As part of a continuing search for possible economic, zircon-rich Tertiary marine placer mineral sands deposits within its tenement holdings in the eastern Eucla Basin, licensee Iluka Resources carried out scout drilling on ELs 3163, 3201 and 3203 over the period May to August 2004. 385 vertical reverse circulation aircore drillholes were put in at nominal 400 m intervals, with closer infill where necessary, along six traverses spaced approximately 20 km apart, for a total penetration of 11,066 m. The drillholes were sampled at 1.5 m depth intervals for stratigraphic logging and laboratory heavy mineral (HM) analysis. The most prospective areas that were so tested have encouragingly thick beach and dune sand sequences that were formed during multiple marine shoreline transgressions. The positions of these units are predominantly controlled by the topography of the underlying granitic basement. Notably, 6 of 1108 drill cuttings samples which were submitted during July 2004 for laboratory heavy mineral analyses returned grades of greater than 3% HM (best result 4.80% HM from the depth interval 22.5-24 m in hole EP291 drilled on EL 3163). Samples of pedogenic calcrete were also collected by Iluka and assayed for gold, and anomalous values were returned from two areas. The 3.12 ppb Au anomaly that was detected on Diagonal Road had previously been followed up by Aurora Gold Ltd with drilling, without success. The 1.53 ppb Au anomaly on Finlayson Rd / Pearson's Rd awaits investigation. One of the initial aims of this scout drilling programme was to relocate and evaluate the zircon-rich Tertiary HM mineralisation previously found by BHP Minerals' drilling. It now appears that most of this mineralisation has formed in fine sands in a low energy environment, without the subsequent reworking required to concentrate the heavy minerals. Mineralogical laboratory results for samples submitted by Iluka have confirmed that such regions contain fine grained heavy mineral sands (less than 75 microns) with visually high levels of zircon (approximately 30%). The cover sequence within the western, more seaward portions of the above ELs was shown by the drilling results to consist in many places mainly of thick calcrete and/or fluvial sediments, or else is effectively almost absent due to widespread shallow bedrock subcrop, and thus is likely to contain insignificant HM mineralisation. Due to this unprospective geology, these various areas that in total comprised 52% of the three licences were relinquished on 11/11/2004. In further scout drilling of the remaining tenement ground, conducted during the period February-April 2006, 351 RC aircore holes for 16,033.5 m were completed along 12 traverses spaced roughly 20 km apart. A total of 2222 HM samples and 47 basement/saprolite samples were sent for analysis. The geological facies encountered range from well-developed beach deposits to low energy, little reworked estuarine and deltaic deposits associated with a broad shallow marine shelf and the mouth of the Narlaby Palaeochannel. Low level anomalous uranium (to 43 ppm U) and zinc (to 685 ppm Zn) were recorded from basement samples on drill Traverse 12, collected from beneath extensive lignite beds which define the Narlaby Palaeochannel lower reaches. An extensive occurrence of fine grained zircon-rich +1% HM mineralisation was discovered by Iluka within unconsolidated clean sands at a targeted palaeogeomorphic trap site located about 60 km east of Ceduna, within ELs 3201 and 3203, on Drill Traverses 3 and 4, and this find was named the Gullivers prospect. Preliminary definition drilling was completed at a 2 km traverse spacing along strike, within private property. The drillholes were spaced at 400 m along these traverses, and then were infilled to 200 m in areas of higher HM grades, to define a 7 km x 2.5 km envelope of mineralisation. The occurrence contains an average assemblage of 20% zircon, 50% ilmenite and 5% rutile, and has HM grades of up to 7.9% over a 1.5 m interval (in hole EP443). Away from this prospect, the rest of the 2006 drilling produced a few dispersed anomalous HM intersections within fine sands, that had consistently low grades (no greater than 3% HM). Iluka has lately recognised that all of the significant HM mineralisation delineated to date within the Eyre Peninsula region, including the Gulliver’s prospect, is of a very fine grainsize (<75um on average). This type of HM consistently occurs within a very fine to silty sand layer, mixed with gritty units, which is interpreted as evidence of deposition in a low energy marine environment on either the lower shoreface or on a very quiet beach or estuary. The absence of mica in these sediments, in addition to the presence of grits above and below, suggests that estuarine or regressive marine depositional conditions were more likely active. True lower shoreface sands appear to have been restricted to the far western parts of the Eyre Peninsula tenements. The Gullivers mineralised unit has formed at a Relative Sea Level of between 20 and 60 m; this range in sea levels covers a broad, wide shelf. This setting would have created a very low energy marine regime, which explains the fine grained host sands and fine grained HM of the intercepts made to date. By comparison, the Jacinth (105 to 155 meters RL) and Tripitaka deposits (95 to 150 meters RL) lying to the north have formed on a much “steeper” beach shelf, allowing for more vigorous sediment reworking and effective concentration of higher value HM assemblages. Iluka thinks that there is good potential for spatially large HM deposits of the Gullivers type to become upgraded by longshore transport into better trap sites, to yield more favourably composed and much higher grade HM assemblages, perhaps akin to that present at the Jacinth deposit. During the period February-March 2007, another 145 exploratory vertical RC aircore drillholes for 5424.7 m were completed by Iluka within ELs 3163, 3201 and 3202 along six traverses that were spaced approximately 17 km apart. A total of 487 HM samples and 23 basement/saprolite samples were sent for analysis. The geological setting for much of the area that was drilled has been interpreted as a back-beach to lagoonal brackish sedimentary environment, probably with a common fluvial influence, since palaeochannel sediments were intersected on a number of the traverses. Since initial deposition, the sediments of the entire area have been reworked into a number of generations of very well sorted dunal sequences. Although most of the drilling in this programme met with barren silty and micaceous fine alluvial sands, some minor very fine grained HM mineralisation was intersected within EL 3201 on Traverse 5 (where the thickest intercept was 1.7% HM over a 4.5 m interval in hole EP861, but then, upon inspection, the assemblage was found to contain mostly trash, i.e. non-valuable, heavy minerals). It was hypothesised early in 2007 by Iluka, after studies were made of Shuttle Radar Topography Mission (SRTM) data, that the entire eastern Eucla Basin region, Eyre Peninsula tenements included, became tilted to the south during the last Tertiary marine regression. As the pitch angle of the early Pliocene shoreline increased, the more rapid the rate of regression became. The rate of regression was more rapid heading further southeastwards along this shoreline, as the distance increased from the fulcrum of the tilt. This scenario implies that, in the region of the Eyre Peninsula Group 3 tenements, the palaeoshoreline was prograding seaward at such a rate that littoral strandlines were never established long enough to become mineralised to any appreciable degree.