Combined annual exploration report for GR042, EL 25222, EL 25223, EL 25224 and EL 25229 for period ending 8 November 2011

Abstract

During Year 5, exploration was undertaken primarily on EL 25222, EL 25223, and EL 25229 of the Daly River Group. RC drilling was undertaken at Energy (now named Stromberg) (54 holes for 1698m and 781 samples). RC and diamond was undertaken at Quantum with 37 holes (including diamond tail extension of RC holes) for 5,930m and 2,922 samples. Shallow RC drilling (22 holes, 604m and 201 samples) was also undertaken at Green (now named Drax). Reconnaissance with a hired hand held XRF machine exploration was also undertaken on EL 25222. Also metallurgical and petrographic work was completed on samples from Stromberg and Quantum. Re-assaying of pulps for Rare Earth Elements from previous TUC exploration was completed on 1,113 samples (geochemical and RC) from EL 25229, EL 25223 and EL 25222. No significant results were returned from the REE re-assays at Green Ant, but re-assays of soil auger samples at Green returned anomalous REE values. Re-assays of pulps at Energy returned significant REE results with excellent HREE proportions. Regional XRF testing (21 sample sites) also showed promise at the Scaramanga and Moon Boon Prospects. Subsequent drilling at Energy (renamed to Stromberg) successfully intersected significant REE mineralisation near surface, flat lying horizons and confirmed the strong HREE component. At Quantum multiple phases of RC and diamond drilling were completed over the year, including a successful wet season helicopter supported diamond program. Mineralisation has been intersected on 4 sections, resulting in a current strike length of + 300m. Mineralisation forms in folded mineralisation lithologies and remains open to the north and south. Metallurgical and mineralogical test work continues but results so far indicate that at Quantum over 86% of the rare earth minerals were able to be extracted using simple magnetic separation techniques, producing a concentrate grade of up to 19% TREO. Mineralogical work indicates a REE host mineral of Xenotime for Stromberg and Bastnasite after decayed Allanite for Quantum.