Final report and annual report for year ending 30 November 2015 EL 24548 Yalyirimbi

Abstract

The area was originally sought by Arafura to explore for rare earth element (REE) mineralisation to compliment Arafura's nearby Nolans Bore REE-P-U deposit. It was one of six exploration licences surrounding the Nolans Bore deposit which make up Arafura's Aileron-Reynolds project. With heightened world interest in uranium around 2004-05, Arafura's attention soon focussed on the uranium potential of the tenement 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. Throughout the first year of grant no on-ground exploration was conducted on EL 24548 as Arafura sought to separate its uranium interests throughout the Northern Territory from its REE and other interests. This was finally achieved in March 2007 when NuPower Resources Ltd (NuPower) was de-merged from Arafura and listed on the Australian Stock Exchange. EL 24548 was then transferred to NuPower though Arafura retained the rights to all other minerals. Uranium exploration by NuPower then commenced and included; Airborne EM surveys designed to locate palaeochannels in Cainozoic basins overlying favourable Proterozoic basement rocks were completed in 2007 and 2008; Groundwater sampling (station bores initially but exploration drill holes subsequently) was undertaken in 2007, 2008 and 2009; Infill helicopter-supported gravity surveying was financed by NuPower in association with regional widerspaced surveying conducted by the Northern Territory Geological Survey in 2008; 30 'mud' holes totaling 5354 metres were drilled into interpreted palaeochannels in 2008; and Down-hole geophysical logging was completed in all holes. Anomalous gamma responses were detected in 9 of the holes though subsequent geochemical results were disappointing. Apart from some very limited rock chip sampling in 2012, this effectively marked the end of on-ground uranium exploration by NuPower who continued to analysis of drill, groundwater and geophysical through to 2010 when uranium investigations came to a close. NuPower exited the project area in February and the licence was transferred back to Arafura. Between 2010 and 2014 Arafura farmed out its iron ore rights in the licence area initially to Ngalia Resources Pty Ltd (Ngalia) and subsequently to Ferrowest Ltd (Ferrowest) who acquired Ngalia's iron ore rights in early 2013. Iron ore exploration by these parties included: Reconnaissance mapping; 6218 metres of RC drilling in three campaigns in 152 holes; 357 metres of PQ3 core drilling in 8 holes some of which twinned earlier RC holes; Metallurgical investigations focusing on beneficiation to produce high grade concentrates; Over 3000 iron ore assays; Infill gravity survey with stations spaced 50 metres apart; 45 SG determinations on core samples; and Block modelling and resource estimation. The final resource estimate by Ferrowest in the Indicated and Inferred categories (JORC 2004) is 13.3 MT at 27.1% Fe, 53.9% SiO2, 4.3% Al2O3, 0.02% P, 0.08% S and 2.3% LOI. With the collapse of iron ore prices in 2015, Ferrowest withdrew of the project and surrendered its iron ore rights to Arafura.