Annual report for ERLs 46-55 Bigrlyi Prospect period ending 17 November 2006

Abstract

The Bigrlyi project comprises ten granted Exploration Retention Licences (ERL's 46 to 55 inclusive) located 390 kilometres (by road) northwest of Alice Springs. The project is a Joint Venture between Energy Metals Limited with 53.3% (operator), Valhalla Uranium (a subsidiary of Paladin Resources Ltd) with 41.7% and Southern Cross Exploration NL with 5%. Uranium mineralisation was discovered at Bigrlyi by a joint venture managed by Central Pacific Minerals (CPM) in 1973. In the period 1974 to 1982 the project was subject to several major drilling campaigns, with some 413 holes (total 37,500m) completed. Subsequent to 1982 CPM completed metallurgical testing and resource calculations, with a global resource of 809,000 tonnes at 3.43 kg/t U3O8 for 2,770 tonnes of contained U3O8 delineated at Bigrlyi (note that these resources are not JORC 2004 compliant). Field activities conducted in the period 1983 to 2004 were limited to maintenance of the core shed. In May 2005 Energy Metals acquired a 53.3% interest in, and assumed management of, the Bigrlyi project through the purchase of the interests of CPM and Yuendumu Mining Company NL. In September 2005 Energy Metals listed on ASX after raising $3m, primarily to fund exploration at Bigrlyi. In October 2005 the Bigrlyi Joint Venture approved an interim Exploration Program and Budget for 2005 designed to reactivate exploration at Bigrlyi after a 23 hiatus. Activities completed to 17 November 2005 included detailed environmental assessment of the project, rehabilitation of the core shed (including removal of degraded percussion samples and pulps) and installation of appropriate radiation monitoring procedures. Reassaying of uranium (and vanadium) anomalous drill core also commenced towards the end of the period. Exploration undertaken in the period 18 November 2005 to 17 November 2006 included, re-establishment of the exploration camp, validation of historic drilling and assay data, converting historic data to digital format, survey of historic drill holes and lease boundaries. It also included re-assaying of historic drill core, calculation of initial (JORC 2004 compliant) resources for the project, completion of an aboriginal heritage survey over the project area and completion of shallow aircore drilling programs (58 holes for 1,173m). A drilling program (RC and diamond) designed to increase the resource base at Bigrlyi commenced late October 2006 and continued until the end of the field season (mid- December 2006). Initial results from this drilling program have been included in this report; however most results are not yet available and will reported in the 2007 Annual Report.