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TERRITORY IRON LIMITED

A.C.N. 100 552 118

EL23590 FRANCES CREEK EAST

THIRD YEAR

PARTIAL RELINQUISHMENT

REPORT

By

RM VIVIAN

BAppSc MAppSc MAIG

Pine Creek SD52-08 1:250,000 Sheet

Pine Creek 5270 1:100, 000 Sheet

May 2006

Territory Iron Ltd

Partial Relinquishment Report EL23824

May 2005

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CONTENTS

SUMMARY 2

1. Introduction 3

2. Tenure

2.1 Mineral Rights 3

2.2 Land Tenure 3

2.3 Aboriginal Sacred Site Clearance & Native Title 3

3. Local Geology 5

4. Mineralisation 5

5. Exploration Activities 5

5.1 First Year 5

5.2 Second Year 5

5.3 Third Year 5

6. References 7

FIGURES

Figure 1: Relinquished Area of EL23590 4

Figure 2: Geology & Relinquished Area – EL23590 6

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SUMMARY

This third year partial relinquishment report describes work undertaken by Territory Iron Ltd

during the three year period 28 February 2003 to 27 February 2006 within the 4 graticular

blocks relinquished from tenement EL23590.

Work undertaken comprised office studies, technical report search, air photo interpretation

and a reconnaissance visit to the tenement area.

This work confirmed that the four blocks are predominantly underlain by Allamber Springs

Granite of the Cullen Batholith and has no potential for iron mineralisation.

As a result, this area was relinquished in January 2006.

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1. INTRODUCTION

This report is submitted by Territory Iron Ltd on the relinquishment of 4 blocks from

tenement EL23590 and details work undertaken within the relinquished area during the

period 28 February 2003 to 27 February 2006.

The tenement area is located about 28km NE of the township of Pine Creek which is located

on the Stuart Highway about 220km south of Darwin. Access from Pine Creek is 29km along

the sealed Kakadu Highway, then about 8km along the graded dirt Mary River Station road

to the tenement area.

2. TENURE

2.1 Mineral Rights

EL23590 was granted to Territory Iron Ltd on 28 February 2003 with the term of the

tenement expiring on 27 February 2009.

The southernmost four graticular blocks were relinquished on 18 January 2006; effective on

27 February 2006 – the 3rd anniversary year. The relinquished ground comprises 50% of the

total number of blocks originally forming the tenement area, Figure 1.

2.2 Land Tenure

The relinquished ground includes parts of the following land tenure:

• Ban Ban Springs Pastoral Lease, owned by Ban Ban Springs Station Pty Ltd (Linda

Claris, fax 8978630), c/- level 5,478 Albert St, East Melbourne.

2.3 Aboriginal Sacred Site Clearance & Native Title

• A search of the Aboriginal Areas Protection Authority’s sacred site digital register was

carried out in May 2004 and did not locate any registered or recorded sites within the

tenement area (AAPA Ref 90/313).

• A Registered native title claim DC01/21 Ban Ban Springs, lodged on 13 March 2001,

covers the tenement area.

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Figure 1 Relinquished Area of EL23590

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3. LOCAL GEOLOGY

Post-orogenic granites of the Cullen Batholith cover the entire tenement area with the except

with a minor outcrop area along the northern boundary of Palaeoproterozoic Mundogie

Sandstone sediments of the Mt Partridge Group, Figure 2.

4. MINERALISATION

No iron occurrences or any other mineralisation are known from the relinquished area of

EL23590.

5. EXPLORATION ACTIVITIES

5.1 First Year Exploration during the year consisted of a helicopter flyover to check ground access and

general geology. Minor desktop preparatory work prior to the survey was undertaken, and

included compilation of regional geology and topography maps in MapInfo.

5.2 Second Year A search for past technical reports by previous mineral exploration companies was

undertaken at the NTGS library, Darwin by Territory Iron personnel during the year. No

technical reports were found for the area. All ground activity during the Second Year was

focussed on the retained portion of EL23590.

5.3 Third Year

A review of the geology of the full tenement area was undertaken to discriminate between

the prospective iron-bearing sediments of the Masson Formation and non-prospective

granites. The Pine Creek 1:100,000 scale geological map sheet and 1:25,000 Pine Creek –

Ranford Hill 5270 & 5370 Run 4, sheet nos 121 to 125 and Run 3, sheet nos 178 to 181

colour air photography were used for this purpose.

This work indicated that the granites of the Cullen Batholith underlie the southern four

tenement blocks and comprise predominantly Allamber Springs Granite (Pgca), which

presents as a subdued texture with light grey brown colour, and a minor area of Bludells

Monzonite, which occurs along the northern side of Nellie Creek and is distinctive by its

orange brown colour and featureless texture (Figure 2). Sediments of the Mundogie

Sandstone occur in the northern part of the tenement and are characterised by topographically

prominent strike ridges. Masson Formation sediments by contrast are subdued and are

characterised by more subtle bedding linears.

Reconnaissance traversing in the area was then undertaken and confirmed the above

interpretations. As a result, the southernmost four blocks of the tenement between 8490860N

and 8492720N were recommended for relinquishment (Figure 2).

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Figure 2 Geology & Relinquished Area (in red) – EL23590

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6. REFERENCES

Ahmad, M. et al, 1993. Explanatory Notes and Mineral Deposit Data Sheets. Pine Creek

SD52-8 1:250,000 Metallogenic Map Series

Stuart-Smith, P.G., Needham, R.S., Bagas, L., and Wallace, D.A., 1987. Pine Creek

Northern Territory – 1:100,000 geological map series and commentary. Bureau of Mineral

Resources, Australia.