Potential Carrapateena or Prominent Hill style IOCG targets represented by newly recognised gravity anomalies in the eastern Lake Gilles area were the reason for a PACE Initiative Year 4 drilling funds proposal submitted to PIRSA by InterMet Resources. The subject licences lie in the north-western part of the Spencer Domain, close to the eastern boundary of the Cleve Domain. It is inferred that the area has a similar geological environment to that of the Prominent Hill IOCG deposit, i.e. a setting marginal to the Gawler Range Volcanics, with reactive host lithologies of carbonates, banded iron formations and graphitic schists present. Because the project area has had minimal past exploration for gold or base metals, InterMet during August-September 2006 acquired a detailed 1 km x 1 km gravity survey to infill the existing PIRSA-SAEI 2 km gravity grid. The new coverage revealed three distinct gravity anomalies at Lakes Edge, Salt Creek and Red Dam, which were chosen for drill testing. All of the proposed drillhole sites are coincident with magnetic features, and lie adjacent to interpreted large scale basement structures. Three approved RAB/diamond drillholes totalling 1777 m of penetration (1555 m cored) were completed during the period November 2006 - March 2007. PACE project DPY4-22 drillhole RDD2 tested a gravity feature located approximately 6 km south-west of Gilles Down Homestead, close to Red Dam, and was drilled vertically to a total depth of 591.0 m. It encountered predominantly magnetite-rich, course grained syenite, with occasional bands of fine grained mafics and calc silicate alteration. A breccia zone was intersected over the depth interval 401-420 m which contained extensive sericite alteration and quartz veining, possibly indicating a large scale shear zone. Magnetite and occasional minor pyrite were present throughout the entire hole, with portions of the mafics (amphibolite?) containing thick bands of magnetite. Samples from the depth interval 400-462 m were sent for gold and base metal assays, but nothing significant was found. Drillhole LED1 tested a gravity feature located approximately 20 km west of Iron Knob, on the north-eastern edge of Lake Gilles. It was drilled at an angle of 60 degrees due west to a depth of 676.0 m. This hole encountered predominantly magnetite-rich, course grained granodiorite, with occasional bands of fine grained mafics and calc silicate alteration. Magnetite and occasional minor pyrite were present throughout the entire hole, with portions of the mafics (amphibolite?) containing thick bands of magnetite. Magnetic susceptibility and specific gravity measurements were carried out on the drill samples, and several sample intervals had specific gravities greater than 3.0 but had no elevated magnetic susceptibility. These intervals were sent for gold and base metal assays, but nothing significant was found. Downhole EM logging was attempted, but it was not possible to get the sonde to pass below 20 m depth due to hole collapse. Drillhole SCD1 tested a gravity feature located approximately 10 km west of Iron Knob, on Corunna Station. It was drilled at 60 degrees toward 315 deg Magnetic, to a total depth of 510 m. Hole deviation surveys were carried out every 30 m with an Eastman camera. Drilling conditions in general were good, but the hole encountered a quantity of extremely saline groundwater. The precollared hole section consisted mostly of coarse grained granite (? Burkitt Granite) with minor magnetite. The depth interval 70-120 m showed minor to moderate amounts of sulphides (mainly pyrite), +/- quartz, and returned an assay intercept of 8 m @ 0.2% Zn. The underlying diamond cored section consists mainly of coarse grained granite which is highly altered in places, alternating with finer-grained, more magnetite rich portions. Small bands of mafic intrusives are common throughout the cored section, and often are bounded by up to 2 m broad zones of strong calcsilicate alteration. These zones of alteration sometimes contain minor sulphides, usually pyrite but occasionally arsenopyrite. Assay results for core samples gave no significant values for gold or base metals, although there were minor intervals with slightly elevated lead, well under anomalous level. This hole failed to intersect massive sulphides, and it is thought that the gravity anomaly is most likely due to the dense, magnetite rich granite country rock. The discovery of possible hydrothermal vein material in the precollared hole section is regarded as interesting, because recently completed InterMet geophysical surveys at the Triumph prospect (ground magnetic and IP) have indicated the possibility of large vein structures existing to the north, while to the north-east on EL 3316 Tasman Resources has recorded a significant gold-mineralised vein intersection over a 20 m downhole width.