An almost 3000 square km area situated to the north of Coffin Bay and to the east of Elliston, on western Eyre Peninsula, is being explored for possible volcanic-hosted massive sulphide (VHMS) and ultramafic magmatic nickel deposits formed in Archaean basement rocks that are now completely buried under shallow cover. Basement rock types in the region range through meta-felsic and mafic volcanics, mafic sills, magnetite-rich pelites, marbles, carbonaceous to graphitic schists, silicate iron formations, komatiites, komatiitic basalts, tourmalinite, and a host of premetamorphically altered equivalents. Post-tectonic granitoids (e.g. Hiltaba Suite granites) do not appear to be present in the region. SHRIMP U-Pb zircon dating of felsic volcanics in the Mount Hope area has revealed a dominant 2520 ± 7 Ma magmatic component, with inheritance to a major peak at 2720 Ma. Recent SHRIMP dating of a komatiite-bearing sequence in the Brimpton Lake area (unpublished data) has yielded similar ages (2520 Ma), with a metamorphic event at ~2420 Ma. The 2520 Ma age is similar to that obtained in the Harris Greenstone Belt, and indicates that komatiite - bearing basement is more prevalent than previously envisaged. Proterozoic basement inliers (1700 Ma-1800 Ma) are also present in the Elliston to Lock area. The 2520 Ma terrane is separated from the 1850 ± 50Ma Hutchison Group terrane by a major crustal structure. Both terranes are magnetically distinct. Metamorphic grade in the region increases from lower amphibolite facies at Mount Hope to upper amphibolite, possibly granulite facies near Brimpton Lake / Oakdale, a distance of about 40 km. Three separate basement target areas were proposed and accepted for subsidised drilling under the PACE Initiative Year 2 programme, to investigate the source of base and precious metal downhole geochemical anomalies in saprolite, as indicated by various previous explorers' reconnaissance aircore and RC drillholes which may have been subject to downhole sample mixing. In expectation of being able to better determine the bedrock geology and rock sequence, 4 rotary mud / diamond holes were planned to be drilled at Mount Hope, 3 in the Oakdale area and 1 at Tooligie, all declined to maximise exposure to the stratigraphy, after being rotary mud drilled into basement and cased off to eliminate uphole cavings contamination of target zone samples. The 8 PACE drillholes were completed in January-March 2006. The total drilled was 1766.6 m, consisting of 691.9 m of rotary and 1074.7 m of NQ2 diamond core penetration. The Oakdale prospect drillholes yielded the most significant results, with holes BLDD02, 03 and 04 encountering massive exhalative iron sulphides containing anomalous zinc. In particular hole BLDD04 at Oakdale North intersected a 92.3 m thick zone of mineralisation averaging 0.67% Zn from 83.4 m to 175.7 m depth. Within this zone better grade intercepts included 19.2 m @ 1.77% Zn, 0.86% Pb and 3.5 ppm Ag over the depth interval 141.0-160.2 m, underlain by 3.1 m @ 4.92% Zn, 3.3 ppm Ag and 0.12 ppm Au from 172.6-175.7 m depth. The setting to this mineralisation is characterised by milled breccias plus lesser crackle breccias and fractures in a high grade gneiss. The drilled zone at Oakdale coincides with an interpreted major subvertical basement structure that is trending towards 110 degrees True. This mineral occurrence is considered to highly encouraging to further exploration, with the potential for finding economic Archaean VHMS Cu-Zn deposits in the region being dramatically increased. Elsewhere, three PACE drillholes at the Mount Hope prospect, located to the north of the Coffin Bay aeromagnetic anomaly, encountered magnetite-rich (to 14.5% Fe) meta-pelites, altered and veined meta-mafic volcanics, calc-pelites, and graphitic schists containing deformed sulphidic quartz veins, but no significant gold or base metal anomalies.