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ARGOLD HOLDINGS PTY. LTD.

ABN 52 191 636 484

Contract Geologists in Mineral Exploration and Mining.

PRINCIPAL OFFICE: Unit 5, 29 Point Walter Road, BICTON, 6157. Western Australia.

POSTAL ADDRESS: P.O. Box 257, MELVILLE, 6956. Western Australia.

PHONE/FAX AND E-MAIL: Telephone and Fax.(08) 9438 2741, E-mail. argold@westnet.com.au

FIRST ANNUAL REPORT EXPLORATION ON EL 28822

Held equally by Argold Holdings Pty. Ltd. and Austasia Resources Pty. Ltd.

For the year

PART OF THE DUNDEE GLAUCONITE PROJECT. “Bynoe” and “Fog Bay” 1:100,000 sheets

Exploration field work and reporting by

H.F.Girschik. Argold Holdings Pty. Ltd. Perth, Western Australia.

December 2012

21 February 2012 to 20 February 2013

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SUMMARY Exploration Licences 28822 and 28823 equally held by Argold Holdings Pty. Ltd (Argold) and Austasia Resources Pty. Ltd (Austasia) are located in the Dundee area of the Top End of the Northern Territory. These two Exploration Licences (EL’s) form the “Dundee Glauconite Project”. A green clay-like substance fitting the description of the potassium bearing mineral, glauconite, was previously identified in the 2007 RAB drilling conducted by Uranex for determination of basement rock-types as part of their uranium exploration on adjacent ground. An examination was made of the open-file Company Reports (CR’s) relating Uranex’s work and also that of the several earlier generations of EL’s covering these EL’s and also to those on the adjacent ground. That examination established that although a lot of aerial magnetic work had been conducted, none was useful in predicting the location of glauconite. (Glauconite is a weakly paramagnetic substance rather than ferro-magnetic.) However a lot of percussion drilling had been conducted which confirmed the widespread distribution of the green clay. Exploration work in 2012 consisted in the examination of the CR’s as mentioned above, and a field reconnaissance of access onto EL 28822, which established that, contrary to previous perceptions, there is a good network of well-established vehicular tracks to provide access for the RC drilling proposed for 2013.

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TABLE OF CONTENTS.

INTRODUCTION. TENURE. LOCATION. ACCESS TOPOGRAPHY VEGETATION CURRENT LAND USE GEOLOGY PREVIOUS EXPLORATION CURRENT EXPLORATION WORK CONDUCTED RESULTS CONCLUSION RECOMMENDATIONS LIST OF TABLES. SUPPLIED AS SEPARATE FOLDERS

Table 1 “List of historic exploration licences covering or around the ground covered by EL 28822”. EL 28822_2013_A_2_historicels

Table 2 “Summary of Open File Company Reports”. EL28822_2013_A_3_crsummaries FIGURE WHICH FOLLOWS THE TEXT Plan of EL 28822 showing access tracks.

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EXPENDITURE REPORT APPENDICES 1 LIST OF HISTORIC EXPLORATION LICENCES COVERING OR AROUND THE GROUND COVERED BY EL 28823 FOR WHICH THE OPEN FILE COMPANY REPORT WAS OBTAINED, EXAMINED AND SUMMARISED. Follows Text 2 SUMMARIES OF THE OPEN FILE COMPANY REPORTS. Supplied as separate folder.EL28823_2013_A_3_crsummaries.

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FIRST ANNUAL REPORT OF EL 28823, PART OF THE DUNDEE GLAUCONITE

PROJECT.

FOR THE YEAR 23 February 2012 to 23 February 2013

INTRODUCTION. Exploration Licence 28822 is held jointly by Argold Holdings Pty. Ltd. (Argold) and Austasia Resources Pty. Ltd. (Austasia). It is located to south west of Darwin in the Dundee district of the Northern Territory. In 2007, the author supervised a program of shallow, reconnaissance air-core drilling for Uranex NL as part of an exploration program for uranium. The objective of that program was to identify the rock types and stratigraphic units occurring underneath the Cretaceous and Quaternary cover rocks. The author was impressed but the substantial thicknesses of a bright-green clay-like substance which fitted the description of glauconite, an iron potassium aluminium silicate with maximum potassium content of 7% intersected in the drilling. Subsequent reading on the matter confirmed that this was most probably glauconite. It is a well-recognised as a unit in the Cretaceous in that part of the NT and is designated as a marker bed in the Groote Eylandt manganese mining operations in eastern Arnhem Land which are stratigraphically in the Cretaceous. It is formed in shallow marine situations from the diagenetic alteration of biotite derived from granites and gneisses. However, at the time there was no commercial interest in potassium. The green clay was not analysed for potassium. The main use for potassium is as a fertiliser. Potassium, phosphorus and nitrogen are the three elements taken up from the soil by plants. The potassium in commercial fertilisers is usually in a water-soluble form such as the sulphate or the chloride. Non-soluble forms such as glauconite have been used as a form of slow- release fertiliser in cases where transport cost is not prohibitive. In 2010 there was a marked increase in the price of potassium. Around that time, Potash West Ltd, an ASX listed company, was granted exploration tenements over a large part of the Perth Basin in Western Australia. The occurrence of greensands (a mixture of glauconite and sand) in the Perth Basin had been well documented for over 60 years. While glauconite has never been considered a commercial source of potassium, Potash West Ltd. is investigating ways to convert the potassium fixed in the glauconite into a soluble form on a commercial scale. In 2012 they were reporting significant successes in this field. Argold and Austasia applied for two Exploration Licences in the Dundee district to include the area of Quaternary rocks,(which presumably overlay the favourable Cretaceous) and which also not on freehold land or otherwise encumbered These two EL 28822 and 23323 are referred to as the “Dundee Glauconite Project”. In 2012, EL 28823 was RC percussion drilled to obtain samples the green clay to confirm that was in fact glauconite, and to determine the areal extent and thickness of

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the clay. Access to this EL was much easier than for EL 28822. Hence it was the logical choice for initial drilling. However that drilling failed to intersect significant amounts of glauconite as the Cretaceous host rocks were not developed to any degree and are too thin to permit the diagenetic process of converting biotite to glauconite to have taken place there. No further work is warranted on EL 28823. The tenement has been surrendered This report deals with EL 28822 only. TENURE. EL 22822 was applied for jointly (each at 50%) by Argold and Austasia on 25 May 2011. It was granted on 23 February 2012 for a period of 6 years. It consists of 48 graticular blocks in an irregular shape. The EL does not extend beyond the coast. Total area is 103.3 square kilometres. Annual rental is $1488. LOCATION. The EL is located approximately 55 kilometres directly south west of Darwin or 127 kilometres by road southwards along the Stuart Highway and thence west along the Dundee road. ACCESS Access around the EL is via a network of old exploration tracks kept clear by repeated use as they provide access to hunting and fishing locations. TOPOGRAPHY The area of the EL is flat to gently undulating. The north-eastern, northern and western boundaries abutt tidal areas where there are mangroves and swamps. VEGETATION Vegetation consists of paperbark trees around the swamps, mangroves adjacent to salt water and dry, stunted eucalypt forests elsewhere interspersed by small areas of grasslands. CURRENT LAND USE The EL is entirely within Crown Lease 571 Section 2882 Hundred of Glyde. There is no pastoral or other regulated activity on the EL. GEOLOGY Basement rocks are the Proterozoic Two Sisters Granite and the Welltree Metamorphics including the Depot Creek Sandstone Member. These do not crop-out, and are known only from drilling. Within the EL, the Proterozoic rocks are overlain by the Darwin Member of the Cretaceous Bathurst Island Formation which consists of clays, silt, fine sands, biotite rich beds and glauconite. The glauconite is considered to be a product of the degradation by diagenetic processes of the biotite which was derived from the underlying and nearby granites and biotite schists. The Cretaceous

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does not crop-out and is known only from drilling, but is recognises as being widely distributed. It is overlain by a widespread blanket of Quaternary sand and clay, including layers of partly to completely cemented iron and manganese pisolite, locally referred to as pindan. Archaean rocks, including the biotite rich granites of the Rum Jungle Complex occur some 50 kilometres to the east in the headwaters of the streams,( including the Finniss River, around 13 km. to the south of the EL), which discharge into the ocean on this part of the coast. PREVIOUS EXPLORATION The Dundee district was extensively explored from the mid 1970’s through to 2008 with the work being directly related to uranium in the basement Proterozoic rocks. In particular, there was a lot of shallow drilling to the base of the Cretaceous to determine the nature of these basement rocks and to obtain a sample of same to establish their geochemistry. The author examined the records of that drilling and noted that a very large number of these holes intersected green clay. Sometimes this was qualified as “bright or apple green”, sometimes “yellow or lime green”, and still again “khaki”. However the term glauconite was never used to describe these clays, and there were only a few assays for potassium. The location of the holes showing green (and its variants) clay and the depth and thickness of the clay in those holes were plotted onto a plan. The result showed that the green clay was widespread, 26 metre at thickest, commonly 6 to 10 metre, but it was not a continuous sheet. There was also a substantial amount of geophysical work conducted by way of aerial and ground radiometric and magnetic surveys, and gravity surveys. Deep diamond and percussion holes were also drilled to test geophysical and geochemical targets. These were not of great interest to the current exploration. A summary of the tenements held by the various explorers and the work they conducted is given as Table 2 in the Appendices. (EL 28822_2013_A_3_crsummaries.) CURRENT EXPLORATION WORK CONDUCTED. As indicated in “Previous Exploration above, the Company Reports relating to previous exploration in the area were perused and the location of green clay was noted and summarised. The only field work conducted on the EL was a reconnaissance of access tracks. This established that there was a network of former exploration tracks, plus other tracks used by hunting and fishing parties which led to various parts of the EL

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CONCLUSION. While the drilling on nearby EL 28823 returned disappointing results, the reason for the lack of success is clear. On the northern EL28822, from the accounts in the CR’s, the host unit, the Cretaceous Darwin Member appears to be widely distributed and, being further from the Cretaceous shore, is expected to be a thicker. Thus it remains a valid exploration target. However islands, high points in the basement and scouring cannot be ruled out. RECOMMENDATIONS On EL 28822, the mapping of existing tracks, commenced in 2012, should be continued and extended to pick up all trafficable tracks. On the basis of ease-of-access and the most likely position of the better thickness of glauconite, further drilling can be planned. Eight Reverse Circulation Percussion holes to an average depth of 20 metre are envisaged. This is expected to cost around $ 22,440 This work will be conducted during the 2013 “dry” season. H.F.GIRSCHIK. Geologist.

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APPENDICES APPENDIX 1 LIST OF HISTORIC EXPLORATION LICENCES COVERING OR AROUND THE GROUND

COVERED BT EL 28822 FOR WHICH THE OPEN FILE COMPANY REPORT WAS OBTAINED, EXAMINED AND SUMMARISED

LIST OF HISTORIC ELS ON AND AROUND 28822

877

1753

1926 INCLUDED IN

3595

3149

3170 INCLUDED IN

3595

3595

4803

6873

23070

23071

23915