Partial Relinquishment Report After the Fourth Year of Tenure

Duyfken Explorations Pty Ltd ACN 124 925 944

Partial Relinquishment Report

After the Fourth Year of Tenure

Exploration Permit

EPM 17234

c/‐ Luminus Systems Limited 349 Collins Street, Melbourne, Victoria, 3000

T +61 3 8614 8400 F +61 3 8614 8410

Table of Contents

1. Overview 1 2. Location and Access 1 3. Tenure 2 4. Geology 2 4.1 Regional Geology 2 4.2 Tenement Geology 4 5. Previous Explorations 5 6. Exploration Work and Results 8

1. Overview Duyfken Explorations Pty Ltd (the company) acquired EPM 17234 to explore for base metals and uranium within the Western Succession of the Mount Isa to McArthur River Block mineralised sequence. The Walford Creek lead deposit is located to the northeast of the EPM. Exploration work consists of a review of past exploration activities as well as completion of data management and interpretation of open file geophysics and geochemistry data to determine the extent of mineralisation on this tenement. After four years of tenure, 29 sub‐blocks were relinquished. This report summarises the exploration activities within the relinquished portions of the tenement during the tenure period.

2. Location and Access EPM 17234 (Dreamland 1) is well located with respect to infrastructure, being relatively close to the regional mining city of Mt Isa with rail link to the major port city of Townsville. The project is well serviced by sealed and formed gravel roads. The tenement is located 400km northwest of the city of Mt Isa, and is only partly serviced by gravel roads and station tracks. Some parts of the EPM are inaccessible by vehicle. Commercial goods and services are readily available at the regional administrative and mining centre of Mt Isa.

Figure 1: EPM 17234 location

1 3. Tenure Exploration Permit 17234 was granted to Duyfken Explorations Pty Ltd for a period of five years from 31 May 2011.

Tenure Tenure Date Date No. Status Principal Holder Type Number Granted Expires Subblocks

DUYFKEN EXPLORATIONS PTY EPM 17234 GRANTED 31‐May‐11 30‐May‐16 72 LTD

Following four years of tenure, the following twenty‐nine sub‐blocks were surrendered:‐

Block Sub-blocks NORM 1371 FGHJKLMNOPQRSTU (15) NORM 1372 ABFGLMQRSTUZ (12) NORM 1444 EK (2)

Figure 2: EPM 17234 showing relinquished sub-blocks

4. Geology 4.1 Regional Geology The project area lies within the Western Succession of the Mount Isa to McArthur River Block mineralised sequence. Mt Isa/McArthur Basin mineralised sequence is one of the world’s major copper, lead, zinc and silver provinces hosting several deposits including the Mt Isa, George‐Fisher, Hilton, Gunpowder, Century, Valhalla (U), Westmoreland (U), Constance Range (Fe) deposits. The Western Succession copper‐zinc‐lead‐silver deposits make the region one of Australia ’s most sought‐ after target regions. The currently operating mines to the north and south of the project areas along the same structures confirms this part of the region’s potential to host large deposits. The Mt Isa Basin consists of a north‐trending belt of Early Proterozoic basement rocks (the Kalkadoon‐ Leichhardt Belt) flanked by two belts of Middle Proterozoic rocks, known as the Eastern and Western Successions (Figure 3). The Western Succession is subdivided into the Lawn Hill Platform, Leichardt River Fault Trough, Ewen Block and Myally Shelf. The Eastern Succession is subdivided into the Mary Kathleen, Quamby‐Malbon and Cloncurry‐Selwyn Zones.

2 Figure 3: EPM 17234 with geology

Within the Mt Isa Block, four Proterozoic tectono‐stratigraphic terrains are recognized which comprise an older basement core overlain by three younger Proterozoic sedimentary sequences referred to as Cover Sequences 1, 2 and 3. These cover sequences are related to major episodes of intra‐cratonic rift and sag phase sedimentation. The Middle Proterozoic rocks record a complex history of intra‐continental rifting and subsidence during the period 1,800 to 1,590 million years (Ma), followed by compression, basin inversion and regional wrenching during the Isan Orogeny (1,590 to 1,500 Ma). Within the Western Succession, Cover Sequence 3 east of the Mount Gordon Fault is assigned to the Mt Isa Group (maximum thickness of 4,500 m) within the Leichhardt River Fault Trough. The equivalent sequence to the west of the fault is assigned to the McNamara Group (maximum thickness of 8,500 m) deposited in the Lawn Hill Platform. In the far north of the Mt Isa Block, this rock sequence is termed the Fickling Group. Cover Sequence 3 hosts many of the significant base metal deposits within the Mount Isa Block, including the Mt Isa, Mount Gordon, Mount Oxide, Hilton and George Fisher base metal deposits within the Mt Isa Group, and the Lady Loretta, Century and Lady Annie deposits within the similar‐aged McNamara Group. Throughout the Mount Isa Block, copper mineralisation is associated with deformation, especially the reactivation of early‐stage faults during later movement. The faults acted as fluid conduits and depositional sites. In the Western Succession, hydrothermal activity accompanying D2 deformation produced copper (‐ cobalt‐gold) deposits surrounded by characteristic zones of silica‐dolomite alteration. In the Eastern Succession, granitic intrusions accompanied and followed the D2 event, driving iron, silica and base and precious metal‐rich fluid along reactivated D1 structures. These are preserved as magnetite‐rich ironstones, quartz veins and/or siliceous mylonites containing mineralisation.

3 4.2 Tenement Geology The tenement is located within the Murphy Tectonic Ridge (MTR), of early Proterozoic age, and consisting of three main units. The oldest unit is the greenschist facies Murphy Metamorphics, made up of quartz‐ albite‐biotite‐chlorite schist and quartz‐albite‐muscovite gneiss. The metamorphics are intruded by the Nicholson Granite Complex (NGC). Within EPM 17234 these appear to mainly consist of biotite adamellite plutons. Just to the west a separate phase of tin mineralised greisenised granite crops out. The NGC is in turn post‐dated by the Cliffdale Volcanics which are made up of rhyolite and rhyodacite tuffs and ignimbrites. Lithologies of the MTR are overlain unconformably by the mid Proterozoic Wire Creek Sandstone. This unit represents the base of the Lawn Hill Platform. To the north of EPM 17234, an equivalent unit, the Westmoreland Conglomerate forms the base of the McArthur Basin. The Wire Creek Sandstone is conformably overlain by the Peters Creek Volcanics. The Buddawadda Basalt Member (BMB) forms the base of the Peters Creek Volcanics. This unit correlates with the Siegal Volcanics in the McArthur Basin and probably the Eastern Creek Volcanics further to the south. Overlying the BMB is a thick sequence of acid to intermediate tuffs and lavas with minor interbedded siltstones/sandsones and conglomerates. The Peters Creek Volcanics are overlain by the Fickling Group which correlates with the McNamara Group. Units include the Doomadgee Formation, the Fish River Formation, the Mt Les Siltstone and the Walford Dolomite. The sediments outcrop to the south of EPM 17234. The Westmoreland Conglomerate consists of four sub‐units. The uppermost sub‐unit hosts significant uranium (and lesser gold), mostly to the north and northwest of EPM 17234. The main deposis include Redtree, Junnagunna and Huarabagoo. The Westmoreland Conglomerate contains strong NE and NW faults and joint sets. Some of these are filled by dolerite dykes (probably cogenetic with the Siegal Volcanics). The uranium occurs as higher grade but erratic shoots alongside the dolerite or as broadly horizontal sheet like bodies, with grade diminishing away from the dyke. The source of the uranium is either hot granites or the Cliffdale Volcanics. The Westmoreland Conglomerate does not outcrop within EPM 17234. The Wire Creek Sandstone, although very similar to the Westmoreland Conglomerate, does not at this stage appear to host uranium mineralisation. The Cliffdale Volcanics is a minor host to uranium mineralisation (Sandpaper Sally) within shears and disseminated uranium has been reported from the Nicholson Granite Complex. Just to the west of the tenement a large block of greisenised granite contains numerous small cassiterite prospects. The cassiterite is associated with quartz veining. Government mapping includes a small copper prospect, located to the west of the greisenised granite intrusive, and located within EPM 17234. The Fickling Group which is correlated with the McNamara Group hosts the Walford Creek prospect (inferred resource of 6.5 mt @ 0.6% Cu/1.6% Pb/2.1% Zn/25 g/t Ag/0.07% Co) is located only 4kms south of EPM 17234. The Walford Creek prospect is thought to be a stratiform style deposit in the Mt Les Siltstone and is analogous to the Century and Mt Isa lead‐zinc mines. Unfortunately the Fickling Group outcrops just to the south of the tenement.

4 5. Previous Exploration

ATP 444 was held by Queensland Mines from 1967‐1971. The ATP overlaps with the northern one third of the current tenure. Their target was uranium (with associated gold) in the Westmoreland Conglomerate. The company used airborne radiometrics/magnetics and photogeological mapping to identify prospects. The company drill tested a number of these prospects but nearly all exploration was concentrated to the north of EPM 17234. Interestingly Queensland Mines also found uranium at the Westmoreland Conglomerate‐Peters Creek Volcanics contact. BHP held ATP 445 during the period 1967‐1974. Like Queensland Mines they were looking for uranium within the Westmoreland Conglomerate. ATP 445 lies outside of EPM 17234, apart from a smaller non‐ contiguous block to the south which is located through the middle of EPM 17234. Nearly all exploration was focused on the Westmoreland Conglomerate to the north. They contracted McPhar Geophysical to fly a radiometric‐magnetic survey, using a 75m ground clearance and 500m spaced flight lines. The outline of the survey is 138⁰ 04’/17⁰18’‐138⁰22’/17⁰17’‐138⁰32’/17⁰25’‐138⁰25’/17⁰37’‐ 138⁰06’/17⁰37’. CR 4844 presents a summary of work during 1968‐1973. ATP 658 was acquired by Westmoreland Minerals during the period 1969‐1971. The ATP overlaps with the southern part of EPM 17234. Most of the ATP is located to the south. They carried out a stream sediment sampling which identified a number of Cu‐Pb‐Zn anomalies in the west Hedley Creek catchment. The anomalies appear to drain from the Peters Creek Volcanics and the Fish River Formation. The anomalies are located well to the south of EPM 17234. In 1969‐1970 an airborne radiometrics survey was flown over three designated areas using a flight line spacing of about 200m and about 100m ground clearance. Several radiometric zones were highlighted. However these appear to lie to the SE side of the Nicholson River and to the south of EPM 17234. The BMR in conjunction with the GSQ carried out a region wide ‐80# stream sediment sampling program during 1975. The sample program defined a number of base metal anomalous catchments within the current tenure. These appear to originate from the Buddawadda Basalt and the Peters Creek Volcanics. ATP 1633 (CEC) was held in 1979. The ATP partly overlaps with the southern portion of EPM 17234. CEC undertook a ‐80# stream sediment sampling program (543 samples). The samples were analysed for Cu, Pb and Zn and collected from the Hedleys Creek catchment. The area drains Peters Creek Volcanics and the Fish River Formation. The ATP was relinquished because of negative results but a review of the data highlights maximum assays of 137 ppm Cu (located inside EPM 17234), 63 ppm Pb and 164 ppm Zn. The last two values lie outside the EPM. Mines Administration held ATP 1720 between 1977 and 1979. The east part of ATP 1720 overlaps with the western third of EPM 17234. The company was searching for uranium and base metals. They contracted a photogeological mapping survey, carried out scintillometer traverse and completed detailed stream sediment sampling (seven samples/square km). This work identified tin anomalies draining from outcrops of Nicholson Granite. ATP 1861 was also held by Mines Administration after relinquishing ATP 1720. The company followed up one of the tin (and tungsten) anomalies, G018, located in one of the southern catchments of Cliffdale Creek. Rock and soil sampling and geological mapping were carried out. The anomalies were thought to emanate from quartz veins within greisenised adamellite of the Nicholson Granite. The company concluded though that the mineralisation held only limited grade and tonnage potential and the ATP was relinquished. ATP 2977 and 2978 were acquired by Minatone. The two tenements provide complete coverage of EPM 17234. The company targeted the Murphy tectonic Ridge and the overlying Lawn Hill Platform for potential uranium mineralisation. Minatone undertook mapping, stream sediment sampling and scintillometer traversing.

5 The company identified the Balancing Rock uranium prospect (on ATP 2978) within a dolerite dyke which occurs in Unit 2 of the Westmoreland Conglomerate. Their work suggested though that the Carpentarian sediments and the Nicholson Granite were not prospective for uranium. The prospect is located well to the north of EPM 17234. No other anomalies were identified on ATP 2978 and it was relinquished. In 1984 International Mining Corporation acquired ATP 3671 . The exploration targets were base metals, gold and diamonds. A stream sediment survey was completed. This work outlined five gold anomalies draining Westmoreland Conglomerate (outside of EPM 17234) and one draining the One Hen prospect, further to the south. Separate Pb‐Zn anomalies drain the Cliffdale Volcanics. Another anomalous zone emanates from the contact between the Cliffdale Volcanics and unroofed Nicholson Granite. The anomalies report elevated Sn‐Bi‐Cu values. Subsequent reports downplay the significance of the above anomalies as the exploration focus shifted to diamonds. There were no indications of a diamond mineralisation within the ATP and the ground was dropped. ATP 3772 was held by Uranerz who explored for uranium. Work was concentrated well to the west of EPM 17234. Selected areas were mapped with some helicopter spectrometer traversing undertaken. Eleven anomalies were detected and ground checked. The results were negative and the ground was relinquished. ATP 3864 was taken by Stockdale for regional diamond exploration. The ATP has only minimal overlap with EPM 17234. No diamonds or indicator minerals were recovered from drainage sampling and the ATP was soon surrendered. CRAE acquired ATP 4640 and ATP 4798 during 1987‐1989 to search for base metals (Fickling Group) and gold (Peters Creek Volcanics). The ATP overlaps with the southern one third of EPM 17234. They took 112 ‐80# stream sediment samples. This work identified very low order gold anomalism in the Peters Creek Volcanics over a distance of 30 kms of strike. The anomalies drain the Buddawadda Basalt Member. Sampling also located several significant Cu‐Pb‐Zn anomalies, including 360 ppm Cu from a sample 4‐5 kms east of the Motor Car prospect, within EPM 17234. Follow up BCL and ‐80# stream sediment sampling of the gold anomalies was disappointing with a best assay of 0.55 ppb Au. CRAE also carried out a gravity/magnetics survey and drilled two holes to test a gravity anomaly. The company was looking for Walford Creek style mineralisation. The drilling results however were disappointing. The ATP was surrendered. ATP 4649 was applied for by CSR to look for gold in the Cliffdale Volcanics. Their target was epithermal gold with Coronation Hill affinities. The ATP overlaps with the northern half of EPM 17234. CSR undertook a wide spaced stream sediment sample survey (59 BCL samples/12 rock chip samples). The results were very disappointing and the ATP was dropped. EPM 7538 was held by Sipos in the early 1990s. The tenement overlaps with the western edge of EPM 17234. The company was focused on the tin and base metal mineralisation associated with the Nicholson Granite Complex. Following mapping and rock chip sampling work was to concentrate on the Motor Car and One Hen prospects, with other areas of interest including the Western microgranite and the NW corner of their EPM. However due to a lack of funds this work did not take place. Acacia Resources applied for EPM 9695 in 1994. Four targets were (i) Cu‐Au mineralisation within a pluton of the Nicholson Granite Complex (ii) Cu‐Au, as above, associated with the Jennifer Anne Cu deposit and look at peripheral Zn anomalous SS samples (iii )look at anomalous Cu‐Pb‐Zn clustered around a parallel structure to the Calvert Fault and associated with a dolomitic unit within the Peters Creek Volcanics and (iv)test the Calvert Fault where it intersects granites and volcanics. Limited check sampling of past stream sediment anomalies however only partially confirmed previous results and as the access was very difficult the ground was dropped.

6 The report includes an excellent summary map of past exploration soil, stream sediment and rock chip anomalies within and surrounding EPM 9695 (see Figure 4). This will be very useful as EPM9695 largely overlaps with EPM 17234.

Figure 4: Blow up from Exploration Summary (Billiton EPM 9695) with outline of EPM 17234 (red)

CRAE held EPM 10930 in conjunction with EPMs 10242, 10931, 10932 and 10933 in their search for uranium, gold and diamonds. EPM 10930 overlapped with the northern half of the current tenure. Their exploration targets were shallowly buried Redtree and Alligator River type uranium deposits. They were also looking at the potential for hydrothermal gold. Exploration commenced with a comprehensive review of past work in the area. CRAE acquired the airborne magnetics and radiometrics data. This comprised the Hedley’s Creek/Murphy’s and Crossover airborne surveys. The data was merged and interpreted to identify anomalous responses. CRAE also undertook infill gravel sampling for diamonds and reconnaissance soil sampling. During the second year anomalous responses were checked with heli‐borne magnetics‐radiometrics surveying. Interpretation and detailed modelling of the magnetic data together with geological mapping led to the drilling of twelve diamond holes. Interestingly one of the holes targeted a small high intensity uranium radiometric anomaly in the Cliffdale Volcanics. Structurally the anomaly occurs in the hanging wall of the Main Range Fault. The Cliffdale Volcanics have been thrust over the Westmoreland Conglomerate. DD94WES393 intersected 12m @ 0.076% U and 0.26 ppm Au. The prospect (Sandpaper Sally) is located on EPM10242 and lies to the NW of EPM 17234. The other drilling targets occur within the Westmoreland Conglomerate, well to the north of EPM 17234. The report lists a number of radiometric anomalies located following the acquisition and amalgamation of past airborne radiometric surveys. Several of these anomalies are located within EPM 17234.

7 6. Exploration Work and Results

No field work has been undertaken within the relinquished portions of the tenement during the tenure period. Following a review of past exploration, it was concluded that the Cliffdale Volcanics were less prospective host for economic mineralisation. Previously, areas within EPM 17234 containing outcropping Cliffdale Volcanics have been tested by the BMR/GSQ (1975), CSR (ATP 4649) and IMC (ATP 3671) by stream sediment and minor rock chip sampling. Two weak Cu‐Zn anomalies were detected by the BMR program. These drain small tributaries to the south of Cliffdale Creek. Elsewhere no significant results were reported. On that basis, the twenty‐nine sub‐blocks situated in the northern portion of the EPM were surrendered. This area is probably underlain by Cliffdale Volcanics and outcrop though is largely obscured by Quaternary alluvium associated with Cliffdale Creek.