TARGET: Evaluation of the gemstone tourmaline and kaolin clay potential of the Dudley Pegmatite on Kangaroo Island. It is believed that this known occurrence of coloured tourmaline is one of only two locations in Australia which have produced faceting-grade gem crystals. EXPLORATION: Trenching, sampling and geological mapping. Initially, eight costeans were dug during early May 1987, sited generally 70 m apart and varying in length from 60 m to 90 m, and in depth from 1 m to 1.8 m. These showed that the pegmatite extends NE-SW for >600 m, and that it varies in width at surface from 80 m down to 7 m, in places becoming attenuated and divided into several separate bodies. The geology of the trench walls was logged at 1:200 scale, and channel samples were collected for analysis. During the ensuing two years, another fifteen costeans totalling 505 m in length were dug to further expose the weathered portion of the Dudley Pegmatite. Old shallow workings at and near Gem shaft were cleaned of mullock using a backhoe, and the removed material plus that from three newly dug pits were washed and examined to better determine the nature of the gem-bearing mineral assemblage. Prospecting of the wider licence area located other pegmatite veins on surrounding cleared farmland, but these veins are barren of gem crystal species. RESULTS: The Dudley Pegmatite was shown to be a larger body than had hitherto been realised. Also, it has been disrupted by a drag fold to produce northern and southern sections separated by Kanmantoo Group country rock material. Within both sections, there is thought to be good potential for the near-surface occurrence of gem quality dark blue to green-coloured tourmaline, citrine and smoky quartz. Clear crystals of +10 mm in length are associated with narrow, late stage, coarsely crystalline muscovite and large smoky quartz crystals filling zones located near and parallel to the pegmatite margins. Regrettably, it appears that most of the crystals that grew into voids in the pegmatite have been fractured by post-emplacement folding stresses, such that gem grade tourmaline in particular occurs only in a few isolated pockets. Relatively better potential exists for obtaining gemmy citrine/smoky quartz from thin quartz veins that have formed within greisenised Kanmantoo Group schistose sediments adjacent to the north-eastern end of the Dudley Pegmatite. Many of these crystals are also fractured, but the larger ones include a fair proportion of cuttable material, much having a deep colour which is not readily apparent without washing and scrubbing to remove stiff coatings of clay. Some of the deep brown and golden yellow crystal parts of high quality were cut and facetted as small brilliants, to gauge the market appeal of likely small scale mining products. However, it soon became obvious that the cost of preparing the larger gem pieces for jewellery use would exceed the acceptable retail value of finished articles. With regard to developing the pegmatite for its low value commodities, much additional resource definition work would be required such as drilling, which could only be justified if markets for the feldspar and china clay were assured. Partly kaolinised pegmatite is restricted to higher elevations as a remnant weathering profile. The depth of kaolinisation is probably <10 m; it may only be 2-3 m on hillslopes. The kaolin is poorly crystalline below minus 2 micron size, is discoloured by iron oxide staining, and has a high grit content. These factors would limit its applications to use in coloured ceramics or for brickmaking.