Lucy Creek Project EL 24716 Luck Creek and EL 24724 Johanssen Range Group annual report for period ending 1 December 2010

Abstract

The Lucy Creek Project comprises three tenements, EL 24716 Lucy Creek, EL 24724 Johanssen Range and EL 10215 Jervois. These licenses were applied for and granted to Arafura Resources NL in December 2005. Two licenses, Lucy Creek and Johanssen Range, were transferred to NuPower Resources Ltd during the demerger by Arafura of certain uranium assets into the new company. Arafura retained Jervois but transferred the rights to uranium to NuPower. This year, Year 5, NuPower drilled 29 infill vertical and inclined RC holes at the Patanella Prospect for 1376m, that followed on from the geological mapping in Year 4. Of these 15 holes returned intersections greater than10% P2O5 of which 6 reported intercepts greater than 15% P2O5, the best of which is 10m at 32% P2O5 from LCRC074. Drilling to date at Patanella has now outlined a potential resource of DSO that warrants further drilling. Petrography of drill chips indicates protoliths of siliceous siltstone and mudstones cemented by a clay-cryptocrystalline matrix of silica and phosphate, that are altered by post-diagenetic crystallisation of silica and apatite and dissolution and re-precipitation of silica and phosphate in irregular veins, colloform bands and voids. Xray diffraction confirmed the presence of fluroapatite and although the rocks are mostly very fine-grained and homogenous and thought to be poorly amenable to beneficiation, a trial size analysis suggested that high-grade material reports to the coarser fractions. Lesser radiometric anomalies on both tenements indicate considerable potential strike extent of Errarra Formation and further reconnaissance mapping, sampling and scout drilling are warranted. NuPower believes that the Lucy Creek project has excellent potential for a sizeable phosphate resource containing one or more high grade zones of Direct Shipping Ore. Groundwater anomalies reported previously, in Year 3, were found to be erroneous on reassay. The new reliable results, reported here, contain anomalies that are thought to be derived from the underlying rocks of the Georgina Basin and in particular Cu, Ni and Ce are thought to be due to concentrations of these elements from the phosphate bearing Errarra Formaiton.