Combined annual report on EL 26006 and EL 26012 Arunta Project, for the period 14 February 2009 to 13 February 2010

Abstract

EL 26006 'Mt Hay' and EL 26012 'Undoolya' are located near Alice Springs in the Arunta Region and Aileron Basin of the Northern Territory. EL 26006 and EL 26012 are held by Arunta Uranium Pty Ltd, a wholly owned subsidiary of Callabonna Uranium Ltd. The tenements form part of the Arunta Project which also includes EL 26040, EL 27181 and ELA 27802, ELA 27803 and ELA 27804 for a total area of 2,328 km2. The project is managed by the parent company Callabonna Uranium Ltd. EL 26006 is also subject to a farm-in joint venture with NuPower Resources Ltd. The joint venture is targeting sandstone-hosted uranium deposits amendable to mining by in-situ leach. A secondary target is also calcrete-hosted uranium mineralisation in recent drainage channels. This combined annual report will summarise the exploration activities completed during year 2 in EL 26006 and EL 26012. Work carried out during the reporting period involved a reconnaissance field program and the continued assessment of previous exploration results.