SEL 25055 and SEL 25056 Group annual report for the period ending 12 June 2010

Abstract

Flinders Diamonds Ltd originally applied for exploration licenses in the Strangways region to explore a series of discrete dipolar magnetic anomalies for diamondiferous kimberlitic or lamproitic intrusive pipes. EL 10364 Mud Tank was granted on 6 December 2001 and EL 22443 Strangways, EL 24446 Alcoota and EL 22623 Phlogopite were granted on 20 December 2001 all of which were for a term of 4 years. Then in 2005 FDL sold the non-diamond rights to Maximus Resources Ltd (MXR). The 4 original licenses were surrendered on 27 January 2006 in exchange for SEL 25055 and SEL 25056 that were granted on 13 June 2006 each for a period of 4 years. NuPower then entered into a Joint Venture Agreement with MXR on 31 January 2008 to explore for the energy minerals uranium, thorium and coal, targeting secondary uranium mineralisation and coal in Cainozoic palaeochannels and sedimentary basins and primary uranium-thorium mineralisation in the Proterozoic metamorphic basement rocks of the Arunta Block/Strangways Metamorphic Complex associated with regional radiometric anomalies. However, after further negotiations Maxmimus Resources have agreed that NuPower will also have the right to explore for all metals (diamonds will be retained by Maximus Resources The Strangways region hosts a broad range of mineralizing styles and base metal deposits that include Cu-Pb-Zn deposits at Gecko, Rankins, Gumtree, Utnalanama (Johanssen's Phlogopite Mine), Edwards Creek and Glancroil, Cu-Au deposits at Johnnies Reward, Pinnacles and Turners and vermiculite-REEs deposits at Bleechmore Dykes and Mud Tank. However the region has never been explored systematically for uranium deposits. Using a model adapted from South Australia, NuPower became interested in the area following successful results of an airborne electromagnetic survey (AEM) in 2007 over its own tenements in the Aileron region that identified palaeochannel and basinal structures with considerable thicknesses of unconsolidated Cainozoic sediments. In South Australia secondary uranium deposits have formed in similar Cainozoic sediments of the Frome Embayment by dissolution of uranium under oxidising conditions from basement rocks of the adjacent Flinders Ranges and re-precipitation under reducing conditions that has been responsible for the formation of the very significant sandstone hosted Beverley and Four Mile deposits. Similarly in central Australia uraniferous basement rocks are widespread in the Arunta Block of the Reynolds and Strangways Ranges. Limited previous exploration of the Cainozoic sediments in surrounding basins had identified locally thick sequences beneath the Burt and Ti Tree Plains that encouraged NuPower to undertake a regional AEM survey to explore them as potential hosts for secondary mineralisation. This successfully located extensive and deep sequences of prospective sediments that accumulated in part as a result of substantial neo-tectonics that has been largely underestimated. In exploring for Cainozoic sediments in the vicinity of the Strangways Ranges, the northern part of the MXR tenements was targeted for potential southeast extensions of the structures, underlying plains in the headwaters of Mueller and Waite Creeks, controlling the southern margin of the Ti Tree Basin where the Cainozoic succession is over 300m thick in the Woodforde area of NuPower's ground. The licenses are underlain predominately by Palaeoproterozoic sedimentary, volcanic and intrusive rocks of the Strangways Metamorphic Complex (SMC), forming part of the eastern Arunta Block that has undergone a prolonged multiphase history of accumulation, metamorphism and deformation through a series of orogenies from the earliest Strangways Orogeny (1780-1720Ma), the Liebig Orogeny (1645Ma), the structural character of which dominates the area and the Chewings Orogeny (1590-1560Ma). Later, carbonatites were intruded along the NW-trending Woolanga Lineament around 730Ma comprising a series of lenses emplaced along a ductile shear zone consisting of a carbonate core surrounded by mica-rich zones, emplaced into granitoid cataclasites and mafic granulites. Further significant reworking continued from the Cambrian through to the Carboniferous, commencing with formation of the Harts Range Metamorphic Complex (510-460Ma) and north over south ductile thrusting of the SMC granulites (430-390Ma) when the Wallaby Knob Schist Zone was reactivated. Compressional deformation continued, probably intermittently, until 300Ma, during the Alice Springs Orogeny. Mapping of the Strangways Ranges has subdivided the rocks into a series of high grade metamorphic units including the Cadney, Hillsoak Bore, Erotonga, Ankala and Sliding Rock Metamorphics and Yambah Granulite consisting of calc-silicate rocks, marbles, sillimanite-biotite, garnet-biotite and quartzofeldspathic gneisses, felsic and mafic granulites, cordierite granulite, migmatites, quartzites and amphibolites. These rocks are cross cut by belts of retrogressed greenschist facies quartzofeldspathic, muscovite-biotite and kyanite schist, quartzite, amphibolite and calc-silicate rocks that include the Southern Cross and West Bore Schist Zones. In the south these rocks are intruded in the Wuluma Hills and Utnalanama Range by two separate felsic bodies-the Wuluma Granitoid containing rafts of sillimanite gneiss and the Utnalanama Granulite interlayered with Johanssen Metagabbro and Harry Anorthositic Gabbro. A small body of Late Proterozoic Gum Tree Granite is also present here consisting of porphyritic granite with numerous acidic dykes. North of the Plenty Highway the Mt Bleechmore massif is underlain by Mt Bleechmore Granulite consisting of sillimanite-garnet-biotite quartzofeldspathic gneisses, garnet-K feldspar migmatites, mafic granulites, plutonic migmatites and rare calc-silicates. The massif also contains small bodies of mafic granulite and amphibolite and garnet plutonic migmatite. Structurally the southern NT forms a 'basin and range' province with Proterozoic and Palaeozoic rocks forming prominent ranges separated by broad valleys containing thick sequences of unconsolidated Cainozoic sediments in at least twenty major basins of which the Strangways tenements cover a small area of the most eastern part of the Ti-Tree Basin. However the stratigraphy of the intermontane Cainozoic basins is generally poorly known except for the Hale Basin where exploration for lignite and sedimentary uranium during the late 1970's and early 1980's has provided the most knowledge, and although the succession is relatively thin here it is considered to represent a generalised Tertiary stratigraphy for the southern NT. This comprises a broad two-fold stratigraphic subdivision that corresponds well with the observed pattern of Cainozoic sedimentation elsewhere in southern Australia that consists of a restricted, fluvial palaeochannel dominated Palaeogene succession, the Hale Formation, overlain by a more widespread, dominantly lacustrine Neogene succession, the Waite Formation. Historical exploration indicates that the Cainozoic fill of the Burt Basin exceeds 200m, that the Sixteen-Mile Basin contains at least 180m of sediment, that the Whitcherry Basin and Waite Basins contain thicknesses in excess of 250m in thickness and that the sediment in the Ti Tree Basin is in excess of 300m deep. An additional stratigraphic unit, the Napperby Formation has since been recognised by NuPower as overlying the Waite Formation and represents the development of prograding alluvial fans shed from the ranges flanking the Cainozoic Basins. While the Cainozoic stratigraphic units were initially defined in separate, small and isolated Tertiary Basins, these units are now recognised as components of a much larger Tertiary palaeodrainage system, the extent and size of which has until now been vastly underappreciated. Deposition of Cainozoic sediments was episodic and punctuated by hiatuses during which prolonged periods of weathering resulted in the formation of five well-developed weathered profiles (palaeosols and duricrusts) extending from the late Cretaceous and affecting the basement rocks through to the Quaternary. There are three Palaeogene weathering events which affected Arunta igneous and metamorphic basement rocks and the overlying Tertiary succession and two weathering events from the overlying Neogene succession that appear to correlate with similar periods of weathering and exposure evident in southern Australia. NuPower Previously completed an AEM survey of the northern parts of both tenements and has received final reprocessed products for that and the infill results from the CAGS gravity survey over a small part of SEL 25055 for the exploration for secondary uranium in palaeochannels. There were 171.8 line kilometers flown for SEL 25055 and 385.5 line kilometers for SEL 25056. The surveys were conducted at 1000m line spacing at a nominal altitude of 120m. A regional stream sediment sampling program was also completed throughout both areas for primary uranium mineralisation in basement rocks. There were 254 samples from SEL 25055 and 85 samples from SEL 25056. The AEM survey identified a deep eastwards trough-like extension of the southern margin of the Ti Tree Basin with excellent potential for thick sequences of unconsolidated sediments as hosts for secondary uranium mineralisation. A significant part of the Strangways Ranges, including areas of anomalous uranium and thorium radiometrics, confirmed by anomalous uranium stream sediment geochemistry, lies within the watershed of creeks draining northwards towards the Trough and therefore this structure is regarded as highly prospective for secondary sandstone-hosted uranium deposits and should be tested with scout rotary mud drilling. The regional stream sediment sampling identified a number of multi-element (U-Th-Ce-La-P-REE) anomalies, the most important of which is apparently related to a granite with potassic (biotite-magnetite) alteration at Utnalanama. This elemental association suggests the presence of monazite and therefore the potential for alluvial concentrations of this mineral. Further infill steam sediment sampling and reconnaissance mapping and rock chip sampling is recommended to assess their significance as primary multi-commodity exploration targets. Panning of sediment from these anomalies would be a useful way of identifying the heavy minerals present. There was no on-ground exploration during the current reporting period, as administrative research was completed in preparation for Year 5 exploration works.