Annual report for ERL 25896 Cadell Project for the period 27 September 2008 to 26 September 2009

Abstract

The Cadell Project is a uranium exploration project consisting of a single Exploration Retention Licence (ERL) 25896 consisting of 6 blocks with a total area of 20.13 km2, located in West Arnhem Land approximately 250 km east of Darwin. Cadell project was part of EL 3347 before being converted to ERL 25896 in January 2007. In early December 2006 a Joint Venture agreement was signed between Cameco and Uranium Equities Limited (UEL). Under the terms of the agreement, UEL would earn in interest in the Cadell project, and adjacent EL 22784, EL 22785, and EL 24992 if expenditure obligations were met. In June 2008, UEL declined to continue the Joint Venture arrangement and Cameco remains operator and manager of the project. The Stevens prospect was identified by an airborne radiometric survey in 1997 and followed up with outcrop sampling with the best result being 4.6% U3O8, 1.3% Pb and 2.2% P2O5 in clay-hematite talus rock with yellow secondary U stains. Six diamond cored holes (CDD0003 to CDD0008) for 1,019 m, and 25 reverse circulation holes for 1,388 m were drilled from 2003 to 2007 to test uranium mineralisation associated with the Steven's fault and the weathered saprolitic dolerite beneath transported cover to the north of Steven's fault. The best analytical results returned were CDD0003 of 0.6% U3O8 over 0.6 m in a vein within Nimbuwah granite; CDD0005 of 6.8 m @ 2,620 ppb Au, 542 ppb Pt and 709 ppb Pd in saprolitic dolerite; CDR0015 and CDR0016 had the best results of 0.187% U3O8 and 0.094% U3O8 over 1 m in the Stevens fault breccia respectively; and CDR0013 with 6.06 g/t Au, 1.58 g/t Pt and 2.20 g/t Pd over 5 m in dolerite. Exploration conducted in the second year of tenure (this report) consisted of eight reverse-circulation drill holes (CDR0109 to CDR0116) for 1,386 m and 75 air-core drill holes (CDA0034 to CDA0108) for 878 m. The reverse circulation drilling activities were designed to test the uranium potential of the eastwest trending Steven's fault and investigate the low magnetic features for uranium mineralisation. The air-core drilling was designed to test for indications of uranium mineralisation beneath sand cover to the north of the Steven's fault. An additional target is gold, platinum and palladium mineralisation in saprolitic weathered dolerite proximal to the Steven's fault. The best analytical uranium results: 12 m @ 0.11% U3O8 from 85 m in brecciated dolerite in CDR0110; 6 m @ 115.3 ppm U3O8 from 49 m in brecciated dolerite in CDR0112 and 4 m @ 281.1 ppm U3O8 from 84 m at the faulted dolerite-sandstone contact in CDR0113. Anomalous Au and PGE results from geochemical sampling include: 10 m @ 661 ppb Au, 198 ppb Pt and 310 ppb Pd from 52 m in dolerite in CDR0112 and 1m @ 247 ppb Au from 51 m in dolerite in CDR0113. Planned exploration in 2009 will include a subaudio magnetic survey to determine further structural controls on mineralisation and followup drilling of CDR0110 which returned 12 m @ 0.11 % U3O8.