Earaheedy Iron Ore Project (Giralia 100%)

The Company completed an initial drilling program during the December 2007 quarter comprising 45 widely spaced vertical RC drill holes for a total of 2,803 metres at its 100% owned Earaheedy iron ore project.  Giralia controls a 570 square kilometre area in the Miss Fairbairn Hills area of the northern Earaheedy Basin, 100 kilometres north of Wiluna, and 200 kilometres south of Newman in Western Australia.

Giralia was the early mover in this new, high potential iron ore province which is thought to be the second largest accumulation of iron formations (the host to bedded iron ore deposits) in Australia, reported to contain in total over 500 strike kilometres of thick (up to 500 metres) iron formations.

The Company's 100% owned tenements cover 130 strike kilometres of the most iron-ore prospective areas defined by past exploration work in the late 1970s, principally by Amax Exploration (Australia) Inc. ("Amax"), which resulted in the location of widespread areas of hematite enrichment with surface grades up to 66% Fe, including zones described by Amax as up to 75 metres (true thickness) grading 62% Fe.  A small program of shallow drilling by Amax (only 652 metres of drilling in total, average hole depth 23 metres) returned intersections of 22 metres @ 56.5% Fe including 14 metres @ 59.3% Fe, and 4 metres (to end of hole) @ 60.4% Fe, in the Miss Fairbairn Hills, now wholly on Giralia's tenements.

Importantly, the Earaheedy iron formations are shallowly dipping, providing the opportunity for large tonnages. Additionally, major low angle fault repetition interpreted from the Company’s newly flown 11,000 line kilometre detailed aeromagnetic survey provides numerous potential targets for structurally controlled hematite enrichment.  Giralia's Exploration Target in the Miss Fairbairn Hills is very large (+1 billion tonnes) within the 130 strike kilometres of iron formation on the Company's tenements.  Giralia's mapping and rock sampling has confirmed high-grade outcropping iron ore mineralisation.  In the best zone defined to date an open ended exposed cumulative thickness of approximately 20 metres of hematite mineralisation grades 62% Fe, with 0.088% P.

Giralia’s Earaheedy Iron Project, and other MidWest Region iron deposits shown on satellite image

The preliminary program of reconnaissance drilling  was completed by Giralia in early November 2007 along existing vehicle tracks in the area at mostly 400 metre (up to 1200 metre) spacings.  The access tracks traversed sand and soil covered areas and skirted the perimeters of several hills containing exposures of hematite mineralisation. 

Although holes in the initial program were not optimally sited, the use of the existing tracks for drilling accelerated the statutory and Native Title approvals process and enabled the Company to drill at Earaheedy significantly earlier than would have been the case if approvals were sought to establish new roads to access the hills of outcropping hematite mineralisation. 

Giralia's next drill program, planned for early 2008, will directly target the outcropping zones of massive hematite in the Miss Fairbairn Hills area, and other areas to the south with significant rock chip sample results that have not yet been followed up.

Significant results from the initial program included the recognition of thick zones of iron rich transported gravels flanking hills in the south of the drill traverse. Grades in the gravels reach 57.2% Fe.  A portion of the hematitic gravel zone in hole RCE004, which returned an overall  intersection of 32 metres @ 43.3% Fe, was tested in the field with trial wet screening (using a ~2mm sieve) which provided significant encouragement, with an upgrade of 14% overall in the +2mm fraction to average 51.2% Fe (with 4 metre composites returning up to 54% Fe).  There is significant potential tonnage of these hematitic gravels in the area and the company believes that it is likely further screening tests using coarser size fractions will further increase iron grades.

Earaheedy Project-November 2007 RC drilling-Selected results

Drill hole samples were sampled as 4m composite grab samples and submitted to Spectrolab, Geraldton  for XRF and LOI analyses. ** =sieved to +~2mm

Drilling confirmed relatively deep oxidation and hematite alteration(?) of the target Frere Formation which consists of generally hematitic granular iron formation (GIF), hematitic shales and some chert.  Rarely, at depth the primary GIF contains significant magnetite (eg: RCE001-002).  Drill holes collared in the alluvial plains between the hills; RCE008-RCE0010, RCE020-021, 028 and 36-039 intersected residual pallid clay zones overlying grey and black shales, possibly beneath a down faulted block of the overlying Windidda Formation.  Geological information from the drilling will be invaluable, in conjunction with interpretation of the Company’s newly flown 11,000 line kilometre detailed aeromagnetic survey, in defining targets for follow up drilling.

In preparation for detailed planning of stage 2 drilling at Earaheedy, the area around historic Amax drill hole NAB13 was mapped and sampled in detail (see photo below).  This area lies 3 kilometres west of the track areas drilled in the Company's initial program.  The only hole in this area, NAB13 returned an intersection of 6m @ 59.3% (16-22metres, hole finished in +60 %Fe at EOH) with the last 4 metres of the hole averaging 60.4% Fe..  Five rock chip samples of shallow dipping massive hematite taken in the vicinity of this hole returned grades above 61% Fe.  Clearly, substantial drilling is warranted at this and other mapped areas of high grade hematite outcrop. 

Earaheedy project drill location plan, showing rock chip results and iron formation outcrops