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’.