Annual Exploration Report - Year 15 MLN 1154 Merlin 1 January 2012 to 31 December 2012

Abstract

Activities during the reporting period included completion of processing of drill spoil samples from the 2010 reverse circulation drilling program that were sent to the Company's Perth laboratory for processing for kimberlite indicator minerals and diamonds. A detailed desktop study of available geoscientific data was completed that identified numerous targets. An external geophysicsal consultant produced a report that identified additional targets. Over 400 soil geochemical samples were collected to determine appropriate locations for the subsequent drilling program, which comprised 128 holes for a total of 3568 metres. No kimberlite was identified. Feasibility studies continued throughout 2012 with a proposed borehole mining program scheduled to commence in early to mid 2013.