An exploratory drilling programme (23 vertical rotary/NX diamond core holes for a total penetration of 487 feet 10 inches) was carried out during May-June 1969 on the surface of Lake MacDonnell, which covers an area of approximately 4.5 square miles. Waratah Gypsum Pty Ltd currently holds a number of mining leases for salt on this lake, but its shallow subsurface gypsum potential has hitherto not been assessed. The centre of gypsum mining presently being carried out by Waratah lies about 3 miles to the north-east of the lake, underlying the coastal dune flats, where an extensive bed of Holocene crystalline rock-gypsum [selenite] occurs with a maximum thickness of 24 feet. The drilling successfully defined a considerable quantity of coarse crystalline gypsum conservatively estimated at 30.6 million tons @ 87.6% CaSO4. Other reserve estimates were made that include the overlying unconsolidated granular gypsum and gypseous clays and marls, factored with CaSO4 cut-off values of 90%, 80% and 60%. The gypsum appears to thin to the south-east and also to the south and west. Both the gypsum and overburden are saturated with ground water, and this will need to be taken in account by extraction feasibility studies.