Group Annual Technical Report for EL 27972 Charlotte and EL 27974 Central Railroad, Charlotte Project for the period 21 September 2012 to 20 September 2013

Abstract

The Charlotte Project consists of seven exploration licences held by Tellus, located in the Amadeus Basin, approximately 130km south of Alice Springs. This group annual report relates to two of the exploration licenses; EL 27972 Charlotte and EL 27974 Central Railroad for the reporting period ending 20th September 2013. The Charlotte Project is targeting subsurface salt deposits to assess potential evaporitic mineralisation within the Amadeus Basin. Two known salt units are present in the Charlotte project area, namely the Chandler Formation (400-700m deep) and the deeper Gillen Salt Member (1,800m deep). Exploration activities to date indicate a significant thickness of massive to semi massive halite exists within the Chandler Formation with an estimated notional volume of massive to semi-massive halite target mineralization in the order of 2.3 km3. During the reporting period Tellus commissioned RPS Group Canada to review available 2D seismic survey data and assess the extent of salt within the Chandler Formation. A geological and geotechnical assessment of the project area was conducted to assist with drill planning; in consultation with Douglas Partners Pty Ltd. In order to assess potential evaporitic mineralisation further; drilling, core sampling and geochemical analysis of samples is required. Additional seismic data acquisition and processing would improve data coverage over the project area giving greater confidence is the salt unit model. Proposed drilling is expected scheduled to take place in 2013. The results will be used to remodel the Chandler Formation over the project area.