Project Overview

Introduction

Southern Uranium has exploration rights to 20 tenements covering 10,393 sq km of prospective geology in the Gawler Craton. These rights are held predominantly through 100% owned Exploration Licences but also include joint venture arrangements, or access rights to explore for and develop uranium only.

South Australia, as the focus of Southern Uranium’s initial exploration activities, offers excellent uranium exploration opportunities demonstrated by the State’s concentration of Australia’s uranium resources and operating mines. The portfolio was largely established before the recent blanket pegging rush and is therefore carefully selected priority ground that is prospective for palaeochannel roll-front uranium deposits, unconformity uranium deposits and iron oxide copper gold uranium (IOCGU) deposits, the latter well exampled by the giant Olympic Dam mine.

After the hiatus in uranium exploration and discoveries during past twenty years, the State’s warehoused uranium potential was further demonstrated by the new exploration upturn producing the country’s first new and significant uranium discovery at Beverley Four Mile in the Olary region in the east of the state. The Gawler Craton has similar palaeochannel geology with early explorers detecting roll front prospects with preliminary exploration in the 1970’s.

The geology of the Gawler Craton also offers potential for other uranium deposit styles evident in similar geological terrains overseas. Uranium deposits hosted in veins, volcanics, intrusives and consolidated unconformities such as the Athabasca style deposits in Canada are likely to be present in the uranium pregnant Gawler Craton but have remained undetected due to the cover blinding early methods of radiometric surveying and the lack of persistent modern exploration. The Oak Dam and South Vivian projects are being evaluated for the unconformity style uranium potential in the Pandurra Formation sandstones.

The Southern Uranium portfolio is therefore considered to offer excellent exploration opportunities with projects selectively and competitively placed in areas of high uranium prospectivity.

The portfolio includes :

• About 260 km of Tertiary palaeochannels with limited exploration undertaken prior to the 1983 - 2004 hiatus demonstrating positive indications of uranium deposition.
• Southern Gold and joint venturers restarted exploration of the palaeochannel projects including the successful application of modern gravity and airborne electromagnetic exploration technologies, not available to earlier explorers, to better define prospective channel positions.
• Ten IOCGU prospects, some near drill ready, defined by new target selection criteria derived from a better understanding of Olympic Dam and the recent Prominent Hill and Carrapateena discoveries.

Palaeochannel Roll Front Uranium Projects

The uranium-only joint venture projects at Tallaringa and Challenger West provide a dominant tenement position covering about 120 km of palaeochannel length over the Garford and Anthony systems in the northwest of the craton.

Smaller but prospective segments of palaeochannels are held in the Warrior South Project, the Yarlbrinda South (Narlaby Channel) and Comet Well Project (Yaninee Channel) and total about 90 km of palaeochannel length.

Another 50 km of less defined palaeochannels cross the tenement areas of the Streaky Bay and Southern Gawler Arc IOCGU Projects and will be evaluated for secondary uranium potential.

Challenger West - Tallaringa Project
Warrior South Project
Yarlbrinda South (Narlaby) Project
Comet Well (Yaninee) Project

IOCGU (Olympic Dam style) Projects

The IOCGU projects were selected using the revised criteria developed from the new information provided by the Prominent Hill and Carrapateena discoveries; i.e. :

• Northwest and northeast structural corridors controlling granite emplacement and hydrothermal activity.
• A high-level of granite emplacement within or directly beneath coeval Gawler Range Volcanics.
• Volcanic and hydrothermal centres.
• Low temperature (“epithermal”) alteration especially fluorite and sericite with indications of haematite.
• Gravity anomalies in the range 2 - 10 milligals with sources modelled with densities greater than 3.1 gm/cc and depths to top less than 1,000 m.

The modern availability of microgravity is facilitating the Company’s focus on gravity targeting for IOCGU deposits.

The highest priority IOCGU target is Cocky Swamp in the Oak Dam project area near Olympic Dam. A gravity anomaly is modeled to be a haematitic phase with copper gold uranium potential adjacent to a sporadically mineralized magnetite body intersected by a single WMC drillhole.

The Company’s other IOCGU projects are predominantly in the northwest Moonta -- Tarcoola corridor i.e. Southern Gawler Arc, East Eyre Peninsula, and Jumpuppy. The potential of this corridor is shown by presence of:

• Historically mined IOCGU style deposits with northwest orientations at Moonta.
• A concentration of vein uranium occurrences where the corridor intersects northeast mylonites on the east side of Eyre Peninsula.
• The large volcanic breccia hosted base metal deposit at Menninnie Dam.
• Hiltaba-age gold deposits at Weednanna, Tunkillia and Tarcoola.
• Small high-level Hiltaba granites and volcanic centres.
• Epithermal alteration with small exposures of haematite at the base of the Gawler Range Volcanics.
• The Southern Gawler Arc Project is a good example of how the modern exploration tactics can be progressively applied and the quality of targets that may be generated in the less developed IOCGU projects.
• The Streaky Bay Project is situated on secondary regional structures on the west side of Eyre Peninsula.

Oak Dam (Cocky Swamp) Project
Southern Gawler Arc Project
Jumpuppy Project
Streaky Bay Project
East Eyre Project