Combined annual exploration report for EL 25222, EL 25223, EL 25224 and EL 25229 for period ending 8 November 2010 Daly River Project

Abstract

The project area is approximately 140km due south of Darwin and consists of four tenements: EL 25222, EL 25223, EL 25224 and EL 25229. Land access is restricted on EL 25224 with numerous small freehold blocks, but access is good on EL 25222, EL 25223 and EL 25229. All four tenements have completed their fourth term. Partial reduction has been carried out for EL 25223 and EL 25229 and full reduction for EL 25222 and EL 25224 for year four. The tenement group is situated near the western margin of the Pine Creek Orogen with Middle Proterozoic sediments of the Tolmer Group mapped as overlying the western portion of EL 25222 and EL 25229. To the north EL 25224 is mostly over the Early Proterozoic Finniss River Group Sediments. In the east EL 25229 covers the eastern edge of the Daly Basin with Proterozoic sediments exposed along its western boundary.Geochemical sampling was undertaken at various prospects on EL 25229 (8 samples) and on EL 25222 at Green (14 rock chip). Also results from 268 soil auger samples taken in 2009 from EL 25222 (Green) were returned, results from which confirmed uranium anomaly targets with corresponding multi-element highs. Drilling was undertaken at Green Ant (4 holes for 310m, 253 samples). No significant mineralisation was intersected, but uranium prospective Proterozoic basement beneath the Tindal Cover was intersected at shallow depths. Drilling at Green (part of the Northern Territory Government's 'Bringing Forward Discovery' collaboration initiative, 2 holes for 1066.9m, 64 samples) did not reach the unconformity between the Tolmer group and the lower Proterozoic sediment but did demonstrate that the unconformity was shallower to the north. Reinterpretation of geology across the group revealed a new prospect on EL 25229, named Quantum. Re-sampling of historic drill core returned significant uranium intercepts including 0.5m at 4,224ppm U3O8 (0.42% U3O8 or 4.24kg per tonne U3O8. Also other elements were associated with mineralisation including gold-silver-bismuth-zinc. A down hole gamma logging programme was completed on 7 of the historic drill holes in the area. This confirmed the presence of several additional target zones. RC drilling (8 RC holes for 802m, and 2 RC precollars, 753 samples) and diamond drilling (2 diamond tails for 524.8m, 179 samples) was completed to test the prospect. Significant mineralisation was intersected including 50m at 1.55% TREO (Rare Earth Oxide) from 245m and 2.3m at 2.75% TREO from 374m. Gold and Silver mineralisation was also noted associated with mineralisation. Also on EL 25229, at the end of the reporting year, a program of 28 Aircore holes at Wildcard for 1,633m and 371 samples was completed to test a significant radiometric anomaly over interpreted prospective stratigraphy. Assay results (528 RC samples) were returned for drilling at Energy in 2009 (previous reporting year). Assays returned significant uranium mineralisation within a continuous shallow, flat lying, zone with widths up to 10m at the base of a brecciated sandstone unit. Best intersects included 2m at 972ppm (0.97kg per tonne) U3O8 from 4m.