De Grey has entered into a non-binding letter agreement with Teck Australia Pty Ltd (Teck) in September 2009 under which the Company can earn 100% interest in EPM14142, “Tee Tree Well”, located north of Cloncurry in Northwest Queensland.

EPM14142 covers a geophysical feature informally called the Apex Magnetic Complex, located 55 kilometres north of Xstrata's Ernest Henry copper-gold mine and 90 kilometres south of Falcon Minerals/Anglogold Ashanti's Saxby project, in the covered northern extension of the Eastern Succession of the Mount Isa Inlier.

In addition to the established deposits such as Ernest Henry (copper-gold), Cannington (silver-lead) and Eloise (copper-gold), the prospectivity of the Eastern Succession has been highlighted by recent discoveries including CuDeco's Rocklands copper deposits, Ivanhoe Australia's Merlin molybdenum-rhenium deposit and both nickel-copper mineralisation and high-grade gold mineralisation at Saxby.

Apex Project location map

Apex is located at the northern extremity of the Ernest Henry Terrain, an area where Na-Ca metasomatism and K-magnetite alteration, driven by magmatic events, have resulted in basement rocks of distinctive magnetic character.

The Apex IOCG target has never been drilled. Based on the nearest drilling to basement, about 10 kilometres from Apex, prospective Proterozoic rocks are thought to be overlain by about 350 metres of flat-lying Cretaceous rocks and recent cover.

Regional geology and mineral occurrences, Ernest Henry terrain	Regional aeromagnetics, Ernest Henry terrain

De Grey completed a 1,035 station detailed ground gravity survey covering a 32.7km² area over Apex in June 2010.  Preliminary processing of the data confirms a significant gravity coincident with the magnetic high.

The coincident magnetic - gravity signatures at Apex are similar to those at Ernest Henry and occur in an area of structural complexity immediately adjacent to the intersection of major, terrane-bounding structures.  The high-amplitude anomalies are thought to be due to magnetite associated with an IOCG-style alteration system or, alternatively, a mafic intrusive complex similar to that which hosts nickel-copper mineralisation reported by Falcon Minerals at their nearby Saxby Project joint venture with AngloGold Ashanti.

RTP magnetic image of Apex Magnetic Complex.              Contours are at 25 nT intervals	Residual gravity image over Apex Magnetic Complex. Contour intervals are 1 gravity unit

De Grey can earn 100% interest in the Tee Tree Well EPM by sole funding $2 million exploration expenditures over 4 years, including a commitment to spend $250,000 in the first year with a work program to include at least two drill holes to basement.  Teck retains a 1% NSR royalty and the right to earn back to 70% interest by incurring a significant premium on De Grey's expenditures at any time up until De Grey has spent $7.5 million.

De Grey has been awarded funding of up to $80,000 under the Queensland Government's Cooperative Drilling Initiative (CDI) to drill test the Apex Magnetic Complex.   The CDI grant recognises the quality and the potential of this exciting drill target in a frontier exploration area.

Computer modelling of the combined gravity-magnetic data is now underway in order to create a three dimensional geological model for drill targeting.

Jacky's Creek & Cattle Creek EPM Applications

De Grey has lodged applications for two EPMs, Jacky's Creek and Cattle Creek, covering a combined 158km² of ground contiguous with the Tee Tree Well EPM. 

The application areas cover other discrete geophysical features that may represent alteration associated with IOCG-style copper-gold mineralisation.  Exploration will commence upon grant of the tenements.

Teck's claw-back rights to the Apex EPM will extend to cover those parts of EPM18296 that lie within one kilometre of the boundary of the Apex farm-in tenement.