Lagoon Creek Project EL 23573 Lagoon Creek Relinquishment report for period ending 22 December 2008

Abstract

EL 23573 was granted to Arafura Resources NL on 23rd December 2003 for 6 years, comprising 67 blocks covering an area of 194 square kilometres of Wollogorang Station in the Gulf region of the NT. In May 2005 Arafura entered into an agreement with Laramide Resources via the wholly owned Australian subsidiary Lagoon Creek Resources Ltd whereby Lagoon Creek Resources can earn up to 60% interest by spending A$5.5M over 5 years. Nupower Resources Ltd acquired the property from Arafura on 14th March 2007 as a result of the demerger of certain uranium interests into the new company and is now the registered title holder. NuPower applied for a partial reduction of the area by relinquishment of two blocks on 2nd February 2009 that was approved on 10th March 2009. The Westmoreland region lies on the Palaeoproterozoic Murphy Tectonic Ridge that separates the Palaeoproterozoic Mt Isa Inlier from the Mesoproterozoic McArthur Basin and the flanking Neoproterozoic South Nicholson Basin. Early Proterozoic sediments, volcanics and intrusives of the Murphy Metamorphics are the oldest rocks exposed in the area and are overlain by two Proterozoic cover sequences. The oldest cover lying unconformably on the Inlier is the Cliffdale Volcanics comprising over 4000m of volcanics of probable sub-aerial origin, over half of which is ignimbrite and the rest of which is rhyolite. They are comagmatic with the Nicholson Granite and together comprise the Nicholson Suite. The Tawallah Group unconformably overlies the Nicholson Suite and is the oldest part of the southern McArthur Basin. The base contains conglomerates and sandstones of the Westmoreland Conglomerate that thin towards the southeast and are overlain by andesites, basalts agglomerates, tuffs and sandstones of the Seigal Volcanics. Together the Westmoreland Conglomerate and Seigal Volcanics make up two thirds of the total thickness of the Tawallah Group. Although not represented here the volcanics are in turn overlain by the McDermott Formation, the Sly Creek Sandstone, the Aquarium Formation and the Settlement Creek Volcanics. Uranium mineralisation in the Westmoreland region is found in structural zones of the Murphy Metamorphics, in shear zones of the Cliffdale Volcanics close to the Westmoreland Conglomerate unconformity, at the reverse-faulted contact between Cliffdale Volcanics and Westmoreland Conglomerate, within the basal part of the Westmoreland Conglomerate, in Westmoreland Conglomerate close to the overlying Seigal Volcanics, in association with mafic dykes and sills and in shear zones within the Seigal Volcanics. Prospects within EL 23573 include NE Westmoreland (Lagoon Creek, Mageera Zone, Contact Lode, Jackson Point, Jim Beam, Southern Comfort, Jacques), Duccios, El Hussen, Wide Reef, St. Barb, Terrace Mountain, Horse Pocket, White Label, Calvert North and Calvert South, Debbil Debbil Zone and Conglo. The Joint Venture is exploring primarily for uranium and secondly for gold and has focussed to date on the extension of the Redtree Dyke Zone from Queensland southwestwards into the NE Westmorland area where uranium is localised around mafic dykes that intrude the shear zone and the adjacent Conglomerate and in structures of the El Hussen Fault Zone. An airborne radiometric and magnetics survey covering 100% of the area at 60m flight height on 100m spaced lines for a total of 21,500 line kilometres was completed in 2005 that identified no anomalies in the area relinquished. In 2006 two geological interpretations using the airborne geophysical data and satellite imagery were undertaken and regional geological mapping was completed that covered the areas relinquished, showing that it is underlain mostly by basalts of the Seigal Volcanics. The exploration model for all the historical drilling was near flat-lying mineralisation either side of a major NE trending fault at the lower contact of a siltstone at the top of the Westmoreland Conglomerate immediately beneath Seigal Volcanics. However Laramide recognised that uranium mineralisation at Redtree occurred both at flat lying contacts and in association with steeply dipping mafic dykes. Sparse dyke material was also noted in the structure at NE Westmoreland. A regional stream sediment program in 2007, results for which were available in 2008, showed no anomalies in the areas relinquished.