Roper River Iron Ore Project, EL 24101 Sherwin Creek - Mount Scott, Eighth Annual Report for period 20 August 2011 to 19 August 2012

Abstract

Following a management change during the current reporting period a new corporate focus addressed potential for early cash flow from small scale production of high grade iron oxide (DSO). An independent review of the Lower Grade global resource (reported by SRK, 2011) for Deposit C was conducted to identify areas of higher grade iron oxide with a low strip ratio. A portion of the lower grade Inferred resource at C was identified as having a higher grade resource component. It was decided that infill drilling, adopting half metre sample spacing and some additional QA/QC procedures, would enable an Indicated Resource component at DSO grade ( +55%Fe) to be estimated. The RC drill programme was overseen by Coffey Mining, who advised on QA/QC procedures and reviewed field and assay data accordingly as auditors for the resource reporting. An initial assessment of the high grade resource component was conducted based on drilling conducted to the 2011 Reporting period. Infill (confirmatory) drilling was subsequently conducted. A total of 88 RC holes were drilled on EL 24101 at Deposit C for a total of 2260.5m. This included a total of 28 holes drilled in a close spaced panel area. This drilling was designed to infill and upgrade to Indicated Classification areas where a high grade DSO component and low strip ratio could provide early cash flow from initial mining. A total of 4524 half metre drill samples were collected from the drilling at C. Approximately half of these samples were submitted for laboratory analysis at NTEL, Darwin. Check assaying was conducted through ALS Laboratory towards the end of the programme. The drilling was successful in identifying a DSO resource component which is still subject to final audit before public reporting. Rehabilitation was conducted following drilling. Reconnaissance mapping and sampling was carried out at Deposit E Extended, Deposit D and Mt Scott Eastern mesa area. In all cases samples were collected for Niton analysis and estimates of iron oxide thickness assessed. Deposit E Extended contains remnant basal oolitic ironstone horizon as patchy outcrop to a maximum 2 metres (but generally less than 1 metre) thickness where present. Most of the oolitic horizon has clearly been eroded at E Extended. At Deposit D the interpreted Lower Ironstone is very narrow (less than 1 metre thick). The northern portion of the eastern mesa at Mt Scott including Deposits I, K and L has been re assessed. RC drilling is planned in an area where mapping indicated thicknesses in excess of 4m with grades likely over 50% Fe. This drilling would provide an early indication of DSO potential, in an area not too distant from Deposit C at Sherwin Creek.