EL 24287 Native Gap Relinquishment Report for period ending 11 February 2009

Abstract

EL24287 was granted to Imperial Granite and Minerals Pty Ltd on 11th February 2005. Atom Energy Ltd purchased the property from Imperial Granite and Minerals in April 2007. A Farm-In and Joint Venture Agreement was agreed upon with NuPower on 1st November 2007 and was executed on 8th July 2008 to explore for energy minerals. NuPower was attracted to the Native Gap property by its strategic position amongst NuPower's own tenements of the Aileron Project. The Native Gap tenement is underlain by Division 1 and 2 basement rocks of the Aileron Province. The oldest rocks are preserved as small isolated outcrops of Pre-Cambrian orthogneiss, gneiss and minor schist of the Wallaby Schist Zone in the eastern part of the property. Palaeoproterozoic rocks of the Aileron Metamorphics of Division 1 form minor isolated outcrops along the northern boundary of the property of mafic and felsic granulite and quartzofeldspathic gneiss, quartz-rich metasediments, cordierite gneiss and mafic granulite and amphibolite. Isolated outcrops of Division 2 rocks, also along the northern boundary, include calc-silicates, marble, gneiss and schist of the Wickstead Creek Beds and schist, gneiss, quartzite and quartz-rich metasediments of the Mt Freeling Schist that are cut by retrogressively metamorphosed rocks of the Aileron Shear Zone. Rocks of both divisions are intruded by Napperby Gneiss in the northwest and undifferentiated granites and gneisses north of the Napperby Thrust. Further south within the tenement the Arunta Inlier is stratigraphically unconformably overlain, though, because of thrusting, structurally underlain by Neoproterozoic and early Palaeozoic sediments of the Ngalia Basin. The succession consists of Neoproterozoic to Ordovician shallow marine and fluvio-glacial clastic, carbonate and evaporitic rocks, overlain by Devonian and Carboniferous fluvial to continental sandstone, greywacke and siltstone. Only the lower units are exposed here in the Hann Range consisting of the Vaughan Springs Quartzite composed of a thickly bedded quartzite and conglomerate and containing the Truer Member consisting of thin bedded fine sandstone siltstone and possible evaporates. The Ngalia Basin is an under-explored greenfields basin with significant sandstone hosted uranium potential. Within the Hann Range Ngalia Basin sediments unconformably overlie basement granites and gneisses outcropping as low hills southwest of Sheppard's Bore. A body of ultramafics, highly weathered at surface, is present in the granite immediately south of the Hann Range. Structurally the southern NT forms a 'basin and range' province with Proterozoic and Palaeozoic rocks forming prominent mountain ranges separated by broad valleys. Cainozoic basins of unconsolidated sediments are widespread and well-developed within these intervening topographic depressions with at least twenty major basins outlined. The Native Gap tenement lies along the northern margin of the Burt Basin and the eastern extremity of the Whitcherry Basin. The stratigraphy of the intermontane Cainozoic basins is subdivided into a two-fold stratigraphic succession that broadly corresponds with the observed pattern of Cainozoic sedimentation elsewhere in southern Australia comprising a restricted, fluvial palaeochannel dominated Palaeogene succession (Hale Formation) and a more widespread, dominantly lacustrine Neogene succession (Waite Formation). Deposition of these sediments was episodic and punctuated by hiatuses during which prolonged periods of weathering resulted in the formation of well-developed weathered profiles. Three weathering events which affected Arunta igneous and metamorphic basement rocks and the overlying Tertiary succession have been identified. The Waite Formation interfingers with and is conformably overlain by a moderately thick (<60m) succession of oxidised colluvial material shed from the ranges in response to neotectonism during the (?Late) Pliocene, comprising a broadly coarsening upwards alluvial fan succession that can be recognised throughout the region. This unit is informally referred to as the Napperby Formation and comprises oxidised and haematitic, clayey sands, sandy clays and minor conglomerates. Cainozoic sediments are not exposed here. The Napperby Formation is capped by Quaternary alluvial sands and gravels and aeolian sand and red earth that accumulated downslope from the uplifted areas. Like the underlying Proterozoic-Palaeozoic basins, the overlying Cainozoic basins are regarded as grossly under-explored greenfields basins with significant sandstone hosted uranium potential 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 and although there are no reported mineral occurrences here the most significant discovery to date in the region is the Nolans REE-U-Th-P near Aileron. In 1972 CRA Exploration Pty Ltd recognised that while these rocks may host primary deposits of uranium they also provide a potential source of uranium for secondary uranium deposits that may have accumulated in flanking Cainozoic basins. Arafura Resources Ltd 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 acquired a number of exploration licenses in the Aileron region. Some of these licenses, and the uranium exploration rights of others were transferred to NuPower during the demerger process from Arafura. NuPower recognized the strategic position of EL24287 amongst its own Aileron properties and proceeded to gain access to the tenement through the JV with Atom Energy to explore for uranium. Although the area has been poorly explored for gold and base metals it appears to have never been explored systematically for uranium. The area formed part of the NuPower regional airborne electromagnetic (AEM) surveys in 2007 and 2008 for palaeochannels as hosts for sandstone hosted uranium in Cainozoic sediments and the Geoscience Australia-NTGS Central Arunta Gravity Survey (CAGS) that provided valuable data for the interpretation of basement structures as controls for other styles of mineralisation including gold, rare earths, carbonatites and diamonds. The AEM survey over Native Gap consisted of 1800.8 line kilometers representing 17% of the total survey. It was flown at a nominal survey height of 120m on 1km spaced lines. The line kilometers for the relinquished area were 866.3 comprising 8.2% of the total survey. The gravity survey consisted of 409 stations at 2km x 2km spacings. There were 213 gravity stations in the relinquished area. The survey of Native Gap located a shallow trough on the northern side of the Hann Range with palaeochannel outflows to the west and east, a thickening sequence of Cainozoic sediments on the margin of the Burt Basin in the western part of the license and two south flowing palaeochannels in the eastern part that merge with the northern margin of the Burt Basin. These areas were retained. The survey also identified three areas that were considered unprospective and have been relinquished; the outcropping Hann Range, an extensive area of granite beneath shallow cover around Shepperds Bore, and a shallow basement high trending northeast beneath Conner Well. One bore water sample from the central part contained high levels of U and F consistent with the water being derived from shallow basement granites and gneisses of the Sheppard's Bore gneiss. This water appears to be an excellent source water for the formation of secondary uranium in deeper parts of the Cainozoic sediments in the western and central parts of the license that has been retained. The use of biogeochemistry and in place of hydrogeochemistry as an exploration tool has been demonstrated but requires further validation. As a result of the EM surveys completed in 2008, NuPower has identified blocks for relinquishment as required at the end of work for Year 3. Two hundred and forty nine blocks were proposed for relinquishment on 06/03/09, reducing the license area to 251 blocks covering 794.54 square kilometres. This relinquishment request was approved by DRDPIFR on 06/04/09.