Report on voluntary surrender EL 23571 Reynolds Range

Abstract

The Reynolds Range area is prospective for numerous styles of mineralisation with U, Au, As, Sb, Ag, Fe, Sn, Ta, W, Mo, Cu, Pb, Zn, Ni, REE, P, Th and talc occurrences known in the region. Of these, Arafura Resources is principally interested in exploring for economic REE mineralisation. Several companies conducted exploration activities in EL 23671, adjacent to EL 23571, and failed to realise the potential of the world-class Nolans Bore REE deposit, which now has a defined total resource of 30.3 Mt at 2.8% REO, 12.9 % P2O5 and 0.44 lb/t U3O8 [see Goulevitch (2008) for details]. This is encouraging because the Nolans Bore- type REE mineralisation may occur elsewhere in the region. Elevated levels of phosphate-hosted rare earth elements (REEs) mineralisation was discovered in the Nolan's Bore area by PNC Exploration (Australia) Pty Ltd in 1995 (Thevissen, 1995). This occurred during follow-up of an airborne radiometric anomaly as part of that company's uranium exploration program along the Reynolds Range. Total REE levels of 5-7% were reported from selected grab samples of apatite which crop out sporadically within an area some 1000 x 800 metres in extent around the Bore. A distinct ground-radiometric response correlates closely with this area of apatite development. EL 23571 is part of a number of tenements in the Aileron-Reynolds Range area including EL 23571 (Reynolds Range), EL 23671 (Aileron), EL 24548 (Yalyirimbi Range) and EL 24741 (Woodforde). Desktop and field based studies were undertaken to evaluate the mineralisation potential of EL 23571. These studies were based on all available regional datasets, including Arafura's HyMap survey of the Aileron-Reynolds project area. A desktop assessment and evaluation of the existing rock chip dataset and HyMap targets indicates that the exploration of additional, smaller outcropping HyMap targets is probably not warranted within the surrendered area, however it should be pointed out that buried REE targets may exist. Unfortunately the extreme wet year and ground conditions prevented access for on ground exploration activities in 2010. Reconnaissance exploration activities visited a number of sites within the surrendered area. A total of 21 rock chips were collected and assayed. No REE mineralisation was identified within the outcropping targets that have been assayed to date.