EL 25325 Yambah, Annual report for period ending 16 January 2009

Abstract

Basement rocks of the Reynolds, Yalyirimbi and Strangways Ranges contain elevated background levels of uranium and thorium and have been explored for gold, base metals, rare earth elements and uranium. Success came with the discovery of elevated levels of rare earth elements hosted by massive fluorapatite in the Nolan's Bore area by PNC Exploration (Australia) Pty Ltd in 1995 (Thevissen, 1995). This occurred during follow-up of an airborne radiometric anomaly as part of that company's uranium exploration program along the Reynolds Range. As far back as 1972 it was recognised that while these rocks may host primary deposits of uranium, they also provided a potential source of uranium for secondary uranium deposits. The products of the weathering and erosion of these rocks throughout the Cainozoic have accumulated in flanking basins as thick sequences of unconsolidated material and provided a potential host for the precipitation of uranium from solution in meteoric groundwaters sourced from the upstanding ranges and percolating through these basinal sediments. Arafura Resources, with this target model, also recognised the potential of the Cainozoic basins in the Aileron region on the flanks of the uraniferous basement rocks for secondary sandstone-hosted uranium deposits and applied for and was granted a number of exploration licenses here, including EL25325, Yambah that covers part of the Burt Basin. Yambah (EL25325) was selected by Arafura Resources NL because of the potential for secondary sandstone hosted type uranium mineralisation in unconsolidated Cainozoic basin sediments of the Burt Basin, derived by erosion of adjacent uraniferous basement granites and gneisses. The license was granted on 17 January 2007 and transferred to NuPower Resources Ltd in 14 March 2007 as a result of the demerger of Arafura's uranium assets into the newly formed company focussed on uranium. NuPower carried out an airborne electromagnetic (AEM) survey in June-July 2007 over the western two-thirds of the area as part of a larger survey of Nupower's tenements in the Aileron region, designed to explore for buried palaeochannels at the base of and within the Cainozoic sedimentary package as potential hosts for secondary uranium. Concurrently water from station stock water bores was sampled and assayed for a suite of major and trace elements the results of which are expected to assist with targeting potential sites of uranium accumulation within the palaeochannel systems. Final results from the AEM survey show that the technique has successfully identified sections of several major palaeochannels in the license area. Interpretation and modelling of the results is in progress. AEM survey results indicated that the technique was very successful, revealing that the Tertiary palaeodrainage is far more extensive and better developed than previously thought. Several palaeochannels have been identified within the tenement; shallow palaeochannels draining northwards off the MacDonnell Ranges occur in the eastern part of the tenement, whilst more substantial palaeochannels occur in the west of the tenement and form part of the eastern half of the Burt Basin. Results of the NTGS collaboration regional gravity survey over the Central Arunta region were received. Preliminary images are included in this report. Twelve water samples were taken from station bores and a further six samples from three of NUP's drillholes during this period. Assay results are currently available for five samples from the station bores. Interpretation of the water geochemistry is in progress. NuPower completed four rotary mud drillholes for a total of 504m on Yambah using the 2007 AEM data to assist in siting the holes. Tertiary sediments were intersected in all holes, thereby validating the airborne EM data. No significant reduced horizons were intersected in the 'Canteen' palaeochannel developed on Yambah. Relogging of Mistake Bore indicated anomalous gamma. Whilst situated outside the margins of the Canteen Palaeochannel, one hole was drilled to investigate this anomaly and intersected anomalous gamma within sediments. This drillhole was later logged using a Prompt Fission Neutron (PFN) tool which indicated that no significant amounts of anomalous uranium was present. The program for Year 3 is: - Compilation of the NuPower drill results with existing open file data and interpretation of the overall structure and stratigraphy of the Burt Basin and its tributaries. - Interpretation of the borehole and drillhole water chemistry. - Definition and scout drilling of further palaeochannel targets based on the interpretation of the basin architecture and water geochemistry.

Limited reconnaissance geological mapping and sampling of basement radiometric anomalies in the eastern portions of the license area. Fugro Airborne Surveys offers a number of AEM time-domain survey systems and aircraft configurations, suitable for a range of mineralisation types. All AEM systems have in common an AEM transmitter, attached or suspended from the aircraft that transmits pulses of electromagnetic energy as it flies regularly spaced lines of a grid system. The primary electromagnetic field induces an electric eddy current in the ground beneath the aircraft and provided that the ground is sufficiently conductive this current generates a secondary electromagnetic field that is measured by an AEM receiver usually suspended below and behind the aircraft in a small bird. During 2008 the NTGS conducted a helicopter-borne regional gravity survey over the central Arunta Region with survey points spaced 4km apart. NuPower contributed to the program in order to obtain more detailed, 2km spaced data, over its Aileron Project tenements. NuPower conducted extensive water bore sampling throughout the region of its Aileron Project during 2007 and 2008. Six station bores were visited on Yambah during the period, from which twelve water samples were collected. Another six water samples were taken from three of NUP's exploration drillholes. NuPower completed four rotary mud drillholes for a total of 504m on Yambah. Drillhole details are outlined and locations shown. Drilling was based on 3D modelling of the 2007 AEM data and was designed to confirm the presence of a buried palaeodrainage system and determine the characteristics of its sedimentary fill. Three holes were successfully drilled through the Tertiary succession to basement, whilst a fourth (BP003) had to be abandoned as the hole collared off whilst drilling through heavy Tertiary clays. All holes were geophysically logged for natural gamma (GAMMA), self potential (SP) and resistivity (LLS- Laterolog Shallow & LLD - Laterolog Deep).