EL 23571 Reynolds Range Third annual report

Abstract

Arafura advise that on-ground exploration was conducted on the licence area during the past year. Expenses were incurred and can be attributed to Consulting Geologist's expenses, and an Independent Geologist's Report and helicopter reconnaissance associated with our uranium demerger, plus our administration costs. This licence area forms an integral part of our holdings in the Reynolds Range/Aileron area and is considered prospective for Nolan's Bore type deposits. In addition, the licence area also forms an important part of the Aileron Basins project area, a group of tenements held by Arafura Resources which are all considered prospective for uranium. EL 23571 is therefore part of Arafura's uranium demerger and it was not considered appropriate to continue with exploration on this tenement while the demerger was in progress. The uranium rights to EL 23571 will be transferred to NuPower Resources in March 2007. Apart from the lengthy demerger process and its associated expenses (more than $1 million), Arafura's exploration activities focused on further developing our other interests elsewhere within the Northern Territory.