Annual Report - King River Project 5 July 2011 to 15 March 2012 EL 25064 and EL 25065

Abstract

The King River project area has been explored since 1970 by Union Carbide, PNC and Cameco who has been the operator between 2000 and 2005 then resumed work in July 2011. The main target commodity has been uranium. Cameco Australia has been exploring the area for unconformity related uranium deposits. The most notable prospects on EL 25064 and EL 25065 are Aurari North, Laterite Deeps, Kuroikin and Fishtail. Aurari North is a known sub-economic uranium mineralisation prospect associated with the Aurari fault zone breccia. In 2011 exploration efforts targeted Aurari North type mineralisation along strike of the Aurari fault zone toward the north of the area that has previously been under a No Go Zone. The 2011 field season consisted of a ground gravity survey, four diamond drill holes and field mapping. The ground gravity survey was carried out to locate the Aurari fault zone at the NW corner of tenement SEL 25064. Eleven (11) lines were surveyed with 500m spacing and a station density of 50m along the lines. The ground gravity survey detected Cretaceous sediment cover as a gravity low, but did not locate the Aurari fault zone. Four (4) diamond core drill holes (DDH) were drilled in the Aurari North area (within the ground gravity survey coverage) for a total of 1451.7m. The holes were planned to intersect the Aurari fault, and were drilled as one fence oriented WSW. One of the holes was drilled in the location of the Aurari fault inferred from Geophysical data, the other three in the geologically inferred fault location. The main Aurari Fault Zone structure was not intercepted. Weak Kuroikin prospect type mineralisation associated with quartz-carbonate veins was intercepted by 3 drillholes. The best U3O8 value was obtained from hole KRD1264 as 5093 ppm in a 0.5m sample from at 276.0m depth. In total 220 geochemistry samples were taken from 4 diamond drillholes, excluding QAQC samples. Localised ground reconnaissance and outcrop sampling was carried out on EL 25064 and EL 25065. Seven (7) outcrop samples were taken with the best U3O8 results of 2.38 ppm occurring in Mamadawerre sandstone.