EL 10214 and EL 10215 Jervois Project Annual report for year ended 5 December 2006

Abstract

Arafura Resources completed two consecutive but geographically separated drilling programs to explore selected U and Fe-Ti-V targets in the Lucy Creek and Unca Prospects, respectively, in EL 10215 in November 2006. No significant field works were undertaken in EL 10214 although an area with an anomalous airborne uranium signature in the southern parts of EL 10214 was investigated to determine its potential for future work programs. The first exploration RC drilling program was designed to selectively drill test for uranium mineralisation beneath the segmented airborne radiometric anomalies that define the Lucy Creek Prospect. A total of 60 RC holes for 1713 metres were completed across the entire Lucy Creek Prospect area. The Lucy Creek Prospect spans the boundary between EL 10215 and the adjacent EL 24716 [also held by Arafura Resources, see Hussey (2007) ARU Rep 07-009]. 15 of these RC drill holes, for a total of 241 metres at depths of 4-43 metres, were within EL 10215. The remainder of the holes were located in the adjacent EL 24716. All samples from this RC drilling program were despatched to ALSChemex, Alice Springs in late November 2006 and held in temporary storage awaiting assay instructions. Samples were stored temporarily at the lab during the demerger of Arafura's uranium interests to NuPower Resources Ltd to avoid further delaying the demerger process and lengthy revaluation of our entire assets. Results will be reported in the next annual report, as the approval for assaying was not granted until mid-February 2007 and work is still in progress at the time of writing this report. The second RC drilling campaign was a preliminary grass-roots exploration program designed to explore for and drill test Fe-Ti-V mineralisation within the Unca Prospect area by selectively targeting magnetic anomalies within the interpreted extents of the Attutra Metagabbro. A total of 934 metres were drilled in 15 RC holes to depths of 25-82 metres. Hole locations were selected using Arafura's detailed aeromagnetic data and preliminary geological observations. 14 of the 15 holes intersected magnetite bodies within Attutra Metagabbro. Based on visual logging and magnetic susceptibility measurements on the RC residues, a total of 285 samples were submitted to ALS Chemex, Alice Springs for prep work and despatch to Perth for the determination of the recoverable magnetite by the Davis Tube Recovery method and the subsequent assaying of the head feed and magnetic concentrate. Final results were not available at the time of this report.