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ACN 103 006 542 EPM 15549 ANNUAL TECHNICAL REPORT For the Period 28 March 2009 to 27 March 2010 April 2010 MC KELLY SUMMARY No field based exploration was possible during the reporting period due to the inability to gain access to the ground. Negotiations with the Kutijar People are continuing. TABLE OF CONTENTS PAGE No 1.0 Introduction ........................................................................................................................................................... 1 1.1 Tenure ............................................................................................................................................................... 1 1.2 Regional Setting, Physiography & Climate ...................................................................................................... 2 2.0 Coastal Geology ..................................................................................................................................................... 4 2.1 Heavy Mineral Prospectivity ............................................................................................................................ 4 3.0 Native Title............................................................................................................................................................. 7 4.0 Work Completed.................................................................................................................................................... 7 5.0 Proposed Work ...................................................................................................................................................... 8 6.0 References ............................................................................................................................................................. 8 LIST OF FIGURES SCALE Figure 1 Project Location Figure 2 Tenure Location 1: 2 million Figure 3 EPM15549-Google Image-Clearly showing Dune & Tidal Morphology Figure 4 ClearlyRegional Showing Geology Dune & Tidal Morphology 1: 2 million Figure EPM15549-NT Boundary 1.0 INTRODUCTION EPM5449 is one of 5 granted and 9 applications located on the western coastline of Cape York Peninsula which comprise the Inkerman Project, see Figure 1. The tenements were acquired for their potential to host heavy minerals within dunes and fossil beaches sub-parallel to the current coast-line. Historical and recent exploration by Matilda Minerals in 2008 has indicated that the dunes contain relatively high proportions of rutile and zircon within their heavy mineral concentrates (from 10-30% of the concentrate). Figure 1- Project Location 1.1 TENURE EPM 15549 covers 85.6 sq. km and lies approximately 150 km south of the township of Kowanyama in Cape York within the Shire of Carpentaria. The tenement was granted to Niplats Australia Pty Ltd (ACN 103 006 542) which has suffered a number of name changes from Ni Plats to Mineral Sands Ltd and now to Corvette Resources Ltd ( ACN 103 006 542). The ground lies within QLDGS Galbraith (SE54-03) 1: 250,000 and the Macaroni (7164 ) 1: 100,000 map sheets and within the Mareeba Mining District The tenement was granted on 28th March 2007 for a period of 5 years and comprises 26 sub-blocks as detailed in Table1 Table 1-EPM15549-Sub Block Description BIM BLOCK SUB-BLOCKS NORM 543 J,K,O,P,T,U,Y,Z NORM 544 F,G,H,J,L,M,N,O,Q,R,S.V,W NORM 615 C,D,E,H,J An exemption from compulsory drop-off was granted in 2009 and has been applied for currently on the basis that access to the ground has not been possible due to difficulties associated with the traditional owners. 1.2 REGIONAL SETTING, PHYSIOGRAPHY & CLIMATE The Gulf of Carpentaria is a semi-enclosed epi -continental sea. A broad coastal plain is developed along the western part of the Cape York Peninsula and the southern end of the Gulf of Carpentaria. Tidal ranges increase from north to south with a range of 2.4m at Weipa in the north and 3.2m at Karumba in the south. These tidal ranges are also affected by diurnal and seasonal variation in temperature which is wind dependant resulting in a tidal variance of as much as a meter. The Gulf waters are shallow from a maximum of 80m in the deepest part to some 20m in the near shore zone. The coastal plain (Karumba Plain) extends from the northern tip of Cape York to the Northern Territory border and is some 50km wide and largely made up of low swampy areas, mud flats and clay pans and both recent and fossil sand /beach ridges. Deposition is controlled by a number of smaller rivers discharging into the Gulf of Carpentaria. The climate is often referred to as monsoonal with its hot, moist climate and marked dry season. Summer occurs during the months of December-March which also marks the “wet” season where rainfall ranges from 800mm in the southern areas to 2000mm in the northern part of the Gulf. Maximum summer temperatures range from 290C to 350 C with winter temperatures in the range 15- 210C. The summer is characterised by north-west winds which brings moist air in from the Gulf. Rainfall is highest in coastal areas diminishing inland and subject to cyclonic disturbances. Winters are dry and are characterised by strong south-east winds blowing off the continent with local land and sea breezes. Figure 2- Tenure Location 2.0 COASTAL GEOLOGY The coastal plain is made up of two well defined sets of beach ridges separated by lower areas of intertidal salty mud flats and vegetated swales. The beach ridges (strand lines) reflect sea level fluctuations over time. The older of the two Beach ridges was deposited in the Pleistocene and dates from the last interglacial high sea level about 120,000 years ago. The younger ridges are Holocene in age and date as old as 6440 years ago. These ridges can be clearly seen from the Google image in Figure 3. The beach ridges are prospective for heavy mineral sands with the pre-Cambrian basement areas of the Mt Isa Block, the Georgetown Inlier, the Coen and Yambo Inliers all providing a source of resistate minerals into the Tertiary and Quaternary depositional basins. Concentration of resistate minerals in the Tertiary have in themselves provided a source for the heavy minerals within the relict dune sands. 2.1 HEAVY MINERAL PROSPECTIVITY Exploration in the 1950’s concentrated on the Holocene younger sand ridges with auger sampling intersecting cemented shell fragments with low levels of heavy mineral sands (0.2% in the Inkerman –Rutland Area –CR275-1957). Reconnaissance work by BHP in 1990 suggested that the older Pleistocene quarztose ridges were more likely to host heavy mineral sands as much of the earlier work conducted during the 1950’s was based on the more recent Holocene ridges. Drilling by Matilda Minerals in 2008 at Urquhart Point (Weipa) defined an indicated resource of 2.8mt @ 7% THM with some 30% of the heavies being comprised of rutile and Zircon. All of the historic exploration indicates that of the heavy mineral sands concentrates are comprised 10-30% zircon and rutile. Figure 3-EPM15549- Google Image –Clearly Showing Dune & Tidal Morphology Figure 4: Regional Geology 3.0 NATIVE TITLE The Native Title parties who speak for the entire project area are: Wik and Wikway People Council of the Shire of Aurukun Pormpuraaw Aboriginal Council Kowanyama Aboriginal Council Kowanyama People Kurtijar People The area covered by EPM15549 is spoken for by the Kurtijar people. Contact was made with the Kurtijar People in 2007 and negotiations have progressed slowly. As yet no access agreement is in place which will allow field based activities to commence. Figure 5-EPM15549-NT Boundary 4.0 WORK COMPLETED Whilst an access agreements remains outstanding field based activities cannot progress, unfortunately this was the case during the reporting period. 5.0 PROPOSED WORK Provided that the CHA can be concluded prior to the onset of the wet season the planned programme is to visit the site, train a field team, and inspect the ground, taking samples from any surface HM accumulations, to ascertain the mineral assemblage. This will target a drilling programme, focussed on the dunes and fossil beaches apparent from aerial photography and maps. 6.0 REFERENCES Depositional model for a chenier plain, Gulf of Carpentaria, Australia- EG Rhodes-Sedimentology- 1982 Evolution of drainage patterns on Cape York Peninsular northeast Queensland- A Forsyth and J Nott-Australian Journal of earth Sciences (2003). CR 21895-Exploration by BHP-1990 CR275-Exploration on Authority 106M-1957 .