Annual report EL 23573 Year ending 5 January 2005 Lagoon Creek

Abstract

Exploration Licence 23573 (Lagoon Creek) is located about 235 km southeast of Borroloola and about 1250 km SE of Darwin. The tenement was granted on 6th January 2004 for 6 years, and contains 67 blocks with an area of 194 sq km. The tenement is located at the boundary between the Palaeoproterozoic Murphy Inlier and the overlying Mesoproterozoic McArthur Basin in the Westmoreland uranium province. The oldest rocks exposed in the tenement are flow-banded rhyolitic lavas and tuffs of the Billicumidji Rhyolite Member of the Cliffdale Volcanics (Murphy Inlier). The Cliffdale Volcanics are overlain unconformably by the 1400-1800 metres thick Westmoreland Conglomerate of the Tawallah Group (McArthur Basin). The Seigal Volcanics conformably overlie the Westmoreland Conglomerate. Uranium, uranium-gold and copper mineralisation occur in the area. Uranium was mined at the Cobar 2 and Eva mines in the 1950's; both these prospects are outside the current tenement. The Westmoreland Conglomerate is of a similar age to the Kombolgie Sandstone of the Alligator Rivers Uranium Field. World-class unconformity-related uranium deposits are associated with the Kombolgie Sandstone in that area. Substantial uranium deposits have been found in the Westmoreland Conglomerate about 30 km to the east in Queensland. These deposits remain unexploited due to a moratorium on uranium mining in that state. The Westmoreland Region in the NT has the potential to host significant uranium deposits similar to those found across the border in Queensland. EL 23573 covers much of the prospective ground. The tenement has been explored extensively for uranium over the last 50 years. A previous intersection of 1 m at 2.4% U3O8 and 1 m at 6.8 g/t Au in drillhole WPD 60 drilled by Kratos at Ooogoodoo is mentioned. It seems unlikely that any large outcropping uranium deposit still remains to be discovered in the area. Over twenty percent of the tenement is covered by Cretaceous sediments and alluvium which effectively prevent radiation caused by uranium mineralisation in the basement rocks from being detected at the surface.