PACE Initiative Year 2 funding, to assist with drilling two deep holes on the Carra-east anomaly located near Salt Creek, 8 km west of where the Carrapateena Arm southern shoreline meets central Lake Torrens, was granted to RMG Services in May 2005. One of the drillholes, CAR002, was designed to test a probable iron-oxide associated copper-gold target, at a near-coincident gravity/magnetic anomaly recognised from the results of new infill gravity surveys conducted by two of the licensee's recent joint venturers, while the site of the other hole, CAR001, was selected in order to test an unexplained intra-basement low resistivity anomaly, revealed by a MIMDAS IP survey run under another, now ceased joint venture. Both planned drillholes had target depths at around 600 m. In mid-May 2005 CAR001 was RC airhammer drilled through the Adelaidean cover to 299 m depth, and then was NQ diamond cored to a total depth of 560.8 m, finishing within pre-Adelaidean basement. Haematite alteration was encountered in the basement granitic rocks, but there was no sulphide mineralisation. CAR002 was also first RC drilled to about 240 m depth, and then was NQ diamond cored to 654.2 m total depth; this depth represented the maximum penetration capability of the diamond drilling machine being used, and drilling of the hole was stopped on 7/7/2005. Within the variably haematite-altered and brecciated basement section, a veined and breccia matrix - hosted progression of copper sulphide and gold mineralisation was encountered, extending from about 471 m depth to the bottom of the hole. It was clear that a very major copper-gold mineral discovery had been made by CAR002. The first 67 m of mineralised core from CAR002 assayed 3.03% Cu and about 0.4 grams per tonne Au. Visible pervasive copper mineralisation (principally chalcopyrite, with lesser bornite and minor chalcocite) is present throughout most of the basement core, right to the bottom of the hole. An assayed copper-mineralised zone at the bottom of the hole averaged 1.83% Cu and 0.64 grams per tonne Au. In the period since this exciting discovery was made, many companies have expressed interest in forming a joint venture arrangement to assess and develop the Carrapateena prospect orebody. At the time of writing this report, RMG Services is negotiating a joint venture or option agreement with the highest stake bidder.