NABARLEK ML PROJECT (MLN962)
Annual Technical Report for the Period 23/03/13 – 22/03/14
Author: Grant Williamson Date: 12/05/2014
Title holder Queensland Mines Pty Ltd
Operator Uranium Equities Limited
Title/Tenement MLN962
Report Title Nabarlek ML Project (MLN962) Annual Technical Report for the Period 23/03/13 – 22/03/14
Personal Author Williamson, Grant
Corporate Author Uranium Equities Limited
Company Reference Nabarlek ML 2014 Annual Report
Target Commodity Uranium
Date of Report 12/05/2014
Datum/Zone GDA94/Zone 53
1:250,000 Map Sheet Alligator River (SD5301)
1:100,000 Map Sheet Oenpelli (5573)
Contact Details Uranium Equities Limited 22B Beulah Rd NORWOOD SA 5067
Phone 08 81100700 Fax 08 81100777
Email for Technical Details [email protected]
Email for Expenditure [email protected]
NABARLEK MIN ERAL LEASE, WEST ARNHEM LAND, NORTHERN TERRITORY
EXECUTIVE SUMMARY
Nabarlek Mineral Lease is located in the western portion of the Arnhem Land Aboriginal Reserve, 28km east of the Gunbalanya (Oenpelli) Aboriginal Community and approximately 300km east of Darwin.
The Mineral Lease (MLN962) contains the Nabarlek Uranium Mine which historically produced a total of 24.4 million pounds U3O8 at an average grade of 1.84% U3O8 (40.5 lb/tonne U3O8) between 1978 and 1988.
Uranium Equities Limited acquired the mineral lease with the purchase of Queensland Mines Pty Ltd in mid-2008. Uranium Equities Limited believes that the region provides outstanding potential to discover additional economic high grade uranium mineralisation in the immediate vicinity of the historical mine.
No field work was completed during the reporting period. Work completed was restricted to office based research and targeting, including;
• Submission to the NTGS of a ‘Bringing Forward Discovery’ collaborations co-funding drilling proposal
• 3D modelling of key target areas
Field based exploration is planned to continue in the 2014 field season with recommendations for further work including additional RC and diamond drilling programs at priority target areas on the Nabarlek ML.
COPYRIGHT STATEMENT
© Uranium Equities Limited 2014
This document and its contents are the copyright of Uranium Equities Limited. The document has been written by Uranium Equities Limited for submission to the Northern Territory Department of Mines and Energy as part of the tenement reporting requirements as per the Minerals Titles Act. Any information included in the report that originates from historical reports or other sources is listed in the “References” section at the end of the document. Uranium Equities Limited authorises the Department to copy and distribute the report and associated data as required.
CONTENTS
1. INTRODUCTION ...... 1 1.1 Location ...... 1 1.2 Tenement Status ...... 2 1.3 Aboriginal Heritage ...... 2 1.4 Access ...... 2
2. PROJECT GEOLOGY ...... 3 2.1 Conceptual Model ...... 3 2.2 Geological Setting ...... 4 2.3 Previous Investigations ...... 5
3. WORK COMPLETED BY UEL IN PREVIOUS YEARS ...... 6 3.1 2008 Field Season ...... 6 3.2 2009 Field Season ...... 6 3.3 2010 Field Season ...... 7 3.4 2011 Field Season ...... 8 3.5 2012 Field Season ...... 9
4. WORK COMPLETED DURING THE CURRENT REPORTING PERIOD ...... 9 4.1 Submission of Co-funding Proposal ...... 9 4.2 3D Modelling ...... 10
5. CONCLUSIONS AND RECOMENDATIONS ...... 11
6. REFERENCES ...... 11
LIST OF APPENDICES
Appendix I: Collaborations Submission Appendix II: 3D Modelling by Aurel Consulting
LIST OF FIGURES
Figure 1: Location Map ...... 1 Figure 2: Aerial View of Nabarlek ...... 3 Figure 3: Geological Framework of the Nabarlek Region ...... 4 Figure 4: Prospects and Anomalism at Nabarlek ...... 7 Figure 5: Nabarlek ML – Ground Gravity and 2011 Drilling ...... 8 Figure 6: Schematic Cross-section with Proposed Drilling ...... 10
LIST OF TABLES
Table 1: 2008 RC Drilling Intercepts ...... 6 Table 2: 2009 RC Drilling Intercepts ...... 6 Table 3: 2010 Aircore Intercepts ...... 7 Table 4: 2010 RC Drilling Intercepts ...... 7 Table 5: 2011 RC Drilling Intercepts ...... 8
1 INTRODUCTION
1.1 Location
The Nabarlek Mineral Lease is located in the western portion of the Arnhem Land Aboriginal Reserve, 28km east of the Gunbalanya (Oenpelli) Aboriginal Community and approximately 300km east of Darwin. It lies within the Alligator River (SD5301) 1:250,000 and the Oenpelli (5573) 1:100,000 Map Sheets.
The Mineral Lease (MLN962) contains the historical Nabarlek Uranium Mine which was discovered by Queensland Mines Pty Ltd (QMPL) in June 1970 via the follow-up of a prominent airborne radiometric anomaly in outcropping basement lithologies.
Nabarlek produced a total of 24.4 million pounds U3O8 at an average grade of 1.84% U3O8 (40.5 lb/tonne U3O8) between 1978 and 1988. Open cut mining was completed in 4 months and 11 days (one dry season), starting in June 1979 and finishing in October 1979. During this time 546,437t of ore grading 1.84% U3O8 and 157,000t of mineralised waste grading 0.05% U3O8 was stockpiled.
The processing mill at Nabarlek started operation in June 1980 and continued until 1988, by which time 11,084t U3O8 had been produced (Lally & Bajwah, 2006).
Figure 1: Location Map
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1.2 Tenement Status
Mineral Lease North 962 (MLN962) was initially granted on the 23rd March 1979 to QMPL (formerly Queensland Mines Limited).
Following the completion of mining operations, the Mineral Lease remained an asset of QMPL until the company was purchased by Uranium Equities Limited in 2008. The tenement is 1,278.9ha in area and is bounded b y exploration licence EL10176 held in a joint venture partnership between Uranium Equities Limited (40%) and Cameco Australia Pty Ltd (60%).
With Uranium Equities Limited assuming ownership and management of the Mineral Lease, an initial Mine Management Plan (MMP) was lodged in May 2008 covering the proposed exploration program and the outstanding legacy rehabilitation obligations. The MMP was approved by the regulatory authorities on 9th September 2008 and a bond lodged with the NT Government. The MMP Authorisation is renewed annually.
1.3 Aboriginal Heritage
The project area lies within the Arnhem Land Aboriginal Reserve and is therefore freehold Aboriginal Land. All personnel entering the project area are required to obtain the appropriate Northern Land Council (NLC) permit.
Permission to explore over Aboriginal Freehold land is gained via Exploration Agreements with the relevant Traditional Owners under the Commonwealth Aboriginal Land Rights (NT) Act.
QMPL had both an exploration agreement and a settlement deed with the NLC. QMPL was specifically given the right to undertake exploration on MLN962 pursuant to the Nabarlek Settlement Deed (clauses 3.4 and 3.5) and in accordance with the applicable provisions of the Exploration Agreement.
Upon purchase of the Mineral Lease, Uranium Equities Limited provided a verbal undertaking to the NLC to adhere to the requirements set out in the existing QMPL agreements and to also initiate discussions to re-negotiate the Exploration Agreement to be more in keeping with those for the surrounding Uranium Equities Limited-Cameco Joint Venture tenements.
Legislation requires that all sacred, cultural and heritage sites are initially documented by the Traditional Owners and NLC Anthropologists and Archaeologists prior to exploration commencing. This information is then utilised to determine ‘No-Go’ areas.
Prior to issuing the Nabarlek Mineral Lease to QMPL, six sites were identified and surveyed by the Northern Territory Lands Branch surveyors to obtain their protection under the legislation of the time. One of the surveyed sites, Gabo Djang or Green Ant site, is located immediately south-west of the Nabarlek Pit. QMPL retained confidential records of ten other sites in the vicinity and ensured that mine staff did not intrude on those areas. These areas remain ‘No-Go’ areas for Uranium Equities Limited personnel.
Uranium Equities Limited liaises with the Traditional Owners each year to discuss future exploration activities and have developed a strong professional relationship, which includes employment in exploration and rehabilitation activities.
1.4 Access
Access to the site is via the unsealed and seasonal Oenpelli – Maningrida road from Cahill’s Crossing at the East Alligator River to the ‘Three Ways’ intersection to the Coburg Peninsula. From there, access is via the old Nabarlek Mine access road to the Mineral Lease. There is good vehicular access throughout the Mineral Lease due to pre-existing mine infrastructure.
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Access to site is also possible using a light plane direct from Darwin, to land on the all- weather sealed airstrip at the Nabarlek Mineral Lease. Uranium Equities Limited has established a semi-permanent field camp adjacent to the airstrip (Figure 2).
Figure 2: Aerial View of Nabarlek
2 PROJECT GEOLOGY
2.1 Conceptual Model
The primary focus of exploration on the Nabarlek ML is for the discovery of a high grade Nabarlek-s t y l e uranium deposit. Nabarlek is an unconformity-associated uranium deposit whereby mineralisation is concentrated within structural zones, spatially associated with a regional unconformity between flat-lying siliciclastic basinal sediments and the underlying metamorphic basement rocks.
The highly prospective nature of the Alligator Rivers Region for this type of mineralisation is demonstrated by the presence of economic Uranium deposits not only at Nabarlek, but also at Ranger, Jabiluka and Koongarra.
In addition to Uranium, significant Gold, Platinum and Palladium resources are present at existing Uranium occurrences within the Alligator Rivers Uranium Field (Ranger, Jabiluka, Koongarra and Coronation Hill/South Alligator Valley-style deposits) suggesting that economic mineralisation of Gold and PGE’s (Platinum Group Elements) associated with economic or sub-economic Uranium may also be present within the project area.
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2.2 Geological Setting
The Nabarlek Mineral Lease is located within a small embayment on the northern edge of the Arnhem Land Plateau and comprises gently undulating terrain of red-yellow coloured lateritic soils and transported sands.
Outcrop within the Mineral Lease area is poor, with most of what is known of the geology having been derived from drilling within the Mineral Lease and mapping in the old open pit.
The oldest rocks are a sequence of Early-Proterozoic metamorphosed sediments (semi- pelites), schists and amphibolites termed the Myra Falls Metamorphics. This unit is considered to be stratigraphically equivalent to the Cahill Formation in the western part of the Alligator Rivers Uranium Field and forms the host lithologies of the Nabarlek Deposit.
Figure 3: Geological Framework of the Nabarlek Region
The Myra Falls Metamorphics are faulted against the Nabarlek Granite which has been intersected in two deep drillholes beneath the Nabarlek Deposit (Wilde and Wall, 1987). This granite also outcrops a few kilometres to the northeast of MLN962 on the adjacent exploration licence EL10176 (refer Figure 3).
Mid-Proterozoic, shallow-dipping Mamadawerre Sandstone (Kombolgie Formation) unconformably overlies the sequences described above, forming an extensive inaccessible plateau to the immediate north, west and south of the Mineral Lease (Figure 3).
Drilling in the pit environs has revealed that the Mamadawerre Sandstone forms extensive subcrop areas blanketing the basement geology. Between 10 and 50m of sandstone and basal conglomerate sequences occur beneath the current land surface in areas covered by soils and transported sands. These cover sequences (both transported and in situ) would effectively obscure mineralisation that may occur at the unconformity position or associated with a structural zone.
The metamorphic basement sequences in the Mineral Lease area have been intruded by the late stage Oenpelli Dolerite, which comprises a significant part of subcropping lithologies found immediately north of the open pit site. In the Ponds Prospect, the Oenpelli Dolerite forms a shallow southerly dipping 250m thick dolerite dyke that also forms the base of mineralisation in the Nabarlek Pit.
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Mineralisation at Nabarlek is believed to be at least partially controlled by the Nabarlek Shear Zone, which forms a NW–SE trending structure through the Mineral Lease. The Nabarlek Shear Zone may provide the important favourable structural focus for mineralisation.
Recent drilling has revealed that the dolerite may also intrude through the overlying Mamadawerre Sandstone sequence and has been found to sill along the regional unconformity between basement sequences and the overlying Mamadawerre Sandstone.
Like the surficial transported sediments and subcropping Mamadawerre Sandstone, the dolerite has the potential to mask the surface expression of any additional mineralisation and structural zones.
2.3 Previous Investigations
Queensland Mines Limited discovered surficial uranium mineralisation in the Nabarlek region in June 1970 from following up of an intense airborne radiometric anomaly.
Initial exploration work included trenching, mapping, scintillometer surveys and rock chip sampling. The program quickly moved to exploration and resource drilling, which was completed in December 1971. The majority of this drilling concentrated on delineating the Nabarlek orebody with only minimal exploration work conducted on the remainder of the Mineral Lease.
Following government approvals, the Nabarlek Mine was operated by Queensland Mines Limited from 1978 until 1988. Mining was conducted in one campaign of 143 days duration in the dry season and the ore was stockpiled on a custom built impermeable pad. The mill was built through the following wet season and milling of the stockpiled ore commenced in 1980. A total of 606,700t of ore was milled to produce 11,084t of U3O8. During this process 2.3Mt of waste rock material was temporarily stockpiled and 595,900t of tailings material was deposited in the mined out pit.
No exploration activities occurred within the Mineral Lease during the period of 1973 to 1981. Exploration work did resume in 1981, with geochemical soil and track etch radon surveys conducted over parts of the Mineral Lease. Drilling was conducted from 1983 to 1984 targeting eight anomalous zones identified from the surveys.
No further exploration work on MLN962 was conducted until 1994, when Afmeco Mining and Exploration Pty Ltd (AFMEX) conducted a program of percussion drilling with diamond tails around the margins of the Mineral Lease.
Following this program, there has been no additional work carried out on MLN962 prior to Uranium Equities Limited involvement in 2008. However a number of airborne surveys have been conducted over the Mineral Lease as part of wider regional surveys conducted by Cameco Australia Pty Limited, including radiometrics, magnetics, hyperspectral and electromagnetic (GEOTEM/TEMPEST) surveys.
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3 WORK COMPLETED BY UEL IN PREVIOUS YEARS
3.1 2008 Field Season
Uranium Equities began exploring MLN962 in 2008. The work program completed during the first year consisted predominantly of an extensive process of compiling and validating available datasets for the project area with field operations consisting of limited reverse circulation (RC) and aircore drilling campaigns.
Drilling operations were restricted to disturbed areas within the Nabarlek mine/mill perimeter fence. RC drilling focused on the Nabarlek Pit environs, while aircore drilling tested strike extensions of the Nabarlek Shear.
Significant results were received from the on-site XRF analytical work. Using a 200ppm U3O8 cut-off, better intercepts are presented below in Table 1.
Drillhole MGA_N MGA_E A z i Dec TD Intercept (XRF Results)
NMLR015 8638743 317399 225 -60 115 1m @ 588ppm U3O8 from 37m
17m @ 799ppm U3O8 from 65m NMLR026 8638256 317847 225 -60 150 (inc. 7m @ 1444ppm U3O8 from 68m)
NMLR027 8638308 317803 225 -60 126 1m @ 451ppm U3O8 from 72m
Table 1: 2008 RC Drilling Intercepts
Further details and discussion on the exploration program can be found in the Annual Technical Report (Williamson 2009).
3.2 2009 Field Season
In June 2009, Uranium Equities commissioned a 797 station gravity survey. The survey was aimed at identifying potentially mineralised structures underneath the cover sediments, particularly associated with offsets of the Nabarlek Shear.
A radon survey was carried out in October 2009. The purpose of the survey was to determine the effectiveness of the technique over the known Nabarlek mineralisation and to try to identify hidden targets beneath cover sequences elsewhere within the Mineral Lease.
The 2009 RC drilling program focused around the historical Nabarlek pit and the north- western edge of the lease. Significant results were received from the on-site XRF analytical work. Using a 200ppm U3O8 cut-off, better intercepts are presented below in Table 2.
Drillhole MGA_E MGA_N A z i Dec TD Intercept (XRF Results)
NMLR031 317890 8638245 225 -60 202 2m @ 200ppm U3O8 from 102m
NMLR034 317736 8638331 225 -60 170 1m @ 591ppm U3O8 from 50m
NMLR034 317736 8638331 225 -60 170 2m @ 621ppm U3O8 from 72m
NMLR035 317803 8638385 225 -60 160 3m @ 485ppm U3O8 from 118m
NMLR036 317841 8638426 225 -60 208 2m @ 348ppm U3O8 from 44m
NMLR063 317750 8638813 135 -60 94 2m @ 226ppm U3O8 from 0m
Table 2: 2009 RC Drilling Intercepts
Further details and discussion on the exploration program can be found in the Annual Technical Report (Bennett and Williamson 2010).
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3.3 2010 Field Season
An extensive aircore program was designed and implemented to broadly cover the mineral lease to delineate areas of near surface anomalism. Based on the aircore drilling three areas were then followed up with RC drilling.
The combination of aircore and RC drilling highlighted the Boomerang, Bullroarer and Clapstick Prospects (Figure 4). Best intercepts are provided below in Tables 3 and 4 for the aircore and RC drilling respectively.
Figure 4: Prospects and Anomalism at Nabarlek
Drillhole MGA_E MGA_N A z i Dec TD Intercept (XRF Results)
NMLA098 318595 8641643 0 -90 16 10m @ 120ppm U3O8 from 3m
9m @ 400ppm U3O8 from 5m NMLA320 318984 8641461 0 -90 18 (inc.1m @ 1580ppm U3O8 from 12m)
Table 3: 2010 Aircore Drilling Intercepts
Drillhole MGA_E MGA_N A z i Dec TD Intercept (XRF Results)
2m @ 1465ppm U3O8 from 55m NMLR106 317391 8641002 221 -60 100 1m @ 230ppm U3O8 from 60m
NMLR113 319328 8639773 176 -60 120 4m @ 324ppm U3O8 from 60m
11m @ 1138ppm U3O8 from 21m NMLR115 319134 8639815 176 -60 136 12m @ 791ppm U3O8 from 46m (inc. 8m @ 1014ppm U3O8 from 46m)
Table 4: 2010 RC Drilling Intercepts
Further details and discussion on the exploration program can be found in the Annual Technical Report (Reed and Bradley 2011).
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3.4 2011 Field Season
The main focus for exploration work in 2011 was the Bullroarer, Clapstick and Boomerang Prospects. The RC drilling program undertaken in July 2011 was designed to extend the drill coverage over the Nabarlek - Boomerang Structural Corridor (Figure 4) and to further test the basement anomaly within the Boomerang Prospect. A total of 47 RC drillholes was drilled for 4,935 metres.
Drilling within the Nabarlek - Boomerang Structural Corridor highlighted areas of strong hematite alteration, brecciation and quartz veining. This confirmed that there are complex structures in the area and that they are associated with strong alteration. Anomalous uranium values were also encountered within the Boomerang Prospect extending the known mineralisation. Table 5 shows significant RC results.
Drillhole MGA_E MGA_N A z i Dec TD Intercept (NTEL Lab Results)
3m @ 824ppm U3O8 from 97m NMLR162 317291 8640829 - -90 154 2m @ 540ppm U3O8 from 116m 5m @ 1610ppm U3O8 from 121m
5m @ 632ppm U3O8 from 104m 5m @ 554ppm U3O8 from 113m N M L R 1 73 317256 8640935 - -90 244 4m @ 371ppm U3O8 from 156m 4m @ 352ppm U3O8 from 192m
Table 5: 2011 RC Drilling Intercepts
A detailed ground gravity survey over the north western parts of the Nabarlek Mineral Lease was undertaken by Geophysical consultants Atlas Geophysics Pty Ltd in September 2011 with a total of 1,637 gravity stations collected on a 50 x 50m grid pattern. The survey was designed to focus on areas with thin Kombolgie Sandstone cover sequences in the attempt to define basement structures (Figure 5).
Figure 5: Nabarlek ML – Ground Gravity and 2011 Drilling
Further details and discussion can be found in the Annual Technical Report (Reed 2012).
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3.5 2012 Field Season
No field work was completed during the current reporting period. Work completed was restricted to office based research and targeting, including;
• Reprocessing and interpretation of recently acquired geophysical datasets to assist with the structural interpretation of the Nabarlek ML;
• Re-logging of all RC drill chips; and
• On-going review of historical geological and geophysical data to generate potential exploration targets.
Further details and discussion on the exploration program can be found in the Annual Technical Report (Williamson 2013).
4 WORK COMPLETED DURING THE CURRENT REPORTING PERIOD
No field work was completed during the current reporting period. Work completed was restricted to office based research and targeting, including;
• Submission to the NTGS of a ‘Bringing Forward Discovery’ collaborations co-funding drilling proposal
• 3D modelling of key target areas
4.1 Submission of Co-funding Proposal
The Company submitted a co-funding drilling proposal, as part of the NTGS ‘Bringing Forward Discovery’ collaborations program. The proposal was to target the Nabarlek Deeps concept.
The Nabarlek Deposit is hosted within the Nabarlek Shear that is terminated by the intrusion of the Oenpelli Dolerite. This target assumes the Nabarlek Shear continues deeper into the basement sequences, with the potential for more mineralisation on this structure below the dolerite (Ranger 3 Deeps-type target).
The proposal is to test beneath the dolerite with deep angled diamond drillholes (with RC precollars), assuming the Nabarlek Shear has been displaced or offset by the dolerite. If there has been an offset, the historical deep drillholes would not have intersected the extension of the Nabarlek mineralised system (Figure 6).
A copy of the submission is included as Appendix I.
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Figure 6 – Schematic Cross-section with Proposed Drilling
4.2 3D Modelling
Aurel Consulting was commissioned with constructing 3D models of key target areas in the Nabarlek region.
A completion report has been received which includes 3D models of the Nabarlek ML area including SMLB, Coopers, Coopers South and N147 Prospects areas. In addition, the report also discusses limitations to the study and future work required to upgrade the model and to improve targeting opportunities. Appendix II contains the Aurel Consulting report. Comments include;
Nabarlek Trend
• The modelling work has successfully modelled the geometry of the Oenpelli Dolerite and the Kombolgie – basement unconformity, across the Nabarlek ML and immediate extensions. These models can be used for geometric analysis of targets for extending the SMLB mineralisation and targeting the Nabarlek Deeps potential.
• The SMLB and Nabarlek structures have different orientation and dip and are likely to be different structures. The intersection area of the two faults may a good place to investigate further, as both deposits are related to known mineralisation.
• For the Nabarlek Deeps targeting, Aurel notes that the down-dip distance between NAD0083 and NAD0098 is about 193m, and the down-dip extent of the Nabarlek orebody is about 60m. Therefore, these two holes cannot be assumed to sterilise the area, with being enough space to fit three Nabarlek-sized orebodies between the two drill holes.
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5. CONCLUSIONS AND RECOMMENDATIONS
While the company did not complete any field operations during the 2013 dry season, the work program undertaken was planned to further examine the extensive geological and geophysical data already available from the Project area. In addition, new detailed 3D modelling has provided a greater understanding of key target areas within and around the Nabarlek ML.
Field based exploration is planned to continue in the 2014 field season with recommendations for further work including additional RC and diamond drilling programs at priority target areas such as the Boomerang West, Gateway and Nabarlek Deeps Prospects. A proposed exploration plan has been developed with the aim of advancing drill ready exploration targets.
In addition, the Company plans to test more grassroots targets with the view of providing further drill targets for the 2015 field season. The Company believes that with a sustained exploration effort in the region will outline additional resources.
6. REFERENCES
Bennett, A and Williamson, G, 2010: Nabarlek ML Project (MLN962), Annual Technical Report for the Period 23/03/09 – 22/03/10
Lally, JH and Bajwah, ZU, 2006: Uranium Deposits of the Northern Territory. Northern Territory Geological Survey, Report 20
Reed B, 2012: Nabarlek ML Project (MLN962), Annual Technical Report for the Period 23/03/11 – 22/03/12
Reed B and Bradley, F, 2011: Nabarlek ML Project (MLN962), Annual Technical Report for the Period 23/03/10 – 22/03/11
Wilde, AR and Wall, VJ, 1987: Geology of the Nabarlek Uranium Deposit, Northern Territory, Australia. Economic Geology 82, 1152 – 1168
Williamson, G, 2009: Nabarlek ML Project (MLN962), Annual Technical Report for the Period 23/03/08 – 22/03/09
Williamson, G, 2013: Nabarlek ML Project (MLN962), Annual Technical Report for the Period 23/03/12 – 22/03/13
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APPENDIX I
Collaborations Proposal
2013
NABARLEK ML PROJECT
BRINGING FORWARD DISCOVERY DRILLING SUBMISSION
Nabarlek ML Project Bringing Forward Discovery Drilling Submission – April 2013
Contents
EXECUTIVE SUMMARY ...... 1 1. INTRODUCTION ...... 2 1.1 Tenement Status...... 3 1.2 Aboriginal Heritage...... 3 1.3 Access...... 4 2. GEOLOGICAL OVERVIEW ...... 5 3. PROJECT GEOLOGY ...... 6 3.1 Uranium Mineralisation...... 8 4. HISTORICAL EXPLORATION...... 9 5. EXPLORATION CONDUCTED BY URANIUM EQUITIES LIMITED...... 10 6. EXPLORATION CONCEPT – NABARLEK DEEPS...... 11 7. PROPOSED BRINGING FORWARD DISCOVERY DRILLING PROGRAM...... 15 8. ESTIMATED COSTS AND TIMEFRAMES...... 17 9. CORPORATE POSITION...... 18 10. CONCLUSION...... 21 11. REFERENCES...... 22
Nabarlek ML Project Bringing Forward Discovery Drilling Submission – April 2013 Page 2
EXECUTIVE SUMMARY
Uranium Equities Limited is seeking collaborative funding as part of the NT Government’s ‘Bringing Forward Discovery’ Program for a deep diamond drilling program at our Nabarlek Project. The program will involve completing three drillholes for a total of up to 1350m. Funding requested from ‘Bringing Forward Discovery’ Drilling is $100,000, which will be approximately 35% of direct drilling costs.
This proposal was previously approved for co-funding during the 2012 round of collaborations funding. However due to on-going corporate negotiations with Cameco Australia Pty Ltd regarding exploration licences comprising the surrounding West Arnhem Joint Venture, the work was not able to proceed as planned prior to the commencement of the ‘Wet’. Subsequently, the Company is re-submitting this drilling proposal.
In September 2012, Uranium Equities announced that is set to launch a new phase of uranium exploration within the highly prospective ground package surrounding the historic Nabarlek Uranium Mine after reaching agreement to acquire 100% ownership of the tenements from Cameco. The agreement consolidated Uranium Equities long-held desire to consolidate ownership and management of the tenements surrounding the historic Nabarlek Uranium Deposit. This consolidation, together with the Company’s existing presence in the Arnhem Land region gives Uranium Equities a renewed focus in the region.
This drill proposal relates to a new exploration model based on recent exploration success at the Ranger Mine and the discovery of the Ranger 3 Deeps mineralisation. That is, there is a realisation that there is a strong structural control on mineralisation, possibly independent of the regional unconformity position which has been the primary exploration target to date.
The Nabarlek Deeps concept is to test beneath a barren dolerite sill with deep angled diamond drillholes, assuming the mineralised Nabarlek Shear has been displaced and is obscured by the intrusion of the Oenpelli Dolerite. Due to this offset, the historical deep drillholes completed in the Nabarlek Pit environs would not have intersected the extension of the Nabarlek mineralised system.
Nabarlek ML Project Bringing Forward Discovery Drilling Submission – April 2013 Page 3
1. INTRODUCTION
The Nabarlek Mineral Lease is located in the western portion of the Arnhem Land Aboriginal Reserve, 28km east of the Gunbalanya (Oenpelli) Aboriginal Community and approximately 300km east of Darwin (Figure 1). The mine lease contains the historical Nabarlek Uranium Mine, which produced a total of 24.4 million pounds U3O8 at an average grade of 1.84% U3O8 between 1978 and 1988.
Figure 1: Location of Nabarlek ML
Nabarlek ML Project Bringing Forward Discovery Drilling Submission – April 2013 Page 4
Uranium Equities Limited (UEL) believes there is outstanding potential to discover additional economic high grade (>1%) Nabarlek-style uranium mineralisation in the immediate vicinity of the historical mine and has been actively exploring the ML since 2008. Exploration activities conducted by UEL include; 204 RC drillholes for 21,413m 389 aircore drillholes for 6487m radon cup and ground gravity survey
This submission relates to a proposed deep diamond drilling program to test for a structural repetition of Nabarlek mineralisation beneath the Oenpelli Dolerite lopolith.
1.1 Tenement Status
Mineral Lease North 962 (MLN962) was granted on the 23 March 1979 to Queensland Mines Pty Ltd (QMPL), which through a number of company mergers and acquisitions became a subsidiary of multinational Hanson PLC. Uranium Equities Limited purchased Queensland Mines Pty Ltd in 2008.
With Uranium Equities Limited assuming management of the Mineral Lease, a Mine Management Plan was lodged in May 2008 covering the proposed exploration program and the outstanding legacy rehabilitation obligations. The MMP was approved by the regulatory authorities on 9th September 2008 (Authorisation 0435-01) and has been subsequently renewed every year (current approval attached as Appendix I). A renewal to replace the current authorisation was submitted in March 2013 and is expected to be approved before the start of the field season.
1.2 Aboriginal Heritage
The project area lies within the Arnhem Land Aboriginal Reserve and is therefore freehold Aboriginal Land. Permission to explore over Aboriginal Freehold land is gained via Exploration Agreements with the relevant Traditional owners under the Commonwealth Aboriginal Land Rights (NT) Act. All personnel entering the project area is required to obtain the appropriate Northern Land Council (NLC) permit.
Nabarlek ML Project Bringing Forward Discovery Drilling Submission – April 2013 Page 5
QMPL had both an exploration agreement and a settlement deed with the NLC. QMPL was specifically given the right to undertake exploration on MLN962 pursuant to the Nabarlek Settlement Deed (clauses 3.4 and 3.5) and in accordance with the applicable provisions of the Exploration Agreement. In addition, upon purchase of the Mineral Lease, Uranium Equities Limited gave an undertaking to the NLC to adhere to the requirements set out in the existing agreements.
Work program meetings between the company, Traditional Owners and the NLC to approve the exploration and rehabilitation programs have occurred at the start of every field season since 2008. A Work Program Meeting for the 2013 field season is planned for May 2013.
1.3 Access
Access to the site is by the seasonally open dirt Oenpelli – Maningrida road from Cahill’s Crossing at the East Alligator River to the ‘three ways’ intersection to the Coburg Peninsula. From there, access is via the old Nabarlek Mine access road to the lease area. There is good vehicular access throughout the Mineral Lease by way of existing tracks due to the old mine infrastructure.
Figure 2: Nabarlek Mine Lease infrastructure and existing ‘No-Go’ areas
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Access to site is also possible using a light plane direct from Darwin, to land on the all-weather sealed airstrip at the Nabarlek Mine Site. Uranium Equities Limited has established a semi- permanent 12-man field camp adjacent to the airstrip. Transportable office, accommodation, kitchen and ablution blocks have been installed, serviced by both power and water (Figure 3).
Figure 3: Aerial View of Nabarlek Airstrip and UEL Camp
2. GEOLOGICAL OVERVIEW
The focus of exploration on the Nabarlek Mineral Lease project area is the discovery of additional high grade Nabarlek-style uranium deposits. The Nabarlek Mine is one of the world-class uranium deposits of the Alligator Rivers Uranium Field (ARUF) with other similar deposits including Ranger, Jabiluka and Koongarra. These uranium deposits represent the most important type of uranium resource in the Northern Territory.
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The deposits occur within Palaeoproterozoic basement rocks of the Pine Creek Orogen, within fracture/fault and breccia zones (containing variable amounts of graphite) in proximity to unconformable contacts with overlying platform cover sedimentary rocks.
The prevailing theory on uranium mineralisation for these deposits is the diagenetic – hydrothermal model (Hoeve & Sibbald, 1978) based on observations from the classic unconformity-style uranium deposits from the Athabasca Basin, Canada.
These deposits are characterised by uranium being scavenged from the overlying sedimentary pile and involves an influx of oxygenated fluids bearing uranyl complexes into underlying metasediments. These fluids then decomplex and precipitate uranium upon contact with a reducing environment in the basement lithologies. Structural controls such as shears, faults and breccias have been recognised as a major factor in formation of uranium ore bodies (Johnston 1984).
Work over the past 20 years in the ARUF on unconformity-style deposits assuming this digenetic hydrothermal model has limited the scope for alternative models and interpretations and their application to exploration.
While consideration of the unconformity-style model is important, a strong structural component to mineralisation in the ARUF has now become more apparent.
3. PROJECT GEOLOGY
The Nabarlek Mineral Lease is located within a small embayment in the northern edge of the Arnhem Land Plateau. Outcrop within the Mineral Lease is poor, with most of what is known of the geology derived from drill programs and historical pit mapping.
The oldest rocks are the Myra Falls Metamorphics, a sequence of Early-Proterozoic metamorphosed sediments (semi-pelites), schists and amphibolites. This unit was the host rock to the Nabarlek Deposit.
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Myra Falls Metamorphics are faulted against the Nabarlek Granite, which has been intersected in two deep diamond drillholes beneath the Nabarlek Deposit. This granite also outcrops a few kilometres to the northeast of MLN962 on the adjacent exploration licence (Figure 4).
Mid-Proterozoic, shallow-dipping sandstone (Kombolgie Formation) unconformably overlies the sequences described above, forming an extensive inaccessible plateau to the immediate north, west and south of the Mineral Lease.
Figure 4: Summarised Geology Plan of the Nabarlek ML
Historical drilling around the pit shows that the sandstone forms extensive subcrop blanketing the basement geology. Between 10 and 150m of sandstone and basal conglomerate sequences occur beneath the current land surface, now covered by soils and transported sands. Such cover sequences (both transported and in situ) would effectively obscure radiometric response from uranium mineralisation that may occur at the unconformity position and/or associated with a structural zone.
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The basement sequences in the Mineral Lease have been intruded by the lopolithic late stage Oenpelli Dolerite, which comprises a significant part of subcropping lithologies found immediately north of the open pit site. The dolerite is up to 250m thick and underlies the base of the Nabarlek Pit (Figure 5).
Figure 5: Nabarlek ML Longsection with Known Uranium Mineralisation
3.1 Uranium Mineralisation
The Nabarlek Deposit was associated with the north-northwest trending Nabarlek Shear Zone within variably altered Myra Falls Metamorphics (chlorite – muscovite – biotite – sericite schists). Graphite and/or carbonaceous schists are not present in the mine sequence at Nabarlek.
The orebody was 230m in length with an average thickness of 10m. The bulk of the ore is within 45 vertical metres of the surface with extensions to vertical depths of 85 metres at the southern end of the ore zone (Anthony 1975). The orebody is underlain by the intruded Oenpelli Dolerite which possibly terminates the continuation of the orebody at this location (Figure 6).
This mineralisation is partially open along strike within the Nabarlek Structure and it is known that ore grades in pit can change significantly over very short distances.
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Mineralisation is inferred to be within 50 metres of the unconformity between the Myra Fall Metamorphics and the overlying Kombolgie Formation, prior to the erosional stripping of the sandstone cover (Wilde and Noakes, 1990).
Figure 6: Cross-section though Nabarlek Orebody
4. HISTORICAL EXPLORATION
Nabarlek was discovered by QMPL in June 1970 via follow up of a prominent airborne radiometric anomaly. Drilling on the project to delineate the Nabarlek Deposit was completed during the 1970 and 1971 field seasons. Very little effective exploration work was done in the area immediately surrounding deposit.
Open cut mining started in June 1979 and was completed in 4 months and 11 days. During this time 546,437t of ore grading 1.84% U3O8 and 157,000t of below grade ore of 0.05% U3O8 was stockpiled. The processing mill at Nabarlek started operation in June 1980 and continued until
1988, by which time 11,084t U3O8 was produced (Lally and Bajwah, 2006)
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No exploration activities occurred during the period of 1973 to 1981, after which geochemical soil and track etch radon surveys were conducted over parts of the Mineral Lease. Drilling was initiated from 1983 to 1984 to target 8 anomalous zones identified from the surveys.
No further exploration work in MLN962 was conducted until 1994, when Afmeco Mining and Exploration Pty Ltd (AFMEX) conducted a program of percussion drilling with diamond tails around the margins of the Mineral Lease. No further drilling or geological sampling has been carried out prior to Uranium Equities Limited acquiring the project in 2008.
5. EXPLORATION CONDUCTED BY URANIUM EQUITIES LIMITED
Uranium Equities Limited (UEL) believes there is outstanding potential to discover additional economic high grade (>1%) Nabarlek-style uranium mineralisation in the immediate vicinity of the historical mine and has been actively exploring the ML since 2008. Exploration activities conducted by UEL include; 204 RC drillholes for 21,413m 389 aircore drillholes for 6,487m radon cup and ground gravity survey
There are a number of exploration concepts that have driven exploration on the Nabarlek ML since UEL commenced investigations in 2008. These models include;
Searching for the ‘traditional’ unconformity-style type mineralisation at or near the regional unconformity. Basement mineralisation can be obscured by surface alluvium, soil or Mamadawerre (Kombolgie) Sandstone cover.
Near pit structural offsets/displacements
Later stage remobilisation of uranium mineralisation along the dolerite - basement contact.
The realisation that there is a strong structural control on uranium mineralisation in the region where mineralisation may form elsewhere along the structure, possibly at depth and unrelated to the unconformity.
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Work programs completed by Uranium Equities Limited to date have focussed on the first three exploration models and have produced encouraging exploration results from a number of new prospect areas within the Nabarlek ML (Figure 7). This drilling submission is focussed on the fourth exploration concept and has yet to be tested.
Figure 7: Nabarlek ML Drilling Prospect Map
6. EXPLORATION CONCEPT – NABARLEK DEEPS
This proposal relates to a new exploration model based on recent work conducted at the Ranger Mine and the discovery and ongoing exploration success of the Ranger 3 Deeps mineralisation. It has become apparent that there is a strong structural control on mineralisation, possibly independent of the ‘traditional’ unconformity-style target.
At the Ranger Mine it has been found that reverse faults mapped in the pit can be matched to roughly linear zones of higher grade mineralisation, defined by grade control drilling data. These reverse faults can be traced into a distinct lithological contact which is the principle structure in a
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west directed thrust system. Changes in the geometry of the contact, due to pre-mineralisation folding, faulting and carbonate dissolution, controlled the fracturing of the sequence and focused mineralising fluids to form the orebody.
Exploration at Ranger since 2008 has discovered a significant extension to mineralisation at depth beneath the Ranger Pit (Figure 8), with the exploration potential believed to be in the range of
30,000 – 40,000 tonnes of contained U3O8. The target has a strike length of approximately 1.2km and has been intersected by numerous diamond drill holes at depths between 250 metres and 500 metres from the surface.
On 4th August 2011, ERA announced that the ERA Board had approved the construction of the Ranger 3 Deeps exploration decline with all necessary regulatory approvals having been received (ERA ASX announcement – 25th August 2011). The exploration decline will allow ERA to conduct close spaced underground exploration drilling and explore areas adjacent to the Ranger 3 Deeps resource.
In May 2012, ERA announced that work on the exploration decline had commenced, with contractor Macmahon Holdings Limited to construct the 2.2 km decline to a depth of ~400 metres (ERA ASX announcement – 1st May 2012).
The current Ranger 3 Deeps Mineral Resource contains an estimated 34,000 tonnes of U3O8
(10 million tonnes @ 0.34% U3O8 with a cut-off grade of 0.15% U3O8). (ERA ASX announcement – 25th August 2011):
Tonnes Uranium Oxide Category Grade (million tonnes) (tonnes) Indicated 9.2 0.34% 31,000
Inferred 0.8 0.37% 3,000
Total 10.0 0.34% 34,000
The work has highlighted the value of additional exploration drilling testing the down dip extensions of known mineralisation at Nabarlek. This discovery of significant mineralisation at depth at Ranger provides an additional target for Nabarlek where structurally related depth extensions of mineralisation have yet to be tested due to the masking effect of the Oenpelli Dolerite intrusion (Figure 8).
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A strong structural control on known mineralisation has been observed at Nabarlek with individual reverse faults defined by breccia zones up to 15m wide, intense veining and hydraulic fracture zones.
Figure 8: Schematic Cross-sections Ranger 3 Deeps (Top) and Nabarlek Deeps (Bottom)
The Nabarlek orebody originally lay within and around a fault breccia and consisted of a high grade core (>1% U3O8) in the breccia zone within an envelope of low grade ore (0.15% U3O8). These zones lie within the Nabarlek Shear Zone a north-northwesterly trending structural corridor.
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It is important that structural zones identified during the course of exploration should be examined not only at shallow depths where they intersect the unconformity position but should also be traced along strike and at depth.
There are three deep diamond drillholes on the Nabarlek ML, of which two (NAD083 and NAD098) are located adjacent to the Nabarlek Pit. These have partially has tested the entire sequence beneath the dolerite (Figure 8). Drillhole NAD083 finishes in the Nabarlek Granite at a depth of nearly 500m with no significant mineralisation encountered.
When planning these drillholes, QMPL geologists would have made a number of assumptions.
Firstly, it was assumed that the mineralised Nabarlek Structure extends directly through the dolerite. A review of the core from NAD083, which is still available for review at the NTGS Core Facility in Winnellie, did not reveal any major structural zone intersected by the drillhole.
The second assumption is that the intrusion of the dolerite when forcing both the upper and lower parts of the Myra Metamorphics apart did so in a regular manner. It does not take into account the possibility of significant horizontal, vertical and/or oblique displacement (or rafting of the upper basement block) related to the intrusion of the Oenpelli Dolerite. Any such offset suggests the area beneath the dolerite may never have been adequately tested.
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7. PROPOSED BRINGING FORWARD DISCOVERY DRILLING PROGRAM
This proposal is to test beneath the dolerite with deep angled diamond drillholes, assuming the Nabarlek Shear has been displaced or offset by the dolerite. If there has been an offset, the historical deep drillholes would not have intersected the extension of the Nabarlek mineralised system (Figure 9). Angled drilling will allow good coverage of the projected sequence.
Figure 9: Schematic Cross-section with Proposed Drilling Targeting Offset Mineralisation
The westerly drillhole will be completed first and is planned to be drilled to a total depth of 450m. Two further follow-up drillholes are planned (for a total program of 1350m) with planned total depths of these subsequent drillholes possibly varied due to the geology, alteration or structural zones encountered.
In addition, to guarantee the likelihood of intersecting at least one major structure in the area, the drillholes will be planned to target known structures identified during recent exploration in the northern half of the Nabarlek Mineral Lease, where these structures are projected to extend beneath the Oenpelli Dolerite lopolith.
The primary structure to be targeted in this way is the SMLB Structure (refer Figure 7). The SMLB Structure is known to be mineralised at the SMLB Prospect which lies immediately north of the Mineral Lease. While known mineralisation at the SMLB Prospect is currently sub-economic, the argument is that while geological conditions are suitable to produce mineralisation at the SMLB
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Prospect, geological conditions near the historical Nabarlek Pit may in fact, produce a better geological environment for the deposition of significant economic mineralisation.
Three diamond drillholes for approximately 1350 metres of NQ diamond drilling will be required in this first pass program to test the Nabarlek Deeps concept. Subject to field verification, the proposed collar locations are listed in Table 1 and shown in Figure 10.
Easting Northing Planned Total Hole ID Azimuth Dec GDA94 Z53 GDA94 Z53 Depth
Nab Deeps 01 317830 8638870 225 -60 450m
Nab Deeps 02 318050 8639080 225 -60 450m
Nab Deeps 03 318270 8639290 225 -60 450m
Total 1350m
Table 1: Planned Drill Collars
All drillholes will be geologically logged and photographed. A downhole gamma tool will be run on completion of each hole and non-destructive sampling with a handheld Niton XRF instrument is proposed. All techniques will assist in the identification of zones of interest, which will then be cut and sent for laboratory analysis.
Independent assaying will likely be done at NTEL in Darwin using ICPMS, including elements Ag, As, Bi, Co, Cu, Ni, Pb, Th, U and Zn, with additional fire assay analysis of Au, Pd and Pt. The quoted accuracy on ICPMS uranium assay is +/- 10% with a 5ppm detection limit. Uranium Equities also has high and low grade standard samples which it uses for assay quality control, and will insert field duplicates to monitor sampling quality.
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Figure 10: Planned Drill Collars
8. ESTIMATE COSTS AND TIMEFRAMES
Field personnel will be based at Uranium Equities’ field camp at Nabarlek and consist of an onsite geologist, two field assistants (including at least one traditional owner) and a four man drill crew. The program is currently scheduled for August 2013.
The drilling program outlined in the preceding sections is estimated to cost a total of $389,000. According to the eligibility criteria, approximately $259,000 of the total is considered claimable if this submission is successful. Uranium Equities is therefore applying for a NT Government co-contribution under this scheme for the maximum amount of $100,000. A breakdown of the major anticipated costs is shown in Table 2.
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Claimable Costs Drilling - Metres $220,000 Drilling - Consumables $22,000 Downhole gamma $12,000 Geology supplies $5,000 TOTAL $259,000 Non Claimable Costs Drilling - Inactive $30,000 Mob/Demob $20,000 Field supplies $10,000 Assays $10,000 Site Preparation $5,000 Field personnel $20,000 Core cutting $3,000 Fuel $25,000 Travel $5,000 Freight $2,000 TOTAL $130,000 Summary GRAND TOTAL $389,000 Co-contribution $100,000 Cost to UEQ $289,000
Table 2: Proposed Budget
9. CORPORATE POSITION
Uranium Equities has both the capabilities and the financial and technical strengths to carry out the work plans presented in this submission and to the highest standards. Uranium Equities was formed in May 2006 with most of the principals and technical staff are not new to the uranium industry and possess significant collective experience within the sector.
Financial Capability
Uranium Equities Limited is an ASX-listed uranium exploration and development company with access to capital and equity markets to provide funding for ongoing activities. The company is focussing on two main areas of activity:
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Exploration in the Alligator Rivers Region; and
Development of the PhosEnergy Process, a breakthrough technology for the removal of uranium from phosphoric acid produced in the phosphate fertilizer industry.
The company has an Australia-wide exploration portfolio however the primary exploration focus continues to be the Alligator Rivers Region in Arnhem Land, including:
The Nabarlek Mineral Lease North (MLN 962) where a substantial exploration program is planned to continue during the 2013 field season. Work on the lease includes the on-going environmental and rehabilitation liability on the Lease; and
A significant Joint Venture with Cameco Australia surrounding the historic Nabarlek Deposit (EL10176, EL24371 and EL23700). Uranium Equities has recently negotiated the right to earn 100% of this joint venture area, achieving a long-held desire to consolidate ownership of the exploration rights in this region.
Uranium Equities has demonstrated its commitment to exploration in the Northern Territory, predominantly in the Alligator Rivers Region. To date the Company, not including contributions of JV partners, has spent over $15 million on uranium exploration and rehabilitation in West Arnhem Land. Planned exploration activities, which could easily see this number double in the next 5 years. Table 3 revealing the current landholding with uranium being the dominant target commodity.
The company is well positioned to carry out the proposed program. A large portion of Uranium Equities exploration and technical development costs are funded through joint venture activities leaving the company significant scope to expand its base of projects. In addition, the company has recently consolidated its ground position throughout Australia to allow exploration in proceed in priority target areas, including the West Arnhem Land region.
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Table 3: Uranium Equities Limited – NT Tenements
Uranium Equities Limited has had one other previous funding arrangement under the NT Government’s Drilling and Geophysics Collaborations Program. Drilling on the Headwaters Project was completed as part of the Round 3 co-funding arrangements and is documented in Company Report Number CR2011-0171 (Bradley and Bennett, 2011).
Uranium Equities has a strong group of mining professionals with significant in-house geological and mining experience specialising in the uranium sector.
Bryn Jones BAppSc (Chemistry), MAusIMM Managing Director
Bryn is an Industrial Chemist who since joining the Company in 2006 has been instrumental in the development of the Company’s uranium from phosphoric acid technology, the “PhosEnergy Process”.
Bryn has extensive experience in the uranium industry, particularly in the development and operation of In-Situ Recovery (ISR) mines gained during his time at Heathgate Resources, the operator of the Beverley Uranium Mine. Bryn held various technical, operations management and project management roles with a focus on mine geology and resource development. Bryn has also worked for Worley Parsons on the Olympic Dam Expansion Project and consulted on various ISR operations around the world.
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Grant Williamson BSc (Hons) MAIG Geology Manager – Exploration
Grant is a geologist with 25 years experience and has previously been employed in various operational roles in gold and mineral exploration in Western Australia and Queensland.
Since joining Uranium Equities in January 2007, Grant has been involved with the technical operations and management of the company’s exploration portfolio, working predominantly on the company’s Northern Territory Alligator Rivers Uranium Field Projects.
James Davidson Grad Dip (Chem Eng), BSc, MAusIMM Chief Metallurgist and Manager UEL Services
James is a Chemical Engineer and Metallurgist with 20 years of experience in the mining industry, 14 of which is in the uranium sector. Prior to working for Uranium Equities, James was Manager of Technical Services for Heathgate Resources.
James was Technical Superintendent for Energy Resources of Australia (ERA) at the Ranger Mine in the Northern Territory. He also worked for Rio Tinto Technical Services, which included working on the pilot plant for the Kintyre Uranium Project in Western Australia.
Support
This team is supported by a group of highly experienced geologists and field technicians.
10. CONCLUSION
Uranium Equities Limited is seeking collaborative funding as part of the NT Government’s ‘Bringing Forward Discovery’ Program for a deep diamond drilling program at our Nabarlek ML Project.
This proposal relates to a new exploration model based on recent exploration success at the Ranger Mine and the discovery of the Ranger 3 Deeps mineralisation. That is, there is a realisation that there is a strong structural control on mineralisation, possibly independent of the regional unconformity position which has been the primary exploration target to date.
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The Nabarlek Deeps concept is to test beneath the barren dolerite with deep angled diamond drillholes, assuming the mineralised Nabarlek Shear has been displaced and is obscured by the intrusion of the Oenpelli Dolerite. Due to this offset, the historical deep drillholes completed in the Nabarlek Pit environs would not have intersected the extension of the Nabarlek mineralised system.
11. REFERENCES
Bradley F and Bennett A 2011. Final Report – Drilling Program Headwaters Project E25220. CR2011-0171
Hoeve J and Sibbald T 1978. On the origin of Rabbit Lake and other Unconformity-type Uranium Deposits in Saskatchewan, Canada. Economic Geology 73, 1450–1473.
Johnston JD 1984. Structural Evolution of the Pine Creek Inlier and Mineralisation therein, NT, Australia. Monash University, Doctoral Thesis.
Lally JH and Bajwah ZU, 2006. Uranium Deposits of the Northern Territory, Northern Territory Geological Survey, Report 20
Wilde AR and Noakes JS 1990. Nabarlek Uranium Deposit. In: Hughes F.E. (Ed.), Geology of the mineral deposits of Australia and Papua New Guinea, vol. 1. Australasian Institute of Mining and Metallurgy, Monograph Series, 14; p. 779-783.
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APPENDIX II
3D Modelling
by
Aurel Consulting
3D Models of Nabarlek Uranium Project, Northern Territory
Report Prepared for Uranium Equities Ltd
Report Prepared by Aurel Consulting
Aurel Consulting Project ID: UEL201303 April 2013
Aurel Consulting Page i
3D Models of Nabarlek Uranium Project, Northern Territory
Uranium Equities Ltd
Aurel Consulting
e-mail: [email protected]
Tel: +61 8 9244 7731 Mob: +61 4 09779042
Project Number UEL201303
April 2013
Author
Peter Williams Principal Consultant
Email: [email protected]
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Executive Summary Data acquired by UEL at the Nabarlek project in Arnhem Land, Northern Territory was reviewed by Aurel with a view to constructing a 3D model for the region. Following construction of an initial pilot project of the data at U40, and recommendations from Aurel that a full model for the entire region at a suitable resolution would not be feasible in a short timeframe, UEL determined that Aurel should complete models for U40 and the SMLB – N147 (and Coopers) areas.
Stage 1 of this project was reported verbally by teleconference and provision of a 3D model of U40 for review by UEL. This is a completion report from Stage 2 of the project which includes:
A 3D model of the Nabarlek tenement area including SMBL, Coopers and Coopers South and N147 areas, plus separate models for the U40 – U42 prospect areas, which can be viewed using the free Leapfrog Viewer software. A description of the methodology, results and recommended targets, based on the structural and stratigraphic controls identified in the study. The report also discusses limitations to the study and future work required to upgrade the model and to improve targeting opportunities.
This report contains Aurel’s opinion on the exploration implications of the 3D modelling of the Nabarlek project, based on the scope outlined above.
SMLB – Nabarlek – N147 The modelling work has successfully modelled the geometry of the Oenpelli dolerite, and the Kombolgie-Basement unconformity, across the Nabarlek mine lease area and immediate extensions. These models can be used for geometric analysis of targets for extending the SMLB mineralisation and targeting the Nabarlek Deeps potential.
The Oenpelli dolerite in the mine lease area is a lopolith with a well-defined northern, eastern and southern limb, but the structure is not closed off to the west in the mine lease area (possibly because there is very little exploration drilling in this area.
The Nabarlek deposit is defined as being on the Nabarlek shear. However, the N147 mineralisation is located predominantly on the hanging-wall of the projection of the shear in the basement.
The SMLB and Nabarlek structures have different orientation and dip, and are likely to be different structures. The intersection area of the two faults may a good place to investigate further, as both deposits are related to known mineralisation.
For the Nabarlek Deeps targeting, there is missing data from the database. Aurel has not seen any geophysical data for either of the deep drill holes, and no assay data, XRF data or alteration data have been provided either, to allow an assessment of these zones. Aurel recommends a re-logging of the NAD0083 and NAD0098 core as a priority, to assess the geological model and hence target positions to be tested (as well as the other deeper drill holes). Aurel also notes that the down-dip distance between NAD0083 and NAD0098 is about 193 m, and the down-dip extent of the Nabarlek orebody is about 60 m. Therefore, these two holes cannot be assumed to sterilise the area, with being enough space to fit 3 Nabarlek-sized orebodies between the two drill holes.
U40 to U42 Aurel has used the displacements at the U40 prospect, where drilling is closely spaced, to put together a 3D interpretation of faults in that area. This results in the definition of seven faults across what might be considered the Quarry Fault Zone. The timing of faults in this zone is unknown. For
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the model, Aurel truncated smaller faults against larger faults, and has projected the larger faults to the model margins to define a total of 9 separate geological domains.
Mineralisation at U40 prospect appears controlled by one of the larger cross faults (termed F4 in the current model) and also to be closed off by the current drilling in the immediate vicinity.
Aurel as not modelled west-northwest striking cross faults, as there was no requirement for these in the model at U40. They may be present. However, it is also possible to explain the north-westerly trend of units as two sills of Oenpelli Dolerite.
The Quarry Fault Zone appears to be a regional graben structure, with downthrown blocks of Kombolgie Sandstone at multiple locations along the zone. Some of these down-faulted blocks are then covered by the dolerite sills. This graben may have a long history, and be reactivated by reverse or strike slip faulting after its initial development. This geometry potentially significantly increases the prospectivity of the Quarry Fault zone, as multiple favourable trap sites could be preserved where the sandstone is below the dolerite, and where the unconformity is still preserved in fault blocks below relatively thin Kombolgie Sandstone.
There is very little information from deeper drilling, especially in the southern part of U40, to control the thickness of the dolerite. Aurel has maintained a consistent sill-like geometry based on the thicknesses available. A reinterpretation of his may be needed depending in the forward or inverse modelling of the gravity and magnetics data. Incorporation of this would require additional modelling time to that provided in the current scope.
Recommendations UEL review logging, particularly of quartzite, to reassign some codes as necessary from Kombolgie to basement or vice-versa UEL track down the analytical and geophysical data from deep drill holes below the dolerite at Nabarlek to allow assessment of the lithological logs, and allow improved targeting of Nabarlek Deeps Because of this gap between the base of the Nabarlek orebody and the top of the dolerite, there is added uncertainty as to the continuity of Nabarlek below the dolerite, as the orebody already seems to have died out. To resolve this uncertainty, Aurel recommends that a more in-depth review of the geometry and structural controls on the Nabarlek orebody itself be undertaken, with detailed modelling if appropriate. The outcome of this study would be to determine accurate dips on the shears and determine if the deposit lies within a dilational breccia on the predominantly reverse fault. In addition, the review should document any reasons for the position of Nabarlek on the shear, both in its strike and dip position.
Due to the lack of deeper drilling over most of the U40 – U42 block, Aurel recommends that prior to further targeting in the U40 – U42 corridor the following work be carried out
The differences in structural interpretation between the Aurel and Cameco maps need to be reviewed with any additional data held by UEL (such as fact mapping) The existence of small blocks of Kombolgie Sandstone around the periphery of the Oenpelli Dolerite sills should be checked if possible The model needs to be checked against an inversion of the gravity and magnetics data, and any reliable results from either inversions or forward modelling included in the 3D model interpretation
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Testing south of U40 to see if the favourable environment (and hopefully mineralisation) extends below the dolerite to Section 8644500 mN. This may need a “proof-of-concept” hole collared in dolerite. Review radiometric and surface geochemical (and radon cup) data over identified target areas in U40-U42 that are not predicted as covered by dolerite.
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Table of Contents Executive Summary ...... ii Disclaimer ...... viii 1 Introduction and Scope of Report ...... 9 1.1 Standard of the Report ...... 9 1.2 Work programme ...... 9 1.3 Statement of Independence ...... 10 1.4 Consents ...... 10 2 Location and Access ...... 11 2.1 UEL tenements ...... 11 3 Geology of Project Area ...... 12 4 Geological Database ...... 13 4.1 Drilling ...... 13 4.2 Database errors/warnings ...... 16 5 Geological Modelling ...... 16 5.1 Topography ...... 16 5.2 Grid and Model Limits ...... 17 5.3 Geological modelling ...... 18 6 Lithological modelling ...... 21 6.1 Nabarlek Extended Mine lease models ...... 23 6.1.1 Faults ...... 23 6.1.2 Lithological Model – Late Dolerite model ...... 24 6.2 U40 modelling ...... 27 6.2.1 Faults ...... 27 7 Exploration Implications ...... 32 7.1 Nabarlek Deeps Targeting ...... 32 7.2 Other targets ...... 33 7.3 Targeting, U40 and Quarry Fault Zone ...... 34 8 Conclusions ...... 36 8.1 SMLB – Nabarlek – N147 ...... 36 8.2 U40 to U42 ...... 36 8.3 Exploration recommendations ...... 37 9 References ...... 38
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List of Tables Table 4-1: Drilling basis for Nabarlek – SMLB model ...... 13 Table 4-2: Drilling campaign data as the basis for geological modelling, meters drilled vs drilling method .... 13 Table 4-3: Holes with no coordinate data ...... 16 Table 5-1: Extents for the 3D geological model, SMBL - Nabarlek ...... 17 Table 5-2: Extents for the 3D geological model, U40 ...... 17 Table 6-1: Data used for the geological model, U40 and SMBL-Nabarlek ...... 21 Table 6-2: Lithological grouping of database rock codes...... 21 Table 6-3: Modelling parameters, geological model ...... 22
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List of Figures Figure 2-1: Project location map and major mineral fields ...... 11 Figure 2-2: Tenement over NT regional geology ...... 12 Figure 4-1: Nabarlek Drill pattern, looking NE ...... 14 Figure 4-2: SMLB – Nabarlek Model drilling distribution ...... 14 Figure 5-1: SMLB Geological model with drilling locations; cover in brown, dolerite in green; basement in blue...... 17 Figure 5-2: U40 Geological model with drilling locations; cover in brown, dolerite in green; basement in blue18 Figure 5-3: Interpretation cross section of the shape of Nabarlek Mine mineralisation ...... 19 Figure 5-4: 3D model, Nabarlek, showing the position of the dolerite (green) in the footwall. Looking down 11⁰ to the north ...... 19 Figure 5-5: U40 Mineralisation pod on Section 8645000 mN...... 20 Figure 5-6: U40 3D mineralisation model...... 20 Figure 6-1: Colour-coding for the geological model used in this report ...... 23 Figure 6-2: Cover model – SMLB to Nabarlek...... 23 Figure 6-3: Fault interpretation, SMLB and Nabarlek ...... 24 Figure 6-4: Overview of model, showing the extent of the Oenpelli Dolerite ...... 24 Figure 6-5: Section 314700 mE – Note increase in extent of granitic sill-like intrusion of the Oenpelli Dolerite25 Figure 6-6: 315700 mE. SMLB Fault, dolerite sill ...... 25 Figure 6-7: 316700 mE. Lopolith form well developed...... 25 Figure 6-8: 317700 mE – dolerite probably connected – lack of drilling in this area. Kombolgie Sandstone absent on this section ...... 25 Figure 6-9: 318700 mE – Lopolith form, Kombolgie Sandstone in the south...... 25 Figure 6-10: 319700 mE – Lopolith form, Kombolgie Sandstone in the south...... 26 Figure 6-11: 320700 mE – East of the Oenpelli intrusion, predominantly basement with thin Kombolgie Sandstone in places...... 26 Figure 6-12: U40 Cover Model, suggesting poor outcrop in this area...... 27 Figure 6-13: U40 Geological plan at 50m RL ...... 28 Figure 6-14: U40 cross section 8645500 mN...... 29 Figure 6-15: U40 cross section 8645000 mN...... 29 Figure 6-16: U40 cross section 8644500 mN...... 29 Figure 6-17: U40 cross section 8644000 mN...... 30 Figure 6-18: U40 cross section 8643500 mN...... 30 Figure 6-19: U40 cross section 8643000 mN...... 30 Figure 6-20: U40 cross section 8642500 mN...... 31 Figure 6-21: U40 cross section 8642000 mN...... 31 Figure 7-1: Oenpelli long section below Nabarlek open pit ...... 32 Figure 7-2: Possible sub-dolerite fault positions ...... 32 Figure 7-3: Connelly Section showing barren drill holes at depth between the dolerite boundary (in green) and the base of the orebody...... 33 Figure 7-4: Long Section 327250, looking west ...... 34
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Disclaimer The opinions expressed in this Report have been based on the information supplied to Aurel Consulting (Australasia) Pty Ltd (Aurel) by Uranium Equities Ltd (UEL). The opinions in this Report are provided in response to a specific request from UEL to do so. Aurel has exercised all due care in reviewing the supplied information. Whilst Aurel has compared key supplied data with expected values, the accuracy of the results and conclusions from the review are entirely reliant on the accuracy and completeness of the supplied data. Aurel does not accept responsibility for any errors or omissions in the supplied information and does not accept any consequential liability arising from commercial decisions or actions resulting from them. Opinions presented in this Report apply to the site conditions and features as they existed at the time of Aurel’s investigations, and those reasonably foreseeable. These opinions do not necessarily apply to conditions and features that may arise after the date of this Report, about which Aurel had no prior knowledge nor had the opportunity to evaluate.
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1 Introduction and Scope of Report Aurel Consulting (Aurel) was engaged by Uranium Equities Ltd (UEL) to undertake a data review leading to 3D modelling of prospects in the Nabarlek area, Arnhem Land, Northern Territory. Aurel understands that the focus of the project is to provide an improved geological context to the uranium prospects and mines in the tenement areas, with a view to improving drill targeting. Uranium Equities Limited (UEL) sees visualisation of these deposits and prospects in 3D as a critical aspect of improving this understanding.
The work program was initially divided into two separate stages as follows:
Stage 1: An initial memo report outlining the results of the review, with recommendations on the need for additional data and/or re-interpretation. The report will also present outcomes of the 3D modelling work to date, any delays required before moving to full modelling, or a updated estimate of the cost the progressing the current information to completed models. Stage 2: A 3D model of the Nabarlek tenement area, plus separate models for the E40, SMBL, Coopers and Coopers South and N147 areas, which can be viewed using the free Leapfrog Viewer software, or in a format that imports into UEL software. A report outlining the methodology, results and recommended targets, based on the structural and stratigraphic/alteration controls identified in the study. The report discusses limitations to the study and future directions for exploration program implementation where this is appropriate to the report conclusions.
This report contains Aurel’s opinion on the exploration implications of the 3D modelling of the Nabarlek area, based on the scope outlined above.
1.1 Standard of the Report This Report has been prepared to the standard of, and is considered by Aurel to be, an Independent Technical Report under the guidelines of the VALMIN Code. Although the report may refer to Resources, Aurel notes that under the JORC code, these resources may not fully comply with the code.
1.2 Work programme Stage 1 of the project was been undertaken between the 18th March 2013 and 5th April 2013 2013. And reported to UEL through a telephone conference call. Aurel transferred a preliminary model of the U40 prospect as “proof of concept” for the modelling technique. The meeting was attended by Grant Williamson and Bryn Jones (Adelaide) and Peter Williams (Perth).
Following this meeting, there was agreement to continue the modelling to the SMLB to Nabarlek corridor, and to consider in particular the shape of the dolerite and potential implications for deep targeting of a potential continuation of Nabarlek below the dolerite.
Modelling for this phase was completed in first draft format on Sunday 14th April, followed by correspondence with UEL, some revisions to the model and reporting of the results.
At the current stage, the down-hole geophysical data and the alteration data have not been included in the 3D model, due to the time required to complete the two 3D lithological and grade models.
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1.3 Statement of Independence Aurel does not have any material present or contingent interest in the outcome of this Report, nor does it have any pecuniary or other interest that could be reasonably regarded as being capable of affecting the independence of Aurel.
Aurel has no prior association with UEL in regard to the mineral assets that are the subject of this Report.
Aurel’s fee for completing this Report is based on its normal professional daily rates plus reimbursement of incidental expenses. The payment of that professional fee is not contingent upon the outcome of the Report.
1.4 Consents Aurel provides no consents in relation to this report.
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2 Location and Access 2.1 UEL tenements The Nabarlek project is located in the Northern Territory approximately 260 km east of Darwin. The Nabarlek uranium mine was operational between 1978 and 1988, and comprises high-grade uranium mineralisation located in Late Archean basement schists close to the unconformity with overlying sandstones of the Paleoproterozoic Kombolgie Subgroup. The UEL exploration interests include four tenements:
MLN962 (Nabarlek ML) EL10176 EL24371 EL23700
Figure 2-1: Project location map and major mineral fields Source: Nabarlek ML Project: Bringing Forward Discovery Drilling Submission – April 2013
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The area is accessible via the Oenpelli – Maningrida secondary roads. The road is not open all year. Once at the lease area, road access is good due to old mine infrastructure. Access by light aircraft is possible using the all-weather sealed mine airstrip.
UEL had a Joint Venture with Cameco over the tenement areas, and has recently consolidated ownership and moved to an operator position. This review covers the major prospect areas identified to date.
Figure 2-2: Tenement over NT regional geology Source: West Arnhem Land JV – JV meeting Cameco. Note Cahill formation and Nourlangie Schist = basement, Mamadawerre Sandstone is referred to as Kombolgie Sandstone in this report. No due diligence on the tenements has been carried out as part of this review. 3 Geology of Project Area The geology of the tenement areas is very simple in its regional context. Basement metamorphic rock, predominantly the Paleoproterozoic (Orisian) Nourlangie Schist, are unconformably overlain by younger predominantly sandstones of the Mamadawerre Sandstone of the Kombolgie Subgroup. This is also Paleoproterozoic (Stratherian) in age (see Oenpelli 1:100,000 map sheet 5573 for reference).
Both the basement units and Kombolgie Subgroup are intruded by the Oenpelli Dolerite, predominantly as sill-like intrusions. Aurel notes that Cameco refer to the basement unit in this Nabarlek area as Cahill Formation, whereas the Oenpelli geological map shows the areas as underlain by Nourlangie Schist. Aurel has simply modelled all basement rocks as undefined basement.
Drilling as shown that the Oenpelli Dolerite is much more extensive in the Nabarlek area than shown on the geological map.
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4 Geological Database
4.1.1 Drilling Drilling data for the tenement areas has been assembled into a relational database by Geobase Australia, and they are acting as custodian of the data for UEL. Aurel received the data as both an Access database and as extracted CSV files suitable for reading directly into Excel. Other than noting some obvious data omissions and duplications, the data were taken as received, and no separate due diligence has been conducted on the data. Any data with errors was rejected from the modelling carried out.
The data loaded comprised 5021 drill holes over the project extent, made up of 1709 AC holes, 2141 RAB holes, 770 RC holes and 383 DD holes, and 18 holes of unknown type (most of which also have no elevation data).
Two areas that were modelled in detail, U40 to U42, and the Nabarlek mine lease and surrounds. Drilling used in the SMLB – Nabarlek model Details of the drilling used for the model are shown in (Table 4-1).
Table 4-1: Drilling basis for Nabarlek – SMLB model
Drilling Number of method Total Metres holes
AC 10605.40 633
DD 31494.09 286
RAB 8252.40 625
RC 48067.85 561
UK 836.15 3
Grand Total 99255.89 2108
The breakdown by drilling campaign is shown in Table 4-2.
Table 4-2: Drilling campaign data as the basis for geological modelling, meters drilled vs drilling method
Campaign Method Metres drilled # holes NAA AC 4119 244 NABAR RC 215.11 4 NAD DD 13941.33 193 UK 354.8 2 NAMLB RAB 5763.4 476 NAMLR RC 5262.6 56 NANAB RAB 1 1 NANAR RC 493 6 NANNB RAB 1259.1 82 NANND DD 6815.3 28
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NANNR DD 1 1 RC 4374 47 NAOBR RC 919 26 NAPRR RC 79 2 NAR RC 10415.49 125 NARD DD 840 3 NASAB RAB 738.9 43 NASAR RC 84 1 NASMD DD 9306.56 57 UK 481.35 1 NASMR DD 589.9 4 RC 3752.15 46 NATBR RC 1016.5 43 NAUAB RAB 490 23 NAWCR RC 42 1 NMLA AC 6486.4 389 NMLR RC 21415 204 Grand Total 99255.89 2108
Figure 4-1: Nabarlek Drill pattern, looking NE The sub-set of drilling at SMLB – N147 (as identified in the drilling database) is shown in Figure 4-2.
SMLB Boomerang
Nabarlek Coopers
N147
Figure 4-2: SMLB – Nabarlek Model drilling distribution on topography Drilling used in the U40 – U42 model Details of the drilling used for the model are shown in Table 4-3. The breakdown by drilling campaign is shown in Table 4-4.
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Table 4-3: Drilling basis for U40 model
Drilling Number of method Total Metres holes AC 2610.0 129 DD 2873.6 20 RAB 3332.8 166 RC 2389.0 25
Grand Total 11205.4 340
Table 4-4: Drilling campaign data as the basis for geological modelling, meters drilled vs drilling method
Campaign Metres drilled Number of holes NAA 2610.0 129 NAD 2162.6 15 NAR 888.0 6 NAUAB 3332.8 166 NAUAD 711.0 5 NAUAR 1501.0 19 Grand Total 11205.4 340
The sub-set of drilling at U40 - U42 (as identified in the drilling database) is shown in Figure 4-3
U40
U42
Figure 4-3: U40 – U42 drilling distribution on the topography model
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4.2 Database errors/warnings Holes with no coordinate data are listed in Table 4-5. These were removed from the data prior to loading. There are also several holes in the database (23 in all) that have identical coordinates. Some of these appear to be RAB holes that have been re-entered or followed up with RC (about 5- 6). The longest hole was used in the modelling.
Table 4-5: Holes with no coordinate data
Project SiteID Prospect SiteType SiteSubType NAB NAD0141 Nabarlek DH UK NAB NAD0239 Nabarlek DH UK NAB NAD0240 Nabarlek DH UK NAB NAD0257 Nabarlek DH DD NAB NAD0258 Nabarlek DH DD NAB NAD0260 Nabarlek DH DD NAB NAD0261 Nabarlek DH DD NAB NAD0355 Nabarlek DH UK NAB NAD0359 Nabarlek DH UK NAB NAR0196 Nabarlek DH RC NAB NARD6020 Nabarlek DH UK NAB NARD6021 Nabarlek DH UK NAB NMD0004 Nabarlek DH UK NAB NMD0005 Nabarlek DH UK NAB NMD0006 Nabarlek DH UK NAB NMD0007 Nabarlek DH UK NAB NMR0003 Nabarlek DH UK NAB RC28D Nabarlek DH UK
Several holes had no collar survey information. These were placed on the topography for the purpose of modelling.
5 Geological Modelling
The Nabarlek geological model was developed by Aurel using Leapfrog Geo software, version 1.1.0. The drilling at the prospect has been exploratory in nature, and as a consequence the data tends to be quite clustered around existing prospects and the Nabarlek mine.
The lithological data modelled was recorded in an Excel spreadsheet “NAB_Drilling_Geology.csv”. The code used for modelling were “Lith1”. The coding was simplified by grouping all codes into six lithology groups; Basement, Fault Fill, Kombolgie Sandstones, Surficial Cover, Dolerite Intrusions and Granitic Intrusions. This provides for a basic simplification of the rock coding, with the analysis of the mineralisation being restricted to bedrock units.
5.1 Topography Topography was generated from ASCII files exported from Micromine. The Micromine data was a triangulation of the levelling data from the aeromagnetic survey, which was in two parts (East and
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West files from separate surveys). The data were provided by Geobase Australia. Date used here was extracted from the files provided using Excel to sort the coordinates by the extents used in the Leapfrog models, and re-surfaced using Leapfrog RBF’s.
5.2 Grid and Model Limits The grid for reporting the drilling results is MGA Projection, based on the GDA, Zone 51 South. All data were provided in or converted to this system before importing to Leapfrog.
For the purpose of this review, the model size was limited to the Nabarlek Mine lease with some small extensions. This was defined as in Table 5-1.
Table 5-1: Extents for the 3D geological model, SMBL - Nabarlek
Extents Min Max Length (m) X (mE) 314680 320820 6140 Y ( mN) 8637100 8642070 4970 Z (m RL) -245 250 495
The extent of the model and the relationship with the drill collar locations is shown in Figure 5-1.
Table 5-2: Extents for the 3D geological model, U40
Extents Min Max Length (m) X (mE) 326570 328000 1430 Y ( mN) 8641900 8645565 3665 Z (m RL) -245 250 495
The extent of the model and the relationship with the drill collar locations is shown in Figure 5-2.
SMLB
Nabarlek
Figure 5-1: SMLB Geological model with drilling locations; cover in brown, dolerite in green; basement in blue
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U40 U41
U42
Figure 5-2: U40 Geological model with drilling locations; cover in brown, dolerite in green; basement in blue
5.3 Geological modelling Grade modelling was undertaken in two passes. The shape of the mineralised envelope was determined firstly by modelling the 50 g/t, 300 g/t and 1,000 g/t grade envelopes, to determine any grade continuity from the data. This initial pass was carried out on de-surveyed 1 m composited grade data from the assay data provided by UEL. There is good continuity above 100 g/t, with widespread unconnected zones at 50 g/t. At SMLB-Nabarlek, there is a well-defined structural trend to the data above 100 g/t.
To enhance the SMLB structural directions in this data, a plane was fitted through the Nabarlek model, and used with a 2:2:1 asymmetry (Figure 5-3). The plane was 40⁰ to 065⁰ with a zero pitch. The result is shown in 3D in Figure 5-3. For U40 the best fit plane was 65⁰ to 110⁰, with a 90⁰ pitch, and this was applied with a 2:2:1 asymmetry to model the U40 pod (Figure 5-5).
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Figure 5-3: Interpretation cross section of the shape of Nabarlek Mine mineralisation Looking to 335⁰ centred on Section 8638658mN, 317486mE
Figure 5-4: 3D model, Nabarlek, showing the position of the dolerite (green) in the footwall. Looking down 11⁰ to the north
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Figure 5-5: U40 Mineralisation pod on Section 8645000 mN. Rock units blue = basement, brown = sandstone, green = dolerite
Figure 5-6: U40 3D mineralisation model. Purple feature on right is the controlling fault, called F4 in this model, fault to the west is F5 and central fault is F3
The U42 mineralisation is a low-grade zone up to 3150 ppm U within the Oenpelli Dolerite lying above Kombolgie Sandstone. Most intersections are lower grade in zones up to 10 m thick. Fault zones within the dolerite have not been identified in the logging.
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Figure 5-7: U42 mineralisation – green>50ppm, yellow>300 ppm, red>1000ppm Blue is basement, brown is Kombolgie Sandstone. Dolerite colour on drill strings, topography is grey. Looking west
6 Lithological modelling The lithological model was prepared based on combining a number of lithological codes into coherent geological units, as these were not identified separately in the logging data provided. The data used is shown in Table 6-1, and the geological units generated with the coding used for each unit is shown in Table 6-2.
Table 6-1: Data used for the geological model, U40 and SMBL-Nabarlek
03 April Model File name Collar file NAB_Drilling_Collar_LF210313.csv Survey File NAB_Drilling_Survey_LF210313.csv Assay file NAB_Drilling_Assays_All_LF210313.csv Lithology file NAB_Drilling_Geology_LF210313.csv Geophysics file NAB_Drilling_Geophysics_LF210313.csv
Modelling was carried out using Leapfrog Geo v 1.1.0, Build 0.0.6.3567.
Table 6-2: Lithological grouping of database rock codes.
Unit Codes – original database Splits – generated Splits interpreted by Aurel by Aurel Surficial Cover Codes starting with D, R and T as well as LC and LY Faults BX, FT, YF and YM Kombolgie C,S,SA,SAK,SB,SC,SL,SQBC SA-LowerPlate Underthrust Kombolgie
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Sandstone Basement SAQ, codes starting with X Some SAQ may belong to Kombolgie Dolerite Intrusions MOD Some MOD may be basement meta-mafic rock Granite Intrusions FIL, GD, GR Veins and gouge V, Vqtz Missing data NSD, NSV, UK
The colour coding used for the models in this report is shown in Figure 6-1.
Fault modelling was done on sections based on logged faults, by identifying stratigraphic inversions, and identifying level changes in the unconformity surface.
The lithological model was constructed on an assumption of the order of intrusion or deposition of the modelled units as shown in Table 6-3.
Table 6-3: Modelling parameters, geological model
Youngest Unit Model Laterite and other cover Erosional contact Missing data Excluded from other older units Veins and gouge Excluded from other older units Oenpelli Dolerite Intrusion Granitic rocks Intrusion Kombolgie Sandstone Erosional contact Oldest Basement Below Sandstone
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Figure 6-1: Colour-coding for the geological model used in this report
There was insufficient data in the database to effectively model the veins and fault gouge. Accordingly, the lithological models were simplified to laterite and other cover, dolerite intrusions, Kombolgie Sandstone, basement units, and granitic intrusions. The cover rocks were modelled as a separate geological model in Leapfrog Geo, and the lower surface of the cover was extracted as a mesh. This mesh was then used as the upper limit of the geological model, together with the topography.
Three complete models were developed during the project:
Nabarlek Extended lease with faults pre-dating Oenpelli Dolerite Nabarlek Extended lease with faults post-dating Oenpelli Dolerite U40 model
All models are constrained in resolving the small size of the uranium deposits compared to the large extent of the exploration models. For example, Nabarlek is about 250 m along strike and 35 m thick, but the exploration model is 6.1 km by 5.0 km, so wireframes are quite “rough” at a deposit scale (see coarse triangulation on the dolerite in Figure 5-4 at the deposit scale).
6.1 Nabarlek Extended Mine lease models The Nabarlek extended mine lease cover model is shown in Figure 6-4.
Figure 6-2: Cover model – SMLB to Nabarlek
6.1.1 Faults Two faults have been modelled in the SMLB – Nabarlek models. The SMLB Fault was modelled from the north-eastern cross sections, and traced to the east by mapping offsets of the base of the Kombolgie sandstone. Aurel tagged all sections of Kombolgie Sandstone in the drilling data that were logged as occurring below basement, and generated a model showing the offset.
The offset surface was used to guide interpretation of the cross sections. A typical section showing the sandstone offsets and interpreted faults is Figure 6-3.
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SMLB Fault, Looking WNW Nabarlek Fault
Figure 6-3: Fault interpretation, SMLB and Nabarlek There are numerous other faults known in the area, such as the Gabo Fault and Green Ant Shear. However, for the major geological domains, modelling of the SMLB and Nabarlek faults is considered sufficient at the current level of investigation and with the current level of drilling control. There is no real evidence as to the timing on the movements on the two faults. For the purpose of modelling, Aurel has terminated the SMLB fault against the Nabarlek Fault, resulting in three geological domains in the geological model, with the Nabarlek Fault dividing the model into an eastern and western domain, and the SMLB Fault dividing the western domain into a north-western and south-western domain.
6.1.2 Lithological Model – Late Dolerite model The overall model showing the surface distribution of rock types with the cover stripped off is shown in Figure 6-4.
SMLB
Coopers Nabarlek
Figure 6-4: Overview of model, showing the extent of the Oenpelli Dolerite
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(Note the shape of the dolerite intrusion suggesting a gently west-plunging lopolith. Drilling data gaps can be seen on this block diagram)
The lithological interpretation is shown as a series of North-South cross sections that demonstrate the geometry of the Oenpelli dolerite intrusion in this area (Figure 6-5 to Figure 6-11) . All section are looking to the west. No vertical exaggeration.
Figure 6-5: Section 314700 mE – Note increase in extent of granitic sill-like intrusion of the Oenpelli Dolerite
Figure 6-6: 315700 mE. SMLB Fault, dolerite sill
Figure 6-7: 316700 mE. Lopolith form well developed.
Figure 6-8: 317700 mE – dolerite probably connected – lack of drilling in this area. Kombolgie Sandstone absent on this section
Figure 6-9: 318700 mE – Lopolith form, Kombolgie Sandstone in the south.
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Figure 6-10: 319700 mE – Lopolith form, Kombolgie Sandstone in the south.
Figure 6-11: 320700 mE – East of the Oenpelli intrusion, predominantly basement with thin Kombolgie Sandstone in places. Due to the scale of the models, there is no significant difference in geometry between the “late dolerite” model and the “offset dolerite model”. Both are provided digitally, but the latter model is not described further here.
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6.2 U40 modelling The U40 area is located in the north-eastern sector of the exploration tenements.
The U40 Cover model is shown in Figure 6-12. This model was used to limit the vertical extent of the basement geological model.
Figure 6-12: U40 Cover Model, suggesting poor outcrop in this area.
6.2.1 Faults The rock distribution at U40 is complicated by the presence of a large number of faults, which individually are not well constrained in the logging or structural data available. Modelling of faults in the U40 prospect area is based on correlating contacts where basement units have been mapped above intervals of Kombolgie Sandstone, and also where there are distinctive level changes in the position of contacts between basement and Kombolgie Sandstone.
There are also significant data gaps for modelling purposes at U40. One section (8645000 mN) has been drilled by overlap diamond drilling, but sections north and south of this have only been partially drilled, and not necessarily on section. Rather drilling has been designed to target possible extensions of the U40 Mineralisation, which was intersected initially on 8645000 mN.
The mineralisation is hosted in the N-S trending Quarry fault zone, which is characterised by widespread alteration and development of fault breccia. Cameco has interpreted the area as a down-faulted block of Kombolgie Sandstone, cut up by a series of north-west striking subsidiary faults (JV presentation document 2012). The Cameco interpretation seems unreasonable from the perspective that faults with significant offset in geological units are shown to cross each other with no offset on the faults. The only way this geometry is possible is if the movement vector on both faults is parallel to the line of intersection of the faults.
Aurel has used the displacements at the U40 prospect, where drilling is closely spaced, to put together a 3D interpretation of faults in that area. This results in the definition of seven faults across what might be considered the Quarry Fault Zone. Six of these faults are shown on the 8645000 mN
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cross section in Figure 5-5. In the Aurel interpretation, all faults can be interpreted as sub-parallel to the Quarry Fault Zone, with smaller faults oriented towards the north-northeast. Note that Aurel does not disagree there may be some northwest striking regional faults, but they are not necessary to explain the fault geometry at the U40 prospect itself.
There is no data available on the relative timing of the faults. Where faults intersect, Aurel has in all cases truncated smaller structures against larger structures, resulting in a model of interlocking, presumably coeval master faults and subsidiary structures. The master faults were allowed to propagate through the entire model.
Because of the number of faults, nine domains have been defined, resulting in a rather complicated final lithological model. The final geological map at 50 m RL is shown in Figure 6-13. The geological plan is very similar to the Cameco interpretation, with the only significant difference being the interpretation by Cameco of the northwest trending geological boundaries as faults. The N-S faults are interpreted as the Quarry Fault Zone.
Figure 6-13: U40 Geological plan at 50m RL There is also very little information from deeper drilling, especially in the southern part of U40, to control the thickness of the dolerite. Aurel has maintained a consistent sill-like geometry based on the thicknesses available. A reinterpretation of his may be needed depending in the forward or inverse modelling of the gravity and magnetics data. Incorporation of this would require additional modelling time to that provided in the current scope.
The U40 area regional geology model is further illustrated as a series of E-W cross sections as 500 m intervals from north to south in Figure 6-14 to Figure 6-21. All section are looking north, so with east to the right.
The cross sections identify some fault blocks with deep wedges of Kombolgie Sandstone. Aurel is of the opinion that these are probably an artefact of lack of deep drilling (ie no data) in these areas, and as elsewhere these areas probably have a flat base at an unknown depth in the sections.
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Figure 6-14: U40 cross section 8645500 mN.
Figure 6-15: U40 cross section 8645000 mN.
Figure 6-16: U40 cross section 8644500 mN.
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Figure 6-17: U40 cross section 8644000 mN.
Figure 6-18: U40 cross section 8643500 mN.
Figure 6-19: U40 cross section 8643000 mN.
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Figure 6-20: U40 cross section 8642500 mN.
Figure 6-21: U40 cross section 8642000 mN.
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7 Exploration Implications 7.1 Nabarlek Deeps Targeting A long section through the Oenpelli Lopolith at the position of the Nabarlek open pit is shown in Figure 7-1. The thickness of the Lopolith is a maximum of 244 m and about 230m on average in this area, based on the modelling.
Figure 7-1: Oenpelli long section below Nabarlek open pit A cross section through the previous deep drilling below Nabarlek is shown in Figure 7-2. In this diagram:
the upper orange fault is the fault modelled from the open pit data, and extrapolated to depth the dark blue line is the lower range of the extrapolation position assuming a slightly steeper dip on the Nabarlek Shear to that modelled the lower brown line is the implied position of the Nabarlek Fault assuming a vertical extension direction to allow emplacement of the dolerite and an offset of the Nabarlek Fault as a result of the vertical extension.
Figure 7-2: Possible sub-dolerite fault positions Aurel suggests that using a vertical extension direction during emplacement of the Oenpelli Dolerite seems logical, given the modelling that suggests the unit is a relatively flat-lying lopolithic intrusion. Using this model, note that NAD0083 and NAD0098 should have intersected the Nabarlek Shear below the dolerite. Importantly, those two holes should also have intersected the Nabarlek Shear if
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the shear transects the dolerite for all reasonable projections of the position of the shear. The intersections would have been at a more shallow depth.
The lithological logs suggest that there are two possible fault zones in the basement at approximately the correct position to be identified as the Nabarlek Shear (see red intersections Figure 7-2), but the logging does not identify any faults in the position of shears projected through the dolerite.
Aurel has not seen any geophysical data for either of these holes, and no assay data, XRF data or alteration data have been provided either, to allow an assessment of these zones.
Accordingly, Aurel recommends a re-logging of the NAD0083 and NAD0098 core as a priority, to assess the geological model and hence target positions to be tested (as well as the other deeper drill holes). Aurel also notes that the down-dip distance between NAD0083 and NAD0098 is about 193 m, and the down-dip extent of the Nabarlek orebody is about 60 m. Therefore, these two holes cannot be assumed to sterilise the area, there being enough space to fit 3 Nabarlek-sized orebodies between the two drill holes.
One other aspect of the Nabarlek mineralisation that is of interest for targeting is the significant down-dip “gap” between the base of the Nabarlek orebody and the top of the dolerite. This is shown graphically in 3D in Figure 6-4. For clarity, this is also shown in a Connelly section (plane 40⁰ to 055⁰) generated in the plane of the orebody in Figure 7-3. This figure also shows that the orebody appears to plunge gently to the north and that the dolerite boundary rises to the northwest. However, the dolerite does not intersect or truncate the orebody on any long sections.
Figure 7-3: Connelly Section showing barren drill holes at depth between the dolerite boundary (in green) and the base of the orebody. Because of this gap, there is an increased uncertainty as to the continuity of Nabarlek below the dolerite, as the orebody already seems to have died out. To resolve this uncertainty, Aurel recommends that a more in-depth review of the geometry and structural controls on the Nabarlek orebody itself be undertaken, with detailed modelling if appropriate. The outcome of this study would be to determine accurate dips on the shears and determine if the deposit lies within a dilational breccia on the predominantly reverse fault. In addition, the review should document any reasons for the position of Nabarlek on the shear, both in its strike and dip position.
7.2 Other targets The SMLB and Narbarlek structures have different orientation and dip, and are likely to be different structures. The intersection area of the two faults may a good place to investigate further, as both deposits are related to known mineralisation.
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7.3 Targeting, U40 and Quarry Fault Zone The U40 mineralisation appears to be controlled by the more north-easterly strands of the fault system. This may suggest that there is a dextral component of slip on the Quarry Fault system. The known pod of mineralisation at U40 appears to be closed off by the current drilling, but the question remains as to whether this is an outlier of a larger zone of mineralisation. In the section 500 m south of U40, a similar down faulted block of Kombolgie adjacent to the main faults is present, and could provide a target by tracing the U40 structure to the south. The Aurel interpretation suggests that the Kombolgie may continue to the south of the dolerite, with the dolerite simply providing a cover unit. The dolerite would also obscure the radiometric signature of any underlying orebody.(see Figure 6-16).
Two similar targets are apparent on Figure 6-18 on section 8643500 mN, at a reasonable depth of about 50 m. The eastern one of these targets may be accessible for testing by radon cup prospecting, whereas the western target is covered by the dolerite sill.
A long section across the region demonstrates the overall geometry of the U40 – U42 Block. There appears to be two separate sills close to the unconformity surface. The Kombolgie sandstone is downthrown into an overall graben-like structure (the Quarry Fault Zone), in a structure that may have been an early extensional fault later reactivated as either strike slip or thrust. This interpretation would increase the prospectivity of the Quarry Fault Zone, as a multiple favourable trap sites could be preserved where the sandstone is below the dolerite, and where the unconformity is still preserved in fault blocks below relatively thin Kombolgie Sandstone.
Figure 7-4: Long Section 327250, looking west There are some issues that need to be resolved in the U40 to U42 target volume before confident targeting can be carried out.
The differences in structural interpretation between the Aurel and Cameco maps need to be reviewed with any additional data held by UEL (such as fact mapping) The existence of small blocks of Kombolgie Sandstone around the periphery of the Oenpelli Dolerite sills should be checked if possible The model meeds to be checked against an inversion of the gravity and magnetics data, and any reliable results from either inversions or forward modelling included in the 3D model interpretation
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Testing south of U40 to see if the favourable environment (and hopefully mineralisation) extends below the dolerite to Section 8644500 mN. This may need a “proof-of-concept” hole collared in dolerite. Targeting the source for the mineralisation at U42 relative to specific fault feeders may be useful. This would need to be based primarily on geophysical data, as no faults have been mapped in the drilling to date. Modelling of the alteration systems may also be a method of tracing the source, provided the data are available.
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8 Conclusions Data acquired by UEL at the Nabarlek project in Arnhem Land, Northern Territory was reviewed by Aurel with a view to constructing a 3D model for the region. Following construction of an initial pilot project of the data at U40, and recommendations from Aurel that a full model for the entire region at a suitable resolution would not be feasible in a short timeframe, UEL determined that Aurel should complete models for U40 and the SMLB – N147 (and Coopers) areas.
Stage 1 of this project was reported verbally by teleconference and provision of a 3D model of U40 for review by UEL. This is a completion report from Stage 2 of the project which includes:
A 3D model of the Nabarlek tenement area including SMBL, Coopers and Coopers South and N147 areas, plus separate models for the U40 – U42 prospect areas, which can be viewed using the free Leapfrog Viewer software. A description of the methodology, results and recommended targets, based on the structural and stratigraphic controls identified in the study. The report also discusses limitations to the study and future work required to upgrade the model and to improve targeting opportunities.
This report contains Aurel’s opinion on the exploration implications of the 3D modelling of the Nabarlek project, based on the scope outlined above.
8.1 SMLB – Nabarlek – N147 The modelling work has successfully modelled the geometry of the Oenpelli dolerite, and the Kombolgie-Basement unconformity, across the Nabarlek mine lease area and immediate extensions. These models can be used for geometric analysis of targets for extending the SMLB mineralisation and targeting the Nabarlek Deeps potential.
The Oenpelli dolerite in the mine lease area is a lopolith with a well-defined northern, eastern and southern limb, but the structure is not closed off to the west in the mine lease area (possibly because there is very little exploration drilling in this area.
The Nabarlek deposit is defined as being on the Nabarlek shear. However, the N147 mineralisation is located predominantly on the hanging-wall of the projection of the shear in the basement.
The SMLB and Narbarlek structures have different orientation and dip, and are likely to be different structures. The intersection area of the two faults may a good place to investigate further, as both deposits are related to known mineralisation.
For the Nabarlek Deeps targeting, there is missing data from the database. Aurel has not seen any geophysical data for either of the deep drill holes, and no assay data, XRF data or alteration data have been provided either, to allow an assessment of these zones. Aurel recommends a re-logging of the NAD0083 and NAD0098 core as a priority, to assess the geological model and hence target positions to be tested (as well as the other deeper drill holes). Aurel also notes that the down-dip distance between NAD0083 and NAD0098 is about 193 m, and the down-dip extent of the Nabarlek orebody is about 60 m. Therefore, these two holes cannot be assumed to sterilise the area, with being enough space to fit 3 Nabarlek-sized orebodies between the two drill holes.
8.2 U40 to U42 Aurel has used the displacements at the U40 prospect, where drilling is closely spaced, to put together a 3D interpretation of faults in that area. This results in the definition of seven faults across what might be considered the Quarry Fault Zone. The timing of faults in this zone is unknown. For the model, Aurel truncated smaller faults against larger faults, and has projected the larger faults to the model margins to define a total of 9 separate geological domains.
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Mineralisation at U40 prospect appears controlled by one ie larger faults (termed F4 in the current model) and also to be closed off by the current drilling in the immediate vicinity.
Aurel as not modelled west-northwest striking cross faults, as there was no requirement for these in the model at U40. They may be present. However, it is also possible to explain the north-westerly trend of units as two sills of Oenpelli Dolerite.
The Quarry Fault Zone appears to be a regional graben structure, with downthrown blocks of Kombolgie Sandstone at multiple locations along the zone. Some of these down-faulted blocks are then covered by the dolerite sills. This graben may have a long history, and be reactivated by reverse or strike slip faulting after its initial development. This geometry potentially significantly increases the prospectivity of the Quarry Fault zone, as multiple favourable trap sites could be preserved where the sandstone is below the dolerite, and where the unconformity is still preserved in fault blocks below relatively thin Kombolgie Sandstone.
There is very little information from deeper drilling, especially in the southern part of U40, to control the thickness of the dolerite. Aurel has maintained a consistent sill-like geometry based on the thicknesses available. A reinterpretation of his may be needed depending in the forward or inverse modelling of the gravity and magnetics data. Incorporation of this would require additional modelling time to that provided in the current scope.
8.3 Exploration recommendations UEL review logging, particularly of quartzite, to reassign some codes as necessary from Kombolgie to basement or vice-versa UEL track down the analytical and geophysical data from deep drill holes below the dolerite at Nabarlek to allow assessment of the lithological logs, and allow improved targeting of Nabarlek Deeps Because of this gap between the base of the Nabarlek orebody and the top of the dolerite, there is added uncertainty as to the continuity of Nabarlek below the dolerite, as the orebody already seems to have died out. To resolve this uncertainty, Aurel recommends that a more in-depth review of the geometry and structural controls on the Nabarlek orebody itself be undertaken, with detailed modelling if appropriate. The outcome of this study would be to determine accurate dips on the shears and determine if the deposit lies within a dilational breccia on the predominantly reverse fault. In addition, the review should document any reasons for the position of Nabarlek on the shear, both in its strike and dip position.
Due to the lack of deeper drilling over most of the U40 – U42 block, Aurel recommends that prior to further targeting in the U40 – U42 corridor the following work be carried out
The differences in structural interpretation between the Aurel and Cameco maps need to be reviewed with any additional data held by UEL (such as fact mapping) The existence of small blocks of Kombolgie Sandstone around the periphery of the Oenpelli Dolerite sills should be checked if possible The model needs to be checked against an inversion of the gravity and magnetics data, and any reliable results from either inversions or forward modelling included in the 3D model interpretation Testing south of U40 to see if the favourable environment (and hopefully mineralisation) extends below the dolerite to Section 8644500 mN. This may need a “proof-of-concept” hole collared in dolerite. Review radiometric and surface geochemical (and radon cup) data over identified target areas in U40-U42 that are not predicted as covered by dolerite.
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9 References This report has been prepared using unpublished data provided by UEL through spreadsheets, internal reports and PowerPoint presentations and discussion. Data used is up-to-date as of 15 March 2013 for the lithological and grade modelling.
PRW UraniumEquities201303_ReportRev0.docx 18 April 2013 Aurel Consulting Peer Review Record
Aurel Report Client Distribution Record Project Number: UEL201303
Date Issued: January 2013
Name/Title Company Bryn Jones -Managing Director Uranium Equities Limited Grant Williamson – Geology Manager Uranium Equities Limited
Rev No. Date Revised By Revision Details 1 18 April 2013 Peter Williams First Draft Report
This Report is protected by copyright vested in Aurel Consulting (Australasia) Pty Ltd. It may not be reproduced or transmitted in any form or by any means whatsoever to any person without the written permission of the copyright holder, Aurel.
PRW UraniumEquities201303_ReportRev0.docx 18 April 2013