Diamond exploration undertaken in an area south of Terowie included acquisition of a low-level detailed helimag survey flown along irregular flight traverses centred on Hiles Lagoon that used a mean sensor elevation of 80 m above the ground surface, loam sampling and petrological analyses, the conduct of gravity (114 new gravity stations read on a 50 m x 50 m grid during June 1994) and ground magnetic surveys and soil geochemical sampling (104), exploratory diamond drilling (6 vertical holes, total 306 m), and bulk density determinations made on cored bedrock lithologies. Drilling confirmed the existence of a small, previously unknown kimberlite body buried beneath cover at the Terowie South topographic and magnetic anomaly, which was the licensee's early target of exploration activities. This identification of rock type was borne out by electron microprobe analyses of the mineral chemistries of chromite and garnet crystals that were separated from the drill cores. However, no natural diamonds were recovered by 'soft' acid digestion of 146.2 kg of drill half-core sample kimberlite material, although some synthetic diamond fragments originating from the diamond drill bits that were used were recovered by the method. Thereafter, lakebed sediment heavy mineral sampling plus helimag and gravity surveys were conducted over Hiles Lagoon, a shallow salt lake located 5.5 km south-east of Terowie, while elsewhere, loam and heavy mineral samples were collected over certain anomalies discerned from previous SAEI aeromagnetic survey data. Kimberlitic indicator minerals were reported from all the regolith sampling programs, but no diamonds were recovered. A circular gravity low which was detected at Hiles Lagoon by the conduct during August 1994 of a hovercraft-borne detailed gravity survey (154 stations read at a nominal 200 m x 200 m spacing) possibly represents a new concealed kimberlitic body. After conducting a review of the results of all previous diamond exploration in the region, and factoring in the outcomes of the present programme, the licensee chose not to continue with more work, citing diminished potential for making a major diamond find.