An area which has had little exploration for iron ore done previously was taken up by Centrex Metals Ltd to cover potentially magnetite-rich Early Proterozoic banded iron formation (BIF) strata outcrops and subcrop located within the Lincoln Uplands close to the eastern coast of southern Eyre Peninsula. The target rock sequence there has in the past been strongly deformed and subjected to high grade metamorphism. This has produced moderately to coarsely grained BIF magnetite mineralisation of high grade which contains low impurities, that in many cases has become remobilised and concentrated into enriched deposits occupying fold hinge positions. The intent was to find iron ore resources to support the planned establishment of a magnetite concentrate export operation which could take advantage of simple extractive metallurgy and good regional infrastructure. A magnetite processing plant costing about A$130 million would be required, with production to be exported via the existing rail system and the wharf shipment facilities in Port Lincoln. During the first licence year, the exploration programme was designed by SAIOG to delineate some high intensity magnetic anomalies and evaluate them as rapidly as possible, and so it comprised: • acquisition in January 2002 of part of a multi-licence, low level fixed-wing high resolution airborne magnetic/radiometric/DEM survey, for 449 line km along E-W flight lines 40 m apart, using a 20 m mean sensor height above the ground surface; • acquisition in August 2002 of 63.4 line km of infill high resolution airborne magnetic/radiometric/DEM coverage to augment the Bald Hill portion of the above survey, using the same flight line attitude and altitude parameters as before; • the drilling of 2 inclined, aircore/RC precollared diamond drillholes for a total penetration of 322.95 m, that included 110.8 m of HQ coring and 123.05 m of NQ2 coring; • performing base metal pathfinder element suite and gold assaying on 63 selected drill cuttings samples; • performing Davis Tube Recovery (DTR) magnetic separation and magnetic mineral concentrate assaying via XRF spectroscopy on 39 selected samples; and • performing whole rock iron ore suite assaying via ICP mass spectroscopy on 40 selected samples. The initially explored Bald Hill prospect is part of a semicontinuous “tram track” pair of linear regional magnetic anomalies which have a strike length of >15 km. The aeromagnetic surveys were located over the highest amplitude parts of these anomalies, which were interpreted to reflect shallowly subcropping magnetite BIF units in moderately to steeply dissected terrain. These rock units appeared to be the southern extension of the Koppio BIF sequence. Holes BADD001 and BADD002 were designed to test the BIF sequence in each of the limbs of an interpreted synform. BADD001 sited on the eastern limb intersected inter-banded BIF, amphibolite and schist dipping towards the west at about 40 degrees. BADD002 intersected a similar sequence on the western limb, where the estimated dip of the BIF units is much steeper, ~70 degrees towards the east. Preliminary exploration targets at Bald Hill were calculated based on the results of initial drilling on each limb of the synform: eastern limb (BADD001) 28 Mt @ 27.2% DTR (65% Fe, 7.8% SiO2), at a waste to ore ratio of 3.7:1; western limb (BADD002) 19 Mt @ 26.8% DTR (67.6% Fe, 5% SiO2), at a waste to ore ratio of 4.2:1. The drill core sample DTR results suggested that there would be poor liberation of the magnetite due to its fine grainsize. However, some of the laboratory treated batches had problems with grind precision, casting doubt on the validity of concentrate yields and iron content assay values. SAIOG concluded that the Bald Hill prospect was unlikely to contain resources sufficient to sustain a stand-alone magnetite project, but it was thought that potential exists within the very large strike extent of BIF for finding smaller higher grade magnetite deposits with a more favourable geometry for open pit extraction. Whole rock assays of drill samples taken through the weathered BIF intervals in each drillhole returned iron values to 27% Fe, well below the grade of haematite required for DSO extraction. During licence Year 2, SAIOG did no work before transferring the management of EL 2905 to Centrex Metals. Joint venturer Peninsula Minerials carried out a preliminary assessment of the tenement for its gold and base metals potential. During licence Year 3, Centrex Metals acquired a part of multi-licence ground gravity survey with the aim of generating copper and gold targets for surface geochemical and drilling follow-up. On EL 2905, 223 stations were read on a regular 400 m x 50 m grid in May 2004. The processed new gravity data were provided to consultant Jim Hanneson for merging with the existing gravity coverage before interpretation, and for comparing the distribution of gravity anomalies possibly denoting dense, possibly haematitic source bodies with that of linear magnetic highs, which probably represents the locations of near-surface magnetite BIF strata. Peninsula Minerals made field reconnaissance visits to assess magnetic anomalies which they had noted from previously reviewing the area's existing geophysical data, and 8 rock chip samples were collected from outcrops of interest.