Wellington Range Project EL 5893 Annual report

Abstract

This report describes exploration work undertaken on EL5893 Wellington Range for the fourth year of tenure. The licence is located in Arnhem Land approximately 100 km north northeast of the community of Jabiru. The tenement was granted for a period of six years on May 5 2004 and to the end of year three there has been no statutory reduction. Cameco is awaiting the decision of DPIFM Minerals and Energy on a 'Partial Waiver of Reduction' application submitted in April 2008. Field activities for the reporting period consisted of diamond and air core drilling, outcrop sampling and geophysics, the latter comprising a ground EM survey and airborne Gravity. Eight diamond core holes were drilled in 2007, two of which were abandoned due to difficulties encountered in the Cretaceous. Total metreage drilled was 2,932 m, which included 2,212 m of rotary mud pre-collaring. The program was designed to broadly target the northern extension of the regional magnetic trend as defined by the Southern Geoscience interpretative study. The trend forms an arc-like linear belt that is traceable on the magnetic image for approximately 30 km along the north-western boundary of the tenement. Specific target areas were inferred northeast and northwest structures, where they crosscut the prospective stratigraphy. Drilling in 2006 along the southern part of this trend discovered the presence of a magnetite-bearing pelite on several drill fences, which with other intersected lithotypes were interpreted to be correlatives of the Cahill Formation. In 2007, intersections of two of the three marker horizons, the magnetic pelite (magnetite-bearing schist) and the underlying carbonate sequence (marble, calc silicate gneiss and para amphibolite) confirmed continuation of the prospective stratigraphy. Observations of interest concerning the stratigraphy in the current program as compared to 2006 include: The graphite bearing horizon intersected in 2006, which comprises a distinctive light grey, banded silicified semipelite was absent; The Magnetite bearing pelitic schist is present in several holes and is visually identical to the 2006 intersections. Streaky foliation controlled masses of magnetite were observed in one of the 2007 holes; Sulphide-rich layers within pelite, semipelite and amphibolite contain Pyrrhotite which is slightly magnetic; Graphite occurrences were confined to localised structures mainly within the carbonate sequence; The 'carbonate sequence' is better developed and is traceable over the three drill fences, a distance of approximately 9 km. Despite the favourable environment, there were no obvious indications of structural disruption, hydrothermal alteration effects or uranium mineralisation. In the southern part of the tenement 71 air core holes were drilled for a total of 1039m. The program was designed to map the basement geology through the regolith, determine it's prospectivity by observing any alteration features and obtain samples for geochemical analysis. The area is underlain by gneissic granitoid of the Nimbuwah Complex, which has been intruded by Oenpelli dolerite. Cover rocks are Cretaceous sandstone and siltstone with recent ferricrete and transported sand. No indications of uranium mineralisation were found. A total of 12 rock samples were collected from Nimbuwah basement outcrops within the boundary of the Air core area. Five sandstone samples were collected from the environs of the planned (but cancelled) Tempest anomaly heli-hole. Bell Geospace Limited conducted airborne gravity over the northern half of the tenement. A total of 1452 line kilometres on 200 metre spaced lines were flown to assist mapping basement geology below cover. Legal restrictions have prevented the data from being interpreted. Quantec Geoscience Pty Ltd carried out a trial Time Domain EM orientation survey on a 1.5 km long traverse. The traverse corresponded to a 2006 drill fence on which one hole intersected the graphite-bearing semipelite. The object of the survey was to trial various configurations in an attempt to locate graphitic conductors beneath highly conductive Cretaceous cover. The survey was partly successful in that a subtle response was attributed to the graphitic horizon. Rio Tinto Exploration continued their exploratory air core program within the tenement as part of the Malay Bay farm-in agreement with Cameco. Rio drilled 20 shallow holes for a total of 177 m. Analysis returned up to 30.2% Al2O3 however this result is related to kaolinitic clays. Rio considers that the area is unsuitable for bauxite formation. Eligible exploration expenditure for Cameco's activities for the reporting period totalled $1,577,315.16. Rio Tinto Exploration expended $36,115, which brings total expenditure to $1,613,430.16. The exploration program for 2008 will consist of both diamond core and air core drilling programs and further ground EM. The coring program, consisting of a minimum 11 proposed holes, which will focus on two main areas, one targeting a structural environment with similarities to the Aurari Fault Zone and the second a Gravity anomaly located adjacent to the south-eastern corner of the 2006 drilling area. Should additional funds be available then more detailed drilling of the primary targets can be carried out if necessary. Alternatively other defined target areas, such as structurally favourable sections of the magnetic trend can be drilled.