The Tollu Project is located in the southeastern portion of the West Musgrave Region, north of the A-type Tollu Granite on a major north trending structure. Initial interest in the area was focused on the Tollu Mining Centre which hosts a rich and extensive copper-bearing vein system. It was delineated in 1957 by Southwestern Mining Limited (INCO subsidiary) when 68 rock chip samples of the reef system returned an average grade of 6.75% Cu, and up to 22 grams per tonne silver. Eleven samples returned assays of over 15% Cu with a peak of 54% Cu.

These values were confirmed by Redstone in early 2007 with peak values of 56.5% Cu, 50g/t Ag, 19ppb Au, 0.03% Pb and 23ppb PGE. High grade copper mineralisation is known over a 2km x 3km area where mineralisation styles include fault-related, vein and fracture fill, stringer and disseminated mineralization in altered gabbro and felsic volcanic host rocks.

Seven shallow slim-line RC drill holes were drilled in May 2007 to test surface vein-related copper mineralisation below weathering. However split results were not received until this annual reporting period. Significant mineralization was intersected in several holes (Table 2)

Split Results from Slimline RC Drill Holes at the Tollu Project

Results from shallow vertical RAB in the area were also encouraging, demonstrating a large low-grade copper halo is present and follow-up drilling is required (Table 3)

The volume of stringer style mineralization surrounding high-grade copper rich veins at Tollu is encouraging. RAB drilling on the licence was terminated early due to time constraints of the drilling contractor, and many areas require first pass RAB geochemical drilling as well as deeper RC or diamond drilling.

Split and Composite Results for Shallow RAB Drill Holes at the Tollu Project

An EM survey was conducted in June 2007 and an anomaly was located along strike of the RAB drilling in an area of significant cover, associated with high-grade vein-style mineralization and a moderate soil anomaly. This presents as an interesting target and requires deep RC drilling to test the target at around 200m below surface.

• 17m @ 0.21%Cu from 32m open at depth (TLC001);
• 2m @ 2.82% Cu from 83m, 5m from the end of hole (TLC003);
• 16m @ 0.55% Cu from 21m including 5m @ 0.94% Cu from 32m (TLC005); and
• Eight holes contained >0.1% Cu.

Geological map of Tollu showing high-grade rock chip assay results, RAB drill collars and location of EM anomaly. Vein related mineralisation (black) is associated with the Tollu Fault cutting a series of felsic volcanic rocks (orange) and intrusive gabbro (green).