Highland Plains Project and Phospate Exploration Targets EL 25068, EL 25600 and EL 25972 Group annual geological report for the period ended August 2009

Abstract

Tenements EL 25068, EL 25600 and EL 25972 occur within the Barkly Tablelands of the Northern Territory on the Mount Drummond, Alroy, Ranken and Brunette Downs 1:250,000 map sheets. The area undergoes a sub-tropical climate with the wet season occurring from November to March every year. During this time, the area can be difficult to traverse by vehicle because the access roads may become flooded. In the dry season, the area is accessible by 4WD vehicle via pastoral tracks from the western and eastern sides of the tenements. Phosphate Australia Limited pegged the tenements between November 2005 and March 2007 further to a target analysis of the area using publicly available remotely sensed data. The ground was chosen because of its numerous Uranium channel radiometric anomalies coupled with the existence of published phosphate and iron occurrences. All granted tenements are 100% owned by Phosphate Australia Limited. During the reporting period, Phosphate Australia has conducted exploration activities which have included: Reconnaissance of Highland Plains site for drilling campaign; Reconnaissance of all suppliers for logistical purposes in order to maintain operations; Analysis and correlation of historical and generated data; Purchase of all field equipment to establish a tented camp for up to 15 people and run operations; Development of a sea container camp for up to 15 people. This includes ensuited accommodation which has full plumbing and electrics; Topographic airborne 'LIDAR' Survey; Geophysical Electromagnetic Survey; Ground Surveying - 2 base station points; Drilling of 94 RC holes at 100 metre spacing; Drilling 28 RC holes at random spacing over the project area; 2 RC holes for attempted water bores; 6 HQ diameter diamond drill holes; 10 PQ diameter diamond drill holes; Development of an Inferred Resource using Independent Consultants; Initial metallurgical testwork and the commencement of more detailed metallurgical testwork; Ongoing geological interpretation work of the Highland Plains Phosphate Ore Zone and correlation of all drilling between 2008 and 2009; Logistical and Early Mine Planning Studies; and Desktop Environmental Study. The exploration work conducted until the end of 2008 has helped to delineate a JORC Inferred Resource of: 56 Million Tonnes at 16% P2O5. Within this resource there is a higher grade resource named the Western Mine Target Zone which has a JORC Inferred Resource of: 7 Million Tonnes at 23% P2O5. Exploration activities during 2009 have included further drilling to upgrade this resource. Results from this work were not fully processed at the time of reporting and will be available in next year?s report. Initial metallurgical work obtained during the reporting period from QEMSCAN analysis has indicated the phosphate to consist of hydrous apatite which shows good liberation and separation properties. A comprehensive programme has been designed for the latter half of 2009 to test the flotation properties of the ore.