Two adjoining licence areas located ~50-70 km to the east and south-east of Blinman are being explored for possible economic buried willemite (zinc silicate), scholzite (zinc phosphate) and other base metal mineralisation associated with particular stratigraphic and structural settings present in altered Late Proterozoic to Middle Cambrian metasediments. The focus of exploration has been to understand the complex geology that hosts known mineralisation in these areas, and to develop solid conceptual (e.g. through correlation with MVT and manto deposit style genetic models) and geochemical targets for drilling. Initial work undertaken by Perilya included the following: • a thorough literature research project undertaken to highlight zones of zinc mineralisation potential in the east-central Flinders Ranges. A number of prospects were identified, and their existing prospectivity data were researched and included in a Flinders Ranges database. • Available aeromagnetic data for the subject licence areas were acquired, processed and interpreted. • A 1:100 000 scale LANDSAT image of the entire Flinders Ranges bedrock outcrop region was acquired to assist in prospect generation. 1:25 000 scale images were produced for all of the main zones of interest and were coarsely interpreted with a focus on structure and alteration. • Available stream sediment sampling location and assay data for the licence areas were digitised and added to a corporate geochemical database. Selected prospects were next mapped in detail at 1:5000 scale, and numerous rock chip and grid-based soil samples were collected and assayed for trace elements of interest. Follow-up stream sediment sampling was also performed to define possible extensions of anomalous bedrock zones under Recent cover. From this work an angled RAB drilling program was proposed for Year 2 in the Reaphook Scholzite area, to consist of 10 hole traverses spaced 100 m apart aimed at providing lode assessment information. In addition, it was planned to further evaluate several other highly ranked prospects through doing detailed mapping and geochemical sampling, starting with Wilnuroona and Mount Chambers, to try to promote them to a drillable status. During Year 2 of EL 2692, Perilya reported that it mainly tested anomalous multi-element surface geochemical signatures in areas which it had previously soil sampled. The pulps of 81 soil samples taken previously at Wilnuroona and Emu Bore were sent to Amdel for analysis of their Be, Bi, Sb, Cd, Sr, Ga, Ge, As, Mo, V and Mn content. However, the assay results did not greatly enhance Perilya's understanding of these two prospects. Nevertheless, the company's recent drilling done elsewhere within the project acreage, i.e. in the vicinity of Beltana at the Providence, Reliance and Kynoch prospects, now served to greatly enhanced understanding of the karstic nature of the carbonate strata in the Mount Chambers area, thereby significantly upgrading the potential of prospects there. For instance, the known high-grade smithsonite-cerussite occurrence at Wilnuroona was previously thought to have been fully tested by 5 drill holes put in by Electrolytic Zinc Corp., which had probed beneath the mineralised outcrop. However, a well-developed karst is present to the immediate east of the outcrop, and the surface mineralisation is now thought to have been formed by precipitation of Pb and Zn on the karst wall (similar to at the recent Reliance discovery). The karst itself is filled with limonitic clay and manganiferous clay, and a red silcrete outcrop is present in the eastern part of the karst (similar to Breccia Hill to the south). The western karst wall is exposed in an old trench dug across the mineralisation. Consequently, because the Erics and Wilnuroona prospects are similar in many respects, it was now believed that both had not been drilled adequately to test for deep karst-related mineralisation.