EL 24246 Napperby Project Annual and Final report 11 October 2004 to 10 October 2016

Abstract

The Napperby Project area, comprising Exploration Licence 24246 was located approximately 180 kilometres north-west of Alice Springs. EL 24246 was granted on 11 October 2004 to Paladin Resources NL for a period of 6 years. The tenement was subsequently transferred to Deep Yellow Ltd (DYL) in 2005. This report covers the twelfth and final year of tenure of EL 24246 consisting of 74 blocks covering a total area of 234 km2 and summarises work undertaken during the life of the tenement. Previously EL 24246 was reported together with EL 24606 in the Napperby Combined Report (GR081-09) for the period ending 27 November annually. EL 24606 was allowed to expire at the end of its eighth year of term on 27 December 2013. In 2007 Toro Energy Limited (Toro) entered into an Earn-In Agreement with DYL to purchase 100% of the project based on an agreed JORC compliant resource to be outlined by Toro by July 2010, or based on a 6,000 tonne U3O8 JORC resource if purchased earlier. During 2007, Toro completed a program of 515 sonic core holes, 123 auger holes and 814 aircore holes followed in 2008 by a further 333 sonic core holes and 784 aircore holes. Assay data from both the 2007 and 2008 drilling programs were used to calculate a JORC Code Mineral Resource estimate of 3,351 tonnes of U3O8 (including 670 tonnes U3O8 previously outlined by DYL). The 2009 (and current) JORC Inferred Mineral Resource at Napperby is 9.34 million tonnes at 359 ppm U3O8 containing 3,351 tonnes of U3O8 (7.39 Mlb). Only 50% of the known mineralised area was redrilled and included in the JORC compliant resource. After three years of exploration Toro considered the financial terms of the Earn-In Agreement to be unfavourable and ultimately withdrew from the project after a Scoping Study was completed. The Scoping Study included baseline environmental, radiation and heritage studies and groundwater monitoring activities as a pre-cursor to a Pre-Feasibility Study. With the uranium spot price falling in the aftermath of the Fukushima incident in 2011, and its impact on the company's share price, DYL was obliged to rationalise its expenditure on this and other Australian projects. No on-ground work was conducted with DYL pursuing desktop evaluations of the previously completed geophysical surveys, with the aim of identifying further drill targets and commencing metallurgical investigations on stored drill samples whilst seeking to divest the project by way of outright sale or joint venture. Following a number of unsuccessful attempts to attract a suitable purchaser, DYL decided to allow Exploration Licence 24246 to expire at the end if its twelfth year of term, 10 October 2016.