During the first year of its evaluation of the Beltana and Aroona mining properties on which it has taken out an option, Perilya undertook the following intensive work programme aimed at locating buried extensions and repetitions of the willemite (zinc silicate) orebodies that had earlier been mined by Electrolytic Zinc Co. (E-Z) and Pasminco Limited: • 1:500 scale geological mapping of the Beltana mine open pit (in ML 4370); • 1:2500 scale geological mapping in the Beltana - Moolooloo area (across MLs 4369-4371 and RLs 5 and 6); • 1:5000 scale geological mapping in the Aroona II prospect area (in RL 7); • performing XRD analysis of 7 samples to aid in the identification of the ore minerals in various ore zones (in MLs 4370 and 4371); • performing channel rock-chip sampling (62 samples) in the Beltana mine open pit to define ore boundaries, to aid with geological interpretation in ML 4370 and to enable ore sample multi-element assaying for Cu, Pb Zn, Ag, V, As, Cd and Mn; • undertaking rock chip sampling (19 samples) of selected ore shoots at the Moolooloo prospect (in RL 6) and at the Aristotle prospect (in RL 5), to determine ore grade and associated elements (assayed for Cu, Pb, Zn, Ag); • undertaking systematic channel rock chip sampling (15 samples) near Aroona II prospect (in RL 7); • undertaking grid-based soil geochemical sampling (368 samples) on all of the leases, and fixing the AMG location coordinates of the sampling sites by utilising a hand-held GPS instrument. The samples were sieved to obtain the -2mm to +20 mesh soil particle size fraction, and were laboratory assayed for Cu, Pb and Zn; • 3 separate samples collected from the Aroona mine stockpile, the Beltana mine open pit and the Beltana mine high grade lead ore stockpile were sent away for metallurgical testwork. Results are pending; • a microgravity survey was acquired over all of the lease areas as part of a large survey encompassing the surrounding ELs. Readings were taken at 20 m intervals along lines 40 m apart, for a total of 476 stations. Data from a previous Pasminco microgravity survey of the Beltana mine area was merged with this new gravity dataset. Perilya is of the opinion that gravity surveying is perhaps the only geophysical technique available that may delineate concealed replacement style zinc-rich ore bodies formed within the Flinders Ranges, due to their density contrast with the surrounding limestone and dolomite; • resampling of stored historical drillhole samples (both core and RC cuttings) was done in order to gain geochemical information where previously obtained assay results were now unavailable. A total of 1150 RC cuttings samples from the previous E-Z/Pasminco drilling (on ML 4370) were assayed for Pb and Zn. Likewise, a total of 593 samples of drill cores (on ML 4370 and on RL 5) were cut and assayed for Pb and Zn; • two campaigns of RC drilling were conducted in the Beltana mine open pit area, together totalling 40 inclined holes for 5190 m (31 holes for 4076 m were drilled on ML 4370, and 9 holes for 1114 m were drilled on ML 4371). 5-metre composite drill cuttings samples were assayed for Cu, Pb, Zn, Ag in the first campaign holes, and for just Pb and Zn in the second campaign holes. Samples assaying >1% Zn and/or >3% Pb were split into 1-metre samples and sent for re-assay. Also, a total of 95 samples were sent to Genalysis as a check of high grades recorded by Analabs. In all, a total of 4167 subsurface samples were taken from the 40 holes for assaying; • Records of all work previously done on the leases were compiled, mainly focussing on the Beltana mine area. This compilation included computer coding all drill log geological descriptions for integration into a digital database. Cross-sections were then produced and interpreted to aid in the planning of drill targets. The first drilling campaign done around the Beltana mine open pit tested all outcropping mineralised occurrences and gravity anomalies in the immediate mine area, and provided Perilya with a greater understanding of the controls on mineralisation. The second campaign of drilling was designed to follow up mineralised intercepts made in the first and also to test more conceptual targets. Zones of mineralisation encountered have provided additional incremental tonnes to the combined Indicated and Inferred Mineral Resource for the main Beltana deposit, which is now estimated to be 947 kt @ 13.2% Zn and 3.2% Pb (using a 3% Zn cutoff).