EL 24246 Napperby Annual report year ended 11 October 2005

Abstract

The Napperby Project is located 150 km northwest of Alice Springs in the Northern Territory. It consists of one exploration licence covering 809 square kilometers. It is prospective for both deeper sandstone roll front and surficial uranium target types. Deep Yellow Limited acquired the tenement from Paladin Energy Minerals NL in December 2004 and now holds EL 24246 in its sole name. At the New Well Prospect (now called Napperby), Proterozoic granite basement is overlain by Cainozoic sediments. A Tertiary palaeosoil has developed over the granites and is characterized by puggy dark red-brown clays containing very coarse angular sands and regolith, the sequence is strongly ferruginous. Quaternary fluviatile and lacustrine sediments have been deposited over the palaeosoil horizon. Fluviatile sediments, which also can include reworked lake sediments are characterised by medium to coarse, partly gritty, subangular to rounded sands and clayey sands. These lithologies are porous and act as aquifers. Lacustrine sediments are usually clays and sandy clays with carbonaceous matter, gypsiferous clays as well as massive gypsum. Dark red aeolian sands occur sporadically throughout the sequence. A thick and massive channel calcrete has developed within these sediments mainly in the south of the region. Presently the area is covered by aeolian sands and claypans along the present drainage. The New Well uranium mineralization occurs in the form of carnotite and minor tyuyaminite. It is mainly concentrated below the strongly carbonated sediments, calcretes and present water table. The total mineralized area is several kilometers long, approximately 1,500m wide and in average 1-5m thick. The project in its current phase is targeting uranium mineralization suitable for alkaline heap leaching in the younger shallow channels at the New Well Prospect. Future exploration at the project will also target deeper and older Tertiary palaeochannels which may be amenable to in-situ leach (ISL) mining. During July and August 2005 the Company undertook an air core drilling programme consisting of 569 drill holes. All drill holes were vertical and drill hole depths varied between 8m and 14m. The area drilled lies approximately between eastings 256 000mE and 261 000mE and between northings 7 462 000mN and 7 466 000mN (AMG94 grid). A collar file was submitted as a text file with this report. Also submitted with report as text files are the Gamma Logs, Srat readings and the first set of assay results received for the drilling programme. The Company is awaiting the results of a JORC compliant resource estimate before making further assessment of the tenement and before planning future work. It is anticipated that once the JORC compliant resource estimate is received that further drilling will be planned to further expand and refine the resource.