Possible diamondiferous kimberlite intrusions, and also economic base metals in the Cambrian bedrock strata, were the targets of exploration carried out in the Observatory Hill area, located approximately 250 km west of Coober Pedy. Initially, a 6200 line km airborne magnetic/radiometric survey was flown during February-March 1980 by contractor Geoex (detector altitude 65 m; north-south flight line spacing 300 m), followed-up by 62.8 line km of ground magnetic surveying on grid traverse lines 100 m apart, with readings taken at 10 m intervals along the lines, plus the acquisition of gravity readings from 64 stations read along a 12.6 km north-south traverse across one of the larger magnetic anomalies. Single loam samples were taken from the centres of 16 selected anomalies for heavy mineral analysis, but proved negative for kimberlite indicator minerals. 10 magnetic anomalies were then tested by drilling 31 vertical RAB holes with a total penetration of 796 m (two of these holes being cored at the bottom to aid lithology identification). No kimberlite intrusions or anomalous base metal contents were disclosed in the sedimentary sequence penetrated. Good flows of brackish groundwater were encountered in two adjacent drillholes, POH12 and POH13, at 38 m and 40 m depth respectively.