however negotiated agreements are slowly facilitating limited exploration works. Drilling of a limited area of high-grade hematite outcrops by Territory Iron Pty Ltd, under an exploration agreement, confirmed the mineralisation is similar to that found at the Frances Creek Iron Ore Project where mineralisation is restricted to a relatively narrow brecciated zone that runs above and sub-parallel to the Lower Wildman Formation footwall. The majority of drilling only intersected thin bands of moderate grade Fe with best intersections including 6m at 60.4%Fe, and 5m at 58.1%Fe. Detailed geological mapping in conjunction with some drilling results defined a complex structural setting for the mineralisation which is still not fully understood. Additional access clearances will be required to enable further exploration activities including mapping, sampling, geophysics and drilling of additional haematite mineralisation and previously defined base and precious metal targets. Rehabilitation works were carried out across the majority of the drill pads and tracks with the exception of several that are required to complete planned diamond core bulk sample drilling. Additional samples from the drill chip spoil were taken for base-metal suite multi-element and gold geochemical analysis. Results identified highly anomalous Zn in one of the sampled 1m intervals and 2.3 g/t silver from another 1m interval however gold results were negative. The Aboriginal Areas Protection Authority are currently assessing an Authority Certificate application based on a negotiated access agreement with the Traditional Owners that facilitates land access and exploration activities across the remaining AAPA declared 'no access' areas of the lease. The outcome of this application is currently awaited.