EL 2603 is prospective for gold, base metals and diamonds. Regional studies and diamond exploration in the Nackara Arc region of South Australia demonstrate that it is a favourable tectonic environment similar to that of the AK 1 diamond pipe in the Kimberly region of Western Australia. It has had at least two epochs of kimberlite eruption, the later Jurassic event being sourced from a depth of 125 km. A large 17,500 km2 regional Nackara diamond & diamond indicator anomaly detected in drainage samples and loam sampling work has disproportionately few known kimberlite localities of which only one is a proven primary diamond source area. Landform conditions that conceal bedrock and promoted deep weathering make detection difficult ensuring diamondiferous kimberlite pipes may remain unrecognised. The Nackara Diamond Project has evaluated the existing data and determined from interpretation of magnetic imagery that major strike faulting within the Nackara Arc fold belt of Delamerian age has been the focus of mafic igneous activity and by association kimberlite emplacement. The Beatrice Prospect has been identified as the highest profile diamond and diamond indicator anomaly closely associated with mafic igneous intrusives occurring within the concealed Mafeking Fault Zone that is also associated with the Pine Creek Kimberlite field. At Beatrice the regional magnetic grain is severely disrupted at a NW - SE “jog" in the Mafeking Fault Zone. Interpretation of high-resolution aerial photography of the same area indicates it could be a local source for the diamond/diamond indicator anomaly and an irregular cluster of circular soil-vegetation features up to 300 m in diameter that could be kimberlite pipe signatures are present. During licence Year 1, exploration on EL 2603 “Nackara – Beatrice Project” exploration has been focused on gold and diamonds, with work carried out under a Joint venture arrangement with Goldstream Pty Ltd as operator until internal rationalisation of their exploration portfolio, lead to their withdrawing from the joint venture mid-term, December 1999. Ammona Mining & Exploration Pty Ltd and Filsell & Sons (trading as) retained the title and continued exploration activity. The focus of the Goldstream exploration was gold. The work undertaken comprised rock chip (18) sampling followed by RAB drilling (18 drillholes). Subsequent gold exploration activity by Amona & Filsell has been restricted to reconnaissance activities. All rock chip and systematically selected RAB samples were analysed for Au and Cu, Ag, Pb & Zn. As was also determined on RAB samples. The highest rock chip was 45 ppb Au within a background of <2 ppb. Drill holes NA 002, NA 003, & NA 011 recorded up to 6 ppb Au within a background of <1~2 ppb Au. There was no appreciable correlation with the other elements. [Data not supplied] During the latter half of the reporting period Amona has focussed on the diamond potential of the area. Assessment has been directed to literature examination, processing of magnetic imagery, re interpretation of the geology & structure, and development of an exploration model for Nackara Arc diamonds. Fourteen figures were generated to illustrate location & tenure, diamond prospectivity indications, geophysical imagery, mapped geology, interpreted geology, soil & vegetation mapping, and surface indications at Beatrice. During licence Year 2, to 15th June 2001, Amona Mining & Exploration Pty Ltd re-evaluated existing data and determined from magnetic imagery that major strike faulting within the Nackara Arc fold belt has been the focus of mafic igneous activity, and by association, kimberlite emplacement. This faulting is thought to be of Delamerian age. At the Beatrice Prospect, the regional magnetic grain is severely disrupted at a northwest-southeast dogleg in the Mafeking Fault Zone. Interpretation of high-resolution aerial photography of the same area indicates that it could be a local source for the diamond / diamond indicator anomaly. An irregular cluster of circular soil and vegetation features up to 300 m in diameter that could be kimberlite pipe signatures, are present over much of the area. During this reporting period, Amona reprocessed geophysical aeromagnetic data over the Beatrice Prospect based on initial investigations of grid aeromagnetic data using forward modelling techniques. Of particular interest is a cluster of magnetic anomalies. Ground magnetic data was collected by Amona over these bodies. In conjunction with geological mapping rock chip sampling (23) was undertaken and samples assayed for a range of elements. Fourteen soil samples were also collected with 6 showing positive diamond indicator minerals.