Aileron Project EL 24548 Yalyirimbi Annual report for period ending 30 December 2008

Abstract

Yalyirimbi (EL 24548), was selected by Arafura Resources NL because of the potential for secondary uranium mineralisation, derived from the erosion of adjacent uraniferous basement granites and gneisses, and hosted by unconsolidated Cainozoic basin sediments of the Whitcherry Basin. The license was granted on 7 September 2006 and transferred to NuPower Resources Ltd in 14 March 2007 as a result of the demerger of Arafura's uranium assets into the newly formed company focussed on uranium. NuPower carried out an airborne electromagnetic (AEM) survey in June-July 2007 over the entire area as part of a larger survey of NuPower's tenements in the Aileron region. The survey was designed to explore for buried palaeochannels within the Cainozoic sedimentary package as potential hosts for secondary uranium. Concurrently, water from station stock water bores was sampled and assayed for a suite of major and trace elements the results of which are expected to assist with targeting potential sites of uranium accumulation within the palaeochannel systems. AEM survey results indicated that the technique was very successful; revealing that the Tertiary palaeodrainage is far more extensive and better developed than previously thought and indicating that the Whitcherry Basin infills a deep, E-W trending palaeotopgraphic low developed immediately to the south of the Patty Hill Thrust. A major E-W trending palaeochannel system was identified within the tenement. Two apparently faultcontrolled tributary palaeochannels drain southwards off the Yalyirimbi Range and debouch into the Whitcherry Basin. Results of the NTGS collaboration regional gravity survey over the Central Arunta region were received. Preliminary images are included in this report. Seven water samples were taken from station bores, 6 samples water samples were taken from historical drill collars that were open to the water table and a further 91 water samples were taken from NUP drillholes during this period. Assay results have been received for a total of 49 samples. Interpretation of the water geochemistry is in progress. Thirty, broadly spaced, reconnaissance drillholes were completed on Yalyirimbi during 2008 for a total of 5,354m and an expenditure (to 30 Sep 2008) totalling $922,133.02. Three drillholes intersected uranium mineralisation exceeding 0.01% eU3O8 and indications of anomalous gamma were detected in another six holes. Tertiary sediments were intersected in all holes, thereby validating the airborne EM data. A regionally consistent reduced horizon occurs throughout the tenement and is host to all of the anomalous intervals. PFN logging was attempted on of all the anomalous drillholes on Yalyirimbi along with three historical holes drilled by Agip in the southwest corner of Yalyirimbi. Difficulties in keeping the drillholes open meant that the PFN was run successfully in only one of these holes. Encouragingly, the PFN confirmed the presence of 'uranium mineralisation and indicated that positive geochemical disequilibrium occurred (suggesting deposition in response to actively migrating geochemical cells within permeable sands). The reconnaissance drilling program indicated that the Tertiary palaeodrainage system on Yalyirimbi was very well developed, regularly reaching thicknesses in excess of 200m. NuPower has been able to establish a preliminary stratigraphic model for the Tertiary Whitcherry Basin on Yalyirimbi. Importantly, all mineralisation intersected by reconnaissance drilling is hosted by a flat-lying, regionally widespread stratigraphic horizon occurs throughout the Whitcherry Basin. Significantly, mineralisation and the positive disequilibrium intersected by the historical Agip holes, are hosted within the same stratigraphic interval. Preliminary palynological results have confirmed a Tertiary (Early ? Middle Eocene) age for this horizon. NuPower's exploration efforts have validated it?s exploration model and demonstrated that all the necessary elements for the formation of a sizeable sandstone hosted secondary Uranium deposit (similar to the Four-Mile Deposit in South Australia) occur on the Yalyirimbi tenement.