First time disclosure: Paladin Resources Limited - mineral resources resulting from joint ventures with Energy Metals (including Bigrlyi) and Summit Resources

Abstract

This is a public disclosure report, not a report under the NT Mining Act. It contains information on the Bigrlyi uranium deposit. The Bigrlyi uranium deposit occurs on the northern edge of the Ngalia Basin, an elongate intracratonic depression some 300km long (east-west) and 70km wide (north-south). The northern edge of the basin at Bigrlyi is marked by several curving lines of hills that rise up to around 100m above the surrounding plains. The Bigrlyi deposits occur just south of the main ridge, the outcrop of the Vaughan Springs Quartzite. Uranium mineralisation in the Bigrlyi Prospect is confined to a specific narrow horizon within the lower Mount Eclipse Sandstone for which a local stratigraphic succession has been defined. Eight separate units, designated H to A, have been defined upwards from the base at the Formation. Unit H the lowermost unit is a basal boulder conglomerate 10m to 30m thick. Units G upwards to Unit E, variously from 65m to 395m thick consist of fine to medium micaceous sandstone dolomite, quartz sandstone, pebble sandstone and arkosic sandstone. Units D and C are of potential economic significance, both of which host the significant strata-bound Bigrlyi uranium mineralisation. Unit D, from 10m to 100m thick, consists of medium-grained grey and red, feldspathic sandstone, and contains uranium mineralisation at several locations. Unit C, the principal host for uranium mineralisation at Bigrlyi, ranges from 20m to 200m thick. The unit consists of white to grey feldspathic sandstone, shale clasts and abundant carbonaceous material. Uranium mineralisation occurs principally towards the base of this unit. In detail Unit C, is a medium to coarse-grained feldspathic and occasionally arkosic sandstone, with shale clasts, carbonaceous debris, pyrite and, rarely, pebbles. The intergranular matrix is chlorite and fine mica with carbonate cement. Carbonaceous material occurs as disseminated flecks, as irregular graphite or rare coaly stringers. Shale bands and beds have a similar appearance to the shale clasts and are carbonaceous, graphitic and pyritic. Plant fossils have been found. Where found cropping out, Unit C is pale yellow, brown to yellow, brown and white with feldspar component frequently kaolinised. The surface uranium mineralisation is carnotite, whilst at depth and below the water table, uranium is present as uraninite. In high-grade mineralized intervals the feldspars commonly exhibit a bright orange colour in association with red and reddish brown rock colours, an effect attributed to radiation. The Anomaly 15 prospect is the most thoroughly tested uranium occurrence at the Bigrlyi Project. This prospect outcrops over a strike length of 140m and at the surface varies from 4m to 10m in width. Drilling has established that the deposit dips from 65? to 80? to the south, pitches to the west at approximately 20? and extends down-plunge for a minimum of 600m with an average width of 4m. The prospect, which is offset in the upper levels by a fault with a displacement of 70m, has been drilled to a vertical depth of 250m below surface and is open at depth. The Anomaly 15 mineralisation crops out at the surface where the uranium is present above the water table at 25m depth as carnotite, a bright yellow uranium vanadate. Below approximately 25m uranium occurs as the black, sooty uranium oxide, uraninite, often referred to as pitchblende in its more massive form. The Bigrlyi uranium prospects, particularly the better defined Anomaly 15, exhibit the characteristics of a primary tabular peneconcordant uranium mineralisation hosted in fluviatile sandstone sequences, within a paleo stream or channel facies, in alluvial fans, containing fossil plant remains. The Mount Eclipse Sandstone was deposited in just such a subaerial fluvial to piedmont area, with a north to northeasterly provenance for the sediments eroded off the exposed Arunta Inlier rocks, including the uranium anomalous Southwark Granitic Suite. In this environment the plant material carried in by the streams deposited in quiet-water areas of the meander channels can, directly or indirectly by bacterial activity, precipitate uranium carried in solution in ground water to form uranium deposits. The uppermost units B (40-100m thick) and Unit A complete the stratigraphic sequence of the Mount Eclipse Sandstone. The average elevation of the drill hole collars is 650m above sea level, which is probably close to the elevation of the surrounding plains. The uranium deposits occur under and around some of the lower hills inside the basin edge. Kennedy, 2000, reports that some targets at Bigrlyi were not adequately tested for a range of reasons including access difficulties due to rugged terrain. Potential for uranium mineralisation at Bigrlyi was recognised by Agip Australia Ltd (Agip) in 1970. Bigrlyi and a number of other deposits within the Ngalia basin were discovered by Agip and Central Pacific Minerals (CPM). Early exploration around Bigrlyi appears to have been carried out by a joint venture comprising Agip, CPM, Urangesellschaft Australia Pty Ltd, Offshore Oil NL and Cocks Eldorado NL. Resolute acquired the Agip equity in Bigrlyi and other properties through a total buyout of Agip assets (date unknown). Resolute equity was held through different companies over time including Samantha Exploration, Resolute Samantha, Bulong Nickel and finally Excise Holdings Pty Ltd. Paladin recently acquired the Resolute equity in Bigrlyi and other Ngalia properties (announced October 30th, 2006) through its acquisition of Valhalla Uranium. Energy Metals Limited (EML) was spun-off from Jindalee Resources Ltd as a dedicated uranium exploration company in September 2005 and appears to have acquired the equity in Bigrlyi previously held by CPM and Yuendumu Mining Co Ltd (in May 2005). Currently, the Bigrlyi project is a joint venture between Valhalla Uranium (41.7%), Energy Metals (53.3%) and Southern Cross Exploration (5%). Energy Metals Limited (EML) is the operator and manager of the Bigrlyi project. The latter (1982) estimate was reported as consisting of (non-JORC) Measured and Indicated resources amounting to 808,000 tonnes of mineralised material with an average grade of 3.43 kg/t U3O8, equivalent to 2,770 tonnes of contained U3O8 (Fidler, Pope and Ivanac, 1990). These historical estimates have been superseded by recent more reliable estimates, though the earlier estimates appear to be comparable, at least at an order of magnitude level. The earlier resource classification schemes appear overly optimistic in the author?s opinion. The main metal of interest at Bigrlyi is uranium, with comparable levels of vanadium present and likely to contribute economically significant credits. These metals have weak positive correlation although the maximum levels of each element rarely coincide. Mineralisation is generally steep and narrow, averaging around 5m in true thickness and occurs as disseminations and patches within the host sandstone. The mineralisation occurs as uraninite (U3O8) and montroseite (VO(OH)) when fresh and as carnotite (K(UO2)2(VO4)2.3H2O) when oxidised. The uraninite has an maximum effective grain size of 1mm although the grains commonly form blotchy aggregates of about 1cm diameter, imparting a black sooty appearance to some drill hole intervals. The general sooty appearance is further enhanced by the presence of montroseite (also black) and organic detritus common in the host sandstone. When compared with Precambrian material, the uranium at Bigrlyi is present on average at about 1.4 times the level required for radioactive equilibrium, but the degree of disequilibrium is grade dependent. However, the relationship is sufficiently consistent that radiometric assaying compares well with other analytical methods. Gangue minerals are dominantly quartz with accessory to subdominant orthoclase, kaolin and/or chlorite, muscovite and calcite. Traces of zircon, goethite, ilmenite, pseudorutile, chromite, ferrosilite, pyrite, marcasite and garnet have been identified. Energy Metals re-commenced field activities in November 2005, following a detailed environmental assessment of the project and installation of appropriate radiation monitoring procedures. Work undertaken during this period included re- establishment of the exploration camp, validation of the drilling and assay data generated by previous explorers and re-assay of historic drill core. An aboriginal heritage survey was conducted over the Bigrlyi tenements and 58 aircore/RC holes (1,773m) were drilled to test shallow targets developed at Anomalies 3, 4, 7, 8 & 15, in areas where limited drilling has been carried out previously, recording weakly anomalous uranium and vanadium values. Energy Metals embarked on a program of extensional RC and core drilling designed to increase the resource base at Bigrlyi in October 2006. This drilling will focus on the down plunge extensions at Anomaly 15 and Anomaly 2 deposits, as well as shallower positions at Anomaly 4 and Anomaly 7. Drilling was performed by a commercial drilling contractor under supervision of EML personnel, while all assaying and testing was performed by certified laboratories and contractors. In general, the drilling by Central Pacific Minerals has covered the entire 13.6km of strike length of the Bigrlyi project area with at least one hole every 250m. This was infilled in areas of significant mineralisation and now approximates 30x30m in the better drilled sections of the higher grade deposits, eg Anomaly 15. At the time of the recent resource estimates (mid-July 2006) the Bigrlyi database contained a total of 459 drill holes totalling 36,954m, 236 core holes (24,183m) and 223 percussion holes (12,173m). The drilling contractors were Arinooka Drilling (RC) and Titeline Drilling and Numac Drilling (both diamond). The bulk of the drilling at Bigrlyi is relatively shallow with an average hole depth of 80m. There are occasional deeper holes around Anomalies 2 and 4, but the only area consistently drilled to greater depth is Anomaly 15 with a significant number of holes 200m or greater in depth. Mineralised zones are typically quite thin, with an average true thickness typically between 2 and 5m. The nominal sample length is 0.5m, which is considered appropriate for such thin mineralisation.