Annual report for the year ending 11 September 2010 ERL 116 Mount Porter

Abstract

No on-ground exploration activity occurred during the last reporting period. However at the time of writing, Arafura had commissioned an airborne hyperspectral survey over the tenement and surrounding project area. The Mount Porter gold resource represents the flagship asset of Arafura's Mount Porter-Frances Creek Project. This Project currently comprises six exploration / mining titles, covering an area of approximately 67 km2. Two of these licences, including ERL 116, are owned outright by Arafura. The mineral rights on the remaining four licences are shared with Territory Resources Limited, or with its wholly owned subsidiary, Frances Creek Pty Ltd. To date, Arafura's activities in the Mount Porter region have been directed at preparing for the commercial exploitation of the Mount Porter gold resource. More recently, the Company's strategy to be a major participant in the rare earths industry has necessitated a shift in focus and resources away from the development of Mount Porter, and exploration of the adjacent land package. Consequently, Arafura has been active in its efforts to divest its interest in the Mount Porter-Frances Creek Project.