Annual Report - Nabarlek Project 2 September 2011 to 1 September 2012 EL 10176 and EL 24371

Abstract

The Nabarlek Project is a uranium exploration project covering exploration licences (ELs) 10176 and 24371 for a total area of 383.8km, the number of blocks are 125 and 11 respectively. Cameco Australia Pty Ltd (Cameco) was granted the tenements on 01 September 2004, which are located approximately 250km east of Darwin. In early December 2006, a Joint Venture agreement was signed between Cameco (60% share and operator of the project) and Uranium Equities Limited (40%) to conduct exploration for uranium on the Nabarlek Project. The project is now managed and operated by Cameco Australia Pty Ltd (Cameco) in joint venture (JV) with Uranium Equities Limited (UEL). This report details exploration work completed by the JV during the eighth year of tenure. The exploration objective of the project was to discover economic uranium mineralisation within a geological setting similar to the known deposits of the Alligator Rivers region of the Northern Territory, and the concealed high-grade deposits of the Athabasca region of Saskatchewan in Canada. The 2011 exploration program was presented to the Traditional Owners and Northern Land Council (NLC) at the Work Program Meeting held on 08 June 2011 at Oenpelli. Permission to conduct the program was given by the NLC on behalf of the Traditional Owners. The exploration program for 2011 included diamond drilling and a ground gravity survey. Drilling at the Coopers prospect investigated the nature of mineralisation, basement lithology and structures intercepted by 2010 reverse circulation drilling. The drilling program at the U40 prospect was designed to determine the size, geometry and controls of high grade mineralisation intercepted by 2010 RC and diamond drilling. No discrete single structure was mapped out by survey, but rather wider shear zone with dissected structure lineaments. 13 diamond drillholes, for a total of 1991.7m, were drilled. Two holes were drilled in Coopers and 11 holes were drilled in U40 prospect. One diamond drill hole at the Coopers prospect intersected dolerite hosted uranium mineralisation. Diamond drilling at the U40 prospect also encountered uranium mineralisation.