A number of tenements on central northern Eyre Peninsula are being explored by Adelaide Resources and its joint venture partner Newmont Mining for possible economic buried deposits of gold, copper and other base metals which may have formed in the Gawler Craton basement. For the 2002-2003 reporting year, initial field work on the JV ground proceeded via a continuation of surface calcrete sampling, the aim being to closely sample some previously detected gold-in-calcrete anomalies. 29 calcrete samples were collected on EL 2844 Cocata during July-August 2003. Adelaide Resources' previously completed geochemical orientation studies, preliminary statistical analysis and experience from other areas on the Gawler Craton suggested that a threshold of 2.5 ppb Au is appropriate to define regional gold anomalism, and 18 ppm copper to define regional copper anomalism. No samples collected from within the sampled area surpassed these figures. During the full calender year 2004 that was reported on by the Eyre Peninsula JV's first combined annual report, exploration work done then had consisted of: • regional and infill calcrete geochemical sampling (2317 samples collected). A number of new anomalies were defined and several existing anomalies were infill sampled to better define their extents. This sampling essentially completed the calcrete coverage for the project area. An interpretation of the entire Adelaide Resources calcrete database was made using a reliability factor combination of a maximum 10 m thickness of cover and minimum 10% carbonate content, which revealed that in reality only some 38% of past calcrete samples had been effective, thus leaving the majority (62%) of the licence area essentially untested; • reconnaissance and infill RAB/AC drilling to systematically test numerous gold-in-calcrete anomalies at prospects including Barns/White Tank in EL 2845, WUD1, WUD6/Baggy Green, PA1, WUD2C in EL 2869, and KO1, KY1 and KO3 in EL 2846 (595 holes for a total penetration of 31,780 m during the period July 2003-October 2004). At White Tank, WUD6/Baggy Green and WUD2C, the drilling outlined bedrock gold geochemical hits that were deemed worthy of RC drill testing; • 57 RC holes for 7114.5 m were completed at the Barns, White Tank, Baggy Green/WUD6 and WUD2C prospects. The drilling at Barns and White Tank intersected relatively narrow zones of primary mineralisation, while limited drilling at WUD2C failed to find any definite primary source mineralisation. Drilling at Baggy Green was successful in outlining wide zones of potentially significant gold mineralisation within a shallowly westwards dipping shear/alteration zone; • petrological studies were made of samples from several anomalies. A summary report covering host rocks, alteration and mineralisation from several prospects in the project area was completed. It identified widespread (lower temperature) chlorite/sericite alteration and more localised (higher temperature) sericite/biotite alteration, interpreted the observed mineralisation as being of “lode-gold” style, and nominated an understanding of structural controls as the most important key for success in exploration for this style of mineralisation; • a detailed airborne magnetic/radiometric/DEM survey was flown over two areas during October-November 2004, for a total coverage of 16,527 line km along east-west flight lines spaced 75 m apart, using a sensor 40 m mean terrain clearance. For 2005, the second calendar year of the EPJV joint reporting regime, the following work took place: - during March-April 2005, under the aegis of PACE Initiative subsidised Drilling Project DPY2-58, 44 RAB percussion holes for 3827 m were drilled along five traverses within the confines of the Pinkawillinie Conservation Park to further test the multi-element Empire geochemical target. Very minor mineralisation was intersected, but it was considered to be too small in amount to have generated the surface geochemical feature at the prospect. It was concluded that either a more significant body of as yet undiscovered mineralisation sources the surface gold and copper-in-calcrete anomaly, or else this anomaly is reflecting elevated but wider disseminated metal concentrations in the underlying schistose bedrock; - during July-August 2005, Search Exploration Pty Ltd conducted an IP/resistivity survey along a series of lines at the Baggy Green and Barns prospects, located in ELs 2845 and 2869 respectively. The aims were to a) investigate the applicability of this geophysical method for mapping anomalous gold intersections with associated accessory sulphide mineralisation that had been identified by previous drilling, and b) test favourable magnetic structures, similar to those containing anomalous gold at Barns and Baggy Green. The survey results were encouraging, particularly those from Baggy Green. It was thought that the use of a more geometrically constrained modelling approach might prove helpful in mapping zones of sulphides associated with gold mineralisation. - following the withdrawal of Newmont Mining from the joint venture with Adelaide Resources, the grant licensee undertook a prospectivity study on the sedimentary uranium potential of its tenements, and prepared an information memorandum to distribute to companies which might consider farming in to its ground, since previous exploration carried out by various companies of the Tertiary palaeochannel systems developed in the Eyre Peninsula region had demonstrated, via the discovery of two significant palaeochannel uranium occurrences, Warrior and Yarrana, that the environment is prospective for sediment-hosted uranium deposits. Parts of three large Tertiary palaeochannel systems lie within Adelaide Resources' current tenements: the Narlaby Palaeochannel, draining north-westwards (which hosts the Yarrana uranium deposit), the Yaninee Palaeochannel draining to the south [both of these features having been explored by Carpentaria Exploration Company Pty Ltd during the late 1970s and early 1980s], and the Thurlga Palaeochannel draining towards the north, which has not been explored. The information memorandum about the sedimentary uranium potential of the Tertiary palaeochannels recommended a detailed re-appraisal of the uranium prospectivity of the upper reaches of the Narlaby and Yaninee Palaeochannels, besides some exploration of the Thurlga Palaeochannel. For 2006, the third year of the EPJV joint reporting regime, the following work took place: - during April 2006, as PACE Initiative subsidised Drilling Project DPY3-38, 8 RC holes for 797 m were drilled to test a number of IP chargeability anomalies located in the vicinity of known gold mineralisation at the Barns and Baggy Green prospects. However, five of the holes were abandoned at shallower than planned depths due to insurmountable drilling difficulties. The other three drillholes did reach their targets, but failed to intersect any gold mineralisation of encouraging character, and also failed to define any source for the IP anomalies. The Mesoproterozoic bedrock penetrated at Barns West comprises granodiorite with narrow units of possible metasediment (interpreted to be blocks of country rock) and mafic material. Bedrock at Baggy Green North is dominated by gneiss, which is considered to have a granodiorite parent. Minor lithologies encountered at Baggy Green include mylonites and mafic units, the mafic units including both amphibolite and dolerite or lamprophyre dykes or sills. Weak to strong hydrothermal alteration is present in each of the three PACE-funded drillholes that successfully penetrated bedrock. The alteration is of a distal propylitic style and of the type extensively developed around both the Barns and Baggy Green prospects. Very minor sulphides, typically marcasite in weathered rock and pyrite in fresh rock, are present in all holes. No work ensued during the remainder of 2006, while joint venture negotiations and research into the quality of previous mapping of the palaeodrainage sedimentation were pursued. Exploration for possible economic sandstone-hosted uranium began during project Year 4, in December 2007, with the drilling by Quasar of 88 vertical rotary mud holes for 5295 m on four JV licences. Five drill traverses (34 holes) were completed across the historically defined Yaninee Palaeovalley located on ELs 3501 Yaninee and 3700 Cocata, and four drill traverses (53 holes) were completed across the historically defined Narlaby Palaeovalley located on ELs 3743 Minnipa and 3076 Pildappa. The best mineralised intercept obtained by direct assaying of downhole samples came from drillhole PD031 in the Narlaby Palaeovalley, which returned 0.45 m @ 136 ppm eU3O8 from 20.50 m depth. Cross- sectional geological interpretation, plus the plotting of downhole gamma ray log equivalent uranium content grades, was then able to outline two anomalous radiogenic zones within the Narlaby Palaeovalley; 1) a shallow (18-22 m below surface) anomalously radiogenic area (100 to 150 ppm eU3O8) having an aerial extent of at least 2 km x 1 km - apparently this mineralisation is above the water table, and 2) a deeper (at 30 m) anomalously radiogenic zone of unknown areal extent (i.e. not closed off in any direction) which lies further to the west. During mid-November 2007, a helicopter-assisted ground gravity survey of 942 stations was acquired by Quasar on EL 3546 Mount Ive to effect a preliminary delineation of the Thurlga Palaeovalley, with gravity readings collected at 1 km x 1 km and 1 km x 250 m infill spacings. During Project Year 5, in October 2008, Quasar acquired a 1695.2 line km helicopter-borne electromagnetic survey (RepTEM) over the Narlaby Palaeochannel, covering parts of ELs 3833, 3501, 4145 and 3743. 70.0 line km of this survey was also flown in test mode along six lines located over the Thurlga Palaeochannel on EL 3546 Mount Ive. Flight line spacing was 400 m and 1 km, with a 35 m mean sensor elevation above the ground surface. During November 2008, a follow-up 55 vertical hole (3469 m) rotary mud drilling campaign was conducted by Quasar, with drill traverse positions based on a preliminary review and inversion model of the RepTEM system data, which sought to located constrictions and bends in the palaeovalley that might form precipitational traps for dissolved uranium. Drillholes were placed at 400 m intervals along most of the traverses. High gamma ray wireline log grades were mainly seen in the reduced clays and in the kaolinitic saprolite in the lower parts of those holes that were drilled to basement. Within the saprolite, peak total gamma counts of approximately 100 counts per second (cps) were recorded, compared to background counts of 40 cps. The best geophysical log-derived uranium intercept of 104 ppm eU3O8 was recorded in drillhole PD062, from the top of the reduced clay unit near the south-western margin of the palaeovalley. All attempted PFN in situ grade measurements were below the 300 ppm pU3O8 lower detection limit of the PFN tool. 573 channel fill sediment and saprolite samples were submitted for geochemical assaying; the highest uranium result obtained was 115.5 ppm U3O8 from reduced clays drilled over the depth interval 28-30 m in hole PD066. No significant results were returned for the sixteen other elements in the geochemical assay suite. Because Adelaide Resources retained the right under the Quasar JV agreement to explore for uranium and other metals in basement over certain parts of the joint venture area, the licensee was permitted to complete two phases of vertical RAB/aircore drilling during 2007 and 2008 to test for bedrock uranium mineralisation, by targeting airborne radiometric anomalies at the KO11 South and Ulysses prospects located on ELs 3705 and 3296 respectively. During February-March 2007, Adelaide Resources completed 42 aircore holes along eight traverses at the former, and 23 holes along six traverses at the latter, for a total penetration of 3177 m. Weathered primary such mineralisation, plus secondary remobilised uranium occurrences within the regolith, were discovered at both prospects. At Ulysses, a broad zone of anomalous uranium was defined covering a 2200 m x 900 m area and trending WNW-ESE, with anomalous zones remaining open to the east, south and west. Anomalous uranium in weathered bedrock was also defined at KO11 South, e.g. a maximum value of 171 ppm U308, associated with anomalous Cu (600 ppm), was identified at the bottom of drill hole KO11S-1082. However, the response seen in scintillometric scans of the drill cuttings was less coherent, and hence this occurrence may be arealy more confined. Some gold, zinc, cerium and other trace element anomalies were also returned in downhole sample assays from both prospects. These results were considered highly encouraging, and further drilling at the Ulysses and KO11 South prospects was planned for 2009. Although there is clearly strong uranium enrichment within the weathering profile at KO11 South and Ulysses, it was noted that for individual drillhole samples the relationship between laboratory uranium assays and in-field gamma readings were not always directly proportional. Some samples with only moderate gamma activity returned significant uranium assays, while conversely some samples with significant gamma readings contained relatively low levels of assayed uranium. This non-proportional relationship was interpreted by Adelaide Exploration as possibly a result of disequilibrium existing between the uranium mineralisation and its gamma ray - emitting daughter isotopes, which is a feature commonly observed in many young uranium deposits. Follow-up vertical aircore drilling of the above basement uranium occurrences was carried out during February-March 2008, when 36 holes for 1978 m were drilled at KO11 South and 57 holes for 2862.4 m were drilled at Ulysses. Nine drill cuttings samples from the Ulysses prospect were submitted to Pontifex and Associates of Adelaide for petrological study. These included a number of samples from downhole intervals anomalous in uranium. No uraniferous minerals were identified. The drilling at KO11 South confirmed a strong multi-element U3O8-Cu-Au-Ag-Ce-Pb-Zn-Fe anomaly extending for approximately 700 x 400 m, open to the west, and having possible E-W and NNE-SSW structural controls. The mineralisation occurs in weathered gneiss to mafic granulite, close to the margin of an interpreted Hiltaba Suite granite body. Its southern end is located within this granite, on the margin of a mafic intrusive body encountered in drillholes DD90WU25 (CRAE 1990) and 98WDRC029/030 (Aberfoyle 1998). The 2008 drilling at Ulysses significantly extended the area of known uranium mineralisation occurring both as weathered primary mineralisation and as secondary remobilised uranium salt precipitates. The mineralised zone appeared to cover a 2200 m x 900 m area trending WNW-ESE, which still remains open to the east, south and west. This partially defined trend also appeared to occur at an oblique angle to the original NW-SE-trending radiometric anomaly defined from airborne data. It was surmised that the original anomaly in part reflects the northwest-trending dune and swale topography of the region, with the stronger radiometric signals associated with topographic lows within the swales. The density and depth of drilling were deemed insufficient to allow a confident assessment of the style of uranium mineralisation present. However, there appeared to be some geological similarities between the Ulysses prospect and a number of deposits located in the Westmoreland uranium district north-west of Mount Isa in Queensland. The Westmoreland uranium mineralisation was originally discovered in 1957 following drill testing of airborne radiometric anomalies. The principal deposits occur along the flanks of a mafic dyke array (the Redtree Dyke Zone) with uranium mineralisation occurring as horizontal and vertical lenses on the contacts of mafic dykes. At Ulysses, the uranium mineralisation also appears to be associated with the contact of a series of intensively chlorite-clay altered mafic dykes. Some of these dykes appear to be shallow dipping to sub-horizontal bodies, while others appear more likely to be steeply dipping. More strongly enriched intervals identified in holes ULY-1181 (7 m @ 235 ppm U3O8 from 44-51 m depth) and ULY-1206 (12 m @ 204 ppm U3O8, including 6 m @ 342 ppm, from 36-42 m depth) may be associated with cross-cutting NNE-trending structures. At Ulysses, in addition to uranium, there are intervals of elevated to strongly anomalous variable Cu, Zn and Au mineralisation, occurring both directly associated with anomalous uranium zones and also as independent anomalies. An E-W trending coherent zone of anomalous Cu-Au was defined in the eastern sector of the prospect. Up to twenty additional basement radiometric anomalies, to which it had full access, were identified by Adelaide Exploration in regional radiometric data. Within the Pinkawillinie Conservation Park, 74.1 line km of Quasar's 2008 airborne RepTEM survey was flown for Adelaide Resources over the large multi-element (Cu-Au-Ag-Ni-Zn) calcrete anomaly known as the WUD 9 prospect, to explore for possible bedrock conductors. Interpretation of the AEM data by consultant geophysicist J. Silic of Flagstaff Geoconsultants identified two potential bedrock conductors (Target 1 and Target 2) located on the margin of the prospect. Target 1, called the Empire prospect, had not been tested by previous drilling.