26th October 2005 Report to the Australian Stock...

26th October 2005 Report to the Australian Stock Exchange
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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
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PARAMOUNT ACQUIRES ADDITIONAL PROSPECTIVE GROUND IN
THE KIMBERLEY REGION, WESTERN AUSTRALIA
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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.