Tennant Creek Project Annual Report for the period 4 February 2011 to 3 February 2012 EL 23738, EL 23818, EL 23819, EL 23828, EL 23846, EL 23873, EL 23890, EL 23895, EL 23918, EL 24158

Abstract

This report describes exploration activities for gold and copper undertaken by Prosperity Resources (Tennant Creek) Pty Ltd over ELs 23738, 23818, 23819, 23828, 23846, 23873, 23890, 23895, 23918, 24158 as part of the Tennant Creek Project between the 4th February 2011 and 3rd February 2012. The project area is located approximately 800 kilometres south of Darwin in the Tennant Creek Goldfield and surrounds the town of Tennant Creek. During the reporting period essential research was conducted which included; seeking data; performing desktop reviews; planning for further exploration work; discussing permits and public consultation requirements with relevant government departments. The comprehensive geological review which has been undertaken in the last two reporting periods was required to re-assess the potential for new gold/copper mineralising systems that potentially exist within the Tennant Creek area. It was concluded that Tennant Creek is fundamentally a gold and not an IOCG mineral system because the copper has an apparent sedimentary and not magmatic origin. This means that copper occurs peripherally and not centrally to the system. The most favourable target sites will be larger and more complex structural zones, where a variety of anomaly-types form in a comparatively closely spaced cluster. These sites are likely to be more fundamental structural sites where there have been higher rates of fluidflow, representing a more core part of the system. In this context, the presence of both weathered and possibly haematitic ironstones are positive criteria. Prosperity's tenure in the Tennant Creek region is largely under explored and the paucity of drilling over the vast majority of the Company's leases heightens existing potential. A meeting is being planned with Prosperity's management and the Central Land Council to discuss activities within the Tennant Creek tenements and the potential to undertake exploration within the area. The company has been in discussions with key stakeholders about the implementation of an exploration program within the area. Prosperity has been actively working to address stakeholder concerns and issues preventing the commencement of activities. MMI soil sampling is proposed as the most effective method in deeply weathered terranes.