Annual Report - Mount Howship Project 15 May 2011 to 14 May 2012 EL 9637

Abstract

The Mount Howship project comprises one exploration licence (EL 9637), located in western Arnhem Land, approximately 250km east of Darwin. The exploration licence was granted to Heavy Metal Resources Pty. Ltd. on 15 May 2009 for an initial period of six years. Cameco has formed a 50/50 joint venture with Heavy Metal Resources Pty. Ltd. Cameco is the operator of project. The total area covered by the licence is 66.51km2. There had been no previous exploration on the project. The focus of Cameco's exploration strategy in Arnhem Land is the discovery of unconformity-related uranium deposits. The archetype unconformity-style uranium deposits are found in the Athabasca Basin of northern Saskatchewan, Canada. A detailed summary of these deposits can be found in Jefferson, et al. (2006). The prospective nature of the Alligator Rivers region is demonstrated by the presence of nearby economic deposits at Ranger, Jabiluka, Koongarra, Coronation Hill, and the now depleted Nabarlek Mine. The presence of gold, palladium and platinum in these deposits plus the economic gold-platinum resource at Coronation Hill in the South Alligator Valley, indicates an additional potential for this deposit style. These major deposits appear to have a common position relative to the base of the Kombolgie Subgroup i.e. the Palaeoproterozoic unconformity, or to its erosional margin, and serve here as exploration models. The Mount Howship project is considered to be prospective for uranium mineralisation based primarily upon the presence of an unconformity between metasedimentary packages (possibly Cahill Formation) and overlying Kombolgie Sandstone. Best uranium values in the 2011 surface sampling program were gained in fine grained sandstone. Four sandstone samples returned uranium values above 1ppm with the best being 4.8ppm and 4.38ppm. Two samples within quartz-muscovite schist returned uranium values of 2.35ppm and 1.8ppm and were located in the northern part of the east most NNW trending structure. All sampling completed was focused on the two main NNW trending features within the project area. Exploration activities carried out from 15 May 2011 to the anniversary date were carried out under the terms of consent documentation agreed with the Northern Land Council (NLC) pursuant to the Aboriginal Land Rights (Northern Territory) Act 1976. The field program for the third year of tenure consisted of on-ground rock chip sampling, mapping, and reconnaissance.