Annual report for the period 26th February 2004 to 25th February 2005 second year of exploration

Abstract

The East Alligator Exploration Licence (EL 23522) is located in West Arnhem Land approximately 280 km east of Darwin and has an area of 754 km2 (382 blocks). Cameco Australia Pty Ltd (Cameco) was granted the licence on 26th February 2003 for a period of 6 years. Cameco's exploration efforts within the licence have focussed on unconformity-style uranium mineralisation. This report outlines exploration activity for the year ending 25th February 2005, the second year of exploration. Work consisted of: heli-supported collection of 84 samples for geochemical and PIMA anlaysis. Most sampling was conducted within and marginal to a section of the Bulman Fault Zone and was designed to follow up on a broad zone of anomalous geochemistry identified from the previous year's sampling. Other sampling targeted previously unchecked radiometric anomalies and hyperspectral targets. Values as high as 68.10 ppm U (U/Th=33.55) were recorded in Fe-rich Gumarrirnbang sandstone marginal to the Bulman Fault Zone. It is likely however the metal content has been inherited from immediately overlying Gilruth Volcanics units, and is not related to any deformation in the area. Other geochemical results confirm an intimate association between elevated uranium and volcanic rocks or volcanic-derived materials, or sandstone samples proximal to volcanic layers. As such, elevated uranium values in surface samples map the distribution of residual volcanic material, but do not assist in defining a deeper level, basement-related target. Clay compositions, as inferred from major element geochemistry, are consistent with data from PIMA-TSA analysis. However, these interpretations, even when combined with airborne hyperspectral data, do not readily establish any target area at East Alligator, where minimum sandstone thicknesses exceed 400 m, based on the estimates in Carson et al (1999). Others estimate the total depth to basement to be greater than 800 m, based on well constrained thicknesses of Gumarrirnbang and Mamadawerre Formations recorded elsewhere in the region (D. Rawlings pers. comm. 2005). A drilling target zone is suggested at the intersection of the Bulman and Sawcut Fault Zones, although this is conceptual only. The target is not directly supported by other data sets, although clays in the area display an apparent demarcation between illitic and non-illitic compositions. Moreover, it is emphasised any drilling will be high risk, and possibly unacceptably high in cost.