The Wheal Ellen prospect situated at the centre of EL 3232 is named after the historical lead-zinc-silver mine which was worked there, primarily in the 1850s. Numerous other old shallow workings are also present along strike and in beds running parallel to the mine lodes, and extend onto Hillgrove's surrounding Kanmantoo EL 3277. The wider prospect as a whole represents a strongly mineralised belt at the southern end of Hillgrove’s current tenement holdings, that promises to be the second most strongly mineralised part of the Kanmantoo Trough after Kanmantoo. It is also strategically located up strike from the Angas deposit and historical Strathalbyn mine workings, occupying approximately the same stratigraphic horizon. The Wheal Ellen deposit exhibits a strong stratabound nature, and possibly formed as a sedimentary exhalative (SEDEX) deposit, although this is far from certain as the host strata and the Delamerian S2 foliation are sub-parallel. The lode is constrained to one narrow horizon, and exhibits metal zonation. Probably the most salient point is that lode sits next to a small body of garnet andalusite schist, which is the host rock for mineralisation at the Kanmantoo mine along with numerous other prospects, and that a similar garnet-chlorite alteration halo is present. A second garnet andalusite schist and associated lead lode (Wheal Everly) has also been discovered 400 m east of Wheal Ellen. It has been suggested that andalusite could be a hydrothermal alteration product, and therefore the mineralisation is hydrothermal in nature, meaning that deposits such as Wheal Ellen are stratabound rather than stratiform. During the first licence year, the licensee Hillgrove Resources ('Hillgrove') conducted a thorough review of past mining and exploration records for Wheal Ellen. Although in the recent past (1960s onwards) efforts to appraise the abandoned mine workings had been thwarted by landowner intractability and was also hindered by the presence of the former Private Mine 143 status of the prospect area, which has since been revoked by the Minister of Mines on 16/4/1998. During the second licence year, Hillgrove discovered that it was able to arrange to purchase of the hilly, poor quality farming land on which the mine is located. Thereafter the licensee undertook limited rock chip sampling of mullock heaps near the old and now largely in-filled mine shafts (22 samples), which confirmed the historic ore grades reported from the former mining activity. Consequently, Hillgrove decided to plan RC drilling to try to prove up the remaining base metal resource on the prospect, which the company believed had good potential to become a high grade low tonnage satellite resource. Probably one of its greatest assets was being strategically located within 10 km of the Angas zinc deposit owned by Terramin Resources. If mining went ahead at Angas then Wheal Ellen would be well placed to provide additional reserves. Alternatively, if the Kanmantoo mine re-opening went ahead, then Hillgrove would have the option of processing the extra ore there itself. Because the Wheal Ellen upland property is surrounded by remnant native vegetation that has been accorded informal 'bush heritage area' status, Hillgrove chose to commission an independent botanical study of the vegetation and include the consultants' report in the DEF which was submitted for approval of its proposed initial drilling programme. A digital terrain model was also constructed to aid in drillhole rig placement planning. During the third licence year, following the approval of its DEF by PIRSA, Hillgrove conducted two rounds of RC drilling at the mine, while a third round was started just after the end of the 2006-2007 reporting period. The second drilling round in particular was successful in replicating historical grades as well as in achieving mineralised intercept widths comparable to those seen at Angas prospect. Ongoing surface geochemical sampling apart from Wheal Ellen on EL 3232 also identified several other target areas for future exploratory drilling. A further 21 x minus 75 micron rock chip samples were collected during March 2007 from locations selected either near magnetic anomalies or near past soil base metal anomalies. Sample HG1318 at Wheal Ellen South returned assay grades of 24.36% Pb, 6.94 g/t Au and 503 g/t Ag; and sample HG1283 at Wheal Ellen North returned 34.38% Cu. From field mapping it was found that in some cases aeromagnetic anomalies corresponded with outcropping biotite andalusite schist beds, and that in some cases base metal mineralisation also occurred nearby, the best examples of this being at Monster Lode and Wheal Ellen North. Hillgrove said that other regional examples of this host lithology association are the entire Kanmantoo group of workings, South Hill, Mount Barker Creek, Wheal Ellen North, and Wheal Ellen. In its opinion the significance of this factor has never adequately been explained, particularly in reference to SEDEX models of mineralisation. During the year, as part of a larger geochemical survey, Hillgrove collected 353 regional reconnaissance minus 160 mesh size soil samples along east-west traverses of the licence area, to give either 200 m x 50 m or 100 m x 50 m grid spacing. In areas of known mineralisation the spacing along traverses was reduced to 20 m. Predictably, a strong lead and zinc response was found around the Wheal Ellen mine. Investigation of the sample sites indicated that while the large footprint could be partially attributed to drainage effects and contamination, it seemed likely too that minor parallel buried lodes may be present. Copper anomalies are present in the soil at Wheal Ellen North, Wheal Ellen and Monster Lode, and these correspond to known workings. In February 2007, Hillgrove undertook a dipole-dipole IP survey at Wheal Ellen, plus a downhole Mise a la Masse survey utilising an existing drillhole. The surveys were carried out by Search Exploration and the interpretation of the data by Integrated Geophysical Solutions. The main aim of the surveys was to identify a potential plunge direction for the Wheal Ellen orebody. The original miners believed this was towards the north, but geologists from the Department of Mines believed it to be towards the south (cf. RB 35/73 of 1953). Results from Hillgrove’s first RC program completed in September 2006, of 12 inclined but too shallow holes for a total penetration of 569 m, did not prove or discount either theory, so it was hoped that the geophysics might provide extra clues. Results from the survey program indicated that a northern plunge was the most likely scenario, and that a large chargeable body appeared to be present at depth. Based on this advice, in June 2007 Hillgrove undertook a second round of RC drilling of 14 inclined holes for a total penetration of 1418 m to test the geophysical anomalies and to further probe around the existing stopes. Results from that drilling indicated that the chargeable body was due to disseminated pyrite, not to base metal sulphide mineralisation; however, the now deeper holes did manage to intersect wider (to 7 m) high grade lead-zinc mineralised zones beneath the larger mine stopes, which suggested that the lode plunge is in fact sub-vertical. Recent drilling has confirmed this, and thus it now appears that both IP and Mise a la Masse geophysical methods are unsuitable for detecting Wheal Ellen style mineralisation. Hillgrove decided to pattern drill the prospect on a 20 m x 20 m hole spacing, to try to effectively map the wider ore shoots and allow for making a preliminary resource calculation. From the second round of drilling, the best result of 7 m @ 2.60% Pb, 5.48% Zn, 0.31% Cur, 52.43 g/t Ag and 1.49 g/t Au from 103 m downhole was obtained in hole WHRC020, and ten of the other holes recorded minor to less significant lode intercepts. During the fourth licence year, Hillgrove undertook surface geochemical exploration, contracted the conduct of trial surface and downhole electrical geophysical surveys, and completed two further rounds of prospect appraisal RC drilling for 2822 m. 19 holes for 1652 m were drilled in September 2007, these being relatively shallow holes which were designed to improve the understanding of mineralising trends in the shallower western end of the resource, and then to extend knowledge of the resource to the east as far as practicable. The second round of 11 holes for 1170 m during February 2008, was located within the mapped resource to better define it. This work indicated that the resource, although often high grade over various intercept widths comparable to those found at the neighbouring Angas prospect, may be discontinuous and have a highly variable mineralogy. Hillgrove performed an initial campaign of diamond drilling at the Wheal Ellen mine during January-March 2008, when it completed 5 inclined HQ/NQ2 holes for a total penetration of 952 m. These holes were designed to try to expand the known extent of mineralisation by testing previously undrilled areas down-dip of high grade intercepts, and to try to augment the resource by drilling exploratory holes along strike from the known mineralisation, as well as providing the first core samples from the project to aid in the understanding of the geological structure and facilitate metallurgical testwork. The holes made numerous high grade mineralised intercepts over varying intervals. The results were again a clear indication that a close-spaced drill pattern would be required to delineate the wider ore shoots. Two RC drill cuttings ore samples from Wheal Ellen prospect were submitted to AMMTEC by Hillgrove for bulk mineralogical analysis to determine the quantitative mineralogy of valuable and gangue minerals and the liberation and locking characteristics of Zn-Pb-Cu mineral grains. The first sample was reported to consist of semi-oxidised ore with no sphalerite detected. Relict galena is the only abundant valuable mineral (5% by weight), but it is poorly liberated by grinding. Any zinc present is most likely locked inside siderite, jarosite, iron oxides and ankerite. The second sample was reported to consist of partially/weakly oxidised ore containing abundant sphalerite (17%) and common galena (5%). Both of these ore minerals are poorly liberated by grinding. During December 2007, Hillgrove contracted Outer-Rim Exploration Services to conduct a programme of surface TEM profiling and downhole EM surveying, the latter done in holes WHDD003, WHRC033 and WHRC040. It appeared from the TEM results that the method could be used to identify possible extensions to the Wheal Ellen orebody, but after further analysis of them it was concluded that the TEM responses did not distinguish between narrow or wide mineralisation zones and therefore would not be reliable for drill targeting. During the reporting period Hillgrove also undertook soil sampling, collecting 211 samples over the tenement including infill lines and extending the coverage of the survey to the top of EL 3232. The minus 160 fraction again along east-west traverses of the licence area, to give either 200 m x 50 m or 100 m x 50 m grid spacing. A large lead anomaly exists around the Wheal Ellen Mine, and this has been dispersed by both drainage effects and cultural contamination, several sites exist where the anomaly cannot attributed to the mine and there are several instances where in situ mineralisation has been confirmed. Several copper anomalies were detected at Monster Lode, Wheal Ellen North, and proximal to the main workings channel sampling was utilised to verify the validity of the other anomalies which were not distinguished by obvious signs of prospecting. In total 78 channel samples were collected and subjects to base metal analysis. The samples were collected as 10 metre composites over nine traverses which were selected based on unexplained soil anomalism. Results from the channel sampling program were encouraging in that they helped in identifying potential strike extensions and additional lodes. During the fifth licence year, no technical work was undertaken on the tenement. Minor outstanding downhole survey work was received from the previous reporting period.