Annual report for ERL 116, year ending 11 September 2004 and Results of core drilling programme, November 2003

Abstract

Arafura Resources completed a program of 7 inclined HQ core holes (MPDH241-247) totalling 417.5 metres into the 10400 Zone gold deposit at Mount Porter in November-December, 2004. The first six holes successfully intersected the high grade mineralised zones but the seventh was terminated due to loss of circulation just as it reached the mineralised zone. A total of 258 half-core samples were subsequently submitted for fire assay analyses for gold at North Australian Laboratories in Pine Creek. Forty one of these were check-assayed by ALS Chemex in Townsville. NAL's results included: 60 samples with >1 g/t Au, including; 18 samples with >5 g/t Au, including; 9 samples with >10 g/t Au including; 5 samples with >20 g/t Au. The highest result was 39.9 g/t Au between 34-35 metres in MPDH246. Excellent replication of results was achieved both internally at NAL and also between NAL and ALS Chemex. This suggest an absence of coarse gold in the areas drilled, even in the very high grade samples, and demonstrates that excellent diminution and homogenisation of gold was achieved during sample preparation by NAL. SG measurements were carried out on core samples selected at regular intervals and detailed RQD and recovery logs were recorded in addition to normal detailed geological logs. After logging, all core from MPDH241-247 was photographed in both wet and dry condition. Significant mineralised intercepts were realised including: 22.55 metres at 4.64 g/t Au from 38 metres in MPDH245; 12.90 metres at 6.35 g/t Au from 30.1 metres in MPDH246; 17.10 metres at 3.64 g/t Au from 21.7 metres in MPDH242; 13.00 metres at 3.47 g/t Au from 22 metres in MPDH244; 9.00 metres at 3.16 g/t Au from 30.1 metres in MPDH243; 9.00 metres at 2.28 g/t Au from 36 metres in MPDH241; 1.65 metres at 27.6 g/t Au from 58.9 metres in MPDH245; and 2.00 metres at 10.85 g/t Au from 42 metres in MPDH244. These intercepts compare very favourably with those from earlier drilling on adjacent sections and provide confidence in the earlier assay data for the 10400 Zone. This infill drilling confirmed continuity of the zones of highest grade gold mineralisation. This was previously considered critical to establish continuity of higher grade gold mineralisation in these areas and to confirm the integrity of earlier resource estimates..