First and final report for EL 29503 Black Hole Aileron-Reynolds Project Area 2 January 2013 to 16 January 2014

Abstract

EL 29503 was considered highly prospective for supergene REE mineralisation. A water exploration effort commenced to the south of Nolans Bore in 2012-13 to support the development of Nolans Bore. A portion of this work has been on EL 29503. A desktop geological study to understand and constrain the extent and size of the concealed Tertiary basins to the south of Nolans Bore has commenced. This work has involved: collating and reviewing all open-file exploration and water bore data in the general area; depth to basement modelling using Arafura's detailed airborne magnetic data, where available, and regional open-file NTGS magnetic across the entire area; and reprocessing all open-file AEM surveys in the region. This work also involved an initial phase of water exploration drilling on EL 29503 and EL 29509, and off tenement further to the west. These holes are yet to be fully developed and pump-tested but the water quality and airlifted volumes were considered highly encouraging. The results to date suggest there is potential for a substantial water supply to the south and southwest of Nolans Bore. A substantial staged water exploration effort and the development of water bores is planned in the region in the coming years. Water drilling was targeted at the shallowest modelled depth to magnetic feature on EL 29503. This enabled Arafura to test both the water potential of the Cainozoic northern Burt Basin and the magnetic feature with a single water exploration hole. The hole intersected weathered basement at about 79 metres and was terminated at 112.25 metres before it reached magnetic rocks. Thus the magnetic anomaly was not actually explained. The intersected basement rocks are interpreted to be clay-altered deeply weathered mafic rocks with low REE contents. The geochemistry of these altered rocks are unlike typical carbonatite signatures. The geological data suggests this area is a localised deeply weathered basement high and the absence of a quartz-rich aquifer at depth contrasts with drilling results immediately north of the tenement. Given the drilling results on EL 29503, shallow REE mineralisation appears unlikely and the REE mineral potential of the mafic rocks intersected on EL 29503 is therefore downgraded. Arafura plans to drill additional water bores in the general area under the Water Act. Some of these may be on EL 29503 but there is no longer a requirement to hold tenement over this area for REE mineral exploration.