Annual report on EL 22370, EL 22371 and EL 22826 Meikinj Valley Project, 31 August 2007 to 30 August 2008

Abstract

The Meikinj Valley Exploration Project consists of Exploration Licences 22826, 22370 and 22371. The project area is located in Western Arnhem Land, approximately 250 km east of Darwin. Together, the licences cover an area of 134.67 km(2) (45 blocks). The ELs were granted to Cameco Australia Pty Ltd (Cameco) on August 31, 2005 for six years. Exploration conducted during the 2007-2008 field season consisted solely of an air core drilling program, which commenced on 11 October and finished on 29 October. The late arrival of the rig on the project coupled with the time of year restricted the program to EL 22826. Drilling has been re-scheduled for the other licences to the latter half of 2008. A total of 3,309 metres over 234 holes was drilled with 890 chip samples collected for geochemical analysis. Total eligible expenditure for the Meikinj Valley project for the 2007 -2008 field season was AUD$463,061.87, with AUD$347,605.11 of this being spent on EL 22826, $101, 532.37 spent on EL 22371, and AUD$13,924.40 spent on EL 22370. All drill holes intersected basement lithologies (gneiss, schist, quartzite, amphibolite and arkose) belonging to the Myra Falls Metamorphics and Kudjumarndi Quartzite below a shallow transported surface cover and in-situ weathering profile. Hand held SPP2 scintillometer results of drill cuttings failed to indicate significant elevated radioactivity in any of the holes drilled (maximum <100 cps). Geochemical targeting analysis on drill hole sample assay results using primary (uranium based) and secondary (uranium derived - Pb isotope) geochemical tools did not produce any significant high level geochemical targets. Low level anomalism in U (eg Uppm values up to 14.9ppm), U/Th ratios (significantly greater than 1, [2 samples only]) and Pb206 was identified in a number of holes within the north-eastern zone of drilling, and two of these samples, D07MVA0016-003 (10.7ppm - 90th percentile, U/Th ratio of 7.75 - 95th percentile) and D07MVA0027-004 (7.5ppm U, anomalous in Pb206) were definitively more anomalous than the others. However actual element concentrations were still far too low to be able to label these samples as important drilling targets for 2009. One of the two principal historical anomalies, 'Anomaly 12' was not accessible but will be followed up in the latter half of 2008. The other anomaly, 'Robbies' was not positively identified, however, according to the target file data the drilling was within 150 metres of the anomaly. Air core drilling will continue in the latter half of 2008 to complete the grid as proposed.