EL 2777 Claude Hills covers 1370 square km and is located at Surveyor General’s Corner (the SA, WA, NT State borders' triple point) and consists of 3 blocks. Early SADME work (1966) delineated 4.6 Mt of 1.5% Ni at the nearby Claude Hills/Mount Davies deposit, with a third of this resource estimated to lie within the current EL 2777. Recent exciting mineral discoveries made in similar rock types elsewhere in the Musgrave Block (i.e. nickel and platinum at Nebo, WMC Resources Ltd; platinum below the oxide nickel resource at Wingellina, Acclaim Exploration NL) suggest that this area has a far greater potential than previously thought. During the first licence year, Aboriginal heritage and site clearance surveys and other access negotiations preceded acquisition of an TEMPEST airborne time domain EM survey (200 m flight line spacing – 50 m average flight height with 2500-line km flown), that was followed by geological reconnaissance and then RC drilling of 6 exploratory holes (CHRC001 – CHRC006) for a total penetration of 726 m. Drill hole locations were not ideal due to lack of access in some areas. Hole CHRC002 intersected 33 m of ~1.0% Ni (oxide) from 23 m downhole depth, hosted by very weathered dunite/pyroxenite. Cobalt grades of up to 0.25% Co were disclosed over the same interval. The other five holes encountered no significant mineralisation within felsic gneissic +/- garnet granulite. Many drill targets remain for future exploration. Licence Years 2 and 3 were reported jointly. No commitment work occurred on the licence during Year 2. At the end of this year (2002), the ground changed ownership; Acclaim Exploration NL (Acclaim) acquired a 100% interest of EL 2777 grant licensee Austral Nickel Pty Ltd during November 2002. Acclaim’s objective was the discovery of a significant copper-nickel sulphide orebody that could be developed to provide a source of sulphuric acid for the company’s Wingellina nickel laterite project immediately over the border in Western Australia, where their work has given the company a unique understanding of the geological setting of the laterite deposits in the area that have formed through the weathering of ultramafic units at the base of the layered intrusions. The identification of an intact basal contact at Wingellina provides a geological vector in the search for nickel sulphide deposits, which Acclaim believe are most likely to form along the basal contact or in feeder structures some distance below an intrusion. During licence Year 3 (2003), no on ground exploration activities were undertaken, Acclaim’s work consisted of exploration access negotiations, data compilation and review, image processing, office based geological studies and a regional geological interpretation. The reprocessing of the geophysical data was incorporated into new images covering all of Acclaim’s Musgrave tenements. The expanded data sets enabled the setting of the Wingellina mineralisation to be confirmed, enhancing Acclaim’s exploration model for the region. Date generated in the reprocessing of company (Austral’s 2000 TEMPEST AEM) and government (400 m line spaced aeromagnetic data) geophysical data was supplied to geophysical consultants Mapitt GeoSolutions for modelling, with anomalies ranked for target generation. Concurrently during the reporting period (May 2002 – July 2002), the Geological Survey branch of PIRSA’s Minerals, Petroleum and Energy Division (MEP) carried out a programme of stratigraphic drilling within the licence area which discovered anomalous copper sulphide mineralisation in one diamond hole (DAV-13) located west of Kalka [see RB 2003/00020 CNO:2023129]. During licence Year 4, exploration activities focused on the area north of the Giles-Mulga Park Road and included the completion of ground geophysical survey (magnetic and EM) and diamond drilling targeting anomalies identified with the government aeromagnetic data, a high resolution aeromagnetic and radiometric survey, and gridded surface geochemical sampling. Ground geophysical surveying activities consisted of a single-line ground magnetic traverse and moving loop Transient EM surveys over nine magnetic anomalies identified in the government magnetic data. Sixteen line-km of ground magnetic data was collected and 13.1 line-km or 140 loops of TEM were acquired over the 9 anomalies with station spacing of 100 m down to 50 m. Two discrete “bulls-eye’ magnetic anomalies were selected for testing and 4 inclined RC/rotary pre-collar diamond cored holes for 862.9 m were drilled (CHDH01 – CHDH04). Drillholes CHDH01 & CHDH04 both intersected strongly magnetic gabbroic bodies that are interpreted to belong to a suite of small plugs and dykes that post-date the Giles Complex intrusions. A combined high-resolution aeromagnetic and radiometric survey was flown between 26th August to 19th September, over the more prospective northern half of the tenement at 100 m line spacing at a nominal terrain clearance of 35 m. The survey extended to the far western edge of the company’s Western Australian holdings for a total survey covering 13,474 line-km with approximately 8710 line-km flown over EL 2777. Acclaim commissioned Integrated Geophysical Solutions for data processing and was then reprocessed by Mapitt GeoSolutions. Acclaim believed the new data sets to be a significant improvement on the government surveys and the 200 metre spaced data from the airborne EM survey that was flown over Wingellina. Approximately 30 new magnetic and radiometric anomalies were identified and ground checking of mafic outcrops for evidence of sulphide mineralisation was commenced. A reconnaissance geochemical auger soil sampling program at Claude Hills was designed to detect and outline potential areas of buried mineralisation in the north of tenement, with samples taken at the interface of soil and bedrock. 557 samples were collected via an auger rig on a nominal grid of 400 x 800 m. Samples were analysed for a suite of “path finder” elements commonly associated with nickel sulphide deposits. Six anomalous areas with elevated Cu, Pt, Pd, Au and Ni values were identified, with one anomaly including outcrop where disseminated sulphides were identified. Peak values were Cu 137 ppm, Pt 6 ppb, Pd 3 ppb, Au 10 ppb, Ni 842 ppm, Co 791 ppm and S 796 ppm. These results are 10-20 times the background values for the area and considered significant by Acclaim. During licence Year 5, on 14th June 2005, Metals Exploration Ltd entered into a joint venture agreement with Acclaim to explore and earn up to 80% interest in EL 2777. In December 2005, Acclaim agreed, subject to shareholder approval, to sell 100% interest in Austral Nickel to Metals Exploration. Because of the joint venture of the tenement and the later sale agreement, and of the nonavailability of Traditional Owners for clearance surveys exploration was limited to limited field traversing and detailed image processing of all available image data for the region. Mappit GeoSolutions were again contracted to carry out data processing and image generation from a large suite of geophysical and Landsat data acquired by Acclaim. Field work inspected several areas of lateritic nickel outcrops and the potential for additional resources to augment the Wingellina resource is thought to be very good. A single rock sample was collected for petrological examination. Traversing and thin/polished section descriptions located disseminated Ni-Cu-Fe sulphides in the Giles Complex rocks, confirming that the sequence is, in part, sulphur-saturated. This significantly enhances the sulphide-Ni prospectivity of the region.