26th October 2005 Report to the Australian Stock Exchange ___________________________________________________________________________ POSITIVE RESULTS FROM AERIAL SURVEY OF ELLENDALE DIAMOND PROJECT, WESTERN AUSTRALIA Results from a high-resolution aerial magnetometry survey of Paramount Mining Corporation Limited’s Ellendale Project in Western Australia suggests lamproite targets in two of the tenements, P 04/ 196 and P 04/ 198, may be larger than earlier interpretations. The survey was flown by UTS Geophysics over all four Ellendale Project tenements earlier this year, with field data received in August. These results were subsequently investigated by Cowan Geodata Services (“Cowan”), a group that is specialised in the modelling and interpretation of geophysical data. The Cowan report describes the results of data enhancement, analysis and preliminary interpretation of the high-resolution aeromagnetic and radiometric data from Paramount’s Ellendale ground on the Lennard Shelf, Western Australia. P 04/ 196, P 04/ 197 and P 04/ 198, containing known lamproite and ground magnetic targets, were flown at 25 metre line spacing. E 04/ 1391, a larger area containing subtle targets generated by digital elevation modelling, was flown at 50 metre line spacing. Extracts from the Cowan report follow. Certain statements have been highlighted in bold: “ Magnetic surveys have proved to be very effective over the main Ellendale lamproite field, since the response of the weakly magnetic lamproites is quite clear against a background devoid of other shallow magnetic features. Magnetic signatures of lamproites are quite variable, with usually only the magmatic phases being magnetic. The pipes vary in size and shape and some possess significant remanent magnetisation, consistent with frequent geomagnetic polarity reversals in the Tertiary. Amplitudes range up to 50 nT but are commonly less than 10 nT. In aeromagnetic data, the pipes are seen as small discrete blips superimposed on the much longer wavelength magnetic background due to basement.” “In block A70102 (P04/196), Ellendale 46 images as a striking negative magnetic anomaly, elongate north–south with two closely separated magnetic lows. Napier 1 images as a prominent ‘bulls-eye’ mainly negative magnetic anomaly with a clear linear ‘tail’ to the west.” ..... “Both Ellendale 46 and
26th October 2005 Report to the Australian Stock Exchange ___________________________________________________________________________ PARAMOUNT ACQUIRES ADDITIONAL PROSPECTIVE GROUND IN THE KIMBERLEY REGION, WESTERN AUSTRALIA ___________________________________________________________________________ Paramount Mining Corporation Limited has applied for a diamond prospective tenement in the east Kimberley Region of Western Australia, to be known as the Tunganary Project. Previous exploration has narrowed the target area for kimberlites to a small valley included within the tenement, where diamonds and indicator minerals were found in samples from small creeks. The undiscovered source of the diamonds is expected to exist in the vicinity of these positive sites. The tenement lies approximately 150 kilometres southwest of the Argyle Diamond Mine. The application covers an area of 10 blocks, approximately 32 square kilometres in total, and consists of one tenement, E 80/ 3562. Paramount plans to drill anomalous features and conduct intensive sampling and other ground investigations to locate the hard rock source of the diamonds. Previous explorers discovered small kimberlitic dykes and sills in the area which have no associated diamonds; the mineralogy suggests these bodies are unlikely to carry diamonds. However, their presence confirms that kimberlitic magmas have reached surface within the tenement area, and that a search for further bodies may yield a diamond-bearing host. Acquisition of the exploration property is in line with the Company’s strategy to build on its spread of high ranking projects and thus increase the prospect of making a significant discovery. The addition of the Tunganary tenement adds to the strong presence Paramount is building throughout the Kimberley Region, a classic tectonic setting for kimberlites. The Company has substantial holdings elsewhere in Western Australia, with projects at Ullawarra, Lionel and Yangibana in the Pilbara, the Ellendale and Napier projects in the west Kimberley area, and three central Kimberley projects. The 2005 field programme is currently in operation, at the Ullawarra and Yangibana projects.
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