History

Flinders' initial and flagship project is the Springfield Diamond Project, located in the Southern Flinders Ranges, where 369 diamonds have been located to date. The current mineral rights to the project were obtained by the Initial Licence Holders (ILH) in 1992. The ILH consists of Mr James Allender, Mr Anthony Le Brun and Inca Resources Pty Ltd. After carrying out exploration between 1992 and 1997, the ILH farmed the project out to Tiger International Resources Inc (Tiger) in February 1998. Tiger is a Canadian company listed on the CDNX. In 1998, the President of Tiger, Mr Patric Barry, engaged Dr Kevin Wills to manage Tiger's diamond exploration activities in Australia. Between February 1998 and December 1999, Tiger carried out an exploration program on the Springfield Project, and while spending about $1.3 million, located further diamonds and exploration targets. In early 2000, due to difficulties in raising funds in Canada, Tiger decided to sell its interests in the Springfield Project to Flinders for vendor shares.

After the Springfield Project was secured Flinders set about adding additional projects to its portfolio, with the intention of organising an IPO. Mineral rights to the Adelaide Hills and G2 projects were obtained by direct application for Exploration Licences and by entering a joint venture with AKD Limited and Statelink Holdings Pty Ltd on EL 2585. The Strangways Project in the Northern Territory was introduced to Flinders by Mr Alistair Mackie of Tennant Creek Gold (NT) Pty Ltd. This project was also acquired by a combination of direct application and purchases for vendor shares.

Flinders' Skeleton Flat Project in Western Australia is a joint venture between Flinders and the vendors Mr John Towie and Mr Leslie Field. This and other agreements were described in the Material Contracts, Section 4, of Flinders' Prospectus. Flinders has also been granted an additional Exploration Licence at Tom Hill near Leigh Creek and has negotiated with the owners of the Leigh Creek Mining Leases, NRG Flinders, to carry out a diamond exploration program at Leigh Creek.

Flinders Diamonds developed a plan to create a small diamond marketing division and Mr Peter Taylor became a Director in order to manage diamond marketing. Flinders IPO opened on 30 July 2001 but the events of 11 September 2001 caused a decline in share applications. This created a necessity to extend the duration of the IPO with supplementary prospectuses that were issued on 21 November and 18 December 2001. During these months, Mr Peter Taylor and Mr Patric Barry resigned as Directors for personal reasons. Flinders was fortunate to be able to welcome Mr Bob Kennedy to the Board on 10 December 2001, and soon after he was elected Chairman. Following an improvement in the exploration floats market caused by the announcement of Minotaur Resources Limited's Prominent Hill copper-gold discovery on 14 November, interest in Flinders IPO increased and the issue closed above the minimum subscription on 8 February 2002 with $3.35 million raised. The company listed on the Australian Stock Exchange on 20 February 2002.

Following listing, the company set about establishing and equipping a modest exploration base in Adelaide at 20 Boskenna Avenue, Norwood. A highly-motivated and competent exploration team has been assembled.

Field work on the Springfield Project commenced on 21 March - 1 month after listing. Preparation for target drilling at five of Flinders six projects is underway.

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