An area lying along the eastern side of Pernatty Lagoon is being explored primarily for possible buried economic IOCG style mineralisation of possible Olympic Dam type, that may be hosted by poorly known Proterozoic or older basement rocks which underlie the Gawler Range Volcanics. A secondary target sought by licensee Havilah Resources is possible Tunkillia style gold also hosted by the unknown basement rocks or by the overlying GRV or Beda Volcanics units. During licence Year 6 (2002-2003), after it had renewed tenure over the same 316 square km extent of ground for a second term as EL 2979, Havilah was approached by MIM Exploration and entered into a 6-month long option agreement with that company to allow same to undertake evaluation of the licence area with the view to forming a 30:70 joint venture by earn-in if initial results proved to be sufficiently encouraging. Unfortunately, MIM’s work was cut short by the Xstrata corporate takeover, and the joint venture did not commence. However, MIM did complete some detailed gravity infill surveying during January 2003 (147 stations) over the untested Canegrass magnetic anomaly and 2 mGal residual gravity anomaly, and also made readings along five MIMDAS (proprietary use of combined IP and MT methods via a Distributed Acquisition System) electrical geophysical lines during May-June 2003. The latter failed to show any substantial conductive or resistive bodies in the basement that were deemed to be worthy of immediate drilling follow-up. Nevertheless, the gravity results did verify and better define the Canegrass density anomaly, with forward modelling suggesting that its peak is slightly offset from the magnetic high. During the 2003-2004 licence year, no new work was done. Havilah sought and entered into negotiations with a potential joint venturer party which could materially assist in carrying forward the company's plans for further drilling on the tenement. During the 2004-2005 licence year, a joint venture agreement between Red Metal Limited and Havilah was executed on 15/10/2004, whereby Red Metal became the operator for the joint venture. New work that was carried out subsequently in the reporting year comprised: • reprocessing and modelling of available geophysical data sets; • undertaking a review of drill core information gained from selected historic diamond cored holes; • making a field inspection and obtaining Aboriginal heritage clearance of the JV's proposed initial drill site; • completing early in 2004 vertical percussion precollar drilling to 354.6 m depth in this hole, PNDH0501, which targeted a combined gravity high and strong MIMDAS IP chargeability anomaly. The precollar was stopped when within Neoproterozoic Beda Volcanics; and • scanning selected stored drill core from local historic holes at the PIRSA Core Library, using the Hylogger spectrometer to look for ore-indicator alteration minerals. During the 2005-2006 licence year, drillhole PN-05-01 was completed with diamond drilling to 606.3 m depth in June 2005, with the assistance of the SA Government's PACE Initiative Year 1 approved collaborative drilling project subsidy funds [see the Project DPY1-24 drilling final report, held separately in Env 11030]. No obvious source to the IP anomaly was encountered, but this drilling did encounter Gawler Range Volcanics rocks that had undergone intense phengitic sericite and minor haematite-siderite alteration. Red Metal recognised that this style of alteration is rare and is typically found as a halo around IOCG mineralisation. It is now evident in 2 holes about 3 km apart, which lie adjacent to a structurally controlled gravity anomaly. The partners agreed that other structurally controlled gravity targets which occur along this altered structure required assessment. Accordingly, during June 2006, four further RC precollared diamond cored holes were drilled to depths of 524-572 metres on those gravity targets. They encountered dense rocks types with strong sericite alteration that is similar to alteration in the halo surrounding Carrapeteena, but no haematite breccia or significant sulphides were intersected. Sampling of the PN-05-01 drill core for each 10 m core interval from 400 m to 600 m returned no anomalous trace metal assay values. However, initial assaying of selected drill core samples from the other four holes returned anomalous levels of zinc (up to 0.17% Zn), lead (up to 777 ppm Pb) and arsenic (up to 200 ppm As) in hole PN-06-03. During the 2006-2007 licence year (Year 10 of tenure), the JV's new work included the acquisition of infill gravity surveys, obtaining Aboriginal heritage clearance of proposed drill sites via field inspections of them conducted with Native Title claimant representatives, and then afterwards completing the drilling of eight diamond cored holes, the latter comprising 6 new holes plus deeper extensions made to 2 previous holes. The infill gravity surveying was performed late in 2006 and comprised readings made at 499 stations over three areas of interest. The drilling was carried out between late March and late June 2007, and entailed making six new holes (PN-07-06 to PN-07-11) having a total penetration of 5875.75 m, besides deepening holes PN-05-01 and PN-06-04 by 373.8 m and 140.6 m respectively, in order to test new geological concepts. Overall, this drilling programme identified broad intervals of intense sericite-tourmaline alteration that is typical of the alteration seen in the haloes surrounding the Carrapateena and Olympic Dam deposits, as well as finding a narrow zone of haematite breccia associated with traces amounts of bornite and chalcopyrite. Broad intervals of visible but low-grade lead, zinc and copper sulphides were intersected in hole PN-07-09, while narrow intervals of copper sulphides associated with magnetite and haematite were intersected in holes PN-07-07 and PN-07-11. Dense rocks are present in each of these holes. Selected intervals of the drill cores recovered from new holes PN-07-06, PN-07-07 and PN-07-08 were assayed and were shown to contain anomalous levels of copper (up to 0.3% Cu), zinc (up to 1.27% Zn), lead (up to 2.3% Pb) and arsenic (up to 263 ppm As).