HAWSONS IRON LTD - Capital/Financing Update 2007

Electronic Prospectus and Application Form Carpentaria Exploration Limited ABN 63 095 117 981

Note for intended users of this Prospectus:

a. This file contains the Prospectus dated 17 August 2007 issued by CARPENTARIA EXPLORATION LIMITED ABN 63 095 117 981 (“Company”).
b. Persons who access the Prospectus in electronic form should note that the securities offered by this Prospectus should be considered speculative. Before deciding to invest in the Company potential investors should read the entire Prospectus and in particular consider the risk factors that could affect the financial performance of the Company. You should carefully consider these risks in light of your personal circumstances (including financial and taxation issues) and seek professional advice from your accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest.
c. The securities to which the Prospectus relates will only be issued on receipt of an Application Form issued together with the Prospectus.
d. The offer to which the Prospectus relates is available to persons receiving electronic disclosure documents in Australia.
e. Users of the Application Form included in the Prospectus should note:
i. the Prospectus contains information regarding investing in the securities referred to in the Application Form;
ii. potential investors are strongly advised to read the Prospectus before applying for securities; and
iii. a person who gives another person access to the Application Form must at the same time and by the same means give the other person access to the Prospectus and any supplementary document.
f. Whilst the Prospectus is current, the Company will send copies of the Prospectus and any supplementary document and the Application Form, on request and without charge. In this regard, please contact:

Mr Bruce Acutt Company Secretary CARPENTARIA EXPLORATION LIMITED Level 2 33 Ord Street WEST PERTH WA 6005 Telephone: (08) 9226 1110 Facsimile: (08) 9321 0070 Email: [email protected]

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Carpentaria Exploration Limited A B N 6 3 0 9 5 1 1 7 9 8 1

An offer to raise up to $7.5 million by the issue of up to 30 million ordinary fully paid shares in the Company at an issue price of $0.25 per Share.

This is an important document. Please consult your professional adviser(s) if you have any questions. The mineral properties described in this Prospectus are at the exploration and evaluation stage and accordingly investment in the Shares offered by this Prospectus should be regarded as speculative in nature.

C a r p e n t a r i a E x p l o r a t i o n L i m i t e d

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Corporate Directory

Directors

Nick Sheard (Executive Chairman) Stan Macdonald (Non-Executive Director) Bob Hair (Non-Executive Director)

Independent Solicitor Reporting on Tenements

Hopgood Ganim Lawyers Level 8, Waterfront Place 1 Eagle Street, Brisbane QLD 4000

Joint Company Secretaries

Bruce Acutt / Chris Powell

Principal Place of Business

2nd Floor, 33 Ord Street West Perth WA 6005 Tel: (08) 9481 2284 Fax: (08) 9321 0070 Web: www.carpentariaex.com.au

Investigating Accountant

Mack & Co 2nd Floor, 35 Havelock Street West Perth WA 6005

Auditor

PKF Level 6, 10 Eagle Street Brisbane QLD 4000

Solicitor to the Offer

Pullinger Readhead Lucas Level 2, Fortescue House 50 Kings Park Road, West Perth WA 6005

Independent Geologist

Vidoro Pty Ltd 2 The Nook Underwood QLD 4119

Share Registry

Security Transfer Registrars Pty Limited Alexandrea House Suite 1, 770 Canning Highway Applecross WA 6153

ASX Code

CAP

Important Information

Offer

30,000,000 Shares at $0.25 each to raise $7,500,000 (before costs of issue)

Capital Structure

Shares on issue (1) 35 million Shares offered under Prospectus (2) 30 million

Timetable

17 September 2007

Opening Date 17 September 2007 Closing Date Priority Offer 15 October 2007 Public Offer 29 October 2007

Anticipated commencement of trading on ASX

12 November 2007

These dates are indicative only. The Directors have the right to vary these dates without notice.

Total Shares on issue on commencement of trading on ASX 65 million

Assumes completion under the arrangements for the acquisition of tenements. Further details set out in Section 10.
Assumes subscriptions for $7.5 million. This will be reduced proportionately if subscriptions between $3.5 million and $7.5 million are received.

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Key Investment Highlights

Carpentaria Exploration Limited’s initial focus will be on the discovery of copper, gold, uranium, and nickel in Eastern Australia, particularly in Queensland and New South Wales, where it currently holds seven projects prospective for these metals.
Despite the presence of several of the world’s giant base metal and gold deposits (Mt Isa, Century, Cannington, Ernest Henry, Mt Morgan, Broken Hill, Cadia-Ridgeway and North Parkes) in Queensland and New South Wales, these two States accounted for little more than a quarter of Australia’s total exploration expenditure for minerals in the December 2006 quarter.
In fact, exploration expenditure per quarter for base metals and gold deposits in Queensland and New South Wales as a proportion of total Australian base metals exploration has declined sharply from around 50% in the mid 1990s to 26% in the December 2006 quarter.
Carpentaria has been able to secure 100% interest in a portfolio of exploration properties considered prospective for base metals, gold and uranium in these two States which the Directors regard as underexplored in comparison to Western Australia, which continues to attract the majority of Australian mineral exploration expenditure.
Mineral commodity prices are strong and demand for Australia’s commodities is booming, driven largely by rapidly increasing metal consumption in China and India.
A highly experienced and successful Board and executive team has been recruited for Carpentaria, headed by Nick Sheard, most recently Vice President-Exploration for Inco Limited, and formerly the Global Exploration manager for M.I.M. Holdings Limited, after being initially employed by M.I.M. as Chief Geophysicist. Nick helped develop the novel MIMDAS electrical survey system currently being used commercially as a deep seeking quality EM and IP system for mineral exploration and his experience and skills in exploration for base metals deposits will be a key element of the Company’s strategy.

Carpentaria Exploration Limited

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Contents	Contents
Section		Page
Chairman’s Letter		3
1	Investment Summary	4
2	Details of the Offer	7
3	Project Overview	12
4	Profiles of Directors	17
5	Independent Geologist’s Report	18
6	Independent Solicitor’s Report	66

Section	Section		Page
7	Independent Accountant’s Report		86
8	Corporate Governance		96
9	Risk Factors		99
10	Additional Information		102
11	Director’s Statements		110
	Application Forms		At rear
	Glossary	Inside back cover

IMPORTANT NOTICE

This Prospectus is dated 7 September 2007 and was lodged with ASIC on that date. No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Neither ASIC nor ASX takes any responsibility for the content of this Prospectus or the merits of the investment to which this Prospectus relates.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of those laws. This Prospectus does not constitute an offer of Shares in any jurisdiction where, or to any person to whom, it would be unlawful to issue this Prospectus.

It is important that you read this Prospectus carefully, in its entirety and seek professional advice where necessary before deciding to invest in the Company. In particular, in considering the prospects for the Company, you should consider the risk factors that could affect the performance of the Company. The Offer does not take into account your investment objectives, financial situation and particular needs. Accordingly, you should carefully consider the risk factors in light of your personal circumstances and seek professional advice from your accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest. The Shares the subject of this Prospectus should be considered speculative.

No person is authorised to provide any information or make any representation in connection with the Offer contained in this Prospectus which is not contained in this Prospectus.

WEB SITE – ELECTRONIC PROSPECTUS

A copy of this Prospectus may be downloaded from the Company’s website at www.carpentariaex.com.au. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian resident and must only access the Prospectus from within Australia. Persons who access the electronic version of this Prospectus should ensure that they download and read the entire Prospectus.

The Corporations Act prohibits any persons passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any persons may obtain a hard copy of this Prospectus free of charge by contacting the Company by telephone on (08) 9481 2284 during normal business hours.

EXPOSURE PERIOD

This Prospectus will be circulated during the Exposure Period. The purpose of the Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. Potential investors should be aware that this examination may result in the identification of deficiencies in the Prospectus and, in those circumstances, any application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act.

Applications for Shares under this Prospectus will not be accepted by the Company until after the expiry of the Exposure Period. No preference will be conferred on persons who lodge applications before the expiry of the Exposure Period.

GLOSSARY

Certain terms and observations used in this Prospectus have defined meanings which are explained in the Glossary at the end of the Prospectus.

URANIUM MINING IN QUEENSLAND

Based on existing Queensland State Government policies there is no guarantee that should the Company define any economic deposits of uranium they will be able to be developed into operating mines.

Even if successful in its exploration activities, in order for the Company to be successful in achieving mine production, the Company must obtain approval from Queensland’s Governor in Council (State cabinet) to the grant of a mining lease for uranium production. Such a grant is unlikely if the Queensland State Government’s renewed opposition to uranium mining in Queensland continues. While debate continues at both a state and federal level regarding whether uranium mining in Queensland should be authorised, no guarantee can be given that the outcome of such debate will be favourable to the Company.

Further information on other risk factors is set out in Section 9 of this prospectus.

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Chairman’s Letter

Dear Investor

On behalf of our Directors, it is my pleasure to offer you the opportunity to become a shareholder in Carpentaria Exploration Limited (“Carpentaria”).

Carpentaria has acquired a suite of Eastern Australian exploration properties, many previously held by Giralia Resources NL, and is now seeking to raise $7,500,000 by the issue of 30,000,000 shares at $0.25 per share to commence exploration and evaluation work with respect to its properties.

The Company’s aim is to rapidly discover a deposit and, as soon as feasible, start mining. The Company considers the metal demand and price outlook to be strong as significant production expansion will be required to supply future growth in China and India. Therefore, Carpentaria is focussing on high-demand base and precious metals that can be discovered and brought to the market rapidly.

Carpentaria has deliberately focussed on obtaining exploration properties in Queensland and New South Wales, and has concentrated on properties that host known mineralisation, including project areas with potential for early definition of mineral resources. Substantial early drilling is planned to test some of these targets. It is important to note that all the current properties in Carpentaria’s portfolio are 100% owned. This will ensure full shareholder value if and when discoveries are made.

The Board considers that in both Queensland and New South Wales there is still considerable potential to discover additional medium to large deposits. Both States host world class ore bodies such as Mt Isa, Mt Morgan, Broken Hill, and Cadia-Ridgeway. It is important to note that as opposed to other “mining” States in Australia, there is still quality open ground some of which hosts known mineralisation. Both States have large, easily accessible open file data bases containing a wealth of knowledge that will both help reduce exploration costs and indicate where other deposits could occur.

We consider that these States offer a good opportunity given the mineral pedigree and recent decline in exploration work there. Our Company has targeted regions where the cover is not thick, where there is known mineralisation, and using modern exploration techniques we will be able to rapidly define and drill targets. In fact, our portfolio already has drill ready targets awaiting testing and we are committed to a large drilling program with a large percentage of our budget dedicated to drilling.

In addition to the work planned on the projects described in this Prospectus, it is important to point out that in our exploration budget we have allocated $382,000 in year 1 and $650,000 in year 2 as “Working Capital” (assuming full subscription) which is a business development allocation to maintain a strong pipeline of projects. These funds will be used to fund project evaluation and acquisition, generate new in-house projects and to explore in these new ventures. We consider it essential that Carpentaria continues to add quality projects to the Company so as to develop our company rapidly.

We have assembled a highly competent team with proven exploration strengths in geology, geophysics, geochemistry and importantly in the team we have personnel with native title and land access experience.

Carpentaria has a very experienced Board of Directors, with appropriate skills, to drive the Company focus initially on exploration for base and precious metals in Queensland and New South Wales.

I look forward to welcoming you as a shareholder of Carpentaria Exploration Limited.

Yours faithfully

Nick Sheard

Executive Chairman

Carpentaria Exploration Limited

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1 Investment Summary

1.1 Company Overview and Objectives

Carpentaria controls 7 exploration projects in Queensland and New South Wales, totalling over 1600 square kilometres within 5 granted tenements and 2 applications for tenements.

The Company holds a 100% interest in all of the projects, and many of the project areas contain known mineralisation. The focus of the Company will be on the identification, exploration and development of mineral deposits, principally in Eastern Australia. The purpose of the initial public offering is to raise the funds necessary to carry out the exploration work, resource assessment and scoping studies, including engineering and metallurgical investigations needed to progress one or more projects to development.

Project Highlights

Carpentaria holds a range of exploration properties prospective for various commodities and of several geological styles. All projects are 100% owned by Carpentaria:

Mt Agate, Queensland (copper/gold/uranium) – Located in the Proterozoic Mt Isa Block, south of the town of Cloncurry, Queensland the tenement is prospective for iron oxide copper-gold-uranium mineralisation (IOCG – Ernest Henry style). At the Mt Devoncourt prospect, historical records indicate shallow drill intersections of 30.5 metres @ 1.25 % copper, and 12 metres @ 2.55% copper , and at the QMH prospect, a single RC hole beneath a 650 metre by 250 metre zone of magnetite and hematite veining returned a 28 metre zone of in excess of 0.1 % copper with no follow up drilling.

Glen Isla, New South Wales (gold) – Located in the Palaeozoic Lachlan Fold Belt, the tenement covers the Glen Isla and Kyalite epithermal gold prospects, near the town of Tomingley in New South Wales, in a district where about 1 million oz of gold were mined early last century. Previous drill holes have returned numerous elevated gold values over substantial thicknesses. Examples at the Glen Isla prospect include 79 metres @ 0.40 g/t gold, 90 metres @ 0.26 g/t gold and 396 metres @ 0.13 g/t gold .

Cargoon, Queensland (nickel) – located 150 kilometres west of Charters Towers in northeast Queensland. Includes a substantial gossan outcrop at the Brady’s Reward prospect, where previous rock chip sampling returned up to 1.5% nickel and 1.2% copper . Mineralisation is interpreted to be a possible analogue of skarn style nickel sulphide mineralisation at the Avebury deposit in western Tasmania. The Directors consider that modern geophysical exploration should be undertaken to find the source of this anomaly.

Combaning, New South Wales (nickel, gold) – covers parts of the Temora and Springdale Goldfields in the Lachlan Fold Belt which were substantial historical gold producers. Previous drilling results include: 1 metre @ 10.6 g/t gold at Harvey’s Shaft, and 2 metres @ 6.8 g/t gold at Mother Shipton, 4.0 metres @ 2.65 g/t gold at Opossum Hill and 3.9 metres @ 2.2 g/t gold at Kangaroo Dick. All these gold intersections were in lode quartz veins hosted by sediments or volcanics. In addition to these prospects a number of other drill intersections including 40 metres @ 0.79 g/t gold, 32 metres @ 0.71 g/t gold , and 10 metres @ 1.33% nickel were obtained at the Merri Hill Prospect which coincides with a discrete magnetic anomaly. The source of the magnetic anomaly is a variably carbonate-quartz-talc altered ultramafic unit which hosts the anomalous gold and nickel drill intercepts. Other similar discrete magnetic anomalies near Merri Hill have not been tested by geophysics or drilling and the Directors consider that they have favourable potential for gold and/or nickel mineralisation.

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Waterford, Queensland (uranium) – sandstone hosted roll-front uranium target in the Eromanga Basin. Prior exploration located a redox front in sandstone which returned up to 2 metres @ 140 ppm uranium in drilling. This tenement application covers this drill intersection and approximately 15 kilometres of the interpreted strike of this redox front.

Lady Inez, Queensland (copper) – in central Queensland, covers an area adjacent to the Glassford polymetallic skarn field. The tenement is prospective for copper and precious metal bearing skarn and other intrusive related mineralisation. Just to the east of the licence are the Blue Bag and McDonald Lode skarn prospects where previous drilling has intersected up to 13 metres @ 1.3% copper and 2g/t gold . At the Burns Spur gossan, within the Carpentaria tenement rock sampling revealed 30 metres @1.6% copper and 10.2g/t silver . Several of these mineralised systems within or striking towards Carpentaria’s tenement have not been tested using modern geophysically focussed exploration techniques.

Redbank, Queensland (nickel) – covers an aeromagnetic anomaly interpreted to have potential for buried nickel laterite mineralisation in the Greenvale area.

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Project Location Plan

Carpentaria Exploration Limited

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1.2 The Base Metals Prospectivity of Eastern Australia

Despite hosting several of the world’s giant base metals deposits, (Mt Isa, Century, Cannington, Ernest Henry, Broken Hill, Cadia-Ridgeway and North Parkes), mineral exploration spending on base metals in Queensland and New South Wales as a percentage of Australian base metals exploration expenditure has been steadily decreasing since the mid 1990s when it accounted for around 50% of the Australian total. In the December 2006 quarter, Queensland and New South Wales only accounted for 26% of Australia’s total base metals expenditure.

Quarterly Expenditure on Base Metals Exploration in Qld & NSW as % of Total Australian Base Metals Expenditure

Selected base metals = copper, lead zinc, silver nickel,cobalt

This reduction in base metals exploration expenditure has the flow-on effect of limiting the chances of discovery, despite the well established mineral pedigree of both Queensland and New South Wales. Both States host major world class ore bodies with a long term production history. For example, in the December quarter 2006 report combined Queensland and New South Wales produced nearly 60% of Australian copper production for 2005-06, highlighting the copper prospectivity of Queensland and New South Wales.

Both Queensland and New South Wales also have strong gold production histories. For example the historic Mt Morgan mine in Queensland has produced in excess of 8 million ounces of gold, while in New South Wales a current operating example is the Cadia Valley Mining Project estimated to contain resources of 32 million ounces of gold and 4.7 million tonnes of copper.

The Directors consider that the strong market for commodities will continue as the demand both in China and, increasingly, India grows. From 1995–96 to 2005–06 the world wide demand for minerals (other than oil and gas, uranium and coal) has almost doubled, from $28.5 billion to $52.8 billion. Importantly, China and India’s metal consumption has risen from 4% and 1% respectively of total world supply in 1995–96 to 21% and 8% respectively.

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2 Details of the Offer

This Prospectus invites investors to apply for a total of 30 million Shares at a price of $0.25 for each Share to raise $7.5 million, before costs of the Offer. All Shares offered under this Prospectus will rank equally with existing Shares.

All application monies are payable in full on application.

2.1 Key Dates

Lodgement of Prospectus Record Date for Priority Offer to Giralia Shareholders Opening Date Priority Offer Closing Date (5 pm WST) Closing Date (5.00pm WST) Allotment of Shares under this Prospectus (anticipated) Trading of Shares to commence on ASX (anticipated)	7 September 2007 6 September 2007 17 September 2007 15 October 2007 29 October 2007 5 November 2007 12 November 2007

The above dates are indicative only and may vary. The Company reserves the right to change the key dates of the Offer without prior notice which may have a consequential impact on other dates.

2.2 Priority Offer to Giralia Shareholders

The Company is offering Giralia Shareholders with at least 10,000 Giralia Shares as at 5.00 pm WST on 6 September 2007 (“the Priority Offer Record Date”) the opportunity to become Shareholders in the Company and have set aside as a Priority Offer, a pool of up to 15 million Shares for qualifying Giralia Shareholders.

Entitlements under the Priority Offer will be determined by allocating each qualifying Giralia Shareholder a minimum entitlement of 8,000 Carpentaria Shares ($2,000) plus a further entitlement, derived from the balance of the 15 million Carpentaria Shares (after deducting the total minimum entitlements) on a pro rata basis to the number of shares held in Giralia as at the Priority Offer Record Date.

Giralia Shareholders who wish to subscribe for Shares pursuant to the Priority Offer must make an application on the personalised Yellow Priority Application Form enclosed with this Prospectus. The entitlement of each eligible Giralia Shareholder under the Priority Offer is described in that form.

Giralia Shareholders applying under the Priority Offer must apply for the minimum entitlement of 8,000 Shares (being minimum application monies of $2,000) and thereafter in multiples of 1,000 Shares up to their maximum entitlement as indicated on the Yellow Application Form. Any applications in excess of the amount of Shares indicated on the Yellow Application Form must be made under the Public Offer.

Giralia Shareholders may also apply for Shares under the Public Offer.

The Directors of the Company who hold at least 10,000 Giralia Shares have indicated their intention to participate in the Priority Offer.

Carpentaria Exploration Limited

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2.3 Public Offer

The Public Offer is open to public investors including Giralia Shareholders. A total of 15 million Shares plus any Shares not subscribed under the Priority Offer will be available under the Public Offer. Applications must be made on the Public Offer Application Form enclosed with this Prospectus.

2.4 Application For Shares

All Applicants should read this Prospectus in its entirety in order to make an informed decision on the prospects of the Company and the rights attaching to the Shares offered under this Prospectus before deciding to apply for Shares. If you do not understand this Prospectus you should consult your stockbroker, accountant or other professional adviser in order to satisfy yourself as to the contents of this Prospectus and the nature of the risks involved. The Shares offered by this Prospectus are speculative in nature.

An Application for Shares can only be made on the relevant Application Form as explained above and contained at the back of this Prospectus. The Application Forms must be completed in accordance with the instructions set out therein.

Applications must be for a minimum of 8,000 Shares (being minimum application monies of $2,000), and thereafter in multiples of 1,000 Shares.

Any Application Form must be accompanied by a cheque in Australian dollars, for the full amount of your application monies. Cheques must be made payable to “Carpentaria Exploration Limited – Application Account” and should be crossed “Not Negotiable”.

Application Forms must not be circulated to prospective investors unless accompanied by a copy of this Prospectus.

Completed Application Forms and accompanying cheques must be received by no later than 5.00 pm (WST) on the Closing Date by the Share Registry:

By Delivery to: By Post to: Security Transfers Registrars Pty Ltd Security Transfers Registrars Pty Ltd Alexandrea House PO Box 535, Suite 1, 770 Canning Highway, Applecross, WA 6953 Applecross WA 6153

The Company reserves the right to extend the Offer or close the Offer early without notice. Applicants are therefore urged to lodge their Application Form as soon as possible.

An original, completed and lodged Application Form, together with a cheque for the application monies, constitutes a binding and irrevocable offer to subscribe for the number of Shares specified in the Application Form. The Application Form does not need to be signed to be a valid application. An Application will be deemed to have been accepted by the Company upon allotment of the Shares.

If the Application Form is not completed correctly, or if the accompanying payment of the application monies is for the wrong amount, it may still be treated as valid. The Directors’ decision as to whether to treat the Application as valid and how to construe, amend or complete the Application Form is final. However, an Applicant will not be treated as having applied for more Shares than is indicated by the amount of the cheque for the application monies.

No brokerage or stamp duty is payable by Applicants in respect of Applications for Shares under this Prospectus.

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2.5 Allocation and Allotment of Shares

Subject to the rights of Giralia Shareholders under the Priority Offer as set out in this Prospectus, the Company reserves the right to reject any Application or to allocate to any Applicant fewer Shares than the number applied for. The Company also reserves the right to reject or aggregate multiple applications in determining final allocations.

In the event an Application is not accepted or accepted in part only, the relevant portion of the application monies will be returned to Applicants, without interest.

The Company reserves the right not to proceed with the Offer or any part of it at any time before the allocation of the Shares to Applicants. If the Offer or any part of it is cancelled, all application monies, or the relevant application monies will be refunded.

The Company also reserves the right to close the Offer or any part of it early, or extend the Offer or any part of it, or accept late Applications Forms either generally or in particular cases.

The allotment of Shares to Applicants will occur as soon as practicable after Application Forms and application monies have been received for the minimum subscription of Shares being offered, following which statements of shareholding will be dispatched.

It is the responsibility of Applicants to determine their allocation prior to trading in the Shares. Applicants who sell Shares before they receive their statement of shareholding will do so at their own risk.

2.6 Application Money Held in Trust

All application monies will be deposited into a separate bank account of the Company and held in trust for Applicants until the Shares are issued or application monies returned. Any interest that accrues will be retained by the Company and will not be paid to Applicants.

2.7 Minimum Subscription and Oversubscriptions

The minimum subscription to be raised under this Prospectus is $3.5 million. No over-subscriptions will be accepted.

No Shares will be issued pursuant to this Prospectus until the minimum subscription has been achieved. Should the minimum subscription not be reached within 4 months after the date of this Prospectus, all application monies will be dealt within in accordance with the Corporations Act.

The Company believes the minimum subscription is sufficient working capital to achieve its objective as set out in the Prospectus.

2.8 Expenditure Plans and Use of Funds

The budget expenditure figures for the Company for the first two years following listing are set out below. The objective will be to raise $7.5 million, which will be used to assess the prospectivity of the key projects and fund drilling through resource assessment to scoping studies.

Carpentaria Exploration Limited

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	$7.5 million raising	$7.5 million raising	$3.5 million raising	$3.5 million raising
	Year 1	Year 2	Year 1	Year 2
Pre-float acquisition
expenses and costs
of listing1	390,000	–	241,000	–
Brokerage2	188,000	–	94,000	–
Exploration
expenditure	2,285,000	2,645,000	955,000	1,380,000
Administration	480,000	480,000	410,000	420,000
Working capital	382,000	650,000	–	–
Total	3,725,000	3,775,000	1,700,000	1,800,000

1 Includes repayment of loans and costs to Giralia, brokerage, and stamp duty on tenement acquisitions.

2 Brokerage estimate is based only on the Public Offer, and may vary depending on the extent to which fees are paid on any shortfall from the Priority Offer to Giralia Shareholders, and the actual percentage paid as a brokerage fee.

Details of the intended exploration programs are set out in Section 3 of the Prospectus.

2.9 Capital Structure

As at the date of this Prospectus, the issued share capital of the Company is 30 million Shares, all of which are held by Giralia.

The capital structure at completion of the Offer, assuming the Offer is fully subscribed, is set out below:

Issued Share Capital	Number of Shares	% of Shares
Issued at Date of Prospectus	30,000,000	46.15
Shares issued to Vendors and others(1)	5,000,000	7.7
Shares offered under this Prospectus(2)	30,000,000	46.15
Total Shares on issue at the close of the Offer	65,000,000	100

1 Assumes completion under the arrangements for the acquisition of tenements. Further details set out in Section 10 below.
Assumes subscriptions for $7.5 million. This will be reduced proportionately if subscriptions between $3.5 million and $7.5 million are received.

The Company has also issued 3.4 million options to directors, officers and other parties, details of which are set out in Section 10.4 below.

2.10 Pro rata option issue

Approximately 3 months after the completion of the in specie distribution of Shares in Carpentaria detailed in Section 2.11 below, the Company intends to conduct a pro rata issue of options to Shareholders on the basis of one option for every 2 Shares held at the relevant date. The New Options will be issued at a price of 1 cent each, exercisable at $0.30 each on or before 30 June 2010. The New Options will otherwise be on terms and conditions standard for options in a listed company.

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2.11 Distribution in specie

Upon quotation of the Shares on ASX, Giralia will hold approximately 34 million Shares in the Company, including 4 million shares issued to Giralia in return for the transfer of tenements to the Company.

Giralia will seek shareholder approval to distribute 27.2 million of the 34 million Shares to its shareholders on a pro rata basis.

Giralia intends to undertake the distribution in specie of the 27.2 million Shares to its shareholders as soon as possible after the Shares commence quotation on the ASX.

2.12 Dividend Policy

The Company anticipates that significant expenditure will be incurred in the evaluation and development of the Company’s projects. These activities are expected to dominate the two year period following the issue of this Prospectus. Accordingly, the Company does not expect to declare any dividends during that period.

Subject to the Company achieving sustained profitability, the Directors will consider paying dividends, subject to what available cash flow and capital requirements allow.

2.13 ASX Listing

The Company will apply to ASX within 7 days after the date of this Prospectus for admission to the Official List and for Official Quotation of the Shares, other than those existing Shares that the ASX is likely to treat as restricted securities as defined in ASX Listing Rules.

If the Shares are not admitted to official quotation within 3 months after the date of this Prospectus, none of the Shares offered by this Prospectus will be allotted or issued. In that circumstance, all Applications will be dealt with in accordance with the Corporations Act.

The fact that ASX may admit the Company to the Official List is not to be taken in any way as an indication of the merits of the Company or the Shares. ASX, its officers and employees, take no responsibility for the contents of this Prospectus.

2.14 Investment Risks

The business of the Company involves mining exploration and investment in mining tenements and, accordingly, investments in the Shares offered by this Prospectus should be considered speculative. The key risks associated with an investment in the Company are set out in Section 9 of this Prospectus.

2.15 Commissions

No brokerage or commission is payable by Applicants in respect of Shares issued pursuant to this Prospectus. The Company may pay fees of up to 5% in respect of applications lodged by any member organisation of ASX, licensed securities dealer or the holder of an Australian Financial Securities Licence and accepted by the Company provided the relevant stamp of the organisation is on the Application Form.

Carpentaria Exploration Limited

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3 Project Overview

3.1 Overview of Projects

Carpentaria was formed with the objective of pursuing advanced opportunities in exploration and mining of copper, gold, nickel and uranium in particular in two Australian States (Queensland and New South Wales) that the Directors believe to be highly prospective for these commodities, and significantly underexplored in comparison to Western Australia which has attracted the majority of Australian mineral exploration expenditure in recent years. As a result, Carpentaria has been able to secure seven 100% owned tenements, with several known mineral occurrences.

The Directors believe that the Company’s exploration portfolio contains highly prospective ground that has not been explored using modern exploration techniques. All of the tenements in the portfolio have immediate target areas, with minimal preparatory work for drill testing.

The Directors have limited their tenement selection to areas that have no or reasonably thin overburden and known mineralisation. It is considered preparatory exploration costs will be low, leaving more funds available for drilling. The intent of the Directors is to regularly test project targets and rapidly move on from those shown to lack economic potential. In this way, Carpentaria will maintain an active pipeline of exploration target testing which the Directors believe is a key process in ore body discovery.

The Company will also, subject to the Offer being fully subscribed, have an allocation of unassigned working capital funds that will allow additional opportunities to be identified and evaluated.

3.2 Projects

Mt Agate, Queensland, copper/gold/uranium (100% Carpentaria)

Carpentaria’s Mt Agate project is located approximately 60 kilometres south southwest of Cloncurry and has an area of 252.8 sq kms. The project covers components of the Proterozoic Mt Isa Inliers Eastern Fold Belt prospective for iron oxide coppergold-uranium mineralisation (IOCG) of which the

Ernest Henry deposit, being mined about 80 kilometres to the north, is an example. There are other examples of IOCG deposits that have been mined in the vicinity of Mt Agate, including Mt. Elliot and Selwyn (approximately 30 kilometres south east). Within the Company’s Mt Agate tenement, on the contact of the Wimberu granite with metasediments and metavolcanics, earlier explorers located a prospect of significant interest at Mt Devoncourt. A total of 39 shallow percussion holes were drilled in 1964 for only 783 metres. Five of these holes had multiple intersections of greater than 1% copper over intervals of 3 metres (10 feet). The historical records indicate shallow drill intersections including 30.5 metres @ 1.25 % copper, and 12 metres @ 2.55% copper .

The tenement contains porphyritic felsic metavolcanics and quartzites of the Argylla Formation that hosts mineralisation at the QMH prospect on the contact with the Wimberu Granite. At QMH, quartzmagnetite veining occurs over an area of 650 metres by 250 metres that is consistently copper anomalous (max 0.13%) in rock chip samples. The prospect was tested by only one drill hole which returned a 28 metre zone exceeding of 0.1% copper, including 4 metres at 0.25% copper from 46 metres down hole. The Directors consider that further testing of this anomalous zone using geophysics to define drill targets is warranted.

Elsewhere in this tenement previous work has highlighted at least 10 other copper silver prospects. Using the existing detailed airborne data and geological work the prospects will be prioritised for further follow up work including geophysics and drilling focussed on testing for IOCG deposits.

Glen Isla, New South Wales, gold (100% Carpentaria)

The Glen Isla tenement is located 50 kilometres southwest of the major regional centre of Dubbo within the Lachlan Fold Belt which regionally hosts many base and precious metal deposits including volcanic hosted massive sulphide deposit, porphyrygranitoid associated copper gold deposits and structurally controlled gold.

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Magnetic map, EPM 14955

The tenement lies within a north south belt of lode quartz, porphyry and epithermal gold deposits that extend from Forbes in the south through North Parkes (Goonumbla), Peak Hill and to Tomingley, which is situated just outside the northwest boundary of the tenement.

Relatively large tonnage low grade disseminated epithermal deposits such as Peak Hill are a prime target.

At the Glen Isla tenement, past exploration has located epithermal style gold mineralisation hosted by the Middle Devonian Dulladery Volcanics.

Two epithermal gold prospects, Glen Isla and Kyalite, have been identified in the tenement. Kyalite is a geological and geochemical anomaly that has not been substantially tested, with the bulk of prior work being focussed on the Glen Isla Prospect.

At the Glen Isla Prospect, previous drill holes have returned numerous elevated gold concentrations over wide intercepts hosted by banded silica-pyrite rock interpreted to be a hydrothermal sinter. For example: GI-RP11D intersected 79 metres @ 0.4 g/t gold including 1 metre @ 1.12 g/t gold, and, GI-RP16D

Carpentaria Exploration Limited

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Drillhole locations on RAB gold geochemical image – Glen Isla prospect EL6246

intersected 396 metres @ 0.13 g/t gold . In the same prospect, rock chip sampling returned anomalous results up to a maximum of 2.2 g/t gold . The Directors believe that the data indicates that a substantial volume of low grade gold mineralisation occurs in the geochemical zone at the Glen Isla prospect and further drilling at the prospect could delineate either bulk tonnage low grade deposit or locate higher-grade, thick feeder veins to the known geochemical zone.

The Kyalite prospect 3.5 km south of the Glen Isla prospect has geological characteristics that could be associated with additional epithermal gold mineralisation. Only 6 RAB holes have been drilled at Kyalite so additional geophysical and drilling work is required to adequately test the prospect for either large tonnage low grade or high grade vein style epithermal gold deposits.

Combaning, NSW, nickel, gold (100% Carpentaria)

This large tenement application is located in New South Wales, 120 kilometres northwest of Canberra.

Combaning covers parts of the Temora and Springdale Goldfields in the Lachlan Fold Belt which have been significant past gold producers. The Gidginbung gold mine, which produced 677,000 ounces of gold from 1986 to 1996, is approximately 12 kilometres northwest of Combaning.

The Combaning tenement application covers Lachlan Fold sediments, volcanics, granitoids and ultramafic intrusions prospective for both gold and nickel.

Previous drilling results at the Merri Hill prospect encountered numerous anomalous intercepts including: 40 metres from 14 metres below collar @ 0.79 g/t gold , and 10 metres @ 1.33% nickel. The Merri Hill prospect is centred over a discrete magnetic anomaly – see image next page. The source of the magnetic anomaly is interpreted to be a variably carbonate-quartz-talc altered ultramafic body which is the rock type that hosts anomalous gold and nickel drill hole intercepts. Other discrete magnetic anomalies near Merri Hill within the Combaning tenement have not been previously explored and by analogy the Directors consider they have good potential for gold and nickel.

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Elsewhere at Combaning other gold only prospects, mostly quartz vein lode hosted by sediments or volcanics, have been highlighted by previous explorers. Drilling at these prospects has returned several anomalous gold results which the Directors believe require further investigation, including 1 metre @ 10.6 g/t gold at Harvey’s Shaft , and 2 metres @ 6.8 g/t gold at Mother Shipton , 4.0 metres @ 2.65 g/t gold at Opossum Hill and 3.9 metres @ 2.2 g/t gold at Kangaroo Dick .

Cargoon, Queensland, nickel (100% Carpentaria)

Cargoon is located in northeast Queensland, 150 kilometres west of Charters Towers.

The region has been explored previously mainly for gold due to presence of the Mount Emu Goldfield, discovered in 1909, and located just outside the western boundary of Cargoon. Modern exploration has located further, mostly refractory, mineralisation at Mt Emu and the latest inferred resource by Walhalla Mining NL in 1993 was 825,000 tonnes at 4.9 g/t gold, 79.4 g/t silver, 0.95% lead, and 1.4% zinc using a cut off gold grade of 1 g/t.

In 1971 International Nickel Australia Limited (Inco) undertook reconnaissance exploration in Cargoon which discovered a significant strike length of gossan at Bradley’s Jubilation. Rock chip sampling of this gossan returning up to 1.5% nickel and 1.2% copper . Inco completed one 135 metre drill hole testing the gossan exposure that, whilst intersecting some minor sulphide stringers, did not return any elevated geochemistry or sulphide content to explain the surface geochemical anomaly. The Board considers that one drill hole is not sufficient to discount gossan exposure which strikes over 60 metres at surface. The local and regional geological setting of the gossan mineralisation at Bradley’s Jubilation is interpreted to be a possible analogue of skarn style nickel sulphide mineralisation at the Avebury deposit in western Tasmania. As no modern geophysical exploration has been undertaken to investigate the gossan at Bradley’s Jubilation or its possible strike extensions, the Directors consider that undertaking high resolution, deep penetrating airborne electromagnetic survey, followed by drilling, may identify sulphide mineralisation at the gossan or its potential strike extensions.

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Prospect locations on aeromagnetics, Springdale area, ELA 3077

Waterford, Queensland, uranium (100% Carpentaria)

This tenement application is located in northwest Queensland, approximately 200 kilometres south of Cloncurry. The application covers Mesozoic Eromanga Basin strata that has been previously explored for uranium. Prior reconnaissance drilling based exploration within the application located a redox front in a sandstone aquifer which returned a geochemical analysis of 2 metres @ 140 ppm uranium in one drill hole. This application covers at least 15 kilometres of the interpreted strike of the redox front.

Lady Inez, Queensland, copper (100% Carpentaria)

The Lady Inez project is located in central Queensland, 120 kilometres west northwest of Bundaberg.

The tenement is prospective for copper and precious metal bearing skarn and other intrusive related

Carpentaria Exploration Limited

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mineralisation. Just to the east of the tenement the Blue Bag and McDonald Lode prospects are magnetite-skarns where previous drilling returned a best intersection of 13 metres @ 1.3% copper and 2g/t gold .

At the Burns Spur gossan, within Carpentaria’s tenement, surface sampling revealed 30 metres @ 1.6% copper and 10.2g/t silver .

Another skarn system occurs at the Mt Hector Line, excised by a small mineral development lease from the Lady Inez tenement. The Mount Hector line strikes into Carpentaria’s tenement where it is expressed by mineral occurrences like Johnsons Mine.

The Directors consider that skarn style mineralised systems located at Lady Inez lend themselves well to exploration using new helicopter based electromagnetic systems that allow rapidly delineation of sulphide bearing targets for ground follow up and/or drilling.

Details of the intended exploration programs are set out in the Independent Geologist’s report in Section 5 of this Prospectus.


	xploration Budget
Project	Year 1 $	Year 2 $	TOTAL $
Mt Agate Glen Isla Cargoon Lady Inez Redbank Total on granted tenements Combaning Working Capital	495,000 495,000 450,000 385,000 210,000	515,000 540,000 510,000 440,000 290,000	1,010,000 1,035,000 960,000 825,000 500,000
	2,035,000 250,000 382,000	2,295,000 350,000 650,000	4,330,000 600,000 1,032,000
Totals	2,667,000	3,295,000	5,962,000

Redbank, Queensland, nickel (100% Carpentaria)

Redbank is located in northeast Queensland, 75 kilometres west of Ingham. The target at this conceptual project is a concealed nickel laterite developed on an aeromagnetic anomaly which has a very similar signature to the Greenvale nickel laterite complex.

The aim of this project is to rapidly establish if there is evidence for the laterite by undertaking shallow auger drilling.

The above exploration programs and budgets are subject to change and are contingent on circumstances, results and other opportunities. Expenditure may be reallocated amongst existing and new projects or to general working capital. If tenements are granted for any of the above areas designated as applications, the Company may reallocate funds to these projects having regard to the recommendations made in the Independent Geologist’s report in Section 5.

3.3 Proposed Exploration Budget

The Company proposes to fund its intended activities, as outlined in the table below, from the proceeds of the offer (assuming $ 7.5 million raising).

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4 Profiles of Directors and Senior Management

Nick Sheard — Executive Chairman

Nick has over 30 year’s experience in the industry – most recently Vice President -Exploration for Inco Limited, formerly the world’s second largest producer of nickel. Prior to that, Nick was the Global Exploration Manager for M.I.M. Holdings Limited, after being initially employed by M.I.M. as Chief Geophysicist. Nick developed the novel MIMDAS electrical survey system currently being used commercially as a deep seeking quality EM and IP system. Nick is a Non-Executive Director of Mirabela Nickel Ltd.

Stan Macdonald — Non-Executive Director

Stan has been associated with the mining and exploration industry for over twenty years. He is an Executive Director of Giralia Resources NL and Non-Executive Director of Red Hill Iron Limited, U3O8 Limited, and Zinc Co Australia Limited.

Bob Hair — Non-Executive Director

Bob is by background a lawyer with over 18 years’ experience in the resources sector. Previously a lawyer, director of subsidiary companies and Commercial Manager and General Manager in the MIM group in Australia, Asia, Europe, North America, South America, and GM Commercial for the ASX listed Highlands Pacific Limited, Bob is Company Secretary of Washington Resources Limited and a Non-Executive Director of Washington Resources Limited and Northern Uranium Limited.

Doug Brewster — Exploration Manager

Doug is a career exploration geologist with 20 years Australian and international experience and is an Eastern Australian exploration specialist. Doug worked initially for CRAE (now Rio Tinto) and then in a senior role at Delta Gold (now Barrick) where he assisted rebuilding their east Australian exploration effort in the late 1990s. He has subsequently operated as a successful mineral exploration consultant providing services to a number of major and junior mining companies. He is experienced in gold, base-metal massive sulphide, porphyry copper, iron-oxide copper-gold, uranium, diamond, clay and mineral sand exploration. Doug is a member of the Australian Institute of Geoscientists (AIG).

Bruce Acutt — Joint Company Secretary

Bruce trained and worked as an accountant with major accounting firms in the audit and resources sector. He has been associated with the mining and exploration sector for over 20 years. He is currently Company Secretary of Giralia, PacMag Metals Limited, U3O8 Limited, Zinc Co Australia Limited and The Gold Company Ltd.

Chris Powell — Joint Company Secretary

Chris has had substantial previous experience across a number of industries principally in management of administrative and financial services and Company Secretarial roles.

Carpentaria Exploration Limited

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5 Independent Geological Report

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ABN 28 094 217 482

2 The Nook UNDERWOOD QLD 4119 AUSTRALIA

Telephone: +61 7 3423 1041 Facsimile: +61 7 3423 1042 Email: [email protected]

INDEPENDENT GEOLOGIST’S REPORT

TO CARPENTARIA EXPLORATION LIMITED ON MINERAL EXPLORATION TENEMENTS IN EASTERN AUSTRALIA

Frontispiece: Location of Tenements

David G Jones

BSc., MSc., FAusIMM, FIMMM, MAIME, MGSA

Effective Date: 31[st] July 2007

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Table of Contents
SUMMARY	22
INTRODUCTION	23
DISCLAIMER	24
PROPERTY DESCRIPTIONS	24
PROPERTY DETAILS	24
COPPER-GOLD-URANIUM PROJECTS	25
EPM 14955 “Mt Agate” & EPMA 16393 “Waterford”	25
Regional Geology	25
Local Geology - EPM 14955	26
Prospect Geology - EPM 14955	28
Deposit Model - EPM 14955: Iron Oxide Copper Gold (“IOCG”) Deposits	29
Previous Exploration - EPM 14955	29
Exploration by Giralia and Carpentaria - EPM 14955	31
Proposed Exploration Programme and Budget - EPM 14955	31
Local Geology - EPMA 16393	33
Deposit Model - EPMA 16393: Roll-Front Uranium Deposits	34
Proposed Exploration Programme and Budget - EPMA 16393	34
EPM 14948 Lady Inez	34
Regional Geology	34
Local Geology	36
Prospect Geology	36
Deposit Model EPM 14948: Porphyry Copper-Gold Deposits	37
Previous Exploration	38
Exploration by Giralia and Carpentaria	40
Proposed Exploration Programme and Budget	40
GOLD PROJECTS	40
EL 6246 Glen Isla	40
Regional Geology	40
Local Geology	41
Prospect Geology	42
Previous Exploration	43
Proposed Exploration Programme and Budget	44
ELA 3077 Combaning	45
Local Geology	45
Deposit Model	45
Previous Exploration	45
Exploration by Giralia and Carpentaria	47
Proposed Exploration Programme and Budget	47

Carpentaria Exploration Limited

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NICKEL PROJECTS	48
EPM 14840 Redbank	48
Regional Geology	48
Prospect Geology	49
Previous Exploration	49
Exploration by Giralia and Carpentaria	50
Proposed Exploration Programme and Budget	50
EPM 14170 Cargoon	50
Regional Geology	50
Local Geology	51
Previous Exploration	51
Exploration by Giralia and Carpentaria	54
Proposed Exploration Programme and Budget	54
CONCLUSIONS	54
REFERENCES	56
GLOSSARY OF TECHNICAL TERMS	58

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List of Figures

Figure	1. Access and regional geology , EPM 14955 and EPMA 16393	25
Figure	2. Regional Proterozoic solid geology in the vicinity of EPM 14955	26
Figure	3. Proterozoic stratigraphy in EPM 14955	28
Figure	4. Magnetic map, EPM 14955	32
Figure	5. Geology and Reconnaissance drilling by PNC Exploration (Australia) Pty Ltd	33
Figure	6. Regional geology, Glassford Creek area	35
Figure	7. Regional setting, EL 6246 and ELA 3077	41
Figure	8. Drillhole locations on RAB Fold Image Glen Isla EL 6246	43
Figure	9. Prospect locations aeromagnetics ELA 3077	46
Figure	10. Road and rail access and geological regions, EPM 14840	48
Figure	11. Image processed RTP magnetics at the Bradley’s Jubilation prospect	53

List of Tables

Table	1. Summary of Proposed Carpentaria Budget (in A$ x 1,000)	23
Table	2. Giralia / Carpentaria Mineral Tenements in Queensland	25
Table	3. Giralia / Carpentaria Mineral Tenements in NSW	25
Table	4. Proposed Budget, EPM 14955 Mt Agate, in A$ x 1,000	32
Table	5. Proposed Budget, EPM 14948, in A$ x 1,000	40
Table	6. Proposed Budget, EL 6246, in A$ x 1,000	44
Table	7. Proposed Budget, ELA 3077, in A$ x 1,000	47
Table	8. Proposed Budget, EPM 14840, in A$ x 1,000	50
Table	9. Proposed Budget, EPM 14170 Cargoon, in A$ x 1,000	54
Table	10. Summary of Proposed Carpentaria Budget (in A$ x 1,000)	55

Carpentaria Exploration Limited

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Independent Geologist’s Report

SUMMARY

Carpentaria Exploration Limited, (“Carpentaria”), formerly Sunmustard Pty Ltd (“Sunmustard”), a wholly-owned subsidiary of Giralia Resources NL (“Giralia”) has been granted three mineral exploration tenements in eastern Australia and has made applications for one tenement in Queensland and one in NSW. Giralia in its own name holds one additional tenement in Queensland and one in NSW; both tenements are being transferred to Carpentaria. The total area granted is 659 sq km, and approximately 951 sq km is under application.

Carpentaria requested Vidoro Pty Ltd (“Vidoro”) to review and report on the exploration strategy, the exploration carried out to date, and proposed exploration, relating to the Carpentaria, Sunmustard and Giralia tenements, hereafter referred to as the “Carpentaria tenements”. The review was undertaken by David Jones, Principal.

Carpentaria’s tenements cover a variety of geological settings prospective for a wide range of mineral commodities. In northern Queensland, the Redbank Exploration Permit for Minerals (“EPM”) 14840 west of Ingham covers an area considered prospective for a covered nickel laterite deposit. Further south, and west of Charters Towers, a gossan outcrop at the Bradley’s Jubilation prospect located within the Cargoon EPM 14170 contained up to 1.5% Ni in rock chip samples collected by previous explorers.

South of Cloncurry in NW Queensland, the Mount Agate EPM 14955 covers several strong aeromagnetic features in an environment prospective for iron-oxide copper-gold mineralisation. Further south near Boulia an EPM application lodged by Carpentaria has been explored in the past for roll-front uranium mineralisation with a low-grade body of this type outlined in previous reconnaissance drilling.

The Lady Inez EPM 14948 located west of Bundaberg in central Queensland contains much of the Glassford Igneous Complex which has been explored in the past for copper-gold skarn mineralisation.

In NSW, the Glen Isla Exploration Licence (“EL”) 6246 and the Combaning EL application (“ELA”) 3077 lie within the prospective Tumut Synclinorial Zone of the Lachlan Fold Belt. The Kyalite and Glen Isla epithermal gold-bearing sinters have returned broad widths of strongly anomalous gold up to 396m @ 0.13 g/t Au in preliminary drilling carried out by previous explorers.

The tenement package assembled by Carpentaria in eastern Australia has considerable potential for the discovery, through the exploration programme proposed by Carpentaria, of significant new mineralisation. The selection of the mineral tenement areas by Carpentaria is soundly based on good geoscientific evidence, and their geological models have demonstrated validity in that world class deposits have been discovered using similar criteria.

The exploration programme proposed by Carpentaria is a logical continuation of the work done by previous explorers and manageable within the technical and financial resources currently available to Carpentaria. The balance of effort allocated to the individual properties is sensible, given the state of present knowledge as to the relative merit of each prospect.

It is commendable that Carpentaria proposes that over 40% of the first year’s exploration operating budget of A$2.3 million will be spent on drilling, while only 13% of the entire first year’s budget will be taken up by administration (see Table 1 below). Many large companies struggle to achieve this because of their high overheads, with wages and administration absorbing up to 70% of some budgets. The proportion allocated to drilling rises to 57% of the operating budget in the second year, which is a laudable objective, and a reflection of the efficiencies in the conduct of the Carpentaria programmes. A total budget of A$7.5 million is proposed by Carpentaria for the next two years, broken down as follows:

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Independent Geologist’s Report

Table 1. Summary of Proposed Carpentaria Budget (in A$ x 1,000)


Area	Year 1	Year 2	TOTAL	Annual Commitment
				Year 1	Year 2
EPM 14170 Cargoon	450	510	960	215	150
EPM 14840 Redbank	210	290	500	40	50
EPM 14955 Mt Agate	495	515	1,010	70	90
EPM 14948 Lady Inez	385	440	825	54	50
EL 6246 Glen Isla	495	540	1,035	42	—
ELA 3077 Combaning	250	350	600	127*	127*
Operating budget	2,285	2,645	4,930	548	467
Costs of listing, brokerage	578	0	578
Administration	480	480	960
Working Capital	382	650	1,032
Totals	3,725	3,775	7,500
(Drilling)	958	1,520	2,478

commitment on grant of tenement application

In David Jones’ opinion, the proposed annual expenditures by Carpentaria on exploration of A$2.3 million and A$2.6 million respectively in the first and second exploration years are more than adequate to meet both their commitments and the minimum expenditures required to maintain their licences in good standing during that period.

INTRODUCTION

At the request of the Directors of Giralia, Vidoro Pty Ltd (“Vidoro”) was commissioned in February 2007 to prepare an Independent Geologist’s Report on mineral exploration tenements held by or on behalf of Giralia’s wholly-owned subsidiary Carpentaria in eastern Australia.

The scope of the inquiries by Vidoro and of this report include the following:

A review of the geological model and the approach that Carpentaria has employed in its tenement selection
A review of the exploration portfolio of Carpentaria with respect to exploration history, exploration potential and Carpentaria’s exploration strategy
A review of the budgets proposed by Carpentaria for the next two years
A review of the budgets referred to above to determine if they accord with joint venture arrangements (if any) and statutory expenditure levels
A review of the work plans associated with the budgets referred to above

Mr David Jones, Principal of Vidoro, compiled the report.

Vidoro’s study commenced on 20[th] February 2007. A data package supplied by Carpentaria was reviewed and discussions held with geological consultants to Giralia and Carpentaria . Additional data was sourced from published books and journals, unpublished

Carpentaria Exploration Limited

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Independent Geologist’s Report

company reports held by the Geological Survey of Queensland (“GSQ”) and the Geological Survey of NSW (“GSNSW”), university theses etc. These references are cited within the report and listed at the back of this report.

Geological information usually consists of a series of small points of data on a large blank canvas. The true nature of any body of mineralisation is never known until the last tonne of ore has been mined out, by which time exploration has long since ceased. Exploration information relies on interpretation of a relatively small statistical sample of the deposit being studied; thus a variety of interpretations may be possible from the fragmentary data available. Investors should note that the statements and diagrams in this report are based on the best information available at the time, but may not necessarily be absolutely correct. Such statements and diagrams are subject to change or refinement as new exploration makes new data available, or new research alters prevailing geological concepts.

There is a very large body of data covering the various tenements, encompassing a period of 50 years from 1957 to the present. Carpentaria provided a warranty that, to the best of Carpentaria’s knowledge, full accurate and true disclosure of all material information had been supplied to Vidoro. Although Vidoro has made diligent efforts to cross-check and compare the Carpentaria data with available material from other sources, investors should bear in mind that this report is, by its nature, heavily reliant on the data supplied by Carpentaria.

DISCLAIMER

The opinions expressed in this report have been based on information supplied to Vidoro by Carpentaria, its associates and their staff, as well as the additional information listed in the References. Vidoro has exercised all due care in reviewing the supplied information. Although Vidoro has compared key supplied data with expected values, the accuracy of

the results and conclusions from this review are reliant on the accuracy of the supplied data. Vidoro has relied on this information and has no reason to believe that any material facts have been withheld, or that a more detailed analysis may reveal additional material information. Vidoro does not accept responsibility for any errors or omissions in the supplied information and does not accept any consequential liability arising from commercial decisions or actions resulting from them.

The author has not relied on reports, opinions or statements of legal or other experts who are not qualified persons for information concerning legal, environmental, political or other issues and factors relevant to this report.

All map illustrations in this report are registered to the 1994 Map Grid Australia (“MGA94”), using the 1994 Australian horizontal grid datum (“GDA94”), unless otherwise notified. Field observations are registered to the Universal Transverse Mercator (“UTM”) 1984 World Geographic System (“WGS 84”), which is some 12 cm displaced from GDA 94. Given that the accuracy of the hand-held Global Positioning System (“GPS”) receiver used by the author in the field is between 3-4m at best, the difference between WGS 84 and GDA 94 is trivial. The maps in this report are for illustration purposes only and should not be relied upon for navigation.

PROPERTY DESCRIPTIONS

PROPERTY DETAILS

The legal status of the tenure of the Carpentaria tenements is the subject of a separate Legal Report, which appears elsewhere in the Prospectus. The Carpentaria tenement situation has not been independently verified by Vidoro, apart from a search of the Queensland Interactive Resource and Tenement Map (“IRTM”) on-line database and the NSW MinView on-line database. The results of these searches are summarised in the following tables:

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Independent Geologist’s Report

Table 2. Giralia / Carpentaria Mineral Tenements in Queensland


Owner	Tenement	Grant Date	Expiry Date	Sub-blocks	Area sq km
Giralia Resources NL	EPM 14170	13 Dec 2004	12 Dec 2009	49	158.00
Sunmustard Pty Ltd	EPM 14840	21 Sep 2005	20 Sep 2010	36	117.20
Sunmustard Pty Ltd	EPM 14955	29 Jun 2006	28 Jun 2011	79	252.80
Sunmustard Pty Ltd	EPM 14948	15 Nov 2005	14 Nov 2010	31	96.87
Carpentaria Exploration Ltd	EPMA 16393	Application		(100)	(317.3)

		Total granted:		195	624.87

Table 3. Giralia / Carpentaria Mineral Tenements in New South Wales


Owner	Tenement	Grant Date	Expiry Date	Area sq km
Giralia Resources NL	EL 6246	25 May 2004	24 May 2008	33 87
Sunmustard Pty Ltd	ELA 3077	Recommended for grant 6 Jun 2007		(605.40)
		Total granted:		3387
				.

The various tenements are summarised as follows:

COPPER-GOLD-URANIUM PROJECTS

EPM 14955 “Mt Agate” & EPMA 16393 “Waterford”

These EPMs are located in Northwest Queensland, respectively 60km and 200km south of Cloncurry. Cloncurry is a significant town located approximately 100km east of Mt Isa. Mt Isa is a major mining centre and Queensland’s largest inland city with a population exceeding 20,000. Mt Isa is serviced by major road, rail and air links.

EPM 14955 is accessed from Cloncurry by the sealed Dajarra Road to Malbon, then the formed gravel Toolebuc Road. EPMA 16393 straddles the Selwyn Road 40 km north of the small town of Boulia. Local station tracks provide ready access through the tenements.

Regional Geology

The Mount Isa Inlier in Northwest Queensland (see Figure 1 below) is subdivided by major north-striking faults into three broad tectonic belts: the Western Succession, the Kalkadoon-Leichhardt Belt and the Eastern Succession. These all contain Palaeoproterozoic to Mesoproterozoic metasediments, volcanics and intrusive rocks. EPM 14955 lies within the Eastern Succession.

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Fig 1. Access and Regional Geology EPM 14955 and EPMA 16393

Carpentaria Exploration Limited

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Independent Geologist’s Report

The Western Succession consists of the Lawn Hill Platform, Leichhardt River Fault Trough and the Myally Shelf. The Kalkadoon-Leichhardt Belt is bounded to the west and east, respectively, by the Quilalar and Pilgrim Fault zones. This belt is made up of the Ewen Block and the Kalkadoon-Leichhardt Block. The Eastern Succession is subdivided into the Mary Kathleen zone in the west, the Quamby-Malbon zone, and the Cloncurry-Selwyn zone in the east (Blake, 1987).

The basement rocks consist of sequences of sedimentary, volcanic and intrusive rocks that were highly deformed during the 1900-1870 Ma Barramundi Orogeny. The basement is overlain by three cover sequences, which are Palaeoproterozoic volcanosedimentary packages separated by regional unconformities (Blake, 1987). The cover sequences were deformed and regionally metamorphosed up to upper amphibolite facies during the 1620-1520 Ma Isan Orogeny.

The Mount Isa Inlier has been intruded by granitic batholiths of Palaeoproterozoic and Mesoproterozoic age, respectively termed the Wonga and Williams igneous events. The Proterozoic rocks are overlain unconformably by unmetamorphosed Paleozoic, Mesozoic and Cainozoic sedimentary sequences.

Local Geology – EPM 14955

The oldest rocks in the Quamby-Malbon Zone are Palaeoproterozoic massive to banded granitic to dioritic gneiss and augen gneiss of the Plum Mountain Gneiss. They were originally intrusive and extrusive felsic igneous rocks that were deformed and regionally metamorphosed by the Barramundi Orogeny prior to 1875 Ma. The Leichhardt Volcanics overlie the Plum Mountain Gneiss. The volcanics are non-magnetic to weakly magnetic subaerial felsic ignimbrites and lava flows that range in composition from dacite to rhyolite. The Plum Mountain Gneiss and Leichhardt Volcanics are intruded by the Kalkadoon Granodiorite dated at around 1860 Ma.

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Fig 2. Regional Proterozoic solid geology in the vicinity of EPM 14955

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Independent Geologist’s Report

The Leichhardt Volcanics are unconformably overlain by the Argylla Formation, which consists predominantly of felsic ignimbrites and lavas, with some sediments, high-level felsic intrusives and basaltic lavas. Conformably overlying the Argylla Formation, the Marraba Volcanics are made up mainly of basaltic lavas, with some calcareous and non-calcareous siltstones and sandstones in the upper part. The presence of pillow lavas indicates that at least some of the lavas were erupted below water (Blake, 1987).

The Overhang Jaspilite laps on to the Marraba Volcanics and consists mainly of thinly bedded calcareous and cherty rocks, some of which are stromatolitic. It is regarded as a shallow platform or lagoonal unit (Blake, 1987). The top of the formation is generally marked by a breccia that may be a tectonic feature or a fossil regolith marking an unconformity. The Overhang Jaspilite forms a useful marker unit.

The Corella Formation is characterised by thinly banded, granofelsic to gneissic calc-silicate rocks that are variably scapolitic, amphibolitic, siliceous, calcareous, feldspathic and diopsidic. It also includes brecciated calc-silicate rocks, marble, felsic and mafic metavolcanics, mica schist, black slate, phyllite, shale and quartzite. Minor metabasalt is present in the upper part of the Corella Formation and some metadolerite mapped as sills in the formation may be extrusive rather than intrusive. The Corella Formation may have been deposited on a near-shore evaporitic carbonate shelf or possibly in a lagoonal environment, and the presence of scapolite is considered to result from the regional metamorphism of halite-bearing sediments (Blake, 1987).

The Wonga Batholith is made up of several, discrete, mainly composite intrusions intruded into the Eastern Succession during a major early extensional event between 1760–1720Ma. The granites form elongate bodies parallel to regional northerly trends and are weakly to strongly deformed and regionally metamorphosed, mainly to amphibolite facies. The dominant rock type is a coarse-grained, weakly to strongly foliated porphyritic granite. Pegmatites are common and contain quartz, feldspar and tourmaline.

Rocks of the Soldiers Cap Group crop out in the Quamby–Malbon Zone and have been divided into a number of formations. The Kuridala Formation, which is confined to a belt of rocks extending from Kuridala in the north to the Osborne mine area in the south, consists mainly of greywacke, siltstone, and shale, now mostly metamorphosed to schist. Also present are quartzite, carbonaceous and pyritic slate (the Mount Elliott and Hampden Slate Members of White, 1957), calc-silicate rocks, and banded-iron formation. The top and base of the Kuridala Formation have yet to be satisfactorily established (Blake& others, 1984). The Staveley Formation crops out as a north-south belt in the Quamby–Malbon Subprovince and is characterised by well-bedded to locally brecciated calcareous, ferruginous, feldspathic, siliceous and micaceous sedimentary rocks. This formation was considered by Donchak & others (1983) to overlie the Kuridala Formation, possibly unconformably. Contacts between these two formations are not clearly defined, and some rocks mapped as Kuridala Formation west and north of the Mount Cobalt mine in the Selwyn region may be better assigned to the Staveley Formation (Blake, 1987).

Granites of the Williams Batholith intrude the Quamby–Malbon Zone. They range from 1520– 1490Ma in age and form large circular to elliptical intrusions that were emplaced after the Isan D2 deformation event, which produced major northtrending structures. Individual granites in the study area include the Williams Granite, Saxby Granite, Mount Dore Granite, Wimberu Granite, Yellow Waterhole Granite, Mount Angelay Granite, Mount Cobalt Granite and Squirrel Hills Granite. Although the plutons are dominantly felsic, rock types are very heterogeneous and vary from mafic magnetitehornblende-biotite diorites and monzonites, through porphyritic granodiorites and monzogranites to leucogranites. They are generally coarse-grained and massive, but are strongly foliated near major northnorth-east or north-north-west trending shear zones (Wyborn, 1998).

All of the above units have been intruded by numerous dolerite dykes and sills. Metamorphism and shearing have transformed some dolerites to chlorite-biotite schist and amphibolite.

Carpentaria Exploration Limited

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Independent Geologist’s Report

Prospect Geology – EPM 14955

The oldest unit exposed in within EPM 14955 is the Paleoproterozoic Argylla Formation. It consists of porphyritic felsic meta-volcanics and quartzites, with increasing feldspathic arenites towards the top where it passes conformably into the Marraba Volcanics.

The main lithologies found in the Marraba Volcanics are biotite-amphibole-plagioclase schist and feldspathic quartzite. The unit is intruded by dolerite dykes up to 50m wide and several km in length.

Conformably overlying the Marraba Volcanics are feldspathic quartzites and sandstones of the Mitakoodi Quartzite. Thin interbeds of black slate and pink cherty quartzite grading to chert are common. Conformable lenses of metabasalt or amphibolite occur throughout the sequence. At the top of the Marraba Volcanics is a distinctive banded iron formation (“BIF”) unit which has been named the Overhang Jaspilite. The BIF is between 300m and 900m thick and is composed of interbedded iron carbonate, pelite, and quartz-rich jaspilite.

The Kuridala Formation consists mainly of greywacke, siltstone and shale, now metamorphosed to schist. There are thin interbeds of carbonaceous and pyritic slate, calc-silicates and BIF.

The lower part of the Staveley Formation is composed of laminated sericitic slaty siltstones, with minor fine sandy interbeds. Hematite in the siltstones has caused widespread red-brown staining. These pass up into very soft, poorly outcropping laminated sericitic siltstones with interbeds of pink calc-silicate.

The Answer Slate consists of a monotonous sequence of argillites and fine-grained arenites separated by conformable bodies of amphibolite. The most common lithologies are interbedded grey to light brown slates and fissile siltstones, brown to white siliceous siltstones, and light grey to white, pink or black cherts.

The Wimberu Granite intrudes the metasediments. It is a non-foliated porphyritic hornblende-biotite granite, with phenocrysts of feldspar commonly > 1cm in diameter, and rich in magnetite. The main porphyritic mass has been intruded by later phases including plugs, veins and dykes up to 100m wide

and 1,000m long. The textures vary, ranging from fine to medium-grained up to coarsely pegmatitic.

The present level of erosion is close to the base of the Mesozoic. Outliers of lithic quartz sandstones and grits of the Middle Jurassic to Early Cretaceous Gilbert River Formation are common on the western boundary of EPM 14955. They have been partly lateritised.

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Fig 3. Proterozoic stratigraphy in EPM 14955

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Independent Geologist’s Report

At least 10 copper and 2 silver prospects, within the boundaries of EPM 14955, have been investigated by previous explorers.

The Silver Phantom and adjacent Triangle mineralisation is associated with barite, fluorite and chalcedony in fissures up to 8m wide hosted by the Mitakoodi Quartzite close to the contact with the Wimberu Granite. The mineralised zone has been traced for 100m and is cut by several granitic dykes.

At the Horse Creek prospect, copper mineralisation is hosted by a foliated, micaceous meta-siltstone of the Marraba Volcanics. Medium to coarse-grained dolerite/gabbro dykes intrude the meta-sediments. Sparse chalcopyrite and pyrite occur in some of the dolerite intrusives.

The QMH prospect is located at the contact zone of the Wimberu Granite and Argylla Formation rhyodacites (Cayzer and McIntyre, 1994). Quartzmagnetite-haematite veins occur over an area 650m by 250m. The veins vary in width to a maximum 1.5m with generally flat dips. Rock chip samples were consistently anomalous in copper (maximum 0.13% Cu). In 1994 Mt Isa Mines Limited (“MIM”) drilled one angled RC hole to 146m depth into the magnetic anomaly at QMH. The hole intercepted weakly altered dacitic volcanics with minor quartz-magnetite-pyrite veining. The best interval assayed was 4m @ 0.25% Cu from 46m down hole (Sparks, 1995).

At Mt Devoncourt, MIM drilled 39 shallow percussion holes in 1964 for a total of 783m. Five of the holes made multiple intersections >1% Cu over intervals of 3m including 30.5 m @ 1.25% Cu and 12 m @ 2.55% Cu . The mineralisation occurs in a roof pendant of Mitakoodi Quartzite within the Wimberu Granite.

Deposit Model – EPM 14955: Iron Oxide Copper Gold (“IOCG”) Deposits

Deposits of this type are associated with relatively high-temperature, iron- (commonly magnetite-) rich hydrothermal alteration systems that are spatially and temporally related to felsic plutons and have a variety of forms, including vein networks, breccias, disseminations and replacements. They are localised in dilatant zones of structures active during pluton emplacement and cooling and may contain copper + gold ± cobalt ± silver ± uranium ± rare earth elements ± lead ± zinc ± arsenic ± bismuth ± manganese.

The mineralisation occurs in oxidised sedimentary and volcanic sequences intruded by the felsic plutons. The sediments include banded iron formation and ironstone, carbonaceous slate and phyllite, metasiltstone, schist and ferruginous arenite, with metamorphic grades ranging from greenschist to upper amphibolite facies.

In the vicinity of EPM 14955, some significant IOCG deposits have been mined, including the Mt Elliott and Selwyn mines. The Mt Elliott deposit is magnetiterich and is characterised by a magnetically high geophysical signature associated with an elliptical gravity low. Extensive sodic metasomatic alteration surrounds the Mount Elliott copper-gold deposit, which is hosted by carbonaceous phyllite, mica schist and metadolerite of the Kuridala Formation. The deposit is within the north-west-trending composite Mount Elliott Fault Zone and the mineralisation is bounded by steeply north-east dipping reverse faults on the hanging wall and footwall. Alteration progressively intensifies towards the footwall and, at its peak, comprises an assemblage of coarse-grained minerals typical of skarn type alteration.

Within EPM 14955, IOCG deposits could be found in alteration systems along the contact zone of the Wimberu Granite.

Previous Exploration – EPM 14955

The Hampden copper deposits east of EPM 14955 were discovered in 1884. Shaft sinking began in 1907 with production reaching a peak in 1915, ceasing when the copper price fell in 1922. Total production from the Hampden mines during this period was 210,000 tonnes @ 7.1% Cu and 1.9 g/t Au. The mines were explored again between 1948 and 1960 by Broken Hill South Limited, MIM and Metana Minerals.

Modern exploration began in 1955 when MIM began mapping and experimenting with geochemical sampling in the Malbon area. MIM was seeking Mt Isa-style copper and lead-zinc mineralisation in rocks assumed to be equivalent to the Mt Isa Group. No Mt Isa analogues were observed and the area was relinquished in 1956.

More than 130 reports have been filed on the GSQ QDEX system by 20 companies over the past 50 years, covering work on the 33 tenements that have overlapped the boundaries of the present EPM 14955.

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Independent Geologist’s Report

During 1958 Rio Tinto followed up an airborne scintillometer survey with ground examination of radiometric anomalies in the search for uranium. One of the anomalies fell within the boundaries of the present EPM 14955 but no significant mineralisation was detected. In 1962 Rio Tinto carried out an evaluation of the Silver Phantom silver prospect on the boundary of EPM 14955 by rehabilitating the underground workings and sampling all exposures, including the Enterprise Gossan located midway between the Silver Phantom and Mt Devoncourt prospects. One diamond core hole was drilled into the Enterprise Gossan and intersected 60m @ 0.3% Cu at the contact between the Answer Slate and the Wimberu Granite. Rio Tinto concluded that the deposit was too low grade to justify further work.

The Young Australia copper deposit just outside the eastern boundary of EPM 14955 was investigated by MIM by percussion drilling in 1963 followed by diamond drilling in 1964. A resource of oxide copper mineralisation was outlined which was mined during 1968 as a source of flux for the copper smelter at Mt Isa. A total of 180,000 tonnes were mined and 3,780 tonnes of copper recovered in the smelter (Orridge and Gunn, 1974). During this time MIM also examined the Silver Phantom and Triangle prospects but concluded that the deposits were too small to be of interest.

Systematic regional mineral exploration was carried out by Australian Selection between 1963 and 1969. Stream sediment sampling, airborne INPUT electromagnetic and magnetic surveys were carried out on a regional scale. Detailed soil sampling was used to follow up anomalies generated by the stream sediment surveys.

Newmont Pty Ltd followed up the Australian Selection work in 1973 with detailed geological mapping and gossan searching focused on iron formations in the Answer Slate, Kuridala and Staveley Formations. Some rock chip samples were weakly anomalous in copper and gold but were not considered to have potential for development of deposits like those at the Hampden and Selwyn mines.

CRA commenced work in the area in 1975 with reconnaissance stream sediment geochemical sampling followed up by soil sampling, ground magnetics and IP. Four diamond core holes tested the

4 most promising geophysical anomalies, all of them located outside the present boundaries of EPM 14955. CRA spent the next 8 years exploring the district using mainly airborne radiometric and magnetic surveys to locate anomalies for ground follow-up, but did not find any significant mineralisation.

Newmont returned to the Hampden area in May 1977 to investigate a number of geochemically anomalous BIF and gossanous magnetite bodies that Newmont considered could be favourable for stratiform mineralisation of the type that Newmont had discovered at Pegmont, SE of Hampden. Reconnaissance rock chip sampling of ironstones was followed up by detailed mapping, sampling and ground magnetic surveys at two selected localities. No indications of base metal sulphides were found and the area was surrendered in December 1977.

Aquitaine followed up the CRA work in 1983, focusing on the metasediments SE of EPM 14955. Two prospects in the Answer Slate were investigated using detailed soil and rock-chip sampling. Aquitaine relinquished their tenement in 1984. At the same time Amad NL was exploring the adjacent area to the NW of Aquitaine’s ground, examining the Silver Phantom and Silver Spur prospects using costeaning and chip-channel sampling. The best result was 18m @ 16.7 g/t Ag.

Paget Gold Mining Company Limited (“Paget”) was granted ATP 4383 in 1987 over much the same ground as now covered by EPM 14955. Some rock chip sampling of the Mitakoodi Quartzite was undertaken, together with a ground magnetometer survey of the Silver Phantom prospect. This delineated a magnetic anomaly to the SE of the known mineralisation. The tenement expired in 1988 with no further work being reported.

Metana Minerals NL (“Metana”) made application for the ground dropped by Paget and was issued EPM 5744 in February 1989. Exploration was conducted by CRA under a joint venture agreement with Metana, using airborne magnetics and radiometrics to search for uranium and base metals. No significant mineralisation was found and the tenement expired in 1991.

EPM 8168 was issued to Cyprus Gold Australia Corporation (“Cyprus”) in 1991. Exploration focused on the Trump, Dandy and Sinking Sun Cu-Au

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Independent Geologist’s Report

prospects located outside the NE boundary of EPM 14955. Stream sediment and soil BLEG sampling was followed up with rock-chip sampling and ground magnetic surveys. Percussion drilling of the 3 prospects was recommended. In 1993 Cyprus sold their interest in the tenement to Arimco Mining Pty Ltd (“Arimco”) who commenced RC drilling at the Trump prospect. Intersections were considered too low grade to be economic.

In 1993 Hunter Resources Limited acquired EPM 8653 and explored the Windy Hill Cu-Au prospect which lies outside the southern boundary of EPM 14955, but extended their regional work to the north as far as the centre of EPM 14955. A re-interpretation of previous aeromagnetic data highlighted a magnetic anomaly at the site of what is now known as the QMH prospect. Hunter located massive quartz-magnetite in brecciated granite at this site. A survey grid was installed and ground magnetics carried out over the QMH prospect together with grid soil sampling. Rock chip samples were consistently anomalous in copper up to 0.13% Cu.

Following the discovery by the Hunter-WMC joint venture of the Ernest Henry deposit north of Cloncurry in 1993, Hunter farmed out EPM 8653 to MIM. In 1994 MIM drilled one angled RC hole to 146m depth into the magnetic anomaly at QMH. The hole intercepted weakly altered dacitic volcanics with minor quartz-magnetite-pyrite veining. The best interval assayed was 4m @ 0.25% Cu from 46m down hole (Sparks, 1995).

MIM then turned attention to the Horse Creek prospect, located inside the southern boundary of the present EPM 14955. Gridding, mapping, soil and ground magnetometer surveys were carried out, as well as a moving loop EM survey. No anomalous Cu or Au samples were found, and no conductors were detected by the EM survey.

During 1995-96 control of Hunter passed to Eagle Mining Corporation NL (“Eagle”) and MIM withdrew from the joint venture. A re-assessment by Eagle of previous data highlighted 11 targets within EPM 8653. However, funding became difficult and drilling that

had been proposed was not carried out. At the end of 1997 Eagle became a subsidiary of Great Central Mines Limited (“GCM”), which subsequently was taken over by Normandy Mining Limited. No work was done between 1997 and 2001 when MIM formed a joint venture with Normandy to explore the area. Normandy sold the EPM to Leyshon Resources Limited (“Leyshon”) in November 2000, MIM withdrew from the joint venture. Leyshon did no work and elected not to renew the EPM when it expired in 2003.

In 1995 EPM 10460 was granted to MIM over ground substantially similar to that now covered by EPM 14955. The area was considered to have good potential for gold and Cu-Au mineralisation associated with iron-oxide accumulations in the roof zone of the Wimberu Granite. Regional stream sediment BLEG sampling and re-interpretation of previous airborne geophysical data was followed up with soil sampling. No significant magnetic structures, alteration or geochemical anomalism was detected and the EPM was quickly relinquished.

Hence there has been no effective exploration in the area of EPM 14955 since 1995.

Exploration by Giralia and Carpentaria – EPM 14955

Carpentaria commissioned a complete review of previous exploration, as well as separate image processing of previous geophysical data. Together these studies have highlighted areas for further work on EPM 14955 including the QMH prospect and the Emerald Gossan NE of the Mt Devoncourt prospect.

Proposed Exploration Programme and Budget – EPM 14955

The Mt Agate project covers several aeromagnetic features prospective for IOCG mineralisation including the QMH prospect, a 650m by 250m zone of magnetite and hematite veining tested by only a single RC hole which returned a 28m zone of in excess of 0.1% copper. Geological mapping, surface geochemical sampling, detailed aeromagnetics and drilling of magnetic anomalies are planned.

Carpentaria Exploration Limited

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Independent Geologist’s Report

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Fig 4. Magnetic map, EPM 14955

Table 4. Proposed Budget, EPM 14955 Mt Agate, in A$ x 1,000


Activity	Year 1	Year 2	Total
Geological Data Acquisition	53	90	143
Geochemical Data Acquisition	115	55	170
Geophysical Data Acquisition	152	130	282
Drilling	175	240	415

Sub-Totals:	495	515	1,010

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Independent Geologist’s Report

Local Geology – EPMA 16393

EPMA 16393 lies within the Boulia Shelf of the Eromanga Basin. The Proterozoic basement is overlain by a sequence (<800m thick) of shallow marine Cambrian to Ordovician clastic sediments of the Georgina Basin, covered by a thin veneer of flat-lying Mesozoic sediments of the Eromanga Basin.

Stratigraphic drilling indicates that the Cambrian sediments consist predominantly of calcareous, dolomitic cherty and phosphatic units that are flatlying to gently dipping except near some faults. The oldest identifiable unit is the Pomegranate Limestone, composed of limestone, marl and breccia, overlain by calcarenite of the Gola Beds. These are in turn overlain by the Chatsworth Limestone, succeeded by the

Cambro-Ordovician Ninmaroo Formation, then passing up into the Ordovician Swift Formation siltstones, sandstones and interbedded chert.

The Mesozoic units are fluvial and shallow marine deposits that typically form mesas and partly dissected shallow plateaus, lying unconformably on the Cambrian and Ordovician sediments. In the vicinity of EPMA 16393, the basal Longsight Sandstone is completely covered by the outcropping Wilgunya Formation siltstone.

Non-marine Tertiary and Quaternary alluvial and colluvial sediments partly cover the Mesozoic rocks. Residual ferruginous and siliceous duricrusts are widespread.

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Fig 5. Geology and Reconnaissance drilling by PNC Exploration (Australia) Pty Ltd

Carpentaria Exploration Limited

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Independent Geologist’s Report

Deposit Model – EPMA 16393: Roll-Front Uranium Deposits

Previous exploration on the Boulia Shelf has demonstrated the potential for roll-front uranium mineralisation confined within Mesozoic paleochannels. Although uranium is a relatively common element in nature, it normally is a highly charged ion (4+ or 6+) and does not fit easily into the common rock-forming minerals. Hence it tends to be concentrated in minerals such as zircon, monazite, allanite and apatite, the primary source of which are highly fractionated igneous rocks such as felsic granites, rhyolites, alkali trachytes etc. Secondary apatite (chemical formula Ca5(PO4)3) is the principal phosphatic mineral in the phosphorite mined from the Cambrian sediments on the edge of the Georgina Basin inlier only 50 km north of EPMA 16393. These phosphatic horizons are typically anomalous in uranium, with the U[4+] ion substituting for Ca[2+] in apatite, as well as UO42- substituting for PO43-. The uranium probably originally came from the highly anomalous granites in the Williams Batholith, which may still be contributing uranium directly into the groundwaters of the Great Australian Basin.

Uranium has two oxidation states that have dramatically differing solubilities in geological environments. In an oxidising environment, the hexavalent (U[6+] ) ion is highly mobile. In a reducing environment such as a phosphorite bed, tetravalent uranium U[4+] is highly insoluble and immobile (“fixed”). When phosphorite horizons are exposed to weathering such as around the rim of the Georgina Basin, the U[4+] ion is oxidised to the highly mobile U[6+] state and leached into the groundwater. The presence of carbonate can enhance the solubility and mobility of the U[6+] ion.

Groundwater from the Duchess Inlier of the Georgina Basin flows south, carrying uranium as a complex uranyl carbonate ion. Specific permeable units within the Mesozoic strata of the Great Australian Basin (formerly known as the Great Artesian Basin) carry most of the groundwater. The highly permeable Longsight Sandstone is the main aquifer of the Great Australian Basin in the Boulia Shelf, covered by the impermeable Wilgunya Formation which is an aquiclude. Precipitation of uranium could occur if the migrating groundwater encountered reducing

conditions such as carbonaceous horizons or lignites within the Longsight Sandstone.

Previous exploration by PNC Exploration (Australia) Pty Ltd (“PNC”) identified a fluvial paleochannel in the Waterford area which the company named the Binfield Channel. A total of 98 open hole percussion holes for 9,230m were drilled between May 1981 and May 1983 over a wide area, spaced initially 4km apart. The presence of a roll-front geochemical cell was proven in the Waterford area (Dunn, 1983). Scintillometer counts of drill cuttings returned up to 2m @ 470 counts per second (“cps”) but the corresponding assays were only 140 ppm U, which PNC considered too low to be of interest and they relinquished the tenement at the end of 1983. No follow-up work has been done.

Proposed Exploration Programme and Budget – EPMA 16393

As there is no certainty as to when or if any tenement application will be granted, no budget allocation can be made.

EPM 14948 Lady Inez

EPM 14948 is located 120 km WNW of the city of Bundaberg in Central Queensland. Bundaberg (population 45,800) is a major regional centre on the central coast of Queensland. The main north-south railway passes through the city and the Bruce Highway connects Bundaberg to Brisbane and the port of Gladstone to the north.

Regional Geology

EPM 14948 falls within the Yarrol Province, part of the northern New England Orogen, a major tectonic unit in eastern Australia. The oldest rocks in the vicinity of EPM 14948 are Early to Middle Devonian volcaniclastic sediments, coralline limestones, and submarine tuffs of the Mount Holly Beds. The environment and geochemistry of these rocks support an island arc origin. They are overlain unconformable by a sequence of Late Devonian to Carboniferous volcaniclastic sediments deposited on a shallow marine shelf. These units comprise the fore-arc basin that defines the Yarrol Province.

Overlying the forearc basin strata are scattered outcrops of mafic to felsic volcanics and associated clastic

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Independent Geologist’s Report

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Fig 6. Regional geology, Glassford Creek area

sediments of Early Permian age. These include both marine and continental deposits, and have recently been interpreted as the fill of a series of extensional basins which developed at the same time as the Bowen Basin to the west. This interpretation is consistent with the fact that many of the Permian outcrops overlie or are in faulted contact with middle Lower Carboniferous or older rocks, implying removal or non-deposition of a substantial part of the stratigraphic section. The

Permian sediments give a high radiometric response compared with middle Lower Carboniferous and older sequences, reflecting a much greater content of felsic volcanic and plutonic detritus.

The rocks of the New England Orogen were deformed by the Late Permian Hunter–Bowen Orogeny, characterised by thin-skinned west-north-west thrusting. Post-tectonic Upper Permian and Triassic intrusives form relatively small, discrete plutons and

Carpentaria Exploration Limited

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Independent Geologist’s Report

range from layered gabbro to granite. Granodiorite is probably the most common composition. Gust & others (1993) proposed that active subduction produced the voluminous Late Permian and Early Triassic plutonism in the northern New England Orogen, and was replaced by an extensional phase marked by bimodal and alkalic magmatism in the Late Triassic. Most of the ore deposits in the Yarrol Basin are related spatially and genetically to these intrusives (Barker et al, 1997).

Mesozoic volcanics form relatively undeformed, flatlying sequences that unconformably overlie the older rocks. All these volcanics have been grouped in a single unit, the Muncon Volcanics. During the Cainozoic tectonism was generally mild with rejuvenation of existing fault and fold structures and extensive basaltic eruptions. Numerous, narrow fault controlled basins were formed, including the significant oil shale deposits within the Nagoorin Beds.

Local Geology

All of the important mineralisation in the area of EPM 14948 is related to the Triassic Glassford Igneous Complex. Most of the northern part of the Glassford Igneous Complex, along the valley of Ridler Creek, is granodiorite. There is some variation to tonalite and quartz diorite, but these variants do not seem to represent separate phases or intrusions. The name Ridler Creek Granodiorite has been assigned to this phase. Locally the granodiorite is altered and pink in colour, and large flakes of molybdenite have been noted in one sample of this altered rock.

The most obvious feature on images generated from aeromagnetic data is a prominent elliptical ring anomaly centred on Mount Robert at the eastern end of the Glassford Igneous Complex. One obvious interpretation is that this magnetic rim represents a hornfelsed contact zone around a discrete pluton, but it has not been possible to confirm this on the ground. The central non-magnetic part of the ring consists of granophyric granite to granodiorite. This may be a separate intrusion, or a marginal roof phase of the Ridler Creek Granodiorite. Along the northern slopes of Mount Robert, the granodiorite increasingly shows a granophyric texture, initially as a small proportion of the groundmass, but eventually pervading the entire rock. The Muncon Volcanics are either

completely absent or cover only a minimal area in the vicinity of Mount Robert.

The southern part of the Glassford Igneous Complex south of Coppermine Creek is a zoned pluton ranging from granite in the core to granodiorite at the margin. Magnetite-rich skarns around this intrusion are prominent on magnetic images. Similar magnetic highs suggest the possible presence of other skarns north of the Glassford Creek copper mines. At the western end of the Glassford Igneous Complex, in the Monal Creek area, another magnetic ring is a hornfelsed zone of Carboniferous sediments around a pluton which has a granitic core intruding a rim of granodiorite to quartz diorite.

The area around the Cretaceous syenite at Mount Sugarloaf exhibits quite complex geology. The syenite (Radley Syenite) gives a high radiometric and magnetic response. The magnetic anomaly may be due to strongly magnetic amphibolite inclusions, and the presence of a relatively large arcuate mass of amphibolite around the base of Mount Sugarloaf. There are two types of breccia along the western edge of the syenite intrusion, both of which are nonmagnetic. The smaller outcrop gives a similar radiometric signature to the Radley Syenite, and is mapped as a phase of that intrusion. This breccia contains plutonic rock fragments, and large greenishblack pyroxene and biotite crystals. Dykes or large clasts in this area contain prominent phenocrysts of potash feldspar. The larger outcrop, named the Tollbar Creek Breccia, is a coarse breccia with angular to rounded clasts mainly (but not exclusively) of altered granitic rocks in a limonitic matrix.

Prospect Geology

The Late Permian-Triassic Hunter-Bowen Orogeny deformed the pre-Permian rocks on the area, which were affected by WNW compression that developed a fold-thrust belt. The folding was followed by a major intrusive event during which the Glassford Igneous Complex was formed. Five coalescing zoned Middle to Late Triassic plutons of olivine gabbro, quartz diorite, granodiorite and granite were later intruded in the Early Cretaceous by nepheline syenite, syenite and monzonite. Isotopic dating of the Triassic plutons gives ages ranging from 216-226 Ma (Webb and McDougall, 1968), while the Early Cretaceous

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intrusives have been dated at 141 Ma (Green and Webb, 1974).

The plutons are all hornblende-bearing I-type granitoids dominated by granodiorite, tonalite and quartz diorite. The geochemistry is consistent with a subduction-related origin. Most of the mineral deposits in the region are associated with the Triassic intrusions.

Relatively flat-lying Triassic continental deposits, mainly volcanics but also including sedimentary rocks, are widespread through the area. A newly identified caldera near Kroombit Tops produced rhyolite, rhyolitic ignimbrite, agglomerate and breccia that collectively make up the Winterbourne Volcanics. The Dooloo Tops Volcanics are a separate sequence of rhyolitic ignimbrites.

The most important copper deposits are those in the vicinity of Upper Glassford, collectively called the Glassford Creek mines. MIM evaluated the Blue Bag prospect located just to the east of the Company’s tenement, from 1959-1963. Chalcopyrite occurs in a magnetite-garnet skarn that extends over a strike length of 180m with widths ranging from 18m to 36m. A second similar mineralised body parallel to the Blue Bag skarn and about 30m distant is known as the McDonald Lode. Both bodies trend NNE and dip about 50-70[o] west. Two core holes were drilled by MIM in 1960-61 to intersect the projected Blue Bag lode at 120m and 240m down dip from the outcrop. The first hole intersected both the McDonald and Blue Bag lodes, with an intercept from 126m to 139m down hole in the projected Blue Bag lode assaying 13m @1.3% Cu, 2 g/t Au and 6 g/t Ag. The second hole did not intersect any magnetite skarn.

The Lady Inez deposit is about 1,500m south of Blue Bag and about 240m higher in elevation. An epidotemagnetite-garnet skarn occurs at the contact between granite and calcareous sediments. A number of exploratory workings occur north of Blue Bag near Coppermine Creek, including the School prospect. Once again the hosts to copper mineralisation are a series of garnet skarns up to 30m wide.

The Burns Spur copper mine is located in the Cretaceous Burns Spur Nepheline Syenite, part of the alkalic suite that intrudes the Triassic Glassford Igneous Complex. The copper mineralisation appears

to be associated with syenite dykes that often display various degrees of hydrothermal alteration, shearing, mineralisation and brecciation. Large vughs are characteristic. The sulphide content is variable but rarely exceeds 5%. Noranda sampled the gossans and obtained a result of 30m @ 1.6% Cu and 10.2 g/t Ag. However drilling indicated a grade of <0.2% Cu below the old open pit.

Mineralisation at the Mount Hector gold-copper workings excised by a small mineral development lease from the Company’s tenement, occurs as discontinuous thin shoots at or near, and parallel to, contact between skarn and limestone. The strongest mineralisation is adjacent to the most intense skarn development.

The Mount Hourigan and Mount Hutton prospects are located approximately 4 km NW of Blue Bag. Here the host rocks are massive garnet skarns with lenses of copper-stained wollastonite marble. Several shafts were sunk in the late 19[th] century.

At the Grave’s Spur and Johnson’s prospects, gold mineralisation occurs in calc-silicate skarn horizons up to 180m wide and 900m long with patchily developed wollastinite. Drilling by Newcrest found the skarn horizons to be a thin veneer over carbonitised tonalite.

Deposit Model EPM 14948: Porphyry Copper-Gold Deposits

Porphyry copper-gold deposits are characterised by stockworks of quartz veinlets, quartz veins, closely spaced fractures and breccias containing pyrite and chalcopyrite with lesser molybdenite, bornite and magnetite. The stockworks form large zones of economically bulk-mineable mineralisation in or adjacent to porphyritic intrusions and related breccia bodies. The mineralisation is spatially and genetically associated with contemporaneous hydrothermal alteration of the host intrusions and wall rocks.

The central and early formed potassic zones (Kfeldspar and biotite) commonly coincide with ore. This alteration can be flanked in volcanic host rocks by biotite-rich rocks that grade outward into propylitic rocks. The biotite is a fine-grained, ‘shreddy’ looking secondary mineral that is commonly referred to as ‘biotite hornfels’. These older alteration assemblages in cupriferous zones can be partially to completely

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over-printed by later biotite and K-feldspar and then phyllic (quartz-sericite-pyrite) alteration, less commonly argillic, and rarely, in the uppermost parts of some ore deposits, advanced argillic alteration (kaolinite-pyrophyllite).

Previous Exploration

The discovery of alluvial gold in 1889 in Cabbage Tree Creek, near Mount Cannindah, stimulated prospecting in the district. In 1895, copper staining in a weak gossan was discovered at Mount Cannindah, located 20 km SE of EPM 14948. Mining began in 1896 but high transport costs inhibited development. The extension of the railway from Gladstone to within 18 km of Mount Cannindah re-invigorated exploration and in 1906 underground development by Mount Cannindah Mines Limited broke into secondary enriched ore grading 16% Cu. Once below this zone, about 35m below surface, primary sulphide ore grading only 3% copper was encountered and the mine closed in 1907.

Copper-bearing gossans were discovered in 1898 at Many Peaks, 20 km east of EPM 14948. Attempts to produce copper using crude leaching failed. In 1910 the Mount Morgan Gold Mining Company (“MMG”) commenced mining at Many Peaks, railing the ore to Mount Morgan to use as a pyritic flux in their smelters. A total of 573,000 tonnes of ore were shipped at a grade ranging from 1% to 3% copper before mining ceased in 1918.

Almost 100 exploration reports are on file in the GSQ QDEX database, representing work carried out by 20 companies within the boundaries of EPM 14948 during the past 50 years.

MIM began exploring the area in 1959 after receiving some encouragement from their drilling programme at the Mount Cannindah and Mount Kroombit prospects. MIM had been conducting reconnaissance exploration in the district since the mid 1950s. The Blue Bag and Lady Inez prospects were investigated from 1959 to1963 (Charchalis, 1963), with two core holes drilled at the Blue Bag prospect. One angle hole intersected 13.1 m @ 1.3% Cu (heavily weighted by 1m @ 10.5% Cu) while a vertical hole drilled to 305m depth did not find any significant mineralisation. MIM relinquished its tenements in 1966.

In 1967 Noranda Australia Limited (“Noranda”) was granted ATP 397M of 6,185 sq km covering the Monto region. Noranda covered the region with stream sediment sampling at a sample density of 3 per sq km, followed by systematic reconnaissance rock chip sampling. The anomalies detected were all associated with known mineralisation. Ground magnetic and IP surveys were completed at the Burns Spur prospect. Noranda drilled 6 percussion holes into the Burns Spur prospect for a total of 493m. No assays > 0.2% Cu were reported. Noranda concluded that the prospects were too small to be of interest to a major company and surrendered the tenement in 1971.

Anglo American Corporation (Australia) Limited (“Anglo”) explored the Glassford Creek area from 1970-72, carrying out a reconnaissance geochemical survey, followed by grid soil sampling over anomalous areas. No worthwhile prospects were identified.

Texins Development Pty Ltd (“Texins”) briefly investigated the Many Peaks area and west to Glassford Creek in 1972 but found no prospects of interest.

ATP 1242M was granted to MIM in July 1973. The objective was to search for large, low-grade, disseminated porphyry copper deposits in the Glassford Complex. Previous geochemical data was compiled and highlighted anomalies were investigated by rock-chip sampling. Areas investigated included Booreco Creek, Degalgil Creek, Broad Creek, Captain White Gully, Dooloo Creek, Monal creek, Mount Sugarloaf and the Burns Spur copper prospect. The ATP was relinquished at the end of the first year.

MIM took out ATP 1355M in April 1974 to search for base metal mineralisation south of the Glassford Complex. Previous geochemical data was compiled and three areas selected for follow up. These were Mount Spurber, Warrong Creek and Kalpowar. This ATP was also relinquished at the end of the first year.

Five contiguous ATPs that included the Glassford Complex were granted to Esso Australia Limited (“Esso”) in March 1975 and relinquished a month later. An aeromagnetic survey totalling 3,732 line km was flown on a line spacing of 400m. Ground follow up of 6 selected magnetic highs concluded that they had no economic significance.

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Esso was granted two contiguous ATPs over the Sugarloaf and Glassford Complex areas in mid-1975. The target was a base metal replacement-style deposit. Ground magnetic surveys were completed over aeromagnetic anomalies at Hector, South Glassford, and Captain White Gully, but none was considered by Esso to be worth drilling. The ATPs were relinquished at the end of the first year.

Steetley Industries Limited investigated the Glassford Complex skarns in 1977-78 for magnetite. Four prospects were selected for ground magnetometer surveys. Samples from Mount Hourigan were sent for petrological study. No further work was done.

ATP 2288M was granted to Samantha Exploration in January 1980 to search for bulk low grade copper and molybdenum deposits around the SW margin of the Glassford Complex. Previous exploration data was compiled and it was concluded that the area had been adequately tested. Samantha relinquished the area at the end of the first year.

Amdex Mining Limited (“Amdex”) explored the Glassford Complex in 1980, taking a number of rock chip samples at known prospects. No further work was done. CSR Coal Division explored for commercial deposits of limestone west of Ubobo the following year without success.

Two contiguous ATPs covering the Glassford Complex were granted to Central Pacific Minerals NL in mid-1983. Reconnaissance grab samples taken from old mine dumps and outcrops were analysed for gold and base metals. Results were considered sufficiently encouraging to justify a comprehensive stream sediment geochemical survey at a sample density of 12 samples per sq km. A total of 5,960 samples were collected, with anomalies followed up by ridge and spur soil surveys and rock chip sampling. Drilling was carried out at the Monument, Nestor, Bompa, Johnsons and Waterfall prospects. Best results were 1m @ 86.5 g/t Au, 1m @ 8.3 g/t Au and 1m @ 6.94 g/t Au at the Nestor prospect. In 1987 the ATPs were consolidated into ATP 4854M. A total of 41 drill holes for 2,583m of percussion and 214.5m of core drilling were completed at the Nestor prospect by July 1991.

Sovereign Mining Pty Ltd (“Sovereign”) was granted ATP 3504M in May 1983. The focus was on skarns in the Glassford Complex, utilising photogeological

interpretation, rock chip sampling, and panned concentrate stream sediment sampling. Follow up of the anomalies generated found previously known prospects. Billiton Australia farmed into the project in 1986 and carried out further stream sediment sampling. A gold-bearing gossanous skarn was found at the Barrimoon prospect, where 13 trenches were dug and sampled, with best result of 2.9m @ 1.8 g/t Au. Three holes were drilled with disappointing results. Billiton withdrew and was replaced by Homestake Gold Australia Limited (“Homestake”) in 1988, targeting distal replacement skarn mineralisation. Homestake undertook conventional minus 80 mesh stream sediment sampling, which highlighted the skarn zone between Blue Bag and Lady Inez.

EPM 7199 was granted to Southern Ventures NL in August 1990. A regional stream sediment BLEG survey was completed with 122 samples collected on a sample density of 1 sample per sq km. Rock chip samples were collected around the Blue Bag and Lady Inez workings. Best results included 8.5 g/t Au and 1.2% Cu at the Lady Inez prospect.

Newcrest investigated EPM 8503 briefly from November 1991 to October 1992, investigating porphyry breccia pipe mineralisation in PermoTriassic intrusives. Stream sediment BLEG samples were collected, with two values of 65.3 and 14.6 ppb Au being found in Tollbar Creek. These were not followed up and the EPM was dropped.

EPM 9006 was granted to CRA in September 1992 over the Glassford Complex to search for skarn-related gold mineralisation. Stream sediment, soil and rock chip sampling were employed. Detailed work focused on the Blue Bag-Lady Inez skarn belt. North Limited farmed into the project in 1997 and carried out ground geophysics followed up by two drill holes at the Boggy Creek prospect. Best result was 2m @ 0.1 g/t Au. The project was terminated in 1999.

EPM 13067was granted to Horton Geoscience Consultants Pty Ltd (50%) and Energy Minerals Pty Ltd (50%) in September 2000 (“Horton JV”). The purpose was to investigate a 4km by 2km gold-copper prospect called Dooloo Creek identified by North Limited within sub-horizontally bedded Devonian volcaniclastics, cherts, and basaltic andesitic volcanics.

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Table 5. Proposed Budget, EPM 14948, in A$ x 1,000


Activity	Year 1	Year 2	Total
Geological Data Acquisition	45	60	105
Geochemical Data Acquisition	60	50	110
Geophysical Data Acquisition	120	90	210
Drilling	160	240	400

Sub-Totals:	385	440	825

All but one of 9 very widely spaced drill holes encountered anomalous gold-copper mineralisation. The Horton JV drilled a further 10 reverse circulation holes totalling 1604m. Drill samples from this drilling program were held by Energy Minerals but were allegedly never assayed due to a dispute between the joint venture participants. The tenement expired in September 2005 without further exploration. The area was granted to Sunmustard Pty Ltd in November 2005.

Exploration by Giralia and Carpentaria

Giralia commissioned a review of past exploration in November 2005 and this was completed the following month. The consultant’s report recommended further work at Mount Hector and Lady Inez.

Proposed Exploration Programme and Budget

Lady Inez covers a significant area of old copper-gold workings on skarn style mineralisation. Proposed exploration includes mapping and rock/soil geochemistry, airborne EM and magnetics, and extensive drilling of potential extensions to skarn copper-gold zones.

GOLD PROJECTS

EL 6246 Glen Isla

EL 6246 lies about 50 km SW of the town of Dubbo in the Central West of New South Wales. From Sydney, the Western Highway is followed to Orange and Molong, then the Mitchell Highway leads north to Dubbo. The Newell Highway connects Dubbo with the small hamlet of Tomingley (population 40), located about 5 km outside the western boundary of EL 6246. Several public roads provide access to all parts of EL 6246.

The topography in EL 6246 is relatively flat, ranging from 420m to 440m above sea level.

Regional Geology

Both EL 6246 and ELA 3077 (see below) lie within the Lachlan Fold Belt (“LFB”), a major terrane in eastern Australia. The LFB is one of five Paleozoic orogenic belts that together comprise the Tasman Fold Belt System, which occupies a third of eastern Australia. The LFB contains a diverse array of base and precious metal deposits reflecting a long and complex geological history. Significant quantities of gold, copper, lead, zinc, tin, and tungsten and numerous minor metals have been won from the LFB since mining began in 1850.

The major mineral provinces of the LFB include volcanic-hosted massive sulphide deposits, porphyrygranitoid-associated gold and copper deposits and granitoid-associated tin and tungsten deposit, as well as structurally controlled gold and copper-lead-zinc deposits.

The surface geology of the LFB is dominated by two rock units: quartz-rich Ordovician turbidites (the Lachlan “mudpile” of Coney et al. (1990)) and SiluroDevonian granites and volcanics. The granite batholiths which intruded the Ordovician sediments are elongated north-south, following the overall grain of the geology.

The LFB did not form by collision processes traditionally associated with the formation of orogenic belts (Coney, 1992). It is similar to the Carpathian Belt of Central Europe which formed when the rate of subduction exceeded the rate of convergence (Royden, 1993).

Available fossil and radiometric constraints (Wyborn, 1992; Perkins et al., 1995; Heithersay and Walshe, 1995)

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indicate magmatism extended from approximately 480 to 430 Ma (i.e., Early Ordovician to Early Silurian). The depositional environment was largely submarine with the presence of reefal limestones in most volcanic complexes indicating periods of shallow water and possibly terrestrial conditions. Available geochemical evidence indicates a range from calc-alkaline through high K calc-alkaline to shoshonitic volcanics. The Goonumbla Volcanic Complex in the ParkesNarromine belt which hosts the North Parkes deposit is a Late Ordovician (440 Ma) shoshonitic centre. Early Ordovician volcanics which form a substrate to the complex appear to be less potassic. The volcanics and intrusions at Lake Cowal are Middle Ordovician (about 460 Ma) and at Gidginbung range from Middle Ordovician to Early Silurian (about 460-435 Ma), while

the mineralisation is dated at 440 Ma. The rocks of the Lake Cowal Complex are calc-alkaline to high K calc-alkaline in composition and limited data suggest that the volcanic-intrusive rocks at Gidginbung have similar compositions.

Local Geology

EL 6246 lies within a north-south belt of gold deposits that extends from Forbes in the south, through Parkes and Peak Hill to Tomingley. The gold deposits are hosted by an Early Ordovician to Early Devonian sequence of mostly marine sediments, and mafic to felsic igneous rocks. The Parkes Thrust separates open folded sediments to the west, that host the North Parkes (also known as Goonumbla) porphyry coppergold mine, from rocks that are tightly folded about

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Fig 7. Regional setting, EL 6246 and ELA 3077

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upright axial planes. Longitudinal slip along the boundaries between competent and less competent rock units has occurred over distances of several kilometres. The gold deposits occur in the more highly deformed rocks.

The Ordovician Cotton Formation is the oldest exposed unit in the area. It consists of mudstone with minor beds of arkosic shale, limestone, conglomerate and chert. The mudstones are usually brown and foliated. Conglomerates are generally composed of pebbles and cobbles of volcanic rocks enclosed in a calcareous matrix. The limestone beds form small discontinuous outcrops up to 3m thick and are composed of broken crinoid and shelly fossil fragments in a coarse-grained carbonate matrix. The rocks are strongly fractured and laced with microveinlets of calcite.

The Mugincoble Chert is a prominent unit within the Cotton Formation that is composed of steeply eastdipping interbedded chert and siltstone, with the chert forming bold outcrops on ridges west of the Glen Isla prospect. The unit is about 2,000m thick.

The Forbes Group overlies the Cotton Formation. It is composed mostly of mudstone with local areas of coarse sandstone and conglomerate. In the Glen Isla area two formations can be identified. At the base the light brown Bocobidgle Conglomerate is composed of felsic and mafic lava clasts together with sandstone and brachiopod fossil fragments that are enclosed in a matrix of fine to medium-grained sandstone.

The overlying Mumbidgle Formation consists of olivegreen to brown silty mudstone with rare interbeds of fine sandstone. The sandstones are typically fine to medium-grained, greenish-grey, massive to poorly bedded rocks.

Possibly coeval with the Glennie Ridge Granite, the Dulladerry Volcanics comprise mainly pink and purple massive and flow-banded rhyolite with basaltic members, lithic conglomerates and minor quartzfeldspar porphyry. The presence of pumice fragments suggests that the volcanics include welded pyroclastic horizons.

Part of the Yeoval Batholith, the Glennie Ridge Granite is a typical fine to medium-grained granite that forms characteristic residual tors and rugged hills.

Unconformably overlying the Dulladerry Volcanics, the Late Devonian Hervey Group is a thick sequence of regularly interbedded sandstones and shales that form a prominent ridge SE of EL 6246.

Prospect Geology

A number of gold deposits hosted in quartz veins have been located within EL 6246. This style of mineralisation has been the source of significant production in the Tomingley district in the past. For example, the McPhail mine just outside the western boundary of EL 6246 produced 64,000 oz gold. The veins occur in longitudinal zones along lithological contacts and in oblique zones across units. Wallrock alteration is significant only in those veins hosted by meta-volcanic rocks.

Large-tonnage, low-grade disseminated epithermal deposits like Peak Hill, 14 km south of EL 6246, have been a prime target for modern explorers, but apart from Peak Hill no economic deposits have yet been exploited.

The Glen Isla prospect was identified by Geopeko in 1990 during follow-up of a 5.6 ppb Au BLEG anomaly (Platts, 1990). The anomaly was traced to a chert horizon within a sequence of foliated rhyolite flows to the west and dark green amygdaloidal basalts to the east. The rhyolites are a pale yellow-green colour. One horizon of well-foliated sericitic rhyolite assayed up to 0.3 g/t Au. The cherts are either massive, pyritic chert containing up to 1.0 g/t Au or banded cherts with no visible sulphides that contain <0.2 g/t Au in outcrop. The cherts were thought to be relic sinters. Seven lines of RAB holes totalling 85 holes were drilled across the central zone of the chert outcrops. Best result was 2.1m @ 0.86 g/t Au at the bottom of hole R76 (Platts, 1990b). Detailed rock chip sampling returned a best result of 2.2 g/t Au with other samples containing arsenic up to 1.1% and antimony up to 470 ppm (Platts, 1991).

Geopeko carried out a ground magnetic survey and trial IP and CSAMT geophysics at Glen Isla in 1991, followed up by RC drilling. The holes intersected long intervals of anomalous gold (e.g. hole GIP 3 returned 90m @ 0.26 g/t Au). A pyritic breccia pipe located 500m east of the sinter zone was tested by one diamond core hole and returned 79m @ 0.4 g/t Au (Platts & Freyberg, 1994). Following the takeover of Geopeko

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by North Limited in 1994, no further work was done in the area and the licence was relinquished.

An area of outcropping spongy, banded, siliceous ferruginous rock was given the name Kyalite Prospect by Geopeko in 1990. The outcrop was thought to be an epithermal sinter associated with interbedded basalt, mudstone and volcanic conglomerate within the Early Devonian Dulladerry Volcanics. A traverse of six RAB holes across the zone intersected schistose quartz-sericite-pyrite rocks with anomalous arsenic up to 200 ppm and antimony up to 27 ppm (Platts & Shepherd, 1992). Although gold results were low, Geopeko considered that the zone was in the upper depleted part of an epithermal gold system and recommended further drilling. However, they withdrew from the area before this was done.

Previous Exploration

The Forbes-Tomingley belt was the scene of some of the earliest Australian gold rushes. Alluvial gold was found at Forbes in 1861 and the towns of Parkes, Peak Hill and Tomingley also all owe their origins to gold mining. Production continued through until the First World War, with 1 Moz of gold produced from the belt to 1914 (Clarke, 1985).

The Bureau of Mineral resources (“BMR”) undertook a regional airborne magnetic and radiometric survey over the area in 1961. Modern company exploration began in 1963 when Mines Exploration Pty Ltd (“MEPL”), a wholly-owned subsidiary of Broken Hill South Limited, commenced exploration north and south of Peak Hill. Reconnaissance and detailed IP geophysics, ground magnetics, Afmag and gravity surveys were carried out, followed up with grid soil sampling. Four areas 5km north of Peak Hill were tested by diamond drilling but only sub-economic mineralisation was encountered.

Anaconda (Australia) Inc followed in 1967 with detailed mapping and further IP surveys. Four anomalies were tested by diamond drilling without success. In 1970 Reef Oil explored the belt from Alectown in the south to Tomingley.

In 1977 MEPL returned to the Tomingley area to explore for base metal sulphides, initially geological mapping at 1:50,000 scale followed by 1:20,000 scale mapping over the Glen Isla area. Because of the structural complexity of the area, mapping was enlarged to 1:10,000 scale supplemented by a highresolution airborne magnetic survey. Anomalies were

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Fig 8. Drillhole locations on RAB gold geochemical image – Glen Isla prospect EL6246.

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followed up using ground magnetics, and 8 areas selected for percussion drill testing. Sample results were very low and the anomalies attributed to magnetite in the volcanics.

Homestake Australia Limited (“Homestake”) commenced exploration in the Tomingley district in 1984, specifically to investigate an anomalous aeromagnetic feature dubbed the Caloma anomaly, a circular magnetic low centred 2 km south of Tomingley township. The low was thought to be similar to that which is coincident with the alteration zone that hosts the disseminated gold deposit at Peak Hill. Seven vertical RAB holes were drilled across the anomaly to an average depth of 53m. No mineralisation was encountered.

Climax Mining Ltd (“Climax”) followed up the Homestake work in 1986 with an IP and ground magnetic survey, and 1,400m of RAB, air core and RC drilling. Sub-economic gold mineralisation was found beneath the old mine workings south of Tomingley. Alteration and anomalous arsenic and antimony geochemistry was noted west of Glen Isla but the licence was relinquished without follow-up.

In 1986 Geopeko commenced exploration over the Glen Isla area to investigate the potential for epithermal gold mineralisation similar to that found at the Peak Hill deposit. Geopeko carried out a thorough programme of regional mapping, rock-chip sampling and bulk leach extractable gold (“BLEG”) geochemical sampling, followed up by BLEG grid soil sampling and RAB drilling. The Glen Isla prospect was identified during follow-up of a 5.6 ppb Au BLEG anomaly (Platts, 1990a). Despite encouraging results from drilling, following the takeover of Gepoeko by

North limited in 1994 no further work was done and the licence was relinquished.

EL 5093 was granted to Croesus Mining NL (“Croesus”) in Nov 1995. Part of the licence covered the Glen Isla prospect. MPI Gold Pty Ltd (“MPI”) farmed in to the property in mid-1988 and managed exploration for 12 months. MPI drilled 8 angled and one vertical RC hole at the Glen Isla prospect for a total of 1,322m. Four-metre composites of the holes were analysed for gold and indicator elements. A number of broad, low-grade intersections were made, including 108m @ 0.23 g/t Au in hole GIRC-25, and 32m @ 0.41 g/t Au in hole GIRC-19. Some narrow intersections > 1 g/t Au were made over 1m intervals. Arsenic values ranged up to 5,400 ppm and antimony up to 295 ppm in hole GIRC-19 (Rangott, 2000). MPI concluded that the results supported the possibility that higher-grade gold mineralisation may exist at depth in a feeder structure but that the company lacked the resources to test this concept. MPI withdrew from the joint venture in mid-1999. Croesus did no further work and did not renew the licence when it expired in Aug 2000.

As far as Vidoro is aware, no work has been done at the Glen Isla or Kyalite prospects since 2000.

Proposed Exploration Programme and Budget

The Glen Isla tenement covers the Kyalite and Glen Isla epithermal gold prospect. Previous drill holes have returned elevated gold values over substantial thicknesses, including 32m @ 0.41 g/t Au, 108m @ 0.23 g/t Au, and 396m @ 0.16 g/t Au. A detailed data review has identified potential for porphyry style mineralisation. Grid soil sampling, ground gravity surveys, and RC drilling are planned.

Table 6. Proposed Budget, EL 6246, in A$ x 1,000


Activity	Year 1	Year 2	Total
Geological Data Acquisition	79	80	159
Geochemical Data Acquisition	116	100	216
Geophysical Data Acquisition	60	40	100
Drilling	240	320	560

Sub-Totals:	495	540	1,035

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ELA 3077 Combaning

ELA 3077 lies about 120 km NW of Canberra and 300 km WSW of Sydney. Temora lies just inside the western boundary of the application. There are numerous closely-spaced public roads that provide access to all parts of the area.

The topography in ELA 3077 is relatively flat, around 300m above sea level, except for Gogobilly Hill which rises steeply to a peak of 500m.

Local Geology

ELA 3077 lies on the western boundary of the Tumut Synclinorial Zone, an elongate belt of Early Paleozoic volcanics that extends from Narromine south to the Snowy Mountains. The belt was formed during the Devonian Tabberabberan Orogeny that terminated the formation of the Lachlan Fold Belt.

Early Silurian dominantly dacitic volcanic rocks and related granites, overlain by Siluro-Devonian sedimentary and felsic volcanic rocks, were deposited on a basement of Late Ordovician turbidites. During the Late Silurian, a thick sequence of undifferentiated sediments and volcanics named the Combaning Formation was deposited in a marginal sea environment, overlain by quartz-feldspar porphyry lavas, tuffs and tuffaceous sediments. These rocks were deformed during the Late Silurian - Early Devonian Bowning Orogeny. The folding was accompanied by granite and minor intermediate (diorite) to mafic intrusions.

The Silurian rocks are overlain unconformably by the Cootamundra Group, a sequence of dacitic to rhyolitic tuffs. These are on-lapped by undifferentiated sediments and acid volcanics of the Late Devonian Hervey Group.

A large number of gold-bearing quartz reefs have been worked to shallow depths within the boundaries of ELA 3077. Most of these are very small veins in volcanics, although they are probably related to intermediate intrusives.

Deposit Model

A number of gold deposits occur in a narrow belt of basic to intermediate volcanics of Late Ordovician to Early Silurian age that flank the Gilmore suture to the east. The mineralisation is of differing styles and is

situated close to the suture in the West WyalongTemora-Adelong district (Suppel et al.,1986). The Gidginbung deposit and Dobroyde prospect were considered to be epithermal.

The Gidginbung (Temora) gold deposit (Thompson et al., 1986; Lindhorst and Cook, 1990; Aliibone, 1993; Allibone et al., 1995) is associated with an advanced argillic alteration assemblage of quartz, pyrophyllite, alunite, and kaolinite hosted in basic to intermediate lavas and volcaniclastic rocks. The volcanic rocks are tholeiitic (Wyborn and Cameron, 1990), and a mean Pb/U age of 435 Ma has been obtained using the SHRIMP ion probe. This age is the same as that obtained from the North Parkes porphyry copper deposit.

The gold at Gidginbung occurs within a deformed silica-pyrite body. The highest gold grades are found in pyrite-enargite-barite veins within this zone. Alunite is associated with both an earlier quartz-rich advanced argillic alteration and a later, foliated quartzpoor advanced argillic alteration assemblage that is synchronous with the deformation (Allibone et al, 1995). Ore-bearing veins at Gidginbung pre-date the quartz-poor advanced argillic alteration and are deformed and partly remobilised. The advanced argillic alteration cuts across the peripheral parts of the older porphyry-style alteration systems. Alunite was dated by K/Ar and Ar/Ar techniques and gives a range from 417 to 401 Ma (Perkins et al, 1995)

Overall, the detailed age dating suggests a complex history of magmatic, hydrothermal, and/or deformation activity at Gidginbung that extends from the Middle Ordovician to the Early Devonian.

Previous Exploration

Gold was first found near Temora at the O’Possum Power mine in 1864 but the main rush commenced in 1879. By 1881, the Temora field was producing half the state’s gold. In the first few years there were allegedly some 20,000 residents at Temora, mostly miners. However, gold returns soon declined and the population fell dramatically. During the 1920s depression some mines were re-opened and new discoveries made.

A local syndicate from West Wyalong began exploration in the district in 1969 and drilled 2 diamond

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core holes beneath an old shaft at the Harvey’s prospect. Results are not available. BHP initiated modern exploration in the district with a trial airborne EM survey in 1977. In 1980 Alkane Exploration (Terrigal) NL (“Alkane”) commenced exploration in an area centred on Springdale, 15km east of Temora. Alkane were searching for dip and strike extensions to the numerous quartz vein deposits known in the area. Three deposits were selected for diamond drilling. The only significant intersection was 3.9m @ 2.2 g/t Au in a black, fine-grained poorly-sorted calcareous sediment said to have similar characteristics to the host to gold deposits at Carlin, Nevada.

Teck Explorations Limited (“Teck”) commenced exploration for base metals in the Temora district in 1981 but relinquished their tenements within 12 months after limited work. Zenith Explorations Pty Ltd investigated the gold potential of various small mines around Temora in 1982 but withdrew before implementing their planned programme.

Getty Oil Development Company Limited (“Getty”) commenced exploration on 3 licences east of Temora in 1983. The target was a bulk tonnage disseminated gold deposit hosted by altered intermediate to basic intrusives. Four prospects were tested by RC drilling. No mineralised intrusives were found and no economic gold values intersected. Further RAB and RC drilling at the Dobroyde prospect, outside the western boundary of ELA 3077, encountered interesting mineralisation ranging from 63m @ 1.9 g/t Au to 2m @ 36.5 g/t Au. Getty farmed the properties out to CRA in 1984 (excluding the Dobroyde prospect area, which was purchased by Little River Gold Fields NL). CRA tested the concept that gold mineralisation might occur in the contact metamorphic aureole around the Wallundry diorite intrusion using airborne magnetics and radiometrics. Anomalies were followed up by drilling 19 RC holes. No significant gold or platinum mineralisation was encountered and the licences were relinquished in 1987. Following the CRA JV, Little River completed a program of percussion drill holes, which returned a best intersection of 1m @ 10.6 g/t Au Harvey’s Shaft.

BP Minerals Australia (“BP”) investigated the Stockingdale area during 1984. Three RC holes were drilled that failed to intersect any mineralisation and BP withdrew. CSR Limited explored the area south

of Stockingdale in 1985 for epithermal gold mineralisation of the type found at Gidginbung and Dobroyde, but was unsuccessful.

In 1987 Goldrim Mining commenced exploration in an area now covered by the northern part of ELA 3077. Twelve old gold prospects were identified, of which two had been tested by previous drilling by Alkane. Goldrim sought a joint venture partner to fund their proposed exploration but were unsuccessful and relinquished their tenement in 1988. BP applied for this ground and was granted a licence in 1989. The target was a Gidginbung-style epithermal gold deposit hosted by the Silurian Frampton Volcanics buried beneath Cainozoic cover. A detailed airborne geophysical survey was followed up with RAB drilling of anomalies, but only 3 holes were completed before BP withdrew from mineral exploration world-wide in 1990 and farmed the property out to CRA. CRA withdrew from mineral exploration in NSW in 1991 and relinquished the tenement without attempting any field work.

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Fig 9. Prospect locations on aeromagnetics, Springdale area, ELA 3077

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BHP Gold Mines Ltd (“BHPG”) was granted a licence around the town of Temora in 1990. The NE part of the licence overlapped the present area of ELA 3077, however the focus of their exploration was the Gilmore Suture and little work was done NE of Temora. RAB drilling located anomalous gold in sediments east of the Gilmore Suture but the results were deemed not significant and the tenement was relinquished in 1991.

In 1990 Maymill Pty Ltd was granted a licence overlapping the southern part of ELA 3077. The target was a postulated lineament parallel to and east of the Gilmore Suture. A study of airborne magnetic data did not support this concept and the area was quickly relinquished.

Paragon Gold Pty Ltd, the operators of the Gidginbung gold mine, took out a licence over the Springdale area in the centre of the area now covered by ELA 3077 in 1992. The area was considered prospective for intrusion-related gold, copper and tintungsten deposits associated with the numerous stocks and dykes intruding the structurally complex zone of Paleozoic sediments. Ground magnetic surveys were used to follow up aeromagnetic anomalies identified by previous explorers, together with grid soil and rock chip sampling. In 1994 Paragon Gold Pty Ltd changed its name to Gold Mines of Australia (NSW) Pty Ltd (“GMA”) and expanded its search to include the area north of Springdale. Air core, RC and RAB drilling was employed to follow up geochemical and geophysical anomalies.

Better results included 4m @ 1.2 g/t Au at the Kangaroo Dick prospect, 4m @ 2.65 g/t Au at Opposum Hill, 2m @ 6.8 g/t Au from the Mother Shipton prospect, and

10m @ 1.3% Ni at the Merri Hill prospect. Several anomalous intersections of gold were also made at Merri Hill, including 32m @ 0.71 g/t Au in hole SMR6 and 40m @ 0.79 g/t Au in hole SMRC-17 (Roadley et al, 1994). However, GMA considered that the potential for development of an economic resource was low and transferred the licences to Cyprus Amax Australia Corporation (“Cyprus”) in 1997. Cyprus commissioned SRK Consulting to conduct a structural study while Cyprus reviewed all past exploration in the region. The review concluded that it was unlikely that a “Cyprus Amax sized” resource would be found and Cyprus relinquished the tenements in 1999.

Resolute Limited was granted a licence over the Springdale area in 1999 but did no work and relinquished the tenement at the end of the first year. Essentially the same ground was granted to Michelago Resources NL in 2001. Apart from a literature study and brief field reconnaissance no work was done and the licence was relinquished after 12 months. Since that time the ground has been open until Carpentaria lodged their application for ELA 3077.

Hence for the past 10 years there has been essentially no work done in the area, and no follow up to the interesting drilling results obtained by past explorers such as Alkane and GMA.

Exploration by Giralia and Carpentaria

Carpentaria commissioned a consultant to compile historical exploration reports within the Temora district.

Proposed Exploration Programme and Budget

Subject to the issue of the title, the budget shown below has been set by Carpentaria.

Table 7. Proposed Budget, ELA 3077, in A$ x 1,000


Activity	Year 1	Year 2	Total
Geological Data Acquisition	20	20	40
Geochemical Data Acquisition	10	20	30
Geophysical Data Acquisition	70	30	100
Drilling	150	280	430

Sub-Totals:	250	350	600

Carpentaria Exploration Limited

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Independent Geologist’s Report

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Fig 10. Road and rail access and geological regions, EPM 14840

NICKEL PROJECTS

EPM 14840 Redbank

EPM 14840 is centred about 75 km due west of the North Queensland city of Ingham. Access is via the Stone Creek and Mount Fox Roads to the Camel Creek turn-off, and thence by 4WD station tracks to Lucy Creek. There are no tracks within the tenement.

The town of Ingham is the commercial centre of Hinchinbrook Shire and has a population of 5,075 according to the 2001 Census. The main road and rail system in coastal Queensland passes through the town, with regular train services connecting to Townsville, Cairns and Brisbane. Townsville, 100km SE of Ingham, is the second largest city in Queensland.

Regional Geology

The Geological Survey of Queensland (“GSQ”) has divided North Queensland into 9 “Regions”. Each Region has a coherent, inter-related geological assemblage that is distinguishable from adjacent

Regions. EPM 14840 is located in the Camel Creek Sub-Province of the Clarke River Region of Bain and Draper (1997). This sub-province is dominated by Ordovician to Early Devonian quartz-rich turbidites, with tholeiitic basalts, calc-alkaline volcanics and volcaniclastic rocks. These were multiply deformed in the Devonian. The structure is complex and not well understood. At least two major episodes of folding can be recognised. A feature of the deformation is the development of “melange”, which consists of clasts of arenite and siltstone from millimetres to many metres long in a matrix of cleaved mudstone. Contacts with undisturbed rocks are gradational.

The basement to the Camel Creek Sub-Province consists of mid-Proterozoic continental sediments progressively deformed and metamorphosed from low-grade in the west to extremely high-grade (granulite facies) in the east. Late Ordovician to Devonian deformation, and metamorphism up to amphibolite grade, was followed by granitoid emplacement. A further orogenic cycle commenced

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in the Carboniferous with the intrusion of felsic magmas; eroded remnants of the coeval volcanic and subvolcanic complexes are well preserved.Where folds can be mapped, they appear to be asymmetric and associated with slaty cleavage. East-west shortening of the crust led to the formation of an imbricate stack of thrust sheets over-steepened by ramping and/or later shortening after thrusting ceased. The second phase of deformation was NE trending and reoriented the earlier folds. The major folds have wavelengths of about 20 km.

The oldest rocks are Precambrian metamorphics that lie west of the Burdekin Fault in the Georgetown Province. They are not found in the Camel Creek SubProvince. The ultramafic-mafic complexes along the Burdekin Fault, which forms the western boundary of the Clarke River Region, may be related to an old suture.

The Kangaroo Hills Formation is a turbidite sequence similar in many respects to the Greenvale Formation, and some areas originally mapped as Kangaroo Hills Formation are now shown as Greenvale Formation, and vice versa. The two units are merged in Figure 8 above and labelled Kangaroo Hills Formation. The Kangaroo Hills Formation consists of feldspathic lithic arenite and mudstone with subordinate polymictic conglomerate and mafic volcanic rocks. Partial Bouma cycles are common, particularly in the thinner bedded units. Limestone clasts frequently occur in the conglomerate, and lenses of limestone up to 200m long are interpreted to be allocthonous blocks. The limestone lenses contain Early Devonian conodont fossils.

The Glen Gordon Volcanics consist mainly of andesitic lava flows and dacitic ignimbrites of Upper Carboniferous age. They may be co-eval with the large I-type felsic granitoid batholiths of Carboniferous to Permian age that outcrop extensively throughout the eastern part of the region.

Carboniferous-Permian magmatic activity was associated with the formation of widespread but generally small tin-tungsten and topaz deposits in greisens and veins, both within the granites and their country rocks. Small base metal deposits also formed at this time. The most important mineralising event was the emplacement of the breccia pipe at Kidston and the accompanying alteration and gold

mineralisation. The characteristics of the granitoids are consistent with magma generation in response to a shallow west-dipping subduction zone on the continental margin.

Prospect Geology

Interbedded mudstones and feldspathic arenites of the Early Devonian Kangaroo Hills Formation turbidite sequence are the dominant bedrock units in the area of EPM 14840, although most of the licence is masked by a thin veneer of Tertiary laterite and Cainozoic alluvium along the creek channels. A thin altered basalt occurs at the base of the Kangaroo Hills Formation. The turbidites were intruded in the Late Devonian by a grey, medium-grained biotite granodiorite with minor pink to cream biotite granite.

During the Late Carboniferous to Early Permian, the Bewllder Granite was intruded. This is a pinkish-grey, medium-grained porphyritic sphene-bearing biotite granodiorite, locally exhibiting a granophric texture. The Bewllder Granite was in turn intruded by the Ingham Granite Complex, comprising pale grey to pale pink, fine to medium-grained porphyritic horneblende-biotite and biotite I-type monzo-granite and granodiorite. The plutons are surrounded by aureoles up to 2 km wide and chararacteristically cause “spotting” in the mudstones.

Remnants of an Early Tertiary (Palaeogene) olivine basalt plateau occur as low mesas.

Previous Exploration

More than 30 exploration reports are on file in the Queensland Digital Exploration Reports System (“QDEX”) database, representing work carried out by 8 companies in the area during the past 50 years. Exploration in the area commenced in 1958 in the Kangaroo Hills tin field SE of Redbank, when MIM examined the alluvial tin potential using churn drilling. MIM was followed in 1965 by Tin Mines of Australia Pty Ltd, who conducted a programme of drilling and shaft sinking for alluvial tin in the headwaters of the Burdekin River, including the Redbank area. During 1970 Anexa Pty Ltd carried out reconnaissance prospecting in the region for a wide variety of base metals including nickel and tin. North Broken Hill Limited (“North”) prospected the Lucy Tableland west

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Table 8. Proposed Budget, EPM 14840, in A$ x 1,000


Activity	Year 1	Year 2	Total
Geological Data Acquisition	35	78	113
Geochemical Data Acquisition	70	52	122
Geophysical Data Acquisition	0	0	0
Drilling	105	160	265

Sub-Totals:	210	290	500

of Redbank for tin between 1978 and 1980. Ten diamond core holes were drilled on aeromagnetic anomalies. Only trace low tin values were found, in an area of greisenised granite. Interesting manganiferous grits with anomalous cobalt values up to 1.37% Co were found near the southern boundary of the area, at the location of the present Redbank prospect. At the same time Amoco Minerals Australia Company (“Amoco”) was exploring the deep lead potential in the Ingham Tin Province from Redbank east to Ingham. Amoco tested the Black Cow prospect using Calweld drilling, without economic success. Australian Anglo American Prospecting Limited (“Anglo”) was granted Authority to Prospect (“ATP”) 2657M in May 1980. The objective was to prospect the Pliocene Campaspe Formation for alluvial tin. Reconnaissance prospecting failed to locate any tin deposits.

In 1987, Golden Ant Mining Ltd (“Golden Ant”) was granted ATP 4904 and carried out regional stream sediment geochemical sampling utilising the Bulk Leach Extractable Gold (“BLEG”) technique. The target was epithermal gold mineralisation similar to that discovered in 1986 at the Golden Ant prospect. The company persisted until 1993, the work including 6 separate percussion drilling programmes comprising 467 blast holes totalling 8,282m and 155 RC holes totalling 5,130m. The drilling focused on the Amanda Bel Goldfield, located on Camel Creek SE of Redbank. No economic mineralisation was discovered. No further exploration was reported until Carpentaria applied for EPM 14840 in 2005.

Exploration by Giralia and Carpentaria

Early in 2007 Carpentaria collected a total of 37 minus -80# soil samples 200m apart along a fence line across

the Redbank aeromagnetic feature. Assaying was completed at ALS using the ME-ICP61s method for a suite of 28 elements. The aim was to determine if there was significant Ni-Co anomalism over the magnetic complex, in particular the internal magnetic lows.

The anomalous Ni values coincide with a magnetic low comparable with the Greenvale nickel laterite.

Proposed Exploration Programme and Budget

The Redbank EPM covers an aeromagnetic anomaly interpreted to have potential for buried nickel laterite mineralisation in the Greenvale area. Proposed exploration includes geological compilation, follow up soil sampling, ground magnetics and RC drilling.

EPM 14170 Cargoon

EPM 14170 is located 100 km NE of the town of Hughenden in Central Western Queensland. From Hughenden, the Kennedy Development Road is followed north for 70 km, and then a station track leads north to the western boundary of the EPM. There are no formed tracks within EPM 14170.

The Mt Isa - Townsville railway follows the Flinders Highway, and Hughenden is a service centre for the railway.

Regional Geology

EPM 14170 is located in the Charters Towers Region. A belt of schist, gneiss and quartzite of the Neoproterozoic Cape River Metamorphics forms the basement in the southwest of the area. These are overlain by biotite ortho-gneisses of the Cambrian to Ordovician Fat Hen Complex, which includes minor migmatite, biotite schist, calc-silicate and amphibolite. The unit grades up to a strongly foliated gneissic

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syntectonic granite, the product of migmatisation. The contact with the underlying Cape River Metamorphics is ill-defined. Both these units were subsequently intruded by granitoids and volcanics of the Reedy Springs and Lolworth Batholiths in the Late Silurian to Early Devonian. Widespread olivine basalt flows of Pliocene to Recent age form a plateau to the northeast and southwest of EPM 14170.

Local Geology

The Cape River Metamorphics form a belt 100 km long trending NW from Pentland through to EPM 14170. The original shale, siltstone and sandstone have been metamorphosed to schist, gneiss and quartzite. Calcareous and dolomitic sediments and possibly mafic volcanics were the probable precursors of the scattered outcrops of amphibolite, tremolite schist and gneiss, marble and pyroxene hornfels that occur in the lower part of the sequence.

The dominant biotite gneiss is poorly exposed and deeply weathered. It is typically strongly foliated, comprised of fine to medium grained biotite, feldspar and quartz with minor amounts of garnet, sillimanite, tourmaline and epidote. The gneiss has a welldeveloped banding defined by biotite-rich and biotitepoor layers. The banding is folded into tight isoclinal folds with sub-horizontal fold axes. The gneisses grade laterally into coarse felsic granitic bands of migmatite, interlayered with finer mafic-rich bands. The migmatites grade upwards into the ortho-gneisses of the Cambrian Fat Hen Complex. The rocks were probably originally clay-poor pelitic sediments.

The contact with the overlying Fat Hen Creek Complex is obscure. Within EPM 14170, the Fat Hen Creek Complex is comprised of foliated, melanocratic biotite, tourmaline-biotite and hornblende-biotite tonalite to granodiorite with gneiss and calc-silicate xenoliths. The rocks grade up to migmatites, generated through partial melting. Myrmekite overgrowths on the K-feldspar porphyroblasts suggest deformation occurred at a depth greater than 15 km (Simpson and Wintsch, 1989).

Granites of the Reedy Creek Batholith intrude the Cape River Metamorphics and are associated with a thermal aureole of unknown dimensions. The batholith contains 19 plutons that are dominantly

peraluminous two-mica types, emplaced syntectonically during the Late Silurian to Early Devonian. The pluton hosting the Mt Emu gold diggings is the Upland Granodiorite, a foliated, grey, medium-grained porphyritic muscovite-biotite granodiorite.

In the vicinity of EPM 14170, a long hiatus occurred between the emplacement of the Reedy Creek Batholith and the initiation of volcanism in the Miocene. The surface was eroded down to an undulating plateau. Early in the Miocene, basalt lava was erupted from vents and flowed to the SW. Erosion of the Reedy Creek plutons provided detritus that formed the Campaspe Beds. These consist of moderately to poorly sorted massive and pebbly sandstones, occasionally cross-bedded, with thin interbeds of siltstone and mudstone and rare conglomerate. The Campaspe Beds are less than 15m thick and formed a broad piedmont around the Reedy creek batholith. To the SE of EPM 14170, the Campaspe Beds host the auriferous sediments that were worked around Pentland.

In the early Pleistocene, basalt lava was erupted from vents east of the present Great Dividing Range and flowed east to NE towards the Burdekin River valley. Known as the Nulla Province, this lava field contains flows dated as young as 13,000 years ago, and covers an area of 7,500 sq km.

Previous Exploration

Gold was discovered in the Mount Emu Goldfield in 1909 at the Diecon prospect . Mining at the Granite Castle reef, the largest producer in the field, commenced in 1910. Hand picked high-grade gold ore was shipped to Charters Towers for treatment. All the workings were on narrow quartz reefs, generally less than one metre wide. A treatment plant was erected in 1913, but performance was poor as the gold was only partially free-milling. During World War II shafts and underground workings at the Granite Castle mine were extended to 30m below surface and hand-picked ore sent to Chillagoe for treatment. Total recorded production from the Mount Emu field was 2,400 ounces from 1,900 tonnes of ore (Robinson, 1981).

Modern exploration began in 1962 when North Broken Hill Limited was granted ATP 214M over the

Carpentaria Exploration Limited

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Mt Emu Goldfield. North’s interest was prompted by a suggestion that Granite Castle was a potentially important gold mine lying idle (Lissiman, 1963). Investigations showed that the reef width was narrow and North relinquished the area after one year.

Since then a dozen companies have carried out work within the present boundaries of EPM 14170, generating some 50 exploration reports that are now on open file in the GSQ QDEX database.

North was followed in 1970 by Uranium Consolidated NL, who carried out drainage sampling at a density of 10 samples per sq km and analysed for Co, Cu, Ni, Pb and Zn. Only a few low-order anomalous areas were found and the area was relinquished.

ATP 983M was granted to International Nickel Australia Limited (“Inco”) in 1971. Reconnaissance stream sediment samples collected at a sample density of about 5 per sq km were analysed for Cu, Ni, Pb and Zn. Anomalous samples were followed up by soil and rock chip sampling, and resulted in the discovery of a gossan outcrop which Inco named the Bradley’s Jubilation prospect (also known as the Brady’s Reward prospect). The gossan consisted of a 60m long lens of metamorphosed quartz-rich arenite in an inlier of the Cape River Metamorphics within the Big Bore Granodiorite. Chip samples from the gossan assayed up to 1.5% Ni and 1.2% Cu. One diamond core hole was drilled to a total depth of 133.5m beneath the gossan. Chalcopyrite veinlets were observed from 96.0 to 101.5m down hole but assayed less than 0.05% Cu (Williams, 1974). Inco surrendered the tenement in 1974.

Agip Australia Pty Ltd (“Agip”) was granted ATP 2223M in October 1979 to explore for hydrothermal vein-type uranium mineralisation in the Cape River Metamorphics. A helicopter radiometric survey indicated that the potential for uranium mineralisation was low. Agip then changed focus to the gold mineralisation in the district and carried out percussion drilling on the Sarah Houston prospect near Pentland and the Mount Clearview prospect 50km NW of Pentland. Results were disappointing and the area was relinquished at the end of 1982.

In 1980 Houston Oil and Minerals (“Houston”) was granted 8 ATPs in the Cape River area, one of which

covered ground within EPM 14170. A helicoptersupported reconnaissance stream sediment survey detected a number of anomalies including elevated gold in the vicinity of the Mount Emu Goldfield and a float sample assaying 0.12%Cu and 40 ppm Mo in the southern part of present 14170. Houston relinquished the areas at the end of 1982.

Loloma Limited examined the Mount Emu Goldfield in 1980 and proposed a 14-hole percussion drilling programme at the Granite Castle and nearby prospects but relinquished their tenement without carrying out the programme.

Central Coast Exploration NL (“CCE”) was granted ATP 3340M in July 1982. Initial focus was on an adamellite intrusion near an area known as Gypsy Pocket where CCE found a narrow vein containing molybdenite (up to 432 ppm Mo in a chip sample) and chalcopyrite. Further investigation indicated that only weakly anomalous Cu-Mo mineralisation occurred within an area of porphyry copper style alteration. The ATP expired in 1985.

Chevron Exploration Corporation (“Chevron”) explored the area for porphyry copper, skarn and stockwork mineralisation related to intrusives, as well as volcanogenic massive sulphides associated with extrusives. An aeromagnetic survey was carried out and some anomalies followed up without success. Chevron withdrew in 1984.

In 1986 Conatus Pty Ltd (“Conatus”) covered the Mount Emu Goldfield with ATP 4319M. More than 100 percussion holes were drilled at the Granite castle prospect. Metallurgical test work on the drill cuttings showed that the gold mineralisation was very refractory, with column leach recoveries as low as 26% after 63 days. The tenement was relinquished in September 1989.

Pan Australian Mining Limited (“PanAust”) explored the area now covered by EPM 14170 from 1987 to 1989, using BLEG stream sediment sampling with rock chip follow-up. The targets were epithermal bulk tonnage gold deposits and/or narrow high-grade quartz vein gold deposits. Anomalous BLEG samples were traced to geological features of little economic significance.

CRA Exploration Pty Limited briefly held the area during 1991. A literature review and compilation of

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Independent Geologist’s Report

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Fig 11. Image processed RTP magnetics at the Bradley’s Jubilation prospect

previous geochemical and airborne geophysical was partially completed but no field work was conducted before CRA relinquished their tenement in 1992.

EPM 9352 covering the Mount Emu Goldfield was granted to Walhalla Mining NL (“Walhalla”) in April 1993. Walhalla followed up the Conatus drilling at Granite Castle with an additional 73 RC holes totalling 4,495m, including 886m of diamond core tails on the RC holes. An additional 10 diamond core holes were drilled for a total of 553m. Combining their data with the previous Conatus drilling generated a JORC inferred resource of 825,000 tonnes @ 4.9 g/t Au, 79.3 g/t Ag, 0.95% Pb and 1.4% Zn, using a cut-off grade of 1 g/t Au. The resource was calculated by W.T. Saunders, consultant geologist, supervised by D.A. Berkman, consultant geologist, who has the relevant experience in relation to the mineralisation being reported on to

qualify as a Competent Person as defined in the Australasian Code for Reporting of Mineral Resources. The tenement was relinquished in March 1994.

In June 1993 MPI Gold Pty Ltd (“MPI”) was granted EPM 9409 which partially covered the SE portion of the present EPM 14170. The target was ChartersTowers style shear-zone hosted gold mineralisation at the contacts between the Cape River Metamorphics and various intrusives. BLEG sampling returned only two samples with values > 1ppb Au. Under a joint venture agreement with MPI, Placer carried out an airborne magnetic and radiometric survey in 1994. Ground follow-up was discouraging and the tenement was surrendered in July 1996.

No further work has been reported between 1996 and 2004, when Giralia was granted EPM 14170.

Carpentaria Exploration Limited

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Independent Geologist’s Report

Table 9. Proposed Budget, EPM 14170 Cargoon, in A$ x 1,000


Activity	Year 1	Year 2	Total
Geological Data Acquisition	80	85	165
Geochemical Data Acquisition	105	55	160
Geophysical Data Acquisition	137	90	227
Drilling	128	280	408

Sub-Totals:	450	510	960

Exploration by Giralia and Carpentaria

Giralia commissioned a compilation and reinterpretation of existing geophysical data within EPM 14170, which was undertaken during 2006. Image processing of reduced-to-pole (“RTP”) data has highlighted a strong feature trending SE from the Bradley’s Jubilation prospect. This magnetic high has been interpreted as possibly a skarn, following the contact between the Cape River Metamorphics and the Big Bore Granodiorite. The mineralisation at Bradley’s Jubilation occurs on a NNE-trending structure that appears to cut off the magnetic high.

Proposed Exploration Programme and Budget

Previous rock chip sampling of the gossan outcrop at the Bradley’s Jubilation prospect returned up to 1.5% nickel and 1.2% copper. The gossan is hosted by amphibolites, calc-silicate rocks and metasediments of the Cambro-Ordovician Cape River Metamorphics, close to the margin of the Siluro-Devonian Big Bore Granodiorite. Mineralisation is interpreted by Carpentaria to be a possible analogue of skarn style nickel sulphide mineralisation at the Avebury deposit in western Tasmania. Follow up rock and soil sampling, geological mapping, ground and airborne EM surveys and drilling are planned.

CONCLUSIONS

David Jones considers that the tenement package assembled by Carpentaria in eastern Australia has considerable potential for the discovery, through the exploration programme proposed by Carpentaria, of significant new mineralisation. The selection of the mineral tenement areas by Carpentaria is soundly based on good geoscientific evidence, and their

geological models have demonstrated validity in that world class deposits have been discovered using similar criteria.

Successful exploration has many elements; as well as a good geoscientific basis, it must be driven both from the top management of an organisation as well as the geologists in the field. The directors of Carpentaria have many years experience in mineral exploration, and have survived the highs and lows of this cyclical industry. Above all, successful explorers have demonstrated that dogged persistence is essential, for there are many surprises and even more disappointments along the way.

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Table 10. Summary of Proposed Carpentaria Budget (in A$ x 1,000)


Area	Year 1	Year 2	TOTAL	Annual Commitment
				Year 1	Year 2
EPM 14170 Cargoon	450	510	960	215	150
EPM 14840 Redbank	210	290	500	40	50
EPM 14955 Mt Agate	495	515	1,010	70	90
EPM 14948 Lady Inez	385	440	825	54	50
EL 6246 Glen Isla	495	540	1,035	42	—
ELA 3077 Combaning	250	350	600	127*	127*
Operating budget	2,285	2,645	4,930	548	467
Costs of listing, brokerage	578	0	578
Administration	480	480	960
Working Capital	382	650	1,032
Totals	3,725	3,775	7,500
(Drilling)	958	1,520	2,478

For and on behalf of Vidoro Pty Ltd

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David G Jones

Effective Date: 31[st] July 2007

Carpentaria Exploration Limited

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Independent Geologist’s Report

REFERENCES

Bain, J.H.C., & Draper, J.J., 1997, North Queensland Geology. AGSO Bull.240. 600 pp.

Barker, R.M., Blake, P.R., Burrows, P.E., Crouch, S.B.S., Fordham, B.G., Hayward, M.A., Livingstone, M.D., Morwood, D.A., Murray, C.G., Parfrey, S.M., Robertson, A.D.C., Simpson, G.A.. Taube, A., Domagala, J., and Randall, R.E., 1997. New Insights into the Geology of the Northern New England Orogen in the RockhamptonMonto Region, Central Coastal Queensland: Progress Report on the Yarrol Project. Queensland Government Mining Journal, May 1997, pp11–26.

Bennett, E. M., 1966. Final Report ATP 204M. Mt Isa Mines Limited. QDEX Company Report No.02108. 78p.

Blake, D.H., 1987. Geology of the Mount Isa Inlier and environs, Queensland and Northern Territory. BMR Bull.225.

Cayzer, R.A.S. and McIntyre, J.R., 1994. Horse Creek Area, EPM 8653, Annual Report. Hunter Resources. QDEX Company Report No.25942. 66p.

Champion, D.C., and Bultitude, R.J., 1994. Granites of the eastern Hodgkinson Province. II. Their geochemical and Nd-Sr isotopic characteristics and implications for petrogenesis and crustal structure in North Queensland. Geol.Surv.Qld. Record 1994/1.

Chappell, B.W., Blevin, P.L., and Bryant, C.J., 1999. Moonbi Supersuite: Evolution from Partially Melted Juvenile Crust to Strongly Fractionated Leucogranites. In P.G. Flood (ed.) Regional Geology, Tectonics and Metallogenesis: New England Orogen. Univ. New England, pp 295-296.

Charchalis, N., 1963. Glassford Creek Copper-Iron Deposits. CEC Pty Ltd Technical Report No.30. 8p.

Clarke, I., 1985. Primary Mineralisation in the Forbes-Parkes-Peak Hill-Tomingley Gold Belt. Geol. Surv. NSW Report GS1985/123. 61p.

Clarke, I., and Sherwin, L., 1990. Geological Setting of Gold and Copper Deposits in the Parkes Area, NSW. Geol. Surv. NSW Record 23 Part 1. 189p.

Cox, D. P., and Singer, D.A., 1986. Mineral Deposit Models. USGS Bull.1693. 379pp.

Denaro, T.J., Withnall, I.W., Culpeper, L.G., Burrows, P.E., and Morwood, D.J., 2003. Mines, Mineralisation and Mineral Exploration in the Duchess and Boulia 1:250,000 Sheet Areas, Northwest Queensland. Qld. Dept. Mines & Energy Geological Record 2003/4. 258 pp.

Garrad, P.D., 1996. Mineral Occurrences of the Lolworth, Pentland and White Mountains 1:100,000 Sheet Areas, North Queensland. Qld. Dept. Mines & Energy Geological Record 1996/6. 374 pp.

Gust, D.A., Stephens, C.J., and Grenfell, A.T., 1993. Granitoids of the northern NEO: their distribution in time and space and their tectonic implications in Flood, P.G., & Aitchison, J.C. (Editors): New England Orogen, eastern Australia. Department of Geology and Geophysics, University of New England, Armidale, 565–571.

Lissiman, J.C., 1963. Report on ATP 214M, Mt Emu Plains . North Broken Hill Ltd. QDEX Company Report No. 1214. 6p.

Orridge, G.R., and Gunn, M.J., 1974. Authority to prospect 1208M Agate Downs Relinquishment Report. Newmont Proprietary Limited. QDEX Company Report No.5043. 9p.

Platts, W.D., 1990a. Peak Hill-Parkes Gold Project 6-Monthly Progress Report to 31[st] Dec 1989. Peko-Wallsend Operations Limited. DIGS Company Report No.GS1990/212. 135p.

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Platts, W.D., 1990b. Peak Hill-Parkes Gold Project 6-Monthly Progress Report to 30[th] June 1990. Peko-Wallsend Operations Limited. DIGS Company Report No.GS1991/017. 270p.

Platts, W.D., 1991. Peak Hill-Parkes Gold Project 6-Monthly Progress Report to 31[st] Dec 1990. Peko-Wallsend Operations Limited. DIGS Company Report No.GS1991/017. 59p.

Platts, W.D., and Shepherd, A., 1992. Peak Hill-Parkes Gold Project Final Report. Peko-Wallsend Operations Limited. DIGS Company Report No.GS1991/017. 261p.

Platts, W.D., and Freyberg, J., 1994. Peak Hill-Parkes Gold Project Annual Progress Report to 31[st] Dec 1993. PekoWallsend Operations Limited. DIGS Company Report No.GS1992/281. 203p.

Rangott, M.F., 2000. Final Report EL 5093 “Tomingley Creek”. Croesus Mining NL. DIGS Company Report No.GS2001/105. 17p.

Roadley, G., Cordery, G., Lesh, R., Goesch, L and Hume, J., 1994. Annual Report EL 4236 “Springdale”. Gold Mines of Australia (NSW) Pty Ltd. DIGS Company Report No.GS1995/023. 650p.

Robinson, C.J., 1981. Report on ATP 2461M, Mt Emu . Loloma Ltd. QDEX Company Report No. 9269. 37p.

Sherwin, L., 1997. Narromine 1:250,000 Geological Sheet SI 5303 (Second Edition). Geol. Surv. NSW.

Simpson, C. and Wintsch, R.P., 1989. Evidence for Deformation Induced K-feldspar Replacement by Myrmekite. Journal of Metamorphic Geology Vol. 1, pp 261-275.

Sparks, G.J., 1995. Horse Creek Area, EPM 8653, Annual Report. MIM Exploration Pty Ltd. QDEX Company Report No.26804. 90p.

Thompson J.F.H., Sillitoe R.H., Baker T., Lang J.R., Mortensen J.K. 1999. Intrusion-related gold deposits associated with tungsten-tin provinces. Min Dep 34, pp 323-334.

Warren, A.Y.E., Gilligan, L.B., and Raphael, N.M., 1996. Cootamundra 1:250,000 Geological Sheet SI 5511 (Second Edition). Geol. Surv. NSW.

Williams, W. I., 1974. Authority to Prospect 983M, Mount Cracknell, Queensland. Final Report. International Nickel Australia Limited. QDEX Company Report No.4748. 44p.

Withnall, I.W., Draper, J.J., MacKenzie, D.E., Knutson, J., Blewett, R.S., Hutton, L.J., Bultitude, R.J., Wellman, P., McConachie, B.A., Bain, J.H.C., Donchack, P.J.T., Lang, S.C., Domagala, J., Symonds, P.A., and Rienks, I.P, 1997. Review of Geological Provinces and Basins of North Queensland In Bain, J.H.C. and Draper, J.J., (eds) North Queensland Geology. AGSO Bull.240/Qld. Geol. 9, pp 448-528.

Withnall, I.W., Rienks, I.P., and Hutton, L.J., 1998. White Mountains 1:100,000 Geology Sheet 7857. Qld. Dept. Mines & Energy.

Withnall, I.W., Culpeper, L.G., Burrows, P.E. and Morwood, D.A., 2000. Mineral Occurrence Map, Malbon 1:100,000 Geology Sheet 6955. Qld. Dept. Mines & Energy.

Young, D. I., 1979. Authority to Prospect 2035M, Lucy Tableland Area. Report for 6 months ended 8[th] May 1979. QDEX Company Report No. 7361. 58p.

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GLOSSARY OF TECHNICAL TERMS

This glossary comprises a general list of common technical terms that are typically used by geologists. The list has been edited to conform in general to actual usage in the body of this report. However, the inclusion of a technical term in this glossary does not necessarily mean that it appears in the body of this report, and no imputation should be drawn. Investors should refer to more comprehensive dictionaries of geology in printed form or available in the internet for a complete glossary.

accretion	The process by which a body grows from a small nucleus by the gradual addition
	of other solid bodies.
adamellite	A granitic rock containing 10-50% quartz and with an alkali feldspar to total
	feldspar ratio between 35% and 65%.
aeromagnetic survey	Systematic measurement and collection, from an aircraft, of the earth’s magnetic
	field at regular intervals.
Ag	The chemical symbol for silver.
Al	The chemical symbol for aluminium.
albite	White or colourless plagioclase feldspar with the formula NaAlSi3O8.
alkali feldspar	A feldspar rich in sodium or potassium.
alluvial deposit	A mineral deposit consisting of recent surface sediments laid down by water.
alteration	The change in the mineral composition of a rock, commonly due to hydrothermal
	activity.
alteration zone	A zone in which rock-forming minerals have been chemically changed.
amphibolite	A crystalline rock consisting mainly of amphibole and plagioclase with little or no
	quartz.
andesite	A fine-grained, dark-coloured extrusive rock.
anomaly	A departure from the expected or normal background.
aplite	A fine-grained, sugary-textured rock consisting essentially of quartz and alkali
	feldspar. Commonly occurs as dykes or sills in granites.
arenite	A general name for consolidated sedimentary rocks composed of sandstone-size
	fragments regardless of whether the grains are quartz sand or not (they could be
	limestone, feldspar etc.).
argillite	A weakly metamorphosed compact rock, derived from mudstone or shale.
arsenopyrite	A steely-grey metallic mineral with the formula FeAsS. The principal ore of arsenic.
As	The chemical symbol for arsenic.
Au	The chemical symbol for gold.
AusIMM	Australasian Institute of Mining and Metallurgy.
back-arc	The landward side of an island arc.
basalt	A dark-coloured igneous rock.
base-metal	A non-precious metal, usually referring to copper, lead and zinc.

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batholith	A large mass of igneous rock that has more than 100 sq km of surface exposure.
Bi	The chemical symbol for bismuth.
breccia	A rock composed of angular rock fragments.
bulk sample	A large volume of soil or rock obtained for examination or analysis.
Ca	The chemical symbol for calcium.
Cainozoic	An era of geological time from the end of the Mesozoic to the present.
calcalkaline	Igneous rocks containing calcium-rich feldspar.
calc-silicate	A metamorphic rock composed mainly of calcium-bearing silicates; formed from
	the metamorphism of impure limestone or dolomite.
Cambrian	A period of geological time approximately from 506 Ma to 544 Ma.
carapace	A hard shell on the outer surface of a body.
Carboniferous	A period of geological time approximately from 295 Ma to 355 Ma.
cassiterite	The principal ore of tin with the chemical formula SnO2.
chalcopyrite	A mineral of copper with the chemical formula CuFeS2.
clastic	A rock composed principally of fragments derived from pre-existing rocks.
complex	An assemblage of rocks of various ages and origins intricately mixed together.
conglomerate	A sedimentary rock formed by the cementing together of water-rounded pebbles,
	distinct from a breccia.
continental	Formed on land rather than in the sea.
craton	A major part of the Earth’s crust that has been stable and little deformed for a long
	time.
Cretaceous	A period of geological time approximately from 65 Ma to 135 Ma.
Cu	The chemical symbol for copper.
cupola	An upward projection of an igneous intrusion into its roof.
dacite	A fine-grained extrusive rock composed mainly of plagioclase, quartz and pyroxene
	or hornblende or both. It is the extrusive equivalent of granodiorite.
Devonian	A period of geological time approximately from 355 Ma to 410 Ma.
diamond drilling	Rotary drilling technique using diamond set or impregnated bits, to cut a solid,
	continuous core sample of the rock. The core sample is retrieved to the surface, in
	a core barrel, by a wire line.
differentiation	The process by which rocks develop layers of different composition.
diorite	A plutonic rock intermediate in composition between acidic and basic, consisting
	essentially of plagioclase and mafic minerals.
disseminated	Scattered distribution of generally fine-grained metallic minerals throughout a
	rock.
dyke	A tabular igneous intrusion that cuts across the bedding or other planar structures
	in the host rock.

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dynamothermal	Common type of regional metamorphism involving both directed and load pressure,
	shear stress, and a wide range of temperatures.
equigranular	A textural term applied to a rock in which the constituent grains are all about the
	same size.
evolved crust	Gradual change in the nature of crustal rocks through a succession of tectonic
	events, such that they differ significantly from the earliest rocks.
extrusive	Igneous rock that has been erupted on to the surface of the earth.
Fe	The chemical symbol for iron.
felsic	Light coloured rocks containing an abundance of feldspars and quartz.
feldspar	A group of alumino-silcate minerals that constitute around 60% of the earth’s
	crust.
foliation	A planar arrangement of textural or structural features in any type of rock.
foreland basin	A basin formed within a continental setting, often adjacent to a mountain range.
fractionation,	Crystallization from a magma in which early-formed crystals are separated, e.g.
fractional crystallization	by gravity settling, resulting in a series of residual liquids that are more
	concentrated than normal.
Ga	Billion years ago.
Ga	The chemical symbol for gallium.
gabbro	A coarse-grained intrusive igneous rock composed chiefly of plagioclase feldspar
	and pyroxene.
garnet	A group of variously coloured silicate minerals, commonly found as well-formed
	crystals in metamorphic rocks.
GIS	Geographic Information System. A system devised to present spatial data in a
	series of compatible and interactive layers.
graben	An elongate, relatively depressed crustal unit or block that is bounded by faults on
	its long sides.
Gondwana	The late Palaeozoic supercontinent of the Southern Hemisphere. The present day
	southern continents are believed to be fragments of Gondwana that have separated
	from each other in response to plate tectonics.
graben	An elongate, relatively depressed crustal unit or block that is bounded by faults on
	its long sides.
granite	Broadly applied to any holocrystalline plutonic rock containing quartz, feldspar
	and biotite.
granitoids	A general term to describe coarse-grained, felsic intrusive plutonic rocks, resembling
	granite.
granodiorite	A coarse-grained granitic rock containing quartz, feldspar and biotite.
granulite	A coarse granular metamorphic rock.
granulite facies	A metamorphic zone resulting from deep-seated regional dynamothermal
	metamorphism, in temperatures >650oC.

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graphic	Rock texture that results from regular intergrowth of quartz and feldspar crystals,
	producing the effect of cuneiform writing.
graptolite	A colonial marine organism, characteristically arranged in branches, commonly
	occurring in black shales in Middle Cambrian to Carboniferous aged rocks.
gravity survey	Systematic measurement and collection of the earth’s gravitational field at the
	surface at regular intervals. Used to discern different rock types based on associated
	variations with differences in the distribution of densities, and hence rock types.
greenschist	A schistose metamorphic rock which owes its green colour and schistosity to
	abundant chlorite and lesser epidote and/or actinolite.
greisen	A granitic rock, altered by gaseous emanations, composed largely of quartz, mica
	and topaz.
greywacke	A texturally immature sedimentary rock containing larger grains in a fine-grained
	matrix of clay-and silt-sized particles.
g/t	A shorthand form of grams per tonne, equivalent to parts per million, used in
	measuring the quantity of precious metals (Au, Ag etc) in material.
hematite	A common iron mineral, chemical formula Fe2O3, the principal ore of iron.
holocrystalline	Describes an igneous rock composed entirely of crystals with no glassy component.
hydrothermal	Generally used for any hot water, sometimes but not always of magmatic origin.
igneous rock	A rock that solidified from magma.
intermediate	Igneous rocks whose composition is intermediate between felsic and mafic rocks.
intracratonic	Within a large, stable mass of the earth’s crust.
intrusion	The process of emplacement of a magma into pre-existing rock.
intrusive	General term for a solidified magma.
island arc	A curved chain of islands, close to continent margins, formed by off-shore volcanoes
	rising from the deep-sea floor.
I-type granite	A granite that results from igneous magmatic processes.
Jurassic	A period of geological time approximately from 135 Ma to 203 Ma.
K	The chemical symbol for potassium.
leuco-	Light-coloured; applied to igneous rocks containing <30% mafic minerals.
lithic tuff	A tuff containing fragments of previously formed non-pyroclastic rocks.
lithology	The description of rock on the basis of such characteristics as colour, mineral
	composition, grain size etc.
lithophile element	An element that is concentrated in crustal rather than mantle rocks, and associated
	with the silicate rather than the sulphide phases.
Ma	Million years ago.
mafic	A dark-coloured rock composed dominantly of magnesium, iron and calcium-rich
	rock-forming silicates, and for rocks in which these minerals are abundant.
magma	Naturally occurring molten rock, generated within the earth.

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magnetic anomalies	Zones where the magnitude and orientation of the earth’s magnetic field differs
	from adjacent areas.
magnetic survey	Systematic collection of readings of the earth’s magnetic field. The data are collected
	on the surface or from aircraft.
mantle	The zone in the earth between the crust and the core.
massive sulphides	Rock containing abundant sulphides that constitutes close to 100% of the rock
	mass.
megacryst	A crystal of much larger size than the other crystals in a rock.
mesothermal	Mineral deposits formed (precipitated) at moderate temperatures.
Mesozoic	An era of geological time approximately from 65 Ma to 248 Ma.
metallogenic province	An area characterised by one or more characteristic types of mineralisation.
metallogeny	The study of the genesis of mineral deposits.
metamorphism	Changes in solid rocks in response to physical and chemical conditions that differ
	from those under which the rocks originated.
metasediment	A sedimentary rock that shows evidence of having been subjected to metamorphism.
meteoric water	Water derived from the earth’s atmosphere.
miarolitic	A term applied to small irregular cavities in igneous rocks, especially granites,
	into which crystals of the rock-forming minerals protrude.
mica	A group of minerals characterised by their perfect cleavage which enables them to
	be split into thin elastic lamellae.
microgranite	A rock of granitic composition but whose crystals are only visible under the
	microscope.
migmatisation	Partial injection of igneous magma into pre-existing rock such that the result is a
	mixture of igneous and metamorphic bands or segregations.
Mo	The chemical symbol for molybdenum.
molybdenite	The main ore of molybdenum; a lead-grey hexagonal mineral with composition
	MoS2.
monzogranite	A granular plutonic rock with a composition between monzonite and granite.
monzonite	A group of plutonic rocks containing approximately equal amounts of alkali feldspar
	and plagioclase, little or no quartz, and commonly augite as the main dark mineral.
muscovite	A colourless to pale brown member of the mica group of minerals.
Na	The chemical symbol for sodium.
Neoproterozoic	An era of geological time approximately from 544 Ma to 1000 Ma.
O	The chemical symbol for oxygen.
Ordovician	An era of geological time approximately from 435 Ma to 500 Ma.
orogenic cycle	The interval of time during which an originally mobile belt evolved into a stabilised
	orogenic belt.
orogeny	The process of formation of mountains.

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oxide	Pertaining to weathered or oxidised rock.
Palaeoproterozoic	An era of geological time approximately from 1600 Ma to 2500 Ma.
Palaeozoic	An era of geological time approximately from 600 Ma to 230 Ma.
paragneiss	A gneiss presumed to have been formed from an original sedimentary rock.
pegmatite	An exceptionally coarse-grained igneous rock.
pelite	A sediment or sedimentary rock composed of the finest detritus (clay or mud-sized
	particles).
penecontemporaneous	Formed at almost the same time.
peralkaline	Rocks in which the molecular proportion of alumina is less than that of the Na and
	K oxides combined.
peraluminous	Rocks in which the molecular proportion of alumina exceeds that of the Na and K
	oxides combined.
Permian	An era of geological time approximately from 248 Ma to 295 Ma.
phyllite	A metamorphosed rock, intermediate in grade between slate and schist.
plagioclase	A group of feldspars ranging in composition from NaAlSi3O8 to CaAl2Si2O8.
pluton	An igneous intrusion.
plutonic	Rocks formed at great depth by any process.
porphyritic; porphyry	Describes igneous rocks containing relatively large crystals set in a finer-grained
	groundmass.
porphyroblastic	Metamorphic texture characterised by large crystals within a fine-grained
	groundmass.
porphyry copper deposit	A large body of rock, typically porphyritic, containing disseminated chalcopyrite
	and other sulphide minerals, often including molybdenite. Most are relatively low
	grade and bulk mined on a large scale.
ppb	Parts per billion.
ppm	Parts per million (quantitative equivalent of g/t).
Proterozoic	An era of geological time approximately from 544 Ma to 2500 Ma.
pyrite	A common iron sulphide mineral with the chemical formula FeS2.
pyrrhotite	A common iron sulphide mineral with the chemical formula FeS.
quartz	Crystalline silica, an important rock-forming mineral with the chemical formula
	SiO2.
radiometric survey	Systematic collection of radioactivity emitted by rocks at or near the earth’s surface;
	usually collected by helicopter or fixed wing aircraft.
RC drilling	Reverse Circulation drilling - a method of rotary drilling in which the sample is
	returned to the surface, using compressed air, inside the inner-tube of the drill-
	rod. A more accurate drilling technique than simple percussion drilling, the RC
	technique minimises contamination.
refractory	Descriptive of ore difficult to treat for recovery of valuable minerals.

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rhyolite	A volcanic rock composed chiefly of potassium feldspar and quartz.
rift basin	A large fault-bound depression, in-filled with volcanic and/or sedimentary material.
S	The chemical symbol for sulphur.
schist	A strongly foliated metamorphic rock.
shale	A fine-grained detrital sedimentary rock, formed by the compaction of clay, silt or
	mud.
shear zone	A zone in which rocks have been deformed primarily in a ductile manner in response
	to applied stress.
SHRIMP	“SensitiveHigh-ResolutionIonMicroprobe”, a very accurate method of
	determining the ages of rocks.
Si	The chemical symbol for silicon.
silicified	The alteration or replacement of primary minerals by silica.
sill	A tabular igneous intrusion that parallels the planar structure of the surrounding
	rock.
Silurian	An era of geological time approximately from 410 Ma to 435 Ma.
skarn	A thermally metamorphosed impure limestone.
Sn	The chemical symbol for tin.
soil sampling	The collection of soil specimens for mineral analysis.
stock	A pluton that is less than 100 sq km in surface exposure, is usually but not always
	discordant, and resembles a batholith except in size.
stockwork	A network of (usually) quartz veinlets produced during pervasive brittle fracture.
stratabound	Occurring within and parallel to the rock strata, but not necessarily deposited at
	the same time.
stratiform	Occurring within and parallel to the rock strata, and deposited at the same time.
stream sampling	The collection of stream sediments for mineral analysis.
strike	The direction or bearing of a geological structure on a level surface, perpendicular
	to the direction of dip.
stringer	A small, thin discontinuous or irregular veinlet.
S-type granite	A granite that results from extreme melting of sedimentary rock.
subduction	The process where one slab of the Earth’s crust descends beneath another.
subvolcanic	Igneous rock formed close to the surface, but which has not flowed out across the
	surface.
supracrustal	Located on or above the crust, e.g. sand dune, lake sediment.
syncline	A basin-shaped fold.
synorogenic, syntectonic	Occurring or forming at the same time as deformation and metamorphism.
t, tpa	Metric tonne, tonnes per annum.

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Te	The chemical symbol for tellurium.
tectonics	The processes that create the broad architecture of the surface of the earth.
tectonism	A general term for all movement of the crust produced by tectonic processes.
telluride	A mineral compound that is a combination of tellurium (chemical symbol Te)
	with another metal.
Tertiary	Applied to the first period of the Cainozoic era, 1.8Ma to 65Ma.
terrane	A crustal block or fragment that preserves a distinctive geologic history that is
	different from the surrounding areas.
Th	The chemical symbol for thorium.
tonalite	A coarse grained plutonic rock similar to diorite in composition but containing
	quartz as 5% to 20% of the light coloured minerals.
transcurrent fault	A large-scale strike-slip fault in which the fault surface is steeply inclined or vertical.
turbidite	A sediment deposited by a bottom-flowing current laden with suspended mud,
	sand and rock debris, moving swiftly down a sub-aqueous slope and spreading
	horizontally on the floor of a body of water. The result is a sediment characterised
	by graded bedding, moderate sorting and laminations.
Triassic	Applied to the first period of the Mesozoic era, 203Ma to 248Ma.
U	The chemical symbol for uranium.
ultramafic	Igneous rocks consisting essentially of ferro-magnesium minerals with trace quartz
	and feldspar.
volcanoclastic	Refers to all clastic sediments composed mainly of particles of volcanic origin,
	regardless of how the sediment formed.
volcanism	The processes by which magma and its associated gases rise through the crust and
	are extruded on to the earth’s surface and into the atmosphere.
volcanogenic	Formed by processes directly connected to volcanism.
W	The chemical symbol for tungsten.
Y	The chemical symbol for yttrium.

SOURCES:

The New Penguin Dictionary of Geology , Penguin Books (P. Kearey, ed.). 2001. 336 pp.

Dictionary of Geological Terms , American Geological Institute (R.L. Bates & J.A. Jackson, eds.). 1984. 571 pp. Dictionary of Mining, Mineral, and Related Terms, U.S. Bureau of Mines. 1996.

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6 Independent Solicitor’s Report

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Level 8, Waterfront Place, 1 Eagle Street, Brisbane, Qld 4000 PO Box 7822, Waterfront Place, Qld 4001 Phone 617 3024 0000 Facsimile 617 3024 0300 Internet www.hopgoodganim.com.au

20 August 2007

The Directors

Carpentaria Exploration Limited C/ Pullinger Readhead Lucas Fortescue House, 50 Kings Park Road WEST PERTH WA 6005

Dear Sirs

RE : SOLICITORS’ REPORT ON TENEMENTS

This report has been prepared in response to instructions by Pullinger Readhead Lucas to Hopgood Ganim on 4 July 2007 requesting that Hopgood Ganim conduct a due diligence review of specific Queensland and New South Wales tenements in which Carpentaria Exploration Limited ( Company ) holds an interest, for inclusion in a prospectus to be issued in the last week of July 2007. Hopgood Ganim consents to this report being included in the prospectus.

The report relates to mining tenements held in Queensland ( Queensland Tenements ) and New South Wales ( NSW Tenements ) (collectively referred to as Tenements ) listed in Table 1. For the purpose of this report, we have arranged for searches of the Queensland mining tenements in the registers maintained by the Queensland Department of Mines and Energy ( DME ) pursuant to the Mineral Resources Act 1989 (Qld) ( MRA ). In addition, searches were undertaken at the National Native Title Tribunal ( NNTT ), the Queensland Department of Natural Resources and Water ( DNRW ) and the Queensland Environmental Protection Agency ( EPA ). We have also arranged for searches of the NSW Tenements in the register maintained by the New South Wales Department of Primary Industries ( DPI ) pursuant to the Mining Act 1992 (NSW) ( MA ). Searches were also undertaken at the NNTT and the New South Wales National Parks and Wildlife Service ( NPWS ).

On the basis of the searches we consider that this report provides an accurate statement as to the status of the Tenements as at 6 July 2007 and of the Company’s interests therein.

1 GOVERNING LEGISLATION

1.1 Queensland

The MRA governs the exploration for and production of minerals in Queensland. The MRA establishes a tenures regime that enables the exploration for and testing and production of minerals. Following is a summary of the tenures established under the MRA.

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1.2 Exploration Permits

S 133 MRA provides that a person may apply to the Minister for an exploration permit ( EP ). After native title has been addressed by the applicant (if applicable), the Minister may grant the EP in accordance with s 137 MRA. An EP allows the holder to carry on any activity authorised by the EP with or by such vehicles, vessels, machinery and equipment as may be necessary or expedient for the purpose of exploring for any mineral to which the EP applies and enables the EP holder to enter any part of the land that is not the surface of a restricted area for the purposes of facilitating the exploration for the minerals to which the EP applies. However, written notice must be given to the owner of the land prior to initial entry under the EP in accordance with s 163 MRA.

An EP may be granted in respect of either all minerals other than coal under s 130(1)(a) MRA (known as an EPM) or for coal under s 130(1)(b) MRA (known as an EPC).

The Minister on granting an EP will determine the area to be held and the terms, rent and the conditions, provisions and stipulations on which the EP is granted. Failure to pay rental or other monies or to submit progress, relinquishment and final reports, including details of expenditure may render the EP liable to be cancelled by the Minister.

S 139 MRA states that unless the Minister otherwise decides, the area of an EP must be reduced by 50% at the end of the first 2 years after its grant and by 50% of the remainder at the end of each subsequent year. S 146 MRA states that, unless the Minister otherwise determines, the initial term of an EP shall be for a period not exceeding 5 years from the commencement date. The EP holder is able to apply for a renewal of the EP not more than 6 months and not less than 3 months (unless allowed by the Minister) prior to the expiration of the current term for the renewal of the EP in accordance with s 147 MRA.

Compensation is payable to an owner of land within the area of an EP in accordance with s 145 MRA. Compensation payable under the MRA may be agreed between the parties or determined by the LRT.

S 151 MRA provides that the holder of an EP may apply for the Minister’s approval to assign the holder’s interest in the EP to another person or persons. Upon approval, any such assignment shall be entered into the register and on the EP.

1.3 Mineral Development Licence

A MDL is a tenure granted under the MRA that allows the holder to undertake such activities as drilling, seismic surveys, mining feasibility studies, metallurgical testing and marketing, environmental, engineering and design studies in order to evaluate the potential for the development of a resource. Further, a MDL can be granted to the holder of an EPM for a period of up to 5 years without the relinquishment requirements that are imposed on an EPM.

The boundaries of a MDL must be prescribed and mapped by reference to survey marks and defined points that are acceptable to the Mining Registrar. Landowners must be notified within 20 business days of the grant of a MDL. The Minister may require payment of security prior to granting a MDL. The security ensures compliance with the MRA and the conditions of the MDL as well as rectification of any damage caused under the MDL and ensuring payment of any other penalties imposed by the State under the MRA.

A MDL holder must pay rent yearly. The applicant for a MDL must address native title prior to the grant of the tenure.

A MDL may be renewed and the renewal must be applied for no more than 1 year and no less than 6 months prior to the end of the current MDL. The Minister may grant a renewal for not more than 5 further years.

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A MDL holder is required to give landowners written notice of entry before entering upon the land for the first time under the MDL. Notice must be given at least 5 business days before the initial entry. The initial notice of entry permits the MDL holder to enter the land for 3 months from the day stated in the notice and must be renewed after this point. The notice of entry must contain details of activities proposed to be carried out and where the activities will be carried out. A copy of the notice of entry must be given to the Mining Registrar.

The Minister may give a direction that the MDL holder must apply for a ML in order to commence actual mining operations in the area of the MDL. A failure to apply for a ML may result in cancellation of the MDL.

1.4 Mining Lease

S 232 MRA provides that, unless otherwise approved by the Minister, a ML may be applied for by a person in respect of contiguous land comprised in a prospecting permit, an EP or a MDL. The ML allows the holder to carry out any activity authorised by the ML for the purpose for which the ML is granted or for any purpose permitted or required under the lease or by the MRA. In accordance with s 236 MRA the grant of a ML also entitles the holder to access any sand, gravel or rock, following payment of any royalties to the person with property in the sand, gravel or rock, which the holder of the ML may utilise for any purpose permitted under the ML.

After satisfying the eligibility criteria for a ML application an applicant will receive a certificate of application. S 252 MRA requires the applicant to deliver copies of this certificate to all the owners of land underlying the ML within 5 business days. Members of the public are able to make objections to the grant of the ML in accordance with s 260 MRA. Any objections will be heard by the LRT in accordance with s 268 MRA. The LRT then makes a recommendation to the Minister regarding the grant of the ML in accordance with s 269 MRA.

The Governor in Council in deciding to grant or not to grant a ML will, following recommendations from the LRT to the Minister, determine the area to be held and the terms, rent and conditions on which the ML is granted. Failure to pay rent or royalties or to furnish all prescribed reports, returns, documents and statements may render the ML liable to be cancelled by the Minister.

It is a condition that a ML shall not be granted unless compensation has been determined by the LRT in accordance with s 281 MRA or agreed between the parties in accordance with s 279 MRA. Compensation is payable by the ML applicant to the owner of any land the subject of the ML. At any time before an agreement is made between the parties, the ML holder or landowner can apply in writing to the Mining Registrar to have the LRT determine the compensation and the terms, conditions and times of payment thereof.

A ML holder is able to apply for a renewal of the ML not more than 1 year and not less than 6 months prior to the expiration of the current term of the ML in accordance with s 286 MRA. The ML cannot be renewed unless compensation is agreed between the parties or determined by the LRT.

2. NEW SOUTH WALES

The prospecting for and mining of minerals in New South Wales is governed by the MA. The following is a summary of the main tenures established under the MA.

2.1 Exploration Licences

The holder of an exploration licence ( EL ) may, in accordance with the conditions of the licence and subject to the MA, prospect on the land specified in the licence for the group or groups of minerals so specified.

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Exploration rights however are subject to the Uranium Mining and Nuclear Facilities (Prohibitions) Act 1986 (NSW), which prohibits any person from prospecting for or mining uranium in New South Wales.

The Minister has power under s 22 MA to grant or refuse an application for an EL. An EL may be granted over land of any title or tenure and in respect of any group or group of minerals, regardless of whether the minerals are publicly or privately owned. The land over which an EL is granted must be at least 1, but not more than 100, units in area, unless the Minister determines that it is appropriate for the licence to be granted over a larger area of land.

An EL generally takes effect on the date upon which it is granted and may remain in force for up to 5 years. An EL may be renewed or extended by successive maximum periods of 5 years on application by the holder. Upon renewal, the Minister may amend any of the conditions of the EL or may include further conditions. The area of land over which an EL is renewed may differ from that of the original grant, but must not include any land that was not subject to the initial application. Further, an EL will not usually be renewed over an area that is greater than half the number of units comprising the original exploration area, unless the Minister is satisfied that special circumstances exist that justify renewal over a larger area.

The EL is subject to any conditions imposed by the Minister. EL holders will generally be required to pay royalties for any minerals recovered, give and maintain an amount of security for the performance of obligations under the licence, rehabilitate any land that has been adversely affected by the exploration activities and expend a minimum amount during the term of the licence.

2.2 Mining Leases (MLs)

Under the MA, any person may apply for a ML. The Minister has the power under s 63 MA to grant or refuse an application for a ML. Upon grant, the holder may, in accordance with the conditions of the ML, prospect on the land and mine the minerals specified in the ML, carry out such primary treatment operations (such as crushing, sizing, grading, washing and leaching) as are necessary to separate the minerals from the material from which they are recovered, and carry out on the land any mining purpose specified under the ML.

A ML generally takes effect on the date upon which it is granted and may remain in force for a period up to 21 years. The ML may be renewed for successive maximum periods of 21 years and may be subject to amended or further conditions. The ML may be granted over land of any title or tenure and in respect of any minerals, regardless of whether they are publicly or privately owned.

A ML will be subject to the conditions that the holder of the ML will not suspend mining operations in the mining area otherwise than in accordance with the written consent of the Minister, and any other conditions the Minister may impose. ML holders are generally also subject to the condition to pay royalty, to give and maintain security and any other conditions relating to mining operations, the transportation of minerals, the treatment or preparation for sale of minerals, the disposal or retention of discarded material or that relating to the use to which any mineral may be put.

3. SEARCHES

This report concerns the Tenements. The searches undertaken for this report were register searches of the DME, NNTT, DNRW, EPA, DPI and NPWS.

The results of the searches are recorded in the body of this report. Please note that neither the DME nor DPI provided us with access to departmental files for the purposes of this report.

4. EXCLUSIONS

Please note that this due diligence report did not consider:

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(a) searches of the real properties underlying the Tenements to provide details of the real properties, of the impact of any notices issued or of any Crown land reservations underlying the Tenements. The term “reservations” includes any areas of land within the Tenements which may not be available to the holder to conduct activities such as “protected land” pursuant to s 14 NCA;
(b) non-legal environmental matters such as environmental requirements that do not directly affect the standing of the Tenements; and
(c) searches of the Queensland Cultural Heritage European/Non Indigenous Register or the New South Wales Historic Heritage Information Management System for the Tenements.

5. QUALIFICATIONS

In the preparation of this report we have made the following assumptions:

(a) Our searches were confined to searches of public registers maintained by DME, DPI, DNRW, NNTT, EPA and NPWS. We note that this report is accurate and complete only to the extent that the reports extracted from the registers are accurate and complete as at 6 July 2007 when the searches were conducted.
(b) There have been no material changes in the standing of the Tenements since the dates of our searches.
(c) The Ministers administering the Acts and each of their delegates have been validly appointed and have acted within the scope of their power, authority and discretion in granting the Tenements and are able and willing to grant any required consents and approvals under relevant legislation.

6. REVIEW OF TENEMENTS

The Tenements reviewed in this report are listed as follows:

Table 1a: Queensland Tenements


				Area
Tenure No.	Holder/s	Grant Date	Expiry Date	(sub-blocks)1
EPM 14170	Giralia Resources NL	13.12.04	12.12.09	49
EPM 14955	Sunmustard Pty Ltd2	29.06.06	28.06.11	79
EPM 14948	Sunmustard Pty Ltd	15.11.05	14.11.10	31
EPM 14840	Sunmustard Pty Ltd	21.09.05	20.09.10	36
EPM(A) 163933	Carpentaria Exploration Ltd	N/A	N/A	100

1 One sub-block = approximately 3 square km.

2 We understand that Sunmustard Pty Ltd changed its name and company type to Carpentaria Exploration Limited on 28 February 2007. The DME registers had not been updated with the new name on the date that our searches were conducted.

3 Application lodged 30.04.07

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Table 1b: New South Wales Tenements


Tenure No.	Holder/s	Grant Date	Expiry Date	Area (units)2

ELA 30771	Sunmustard Pty Ltd3	N/A	N/A	214
EL 6246	Giralia Resources NL	25.05.04	24.05.08	12

1 Application lodged 20.04.07. We have sighted a letter from the DPI to Sunmustard Pty Ltd dated 6 June 2007 under which the DPI notes that the exploration titles committee has recommended the grant of EL 3077 to Sunmustard Pty Ltd. This is subject to Sunmustard submitting a more detailed work program demonstrating how the applicants will explore the area.

2 One unit = approximately 3 square km.

3 We understand that Sunmustard Pty Ltd changed its name and company type to Carpentaria Exploration Limited on 28 February 2007. The DPI registers had not been updated with the new name on the date that our searches were conducted.

We note that the details shown in Table 1a-b are those recorded on the DME and DPI registers. The DME/DPI files can also contain copies of agreements that have been entered by holders in relation to a mining tenement. Such agreements may provide a party (other than the holder) with contractual rights to require the holder to act in accordance with that agreement in relation to the mining tenure, eg a farmin agreement. As noted in section 2 of this report, we have not been granted access to these files. The DME/DPI registers for the Tenements does not disclose the existence of any such agreements.

7. RENT

The holders of granted mining tenements in Queensland are required to pay rent on the tenements. Holders of ELs in New South Wales are not required to pay rent.

S 138 MRA requires rent to be paid for each sub-block of an EP. Rent is to be paid on the anniversary of the date of granting of the EP. Under the Mineral Resources Regulation 2003 (Qld) the rent payable on each sub-block of an EP is $121.50 (as of 2 July 2007).

Rent is payable only on EPs that have been granted. No rent is payable on applications. However, once an application has been granted, s 138 MRA requires that rent be paid within 20 business days.

Table 2 outlines the rent payable for the Tenements (as several of the Tenements have not been granted we have estimated the rent payable upon their grant).

Table 2: Rent Payable


		Sub	Rent	Most Recent	Balance
EPM No.	Holder	Blocks	Payable	Payment	Outstanding
14170	Giralia Resources NL	49	$5,953.50	13.12.06	Nil
14955	Sunmustard Pty Ltd	79	$9,598.50	29.06.07	Nil
14948	Sunmustard Pty Ltd	31	$3,766.50	15.11.06	Nil
14840	Sunmustard Pty Ltd	36	$4,374.00	21.09.06	$4,374*
		Total	$35,842.50		$4,374

Due 21 September 2007.

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8. SECURITY

Holders of granted mining tenements are required to pay security by way of financial assurance on the granted tenements. The following is a review of the applicable legislation and details of security deposits payable for the Tenements.

8.1 Queensland

Security for a mining tenement in Queensland is required under the MRA. An amount of money must be paid at the commencement of a term as security for payment of environmental costs and rental payments for the tenement. The amount of security is determined by the Minister and is calculated as reasonable security for compliance with the conditions of the tenement, compliance with any environmental authority and environmental management plan, compliance with the MRA and rectification of damage and other amounts payable to the State under the MRA. The holder of an environmental authority under s 364 EP Act may also be required to give the administering authority financial assurance as security for compliance with the environmental authority, environmental management program or site management plan and any conditions of the program or plan, and costs or expenses mentioned in s 367 EP Act. The administering authority decides the form and amount of security.

The amount of $2,500 is held for each of the granted Queensland Tenements.

With respect to the applications, we are not aware of any security being requested at this time.

8.2 New South Wales

EL holders in New South Wales are required to lodge a security deposit by way of cash deposit or a banker’s undertaking to cover obligations under the licence, including rehabilitation. Upon expiry of the licence, a security deposit will not be released until rehabilitation has been completed in accordance with licence conditions.

A condition requiring security to be given and maintained by the holder of an exploration licence may be expressed so as to require the security held over some other exploration licence to be extended to the new exploration licence.

The security held for EL 6246 is $10,000. With regard to the applications, we are not aware of any security being requested at this time.

9. ENCUMBRANCES OR THIRD PARTY INTERESTS

The DME and DPI maintain registers of encumbrances and third party interests on mining tenements in Queensland and New South Wales. The departments only register encumbrances or third party interests that are lodged by the tenement holder. There may be encumbrances or third party interests on the Tenements that have not been registered. Likewise, an encumbrance or third party interest will only be removed upon notification of the completion of the encumbrance or third party interest by the tenement holder.

Encumbrances or third party interests cannot be registered for a tenement application. The DME and DPI registers do not disclose any registered encumbrances or third party interests for the granted Tenements.

10. OVERLAPPING TENURES

A number of Queensland Tenements are subject to exclusions or restrictions on certain activities due to the existence of an overlapping ATP or MDL. We note that EL 6246 does not overlap any other tenements.

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10.1 Overlapping MDLs

EPM 14948 overlaps with MDL 128. The MDL is held by Central Pacific Minerals NL and was granted on 27 November 1992. It expired on 30 November 2004, however there is a renewal application pending.

S 132 MRA excludes any land the subject of a current MDL from the area granted under an EP, regardless of whether the MDL has been granted or is still in the application stage. Further, upon termination of the MDL, this land will not automatically be included in the EP if the EP was granted after 23 December 1996. In order to acquire land that has been surrendered, relinquished or not renewed from a mining tenure, a separate EP application must be made and native title addressed.

Therefore, the area of MDL 128 would have been excluded from the area of EPM 14948 upon grant of the EPM.

10.2 Overlapping ATPs

EPM 14170 overlaps with ATP 714. The ATP is held by Arrow Energy NL and is still in the application stage.

An ATP is an authority to prospect granted under either the Petroleum Act 1923 or the PGA. It grants its holder the right to explore for petroleum within the area of the ATP.

An EPM may be granted over land in the area of an ATP. However, activities conducted under the EPM cannot be carried out on the land overlapping with the ATP if conducting the activity adversely affects the carrying out of an authorised activity for the ATP, or if the authorised activity for the ATP has already started.

11. SAFETY

11.1 Safety for EPMs

Under s 31 MQSHA, the holders of mining tenements for minerals have a health and safety obligation. Where there are overlapping tenures (with other mining or petroleum tenures), the respective mining tenement holder is required to meet its safety obligations regardless of the activities being carried out by the other holder. The MQSHA provides that the duty can be discharged in the following ways:

(a) by following methods or processes prescribed in regulations or guidelines to achieve an acceptable level of risk [s 34(1)];
(b) by obeying prohibitions on exposure to certain risks [s 34(2)]; or
(c) where no regulations or guidelines exist, by taking reasonable precautions and proper diligence to ensure the obligation is discharged [s 35].

11.2 Safety for ELs

Mining tenement holders in New South Wales are required to comply with safety obligations imposed by the MHSA. Duties relating to health, safety and welfare at mines are stipulated under Part 5. The primary duty of a tenement holder is to nominate a person to be operator of the mine under s 22 MHSA. Operators are then required to comply with obligations pertaining to worker safety (s 26), mine safety management plans (subdivision 2), management structure (subdivision 3), contractors (subdivision 4), emergency management (subdivision 5) and the keeping of data and records (subdivision 6).

12. ENVIRONMENT

12.1 Queensland Environmental Legislation

The EP Act regulates activities that are likely to have environmental impacts. Such activities are referred to in the EP Act as “environmentally relevant activities” or ERAs.

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In respect of mining activities (defined in the EP Act to include activities conducted pursuant to a tenure granted under the MRA), an environmental authority ( EA ) is required to be obtained for the mining activities. The authority is referred to as an “Environmental Authority (Mining Activities)” and once obtained is deemed to be a licence for all of the ERAs set out in the EP Act and its regulation that are carried out under the relevant mining tenure provided those activities were described in the application for the authority.

The specific activities to be described in an application for a particular project are dependant on the nature and extent of that project. Applications for EAs must be made to the EPA with relevant supporting information. For the purposes of the EP Act, an exploration permit that satisfies the criteria for “low impact” activities under the EP Regulations will be classified a “level 2 mining project”.

If the EA does not comply with the prescribed criteria set out in schedule 1A of the EP Regulations, the project would then be classified a “level 1 mining project” and requires a non-code compliant environmental authority (mining activities) for a level 1 mining project.

Application fees and annual licensing fees are payable in respect of EAs and conditions are imposed such as conditions requiring specific monitoring and/or reporting and potentially conditions requiring financial security for environmental performance.

Searches of the EPA register have revealed that EAs have been issued for the following tenements:

Table 3: Environmental Authorities

Tenement	Permit Number	Approval Date
EPM14170	MIC200471206	29 January 2006
EPM 14955	MIM500312805	1 February 2005
EPM 14948	MIM500313405	1 February 2005
EPM 14840	MIM500295604	1 December 2004

12.2 New South Wales Environmental Legislation

Conditions of exploration titles will generally require holders to seek approval for activities which disturb the surface of the land and to submit a security deposit. Most exploration activities will require an environmental assessment under the EPAA before they can be undertaken. An assessment will not be required for exploration activities declared to be an “exempt development” under the SEPP (MPEI), however they may still require approval under the MA. Activities that are exempt will generally involve low intensity exploration activities of minimal environmental impact, such as geological mapping and airborne surveying, sampling and coring using hand held equipment, geophysical (but not seismic) surveying and downhole logging and accessing of areas by vehicle that does not involve the construction of an access way such as a road or track. All other activities will require an assessment.

The standard Exploration Licence Conditions divide types of exploration activities into three categories. Category 1 activities are those that generally involve reconnaissance and other low intensity activities. Such activities do not require any further approvals and are generally deemed an exempt development. Category 2 activities involve operations which have the potential for moderate disturbance to the land surface, native vegetation or other environmental value. Licence holders will be required to submit an EDG10 Surface Disturbance Notice and may possibly be required to submit a further Review of Environmental Factors. Category 3 activities are those that cause a significant adverse environmental

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impact, such as intensive drilling, construction of access tracks or tunnelling. In addition to submitting an EDG10 and a Review of Environmental Factors, it is likely that an Environmental Impact Statement would also need to be submitted to the DPI.

The Exploration Licence Conditions for EL 6246 are attached to this report.

Certain exploration activities may also require approval under the SEPP (MP), NPWA or the WMA.

12.3 Environmental areas within the Queensland Tenements

Our review of the DME’s Interactive Resource and Tenure Maps has indicated that certain excluded areas exists within the Tenements.

(a) National Parks

EPM 14948 overlaps the Kroombit Tops National Park. The park is listed under schedule 5 of the NCR. Therefore, certain restrictions with regards to exploration activities apply.

The creation and protection of national parks is dealt with under the NCA. The purpose of the NCA is to conserve nature through the creation of a State-wide conservation strategy. The NCA achieves its purpose by prescribing certain protected areas and regulating certain activities that are proposed to be undertaken in the protected areas.

In accordance with the NCA, a national park is to be managed to provide, to the greatest possible extent, for the permanent preservation of the area’s natural condition and the protection of the area’s cultural resources and values.

The most significant impact of the NCA on mining is the s 27 prohibition on the grant of mining interests (including EPs) within the area of national parks in Queensland. The prohibition however will not apply where an authority under s 34 has been given for the licence. S 34 NCA provides that an EP, MDL or ML may be granted over a protected area (defined to include national parks and resources reserves) provided it is consistent with the management principles and any management plan approved for the area. It is unlikely that the Company’s interests would satisfy s 34, therefore the prohibition under s 27 would apply to the Tenements.

The Code of Environmental Compliance for Exploration and Mineral Development Projects provides guidelines in respect of conducting activities within areas falling under the NCA. The EA holder must not carry out activities in category A environmentally sensitive areas (which includes national parks). Further, activities involving machinery must not be carried out within 1 km of a category A environmentally sensitive area.

(b) Resources Reserves

EPM 14948 overlaps a resources reserve.

A resources reserve is to be managed to recognise and if appropriate protect the area’s cultural and natural resources, provide for controlled use of the area’s cultural and natural resources and ensure the area is maintained predominantly in its natural condition.

Prior to carrying out activities in category C environmentally sensitive areas (which includes resource reserves), the tenement holder must consult with the relevant administering authority and the EPA. If it is determined through the consultation that additional conditions are necessary, the holder must comply with those conditions.

(c) State Forests

EPM 14948 overlaps the Kalpowar State Forest.

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Under the MRA a ‘State Forest’ is included within the definition of a ‘reserve’. The holder of an EP may only carry out activities over land that is a reserve after obtaining consent from the reserve owner or the Governor in Council (s 54 MRA). If the Mining Registrar is not satisfied that an owner of a reserve (in this case the Governor in Council) has consented to an application for an EP over the reserve, the matter may be referred to the LRT to determine if access should be granted.

Mining activities are permitted to be carried out within a declared State Forest area. However, under s 37 FA, the Governor in Council or the chief executive may impose provisions, reservations or conditions on the grant of an EP, MDL or ML within a State Forest area.

(d) Dam catchment areas

EPM 14955 overlaps the Black Fort dam site.

Under s 258 WA, a regulation may declare an area surrounding a reservoir to be a ‘catchment area’ for the purpose of preserving the water quality in the area. The regulation may control the use of the land in the catchment area, or a part of the area, under s 259 WA. Declared catchment areas are listed under schedule 5 Water Regulation 2002 (Qld).

The DME searches revealed that EPM 14955 is subject to the following conditions with regard to the dam site:

(i) Condition 1: Provide undertaking to the Department of Natural Resources and Mines that there will be no disturbance, except for small-scale sampling, any identified potential or existing dam site or water delivery infrastructure.
(ii) Condition 4: To ensure the prospecting will not adversely affect the stability of the beds and banks of the watercourses within the area and that only small scale removal of material from those bed and banks is permitted.
(iii) Condition 5: There will be no activity directly or indirectly resulting in erosion of the beds and banks of any watercourses and that none of the prospecting, or any potential Mining Tenement, will result in any form of pollution of these watercourses.
(e) Historic Sites

EPM 14948 overlaps a historic mining site, namely the Mt Hector copper smelter.

The Queensland Heritage Act 1992 ( Heritage Act ) protects places and areas that are included on the heritage register established under the Heritage Act. Non-indigenous cultural heritage includes artefacts, places and buildings that are not Aboriginal, but commonly of European origin.

The Minister may enter into a heritage agreement with the holder of a mining tenement. A heritage agreement attaches to the land and is binding on both an owner of the place and, so far as it affects the use of a registered place, an occupier of the place. A heritage agreement may contain any provision to promote conservation or public appreciation of its cultural significance. For example, a heritage agreement may restrict the nature of work that may be carried out in a registered place or require work to be carried out under specified standards. The agreement must be entered into the heritage register.

12.4 Environmental Areas within the NSW Tenements

Our review of the DPI’s interactive TAS Maps has indicated that ELA 3077 overlaps with the Combaning State Forest. S 21 of the FA (NSW) states that land within a State Forest shall be subject to such of the provisions of the MA as are applicable to land permanently dedicated. Under the MA, land that has been “reserved, dedicated, appropriated, resumed or acquired for public purposes” falls within the

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definition of an “exempted area”. Under S 30, the holder of an EL may not, except with the consent of the Minister, exercise any of the rights conferred by the licence within land in an exempted area. However, the exercise of any such rights within a State Forest will be subject to such conditions and restrictions relating to forestry or for the purposes of the reserve as may be prescribed.

13. NATIVE TITLE ISSUES

13.1 Commonwealth native title law

Following the High Court decision in Mabo v Queensland (No 2) (1992), the Commonwealth Government introduced the NTA. The NTA establishes:

(a) a framework of standards governing the recognition of native title;
(b) the protection of native title in relation to dealings and land; and
(c) the extinguishment of native title in accordance with prescribed conditions.

The States and Territories are able to legislate for their own native title provisions provided these act concurrently with and meet the standards set in the NTA. The goal of the Commonwealth scheme is to adopt a nationally consistent approach to the recognition, protection and management of native title while still leaving responsibility for land management with the States as granted under the Constitution.

Native title land is land over which native title holders have rights, which usually co-exist with the rights of other users. The native title rights are related to the Aboriginal peoples’ traditions and customs. In respect of these rights, the NTA grants a number of procedural rights that must be satisfied in order for a future act to be validly undertaken. The grant of a mining tenement is generally a “future act” and therefore must first proceed through one of two options: the “right to negotiate” or an ILUA.

In areas where native title has not been found to be extinguished and in areas where a current application for native title recognition has been lodged, any future acts must be undertaken in accordance with the NTA. The native title holders or claimants must be given the right to negotiate or the ability to negotiate an ILUA with the prospective grantee of the mining interest. Failure to do so could mean that the grant of the interest is invalid, even if the State were to make the grant.

13.2 Native title in Queensland

Native title in Queensland is governed by the NTA and by complementary State legislation - the Native Title (Queensland) Act 1993. The NTA prescribes a regime by which persons claiming to hold native title may lodge a claim to that effect for determination; by which any future act affecting native title (such as the grant of mining tenements) may be validly undertaken; and by which registered claimants may be afforded certain procedural rights including the “right to negotiate”.

Under the NTA, native title is extinguished by grants of private freehold title and exclusive possession tenures such as freeholding and urban leases. Validly granted mining tenements solely over such tenures are not subject to native title considerations.

Tenures which may coexist with native title are generally non-exclusive leases such as pastoral leases, pastoral development holdings, some special leases and term leases for grazing or pastoral purposes, occupation licences, permits to occupy, road licences, etc.

MLs, MDLs and EPs created on or before 23 December 1996 were validated by State legislation as a result of amendments to the NTA in 1998. So long as activities are conducted under those tenements in accordance with the tenement, the miner is not subject to the right to negotiate with native title holders or claimants.

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Hopgood Ganim

Renewals of mining tenements created on or before 23 December 1996 can be effected without recourse to the right to negotiate process, so long as the renewed mining tenement is on the same terms as previously existed.

The NTA will affect the Tenements in different ways, depending on the nature of the Tenement, the date of its grant or proposed grant and the nature of the underlying land tenures.

The Queensland government has adopted a policy whereby mining tenures are only granted over land where native title is considered to be extinguished (in the absence of the applicant complying with the right to negotiate provisions of the NTA or entering into an ILUA). This is given effect by the granting of tenements only over land in the following categories:

(a) current or past private freehold land and “exclusive possession” land as defined in schedule 1, part 3 NTA. Land previously held under tenure of this type which:
(i) is now held or is currently set aside for the benefit of Aboriginals and Torres Strait Islanders; or
(ii) is unallocated State land that is occupied by Aboriginal people or Torres Strait Islanders,
(iii) is not included;
(iv) validly dedicated road reserves up to a maximum width of 120.7 m that are surrounded by private freehold land or exclusive possession tenures as defined in 0 above;
(v) those parts of the area of the road (other than roads defined in (iii) above, and either dedicated or otherwise legally available for public use) that contain a constructed road, to a maximum distance of 60.35 m either side of the centre line of the constructed road;
(vi) railway reserves containing constructed railways and/or associated infrastructure.

As a result, all mining tenements granted after 23 December 1996 are only granted over land within the tenure boundaries that fall within (a) to (d) above ( Extinguished Land ).

An ML can only be granted over Extinguished Land. An applicant for a mining tenement over areas other than Extinguished Land must first undertake the “right to negotiate” process as detailed in the NTA with the registered title claimants or be a party to an ILUA.

13.3 Native Title in New South Wales

The Native Title (New South Wales) Act 1994 adopts the validation provisions of the NTA and applies them in New South Wales. Please note that we have not investigated the underlying land tenure in respect of the NSW Tenements in order to determine the extent of extinguishment of native title for the purposes of this report.

The DPI generally assumes that the grant or renewal of any exploration title will affect some potential native title land and that, therefore, the requirements of the NTA, including the ‘right to negotiate’ process or negotiating an ILUA, will have to be satisfied. As a result of a Determination and Approval made on 24 September 1996 under the NTA by the Commonwealth Minister for Aboriginal and Torres Strait Islander Affairs, ELs may be granted under the NSW Mining Act in one of two ways.

An applicant for the grant or renewal of an EL may apply for the EL to be granted or renewed without the ‘right to negotiate’ process first having been pursued. In this case, the title will include a condition that the holder must not prospect on or in any native title land without obtaining the prior written consent of the New South Wales Minister for Mineral Resources. Alternatively, the applicant can apply for a title free of the ‘Minister’s consent condition’ to be granted, but only after the ‘right to negotiate’ process has been pursued.

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A regime for the grant of low impact exploration licences under the NSW Mining Act has been approved pursuant to section 26A of the Commonwealth Act. A low impact exploration licence limits the permitted methods of prospecting or exploring to those which are unlikely to have any significant impact on the land. A low impact exploration licence may be granted or renewed without the ‘right to negotiate’ process being followed but after giving prior notice to registered native title bodies corporate, registered native title claimants and New South Wales Native Title Services Ltd.

13.4 Native title claims over Tenements

Our searches of the NNTT register have revealed that the Tenements do not overlap with any native title determinations. However, a number of current applications overlap, which are outlined in the table below:

Table 4: Native Title Claims


	NNTT	Federal		Overlapped
Tenement	No.	Court No.	Name	Area (km2)
EPM 14170	QC05/6	QUD80/05	Gudjala People	108.62 km2
EPM 14955	QC05/12	QUD579/05	Kalkadoon People 4	252.76 km2
EPM 14948	QC01/29	QUD6026/01	Port Curtis Coral Coast	96.87 km2
EPM 14840	QC05/7	QUD85/05	Gugu Badhun People 2	117.15 km2
EPMA 16393	QC99/9 QC99/27	QUD6012/99 QUD6025/99	Yulluna People Pitta Pitta People	102.64 km2 208.50 km2
EL 6246	Nil	Nil	Nil	Nil
EL(A) 3077	Nil	Nil	Nil	Nil

Searches of the NNTT register in New South Wales have revealed that there are no current native title claims, unregistered claimant applications or registered ILUAs over ELs 6246 and 3077.

We note that there is a delay of up to 48 hours between a native title determination application being lodged in the Federal Court and its transfer to the NNTT. The application summary may therefore not show applications recently lodged with the court.

It is also possible that a native title claim could be made in the future. We have not conducted research on this matter. However, to determine the impact of native title on the Tenements, considerable legal, historical, anthropological and ethnographic research would be necessary to form an opinion as to whether a native title claim if made would succeed, and if so what the implications would be for the holders and any interested parties.

13.5 Indigenous Land Use Agreements

An ILUA is a voluntary agreement between a native title claimant group and others about the use and management of land and waters. ILUAs may deal with topics such as access to an area, how native title rights coexist with the rights of others, native title holders agreeing to a future development and matters of compensation. Once registered, the ILUA will bind all parties and all native title holders to the terms of the agreement.

Carpentaria Exploration Limited

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Hopgood Ganim

Searches have indicated a number of overlapping ILUAs. Several of these agreements relate to the activities of specific tenement holders and as a result, the Company cannot be party to them. These agreements are:

(a) Metallica Minerals ILUA, overlapping EPM 14840; and
(b) Kalkadoon MIM ILUA, overlapping EPM 14955.

However, the Kerg ILUA, overlapping EPM 14955, is intended to bind tenement holders generally within a specified area. The Company has the option of either acknowledging the terms of the Kerg agreement, or choose to negotiate a new agreement with the relevant native title parties.

A copy of the Kerg ILUA has been provided separately to this report.

14. ABORIGINAL CULTURAL HERITAGE

14.1 Queensland

The ACHA aims to protect Aboriginal areas and objects of cultural significance, irrespective of the underlying tenure of the land. The existence of ACH is in no way an indication that native title exists in an area.

Under the ACHA, “ACH” is defined as:

(a) a significant Aboriginal area in Queensland; or
(b) a significant Aboriginal object; or
(c) evidence of archaeological or historic significance of Aboriginal occupation of an area of Queensland.

Whether or not an area or object is a significant Aboriginal area or object is determined by reference to:

(d) aboriginal tradition, that is, the body of traditions, observances, customs and beliefs of Aboriginal people generally or of a particular community or group of Aboriginal people, and includes any such traditions, observances, customs and beliefs relating to particular persons, areas, objects or relationships;
(e) the history, including contemporary history, of any Aboriginal party of the relevant area.

A significant Aboriginal area does not need to contain markings or other physical evidence indicating Aboriginal occupation, and these areas may include ceremonial, birthing and burial places, and sites of massacre.

When carrying out an activity a person will owe a duty of care to not cause harm to an area or object of ACH. A person is required to exercise due diligence and reasonable precaution before undertaking an activity that may cause harm. When carrying out an activity a person must take all reasonable and practical measures to avoid harm to ACH. The maximum penalty for a breach of this provision is $75,000 for an individual or $750,000 for a corporation. When considering whether a person has complied with the duty of care a court may take into account:

(a) the nature of the activity and the likelihood of its causing harm to ACH;
(b) the nature of the ACH likely to be harmed by the activity;
(c) the extent to which the person consulted with Aboriginal parties about the carrying out of the activity, and the results of the consultation;
(d) whether the person carried out a study or survey, of any type, of the area affected by the activity to find out the location and extent of ACH, and the extent of the study or survey;

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Hopgood Ganim

(e) whether the person searched the database and register for information about the area affected by the activity;
(f) the extent to which the person has complied with cultural heritage duty of care guidelines; and
(g) the nature and extent of past uses in the area affected by the activity.

In conjunction with the commencement of the ACHA, the Minister released the cultural heritage duty of care guidelines ( Guidelines ). The Guidelines are gazetted under the ACHA and have legal status.

The ACHA does not operate using a permit or licensing system. Instead, when undertaking activities in an area a person must meet the ACH duty of care by complying with the Guidelines or by entering into an agreement with the Aboriginal party for the area.

The Cultural Heritage Coordination Unit of the DNRW maintains an inventory of all recorded ACH sites. However the DNRW does not guarantee the accuracy of its records. Further, the ACHA requires persons to take all reasonable and practical measures to ensure an activity does not cause harm to ACH. This is regardless of whether the ACH site is recorded in a register, or on private land, or not yet discovered. Under the Guidelines, for ACH that lies undiscovered or below ground or not yet visible a person must consult with the relevant Aboriginal party before proceeding to remove or excavate.

The table below details the results of a search of the register held by the Cultural Heritage Coordination Unit:

Table 5: Aboriginal cultural heritage registrations


EPM	Site ID	Attribute	Latitude	Longitude	Aboriginal Party

14170					Gudjal Traditional Owners Aboriginal Corporation
14955 14955	BH:B50 BH:B52	PAINTING, WELL	-21.207103 -21.267653	140.320077 140.348137	QC05/12 QC05/12
14948 14840					QC01/29 QC05/7
16393	BG:A15	ARTEFACT	-22.418533	139.961537	Yulluna Traditional Owners Aboriginal Corporation QC99/27
16393	BG:A14	ARTEFACT	-22.418533	139.961537	Yulluna Traditional Owners Aboriginal Corporation QC99/27

The table outlines those Tenements that contain registered ACH sites. Upon grant of the Tenement and prior to the commencement of any activities under the Tenement, the holders must dispose of the duty of care obligations under s 23(3) ACHA (such as an agreement or approved plan) or they will be exposed to a significant risk of breaching the ACHA.

Further, s 24 ACHA makes it unlawful to harm ACH if the person knew or ought to have known that ACH existed on the site. Therefore, even on tenements where no cultural heritage sites have been identified, there is a possibility that sites exist undiscovered and that with reasonable steps should have been found. Without a management plan or a cultural heritage agreement in place for the Tenements, the holder could be liable for breaching its duty of care if yet unidentified cultural heritage sites are harmed.

Carpentaria Exploration Limited

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Hopgood Ganim

14.2 New South Wales

Provisions governing ACH in New South Wales are found under the NPWA, HA and EPAA.

The NPWA provides statutory protection for all Aboriginal objects and places in New South Wales. Areas are gazetted as Aboriginal places if the Minister is satisfied that there is enough evidence to show the area is, or was, of special significance to Aboriginal culture. A person cannot, without a permit issued by the Director-General, undertake the following activities over an ACH area:

(a) disturb or excavate land for the purpose of discovering an Aboriginal object;
(b) disturb or move on any land an Aboriginal object that is the property of the Crown;
(c) take possession of an Aboriginal object that is in a national park, historic site, state conservation area, regional park, nature reserve, karst conservation reserve or Aboriginal area;
(d) remove an Aboriginal object from the areas listed above;
(e) erect or maintain a building or structure for the storage or exhibition of an Aboriginal object in the areas listed above.

S 27 NPWA sets up an Aboriginal Cultural Heritage Advisory Committee with the purpose of advising the Minister on any matter relating to the identification, assessment and management of ACH, including providing strategic advice on the plan of management and the heritage impact permit process.

The HA protects the State’s natural and cultural heritage. Aboriginal places or objects that are recognised as having high cultural value are listed on the State Heritage Register. Places and objects of particular significance are listed on the State Heritage Register. This includes a diverse range of items, including Aboriginal places and objects and natural landscapes. Listing on the Register means that a place is protected and that approval of the Heritage Council is required for any changes or demolitions.

The EPAA provides protection by considering impacts on ACH in land use and planning decisions. For example, an “integrated development” under s 91 may require approval under s 90 NPWA or s 58 HA before it may proceed. Therefore, the impact on ACH may need to be considered before development approval is obtained.

The following table details the results of an Aboriginal cultural heritage search:


Tenement	Site Name	Site Types	Easting	Northing

ELA 3077	Wallundry	Open camp site	564336	6196872
	Geraldra Temora	Burial/carved tree	579683	6197389
	W/OC3	Open camp site	556500	6187290
	WT/OC2	Open camp site	574200	6183800
	Bundawarrah Scarredd Tree (One)	None	551227	6191891
	Bundawarrah Scarred Tree (Two)	None	551044	6191924
	Bundawarrah Scarred Tree (Three)	None	550635	6192008
	Bundawarrah Scarred Tree (Four)	None	550764	6193132
	Bundawarrah Scarred Tree (Five)	None	551096	6196127

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Results of an Aboriginal cultural heritage search (continued):


Tenement	Site Name	Site Types	Easting	Northing

	Bundawarrah Scarred Tree (Six)	None	550939	6193915
	Bundawarrah Scarred Tree (Seven)	None	550334	6190131
	JR1 Junee Reefs	Scarred tree	550000	6160000
	Bethungra Ironbong Creek	Carved tree	574209	6159593
	Bethungra BY 8	Open camp site	577284	6153592
	Yeo Yeo State Forest	Scarred tree	551400	6177450
	S-OS-1	Open camp site	575710	6161840
	Bethungra Scarred Tree	None	578000	6153600
EL 6246	Tandou Creek Burial; Kinchega NP	Burials, midden, open camp site	616000	6392500
	KGE 2	Midden	620800	6392900
	TNC 3 Tandou Creek	Midden, open camp site	616000	6388200
	Woolshed Tank Site 2	None	620860	6393007

15. CULTURAL HERITAGE

15.1 In addition to the ACHA which protects ACH, the QHA allows for authorised persons to inspect places or objects of cultural heritage significance. The Minister may place a stop order on any work or activity likely to damage a cultural heritage site. The maximum penalty for contravening a stop order is $1,275,000. Further the executive officer of a corporation must ensure that a corporation complies with the QHA. If a corporation commits an offence against the QHA the executive officer also commits an offence.
15.2 The Queensland Cultural Heritage register currently lists 1463 protected sites throughout Queensland. We have not received instructions to undertake searches of this register.

16. CONCLUSION AND OPINION

Subject to the comments and qualifications set out in this report, Hopgood Ganim reports that at the date of review of the DME, NNTT, DNRW, EPA, DPI and NPWS registers there is nothing that indicates that the Tenements are not in good standing.

Yours faithfully

HOPGOOD GANIM

Contact:	Tony Nunan/Andre Dauwalder	Direct Phone:	61 7 3024 0343
Email:	[email protected]	Direct Fax:	61 7 3024 0043
Our Ref:	0727396
Partner Responsible:	Martin Klapper

Carpentaria Exploration Limited

Hopgood Ganim

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GLOSSARY

Term	Meaning
ACH	Aboriginal cultural heritage
ACHA	_Aboriginal Cultural Heritage Act_2003 (Qld)
ATP	Authority to prospect
CMSHA	_Coal Mining Safety and Health Act_1999 (Qld)
DME	Department of Mines and Energy (Qld)
DNRWDPI	Department of Natural Resources and Water (Qld)Department of
	Primary Industries (NSW)
Code	The Code of Environmental Compliance for Exploration and
	Mineral Development Projects (prepared by the EPA)
ELEP	Exploration LicenceExploration permit
EA	Environmental authority under the EP Act
EPA	Environmental Protection Authority (Qld)
EPAAEP Act	Environmental Planning and Assessment	Act	1979
	(NSW)_Environmental Protection Act_1994 (Qld)
EP Regulations	_Environmental Protection Regulations_1998 (Qld)
EPC	Exploration permit for coal
EPC(A)	Application for exploration permit for coal
EPM	Exploration permit for minerals
EPM(A)	Application for exploration permit for minerals
EPS	Exploration Permit (Special)
ERA	Environmentally relevant activity
FA	_Forestry Act_1959 (Qld)
FA (NSW) Guidelines	Forestry Act 1916(NSW)ACHA duty of care guidelines
HAILUA	Heritage Act 1977(NSW)Indigenous land use agreement
LRT	Land and Resources Tribunal (Qld)
MAMDL	Mining Act 1992(NSW)Mineral development licence
MHSAML	Mining Health and Safety Act 2004(NSW)Mining lease
MQSHA	_Mining and Quarrying Safety and Health Act_1999 (Qld)
MRA	_Mineral Resources Act_1989 (Qld)
NCA	_Nature Conservation Act_1992 (Qld)
NCR	_Nature Conservation (Protected Areas) Regulation_1994 (Qld)
NNTT	National Native Title Tribunal

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Hopgood Ganim

Term	Meaning
NPWANPWSNTA	National Parks and Wildlife Act 1974(NSW)NSW National Parks and
	Wildlife Service_Native Title Act_1993 (Cth)
PELPGA	Petroleum Exploration Licence_Petroleum and Gas (Production and_
	_Safety) Act_2004 (Qld)
PL	Petroleum lease
PPL	Petroleum pipeline licence
PSPQHA	Petroleum Authority_Queensland Heritage_Act_1992_(Qld)
SEPP (MP)SEPP (MPEI) Tenements	State Environmental Planning Policy (Major Projects) Act 2007
	(NSW)State Environmental Planning Policy (Mining, Petroleum and
	Extractive Industries) Act 2007(NSW)The EPMs and EPCs mentioned
	in ss 5A and 5B
WMAWRA	Water Management Act 2000(NSW)_Wild Rivers Act_2005 (Qld)
WA	_Water Act_2000 (Qld)

Carpentaria Exploration Limited

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7 Independent Accountant’s Report

Mack & Co 2[nd] Floor, 35 Havelock Street WEST PERTH WA 6005

September 4, 2007

The Directors Carpentaria Exploration Limited Level 2, 33 Ord Street WEST PERTH WA 6005

Dear Directors

INVESTIGATING ACCOUNTANTS REPORT ON HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

1. Introduction

This investigating accountants report has been prepared at your request to report on certain historical and pro forma financial information in respect of Carpentaria Exploration Limited. The report has been prepared for inclusion in a prospectus (“the prospectus”) to be dated on or about 7 September 2007 relating to the proposed issue by Carpentaria Exploration Limited of 30,000,000 ordinary shares at 25 cents each to raise a total of $7,500,000. The minimum subscription is 14,000,000 shares at 25 cents each to raise a total of $3,500,000.

2. Basis of Preparation

This investigating accountants report has been prepared to provide investors with information on historical results and assets and liabilities of Carpentaria Exploration Limited. The historical and pro forma financial information is presented in an abbreviated form and does not include all of the disclosures required by the Australian Accounting Standards applicable to annual financial reports in accordance with the Corporations Act 2001. The financial information has been prepared in accordance with the Australian Equivalents to International Financial Reporting Standards (AIFRS). This report does not address the rights attaching to the securities to be issued in accordance with the prospectus, nor the risks associated with investment. Mack & Co has not been requested to consider the prospectus for Carpentaria Exploration Limited, the securities on offer and related invoicing issues, nor the merits and risks associated with becoming a shareholder and accordingly, has not done so, nor purports to do so. Mack & Co accordingly takes no responsibility for these matters or for any matter or omission in the prospectus, other than responsibility for this report.

3. Background

Carpentaria Exploration Limited was incorporated as Sunmustard Pty Ltd, a private company on 17 November 2000. On 20 April 2007 the Company changed its name to Carpentaria Exploration Limited and changed its status to a public company.

Since incorporation the only activities undertaken by the Company have been to negotiate to secure interests in a number of exploration tenements and to prepare for its proposed listing on the Australian Stock Exchange

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Mack & Co.

(ASX). These activities have been funded by the sole shareholder Giralia Resources NL.

On and since incorporation and up to the date of this report the Company has issued the following shares:

Issue of 100 ordinary fully paid shares on incorporation $ 100.00
Issue of 29,999,900 ordinary fully paid shares on 3 May 2007 $ 59,999.80

4. Scope

We have conducted an independent review of the following:

4.1 The income statement of Carpentaria Exploration Limited from 1 July 2006 to 30 June 2007.
4.2 The balance sheet of Carpentaria Exploration Limited as at 30 June 2007.
4.3 The statement of cash flows of Carpentaria Exploration Limited from 1 July 2006 to 30 June 2007.
4.4 The statement of changes in equity of Carpentaria Exploration Limited from 1 July 2006 to 30 June 2007.
4.5 The pro-forma income statement, balance sheet, statement of changes in equity and cash flow statement of Carpentaria Exploration Limited at 30 June 2007 which adjusts these statements to include the financial effects of:
(a) the proposed issue pursuant to the prospectus of 30,000,000 fully paid ordinary shares to raise $7,500,000.
(b) the total capital raising costs of the prospectus of $578,000 less geologists fees of $34,754 already paid.
(c) the proposed issue of 4,000,000 fully paid ordinary shares at an issue price of 25c per share to Giralia Resources NL as consideration for the acquisition of tenements.
(d) the proposed issue of 1,000,000 fully paid ordinary shares at an issue price of 25c per share to Daikoku Investment Trust as part consideration for assisting in tenement acquisition.
4.6 Applicable notes to the above statements.

All of the financial information referred to above has not been audited. The directors of Carpentaria Exploration Limited are responsible for the preparation and presentation of the historical and Proforma financial information including the determination of the pro-forma transactions.

Our review has been conducted in accordance with Australian Auditing and Assurance Standard ASRE 2410 “Review of an Interim Financial Report Performed by the Independent Auditor of the Entity” and was limited to inquiries and discussions with the directors of Carpentaria Exploration Limited, reading of directors minutes and relevant contracts, review of publicly available information and review of work papers, accounting records and other documents.

Our review also determined whether the pro-forma transactions formed a reasonable basis for the preparation of the pro-forma balance sheet.

These review procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit on the historical financial information and the pro-forma balance sheet and accordingly we do not express an audit opinion on the historical financial information and the pro-forma balance sheet set out in Appendix 1.

Carpentaria Exploration Limited

Mack & Co.

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5. Review Opinion

Based on the scope of our review, which is not an audit, nothing has come to our attention that causes us to believe that the historical information, as set out in Appendix 1, does not present fairly, in accordance with the recognition and measurement requirements, but not all of the disclosure requirements of applicable accounting standards and other mandatory professional reporting requirements in Australia, the following:

(a) The balance sheet of Carpentaria Exploration Limited at 30 June 2007, the statement of changes in equity, the income statement and the statement of cash flows from 1 July 2006 to 30 June 2007.
(b) The pro-forma balance sheet of Carpentaria Exploration Limited at 30 June 2007, the Proforma statement of changes in equity, the pro-forma income statement and the Proforma statement of cash flows from 1 July 2006 to 30 June 2007 had the transactions as set out in section 4.5 of this report taken place as at 30 June 2007.

6. Subsequent Events

6.1 On 8 August 2007 the Company entered into an agreement with Giralia Resources NL under which Giralia agreed to sell to the company certain tenements for a consideration of $1,000,000 to be satisfied by the issue of 4,000,000 fully paid ordinary shares in the company. This agreement is conditional on the company raising not less than $3,500,000 on terms reasonably acceptable to both parties on or before 31 December 2007.
6.2 On 20 July 2007 the Company entered into an agreement with Daikoku Investment Trust under which the company agreed to issue 1,000,000 fully paid ordinary shares in the company to Daikoku Investment Trust as partial consideration for assistance provided in the acquisition by the Company of five tenements. The shares are to be issued subject to the successful listing of Carpentaria Exploration Limited.
6.3 On 20 August 2007 the Company adopted an employee share option plan to enable options to be issued to employees and consultants to the company at the discretion of the directors subject to the basic conditions set out in the share option plan.

On 27 August 2007 the Company resolved, subject to a successful capital raising pursuant to the prospectus, to issue 3,400,000 free options to directors, employees and contractors. Each option would entitle the holder to one fully paid share in the Company at an exercise price of 30c at any time up to 30 June 2010.

The Company has also agreed to issue to Mr N Sheard options as part of his agreement to be appointed executive chairman and chief executive officer of the company. The relevant terms are that 3,000,000 free options will be issued expiring three years from the date of issue subject to shareholder approval. Of these options:

(a) 1,000,000 will be exercisable at 40c each if and when the Company shares close above 35c on the ASX for two consecutive ASX trading days.
(b) 1,000,000 will be exercisable at 50c each if and when the Company shares close above 45c on the ASX for two consecutive ASX trading days.
(c) 1,000,000 will be exercisable at 60c each if and when the Company shares close above 55c on the ASX for two consecutive ASX trading days.

Apart from the above, to the best of our knowledge and based on the work we have performed as described in the scope section above there have been no material transactions or events subsequent to 30 June 2007 which would require comment on, or adjustment to the financial information set out in Appendix 1 or that would cause the information contained in Appendix 1 to be misleading.

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Mack & Co.

7. Disclosure

At the date of this report Mack & Co does not have any pecuniary interest in Carpentaria Exploration Limited that would reasonably be regarded as being capable of affecting its ability to give an unbiased opinion in this matter. Mack & Co will receive a professional fee for the preparation of this report.

Mack & Co consents to the inclusion of this report (including Appendix 1) in the Prospectus in the form and context in which it is included. At the date of this report this consent has not been withdrawn.

Yours faithfully

Mack&Co

N A CALDER

Partner

Carpentaria Exploration Limited

Mack & Co.

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APPENDIX 1 INCOME STATEMENT — For the Year Ended 30 June 2007

	Actual Unaudited 30 June 2007	Proforma Unaudited
	$	$
Income Other expenses from ordinary activities Profit/(Loss) from ordinary activities before income tax expense Income tax expense relating to ordinary activities	114 (2,578)	114 (2,578)
	(2,464) –	(2,464) –
Profit/(Loss) from ordinary activities after related income tax expense	(2,464)	(2,464)

To be read in conjunction with the notes to the unaudited financial statements

BALANCE SHEET — As at 30 June 2007

	Note	Actual Unaudited 30 June 2007	Proforma Unaudited
		$	$
CURRENT ASSETS Cash and cash equivalents Provision for income tax TOTAL CURRENT ASSETS NON CURRENT ASSETS Deferred exploration, evaluation and development costs TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Payables TOTAL CURRENT LIABILITIES NET ASSETS EQUITY Issued capital Capital raising costs Accumulated loss	3 4 5 6 6	60,146 52	7,016,900 52
		60,198	7,016,952
		45,746	1,295,746
		45,746	1,295,746
		105,944	8,312,698
		83,062	83,062
		83,062	83,062
		22,882	8,229,636
		60,100 (34,754) (2,464)	8,810,100 (578,000) (2,464)
TOTAL EQUITY
		(22,882) 8,229,636

To be read in conjunction with the notes to the unaudited financial statements

Mack & Co.

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STATEMENT OF CHANGES IN EQUITY — For the Year Ended 30 June 2007

	Issued capital	Accumulated losses	Total
		$	$
ACTUAL Opening balance 1 July 2006 Issue of 29,999,900 shares Capital raising costs Net loss Balance at 30 June 2007 PRO FORMA Opening balance 1 July 2006 Issue of shares Less costs of issue Net loss for period	100 60,000 (34,754) –	– – – (2,464)	100 60,000 (34,754) (2,464)
	25,346	(2,464)	22,882
	100 8,810,000 (578,000) –	– – – (2,464)	100 8,810,000 (578,000) (2,464)
Balance at 30 June 2007	8,232,100	(2,464)	8,229,636

To be read in conjunction with the notes to the unaudited financial statements

STATEMENT OF CASH FLOWS — For the Year Ended 30 June 2007

	Actual Unaudited 30 June 2007	Proforma Unaudited
	$	$
Cash flow from / (used in) operating activities Payments to suppliers Interest received Cash flow from / (used in) operating activities Cash flow from / (used in) investing activities Payment of tenement, exploration & evaluation costs Payment of income tax Cash flow from / (used in) investing activities Cash flow from / (used in) financing activities Proceeds from share issue Payments for share issue costs Loan from holding company – Giralia Resources NL Cash flow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at start of period	(2,578) 114	(2,578) 114
	(2,464)	(2,464)
	(45,746) (52)	(45,746) (52)
	(45,798)	(45,798)
	60,000 (34,754) 83,062	7,560,000 (578,000) 83,062
	108,308	7,065,062
	60,046 100	7,016,800 100
Cash and cash equivalents at end of period	60,146 7,016,900

To be read in conjunction with the notes to the unaudited financial statements

Carpentaria Exploration Limited

Mack & Co.

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS AS AT 30 JUNE 2007

1. FINANCIAL REPORTING FRAMEWORK

Basis of preparation of Proforma Financial Information

The Proforma Financial Information of Carpentaria Exploration Limited has been prepared in accordance with the recognition and measurement, but not all of the disclosure requirements of applicable Accounting Standard and other authoritative pronouncements of the AASB.

Significant Accounting Policies

(a) Exploration, evaluation, development and restoration costs

Exploration and evaluation expenditure

Exploration and evaluation expenditure is stated at cost and is accumulated in respect of each identifiable area of interest.

Such costs are only carried forward in respect of areas of interest for which the rights of tenure are current and where:

such costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or
activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation, to the area are continuing.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Where carried- forward expenditure does not satisfy the policy stated above it is written off to the income statement in the period in which it is incurred.

Accumulated costs in relation to an abandoned area are written off to the income statement in the period in which the decision to abandon the area is made.

Rehabilitation, restoration and environmental costs

Long-term environmental obligations are based on the company’s environmental management plans, in compliance with current environmental and regulatory requirements.

The costs include obligations relating to reclamation, waste site closure, plant closure and other costs associated with the restoration of the site.

Full provision is made based on the net present value of the estimated cost of restoring the environment disturbance that has been incurred as at the balance date. Increases due to additional environmental disturbance (to the extent that it relates to the development of an asset) are capitalised and amortised over the remaining lives of the mines.

Annual increases in provision relating to the change in the present value of the provision are accounted for in earnings.

The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clean-up at closure.

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Mack & Co.

(b) Income tax

The charge for current income tax expense is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(c) Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purposes of the cash flow statements, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(d) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office (“ATO”). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.

Receivables and payables are stated with the amount of GST included.

(e) Impairment

At each reporting date, the company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the company makes a formal estimate of the recoverable amount.

Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for each individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value or money and the risks specific to the asset or group of assets being assessed.

Carpentaria Exploration Limited

Mack & Co.

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(f) Payables

Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the company. Trade accounts are normally settled within 60 days.

Payables to related parties are initially recognised at fair value and subsequently measured at amortised cost.

(g) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and revenue can be reliably measured.

(h) Issued capital

Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the proceeds received.

2. PROFORMA TRANSACTIONS

Proforma Unaudited represents Actual Unaudited 30 June 2007 figures adjusted to reflect:-

(a) The effect of the proposed subscription issue of 30,000,000 fully paid ordinary shares at an issue price of 25c per share to raise $7,500,000.
(b) The total capital raising costs of the prospectus of $578,000 less geologists fees of $34,754 already paid.
(c) The proposed issue of 4,000,000 fully paid ordinary shares at an issue price of 25c per share to Giralia Resources NL as consideration for the acquisition of tenements.
(d) the proposed issue of 1,000,000 fully paid ordinary shares at an issue price of 25c per share to Daikoku Investment Trust as part consideration for assisting in tenement acquisition.

3. CASH AND CASH EQUIVALENTS

	Actual Unaudited 30 June 2007	Proforma Unaudited
	$	$
Cash at bank and on hand 30 June 2007 Proceeds on proposed issues Less estimated expenses of offer	60,146 – –	60,146 7,500,000 (543,246)
	60,146	7,016,900

4. DEFERRED EXPLORATION, EVALUATION AND DEVELOPMENT COSTS


Tenement and application fees – at cost Exploration and evaluation costs	6,070 39,676	1,256,070 39,676
	45,746	1,295,746

Mack & Co.

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5. PAYABLES

5. PAYABLES

	Actual Unaudited 30 June 2007	Proforma Unaudited
	$	$
Loan from Giralia Resources NL	83,062	83,062

6. ISSUED CAPITAL

6. ISSUED CAPITAL

Issue of 100 ordinary fully paid shares on incorporation 17 November 2000 Issue of 29,999,900 ordinary fully paid shares on 3 May 2007 to Giralia Resouces NL for cash Proposed issue of 30,000,000 ordinary fully paid shares for cash Proposed issued of 1,000,000 ordinary fully paid shares to Daikoku Investmet Trust for assisting in tenement acquisition Proposed issue of 4,000,000 ordinary fully paid shares to Giralia Resouces NL for acquition of tenements Less estimated cost of issue (Cash) Contributed equity	100 60,000 – – –	100 60,000 7,500,000 250,000 1,000,000
	60,100 (34,754)	8,810,100 (578,000)
	25,346	8,232,100

The estimated costs of issue amount of $34,754 shown in the actual column above represents the actual costs paid to 30 June 2007 in respect of the proposed issue of 30,000,000 ordinary fully paid shares for cash.

7. COMMITMENTS FOR FUTURE EXPENDITURE

The company has commitments to expend $796,843 on its tenements over the next two years.

Carpentaria Exploration Limited

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8 Corporate Governance

In fulfilling its obligations and responsibilities to its various stakeholders, the Board of the Company is a strong advocate of corporate governance. This statement outlines the principal corporate governance procedures of the Company. The Board supports a system of corporate governance to ensure that the management of the Company is conducted to maximize shareholder wealth in a proper and ethical manner. This statement has been placed on the Company’s website (www.carpentariaex.com.au).

ASX Corporate Governance Council Recommendations

On 31 March 2003, the ASX Corporate Governance Council released its Principles of Good Corporate Governance and Best Practice Recommendations (“ASX Principles”).

ASX Principle 2.1 and 2.2 requires that the majority of the board should be independent directors including the Chairman. The Company does not have a majority of independent directors including the Chairman. The Board considers that the Company is not currently of a size, nor are its affairs of such a complexity, to justify the expense of independent non executive directors. The Board believes that the individuals on the Board can make, and do make, quality independent judgments in the best interests of the Company on all relevant issues. Directors having a conflict of interest in relation to a particular item of business must absent themselves from the Board meeting before commencement of discussion of that topic. The Company’s Chairman, Mr Nick Sheard, is considered by the Board not to be independent in terms of the ASX Corporate Governance Council’s definition of independent director. However, the Board believes that the Chairman is able to and does bring quality and independent judgment to all relevant issues falling within the scope of the role of a Chairman.

ASX Principle 2.3 requires that the roles of a Chairman and chief executive officer (or the like) should not be exercised by the same person. Mr Nick Sheard, is the Chairman and Managing Director of the Company. While the Board recognises the importance of the need

for the division of responsibilities between the Chairman and the Managing Director, it considers the existing structure provides unified leadership important to a newly incorporated company with early stage exploration projects. Mr Sheard’s dual role makes him responsible (along with the whole Board) for determining strategic direction of the Company as well as having primary responsibility for day to day management. At present this dual role assists the Company to run in a cost effective and efficient manner.

The Board intends to re-consider the duality of Mr Sheard’s role and the merits of appointing a new Managing Director as the Company evolves and increases its operations.

ASX Principle 2.4 requires listed entities to establish a nomination committee. The Company does not have a separately established nomination committee. Given the current size of the Board, the Board considers that this function is efficiently achieved with full Board support, in accordance with the guidelines set out in the Board’s charter.

ASX Principles 3.1 and 3.2 require the Company to make available a summary of the Company’s Code of Conduct and its Trading Policy and suggest that these should be posted on the Company’s website. These policies have been posted on the Company’s website.

ASX Principle 4.1 and 7.2 requires the chief executive officer (or equivalent) and chief financial officer (or equivalent) to state in writing to the Board that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results, and are in accordance with relevant accounting standards and founded on a sound system of risk management, internal compliance and control systems. The Board currently receives financial information and reports from the Chairman and Managing Director and personnel responsible for the preparation of financial reports and as such is satisfied that its accounts will reflect the matters required under ASX Principle 4.1.

ASX Principle 4.2 and 4.3 requires listed entities to establish an audit committee. The Company does not have a separately established audit committee. The

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Board considers that the Company is not of a size, nor are its affairs of such a complexity, to justify the formation of an audit committee. The Board as a whole undertakes the selection and proper application of accounting policies, the identification and management of risk and the review of the operation of internal control systems.

Pursuant to ASX Principle 5.2, the Company has made available publicly a copy of the Company’s Continuous Disclosure Policy on the Company’s website.

ASX Principle 6.1 requires that the Company also makes available publicly a copy of its communications strategy. A copy of the Company’s Communications with Shareholders Policy has been placed on the Company’s website.

ASX Principle 7.3 requires the Company publicly to disclose a description of the Company’s risk management policy and internal compliance and control system. These disclosures are contained in a Risk Management policy, which is available to be viewed on the Company’s website.

ASX Principle 9.2 states that the Board should establish a remuneration committee. The Company has a separately established remuneration committee. The Board has approved a Remuneration Policy, which has been posted on the Company’s website.

ASX Principle 10.1 requires the Company publicly to disclose its code of conduct to guide compliance with legal and other obligations to legitimate stakeholders. The Code of Conduct has been placed on the Company’s website.

In relation to the above, the Company believes it has implemented suitable practices and procedures in respect of corporate governance considering the size of the Board and the size and maturity of the Company. The Board wishes to acknowledge that nothing has come to its attention which would lead the Board to conclude that its current practices and procedures are not appropriate for an organization of this size and maturity.

Audit Process

As part of the Company’s commitment to safeguarding integrity in financial reporting, the

Company’s accounts are subject to annual audit by an independent, professional auditor, who also reviews the half-yearly accounts.

The Auditor attends and is available to answer questions at the Company’s annual general meetings.

Auditor Independence

The Company has implemented procedures to monitor the independence and competence of the Company’s external auditors. Details of the amounts paid for both work and non-audit services are set out in each annual report.

The Board requires that adequate handovers occur in the year prior to rotation of an audit partner to ensure an efficient and effective audit under the new partner.

Board Charter

The Board has a Charter, which clearly establishes the relationship between the Board and management and describes their functions and responsibilities. The Board Charter has been placed on the Company’s website.

Share Trading Policy

The Company has established a share trading policy, which has been placed on the Company’s website.

Continuous Disclosure

The Company understands and respects that timely disclosure of price sensitive information is central to the efficient operation of the ASX, prevention of selective or inadvertent disclosure, conduct of investor and analysts briefings, media communications, commenting on expected earnings, communications black-out periods and review of briefings and communications. The policy is reviewed periodically and updated as required.

The Company Secretary has responsibility for overseeing and coordinating disclosure of information to ASX. The Company Secretary also liaises with the Chairman and Managing Director in relation to continuous disclosure matters. The Managing Director is responsible for overseeing and coordinating disclosure of information to analysts, brokers and shareholders.

Carpentaria Exploration Limited

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The Company’s continuous disclosure policy may be viewed on the Company’s website.

Ethical Standards

All Directors, executives and employees are charged with the responsibility to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. The Company’s Code of Conduct has been placed on its website.

Communications with Shareholders

The Board aims to ensure that shareholders are kept informed of all major developments affecting the Company. Information is communicated to shareholders through the distribution of annual reports and presentation to shareholders at the Annual General Meeting, which they are encouraged to attend. The Company’s Communications Policy has been placed on the website.

In addition, all reports, including quarterly reports and releases made by the Company throughout the year with respect to its activities, are distributed widely via ASX and are posted on the Company’s website.

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9 Risk Factors

The Shares offered under this Prospectus should be considered speculative because of the nature of the business activities of the Company. Whilst the Directors commend the Offer, potential investors should consider whether the Shares offered are a suitable investment having regard to their own personal investment objectives and financial circumstances and the risk factors set out below. This list is not exhaustive and potential investors should read this Prospectus in its entirety and if in any doubt consult their professional adviser before deciding whether to participate in the Offer.

9.1 Economic Risks

General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and future production activities, as well as on its ability to fund those activities.

processing facilities, competent operation and management and proficient financial management.

Exploration in itself is a speculative endeavour, while mining operations can be hampered by force majeure circumstances and cost overruns for unforeseen events.

9.4 Exploration and Evaluation Risks

The success of the Company depends on the delineation of economically minable reserves and resources, access to required development capital, movement in the price of commodities, securing and maintaining title to the Company’s exploration and mining tenements and obtaining all consents and approvals necessary for the conduct of its exploration activities.

Exploration on the Company’s existing exploration and mining tenements may be unsuccessful, resulting in a reduction of the value of those tenements, diminution in the cash reserves of the Company and possible relinquishment of the exploration and mining tenements.

9.2 Market Conditions

The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities and, in particular, resources stocks. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

9.3 Security Investments

Applicants should be aware that there are risks associated with any securities investment. Securities listed on the stock market, and in particular securities of mining and exploration companies, have experienced extreme price and volume fluctuations that have often been unrelated to the operating performances of such companies. These factors may materially affect the market price of the securities regardless of the Company’s performance.

Mineral exploration and mining are speculative operations that may be hampered by circumstances beyond the control of the Company. Profitability depends on successful exploration and/or acquisition of reserves, design and construction of efficient

9.5 Commodity Price and Exchange Rate Risks

To the extent the Company is involved in mineral production the revenue derived through the sale of commodities may expose the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and other macro-economic factors.

Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company are and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.

9.6 Environmental Risks

The operations and proposed activities of the Company are subject to State and Federal laws and

Carpentaria Exploration Limited

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regulation concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. The Company’s attempts to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

9.7 Native Title and Title Risks

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is also possible that, in relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be affected.

The Directors closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

9.8 Investment Risks Specific to Uranium Mining Companies

Based on existing Queensland State Government policies there is no guarantee that should the Company define any economic deposits of uranium it will be able to be developed into operating mines.

both a State and Federal level regarding whether uranium mining in Queensland should be authorised, no guarantee can be given that the outcome of such debate will be favourable to the Company.

9.9 Joint Venture Parties, Agents and Contractors

The Directors are unable to predict the risk of financial failure or default by a participant in any joint venture to which the Company is or may become a party or the insolvency or managerial failure by any of the contractors used by the Company in any of its activities or the insolvency or other managerial failure by any of the other service providers used by the Company for any activity.

9.10 Future Capital Requirements

The Company’s activities will require substantial expenditures. There can be no guarantees that the funds raised through the Offer will be sufficient to successfully achieve all the objectives of the Company’s overall business strategy. If the Company is unable to use debt or equity to fund expansion after the substantial exhaustion of the net proceeds of the Offer there can be no assurances that the Company will have sufficient capital resources for that purpose, or other purposes, or that it will be able to obtain additional resources on terms acceptable to the Company or at all. Any additional equity financing may be dilutive to shareholders and any debt financing if available may involve restrictive covenants, which limit the Company’s operations and business strategy.

The Company’s failure to raise capital if and when needed could delay or suspend the Company’s business strategy and could have a material adverse effect on the Company’s activities.

9.11 Potential Acquisitions

As part of its business strategy, the Company may make acquisitions of or significant investments in companies, products, technologies or resource projects. Any such future transactions would be accompanied by the risks commonly encountered in making acquisitions of companies, products, technologies or resource projects.

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9.12 Resource Estimations

Resource estimates are expressions of judgment based on knowledge, experience and resource modelling. As such, resource estimates are inherently imprecise and rely to some extent on interpretations made. Despite employing qualified professionals to prepare resource estimates, such estimates may nevertheless prove to be inaccurate. Furthermore, resource estimates may change over time as new information becomes available. Should the Company encounter mineralisation or geological formations different from those predicted by past drilling, sampling and interpretations, resource estimates may need to be altered in a way that could adversely affect the Company’s operations.

9.13 Reliance on Key Personnel

The Company’s success depends largely on the core competencies of its Directors and management, and their familiarisation with, and ability to operate, in the metals and mining industry and the Company’s ability to retain its key executives.

Carpentaria Exploration Limited

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10 Additional Information

10.1 Incorporation

The Company was incorporated on 17 November 2000 as Sunmustard Pty Ltd, and on 20 April 2007 changed its name to Carpentaria Exploration Limited.

10.2 Rights Attaching To Shares

(a) General

The Shares to be issued pursuant to this Prospectus are ordinary shares and will as from their allotment rank equally in all respects with all ordinary fully paid shares in the Company.

The rights attaching to the Shares arise from a combination of the Company’s Constitution, the Corporations Act, the ASX Listing Rules and general law. A copy of the Company’s Constitution is available for inspection during business hours at its registered office.

A summary of the more significant rights is set out below. This summary is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of the Company’s shareholders. To obtain such a statement, persons should seek independent legal advice.

(d) Winding up

Subject to the Corporations Act, the ASX Listing Rules and any rights or restrictions attached to a class of shares, on a winding up of the Company any surplus must be divided among the shareholders of the Company in proportion to which the amount paid on the Shares bears to the total amount paid and payable on the Shares of all shareholders of the Company.

(e) Transfer of Shares

Generally, shares are freely transferable, subject to satisfying the requirements of the ASX Listing Rules, ASTC Rules, the ACH Clearing Rules and the Corporations Act. The Directors may decline to register any transfer of Shares but only where permitted to do so by the Corporations Act, the ASX Listing Rules, the ASTC Rules, the ACH Clearing Rules or under the Company’s Constitution.

(f) Directors

The Constitution and the ASX Listing Rules contain provisions relating to the rotation and election of Directors.

(b) Voting Rights

Subject to the Constitution of the Company and any rights or restrictions at the time being attached to a class of shares, at a general meeting of the Company every Shareholder present in person, or by proxy, attorney or representative has one vote on a show of hands, and upon a poll, one vote for each Share held by the Shareholder and for each partly paid share held, a fraction of one vote equal to the proportion which the amount paid up bears to the amounts paid or payable on that share. In the case of an equality of votes, the chairperson has a casting vote.

(c) Dividends

Subject to the Corporations Act, the ASX Listing Rules and any rights or restrictions attached to a class of shares, the Company may pay dividends as the Directors resolve but only out of profits of the Company. The Directors may determine the method and time for payment of the dividend.

(g) Calls on Shares

Subject to the Corporations Act and the terms of issue of a share, the Company may, at any time, make calls on the shareholders of a share for all, or any part of, the amount unpaid on the share. If a shareholder fails to pay a call or instalment of a call, the Company may, subject to the Corporations Act and ASX Listing Rules, commence legal action for all, or part of the amount due, enforce a lien on the share in respect of which the call was made or forfeit the share in respect of which the call was made.

(h) Further Increases in Capital

Subject to the Corporations Act, the ASX Listing Rules, the ASTC Rules and the ACH Clearing Rules and any rights attached to a class of shares, the Company (under the control of the Directors) may allot and issue shares and grant options over shares, on any terms, at any time and for any consideration, as the Directors resolve.

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(i) Variation of Rights Attaching to Shares

Subject to the Corporations Act, the ASX Listing Rules, the ASTC Rules and the ACH Clearing Rules and the terms of issue of shares in a particular class, the Company may vary or cancel rights attached to shares in that class by either special resolution passed at a general meeting of the holders of the shares in that class, or with the written consent of the holders of at least 75% of the votes in that class.

(j) General Meeting

Each Shareholder will be entitled to receive notice of, and to attend and vote at, general meetings of the Company and to receive notices, accounts and other documents required to be furnished to Shareholders under the Company’s Constitution, the Corporations Act and the ASX Listing Rules.

10.3 Material Contracts

(a) Corporate Fee

Upon listing, the Company will make a payment of approximately $60,000 to Giralia Resources NL (“Giralia”) for administrative services provided by Giralia in relation to the Company listing on the ASX. Giralia has also agreed to provide the Company with an interest free loan facility to pay any additional costs that are incurred until the earlier of the Company completing the Tenement Purchase agreement (discussed above), or the Company raising not less than $3.5million in equity funding (“Repayment Date”). Any monies borrowed by the Company are repayable as from the Repayment Date.

(b) Director and Officer Protection Deeds

The Company has entered into Director and Officer Protection Deeds (“Deed”) with each Director and the Company Secretary (“Officers”). Under the Deed, the Company indemnifies the relevant Officer to the maximum extent permitted by law against legal proceedings, damage, loss, liability, cost, charge, exchange, outgoing or payment suffered, paid or incurred by the officer in connection with the Officer being an officer of the Company, the employment of the Officer with the Company or a breach by the Company of its obligations under the Deed.

arising from any claim against the Officers in their capacity as officers of the Company. The Company will pay insurance premiums in respect of the above insurance.

Under the terms of the Deed, Officers are also granted access to Company records, during the term of their office and for a specified period thereafter, for the purposes of obtaining information and records that may be of relevance in legal proceedings that may be brought against them. Officers are also entitled to obtain legal advice in relation to their duties as officers of the Company.

(c) Tenement Acquisition Agreement

The Company has entered into an Agreement for Sale of Mining Tenements (“Agreement”) with Giralia Resources NL (“Giralia”) under which it will purchase the legal and beneficial interests in Queenland Exploration Permit for Minerals 14170 and New South Wales Exploration Licence 6246 (“Tenements”) in exchange for issuing Giralia with 4 million Shares.

The Agreement is conditional upon the Company completing an equity raising of no less than $3.5 million by 31 December 2007. Giralia and the Company have provided standard warranties for an agreement of this nature.

Each party has provided standard warranties for an agreement of this nature.

Giralia will indemnify the Company from and in respect of any claims, demands, actions, losses, costs, expenses, proceedings or liabilities suffered or incurred by the Company arising from, in connection with or relating in any way to the Tenements prior to settlement or as a result of any of the warranties being incorrect.

The Company will indemnify Giralia from and in respect of any claims, demands, actions, losses, costs, expenses, proceedings or liabilities suffered or incurred by the Company arising from, in connection with or relating in any way, to the Tenements after Settlement or as a result of any of the warranties being incorrect.

The Company is liable to pay all stamp duty assessed on the Agreement.

Subject to the Company listing on ASX, the Company is required to insure the Officers against liability

Carpentaria Exploration Limited

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(d) Executive Services Agreement

The Company has entered into an executive services agreement with Mr Nick Sheard for the provision of services required of an executive chairman and chief executive officer to the Company (“Agreement”). Under the terms of the Agreement, Mr Sheard will be required to work during normal business hours and in consideration for the provision of the services, Mr Sheard is entitled to be paid the amount of $220,000 per annum payable monthly plus other benefits (including a motor vehicle, life insurance and communication expenses). Mr Sheard will be entitled to participate in the Company’s employee share option plan and will or has been issued the options as set out in Section 10.4 of the Prospectus. The Company will reimburse Mr Sheard for all out of pocket expenses reasonably incurred by him. The Agreement is for a period of three years commencing on the date the Company becomes admitted to the official list of the ASX and can be terminated by the either party on 3 months’ notice.

(e) Consulting Agreement

The Company has entered into an agreement with Mr Cameron Switzer on behalf of the Daikoku Investment Trust for the provision of consulting services. Upon successful listing of the Company on the Official List of ASX, Mr Switzer will be entitled to be issue 1,000,000 ordinary fully paid shares in the Company in lieu of past consulting fees in relation to the acquisition of the Tenements.

(f) Employee Share Option Plan

Under the terms of the Company’s employee share option plan (“Plan”), the Board may offer free options (“Plan Options”) to persons (“Eligible Persons”) who are:

(i) full-time or part-time employees (including a person engaged by the Company under a consultancy agreement); or
(ii) Directors

of the Company or any subsidiary based on a number of criteria including contribution to the Company, period of employment, potential contribution to the Company in the future and other factors the Board considers relevant.

Upon receipt of such an offer, the Eligible Person may nominate an associate to be issued with the Plan Options.

Number of Plan Options

The maximum number of Plan Options that may be issued at any one time is 10% of the total number of Shares on issue in the Company. Subject to the requirements of Corporations Act and the Listing Rules, the Board may from time to time increase this percentage.

Terms of Plan Options

Each Plan Option entitles the holder, on exercise, to one ordinary fully paid Share.

There is no issue price for the Plan Options. The exercise price for the Plan Options will be such price as determined by the Board (in its discretion) on or before the date of issue provided that in no event may the exercise price be less that the weighted average sale price of Shares sold on ASX during the five Business Days prior to the date of issue or such other period as determined by the Board (in its discretion).

Shares issued on exercise of Plan Options will rank equally with other ordinary shares of the Company.

Plan Options may not be transferred other than to an associate of the holder. Quotation of Plan Options on ASX will not be sought. However, the Company will apply to ASX for official quotation of Shares issued on the exercise of Plan Options.

A Plan Option may only be exercised after it has vested and any other conditions imposed by the Board on exercise have been satisfied. The Board may determine the vesting period (if any). A Plan Option will lapse upon the first to occur of the expiry date, the holder acting fraudulently or dishonestly in relation to the Company, the employee ceasing to be employed by the Company or on certain conditions associated with a party acquiring a 90% interest in the Shares of the Company.

If, in the opinion of the Board, any of the following has occurred or is likely to occur, the Company entering into a scheme of arrangement, the commencement of a takeover bid for the Company’s Shares, or a party acquiring a sufficient interest in the Company to enable them to replace the Board, the Board may declare a

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Plan Option to be free of any conditions of exercise. Plan Options that are so declared may, subject to the lapsing conditions set out above, be exercised at any time on or before their expiry date and in any number.

Future Issues of Shares

New Issues

There are no participating rights or entitlements inherent in the Plan Options and Plan Option holders will not be entitled to participate in new issues of capital offered to Shareholders during their currency. However, the Company will ensure that the record date for determining entitlements to any such issue will be at least 6 Business Days after the issue is announced. Plan Option holders must be afforded the opportunity to exercise all Plan Options that they are entitled to exercise pursuant to the Plan prior to the date for determining entitlements to participate in any such issue.

which each Plan Option holder is entitled or the exercise price of his or her options or both or any other terms will be reconstructed in a manner determined by the Board, in compliance with the provisions of the Listing Rules.

Taxation

Under current taxation laws, any taxation liability in relation to the Plan Options, or the Shares issued on exercise of the Plan Options, will fall on the participants. The Company will not be liable to fringe benefits tax in relation to Plan Options or Shares issued under the Plan.

Participation by Directors

Although Directors are eligible to be offered Plan Options, none may be granted by the Company until Shareholder approval has been obtained the requirements of the ASX Listing Rules and the Corporations Act.

Bonus Issues

If the Company makes an issue of Shares to Shareholders by way of capitalisation of profits or reserves (“Bonus Issue”), each Plan Option holder holding any options that have not expired at the time of the record date for determining entitlements to the Bonus Issue is to be entitled to have issued upon exercise of any of those Plan Options the number of Shares which would have been issued under the Bonus Issue (“Bonus Shares”) to a person registered as holding the same number of Shares as that number of Shares to which the Plan Option holder may subscribe pursuant to the exercise of those Plan Options immediately before the record date determining entitlements under the Bonus Issue (in addition to the Shares which he or she is otherwise entitled to have issued to him or her upon such exercise). The Bonus Shares will be paid by the Company out of profits or reserves (as the case may be) in the same manner as was applied in relation to the Bonus Issue and upon issue rank pari passu in all respects with the other Shares issued upon exercise of the Plan Options.

Reconstruction of Capital

In the event of any reconstruction (including a consolidation, subdivision, reduction or return) of the issued capital of the Company prior to the expiry of any Plan Options, the number of Plan Options to

10.4 Interests of Directors

Other than as set out below or elsewhere in this Prospectus, no Director holds, or held at any time during the 2 years before lodgement of this Prospectus with ASIC, any interest in:

(a) the formation or promotion of the Company;
(b) property acquired or to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) the Offer; or
(c) the Offer; and

no amounts, whether cash or shares or otherwise, have been paid or agreed to be paid, and no benefits have been given or agreed to be given:

(d) to any Director, either to induce them to become, or to qualify as, a Director of the Company; and
(e) for services provided by a Director in connection with:
(i) the formation or promotion of the Company; or
(ii) the Offer.

Mr Stan Macdonald is a director of Giralia. The Company has acquired certain tenements from Giralia as set out in Section 10.3 above and Giralia will hold

Carpentaria Exploration Limited

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34 million Shares in the Company upon quotation of the Company’s Shares on ASX, of which it intends to distribute 27.2 million of those Shares as set out in Section 2.11 above. Mr Macdonald will participate in the distribution in specie of Shares by Giralia as a shareholder in that company.

Mr Nick Sheard and Mr Bob Hair have been, or are entitled to be paid a total of $60,000, and $10,000 respectively under consulting arrangements for services to the Company over the last 2 years before lodgement of this Prospectus.

Remuneration of Directors

In accordance with the Constitution, the existing Shareholders of the Company as at the date of this Prospectus have determined in general meeting the maximum non-executive Director remuneration to be $220,000 per annum.

The Directors have resolved that each non-executive director is entitled to receive fees of $30,000 per annum (plus superannuation) and the Chairman of Directors is entitled to receive $50,000 per annum (plus superannuation). A Director will not be entitled to receive Directors’ fees if he or she is employed by the Company in a full-time executive capacity.

A Director may also be paid fees or other amounts as the Directors determine if a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

Directors’ Holdings

Under the Constitution, the Directors are not required to hold any Shares in the Company.

The Directors have interests in the following Shares and Options:

and Options:

Director Shares	Options

Nick Sheard – Stan Macdonald – Bob Hair –	4,000,000 500,000 500,000

Of the 4,000,000 Options issued or to be issued to Mr Sheard, 3,000,000 are subject to Shareholder approval which will be sought at the next General Meeting of Shareholders.

Mr Macdonald will participate in the intended pro rata distribution of Shares in the Company disclosed under Section 2.11 above to the extent that he is a shareholder in Giralia. Directors may also participate in the priority offer to Giralia shareholders to the extent that they are Giralia shareholders and may also subscribe for shares under the Public offer.

The Options issued as at the date of this Prospectus to Directors, officers and other persons total 3.4 million and are on the following terms:

(i) the exercise price of each Option is 30 cents;
(ii) the Options expire at 5.00 pm EST 30 June 2010;
(iii) Shares issued as a result of the exercise of any of these Options will rank equally in all respects with previously issued Shares;
(iv) the Options are exercisable by completing the application for their exercise and delivering the same together with payment for the number of Shares in respect of which the Options are exercised to the registered office of the Company;
(v) subject to ASX Listing Rules, the Options are freely transferable in whole or part at any time prior to expiry;
(vi) within 14 days of the receipt of a properly executed notice of exercise and application monies the Company will issue to the Option holder the number of Shares specified in that notice;
(vii) the Company will apply for official quotation of all Shares issued and allotted pursuant to the exercise of the Options;
(viii) Option holders are permitted to participate in new issues of securities offered to shareholders on the prior exercise of the Options, in which case the Option holder must be afforded the period of at least 10 business days prior to and inclusive of the relevant record date to exercise the Options; and

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(ix) in the event of any reorganisation (including consolidation, subdivision, reduction or cancellation) of capital of the Company, the rights of Option holders are to be changed to the extent necessary to comply with ASX Listing Rules on a reorganisation of capital at the time of the reorganisation.

10.5 Consents

Each of the parties referred to in this section:

(a) does not make, or purport to make any statement in this Prospectus other than those referred to in this section; and
(b) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this section.

Pullinger Readhead Lucas has given and has not, before lodgement of this Prospectus, withdrawn its consent to being named as solicitor to the Offer in the form and context in which it is named.

Vidoro Pty Ltd has given and has not, before lodgement of this Prospectus, withdrawn its consent to being named as the independent geologist in the form and context in which it is named and to the inclusion of the Independent Geological Report included in Section 5 of the Prospectus in the form and context in which it is included.

Hopgood Ganim Lawyers has given and has not, before lodgement of this Prospectus, withdrawn its consent to being named as the independent solicitor reporting on tenements in the form and context in which it is named and to the inclusion of the Independent Solicitor’s Report included in Section 6 of the Prospectus in the form and context in which it is included.

Mack &Co has given and has not, before lodgement of this Prospectus, withdrawn its consent to being named as the Independent Accountant of the Company in the form and context in which it is named and to the inclusion of the Independent Accountant’s Report included in Section 7 of the Prospectus in the form and context in which it is included.

PKF has given and has not, before the lodgement of this Prospectus, withdrawn its consent to being named as auditor of the Company in the form and context of which it is named.

Security Transfer Registrars Pty Limited has not been involved in the preparation of this Prospectus and references to Security Transfer Registrars Pty Limited appear for information purposes only.

10.6 Interests Of Experts And Advisers

Other than as set out below or elsewhere in this Prospectus:

(a) no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of the Prospectus, any promoter of the Company or broker to the Issue, holds, or held at any time during the 2 years before lodgment of this Prospectus with the ASIC, any interest in:
(i) the formation or promotion of the Company;
(ii) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the Offer; or
(iii) the Offer; and
(b) no amounts have been paid or agreed to be paid, and no benefits have been given or agreed to be given, to any of those persons in connection with the formation or promotion of the Company or the Offer.

Pullinger Readhead Lucas has acted as solicitor to the Offer and provided advice and assistance in relation to certain aspects of this Prospectus, the Company’s due diligence regime and enquiries and in relation to its application and admission to ASX. In respect of these services, Pullinger Readhead Lucas will be paid $25,000.

Vidoro Pty Ltd has acted as the independent geologist and has prepared the Independent Geological Report included in Section 5 of this Prospectus. Vidoro Pty Ltd will be paid $37,787 (plus GST) in respect of these services.

Carpentaria Exploration Limited

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Hopgood Ganim has acted as the independent solicitor reporting on tenements and has prepared the Independent Solicitor’s Report included in Section 6 of this Prospectus. Hopgood Ganim will be paid $6,020.76 (plus GST) in respect of these services.

Mack & Co has acted as the independent accountant to the Offer and prepared the Independent Accountant’s Report included in Section 7 of this Prospectus. Mack & Co will be paid $6,000 (plus GST) in respect of these services.

PKF has agreed to act as auditor to the Company and will receive fees for rendering these services in accordance with its normal time based charges.

10.7 Litigation

Legal proceedings may arise from time to time in the course of the Company’s business. As at 16 July 2000, litigation searches confirm that the Company is not involved in any legal proceedings, nor so far as the Directors are aware, are any legal proceedings pending or threatened against the Company the outcome of which will have a material adverse effect on the business or financial position of the Company.

10.8 Expenses of the Offer

The total expenses connected with the Offer are estimated to be approximately $578,000. These expenses will be borne by the Company.

10.9 Restricted Securities

ASX may classify certain existing Shares on issue in the Company (as opposed to those to be issued under this Prospectus) as being subject to the restricted securities provisions of the Listing Rules. If so classified, such Shares would be required to be held in escrow for a period determined by ASX and would not be able to be sold, mortgaged, pledged, assigned or transferred for that period without the prior approval of ASX.

Under CHESS, the Company will not issue certificates to Shareholders. Instead, Shareholders will receive a statement of their holdings in the Company. If an investor is broker sponsored, ASTC will send a CHESS statement.

10.11 Tax Consideration

Investors should seek and rely on their own professional taxation advice in relation to an investment in the Company.

10.12 Distribution of Prospectus

The Prospectus has been prepared by the Company. In preparing the Prospectus, the Company has taken reasonable steps to ensure that the information in the Prospectus is not false or misleading. In doing so, the Company has had regard to the prospectus requirements of the Corporations Act.

Prospective investors should read the full text of the Prospectus as the information contained in individual sections is not intended to and does not provide a comprehensive review of the business and financial affairs of the Company nor the securities offered pursuant to the Prospectus.

No person is authorised to give any information in relation to or to make any representation in connection with the Offer described in the Prospectus that is not contained in the Prospectus. Any such information or representation may not be relied upon as having been authorised by the Company in connection with the Offer.

The Prospectus provides information to assist investors in deciding whether they wish to invest in the Company and should be read in its entirety. If you have any questions about its contents or investing in the Company you should contact your stockbroker, accountant or other financial adviser.

10.13 Non-Resident Investors

10.10 CHESS

The Company will apply to participate in the Clearing House Electronic Sub-register System (“ CHESS ”).

CHESS is operated by ASX Settlement and Transfer Corporation Pty Ltd (“ ASTC ”), a wholly owned subsidiary of ASX, in accordance with the ASX Listing Rules and the ASTC Settlement Rules.

The Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

The distribution of the Prospectus in jurisdictions outside Australia may be restricted by law and therefore persons who come into possession of the Prospectus should seek advice on and observe any of

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these restrictions. Failure to comply with these restrictions may violate securities law. Intending investors who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed to enable them to subscribe for Shares. Intending non-resident investors should also seek advice in respect of the taxation effect of an investment in the Company and dividends that the Company may distribute in the future.

The return of a duly completed Application Form will be taken to constitute a representation and warranty that there has been no breach of such laws and that all necessary approvals and consents have been obtained.

No action has been taken to register or qualify the Shares or the Offer, or otherwise to permit a public offering of the Shares, in any jurisdiction outside Australia.

10.14 Privacy

The Application Form accompanying this Prospectus requires you to provide information that may be personal information for the purposes of the Privacy Act 1988 (Cth) (as amended) . The Company (and its share registry on behalf of the Company) may collect, hold and use that person information in order to assess your Application, service your needs as a Shareholder and provide facilities and services that you request and to administer the Company.

Access to information may also be provided to the Company’s agents and service providers on the basis that they deal with such information in accordance with the Company’s privacy policy.

If you do not provide the information requested of you in the Application Form, the Company’s share registry may not be able to process your Application or administer your holding of Shares appropriately. Under the Privacy Act 1988 (Cth) (as amended) , you may request access to your personal information held by (or on behalf of) the Company. You can request access to your personal information by telephoning or writing to the Company to the attention of the Privacy Officer.

Carpentaria Exploration Limited

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11 Directors’ Statements

This Prospectus is used by the Company and its issue has been authorised by a resolution of the Directors. In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgment of this Prospectus with the ASIC and has not withdrawn that consent.

Dated: 7 September 2007

Stan Macdonald

Director For and on behalf of Carpentaria Exploration Limited

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GLOSSARY

The following defined terms apply throughout this Prospectus unless the context requires otherwise:

“ $ ” means Australian dollars unless otherwise specified; “ ACH Clearing Rules ” means the operating rules of Australian Clearing House Pty Ltd ACN 001 314 503; “ Applicant ” means a person who completes and lodges an Application Form;

“ Application ” means an application for Shares pursuant to this Prospectus;

“ Application Form ” means an application form attached to this Prospectus, including a Priority Offer Application Form;

“ ASIC ” means the Australian Securities & Investments Commission;

“ ASTC Rules ” means the settlement rules of Australian Settlement and Transfer Corporation Pty Ltd; “ ASX ” means ASX Limited (ACN 008 624 691);

“ ASX Listing Rules ” means the Listing Rules of ASX as amended from time to time; “ Closing Date ” means the last date on which Application Forms may be submitted;

“ Company ” or “ Carpentaria ” means Carpentaria Exploration Limited (ABN 63 095 117 981); “ Constitution ” means the Constitution of the Company;

“ Corporations Act ” means the Corporations Act 2001 (Cth); “ Directors ” or “ Board ” means the directors of the Company as at the date of this Prospectus; “ Exposure Period ” means the period of 7 days after the date of lodgement of this Prospectus with the ASIC, which period may be extended by the ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act;

“ Giralia ” means Giralia Resources NL (ABN 64 009 218 204);

“ Giralia Shareholders ” means holders of ordinary fully paid shares in Giralia; “ Issue ” means the issue of up to 30 million Shares under this Prospectus;

“ Offer ” means the offer of Shares pursuant to this Prospectus;

“ Official List ” means the official list of ASX;

“ Opening Date ” means the first date on which Application Forms can be received;

“ Plan ” means the employee share option plan described in Section 10.3(e) of this Prospectus;

“ Plan Option ” means an option issued under the Plan;

“ Priority Offer ” means the priority offer to Giralia shareholders described in Section 2.2 of this Prospectus; “ Priority Offer Application Form ” means an Application Form, being a Yellow Priority Application Form enclosed with this Prospectus;

“ Priority Offer Record Date ” means the record date for the Priority Offer;

“ Priority Pool ” or “ Priority Shares ” means 15 million Shares set aside under the priority offer for Giralia Shareholders; “ Prospectus ” means this prospectus dated 7 September 2007;

“ Shares ” means fully paid ordinary shares in the capital of the Company;

“ Shareholder ” means a holder of a Share(s);

“ Share Registry ” means Security Transfer Registrars Pty Limited; and

“WST” means Western Standard Time .

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C a r p e n t a r i a E x p l o r a t i o n L i m i t e d A B N 6 3 0 9 5 1 1 7 9 8 1

AI assistant

HAWSONS IRON LTD — Capital/Financing Update 2007

65053_rns_2007-09-18_8f271ad1-dc22-44a0-a5dc-86c062f583c7.pdf

Electronic Prospectus and Application Form Carpentaria Exploration Limited ABN 63 095 117 981

Note for intended users of this Prospectus:

Corporate Directory

Directors

Independent Solicitor Reporting on Tenements

Joint Company Secretaries

Principal Place of Business

Investigating Accountant

Auditor

Solicitor to the Offer

Independent Geologist

Share Registry

ASX Code

Important Information

Offer

Capital Structure

Timetable

Key Investment Highlights

Contents

IMPORTANT NOTICE

WEB SITE – ELECTRONIC PROSPECTUS

EXPOSURE PERIOD

GLOSSARY

URANIUM MINING IN QUEENSLAND

Chairman’s Letter

Dear Investor

1 Investment Summary

1.1 Company Overview and Objectives

Project Highlights

1.2 The Base Metals Prospectivity of Eastern Australia

Quarterly Expenditure on Base Metals Exploration in Qld & NSW as % of Total Australian Base Metals Expenditure

2 Details of the Offer

2.1 Key Dates

2.2 Priority Offer to Giralia Shareholders

2.3 Public Offer

2.4 Application For Shares

2.5 Allocation and Allotment of Shares

2.6 Application Money Held in Trust

2.7 Minimum Subscription and Oversubscriptions

2.8 Expenditure Plans and Use of Funds

2.9 Capital Structure

2.10 Pro rata option issue

2.11 Distribution in specie

2.12 Dividend Policy

2.13 ASX Listing

2.14 Investment Risks

2.15 Commissions

3 Project Overview

3.1 Overview of Projects

3.2 Projects

Mt Agate, Queensland, copper/gold/uranium (100% Carpentaria)

Glen Isla, New South Wales, gold (100% Carpentaria)

Combaning, NSW, nickel, gold (100% Carpentaria)

Cargoon, Queensland, nickel (100% Carpentaria)

Waterford, Queensland, uranium (100% Carpentaria)

Lady Inez, Queensland, copper (100% Carpentaria)

Redbank, Queensland, nickel (100% Carpentaria)

3.3 Proposed Exploration Budget

4 Profiles of Directors and Senior Management

Nick Sheard — Executive Chairman

Stan Macdonald — Non-Executive Director

Bob Hair — Non-Executive Director

Doug Brewster — Exploration Manager

Bruce Acutt — Joint Company Secretary

Chris Powell — Joint Company Secretary

5 Independent Geological Report

2 The Nook UNDERWOOD QLD 4119 AUSTRALIA

INDEPENDENT GEOLOGIST’S REPORT

Table of Contents

List of Figures

List of Tables

Independent Geologist’s Report

SUMMARY

INTRODUCTION

Independent Geologist’s Report

DISCLAIMER

PROPERTY DESCRIPTIONS

HAWSONS IRON LTD Capital/Financing Update 2007