During the 2006 reporting period for renewed Mount Woods EL 3518 (i.e. for licence Year 6), Goldstream conducted ongoing exploration that included campaigns of diamond, RC, RAB and AC drilling, plus, in relation to the possible iron ore / copper-gold mine development at Cairn Hill prospect, scoping studies, ore extraction and milling feasibility studies, metallurgical studies, resource calculations and heritage clearances surveys. In April 2006, Goldstream completed a reconnaissance RAB/Aircore (AC) drilling program at the Black Hills and MW34 prospects in order to test magnetic and gravity features associated with an interpreted regional iron enrichment structure. During the program, 12 holes were abandoned before penetrating fresh rock, due to difficult ground conditions. At Black Hills, which lies 20 km south of Cairn Hill and 50 km north-west of the Prominent Hill deposit, 133 vertical RAB holes for 4769 m were drilled 100 m apart along 400 to 800 m spaced traverses. A further 161 vertical RAB holes for 6075 m followed in October 2006, in order to infill and extend this prospect's initial RAB coverage. A new occurrence of copper-gold mineralisation was discovered here, with hits made on the ends of four RAB drill traverses. Drillhole MWRAB081 intersected 18 m of transported cover sediments before penetrating 22 m into weathered mineralised bedrock having an average grade of 0.37% Cu and 0.101 g/t Au. The assay values show increasing grade at depth, with the hole terminating in mineralisation at blade refusal. Visible native copper was logged in the drill cuttings; it returned a maximum grade of 2.16% Cu over a 1 m interval from 37 m depth. The adjacent hole MWRAB080, 100 m to the south, intersected 22 m of cover sediments before also penetrating weathered mineralised bedrock. Its best assay results included 5 m @ 0.124 g/t Au and 972 ppm Cu from 23 m depth, and 1 m @ 0.8 g/t Au and 407 ppm Cu from 39 m depth. This IOCG discovery is interpreted to be open to the east and west, is approximately 400 m wide and has been traced over 2.6 km of strike. The host rock's iron and rare earth geochemistry, in association with the copper and gold, is typical of the regional Hiltaba IOCG mineralising event. The MW34 prospect is located approximately 10 km to the east of the Black Hills area, and was covered by four traverses of mixed RAB and aircore drilling. A total of 5 vertical RAB holes (MWRAB134-138) for 211 m were drilled first, before difficult drilling conditions resulted in a switch to aircore: 16 aircore holes (MWAC001-016) for 742 m were completed. The drilling at MW34 was designed to test a highly magnetic basement unit (with an associated weak gravity anomaly) immediately north of an interpreted east-west trending fault. The depth to bedrock averages about 50 m, the cover being deeper on the western traverse and shallower in the east. A trough filled by thick Cadna-owie Formation is present in MWAC009 on the northern end of the central traverse. This hole was terminated in clay bands and thick gravels and sands at a depth of 81 m. The other holes penetrated quartz-feldspar-biotite±magnetite gneisses and mafic gneisses similar to those in the Black Hills area. No Balta Granite was encountered. A magnetite-chlorite rich gneiss was intersected in the north of the drilled grid, which is sufficient to explain the targeted magnetic anomaly. Goldstream completed RC drilling campaigns at a number of prospects and targets including Cairn Hill, Black Hills, and for PACE Initiative Year 3 collaborative drilling projects addressing IOCG and uranium targets in the Mount Woods region. Most of the new RC holes were inclined at 60 degrees and drilled towards magnetic north, with the exception of some groundwater monitoring bores and regional exploration holes which were drilled vertically. Downhole survey data on actual hole trajectory were collected using an Eastman single shot camera and a Reflex digital shot camera, every 100 m of hole progress or as required ( it should be noted that the magnetic azimuths of downhole shots were unreliable at Cairn Hill, hence the downhole azimuths there are assumed to be zero degrees i.e. also towards magnetic north). A single traverse consisting of three RC holes (MWRC001-003) for 360 m was drilled on 50 m centres to follow up the anomalous RAB results from holes MWRAB080 and 081. All three RC holes returned anomalous results, with a best result of 1 m @ 1.7% Cu and 0.1 g/t Au from 72 m depth in strongly weathered amphibolite. The mineralised horizon appears to have a 35 degrees dip to the north, since hole MWRAB203, drilled as part of the RAB campaign on the adjacent section 200 m to the east, intersected 320 ppm Cu over 4 m from 52 m depth. A single RC hole, MWRC007 for 198 m, was drilled to test the IOCG potential of WMC's Centaurus prospect, where strong IP chargeability anomalies had been recorded earlier. It reached basement below 53 m of covering clays, silcrete and sands. The basement rocks include coarse grained granite and mafic gneiss, but no anomalous geochemistry was detected in them. As part of PACE Project DPY3-28, 3 RC holes for 647 m were drilled at the Penhryn IOCG prospect to test possibly near-coincident gravity and magnetic anomalies (for full results see related Env 11283). In brief, these particular holes (MWRC004-006) holes successfully intersected the modelled magnetic body, whereat the presence of strongly magnetic gneiss is sufficient to explain the anomaly. Aside from low-grade iron and weakly elevated gold values, all other assay results were low. The modelled deeper-lying gravity anomaly at Penhryn was to be tested by hole MWRC004, which had to be abandoned 93 m short of its target depth and so did not penetrate to the centre of the modelled density anomaly. However, the proven presence of amphibole-garnet±pyroxene gneiss in this hole may represent a mass of rock material dense enough to explain the feature. As part of PACE Project DPY3-29, a campaign of RC drilling was planned to test gravity lows for sandstone-hosted uranium mineralisation. Only one of three planned holes on EL 3518 was completed due to difficult drilling conditions. MWRC008 was designed to test a gravity low in the central part of the licence area, interpreted as arising from a north-west trending basin / channel of thick sedimentary cover that obscures the western end of the Cairn Hill Fe-Cu-Au prospect (for full results see related Env 11282). The hole intersected 8 m of clay underlain by 32 m of sands and gravels. Below the sands occurs a thick sequence of claystone and shale to the bottom of hole at 250 m. The upper clays may represent the basal part of the Bulldog Shale and the sands the Cadna-owie Formation. The underlying claystones may be a part of the same Cretaceous units infilling channels / basins marked by the gravity lows, or they may be older Mesozoic or Permian sediments that have been eroded from the surrounding Proterozoic basement highs. All scintillometer measurements made on the individual one-metre drill cuttings samples were low, as were the laboratory assay results. A groundwater sample was collected from 5 m below the standing water table in the hole, to determine its dissolved uranium content as well as values for other major trace elements and the usual water analysis parameters, but no anomalous geochemistry was returned. The aim of Goldstream's 2006 RC drilling campaign at Cairn Hill was to (i) collect fresh massive magnetite mineralised samples for metallurgical testwork, (ii) to infill the two main lodes at 80 m to 40 m drill density to define an indicated resource and (iii) to further test the eastern strike potential of the 18km magnetite trend that defines Cairn Hill. 99 holes for 2783 m were drilled (CHRC037-136). Good mineralised intercepts were obtained in most holes, but the eastern extension iron-rich strata were again found to be deficient in copper and gold. A deposit model began to be constructed from geological and structural data, and Snowden Mining Industry Consultants (Snowdens) were engaged in August 2006 to prepare an inferred and indicated resource determination. 11 inclined PQ3 and HQ3 diameter diamond drillholes for a total of 1525 m were also completed by Goldstream at Cairn Hill between July and December 2006, to collect representative drill cores from the deposit to use for mining geotechnical and metallurgical assessment work to be performed by commercial consultants. Specific gravity determinations were conducted on 115 diamond drill core samples that had been classified into six main rock types. Snowdens were also contracted to undertake a geotechnical assessment of the proposed Cairn Hill mine area based information from the diamond cores. Their scoping study report discussed engineering aspects including engineering geology, slope stability, blast-ability, potential failure models, and rock mass quality. A number of standard QAQC procedures were utilised for the 2006 drilling campaigns, with particular emphasis on the Cairn Hill resource drilling. A standard sample GIOP-1 was purchased from Geostats Pty Ltd in Perth for use at Cairn Hill. This single sample of Pulp Iron Ore from Cockatoo Island was selected because it was the only commercially available reference material that had an iron grade greater than 68% Fe. No other appropriate reference standards were available that fitted the Cairn Hill ore profile, therefore the decision was made by Goldstream to collect magnetite samples from Cairn Hill and create an in-house standard set. Magnetite samples were collected and sent to Geostats (via Gannet Holdings) in Perth to create three standards to be used for South Australia and the Cairn Hill resource drilling in particular. Those standards were prepared and certified by Geostats Pty Ltd and made available in January 2007: GMFE-1, GMFE-2, and GMFE-3 each have between 30 and 67% Fe with high, medium and low Cu and Au grades. Snowdens delivered a Mineral Resource Estimate covering the Cairn Hill Project in January 2007. This calculation took into account the fact that the secondary copper/gold mineralisation is not entirely coincident with the magnetite mineralisation. Some of the magnetite is devoid of copper and gold mineralisation, and in some cases the copper/gold mineralisation extends into the surrounding host rocks (outside the magnetite mineralisation). As a consequence, Snowden interpreted two sets of resource envelopes (iron and copper-gold) and reported each envelope separately. The Inferred iron resource totals 9.5 Mt at 53% Fe. The Inferred copper-gold resource totals 5.5 MT at a copper equivalent grade of 0.8% Cu. On the basis of ore deposit technical information newly gained from the conduct of metallurgical studies, scoping studies, lode rock material handling and beneficiation feasibility studies, cultural heritage clearance surveys, environmental studies, water studies and resource modelling, Goldstream as of January 2007 was able to report that its Cairn Hill massive magnetite iron-copper-gold project was advancing to a feasibility stage and would hopefully be developed into a mine in the near future. During licence Year 7, key elements of the Cairn Hill mining feasibility study were completed (as described in a detailed report submitted by lead consultant Snowdens), and a Heads of Agreement and proposed sales offtake arrangement for Cairn Hill run-of-mine magnetite iron ore were negotiated and signed by IMX Resources (formerly Goldstream) with its first iron ore customer, the Chinese company Jilin Tonghua Iron and Steel (Group) Mining Co. Ltd. Having the HOA was a key milestone in the implementation of the Cairn Hill mining project, as it would allow IMX Resources to produce and ship ROM ore without the requirement to build an onsite processing facility. This significantly reduces the capital cost and time to get into production. Accordingly, the next stage of project development was commenced, of mine designing and major equipment procurement related to production scheduling and planning, with pits and resources being optimised based on ore having a high copper grade. Two pits are planned, to produce 7.3 Mt averaging 50.9% Fe, 0.43% Cu and 0.13g/t Au over a 5.5 year life, with annual production of up to 1.39 Mtpa of ROM ore, after ramp-up, with an average strip ratio of 3.0:1, based on the block models from the diluted Indicated Resource that was estimated in June 2007 of 10.5 Mt @ 50.0% Fe, 0.39% Cu and 0.12 g/t Au. This revised Indicated and Inferred Mineral Resource was estimated by Snowdens based on all resource delineation drilling completed to the end of February 2007. Two versions of it were produced. The first described an in situ Mineral Resource which includes some internal dilution, while the second represented a Diluted Mineral Resource calculated by adding a 0.5 m wide envelope of edge dilution to the in situ Mineral Resource, as an approximation of a mining grade. The resource was divided into two parts based on the different characteristics of the mineralisation, the Initial Pit Area containing a mixture of both magnetite and copper-gold mineralisation, and the Eastern Pit Extension area which contains only magnetite mineralisation. In addition, Snowdens calculated a new Inferred Resource for the Eastern Pit Extension covering a strike length of 800 m. This diluted Inferred Resource, of 3.8 Mt at 43.8% Fe, demonstrated the strike continuity and high grade nature of the main North lode magnetite horizon. The investigations made into ways of processing the Cairn Hill magnetite Fe–Cu-Au mineralisation concluded that there are three main processing options: - magnetic separation to produce a magnetite concentrate, then separation by flotation of a copper-gold concentrate from the non-magnetic fraction; - magnetic separation to produce a magnetite concentrate, with reverse flotation to clean up the concentrate (particularly to remove sulphur), then separation by flotation of a copper-gold concentrate from the non-magnetic fraction; and - flotation to produce a copper-gold concentrate, with magnetic separation of the tails to produce a magnetite concentrate. Test work has shown that a series of flotation steps with extended flotation times, followed by magnetic separation, can produce a premium grade magnetite concentrate at a grind size of 150 microns (exceptionally coarse for a magnetite concentrate). The tests were conducted on a mixture of both fresh and weathered mineralised zones, as well as 0.5 m of waste from each mineralisation boundary. The main issue for the test work had been to reduce the sulphur in the magnetite concentrate caused by pyrrhotite, which is weakly magnetic. Most steel mills require the sulphur content of feedstock to be less than 0.5% S, which for Cairn Hill mineralisation can be achieved with extended flotation during beneficiation. Phosphorus can easily be reduced by magnetic separation to approximately 0.01% P, as most of the phosphorus is contained in the mineral apatite which is non-magnetic. Several sets of magnetite ore samples were sent to potential Chinese buyers for their own testing, and the resulted reports are included herein. Although the initial mining operations planned by IMX Resources and Tonghua Mining were predicated under the HOA on producing ROM ore for export, it was recognised that there are opportunities to expand the scope and size of the operations, in particular to develop the low copper and sulphur magnetite resource identified in the Cairn Hill Eastern Extension.