Skeleton Flat

Regional Setting

The Skeleton Flat project is located in the prospective Kimberley region of WA as shown on Figure 1. The semi-regional setting is shown on the inset diagram to Figure 11. Skeleton Flat is located approximately 65 kilometres northwest of Halls Creek on the Kimberley Block Plateau. The project area is situated in a graben structure that has downfaulted metasediments of the Kimberley Plateau into older Halls Creek Group metamorphic rocks. The Skeleton Flat area is also located close to the major regional Greenvale Fault. Further north this fault links with the Bow River Fault. The Argyle Diamond Mine is located about 10 kilometres from the conjunction of the Bow River Fault and the Halls Creek Fault.

Tenements

The Skeleton Flat project is covered by Exploration Licence Application 80/2547. The registered applicants are J Towie and L Field, and the licence covers an area of 32 square kilometres.

Agreements

The Skeleton Flat Property is the subject of a Joint Venture agreement between the vendors, John Towie and Leslie Field, and Flinders Diamonds. This agreement allows Flinders to initially earn an equity of 51% by the expenditure of $900,000. Flinders then has the right to earn a further 34% by additional expenditure of $600,000. Thus a total equity of 85% is earned by the expenditure of $1.5 million. After this a normal Joint Venture will be formed where each party can contribute or dilute. If Towie and Field dilute to 5%, their equity is converted to a 2.5% carried net profit interest.

Land Tenure

The tenement is located entirely within the Moola Bulla Pastoral Lease, and access is obtained via 70 kilometres of unsealed tracks from the Springvale Homestead.

The area is affected by one Native Title claim, WC 96/75, Ngarrawanji People. The tenement has been advertised according to Section 29 of the Commonwealth Native Title Act. The four-month advertising period closes on 15 September 2002. Should an objection be lodged it will be necessary to negotiate an agreement before the licence can be granted. Flinders hopes to continue and improve the good relations with local Aboriginal groups established by Diamin Resources NL.

Previous Exploration

The project was originally larger and called Mad Gap Yards. It was discovered in the mid 1980s by drainage indicator mineral sampling. Initially work was carried out under a joint venture between Triad Minerals (who later became Diamin) and Freeport (who later became Poseidon).

Poseidon eventually withdrew from the JV, and Diamin Resources NL then held the ground for the period from 1995 to 1999. Diamin relinquished the ground in late 1999, and soon after that the current vendors, John Towie and Leslie Field, applied for it. A summary of exploration results is provided in Figure 11.

After encouraging early exploration results in 1986 and 1987, Freeport located a three-metre wide kimberlite dyke in the area just to the north of the current tenement near Mad Gap Yards. This result encouraged further reconnaissance drainage sampling which turned up a series of kimberlitic chromites and at least two diamond localities at Skeleton Flat.

An airborne magnetic survey was then flown, but no definitive targets were generated. Diamin resorted to a reverse circulation drilling program which failed to detect kimberlite and, ironically, the drilling stopped 200 metres short of Pipe 1 and 150 metres from kimberlites that were later found in holes MGY 50 and 51.

In 1995, Diamin again took up the ground, and a brief sampling program uncovered deficiencies in previous reconnaissance work by locating two new anomalous areas. A second airborne magnetic survey was carried out in May 1996. This yielded a bulls eye magnetic anomaly over the just-discovered chromite-pyrope anomaly. In addition, numerous less distinct anomalies were detected, including a three-kilometre long north-northeast trending dyke structure. These anomalies are shown on Figure 11.

A drilling program was carried out to test a variety of targets in September 1996. This located kimberlite Pipe 1 under the bulls eye anomaly and another eight minor kimberlite intersections in other holes. Pipe 1 is about 50 metres wide NS and 100 metres wide EW. Unfortunately microdiamond determinations on these kimberlites proved negative and the recovered indicators were of low quality so they are unlikely to be the source of the alluvial diamonds located to date. It is now thought that the kimberlites located to date are mostly minor sills and dykes, such as those often present in the vicinity of significant kimberlite intrusions.

Chromite indicator geochemistry suggests that the main source kimberlite should have high diamond prospectivity. Early in 2000, John Towie recognised a photo-feature which could explain the situation. He had previously recognised that the paleo-drainage in the area suggested that the diamonds and associated indicators could have travelled to the south, prior to the formation of the small creek which produced negative results just south of the photo feature. In this interpretation the 37ha circular feature is a buried kimberlite, which is likely to be the source of diamonds in the area (Figure 11).

Proposed Program

It is planned to mount a drilling program as soon as access is available. Some regolith mapping will possibly be carried out but the main need is to drill the Skeleton Flat kimberlite target in a two-phase program. Initially this will consist of relatively shallow rotary air blast and/or air core drilling to define the surface geology of any kimberlite that is located. If this is successful, a follow up reverse circulation/diamond drilling program will be carried out to better define the geometry of the body at depth and to obtain samples for macro and micro diamond determinations. If diamondiferous kimberlite is located a major program of bulk sampling will be carried out in 2003.

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