First Annual Report for EL 25339 Douglas Range Project, 17 January 2007 to 16 January 2008

Abstract

EL 25339 was granted to Whitvista Pty Ltd on behalf of Australian Uranium Ltd on 17th January 2007. The EL consists of 141 sub-blocks of approximately 471.6 square kilometres. Yellow Rock Resources Limited held 25% of Australian Uranium Ltd at the time of IPO. Yellow Rock Resources limited is the operating partner of the licence. Field work on the tenement has indicated that the northern portion is occupied by the Quaternary and Recent fluviatile and lacustrine clays, silts and mixed facies associated with the Mary River and McKinley River catchments. This water system drains a large area of hinterland to the south, with the sediment provenance mainly from the Pine Creek Geosyncline rocks. The laterite profile is a good provenance for uranium and base metal enrichment within the groundwater or hydrologic circulation. The laterite profile is variously developed in the northern area and is resistant to erosion, creating low-lying mounds or rises as remnants of the once extensive oxidation. The palaeo-drainage trending north-south on the eastern side of the tenement shows up well on the airborne total radiometric count (potassium, thorium & uranium) and is of exploration interest for locating possible calcrete or palaeo-channel sources. The area has had good reconnaissance exploration coverage from the Bureau of Mineral Resources (BMR) and WMC Corporation Ltd, Exploration Division in the mid 1980's, followed by Carpentaria Gold Pty Ltd and Northern Territory Gold Mines NL in the early 1990's. However, this work concentrated mainly on gold and there was only token work on base metals and uranium. There are several known mineral occurrences close to the lease for vein-hosted gold, base metals and tin and these have been the focus of prospecting and exploration activity throughout the history of the Pine Creek Goldfield. Soil sampling data by the Bureau of Minerals and Resources (BMR) is now held by the NTGS and the recorded geochemical results indicate positive assays (several multiples of background levels) for lead, zinc, thorium, uranium and vanadium. Exploration work conducted on the Douglas Range Project during the period ending 16th January 2008 included:

- Geological Mapping and outcrop reconnaissance

- Scintillometer surveys

- Rock or Soil samplesA total of 2231 scintillometer readings were taken and 248 rock samples and 5 water samples were sent for assay. Exploration was conducted on three separate areas and anomalous uranium counts were identified at all the surveyed sites. The uranium anomalies are located in the northern, central and eastern parts of the Douglas Range tenement (EL 25339). During the August fieldwork campaign at Douglas Range Project the following uranium anomalies were identified from confirmed and test-calibrated scintillometer readings:

- McKinley (600m long) - anomalies to 210 cps (65 cps background)

- Central (14,000m long) - anomalies to 220 cps (50 cps background)

- South-east ( m long) - anomalies to 390 cps (65 cps background)

Results from water samples taken at Douglas Range also confirm the presence of Uranium and Thorium. Exploration activities completed to date indicate that the scintillometer measurements carried out in the Douglas Range tenement have

- confirmed the presence of significant uranium anomalies exceeding100cps (at several times background levels)

- confirmed the occurrence of uranium within a lateritised and transported profile of probable Mesozoic age

Groundwork in the area around the McKinley Grid anomaly showed that the radiometric results were sporadic or low in tenor and related to modern alluvial sediments rather than a palaeo-surface profile. This does not seem as significant as the other grid areas. The Central Grid area has a broad area of anomalous results that appear to be the result of a palaeo-surface or sedimentary distribution and this warrants further exploration. The South-East Grid shows discrete linear anomalies probably related to bedrock structures. Some follow-up work is needed here.