CORONET HILL

Four large bulk metallurgical samples have been collected from sites along the Coronet Fault and submitted to AMMTEC in Perth for test work. Historical small scale mining has identified massive sulphide mineralization with significant silver and copper content. This ore also contains significant arsenic that would be a penalty metal in any potential concentrate. Metallurgical test work aims to provide a preliminary understanding to the nature and characteristics of arsenic in this style of mineralisation and identify avenues for both removal and profitable downstream processing of other economic metals. To date, detailed head analysis, optical mineralogy and limited sighter flotation tests have been completed. Head assays of the metallurgical samples confirm significant levels of arsenic (up to 32%), copper (up to 9%) and silver (up to 399g/t) combined with other lower level poly-metallic credits (gold, zinc, tin and tungsten). Conclusions gained from the metallurgical sighter flotation tests completed to date have been mostly disappointing. Arsenic removal remains problematical, requiring more testing. From this work, it is considered likely that a penalty level of arsenic will always be present in any potential copper concentrate given the high arsenic feed-grade. Initial results indicate copper concentrates have the potential to be high-grade, however it is considered that copper recovery still has room for improvement.

The wet season in the Northern Territory during this quarter has prevented any field work being conducted at Coronet Hill. Planning has continued in relation to the IP (induced polarisation) data which has delineated zones of high chargeability due to disseminated sulphide concentrations creating direct targets for drilling. These targets will be drilled as soon as access can be achieved following the end of the northern wet season in Q2 2007.

Final data received from IP survey on Coronet Hill Project which has identified priority targets indicative of massive and disseminated sulphides. In September 2006 a gradient-array induced polarisation (IP) survey was undertaken over a 4km zone of the Coronet Fault in the southern part of the tenement. The IP survey was primarily designed to delineate zones of high chargeability due to disseminated sulphide concentrations, creating direct drilling targets. Targets generated are to be drilled at the earliest possible time.