The subject EL 3112 ground represents the continuation of tenure by Gunson Resources, over the same area, from its former EL 2516 Yeltacowie (for which see the relevant licence reports previously released in Envs 9530 and 9715). This replacement licence adjoins EL 2639, being explored by Gunson Resources as part of the Mount Gunson Project, which also includes EL 2756, EL 3008 and EL 3022. The primary exploration objective on EL 3112 is possible economic buried stratiform copper mineralisation of the various styles present in the Mount Gunson area and as is known to occur at the Emmie Bluff prospect. In addition, it is believed that the underlying but poorly known Mesoproterozoic basement has significant potential for hosting analogues of the Olympic Dam style of mineralisation, and for hosting gold mineralisation similar to recent discoveries made at Challenger and elsewhere on the Gawler Craton. During licence Years 6, 7 and 8, no field work was undertaken on EL 3112 due to a focus of activity on other tenements within the project area. Exploration within the whole project area had been suspended for a period following the withdrawal of BHP-Billiton from the Mount Gunson Joint Venture in January 2003, but in 2004 Gunson Resources recommenced work, with geophysical surveys and diamond drilling being undertaken on adjoining tenements. On EL 3112, office-based work which did commence has consisted of the following: • geological assessment of the northern extension of the Chianti prospect (primarily on EL 3264 to the south), including the assessment of MIMDAS data from Chianti. This work was required in order to identify sites for follow-up drilling at Chianti, for which funding had been approved from the first round of PACE Initiative Theme 2 (collaborative drilling between PIRSA and industry) grants. However, due to a state-wide shortage of drilling equipment, the drilling proposed for Chianti prospect was not able to be completed within the required time-frame. • Review of mineralisation potential prior to making recommendations for ground to be dropped as part of the required 25% in total partial relinquishment of the Mt Gunson Project area. This progressive relinquishment of parts of the project area was completed in July 2005, but EL 3112 was retained in its entirety. The discovery by drilling in June 2005 of a significant copper-gold bearing system at RMG Services' Carrapateena prospect on EL 2879 highlighted the potential of the Chianti area in particular and other shallow-basement areas extending north from Chianti onto EL 3112. Gunson Resources intended to merge ASAP the new data emerging from current work at Carrapateena with data from the Mount Gunson Project area to ensure that no opportunities for finding similar orebodies might be overlooked. During licence Year 9, work performed on EL 3112 included: • Negotiation of a joint venture with Xstrata • Completion of a review of regional geophysical data by this new JV partner, followed by the selection of drill targets • Completion of two diamond drillholes to test the Emmie East and Chianti prospects • Aquisition of a local infill gravity survey in the area around Emmie East prospect. The 2006 joint venture was originally negotiated with Falconbridge (Australia) Pty Ltd, who were subsequently taken over by Xstrata Copper Ltd. At this point Xstrata agreed to continue with the planned drilling programme that had been committed to by Falconbridge, but wanted to undertake an independent review of previous work in the Mount Gunson Project area. They reprocessed the available aeromagnetic and regional gravity data, and identified a number of prioritised drill targets – two at Emmie East, three at Chianti North (both on EL 3112), and several holes at Chianti Prospect (on EL 3264). Two holes were drilled on EL 3112 as part of the drilling programme that was completed in May 2007. In addition, a shallow water bore (MGC 43) was drilled close to the site of MGD 42, but only a minor amount of groundwater was encountered, and therefore the bore was not used. North-eastwards angled drillhole MGD 42 at Emmie East was drilled over the period 14 February - 18 March 2007 and was completed at 1023.30 m depth, following considerable delays due to equipment breakdowns and problems associated with hole deflection. Igneous basement comprised of haematite-altered but unmineralised Gawler Range Volcanics (GRV) rocks was reached at 939 m depth, compared with the prognosed depth of ~800 m. Drillhole MGD 46 at Chianti reached granitic basement at 555 m depth, and continued in granitic and doleritic lithologies to the end of the hole at 795.13 m. Coarse-grained and microgranite variants of the granitoid lithology were intersected. Because MGD 42 did not encounter any dense lithology that could be a source for the gravity anomaly on which the hole was targeted, a further examination of the gravity data was made, which indicated some levelling problems betweens different surveys in the area. In addition, it became apparent that the gravity processing done by Xstrata had used a Bouguer density of 2.27 g/cc which seemed to be on the lower limit of densities expected for lithologies in the area. Infill ground gravity surveying was done during late April 2007 in order to better define the Emmie East feature, along with some grid infill in the Chianti North area on EL 3264, for a total of 50 new stations read. During the the fifth licence year, work on EL 3112 was undertaken in joint venture with Noranda Pacific Pty Ltd, which had become part of the Xstrata Copper business unit. The focus was on evaluating the IOCG potential of the Emmie East prospect, where the April 2007 infill gravity survey had collected data from 14 new stations in an attempt to resolve a data levelling problem existing between the overlapping results of several earlier gravity surveys. Although the latest infill survey information was useful in this regard, it was of insufficient coverage to afford confidence in the siting of a follow-up drillhole to MGD 42. In late 2007, therefore, a contract was let to Daishsat Geodetic Surveys to undertake a programme of 1765 gravity stations spread across the northern part of EL 3264 and parts of EL 3112. This work was done in two separate phases, with 646 stations in Phase 1 and the remainder in Phase 2. This programme was intended to provide sufficient coverage to minimise the effect of levelling discrepancies. Reduction, plotting and modelling of this new data when combined with the existing data indicated that the peak response of the residual gravity was some 800 m to the east of the site of MGD 42. After the completion of a two-hole drilling programme on Chianti prospect on EL 3264 in early 2008, the rig was moved north onto EL 3112 and vertical diamond hole MGD 49 (RC precollared to 233 m) was drilled to test this better-defined residual gravity anomaly. MGD 49 was completed at 956.43 m depth on 21/3/2008. At 754.6 m, the hole passed from Pandurra Formation into a massive coarse-grained undeformed dolerite, and stayed in this lithology to the end of the hole. This unit is interpreted to be dolerite of the Gairdner Dyke Swarm which has intruded the lower Pandurra strata. Consequently, the basement was not reached at this location. Precollar drill cuttings samples collected every 6 m were not analysed. Drillcore from the Adelaidean cover sequence and the Pandurra Formation was not sampled. Similarly, because of the nature of the dolerite which MGD 49 encountered down to total depth, no drill core samples were taken from this unit for assaying. During the first year of renewed EL 4187 Yeltacowie, follow-on infill gravity surveying was done in the period April to May 2009 across four of the project licences, extended coverage comprising 1599 stations over parts of ELs 4187, 3261, 3967 and 3477. The coverage on EL 4187 was 1048 stations. Processing of the new gravity data for the Emmie Bluff prospect located in the north-western corner of the subject licence area indicated that the peak of the Emmie Bluff residual gravity anomaly lay between historic drillholes SAE 3 and SAE 4, whereas the existing data had indicated that SAE 3 had already tested the peak response. Therefore a new drillhole, MGD 55, was proposed to test the peak of this newly-defined residual gravity anomaly. A second hole, MGD 56, was also proposed to test a previously-untested area of elevated gravity response west of the Con Ryan magnetic anomaly on the western side of the Emmie Bluff prospect. Earlier attempts by MIM Exploration to drill the large Con Ryan magnetic anomaly via holes SAE 1 and SAE 7 had not been successful in reaching the magnetic source, which was then believed to lie below 1200 m depth. In selecting a site for MGD 56, difficulty was experienced in accounting for the contribution to the observed gravity target of the high proportion of magnetite that was believed to source the huge magnetic anomaly (interpreted to be up to 70% magnetite). Vertical and fully cored hole MGD 55 was completed to a total depth of 1107.32 m on 28/7/2009. It reached pre-Pandurra basement at 735.66 m depth, which consists of haematite and strongly haematitic sediments interpreted to be part of the Wandearah Formation. This basement sequence begins as a haematitic siltstone unit which grades into a siltstone with only minor haematite. Below 930 m depth, this unit grades into strongly haematitic siltstone with moderate to abundant pyrite and local chalcopyrite. Below 1015 m depth, the sediments are only weakly haematitic, and beds of coarse immature arkose are prominent. Overall, this sequence is comparable with that seen in the surrounding holes SAE 3, SAE 4 and SAE 6 drilled by MIM Exploration in the 1980s. The basal section of the Pandurra Formation and all of the underlying basement drill core in MGD 55 were sampled for assaying. The resulting downhole geochemical data profiles are dominated by iron values, which average over 20% Fe for the entire 265 m thick interval from the unconformity to 1015 m depth. While the upper part of this iron-rich interval contains some zones of anomalous Pb-Zn and Co mineralisation, elevated copper, with associated Au and U, is contained within the interval below 930 m, and was calculated to be an average 0.40% Cu and 0.08 ppm Au over 84 m (maxima 4.61% Cu and 1.2 ppm Au from 1006-1007 m depth). Vertical and fully cored diamond hole MGD 56 was completed to a total depth of 1181.10 m on 31/8/2009. It reached basement at 752.69 m depth. This was almost 100 m shallower than had been expected, due to shallowing of the GRV (the slope on the unconformity from MGD 56 to SAE 7 is calculated to be in the order of 18°). From its top down to ~1018 m depth, the basement consists of altered and pyritised GRV rocks, variably brecciated. Between 1108 m and 1149 m is a complex breccia zone with clasts of GRV and coarse red (Hiltaba?) Granite, and below that is essentially massive, but locally brecciated, granite. The sediments (Wandearah Fm?) seen below the GRV in nearby hole SAE 7 were not seen in MGD 56. Mineralised sections in the MGD 56 drill core are few and narrow (widest 18 m), with highest averaged assay values of 0.81% Cu, 0.46 ppm Au and 0.33 ppm Ag. Following completion of both MGD 55 and MGD 56, the rig was briefly kept over the holes to allow the conduct of downhole IP surveying prior to pulling the HQ casing. This IP work provided useful information on the electrical characteristics of the drilled sequences, but did not identify any specific targets. Attempts were subsequently made by logging contractor Search Exploration Ltd to log both holes using a Sirotem probe, but these efforts failed due to both sensitivity and other instrumental issues. In an attempt to obtain better transient EM data while deriving a vector towards possible higher-grade mineralisation, Outer Rim Pty Ltd was contracted to take downhole readings using a variety of surface loop geometries. Hole MGD 56 was found to be blocked, so no data was obtained from this area. A number of readings were recorded in MGD 55, and surface soundings were also recorded. Results from the surface work were encouraging, to the extent that a proposal for extensive surface coverage of the MGD 55 and MGD 56 areas was agreed to by the JV. The JV's 2008 Annual Report for EL 3264 included data and interpretation from a number of east-west lines of surface IP surveying completed at the Chianti prospect. During January 2009 this work was continued to the north onto EL 4187, where a further seven lines of IP were completed by Search Exploration, contributing to the total survey coverage of 21 line km. While the IP profile data was essentially of good quality, no significant strong anomalies were detected, and it was concluded that the depth to basement (generally over 500 m) and the conductive nature of the cover meant that little response from the basement could be identified.