Warrabri Project EL 26227 Shirley Creek Partial relinquihment report for period ending 18 February 2010

Abstract

EL 26226, EL 26227 and EL 26228 were granted to NuPower Resources Ltd on 19th February 2008. Together they comprise the Warrabri Palaeochannel Project and work has been carried out on all three areas. This report deals with the partial relinquishment of EL 26227, Shirley Creek. NuPower is exploring for Cainozoic palaeochannel sandstone-hosted secondary uranium deposits in the Aileron region of Central Australia using a model adapted from successful exploration in the Beverley region of the Frome Embayment of South Australia. The model calls for a hinterland with granites/orthogneisses containing elevated trace levels of uranium, a depocentre of permeable clastic sediments containing clayey horizons to channel the flow of groundwater, the flow of copious volumes of oxidised uranium bearing groundwater from the hinterland to the depocentre driven by a hydraulic gradient and a reductant such as organic matter or finely disseminated authigenic sulphides for the precipitation of secondary uranium. In the Aileron region Arunta basement granites and gneisses with elevated traces of uranium in the Reynolds and Strangways Ranges are the primary source for uranium. The southern portion of the NT comprises a Cainozoic 'Basin and Range' province in which sedimentary detritus from the erosion of the Arunta Block basement ranges has accumulated since late Cretaceous times and as many as 20 small to moderately-sized basins are known, the most important to NuPower being the Burt, Mt Wedge/Whitcherry and Ti-Tree Basins. These are the depocentres for the formation of secondary uranium deposits and although the stratigraphy of the Cainozoic basins in the NT is not well known, Cainozoic sediments are relatively widespread and well developed, comprising Miocene lacustrine sands and clays, represented by the Hale Formation, overlying well developed coarse sandy carbonaceous Eocene sediments of the Waite Formation that contains organic trash and lignite horizons. This twofold Cainozoic subdivision correlates well with similar Cainozoic basins in southern Australia that contain numerous sedimentary uranium deposits. The oldest mapped rocks of the Project area are orthogneisses of the Arunta Inlier forming small outcrops in the southwest part of the area. Early to Mid Proterozoic rocks of the Hatches Creek Group folded tightly into a complex series of intersecting anticlines and synclines, outcrop to the northeast in the Davenport Ranges and extend at depth beneath the Warrabri Plain. Exposed along the northeastern edges of the area they comprise arenites, conglomerates, siltstones, shales, felsic lavas and tuffs, calcarenites, stromatolitic limestones, dolostones and basaltic lavas. Granites as potential sources for uranium include the magnetically quiet, radiogenic Devils Marbles and Skinner Creek Granites in the Davenport Range east of the area and similar granites of the Barrow Creek Granite Complex and Ali Kurung Granite to the southwest. A body with a similar magnetic signature of interpreted granite appears to intrude Hatches Creek sediments 60km west of the Skinner Creek pluton at depth beneath the northern part of the area and an elongate area of low magnetic response in the core of a basement domal structure in the southeast of the area is also interpreted as a granite pluton. A granite is also apparent beneath the Wauchope Tungsten Field. Late Proterozoic-Cambrian sediments of the Georgina and Wiso Basins unconformably overlie Hatches Creek Group and outcrop sparsely in the southernmost part of Shirley Creek. Four units are important here, the Arthur Creek, Chalalowe, Arrinthrunga and Tomahawk Formations. Of these the Arthur Creek and Chabalowe Formations are the targets for phosphate mineralization in discrete phosphorite horizons. They are also potential sources of uranium. The Arthur Creek Formation, present in the Ammaroo region southeast of the Warrabri Project, consists of fossiliferous organic-rich calcareous and dolomitic siltstone, silty limestone and silty dolostone. It interdigitates laterally with the Chabalowe Formation, present immediately south of the Shirley Creek area. Two facies have been identified; anaerobic and aerobic. The anaerobic facies from the deeper part of the basin consists of dark grey-black, finely laminated, carbonaceous, finely pyritic, calcareous and dolomitic siltstone and calcareous mudstone. The aerobic facies of subtidal origin comprises highly fossiliferous, dark grey to black thinly laminated calcilutite, dololutite, and fine grained calcarenite and dolarenite. The Chabalowe Formation, outcropping immediately east of EL 26227, consists of interbedded dolomitic sandstone, siltstone, claystone, dolostone and gypsiferous beds with intervals of domal stromatolites. It comprises two units. The lower Hagen Member is characterized by abundant gypsum or anhydrite in an algal dolostone sequence at the base of which lies a coarse-grained vuggy intraclastic dolarenite with infills of calcite, fluorite sulphides and hydrocarbons. The upper unit is similar lithologically but contains much less anhydrite-gypsum and more clastic detritus. It consists of numerous upwards fining cycles of dolomitic-gypsiferous, cross-bedded sandstone, siltstone, shale and dolostone, with carbonaceous matter and pyrite. The formation accumulated under near-shore tidal-supratidal conditions grading upwards to a sabkha-near-shore lagoonal environment. The Arrinthrunga Formation, east of EL 26227, is a thick, well bedded sequence of mostly dolostones with minor interbeds of quartz sandstone, siltstone and mudstone. It is divided into 8 lithofacies representing a range of environments from high energy ooid, grainstone and sandstone shoals with cross bedding and ripple marks to low energy submerged algal mounds and shallow water shelf, lagoonal and peritidal sediments through to near-shore semi-emergent hypersaline algal flats sandstone and shale beds and evaporite pans. The Tomahawk Beds, immediately east of EL 26227, are a fossiliferous sandstone-dominated, shallow marine sequence overlying Arrinthrunga Formation and consist of medium-coarse grained sandstone with thin interbeds, lamina and partings of micaceous siltstone and shale with occasional pebble conglomerate. The siltstones and shales are carbonaceous with pyrite. They accumulated in a littoral to sublittoral environment. Devonian Dulcie Sandstone unconformably overlies Tomahawk Beds immediately southeast of EL 26227 comprising mostly strongly cross bedded aeolian quartz sandstone. Lake Surprise Sandstone, a correlative of the Dulcie Sandstone from the Wiso Basin, is mapped in the southern part of EL 26226. Basement rocks and sediments of the Georgina and Wiso Basins are poorly exposed and most of the area is covered with an extensive sequence of unconsolidated Cainozoic sediments comprising basal Tertiary silcrete, ferricrete, silty limestone/calcrete and dissected fan deposits of gravel, conglomerate overlain by alluvial/colluvial gravels and sands, lacustrine sand silt and clay, aeolian sand plains and dunes, red earth soils and sand and gravel silt and clay of active channels and flood plains. Calcrete in the northern parts of EL 26226 and EL 26228 appears to have developed in a northwestwards trending palaeochannel along the southern flanks of the Davenport Range. Modern drainages from the southern flanks of the Davenport Range adopt a similar orientation on reaching the plains, suggesting that the regional northwestwards slope of the plain may have persisted for a large part of the Cainozoic. By comparison NuPower believes that the Warrabri Basin is an analogue to the Witchery, Burt Plain and Ti Tree Basins. Radiogenic granites as primary sources for uranium occur on the northern and southern margins of the Basin and beneath the basin as inferred from magnetics. Uranium may also be available from phosphatic units of the underlying Georgina Basin. Little is known of the Cainozoic sediments in the Basin and it is assumed therefore that it contains similar sequences to those of the Aileron basins to the south. Historical drilling for water resources already suggests that they may attain thicknesses of 100m or more. The northwest slope of the basin surface and the similarity of flow directions of drainages entering the basin from the north and the formation of an extensive elongate calcrete suggest the presence of a long-lived hydraulic gradient to the northwest. Airborne electromagnetic (AEM) surveys have been used successfully in South Australia to identify palaeochannel drainage systems and so NuPower elected to carry out a similar survey in 2007 over its tenements in the Aileron region covering parts of the Witcherry, Burt Plain and Ti Tree Basins. This successfully outlined the basement topography of the Cainozoic basins revealing palaeochannels eroded out of the basement rocks and structural sedimentary troughs filled with sediments over 300m deep. Subsequent scout exploration drilling confirmed the AEM interpretation encountering suitably reduced sands, bounded by clays, with low grade uranium mineralisation that demonstrated the validity of the application of the South Australian model to Central Australia. The Warrabri Basin has never been explored systematically and never for sediment-hosted uranium deposits but with technical success in the Aileron region a similar exploration strategy was applied to the Warrabri Basin and the area was included in the 2008 regional AEM survey that completed partial surveys of the Aileron region in 2007. The AEM survey consisted of a total of 2053.3 line kilometers of which 33.7% was from EL 26227. It was flown at a nominal survey height of 120m on 1km spaced lines with tie lines at 10km line spacings. The survey did not cover the area subject to this partial relinquishment. A very small part of Shirley Creek was covered by the Central Australia Gravity Survey (CAGS). The presence of sediments of the Georgina Basin indicates that the region also has potential for phosphate deposits. The NTGS MODAT database records an intersection of 3m @ 2.2% P2O5 from a water bore at Wycliffe Well north of EL 26227 and there are historical intersections of high grade phosphate at Ammaroo to the south. The Chabalowe Formation, occurring along the northern margin of the Basin, is considered the most prospective unit and is the target for phosphate exploration concurrent with uranium exploration and include the potential for uraniferous phosphorites. This formation is believed to lie east of the relinquished area. Groundwater samples were collected from 19 station bores in the region for multi-element analysis, geochemical modeling of which is being used to guide exploration. There were no bores from the relinquished area. The 2008 AEM survey did not cover the central portion of Shirley Creek since the survey was designed to cover the marginal parts of the basin first where it was considered that palaeochannels closest to the hinterland source areas would be the most prospective. It is now unlikely that this area will be flown, and this together with the lack of groundwater geochemistry and the inferred absence of potentially phosphate Chabalowe Formation means that NuPower regards this area to have low prospectivity for uranium or phosphate and has been relinquished.