EL 3347 Cadell Project Annual Report for the period 28 July 2006 to 27 July 2007

Abstract

Cadell is a uranium exploration project area located in Western Arnhem Land and operated by Cameco Australia Pty Ltd. Exploration activities carried out during the reporting period were designed mainly to determine the uranium mineralisation potential of the east-west trending Steven's Fault hematite breccia that runs east-west through the tenement. An additional target was gold, platinum and palladium mineralisation in doleritic-saprolite adjacent to the Steven's Fault. The program consisted of 25 truck-mounted reverse circulation drill holes, named CDR0009 to CDR0033. The RC drill holes were located to the east and west of Steven's radiometric anomaly, to test extensions of mineralisation intersected in the 2005 diamond-drilling program. Eight of the holes were drilled to the east of Steven's anomaly and a further sixteen holes were drilled to the west, extending as far as the western boundary of the tenement. One hole was drilled 600 m to the north of Steven's Fault, testing dolerite concealed beneath transported cover. The best uranium intersections include: 1 m @ 0.187% U3O8 - Fault Zone CDR0015; 1 m @ 0.094% U3O8 - Fault Zone CDR0016; 2 m @ 0.025% U3O8 - chloritised dolerite CDR0020. Anomalous Au-PGE geochemical results include: 1 m @ 0.80g/t Au - CDR0016; 5 m @ 6.06g/t Au, 1.58g/t Pt, 2.20g/t Pd - CDR0013; 1 m @ 0.586g/t Au - dolerite saprolite CDR0032; 5 m @ 0.564g/t Au, 0.274g/t Pd, 0.145g/t Pt - dolerite saprolite CDR0032. Later assaying of individual metre splits from CDR0013 returned: 1 m @ 18.4 g/t Au, 7.58 g/t Pd, 6.10 g/t Pt from 43 m; 1 m @ 4.38 g/t Au, 1.09 g/t Pd, 0.72 g/t Pt from 45 m; 1 m @ 4.85 g/t Au, 1.04 g/t Pd, 0.72 g/t Pt from 46 m. Prior to lease expiry, a trial soil-sampling program was completed to examine the Steven's Prospect. Soil sampling may be an alternate targeting tool for identifying Au-PGE anomalies. It is possible that precious metals represent a proxy or pathfinder for uranium that has been leached from the upper part of the regolith profile. Soil geochemistry indicated anomalous Au levels in the vicinity of CDR0013. A broad anomalous zone was delineated on the eastern end of the prospect. Of particular interest is sample CD070038 with a best value of 96ppb Au and 100ppm U. Fugro Airborne Surveys Pty Ltd (Fugro) undertook a TEMPEST airborne electromagnetic survey over the northern portion of the licence as part of a broader survey over nearby tenements. The 200 m spaced flight lines were oriented west-east and flown at a height of 120 m, for a total of 35.1 line kms. The primary objective of the TEMPEST survey was the identification of conductors associated with structure or alteration. Structural conductors were used for priority targeting in the 2005 drill program. Unfortunately, the smaller 2006 TEMPEST survey at Cadell failed to identify any anomalous conductors in the basement or overlying Kombolgie Subgroup sandstone. Additionally, mineralisation and alteration identified in the drilling program did not correspond with any elevated conductivity in the TEMPEST data. EL 3347 has now expired; an Exploration Retention Licence application has been lodged over the now historic EL 3347.