Ngalia Thrust Annual technical report on EL 24566 for the period 21 October 2008 to 20 October 2009

Abstract

Drilling at the Anomaly A prospect comprising 9 diamond drill holes was completed in December 2008 for a total of 1,014 metres. A total of 374 half core samples taken at varying intervals were subsequently submitted for chemical assay and 7 of the holes were logged using down hole Prompt Fission Neutron (PFN) and gamma methods. Assay results from the 2008 drilling program were disappointing, with the best result being 1m at 176ppm U (08CC07, 30-31m) taken from a heavily altered granite at the margin of a heavily altered mafic intrusion. Results obtained from the PFN tool were erratic due to uranium concentrations being below PFN detection limits, with the gamma logs providing the best correlation with assay data. Reprocessing of the 2007 airborne radiometric data was carried out to produce a U2/Th image over EL 24566, which strongly highlighted the area referred to as Anomaly B. Subsequent field investigation led to the discovery of an outcropping uraniferous ironstone lode approximately 3km in strike length, which varies in width from approx 30cm to several metres with an average width of approx 2m. Using a portable Niton XL3t XRF analyser in the field, the best assay results from the ironstone lode included 3500ppm U (209) at location 83006, 2644ppm U (174) from location 83009 and 1438ppm U (140) from location 83011. Subsequent laboratory XRF analysis of approximately corresponding samples yielded 4000ppm U, 3600ppm U and 700ppm U respectively. QEMSCAN analysis was conducted on two ironstone samples (83006 and 83009). The results of this work suggested that the uranium was hosted by Ti- Fe oxides (up to 5% U) while complex Rare Earth Element phases could host between 1-30% uranium. However, the results of this work were considered largely inconclusive due to complex mineral textures and intergrowths making unambiguous U/Th/REE mineral identification difficult. These samples were subsequently submitted for Scanning Electron Microscopy (SEM) work at the University of Adelaide, results are pending. The ironstone is hosted by felsic intrusive rocks which outcrop throughout the Anomaly B region. These lithologies range from fine grained, quartz-feldspar porphyry to a coarse, equigranular granite. The porphyritic rock type contains varying levels of miarolitic texture and appears to be responsible for producing the U2/Th anomaly in the region, with an average of 48ppm U and 23ppm Th obtained from 12 rock chip samples. A high resolution airborne radiometric and magnetic survey was conducted during September 2009 over the northwest corner of the tenement, encompassing both Anomaly A and Anomaly B. This survey comprised a total of 1,913 line kilometres at a line spacing of 25m and sensor height of 20m. The resulting radiometrics both confirmed and better defined the U2/Th anomaly at Anomaly B, while interpretation of the magnetics suggests the potential for further ironstone structures beneath cover and several attractive magnetic targets which coincide with interpreted structural trends in the area. A soil sampling survey was conducted during October 2009 comprising 20 north-south oriented sampling lines at 200m line spacings with 20m sample intervals. A total of 599 samples were collected and submitted for assay. Results from this survey indicate that elevated Cr, Co, Ni, Ti and V values correlate well with the main ironstone lode and would be useful pathfinder elements for future soil surveys. Conversely, areas of elevated Ta and Nb, coupled with areas of low overall Ti seem to be the best indicators for the greisen alteration. The maximum uranium value obtained from the survey was 29ppm with an overall average of 10ppm U. Further work is also being carried out to confirm the validity of an elevated uranium soil anomaly which sits outside the major radiometric U2/Th anomalous regions.