Annual report on EL 10360 'Ambalindum', 6 December 2006 to 5 December 2007

Abstract

EL 10360 is situated approximately 90 kilometres northeast of Alice Springs in Central Australia. In 2003, 16 soil and 2 rock chip samples were taken on EL 10360 'Ambalindum' to test the Proterozoic basement outcrops that are exposed on a low topographic rise which is surrounded by younger sediments of the Hale River Basin. The rock chip samples taken from an outcrop of gossanous limonitic, and siliceous material with chalcedony, anthophyllite and rare blebs of malachite returned highly elevated Au, Cu, Pb and Zn values. Soil samples within approximately 75 metres of the anomalous rock chips are also anomalous with base metal values in the order of 30-80 ppm Cu, 38-145 ppm Pb and 211-577 ppm Zn (Rohde, C., 2004). The title was acquired from Tanami Gold Exploration (TENL) by Deep Yellow Limited (DYL), with a transfer being registered on 5 December 2006. DYL's consultants, Rum Jungle Uranium (RJU), completed a small air core drilling program totalling 516m for 13 holes. Th drilling was carried out in a broad star pattern with an approximately 500m hole spacing across the Quaternary-Tertiary lake stratigraphy at Ambalindum. All holes were sampled and the radioactivity was surveyed down hole. The best scintillometer reading of 350 TCS was returned from AC009 in brown-orange ferruginous clays above dark grey-black carbonaceous clays. All samples were sent to a laboratory in Pine Creek to be analysed for gold and uranium oxide. Assay results were not received during the reporting period. They are expected to be received early 2008 and will be included in the next annual report. On the east -west traverse three holes encountered Tertiary lignitic clays and leached clayey sandstone, which indicate the existence of some kind of an irregular palaeo-lake system. Only one drill hole (AC009) intersected slightly radioactive orange-buff clays above carbonaceous clays. Most of the holes intersected saprolitie, which was up to 60m thick, before ending in a weathered biotite-quartz-gneiss/ leuco - gneiss. A reading of 350 TCS. AC001 was drilled into 20m of cover then into 8m of Tertiary lignitic clays to end in Proterozoic basement gneiss at 48m. With effect from 21 November 2007, DYL and RJU entered into a Farm-in Joint Venture Agreement in respect of EL 10360 and five other tenements in the Alice Springs area.