Stuart Metals is primarily exploring EL 1946 for stratiform copper mineralisation of the various styles known to be present in the Mount Gunson district. In addition, the company regards the largely unknown Mesoproterozoic basement to have strong prospectivity for possible analogues of Olympic Dam type copper-gold-uranium mineralisation, and also for gold deposits of Challenger deposit type. During the fifth licence year, activities on EL 1946 included: - the acquisition of ground magnetic and gravity surveys at the Lunar Dam and Emu Bluff prospects. A total of 250 gravity stations were read at 50 m intervals along 4 lines; - the conduct of work site Aboriginal heritage clearance surveys with representatives of local Native Title claimant groups; - diamond drilling of 3 angled or vertical exploratory holes for 1066.5 m at the Lunar Dam and Emu Bluff prospects, that included 552 m of RAB precollar drilling plus 514.5 m of NQ2 coring; - RC drilling of 6 vertical exploratory holes for 186 m at the Monalena prospect; - the conduct of downhole EM geophysical logging at Emu Bluff; - assaying of drill core and drill cuttings samples; - compiling and interpreting the latest drilling data; - undertaking modelling of geophysical data from the Lunar Dam and Yeltacowie prospects; - continuing hydrogeochemical sampling, of groundwaters at Lunar Dam and Emu Bluff (4 samples taken from exploration drillholes), to spread the regional dataset; - developing and testing of partial digest wet geochemical analysis methods; and - making an ongoing review and re-assessment of prospect ranking. The Lunar Dam ~1 mGal residual gravity anomaly was chosen for ground gravity surveying because the recent soil sampling had shown that a slight surface geochemical anomaly existed there. Four 1 km long lines of gravity readings were made to assist with siting a drillhole on the peak gravity response (hole MGD5), and a single line of readings was extended westwards to tie in with the gravity acquired at Emu Bluff. Hole MGD4 was sited to test the peak of the Lunar Dam surface geochemical anomaly. In addition to the gravity surveying, contractor Solo Geophysics acquired limited TEM readings at Emu Bluff, which detected a NNE trending conductive feature that was later interpreted to lie within the Adelaidean Tregolana Shale. Results of the diamond drilling done at both prospects during August 1998 were very disappointing. Hole MGD2 at Emu Bluff encountered shallow basement at close to the predicted depth, with no overlying Pandurra Formation. The basement granitoid shows sericite alteration and variable haematisation, with only very minor local brecciation. No anomalous downhole sample assay values were returned, and no discernable causes were found for the targeted gravity and EM responses. Holes MGD4 and 5, which were put in ~500 m apart at Lunar Dam, encountered a similar cover succession and a much deeper lying but identical basement granitoid pluton showing the same muted geochemical character, although with possibly less alteration apparent in MGD5. 7 drill core samples of this coarse grained granite/adamellite were sent to Ian Pontifex for detailed petrographic descriptions of the alteration mineral assembage, particularly the paragenesis of the iron oxides. An example of this rock, with less alteration and of seemingly uniform composition, was sent to John Foden for radiometric dating of its zircon using the Kober lead isotope analysis technique: this work produced a reliable magmatic crystallisation age of the host calculated at 1856+/-4 Ma. Stuart Metals stated that obtaining this determination proved valuable because it shows that older granitoid rocks probably equivalent to the Lincoln Complex exist in the basement of the Elizabeth Creek area. And small subcircular gravity lows in this area might therefore be reflecting younger intrusive felsic igneous bodies, possibly of Hiltaba age, which could have associated Olympic Dam type mineralisation. The exploratory drilling done at Monalena provided some encouraging shows of stratiform copper mineralisation, and importantly, provided new information about the environment of deposition of the Tapley Hill Formation host unit along the western margin of the Pernatty Culmination basement high. Late in 1998, assay development work done by Genalysis Laboratories in Perth, WA formulated a novel partial digest method for 23 surface soil samples that provided a credible anomaly over known blind stratabound mineralisation at the Windabout deposit. This was a significant breakthrough, as the assay methods previously used for Mount Gunson district surface samples had failed to detect this Cu-Co mineralisation. During the first half of 1999, test sampling was done at the Monalena prospect, along two traverses over a sub-basin of the Tapley Hill Formation, to see whether the method would work elsewhere. The assay results of 21 soil samples taken from there were encouraging, with some elevated copper and cobalt values returned. During the sixth year of tenure, following renewal of the licence as EL 2639, and after a swift corporate re-organisation of the Stuart Petroleum/Metals group from which the mineral exploration operatorship was shifted across to a newly floated public vehicle, Gunson Resources Limited, new work performed included: - acquisition of ground gravity surveys at Elizabeth Creek and Yeltacowie; - geophysical modelling and interpretation of the new survey data; - geological interpretation and refinement of drilling targets; - the conduct of work area Aboriginal heritage clearance surveys; - diamond drilling of 1 hole to 520 m (including an RC precollar to 234 m); and - making radiometric age determinations for basement rocks penetrated by earlier drillholes MGD25 and EC21. The Year 6 work programme was funded by a share placement in the newly floated Gunson Resources made by international major explorer Billiton plc, who has the right to earn 80% of the Mount Gunson Project by funding Gunson Resources through to commercial production after an initial A$800,000 has been spent by that company. The new prime focus for exploration has become a search for Olympic Dam type mineralisation in basement rocks, although some work would still be done to evaluate the copper potential of the Adelaidean cover sequence. An infill ground gravity survey was read at the Yeltacowie prospect in October 1999, with stations on a 400 m x 400 m grid. This confirmed a residual gravity high of almost 2 mGal amplitude that could be modelled by a source body lying at 450 m depth. A drill site chosen at a position of coincident apparent slight demagnetisation within a linear magnetic feature was tested by the drilling of vertical diamond hole MGD25 in June 2000, with NQ coring from 234 m to TD 520 m. An Adelaidean cover sequence that is normal for the area was intersected, except that the Pandurra Formation at 125 m thick was thicker than expected and could indicate some local faulting. Crystalline basement was reached at 412.76 m, deeper than prognosed for the reason outlined above, and it consists of a coarse grained felsic granitoid that appears undeformed. At 492.72 m the hole passed into a massive, non-magnetic dolerite which could be part of the Gairdner Dyke Swarm, and which, from subsequently reported petrological microscopic evidence, is regarded as post - dating the granitoid. No mineralisation was evident in any of the rocks drilled, and no significant downhole sample assay values were returned. A core sample of the granitoid unit from the depth interval 466-467 m was submitted for radiometric age dating to find out if it is of Hiltaba age. A second sample, of a brecciated granitoid from the key regional stratigraphic hole EC21, was also submitted for dating. The age derived for the MGD25 sample was 1859+/-11 Ma, while the other EC21 sample has an age of 1872+/-69 Ma, making both probable correlatives of the Palaeoproterozoic Donington Suite. Some more infill ground gravity surveying was done at Lunar Dam in May 2000, which enabled the recognition of small residual gravity highs at Lunar Dam NW and Kialla Dam. During the seventh year of tenure, work done on EL 2639 included: - the conduct of infill ground gravity and CSAMT surveys at Elizabeth Creek; - geophysical modelling and interpretation of the new survey data; - geological interpretation and refinement of drilling targets; - the conduct of work area Aboriginal heritage clearance survey; - performing a partial extraction soil geochemical survey on a 50 m x 200 m grid at the Canegrass prospect (114 samples) to target stratiform Adelaidean copper; and - undertaking exploratory diamond drilling of 4 inclined holes for 3426.6 m, including 474 m of RC precollars (MGD 26, MGD 26 W1, MGD 27 and MGD 28) to test for IOCG mineralisation the Elaine Zone prospect that extends for ~3 km southwards from Elizabeth Creek, close to the intersection of the Cattlegrid and Elizabeth Creek faults. The infill gravity surveys were acquired during January 2001 and May 2001, to profile the Elaine Zone prospect and the Vessel prospect respectively on 250 m x 500 m grids, the total stations read being around 500 and 200 in each case. A number of lines of CSAMT readings totalling 19.4 line km were acquired by Zonge Engineering in August 2001 across the Elaine Zone and the Vessel-Vista trend, to determine whether sulphide-sourced basement bodies were identifiable in the data (Zonge’s report on this work is included with the fourth annual report for EL 2516 - see Env 9530). Dr Gregg Morrison of Klondyke Exploration Services (Townsville, Qld) was contracted to undertake a regional study of basement alteration and mineralisation in the Mount Gunson district. This work involved re-logging all of the basement - penetrating drillholes there, plus a few selected holes from elsewhere on the Stuart Shelf. The re-logging focussed on rock alteration types and assemblages rather than on original lithology (the latter being the focus of most routine drillhole logging). A descriptor legend was derived specifically for this work, and while the stored drill cores were accessible, a set of specific gravity (SG) and magnetic susceptibility readings was acquired for each hole, to provide a regional database of petrophysical property measurements to use to inform geophysical modelling. The alteration study resulted in recognition of several key alteration styles, and more specifically, it resulted in the identification of several instances of severe local cataclasis having a characteristic alteration overprint. The selection of drill targets to test in 2000-2001 was based on a combination of the latest geophysical interpretations and geological modelling based on an assessment of basement alteration and mineralisation patterns. Attention became directed towards the Elizabeth Creek area, where there are distinctive patterns in the residual gravity and magnetics fields, and where it was noted that former CSR drillholes EC 21 and PY 3 had made mineralised intercepts which indicated likely proximity to ore-bearing systems. The first diamond hole, MGD26, was drilled with a delination of 60 degrees, but encountered difficult drilling within the Pandurra Formation while making the RC precollar, such that the hole drooped to dip at 67 degrees in the space of a 174 m long interval. After switching to diamond core drilling, this steep trajectory could not be flattened, so the hole was terminated at 1103.7 m. A hole orientation camera survey reading made at 1074 m gave a dip of 71 degrees, meaning that the finished position of MGD26 was 210 m west of where it had been intended to go. In order to make an adequate test of the modelled target body, it was decided to drill a wedged off hole from a wedge set at ~400 m down the original hole, aiming to induce continuous flattening in the new hole along a curvature of between 2 degrees and 3 degrees per 50 m, which should ideally then take the wedged hole's path into the main target zone. In January 2001 Budd Drilling resumed diamond coring in MGD26 W1, using Navi drill bits to make an open BQ pilot hole so as to achieve a directional and gradually flattening hole trajectory, starting at 395.5 m downhole. The runs of flattened pilot hole were then interspersed with normal NQ core drilling, and downhole survey measurements were frequently made. The process involved pulling the rod string many times to inspect and change the bit and proved very slow and expensive, because over ten days it made an advance of only 100 m from the wedge, with two Navi drill bits breaking down, and the hole trying to steepen every time normal coring was begun again. It was resolved, therefore, to abandon the controlled drilling, and to just drill as straight as possible to see as much of the basement geology as possible. From 500 m to end-of-hole at 1136.9 m, the hole steepened from ~57 degrees to 63 degrees (average rate of ~0.5 degrees per 50 m). MGD26 intersected variably altered Gawler Range Volcanics at 695.8 m downhole beneath the pre-Pandurra unconformity, and ended in a massive dolerite that was entered at ~1047 m. The dolerite was not seen in either EC 21 or in the MGD26 W1 wedge hole, so is assumed to be dipping to the east. No significant copper mineralisation was seen in the parent hole, although disseminated pyrite is common. The wedge hole passed through a similar sequence of Gawler Range Volcanics, fragmental near the unconformity and becoming more massive below 850 m. The volcanic remains fined-grained and massive until about 953 m, at which point the texture becomes increasingly cataclastic. A pervasive quartz-K feldspar (‘red-rock’) flooding is evident from this depth onwards, and the rock shows brittle fracturing and brecciation, with infill of magnetite-carbonate and pyrite, with local chalcopyrite. Below 1070 m there are two zones of visible chalcopyrite mineralisation associated with haematite-pyrite-carbonate infill. The first zone extends from 1070 to 1100 m, and the second is near the base of the hole, from 1028 to 1034 m. Results from the MGD 26 parent hole and wedge, in conjunction with the existing deep hole EC 21, provided the JV partners with valuable new insight into the structure and alteration associated with a mineralised environment. Recognition of a major zone of cataclasis, within an envelope of red rock flooding of the host rocks, represents a major step forward in understanding the origin of iron oxide related Cu-Au mineralisation on the Stuart Shelf. The cataclasis is strongest where the host rocks have been flooded by ‘red-rock’ quartz-K feldspar alteration, reflecting the increased tendency of this alteration zone to brittle fracture. The open space thus produced (estimated at up to 40%), is then amenable to infill by iron oxide and associated sulphide and silicate phases. It was suggested that this type of system could explain parts of the Olympic Dam setting, and may well represent an early stage in the development of that world-class orebody. Hole MGD27 was a follow-up to MGD26 W1, and was sited between that hole and historic CSR hole EC21. It was drilled to a downhole total depth of 1134.0 m (included 990 m of diamond coring) during April-May 2001, to test a steeply dipping zone of cataclasis in basement volcanic and metasedimentary rocks which has an associated density anomaly that might represent IOCG mineralisation, and thus was declined eastwards at a nominal 60 degree angle. Pre-Pandurra basement was encountered at a downhole depth of 743.65 m, equivalent to ~660 m below surface. The sequence in MGD 27 is comparable with that seen in MGD 26 W1 and in EC 21, with variably-altered Gawler Range Volcanics overlying siliceous sediments that were assumed to be Wandearah Metasiltstone. The volcanic rocks are generally fine-grained, and show progressively more intense alteration below about 825 m. This alteration is expressed as pervasive red-rock flooding (aphanitic quartz-K feldspar and albite), which when moderately developed obliterates the original porphyritic texture of the host rock. Distribution of red-rock alteration is patchy to about 980 m, but becomes strong and pervasive below that depth. From about 1010 m, the red-rock altered volcanic sequence shows varying degrees of cataclasis and brecciation with associated infill, which extends downwards into the underlying metasediments. At 1036 m a zone with a curvi-planar structural fabric marks the contact with the underlying metasediments, which are ascribed to the informally-named Wandearah Metasiltstone. Assaying of basement core samples returned a peak values of 7145 ppm Cu and 187 ppb Au from the interval 878-880 m. The main zone of copper enrichment is in the interval 855 to 872 m, which averages 1594 ppm Cu; elsewhere, copper values are less than 1000 ppm. Correlation coefficients for the drill core assay data highlighted relationships between various elements, and suggested that the following associations may be present: Cu-Au-Ba-Ag Pb-Zn-U-Mo-?U Fe-Co-REE Interestingly, there is no obvious correlation between Fe and Cu, and only a weak association between Fe and Au. It was concluded that the dense body causing the Elaine Zone gravity anomaly lies at a level deeper than was tested by MGD 26 W1 and MGD 27. To try to find higher grade mineralised basement intercepts, it was decided to test the Elaine Zone structure along strike to the south. A target was selected on the section through former CSR drillhole PY 3, some 2 km south of the previous line of drilling, where the magnetic anomaly is considerably stronger than on the EC 21 section. Hole MGD 28 was drilled during June 2001 to a downhole total depth of 1155.00 m, that included 999 m of diamond coring, and was declined at a nominal 70 degrees angle towards the west. It was designed to test two geophysical source bodies, and to finish above but on the periphery of the main magnetic source body. Prior geophysical modelling in the area of PY 3 had indicated that this magnetic source (Body 16) lies at a depth of about 1300 m, centred some 400 m west of that hole. Overlying this source was a body of low susceptibility but with 0.9 SG contrast (Body 30), the top of which was centred about 200 m west of PY 3 at a depth of 700 m. Subsequent remodelling, incorporating physical property measurements and geological observations from PY 3 resulted in the original Body 30 being truncated and a new body (Body 73) with higher susceptibility being added between Body 16 and Body 30. Body 73 had a susceptibility similar to that observed in the lower section of PY 3. This configuration of three bodies better explained the observed geology and potential field responses. The final hole path of MGD28 remained above the planned line, but was only about 18 m west of it at end-of-hole. Pre-Pandurra basement was encountered at a downhole depth of 808.36 m, equivalent to ~754 m below surface, which is comparable to the depths encountered in MGD 26 and MGD 27, but is about 80 m deeper (vertically) than in PY 3. In MGD28 only three consecutive basement samples assayed over 1000 ppm Cu (982 to 985 m, 1515 ppm Cu). Elsewhere, copper values are less than 1000 ppm, but with an increase in copper content evident near the base of the hole (1145 to 1155 m, 575 ppm Cu). The peak gold value also occurs near the base of the hole (45 ppb Au, 1152 to 1153 m). So it was hoped that this showing may represent the fringe of a mineralised zone associated with the main magnetic source body. At this stage the JV partners interpreted the positive correlation between magnetite and copper to indicate that mineralisation in the Elizabeth Creek area is dominated by a primary magnetite-chalcopyrite assemblage, and they also recognised that there is little evidence of a subsequent upgrading in copper grades associated with oxidation of magnetite to haematite. This has significant implications for geophysical modelling, where in the past emphasis has been on trying to define bodies that are dense but have low magnetic susceptibility. Such bodies were interpreted to represent concentrations of haematite + sulphides, and the concept was that these would be of higher grade than, and would probably lie above, the primary magnetite-hosted bodies that source the residual magnetic anomalies. Future modelling should therefore assume that concentrations of sulphides will be associated with magnetite, and the approach should be to look for magnetic source bodies that have significantly more mass than can be accounted for by their magnetite content alone.