EPM 16799 KUMBIA REPORT ON SUB -BLOCKS RELINQUISHED DECEMBER 2010 TARONG ENERGY CORPORATION LIMITED J. E. Siemon December 2010 TABLE OF CONTENTS SUMMARY 1 INTRODUCTION 2 LOCATION AND ACCESS 2 TENURE 2 AREA RELINQUISHED 2 PREVIOUS INVESTIGATIONS 4 REGIONAL GEOLOGY 4 EXPLORATION MODEL 7 PREVIOUS EXPLORATION SUMMARY 8 CONCLUSIONS 10 REFERENCES 11 FIGURES 1. Location Map 3 2. Regional Geology 5 3. Regional Geology Legend 6 4. Prior Company Exploration 9 APPENDICES 1. West Goodger 2. Haly Creek EPM 16799 Kumbia Report on Sub-blocks relinquished December 2010 J. E. Siemon Pty Ltd 1 SUMMARY Previous exploration for kaolin in EPM 16799 undertaken in the period 1969 to 1994 identified a number of areas containing small areas of weathered granite containing primary kaolin and some areas with thin layers of transported kaolin. Exploration data available is limited mainly to drill logs and drill hole location maps. No exploration was undertaken by Tarong Energy Corporation Limited in the area relinquished. EPM 16799 Kumbia Report on Sub-blocks relinquished December 2010 J. E. Siemon Pty Ltd 2 INTRODUCTION The presence of kaolin in the Kingaroy – Proston area has been known for many years with records in the Department of Mines and Energy dating back to 1912. Natural exposures are limited, and most records refer to samples from shallow water bores. Detailed exploration in the area commenced in the 1960’s when the Black and Bjelke Peterson (B-BP) partnership applied for a number of Mining Leases in the Kingaroy and Cooyar areas. In the 1970’s J.M Huber Corporation of the United States undertook detailed investigations on the B-BP Authority to Prospect and leases. While raw clay was extracted from the leases, primarily for use at the Petrie paper mill, it was not until the 1990’s that Kingaroy Kaolin commenced production of washed grades of clay. In recent years Unimin Australia Limited acquired the operations of Kingaroy Kaolin, but closed the processing plant. The Application for EPM 16799 was lodged by Tarong Energy Corporation Limited (TEC) as part of a program to identify sources of kaolin suitable for use at Tarong Power Station. LOCATION AND ACCESS EPM 16799 is located approximately 3 km southwest of Kingaroy (Figure 1). The areas relinquished lie between Kingaroy and the township of Kumbia which is approximately 2.5 km southwest of the EPM boundary. The principal access through the area is the Bunya Highway, and the Mannuem Creek and Burrandowan Roads. TENURE All land within the EPM is freehold. There are no Mining Leases within the area relinquished. AREA RELINQUISHED EPM 16799 was originally granted to Tarong Energy Corporation over 74 sub-blocks on 9 January 2008. Thirty seven sub-blocks were relinquished in December 2009,while the 19 sub-blocks described below and shown in Figure 1 were relinquished in December 2010. Block Identification Map: Brisbane Block Sub-blocks 2182 q, r, t, v, y, z 2253 x, y, z 2254 a, b, f, g, q, r, v, 2325 b, c, d No exploration was undertaken by Tarong Energy Corporation Limited in the area relinquished. EPM 16799 Kumbia Report on Sub-blocks relinquished December 2010 J. E. 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Siemon Pty Ltd 4 PREVIOUS INVESTIGATIONS The regional geology of the area was mapped initially by Murphy and others (1976). Detailed mapping of the Yarraman Subprovince began in the late 1990’s and was published by Cranfield and others (2001). This mapping was then included in the digital Southeast Queensland GIS 1:100 000 scale map. A detailed investigation of the kaolin resources of the Kingaroy – Proston region, including drilling, was undertaken by the Department of Mines as part of the Wide Bay – Burnett study (Geological Survey of Queensland, 1981). Records on file at the Department of Mines indicate that kaolinitic clays were first identified in the Kingaroy area about 1912 when settlers began to dig wells. In about 1950 Mining Leases (MLs) were pegged in the Goodger area by Nev Hanson. Because of a lack of funds he sold a half share to Joh Bjelke –Peterson. Following the death of Hanson his share was sold to R.E. Black. Company exploration in the area commenced in 1969 on Authority to Prospect 642M held by Bjelke- Peterson and Black. Exploration within the ATP was undertaken by J.M. Huber Corporation of the United States; in 1971 the ATP was assigned to Huber. The tenement was relinquished in about 1976, but only after extensive drilling and testing had been completed. Between 1980 and 1986 Nyora Mining Company Pty Ltd (Nyora Mining, 1986) undertook extensive investigations including drilling and testing on ATPs 2254, 3128, 3622 and 3715.