EL 24820 Annual Report for period ending 28 July 2013

Abstract

This annual report covers EL 24820 located on the south west coast of Melville Island, part of the Tiwi Islands, in the Northern Territory (see Figure 1). The area is prospective for zircon and rutile rich mineral sands however suitable exploration areas must be outside of environmentally sensitive beach, mangrove and river zones. The tenement was purchased by MZI Resources (previously Matilda Zircon) from Stirling Zircon Pty Ltd who obtained the tenements from the Administrator of Matilda Minerals in July 2009. During the reporting period no mineral sand exploration field work was completed because the company was focussed on mining activities on ML 27438. The EL area was subjected to a desktop review by the company's new chief geologist in conjunction with the senior geologist. The aim of the review was to identify 1 million tonnes of ore at a target heavy mineral grade of 2% in a discrete area. These assumptions are explained further in the exploration section of this report. No areas were identified that were considered likely to contribute 1 million tonnes of ore at the target grade. However a small program to confirm this interpretation was considered prudent. A drilling MMP was prepared during the period based on the desktop review. However the drilling MMP has been withdrawn following the most recent management input which has concluded further exploration expenditure is not justified given the tenement is unlikely to contain an economic mineral sand deposit. It is recommended tenement EL 24820 be surrendered in the 2013/14 period as the 2012/13 desktop review did not find any areas likely to contain an economic sized resource of mineral sand.