Roper River Iron Ore Project EL 24102 Hodgson Downs Fourth Annual Report for period 13 August 2010 to 12 August 2011

Abstract

This report details exploration on the tenement during the reporting period from 13 August 2010 to 12 August 2011. Exploration expenditure for this period was $A3.8M against an exploration covenant of $A2.5M. RC resource drilling continued at Deposit W at a nominal 800x200m spacing ( though locally 400m x 100m) and was completed at nearby Deposit X at a 400 x 200m spacing during the reporting period. In addition diamond drilling of 37 HQ twin holes was completed at Deposit W for 528m in support of the resource estimation conducted late in 2010 and 31 metallurgical PQ core holes were conducted in total at W and X for 167m to assess beneficiation characteristics and physical properties of the oolitic hematite. Drilling in the 2011 field season up to the reporting date has been focused on defining additional resource at Deposit T, U, Y (TUY) where Sherwin completed 86 RC holes for 2465 metres with 394 single metre samples and 186 composite samples collected. Drilling targeted the strike extension of the oolitic hematite resource defined at W by the 2010 drilling. As part of the resource validation of TUY a total of 10 HQ diamond holes were drilled as twins to the RC drilling. No metallurgical drilling was considered necessary at TUY as the resource comprised the same oolitic hematite style as the adjacent W deposit. During the reporting period a total of 270 RC holes were competed for 8363 m with 6644 samples collected and 78 diamond holes for 1046 m of which 31 holes for 367 m were PQ core for metallurgical testing and 47 holes for 679 m were HQ twin holes for resource validation. Site preparation for the current reporting included 39.4kms of drill track access and 82.1kms of drill lines. Drilling was focussed on a single horizon of oolitic hematite mineralisation that occurs at the base of the Sherwin Formation within the Roper Group Stratigraphy. At W and TUY the oolitic hematite bed is typically 3 to 4 metres in thickness, outcrops at cliff faces and dips gently typically to a north or northwest direction. At X the hematite bed is slightly thicker (4 to 6m) with higher average grade than W and dips shallowly west. A total JORC compliant resource of 153Mt @ 44.8%Fe was estimated by SRK and reported for Hodgson Downs (EL 24102) by the end of the reporting period including W,X and TUY. By the tenement reporting date 55.7Mt @ 48.2%Fe was classified Indicated and the balance Inferred. The Inferred component included 50.8Mt @ 45.5% Fe from W and 46Mt @ 39.9%Fe from T, U and Y. Metallurgical drill core was initially forwarded to Ammtec for a range of engineering and metallurgical testwork. Nagrom completed beneficiation testing from trench samples with positive results on improved Fe recovery. A helicopter reconnaissance rock chip sampling programme was carried out at X Extended looking for a repeat or extension of the high grade X mineralisation. Sampling was carried out at seven sites. Results from Niton handheld XRF analysis were not considered sufficiently high to warrant laboratory assay of any of these samples.