Combined annual technical and expenditure report ending 4 May 2018 and estimated work cost for next 12 months

Abstract

EL 26930 held by Terry Hearl was applied for on the 21 August 2008 and was granted on the 5 May 2009 to search for base metals and all associated minerals. Access to this area is limited to five or six months of the year because of the very high rainfall during the wet season. Station roads provide the only access to the area but these are restricted to a very small portion of the tenement with some only being graded as required and many not being graded from year to year. No road access exists to the other parts of the license area. The majority of our time the first year was spent attempting to gain access to the more remote areas of the tenement for sampling. Our sampling program was significantly affected at this time by the accidental death of my brother and business partner Michael Hearl. The sampling program was resumed mid May 2010 once the area was dry enough to gain access. Our exploration and ground truthing on the eastern side of the tenement was very intense and time consuming because of rugged terrain and limited access. This situation resulted in most exploration having to be completed on foot. This was completed with large areas proving to have little or very poor mineralization. The result of this extensive program was the relinquishment of 50% of the tenement. Due to unusually high rainfall and a prolonged wet season in the area over 2010-2011 access was not safely gained until approx. mid June 2011. The surface water that still remained this late in the year proved troublesome limiting access to the lower western quadrant of the tenement. Due to these conditions once again most exploration had to be done on foot. Large areas were covered, however because of the excessive rainfall the average vegetation height was around two metres with almost full ground cover resulting in zero visibility. Three weeks were spent in this area ground truthing with very few samples taken due to poor visibility. Approximately eight weeks were spent on exploration in the 2012-2013 reporting period. We were able to extensively cover the top north eastern quadrant of the lease due to a bushfire having recently swept through the area. After much consultation it was decided to relinquish approximately 15 blocks in this area equaling about 49.5 square kms due to very poor to no mineralization hence no samples were taken from this area. Various attempts made to gain access to the mid western area known as 'Battle Creek' but proved to be continually unsuccessful due to the severe rugged conditions. The conclusion of this exercise being our consideration of hiring a helicopter from the main station 'Victoria River Downs' to achieve this goal. Approximately eight weeks were spent on exploration in the 2013-2014 reporting period. A considerable amount of time was put into on foot exploration in the southern part of the tenement known as 'Soldiers Cap'. This area was extensively explored right through to the western border of the tenement. Poor mineralization was found throughout this area so no samples were taken although I feel this area could not be explored to its full potential because of thick vegetation and ground coverage resulting in poor visibility. An aerial survey by helicopter was initiated to gain access to the 'Price Hills, Battle Creek' area. Numerous areas were targeted during this program and GPS marked for further ground based exploration. Access routes were picked out by air and marked to assist the ground crew gaining entry. Access was gained on the ground to two areas in the 'Gorries Bore' vicinity which were identified from the air and samples were taken to be reviewed by our geological technical support team. Approximately nine weeks were spent on exploration in the 2014-2015 reporting period. Once again a helicopter was bought in to complete the aerial survey that was initiated in the previous reporting period. The 'Battle Creek' and 'Price Hills' area was grid flown right out to the extent of the tenement north and west. Various areas were pinpointed with samples taken and ground crews gaining access for further sampling. A further two weeks were spent mid April to gain land based access to the final areas of the relinquishment that had been pinpointed during the aerial survey and samples were taken. At a later date these samples were examined by our geological support team and found not to contain sufficient mineralization to warrant further testing. Hence we have come to the conclusion to relinquish 65 blocks from the 80 that are held under EL 26930. The area that contains the remaining 15 blocks was identified during the aerial survey with the ground crew gaining limited access due to rough terrain but proving it contained some hopeful indications to warrant further exploration. Approximately five weeks were spent on exploration during the 2015-2016 reporting period. Ground access to a percentage of the remaining 15 blocks was obtained to resume our sampling program. An area of the eastern side of the lease was grid walked with numerous rock-chip and sediment samples taken which are being examined by the geological team. Upon a favorable out-come of testing we are considering the merit of initiating a drilling program for which we have acquired a small drilling rig which we are in the process of tooling up to cope with the harsh conditions. Approximately six weeks were spent resuming our sampling program in the 2016-2017 reporting period. Due to harsh conditions the major percentage of this had to be completed on foot. Once again a large area in the mid-East of the lease was covered with some areas being identified as non-productive and others as prospective from which samples were taken. A number of these samples have been identified by our geological support team as warranting essay and I attach a coordinate list and map to show their position. We are still considering initiating a drilling program pending the results of future sample results. We will be submitting a renewal application for EL 26930 for the period of two years as we feel this time period may allow us to complete our sampling program. Due to the success of our two year renewal application approximately six weeks were spent resuming our sampling program in the 2017-2018 reporting period. This mid area of the lease consists of a very rugged range and access can only be achieved on foot. Two separate three week periods were spent grid walking this area by the ground team continuing our rock-chip sampling program. We were able to identify numerous areas that were classed as non-productive and others that proved prospective and samples were taken. Of these samples 14 were identified by our geological support team as warranting essay and I attach a coordinate list and map to show their position. We are confident that in the 2018-2019 reporting period we may be able to complete our sampling program and take the next step of initiating a drilling program.