Combined Annual Report for EL 26006 and EL 26012 Arunta Project for the period 14 February 2008 to 13 February 2009

Abstract

EL 26006 and EL 26012 are located near Alice Springs and are held by Arunta Uranium Pty Ltd., a wholly-owned subsidiary of Callabonna Uranium Ltd (CUL). The tenements form part of CUL's Arunta project. EL 26006 is subject to a joint venture with NuPower Resources Ltd who is the operator. The joint venture is targeting sandstone-hosted uranium deposits amenable to mining by in-situ leach. Calcrete-hosted uranium is a secondary target. Work carried out on EL 26006 during the reporting period included gravity measurements, an airborne EM survey and analysis of water from several existing water bores. Work on EL 26012 has consisted of review of previous exploration results. The field program on EL 26012 was delayed owing to adverse market conditions postponing CUL's planned float. Fugro Airborne Surveys Pty. Ltd. undertook an airborne TEMPEST electromagnetic and magnetic survey over EL 26006 between the 1st of August 2008 and the 1st of October 2008. The survey was flown using a Shorts Skyvan SC-3-200 aircraft and was based out of Tennant Creek and Alice Springs. Temporary offices were set up at the Bluestone Motor Inn, Tennant Creek and the Elkira Best Western Motel, Alice Springs, where all survey operations were run and the post-flight data verification was performed. At the time of writing, processing and interpretation of these data had not been completed. Accordingly, further details will be provided at a later date.