Annual report for year ended 30 November 2006 EL 24716 and EL 24724 Lucy Creek Project

Abstract

Arafura Resources completed an RC drilling program to explore selected U targets in the Lucy Creek Prospect, in EL 24716 and the adjacent EL 10215 in November 2006. No field works were undertaken in EL 24724 as the targets within EL 24716 appeared to be more significant. The RC drilling program was designed to selectively drill test for uranium mineralisation beneath the segmented airborne radiometric anomalies that define the Lucy Creek Prospect. A total of 60 RC holes for 1713 metres were completed across the entire Lucy Creek Prospect area. The Lucy Creek Prospect spans the boundary between EL 24716 and the adjacent EL 10215 [also held by Arafura Resources, see Hussey (2007) ARU Rep 07/008]. 15 of these RC drill holes, for a total of 241 metres at depths of 4-43 metres, were drilled within EL 10215. The remainder of the holes and the main focus of the RC drilling program were in EL 24716. All samples from this RC drilling program were despatched to ALSChemex, Alice Springs in late November 2006 and held in temporary storage awaiting assay instructions. Samples were stored temporarily at the lab during the demerger of Arafura's uranium interests to NuPower Resources Ltd to avoid further delaying the demerger process and lengthy re-valuation of our entire assets. Results will be reported in the next annual report, as the approval for assaying was not granted until mid-February 2007 and work is still in progress at the time of writing this report.