EL 24549 Cleo's Prospect Annual technical report for the period 21 September 2007 to 22 September 2008

Abstract

Uranium mineralisation was discovered at the Cleo's Project in the Twin and Dam deposits in the mid 1980's by Total Mining Australia Pty. Ltd. (Total Mining). From 1984 to 188 Total Mining carried out an extensive exploration program which included geological mapping, ground radiometric surveys, soil radon (Alphacard) determinations, ground magnetic surveys, EM conductivity surveys, a stream sediment orientation survey, trenching and drilling. A total of 15, 369 metres of drilling was completed in 367 holes and included 68 metres of auger drilling, 13, 569 metres of percussion drilling and 1, 118 metres of diamond drilling. Based on this drilling, Total Mining estimated the two deposits contained a combined inferred resource of 621 tonnes of U3O8. In 2007, Atom designed a drilling program to confirm earlier drilling data and increase the resource at Cleo's. Drilling commenced 20th and continued until 26th November 2007. Atom Energy Ltd. retained Coffey Mining Ltd. to undertake geological modelling and resource estimation of the uranium resources of the Dam and Twin Prospects of the Cleo's Uranium Project. The resource work was to be classified according to the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves (JORC Code, 2004). Cleo's Uranium project lies within the Pine Creek Geosyncline, an Early Proterozoic sedimentary basin with an area in excess of 66,000 square kilometres and a rock sequence of up to 14 kilometres total thickness. The Pine Creek Geosyncline forms part of the North Australian orogenic province and can be correlated with other Early Proterozoic sequences in Northern Australia, including the Granites-Tanami Block, Tennant Creek Inlier, Murphy Inlier, Arnham Block and Halls Creek Inlier. The Pine Creek Geosyncline has been subdivided into five regional entities. These are Litchfield province, Rum Jungle Region, Central Region, South Alligator River Valley and east Alligator Rivers Region. Cleo's is located within the Central region. During 2007 Atom Energy completed 5,291m of RC drilling in 88 holes. of this, 3,356m in 56 holes were drilled at the Twin Prospect and 1,192m in 32 holes were drilled at the Dam Prospect. A further 580m in 9 holes were drilled at Hill 20, some 350m to the north of Twin. Hill 20 was not included in the resource estimate conducted by Coffey Mining. Drilling was at a nominal spacing of 20m along section, with sections being approximately 40m apart. Holes were generally drilled at 60m. All holes were drilled at -600 on a bearing of 268o at the Twin and 216o at Dam. Drilling was undertaken by Drillwest drilling contractors of Bellevue, WA. Resource estimation was undertaken for uranium at the Dam and Twin Prospects which for part of the Cleo's Uranium Project on EL 24549. Atom Energy Ltd. retained Coffey Mining Pty. Ltd (Coffey Mining) to undertake geological modelling and resource estimation of the uranium resources on the Cleo's project area. The resource work was to be classified according to the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2004). Coffey Mining personnel involved in the geological model and resource estimation have sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined by the JORC Code (2004). Atom Energy Ltd. is currently re-evaluating the Cleo's Prospect with the view to increase the current resource figures by further exploration of the project area. A program of deeper core drilling is proposed to examine the depth extent of the current mineralised zones and to examine the structural, and geological features. Work during the next reporting period will involve; 1) A complete review of previous exploration undertaken on and in the region of EL24549, 2) A deeper drilling program to examine depth extent, 3) Regional and local sampling programs and geological mapping.