Stuart Metals took up EL 2516 covering ground in the Elizabeth Creek - Yeltacowie Homestead area primarily to explore it for stratiform copper mineralisation of the various styles present in the Mount Gunson area. In addition, it was thought that the concealed Mesoproterozoic basement there has significant potential for holding analogues of the Olympic Dam style of mineralisation, and for vein gold occurrences similar to recent discoveries which had been made at Challenger and elsewhere on the Gawler Craton. Because the basement geology of the Stuart Shelf area is so poorly known, it was envisaged as quite possible that other, unanticipated styles of mineralisation may be present also. During the first licence year, the company's activities comprised: • performing an interpretation of regional magnetic and gravity data; • undertaking a review and compilation of records of previous exploration activity in the area; • performing orientation soil geochemical sampling over the Emmie Bluff prospect; • drilling a single vertical diamond cored exploratory hole, MGD1, to a total depth of 436 m at the Emmie Bluff prospect, and running a downhole Sirotem survey in it; • undertaking detailed gravity data modelling of the Hunter Hill area; • Sampling groundwater from existing drillholes, as part of an ongoing hydrogeochemical study; and • initiating discussions and negotiation with Native Title claimants having cultural claims over the Mount Gunson area. Aboriginal heritage protection site clearance visits were made in June and July 1998 to places where planned drilling would take place. Major regional geochemical programs were completed on the company's adjoining project tenements in the first half of 1998, and on the basis of this work and ongoing geophysical interpretation, a number of drill targets were identified. A drill programme commenced in July 1998, and the first hole drilled, sited within the subject licence area, was a 500 m step-out to previous drillhole SAE21 at the Emmie Bluff prospect, to look for major extensions to the known mineralisation along strike towards the south-east. Structure contouring on the Pandurra Formation surface had suggested that the host horizon would be shallower in this direction. There was also an indication that the thin shoreline facies of the Tapley Hill Formation (THF), which hosts the highest-grade known mineralisation (3 m @ 3.5% Cu and 0.2% Co in SAE20), could extend for a considerable distance beyond the existing drilling. In addition, the southern margin of the known THF lens seemed to be linear and probably fault-controlled. Drillhole MGD1 was precollared to 276 m, then cored with NQ2 equipment to its final depth. The target was a few metres of Tapley Hill Formation between about 375 m and 400 m below collar. The drilling revealed that the THF is not present in the south-eastern part of the prospect, and that the Whyalla Sandstone / Pandurra Formation contact lies at 414.60 m depth, which is deeper than anticipated, but this depth difference is probably accounted for by the variation in collar RL elevations between SAE21 (~165 m) and MGD1 (~180 m). These RL values are estimates only, as there is very little surveyed elevation control in this area. Geochemically, there is only minor enrichment in Pb and Zn in the Whyalla Sandstone immediately above the unconformity. There is no enrichment in Cu or Co. No near-hole EM conductors were detected by the downhole survey, so it is assumed that there are no lenses of THF in the vicinity of MGD1. Previous exploration by Stuart Metals NL on the Mount Gunson Project licences has utilised geochemical methods extensively, and the sampling techniques and analytical regimes used have evolved over the past few years. In late 1998, assaying development work performed by Genalysis Laboratories in Perth had identified a partial-digest method that provided a credible anomaly over blind stratabound copper mineralisation at the Windabout prospect on EL 1946. This was a significant breakthrough, as previous geochemical techniques employed had failed to detect this Cu-Co mineralisation. During 1999, therefore, some test work was done by Stuart Petroleum on its EL 2516 to see whether the technique could work at the Emmie Bluff prospect. It was recognised that this would be stretching the technique to its limit, because the known mineralisation lies at a depth of 400 m, underneath a cover sequence that includes over 150 m of Tregolana Shale. The soil samples collected by Phelps Dodge were retrieved from storage, and a subset representing a SW - NE profile across the known lens of THF (host unit to the mineralisation) was re-assayed using the Genalysis partial-digest technique. No clear anomaly was identified in any of the elements determined. There was some concern, however, that the existing soil sampling did not extend far enough beyond the known mineralisation to give a reasonable indication of the background levels. The line was re-sampled, ensuring adequate coverage beyond the mineralisation, resulting in a 10 km long traverse. The samples from this traverse were analysed by Genalysis Laboratories in Perth, and by Dr John Watling at the Department of Chemistry, Curtin University, WA. The results did not show any reasonable level of metal enrichment over the mineralisation, and therefore at this stage it was concluded that the technique is not applicable in this challenging environment. Dr Angela Giblin of the CSIRO performed detailed water chemistry analyses for Stuart Petroleum of 6 groundwater samples collected from drillholes located on EL 2516, using the specialist techniques she has developed. Data from these samples were added to a regional database for the Mount Gunson Project area, which now includes information about 70 groundwater samples. Preliminary talks with Billiton Australia about a possible joint venture were begun. During licence Year 2, following the float of Gunson Resources, work consisted mostly of the acquisition of infill gravity survey data in the Hunter Hill area, to augment the existing 1980s WMC dataset, and its subsequent modelling and interpretation to select drill targets. In the previous year, density modelling of the basement had indicated possible density anomalies in the far NE comer of EL 2516, and around the Bottle Hill area on EL 1946. During October 1999, existing 1 km spaced gravity survey lines were extended to the north, using a 200 m station interval, and to the south, using a 100 m station interval, for a total of 512 stations read. The resulting data defined two residual gravity highs which both appeared to straddle a prominent N-S trending magnetic lineament. Studies that had recently been undertaken by geophysical consultant Jim Hanneson of Adelaide Mining Geophysics of the applicability of different Bouguer data reduction densities in different areas of the Mount Gunson Project had resulted in the development by him of a Variable Bouguer Density technique (VBD), which seeks at each data point to minimise the correlation between the reduced gravity and the topography, by selecting an appropriate value for the Bouguer density. This development also included the introduction of Terrain Corrections to processing of gravity data in the project area. The residual VBD image with terrain corrections was believed to provide the best representation of basement rock densities achieved to date, and because of better anomaly shape and definition, and better correlation with magnetic data, was seen as a strategic improvement over earlier simple Bouguer images. This combined technique, when applied to the EL 2516 gravity data, confirmed the two residual gravity anomalies at Hunter Hill as being drillable targets. During licence Year 3, in May 2000, as part of a multi-licence survey totalling around 1700 stations, additional infill gravity data were acquired at Hunter Hill because each of the two recognised anomalies was defined essentially by a single line of data points deemed insufficient to use for picking drill sites. Contractor Solo Geophysics acquired *** readings at 100 m and 50 m intervals along 11 lines spaced 500 m apart which were aligned to match the 1979 WMC gravity survey profiles. The resulting gravity data were reduced and plotted by Jim Hanneson. The northern anomaly was confirmed, but the infill work raised significant doubts about the validity of the WMC data near the southern anomaly. Plans to drill in this area were abandoned when it was concluded that the original residual gravity anomaly was an artefact of suspect data. A single precollared diamond cored hole, MGD24, was drilled at Hunter Hill North late in May, to a total depth of 450.5 m. Drilling was terminated within un-mineralised GRV equivalent felsic volcanic rocks, which the hole entered at 351.12 m depth. No source for the gravity anomalism could be discerned in the basement drill core. Subsequent to the drilling of MGD24, consultant Dr Gregg Morrison of Klondyke Exploration Services (Townsville, Qld) was commissioned to undertake a study of alteration and mineralisation patterns in all basement intersections in the Mount Gunson area. This project involved re-examination of basement core from some 40 drillholes from within the Mount Gunson tenements and the surrounding area. The focus was on the alteration assemblages and patterns, rather than on original lithologies, and a project-specific legend and methodology was developed to handle this new data. In conjunction with the drill core relogging, a large volume of petrophysical property data (SG and magnetic susceptibility) was accumulated, to be used as an input to geophysical modelling. While Gunson Resources had recognised at the outset that the Hunter Hill residual gravity anomaly was not a strong feature, the results of drilling MGD 24 were disappointing in that no significantly dense lithology or alteration was intersected. Despite there now being four basement tests in this general area, none had produced any significant mineralisation or even any strong alteration or brecciation patterns that could be regarded as an expression of ore-forming processes having operated in the immediate area. Haematite flooding of the volcanic pile and minor local brecciation and veining seem to be ubiquitous features in the Hunter Hill area. The subtle, ~1 mGal gravity anomaly on which MGD 24 was sited must be reflecting minor local variation in the intensity of this alteration, rather than increased mass associated with sulphide mineralisation. During licence Year 4, late in 2001, consultant Doug Haynes was retained by the joint venture partners to conduct an appraisal of the project tenements for basement mineralisation, particularly that of the style seen at Emmie Bluff. The work was to address settings where both gravity and magnetic residual anomalies were present, but where the separation was sufficient for these two features to have separate sources. Identification of distinct linear features was a key part of the targeting exercise. The study identified two areas of interest. The southernmost was an area which had been identified previously, but which was assigned a low priority at the time that Gunson Resources became heavily committed to doing deep drilling along the Elaine prospect zone. This first area, which lay mainly on EL 2639, was named the Chianti prospect. The second area of interest lay in the far NE corner of EL 2516. Here a small, 169 station infill gravity survey was read at 200 m intervals along lines 500 m apart, which identified a small residual gravity high of about 0.5 mGal amplitude. This feature had no obvious magnetic association, and was considered to be too small to be of possible economic significance, so no further work was undertaken on it. As a phase of the active exploration along the Elaine and Vessel prospects on EL 2639, several lines of CSAMT plus NSAMT surveying were acquired in an attempt to determine whether any of the observed gravity/magnetic anomalies could be sourced by sulphides at a reasonable depth. During the conduct of this work, it was recognised that additionally having an orientation line across the Emmie Bluff prospect on EL 2516 would be useful in helping to discriminate the various responses being observed. One ~1.4 km long line was read there by contractor Zonge in August 2001, which showed that in general the deep conductive overburden was hampering effective depth penetration of the methods. During licence Year 5, in June 2002, a group of consultants was assembled to review the potential of the Mount Gunson Project tenements for stratiform copper. The group consisted of: Dr D W Haynes, Douglas Haynes Discovery Pty Ltd Mr Mark Dugmore Dr Ken Cross Dr J E Hanneson, Adelaide Mining Geophysics Pty Ltd Mr Hamish Paterson, Hamish Paterson & Associates Pty Ltd. The study was based on the following precepts - • stratiform copper mineralisation was likely to be spatially related to the distribution of the Tapley Hill Formation (THF), occurring with the THF itself or locally within porous units adjacent to the THF; • mineralisation is likely to be strongest where the THF is thin - there are plentiful examples of anomalous but subgrade copper at the upper and lower contacts of thick THF sequences, but potentially ore-grade intersections are more common where the THF is thin. This may be related to the thinner marginal (lagoonal?) facies of the THF having better reductant properties; • mineralisation is likely to be younger than the lithification age of the THF - possibly related to Delamerian events; • basement structures are likely to be important in localising the mineralisation, either by restricting fluid flow into areas where reduction and deposition is more likely, or by providing access to the THF to metal-bearing brines circulating within the basement. A likely Delamerian age for the mineralisation would suggest that NW-trending faults are likely to have an association with copper deposits; • structural disruption within the cover sequence can create fault traps and supratenuous anticlines, with mineralisation being related to the flanks of the anticlinal structures; • a thick substrate of haematite or magnetite-stable rocks is favourable, whether this is the arenite sequence of the Pandurra Formation or the underlying Gawler Range Volcanics. Based on this model, eleven target areas were identified, which included the 23 Mile Tank area which had already been identified because of its geophysical signature. These targets were then ranked according to the following criteria: • presence of untested preserved depositional margin of THF around a basement high consisting of Pandurra Formation and/or Gawler Range Volcanics. The presence of Whyalla Sandstone over a thin section of THF was taken as evidence of preservation of the original THF basin margin; • presence of preserved THF pinchout within 200 m of surface (this contour is poorly constrained in several of the target areas); • a 'Basin Amplification' factor - targets on the eastern flank of the Pernatty Culmination were potentially open to large-scale fluid migration from the main Adelaidean basin lying to the east during the Delamerian compressional event; • presence of through-going structures, particularly in an 045º and/or 320-330º orientation; • copper anomalism recorded in previous drilling; • THF less than 10 m in thickness; • potential for ~250 Mt of mineralisation: calculations of orebody area based on likely thickness and grade parameters were used to determine whether existing drilling allowed room for an orebody of this size to remain undetected. Of the stratiform copper targets identified, only one was located on EL 2516, and this one (Area 3) was followed up by conducting a broadly spaced reconnaissance soil geochemical survey. 135 samples were collected for partial leach laboratory analysis at 1200 m intervals along five traverses spaced 800 m to 1 km apart. Where the sampling traverses crossed a major structure, the sample spacing was closed to about 25 m to test whether there was any indication of geochemical activity associated with the interpreted fault. When BHP Billiton chose early in 2003 to withdraw from the JV agreement, no follow-up to the results of the orientation sampling occurred.