A new 2.5D airborne electromagnetic (AEM) algorithm has been developed by Intrepid Geophysics and Jovan Silic & Associates. The advantage of 2.5D (2D geology, 3D source) AEM inversion in 3D geological mapping applications and identification of conductive drilling targets, compared to the more commonly used conductivity-depth imaging (CDI) transforms or 1D inversions, are demonstrated using examples from banded iron formations (BIFs) and other geological settings. We show emerging AEM systems are capable of providing estimates of economic rock unit thicknesses, dips and fault definition at an accuracy that mitigates the need for pattern drilling.The 2.5D inversion application used in this work and described in Silic et al (2015) is a substantially changed version of ArjunAir (Wilson, Raiche and Sugeng, 2006), a product of CSIRO/AMIRA project P223F. The changes include a new forward model algorithm and a new inversion solver. The application enables the accurate simulation of 3D source excitation for full domain models inclusive of topography, non-conforming boundaries and very high resistivity contrasts. Solution is accurate for a geoelectrical cross-section, which is relatively constant along a strike length that exceeds the AEM system footprint.The major innovation includes a new inversion solver with adaptive regularisation, which allows the incorporation of a misfit to the reference model and the model smoothness function.Memory usage has been dramatically reduced and is estimated prior to execution. For speed the software has been parallelised using Intel message passing interface (MPI) and can be used on standard computing hardware or computing clusters. Data from survey lines with lengths exceeding 100 km can be inverted on high end laptop computers.We allow flexibility in the selection of components and in the estimation of noise.AEM inversion examples are shown for surveys from BIFs, base metals (volcanogenic massive sulfides) and geological mapping projects and the results are compared with known geology and drilling. We demonstrate the much improved mapping and target definition delivered by this inversion method when compared with the other more common transforms or inversion methods used on these projects.CITATION:Paterson, R, Silic, J, FitzGerald, D and Jakica, S, 2017. High accuracy .D airborne electromagnetic inversion method for banded iron formation and other geological settings, in Proceedings Iron Ore 2017, pp 319-330 (The Australasian Institute of Mining and Metallurgy: Melbourne).