EXPLORATION PERMIT FOR MINERALS16032

“MT PERRY”

PARTIAL RELIQNUISHMENT REPORT FOR THE YEAR ENDING 28th JANUARY 2009

Tenements Held and Report Submitted by: GYMPIE ELDORADO MINING PTY LTD

Compiled by:Liam Frømyhr

Report Date:February 2008

VOLUME 1REPORT TEXT AND FIGURES

Copies: 1 Gympie Eldorado Mining - Exploration Office (hardcopy version)2 Qld Department of Natural Resources and Mines (digital version)

TABLE OF CONTENTS

Page No

SUMMARY 1

1 INTRODUCTION 2

2 EXPLORATION PHILOSOPHY AND OBJECTIVES 4

3 LAND ACCESS 5

4 EXPLORATION WORK CONDUCTED 6

6 ENVIRONMENTAL MANAGEMENT 8

7 CONCLUSIONS AND RECOMMENDATIONS 9

LIST OF FIGURESPage No

Figure 1 Location of sub-blocks - EPM 16032 3Figure 2 Retained and relinquished areas (AGD84 Zone 56 projection) 3Figure 3 Rock sample locations in relinquished areas 6Figure 4 Location of prospects and work conducted within EPM16032 7

LIST OF APPENDICES

Appendix 1 Rock Chip Sample Dataincluding 1. Rock Chip Sample Locations

2. Rock Chip Sample Descriptions2. Rock Chip Assay Results

LIST OF TABLESPage No

Table 1 Exploration Permit 16032 History of Tenure 2Table 2 EPM 16032 Sub-block details 2Table 3 EPM 16032 Sub-blocks after relinquishment 2Table 4 Target area summaries 7

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SUMMARY

This report details work conducted on relinquished portions of EPM 16032 “Mt Perry” during the initial two years of tenure under Gympie Eldorado Mining Pty Ltd (GEM), from 29th January 2007 to 28th January 2009.

Minimal work was conducted on the relinquished portions, with only one scout field trip undertaken to gather information regarding road and land access, landholder attitudes and collect type samples for the respective rock units under tenure. Several reviews of the EPM were also performed, with the outcome to relinquish down to 45 sub- blocks and concentrate on other assets held by the company.

This has resulted in not meeting the planned objective of exploring the EPM from a more grassroots-based perspective over the relinquished portions.

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1 INTRODUCTION

This report covers work on the relinquished portions of Exploration Permit for Minerals 16032 during the first two years of grant for the period 29th January 2007 to 28th January 2009. The details of the tenement history are tabulated below. Gympie Eldorado Mining Pty Ltd controls 100% of EPM 16032.

Table 1:Exploration Permit 16032 History of tenure.EPM No. Date of Grant Term Years Renewals

16032 29.01.2007 5

Table 2:EPM 16032 Sub-blocks 29-01-2007 to 28-01-2009BIM: BRIS

Blocks Sub-Blocks886 K N O P R S T U W X Y Z887 A F G L M Q R S V W X957 B C D E G H J K958 A B C D E F G H J K P U Z959 A B C D F G H J L M N O P Q R S T U V W X Y Z960 V

1031 A B C D E F G H J K L M N O P Q R S T U V Z1032 A F G L M Q R W1103 A

Total: 99 Sub-Blocks

Table 3: EPM16032 sub-blocks after relinquishmentBIM: BRIS

Blocks Sub-Blocks886 R S T W X Y957 B C D E G H958 A B C D E959 A C D F G H J M N O

1031 G H J K L M N O P Q R S T U V1032 A F G L

Total: 45 sub-blocks

EPM 16032 is located to the southwest of Gin Gin and east of the Mt Perry townships in south-east to central Queensland. The EPM covers an area of varied topography ranging from flat to moderately undulating farmland in the eastern and south- eastern areas, to rugged and well timbered mountainous terrain with local relief to 600 metres in the west. Freehold beef grazing and timber properties dominate the region. Part of the EPM is covered by the Mt Perry Timber Reserve (western limb of EPM), and the Goodnight Scrub National Park partially covers 6 sub-blocks on the southernmost margins.

3

Broad-scale access to the region is generally good via public roads however detailed access is limited. Numerous small tracks and private roads provide minor coverage, and private vehicle access is required for the majority of the tenement.

Figure 1: Location of sub-blocks - EPM 16032

Figure 2: Retained and relinquished areas (AGD84 Zone 56 projection)

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2 EXPLORATION PHILOSOPHY AND OBJECTIVES

Following a review of the Company’s current mining and exploration activities in the Gympie goldfield, a regional-based approach was initiated as mining operations from the Monkland mine began to diminish. This regional exploration approach was aimed at seeking both short-term mill feed and more grassroots-based targets for future stand- alone operations.

The Rawdon Corridor was selected for its well-known mineralisation potential and proximal location to the Gympie base of operations. The region hosts a significant accumulation of gold and other metals, with the million ounce-plus Mount Rawdon orebody and numerous smaller gold, copper-gold, molybdenum and bismuth deposits in the vicinity. Fertile Triassic granitoids as a result of the New England Orogeny are prevalent throughout the area and are the accepted source of mineralisation. As such, the region can be considered prospective for intrusion-related, porphyry, epithermal, and where limestone/calc-silicate bodies are present, replacement/skarn-type mineralisation styles.

Structural analysis highlighted several areas of interest in the EPM area related to the NW-trending Perry Fault system and interpreted ENE-oriented extensional trends recognised as conduits and focal points for mineralised fluids in the region. In addition, as the above-mentioned forms of mineralisation are not controlled by stratigraphy to such an extent as other styles, it was proposed that the relatively under-explored nature of the region in modern timeframes may be due to the presence of Carboniferous/Permian Goodnight Beds. This stratigraphy was previously not considered as prospective as the typical Permian-Triassic sequences, however local historic workings of numerous mineralisation types are recorded in this stratigraphy. Mineralisation is also known in equivalent rocks south of the region.

Exploration activities on the tenement are planned to test for mineralisation associated with the intrusion-related model, regional structural trends and also deposits within atypical stratigraphy.

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3 LAND ACCESS

Appropriate land access procedures are carried out prior to all exploration programmes with practices undertaken under a formal set of GEM procedures compliant with the DNRM Code of Compliance and the respective Environmental Authority.

Significant time and effort is invested on land access, which is an ongoing process of building goodwill and trust in the local community. Careful attention to landowner relations and environmental issues are a high priority and essential to successful exploration and mining in any area.

Due to the limited amount of work conducted this tenure year, private land access was not required. Reconnaissance in the vicinity of the Mt Perry township indicated the majority of residents are aware of the benefits exploration and mining activities can bring to a region and a largely positive approach was determined. Issues are expected when private land access is to be sought however, with a number of landholders difficult to get in touch with via post and phone communications.

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4 EXPLORATION WORK CONDUCTED

Exploration work conducted on the relinquished areas during the period of tenure was limited in nature and focussed on target generation. This included: a review of previous exploration, structural and geological model generation, geophysical processing and interpretation, airphoto interpretation and one reconnaissance field trip of public access roads and landholder attitudes.

Figure 2 outlines the EPM and relinquished areas including rock chip locations, Figure 3 shows the EPM target areas and Table 4 briefly summarises the results of this work for the sub-blocks relinquished. No results anomalous in precious or base metal values were returned from this limited sampling. Sample details are presented in Appendix 1.

Figure 3: Rock sample locations in relinquished areas

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Table 4: Target Area SummariesTARGET

AREA GEOLOGY STRUCTURE GEOPHYSICS PREVIOUS WORK OTHER NOTES

D

Goyan Andesite, Hogback Granite,

Moolboolaman Granodiorite

- Magnetic high Au to 30ppb in stream sediments -

E

Hogback Granite,

Goodnight Beds, Moolboolaman Granodiorite

-Magnetic high,

anomalous K/Th/U

No previous work -

Figure 4: Location of prospects and work conducted within EPM 16032

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6 ENVIRONMENTAL MANAGEMENT

During the course of this tenure period, exploration work was carried out on EPM 16032 under Standard code-compliant Environmental Authority MIC200487306, granted on 31st January 2007 and will apply to all on-going work until the tenement is surrendered.

All field practices are undertaken within the guidelines of a formal set of GEM procedures, which comply with the DNRM Code of Compliance and the Environmental Authorities granted to the tenure. Field personnel are trained in the application of these guidelines and a responsible officer audits the performance of field crews and contractors.

The GEM procedures are on file at the exploration office, and are revised regularly and as required as changing work practices and locations demand.

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7 CONCLUSIONS AND RECOMMENDATIONS

Exploration conducted on the relinquished portions of EPM16032 Mt Perry was restricted due to a focus on other priority areas including the Mt Scotchy discovery in 2007 and limited staff resources. Work which was conducted was of a scouting nature, low density and not a good test of the potential for mineralisation in the region.

The sub-blocks as relinquished were relinquished largely untested, and should a substantial target develop out of work conducted on the remaining portions of tenure as planned, will see the renewal of interest in these sub-blocks. At this stage they do not form an attractive exploration target due to distance and the undeveloped nature of the targets.

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APPENDIX 1

Rock Chip Sample Data

Including 1. Rock Chip Sample Location2. Rock Chip Sample Description3. Rock Chip Assay Results

1

ROCK CHIP SAMPLE LOCATIONS

SAMPLE DATE LOCATION GRID NORTH EAST TYPE SIZEGR5045 3/04/2007 MOOLBOOLAMAN ROAD AMG AGD84 7232543 382504 GRAB 2MGR5046 3/04/2007 MOOLBOOLAMAN ROAD AMG AGD84 7232543 382508 GRAB 3MGR5047 3/04/2007 MOOLBOOLAMAN ROAD AMG AGD84 7232547 382535 GRABGR5056 4/04/2007 NATIONAL TRAIL AMG AGD84 7214365 389258 GRAB 1.5M X 1.5M

1

ROCK CHIP SAMPLE DESCRIPTIONS

SAMPLE DESCRIPTION LITHOLOGY VEINING ALTERATIONGR5045

GR5046

COMPOSITE GRAB

COMPOSITE GRAB

CALCRETE IN GOODNIGHT BEDS

CALCETE IN GOODNIGHT BEDS

CARBONATE- EXTREME CARBONATE

GR5047 COMPOSITE GRAB CALCRETE IN GOODNIGHT BEDS CARBONATEGR5056 MASSIVE BUCKY

WHITE QTZ VEIN

2

ROCK CHIP SAMPLE ASSAY RESULTS

SAMPLE AU AG AL% AS BA BE BI CA% CD CO CR CU FE% K% MG% MN MO NA% NI P PB S% SB SR TI% V W ZNGR5045 0.001 -0.5 2 -5 170 0.8 -2 16.05 -0.5 5 6 19 1.04 0.53 10.4 714 -1 0.61 4 130 2 0.02 -5 737 0.11 27 -10 26GR5046 0.002 -0.5 2.17 -5 270 0.8 -2 12.9 -0.5 9 14 24 1.55 0.7 9.11 1470 1 0.51 11 170 5 0.01 -5 714 0.14 38 -10 40GR5047 0.002 -0.5 1.4 -5 190 0.6 -2 17.2 -0.5 6 4 18 0.56 0.36 12.25 1075 -1 0.55 1 100 6 0.02 -5 686 0.06 17 -10 58GR5056 -0.001 -0.5 0.04 -5 10 -0.5 -2 0.01 -0.5 -1 2 1 0.45 0.01 -0.01 66 -1 0.01 -1 10 -2 -0.01 -5 1 -0.01 1 -10 -2

NB: All samples analysed by ALS Brisbane using Au-AA22 fire assay and ME-ICP61 multi-element techniques.