During exploration of Exploration Licence 3209 situated on the northern Stuart Shelf, gravity and magnetic modelling performed in early 2004 highlighted several anomaly source bodies, which immediately became of much interest as potential iron-oxide copper gold systems within the basement. Following the apparent success of audio - frequency magnetotellurics (AMT) geophysics undertaken at the Titan prospect in mid-2004, one particular residual gravity anomaly at the nearby Marathon South prospect was chosen for follow-up with a single line of AMT. This survey produced a moderately strong conductive response at the edge of the residual gravity anomaly, and it was thought that this could be due to sulphides associated with a moderately dense iron-oxide system. EL 3209 licensee Tasman Resources was keen to test the AMT/gravity anomalies, so support funding under the PACE Initiative, Theme 2 "Drilling Partnerships with PIRSA and Industry", was obtained in 2004 for the drilling of a single deep hole at Marathon South. Vertical diamond drillhole MS001 was completed in November 2004 at a total depth of 830.8 m. It penetrated pre-Adelaidean basement consisting of at least 270 m of highly haematite - silica - sericite - carbonate altered breccias showing evidence of significant causative volcanic and igneous activity (brecciated, layered tuffaceous rocks, and altered dykes of varying composition). Weak pyrite - chalcopyrite mineralisation occurs locally, however, no potentially economic grades were encountered. The upper 100 m of the breccias show evidence of strong late-stage leaching, and are quite porous. The nature, thickness and alteration of the breccias, and the presence of clearly igneous and volcanic sourced components, are consistent with the rocks having formed in a volcanic - hydrothermal environment, possibly as part of a caldera complex. Similarities with the Olympic Dam deposit, located 25 km to the south-west, are clear. At this stage it is believed that the residual gravity anomaly centred immediately south-east of MS001 is probably due to haematite alteration, possibly developed more strongly than that intersected in MS001. However, the source of the AMT anomaly in the basement is less clear. There seem to be insufficient sulphides in MS001 to have caused the observed AMT response, and at this stage it seems possible that saline groundwater within the porous, probably leached breccias in the upper 100 m of the basement may be the cause of the response. It was noted during drilling that core from this section of the hole was saturated with salty water.