SEL 28291 Roper Gulf Region First Annual Report for the period 6 May 2011 to 5 May 2012

Abstract

This report covers activities on SEL 28291 (formerly EL 23048, EL 24655 and EL 24986 relinquished December 2010, January 2011 and May 2010 respectively) which was granted in May 2011 for a period of four years to Australian Ilmenite Resources Pty Ltd (AIR). The substitution exploration licence is located approximately 130km east of Mataranka in the Roper River region of the Northern Territory. The Project lies in the Urapunga Fault Zone within the Bauhinia Shelf of the Proterozoic McArthur Basin. The area is underlain by sedimentary rocks of the Maiwok Subgroup of the Mesoproterozoic Roper Group. The Kyalla Formation in the area has been extensively intruded by sills of the Derim Derim Dolerite. The exploration target has been heavy minerals associated with the weathering and erosion of dolerite sills within the Mesoproterozoic Roper Group. The area has previously been explored for iron ore, base metals and diamonds. Exploration activities undertaken on the SEL have included auger drilling, trenching and desk top studies. The results of this work indicate that the area has potential for economic heavy mineral (ilmenite) deposits. An application was lodged for a mining lease on 10th August 2010. Subsequent to that, AIR reached an agreement with the Traditional Owners and the Northern Land Council and a tripartite agreement was granted on 22nd September 2011. AIR has successfully negotiated a take-off agreement with a Chinese based company, Meichongda Yunnan Import and Export Trading Company. The take-off agreement calls for AIR to supply initially 100,000 tonnes pa increasing to 300,000 tonnes pa over a 5 year period. The Chinese Company has also designed and supplied an ilmenite processing plant which has been shipped and is now located on ML 27422 which overlies SEL 28291. The processing plant is being stored ready for erection once the Public Environmental Report (PER) has been granted.