Tchintaby Well Project

(E52/1882) - 80% Encounter, 20% Avoca and Tchintaby East (E52/2386) - 100% Encounter

The Tchintaby project covers over 172km 2 targeting high grade SEDEX zinc mineralisation, similar to the Century and McArthur River deposits in eastern Australia.

An Initial drill program of seven vertical RC holes was completed in September 2008 at the Andes, Laksa and Rendang prospects (Figure 1). The program was designed to test a series of bouguer anomalies within the sedimentary package. The excess mass gravity anomalies were interpreted to represent concentrations of sulphidic material and possibly base metal mineralisation.

Figure 1: Tchintaby Well – Location of gravity anomalies, historical drilling and Encounter drilling

Figure 1: Tchintaby Well - Location of gravity anomalies, historical drilling and Encounter drilling

Drilling discovered a significant 4 km strike extension to the Zn-Cu-Ag mineralised black shale horizon, including intersections of 12m @ 7062ppm Zn, 1053ppm Cu (ETW 013 - Rendang) and 11m @ 7327ppm Zn, 1022ppm Cu (ETW 006 - Laksa). Table 1 includes significant assay results from the September 2008 drill program. The drilling results, however, did not account for the 2g/cc (2mgal) excess mass anomaly targeted by the drill program. Samples of the drilled lithologies were submitted for density measurement, which will be incorporated into geological models to determine the depth and nature of the excess mass anomaly.

Table 1: Significant drill hole intersections from Tchintaby project drilling in September 2008

Hole Number

Prospect

Northing

Easting

Depth From(meters)

Thickness(meters)

Zn ppm

Cu ppm

ETW 1

Andes

7340300

611827

26

7

4057

472

ETW 2

Andes

7340702

612072

35

9

6338

870

ETW 3

Andes

7341170

612280

33

13

7488

854

ETW 6

Laksa

7338200

615750

164

11

7327

1022

ETW 9

Laksa

7338200

616200

164

9

6806

999

ETW 13

Rendang

7337400

619200

197

12

7062

1053

ETW 14

Laksa

7336750

615400

273

10

6050

833

Key learnings from this drill program identified the potential for additional SEDEX targets along the northern margin of the Bangemall Basin. A structural targeting exercise and review of the regional geochemical sampling defined a new target 30kms to the east of the Tchintaby project. Tenement E52/2386 was granted in June 2009, with initial field work to commence in 2010.