Remodelling and re-interpretation of the geological and geophysical signatures of the Netley Hill prospect by the EL 3848 Joint Venture has indicated good potential for discovering a large porphyry copper-gold deposit at depth, beneath historical shallow exploratory drilling. Therefore Pacific Magnesium Corp., as part of its commitment to earn a 51% share of the EL entitlement from Giralia Resources, applied for and was granted PACE Initiative Year 5 funding from PIRSA to assist in drilling some deep diamond holes to test this concept, following on from the technically successful PACE Year 3 investigations of a similar target at the nearby Blue Rose prospect. During January-February 2008 PacMag Metals Ltd, as current managers of the Joint Venture, completed a four-hole, vertical and inclined fully HQ/NQ2 diamond cored drilling programme (total penetration 1397 m) to test the source of a 3 km long by 1 km wide IP chargeability anomaly with a depth extent of more than 400 m. This anomaly lies directly below significant copper and molybdenum mineralisation encountered during 1970 by Asarco when it drilled 17 shallow percussion holes at the centre of a 5 km diameter bulls-eye magnetic anomaly. Four of the Asarco holes (NETRP 3, 4,15 and 17) had then defined a copper-molybdenum rich zone extending over a 1.5 km x 600 m area, when they all ended in strongly anomalous copper (>0.2% copper) and/or molybdenum (>0.01%) mineralisation.These earlier drillholes were not assayed for gold or other precious metals, and have only penetrated the immediate upper surface of Pacmag's newly defined strong IP chargeability anomaly, which extends for a further 1.5 km to the north-east. Based on the volume of the three dimensional IP chargeability inversion model, a sulphide-mineralised zone containing 3 billion tonnes of chargeable rock may be inferred. Assuming that only 10% of the chargeability feature is mineralisation of economic copper and molybdenum grade, a target of 300 Mt can be inferred. At a target depth of 100 m, a resource of 300 - 600 Mt @ >0.4% copper equivalent is considered to be of potential economic interest, assuming low strip ratios and favourable metallurgical characteristics. This target size is similar to those of several viable American copper-molybdenum deposits. The PACE drilling at Netley Hill intersected in all four holes medium grained equigranular biotite rich granite and one single discrete zone (NTDD003; 285-338 m depth) of fine grained quartz monzonite porphyry. Strong alteration is present throughout all holes and consists of two types: - Potassium feldspar (pink) selvedge around quartz pyrite veinlets and fractures (that locally contain chalcopyrite). The selvedge ranges in width from 0.5 cm up to 50 cm wide zones where multiple veins coalesce or are at a high enough density to cause selvedge overlap; - Sericite +/-pyrite veins and selvedge. This alteration demonstrably overprints and appears to be a later phase of alteration overprinting an earlier K-feldspar alteration. In the upper portions of hole NTDD001, the sericite alteration is pervasive over 2-3 m, and the average total replacement of original minerals exceeds 60% of the rock mass. Pyrite content in the sericite altered zones is commonly 1-3% disseminated and vein pyrite, with locally 5-10% pyrite where thicker pyrite and quartz-pyrite veins are present. Magnetite content varies throughout the zones drilled to date. Commonly up to 1-2% magnetite is present in the sericite altered zones as small discrete magnetite grains and grain clusters, whilst larger quartz-magnetite veins occur sporadically throughout, particularly in the deeper portions of hole NTDD004. Copper minerals are present in minor amounts as copper carbonates and silicates in the top portions of each hole as fine coatings on fractures and small disseminated blebs. Chalcopyrite and lesser bornite (NTDD001 only) occur predominantly as disseminations, blebs and micro-veins and are restricted to the sericite or K-spar altered rock. Molybdenite was logged in several holes as minor discrete quartz-molybdenite veins, but the molybdenite is very fine grained and difficult to see even under a hand lens. The best-mineralised drill core intercept was made in hole NHDD001, as 40 m @ 0.05% Mo and 1 g/t Ag from 11 m depth, including 7 m @ 0.07% Mo from 11 m depth, and 6 m @ 0.06% Mo from 22 m depth. This of a similar grade to the overall resource grades at other molybdenum mine development projects such as Spinifex Ridge in WA (469 Mt @ 0.058% Mo) owned by ASX - listed Moly Mines Ltd, and the Ruby Creek project (213 Mt @ 0.06% Mo) owned by TSX - listed Adanac Molybdenum Corp. Pacmag's partly PACE-subsidised drilling project at Netley Hill has confirmed and increased the thickness of molybdenum mineralisation identified in previous shallow percussion drill holes above and to the east of the IP anomaly, as well as confirming the presence of large zones of lower grade copper and molybdenum mineralisation which average (for the intervals assayed to date) approximately 0.1% copper, 0.015% molybdenum and 1g/t silver over the length of the 350 m deep drillhole that coincides with the IP feature. The source of this large anomaly has been revealed as pervasive disseminated and vein - hosted sulphide minerals including chalcopyrite, molybdenite and pyrite. The results from this initial broad spaced scout drilling programme are regarded as very encouraging and provide confidence that a very large mineralised system capable of hosting a substantial molybdenum-copper deposit has been identified. Additional drilholes will be designed to define the limits of the molybdenum mineralisation.