Annual Technical Report for Exploration Licence Group GR132/09, EL 24552, EL 25063 and EL 25430 for the year ending 21 February 2012

Abstract

Exploration Licences 24552, 25063 and 25430 comprise Barfuss Corporation's Harts Range Project, covering more than 700 square kilometres. The licences were granted, respectively, on 26 August 2005, 20 November 2006 and 13 March 2007. Underlying geology through most of the area consists of high-grade metamorphic rocks of the Arunta Block, including the Harts Range Group (part of the Late Proterozoic to Cambrian Irindina Province), with older Aileron Province rocks in the east ('Entia Dome') and west (Strangways Metamorphic Complex, including younger deformation in the Gough Dam Schist Zone). Field activity to date has included reconnaissance mapping, extensive rock-chip sampling and detailed ground spectrometer surveying in a number of areas of interest. Detailed air-borne geophysical surveying is planned, as is selective drill testing with the company's own track-mounted diamond drill rig. A significant number of prospects have been identified. These include:- rare earth element ('REE') prospects (+thorium, +/-uranium), principally the 'Spinifex Gully' group of prospects in EL 25430, extending into EL 24552 (assays up to 11.9 % REE, 1140 ppm uranium, 4.72 % thorium); the extensive 'Copper Queen' group of copper-gold prospects, investigated previously by Tanami Gold NL, mostly in EL 24552 but extending into EL 25430; two meta-ultramafic bodies ('Plug 1' and 'Plug 2') in the west of EL 24552, with indications of nickel-chrome (+/- platinum-palladium) anomalism (reconnaissance assays 0.2-0.27 % nickel over 125 metres); and several pegmatite dykes in the east of EL 24552 and EL 25063 with very strong uraniumniobium-yttrium-tantalum(-REE) mineral enrichment ('Bobs', 'Cusp', 'Malex', 'Pearly Gates' prospects) (assays over 7 % uranium). Significant interest has been shown by the Merck Group (Germany) in the muscovite deposits in the licence areas. Merck representatives have visited the project and sampled several areas for analysis, with a number of follow-up bulk samples sent to them, on request, for further analysis. Prospectivity for other minerals is indicated by, for example, the Harts Range Ruby Mine and a near-by vermiculite prospect (surrounded by ELs 25764 & 25063) and the Oonagalabi copper-zinc prospect, a couple of kilometres south of EL 24552. An agreement signed with a South Korean corporation which was to invest $12m on exploration of the Harts Range project has failed to progress. Barfuss has been in on-going negotiations with a number of other companies, however, including the Merck Group (noted above), The Gutnick Network of Companies, Commissioners Gold Ltd, a number of private investors (including personal commitments to satisfy all expenditure commitments for the next 2 years), and a Chinese group (via DDM Capital, a Melbourne-based corporate advisory firm). Pending the results of these investment and joint venture discussions - and the delays related to the South Korean interest - very little in the way of numerical outcomes can be shown for this period. A limited amount of the analysis data from the Merck sampling is included, but most of this data is held by Merck. Fieldwork by Barfuss Corporation has been primarily reconnaissance mapping, prospecting, selective specimen sampling, and siting/planning access to prospects for planned work (e.g. first-pass drilling). The company regards the project as highly prospective and is keen to resume significant exploration activity on it.