Following the first public announcement on 18/11/1976 by Western Mining Corp. of its giant Olympic Dam copper, gold and uranium discovery on Roxby Downs Station, Newmont Pty Ltd began a detailed assessment of the Stuart Shelf region of South Australia. Although the latter company did not yet know the nature of the mineralisation or controlling host strata at Olympic Dam, it swiftly made application to the SA Department of Mines for the grant of exploration licences over available ground located north-west of Olympic Dam, selecting areas occupying a trend that lay to the east of the Torrens Hinge Zone (THZ). The subject Danae Hill area was chosen because it covers the south-western flank of the Mount Woods basement high where it slopes down into the east-west trending Lake Phillipson Trough. A coincident gravity/magnetic anomaly of interest lay near the central-eastern boundary of the licence area. Newmont entered into a 50:50 joint venture partnership with BHP subsidiary Dampier Mining Co. early in 1977, and EL 326 was granted to both companies in the middle of that year along with seven other Exploration Licences covering adjoining ground in the Anna Creek - Mount Woods region which looked to have a similar geophysical character, and which lay over a linear crustal feature that appeared to link major copper deposits further south (Olympic Dam, Mount Gunson and Moonta-Wallaroo). Within the Newmont-Dampier exploration project area, the target sought was of Olympic Dam type, i.e. large tonnage, low grade primary Cu-U mineralisation occurring in or near to a crystalline basement host. Field activities commenced in late June 1977 with the pegging of a prospect reconnaissance grid consisting of three 10 km long lines spaced 2.5 km apart. Ground magnetic survey readings were made at 250 m intervals along the grid traverses, followed in late July 1977 by a gravity survey of 98 stations read at 250 m intervals on the grid. The data from these surveys were interpreted, and a preferred drill site, located, in the absence of reliable density data about the local stratigraphic profile, near the peak of the gravity anomaly, was picked by Newmont's chief geophysicist for conducting an initial stratigraphic test. The intent was to drill to 350-400 m depth to try to penetrate possible Upper Proterozoic strata, i.e. metasediments or granitic breccias, that might contain geochemical vectors to mineralisation. Drilling began during October 1977, when hole SR4 was rotary percussion precollared to 81.5 m depth, before being continued with NQ diamond coring to a total depth of 102.5 m. This hole penetrated a foliated chlorite-garnet-quartz-feldspar gneiss at 83.0 m depth. Another drill site was selected 1.25 km to the south-east, and hole SR10 was precollared in early November to a depth of 55.4 m, whereupon drilling was stopped within a pebbly conglomerate similar to that intersected just above basement in the previous hole. At this point it was decided not to continue the hole by diamond coring. Later scintillometer scans of the recovered drill cuttings and core gave very low radioactivity responses (1-4 counts per second combined U/Th). The drilling results showed that the trough structure indicated by geophysics did not exist. No other geophysical targets were evident. It was inferred by Newmont that Proterozoic strata are unlikely to exist at shallow depth on EL 326, and when viewed in the light of recent drilling results the JV had obtained on their Birthday Hill EL 303 to the north, the decision was made to surrender the subject licence.