Annual report on EL 24837 Calvert Hills, for the period 6 April 2009 to 5 April 2010

Abstract

EL 24837 was granted to Finching Pty Ltd (50%) and Mundena Holdings Pty Ltd (50%) on 6 April 2006 for a period expiring on 5 April 2012 over an area of 251 graticular blocks. The licence was transferred to Uranium West Pty Ltd (now Limited) in December 2006. The licence then became subject to a Joint Venture Agreement with Southern Uranium Limited who is carrying out the work on this area. Southern Uranium to date has reached their expenditure requirements to earn in to seventy five percent of the project. EL 24837 is situated in the Calvert Hills locality approximately 100km west of the Northern Territory-Queensland border. The area has potential for Proterozoic unconformity style uranium deposits with local variants as demonstrated in the Westmoreland Red Tree area. These deposits are hosted in the Westmoreland Conglomerates and Seigal Volcanics, breccia zones and fractured basement rock. The prime targets are reducing boundaries which provide ideal precipitation conditions for uranium transported through the sandstone and conglomerate units. The Northern Territory Geological Survey (NTGS) Geophysics and Drilling Collaboration 2009 program co-funded the initial drill testing of the Westmoreland style targets. The program consisted of (4) RC pre-collared diamond drill holes totaling 1,218 metres that were completed in August 2010 at the Big Foot Prospect. The holes were successful in intersecting the target Westmoreland Conglomerate and Seigal Volcanics, although no uranium mineralisation was identified. Three vertical holes were down hole gamma logged, which detected slight anomalism in clay altered zones within the medium to coarse sandstone units. The fourth hole angled at -60degrees had to be abandoned short of the target due to the intersection of a confined aquifer which created difficult drilling conditions. In addition, further reconnaissance mapping and sampling was conducted to investigate the northeast trending structures and follow-up of anomalous rock chip sampling carried out in Year 3. A further eighteen (18) rock chip samples were collected mostly over the north eastern portion of the tenement which confirmed the earlier discovery of economic grade vanadium cropping out at the Vanadis Prospect. The outcrop extent of Vanadis was preliminarily mapped to 250m(2) with a portable XRF and handheld GPS. A petrographic analysis was also conducted on selected high grade samples from the Vanadis Prospect to confirm and identify the host rock type. The rock samples were described to be a regolith product, but the high levels of vanadium present in this geological setting remains enigmatic. Following assessment of the most recent exploration work carried out by Southern Uranium on EL 24837 and a reappraisal of our exploration strategy, five (5) areas (including the Vanadis Prospect) are recognised as being prospective for uranium, base metals and precious metals +- platinum group metals. Field work planned for Year 5 will comprise reconnaissance mapping and sampling of these areas with early drill testing of the Vanadis Prospect also expected for this phase. Dependent on initial results and observations gravity surveying of selected target areas will also be considered.