In November 2007 an application was made by Austral Nickel Pty Ltd for funding assistance under PIRSA's PACE Initiative, Theme 2 - Drilling Collaboration with Industry, to explore for economic occurrences of magmatic Ni-Cu-PGE mineralisation on its EL 3555 located in the extreme north-western corner of South Australia, 15 km north of Kalka within the western Musgrave Ranges. Austral Nickel is a wholly-owned subsidiary of Metals X Ltd, which is conducting mining feasibility studies for the Wingellina nickel oxide deposit located nearby in Western Australia.The proposed Year 5 PACE exploratory drilling was targeted at the buried southern margin of the northwards-dipping Mesoproterozoic Giles Complex layered mafic/ultramafic intrusion at Claude Hills North to test the interpreted lowermost part of this body for its nickel sulphide potential, and to test the nature of its basal contact with Birksgate Complex gneisses, while at the same time, it was intended that potential extensions to the lateritic nickel-cobalt ochre mineralisation, previously encountered just to the west of the EL 3555 area in holes drilled by Southwest Mining in 1954 and by the South Australian Department of Mines and Energy in 1965, would also be sought. The funding application was successful, with project DPY5-16 being approved in February 2008. The subject exploration work was carried out under the terms and conditions of an existing Deed of Exploration that had been signed on 18/5/2006 by Austral Nickel and by Anangu Pitjantjatjara Yankunytjatjara. All individual drill sites were visited and approved by Traditional Owners for the area prior to being pegged-out and drilled. A 1 km long north-south traverse of ten, 100 m spaced, 60 degrees south-dipping RC drillholes for a total penetration of 1431.5 m was completed during August 2008 to satisfy the PACE project requirements. However,the Giles Complex rock sequence intersected was not arranged in the expected configuration, but actually quite the opposite, which shows that structurally the Claude Hills North layered intrusion is a separate, south-dipping intrusive body (and not the north-western limb of a west-plunging anticline also containing the partly outcropping Claude Hills intrusive body on its south-eastern side, as had earlier been inferred from interpreting regional magnetic data), whose basal contact lies to the north of EL 3555, i.e. largely within the northern Territory, and is probably truncated by the Mann Fault. Thus the Claude Hills mafic/ultramafic sequence does not represent a folded repetition of the Mount Davies and Wingellina Hills nickel ore host sequences. Its nickel sulphide potential has therefore been downgraded. The Claude Hills North intrusion has predominantly olivine-rich ultramafics, being composed of pyroxenites, dunites and peridotites, with lesser melanocratic gabbros. It appears to be similar petrographically to the Ewarara Intrusion. It is probably differentiated on a sub-metre scale in places. This characteristic has also been noted in drilling from the Wingellina area in WA. The weathering profile is more deeply developed over the dunites, and this is where the nickel oxide concentrations have formed. Gold, platinum and palladium were assayed for in fresh Giles Complex pyroxenite drill cuttings samples taken from the PACE-subsidised drillholes. The analysis results were not anomalous. The acid to intermediate felsic gneisses and interbedded mafic units penetrated by the subject drilling traverse, that form the basement to the Giles Complex, are moderately to strongly magnetic, which has clearly complicated the geophysical interpretation of the setting for the Claude Hills intrusion. They contain trace amounts of sulphides throughout. One drillhole, CHRC093, encountered significant nickel oxide mineralisation (70 m @ 1.18% Ni and 0.069% Co from 12 m depth) that is similar in grade to the ore material defined as the 200 Mt resource within the Wingellina deposit. Additional drilling along strike from this intercept was also completed outside of the scope of the PACE agreement, to test the extent of this oxide mineralisation, and it is now believed that a resource to complement the WA ore occurrence will eventually be defined within EL 3555.