ARAFURA RESOURCES LIMITED - ASX: ARU

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Description

Aileron Reynolds Range

Arafura Resources has a substantial land position in the Aileron-Reynolds Range district, covering an area of about 1,500 km2 (EL 23571, SEL 23671, EL 27290, EL 27291, EL 27335, EL 27336, EL 27337). In addition, the Company has non-uranium exploration and development rights over adjoining licences held by NuPower Resources Limited (EL 24741, EL 24548). The Nolans Bore REE-P-U deposit is located on SEL 23671, approximately 135 km north-north-west of Alice Springs. In late 2007, an application was lodged for a mineral lease over the deposit - ML 26659.

The Reynolds Range is in the central Aileron Province of the Arunta Region. The Aileron Province comprises greenschist to granulite facies metamorphic rocks with protolith ages in the range 1865-1710 Ma. Supracrustal rocks in the Reynolds Range are divided into 2 broad units: the Lander Rock Beds and the Reynolds Range Group. The Lander Rock Beds comprise (meta)turbiditic rocks that range in metamorphic grade from greenschist to granulite.

Granite intrusion occurred in the Reynolds Range area between 1810 and 1790 Ma. The supracrustal rocks and granites were overprinted by high grade metamorphism to amphibolite and granulite facies during 1590-1560 Ma. Dykes and irregular masses of very coarse grained pegmatite intrude the supracrustals and intrusive rocks, and transgress all observed metamorphic foliation.

The Reynolds Range has a characteristic NW-SE grain defined in large part by similarly oriented shear zones and faults. These late shear zones were probably active during the later stages of the Alice Springs Orogeny.

Exploration undertaken by Arafura over its Aileron / Reynolds Range holdings to date has largely been focused on the Nolans prospect area, with the exception of limited geological reconnaissance in 2005, and extensive airborne geophysical (magnetic-radiometric), airborne hyperspectral and ground gravity surveys during 2008. The district therefore remains highly prospective for the discovery of apatite-hosted REE mineralisation, gold, uranium and iron.

Hammer Hill Project

The Hammer Hill project is located about 180 km nort-east of Alice Springs. It lies within the Harts Range Group of the Irindina province (eastern Arunta Region), a volcano-sedimentary succession that was metamorphosed to granulite facies during the Ordovician Larapinta Event. The numerous mafic and ultramafic units found throughout the Irindina Province may have intruded during the Larapinta Event. These intrusions are considered prospective for magmatic nickel-copper-PGE sulphide mineralisation.

In November 2005, Arafura and Mithril Resources Limited announced an option agreement which allowed Mithril to conduct exploration on Arafura's Hammer Hill exploration licences (EL 9725 and EL 10136). EL 26520 was added into the JV during 2008. The farm-in allows Mithril to earn up to 70% interest in the project by spending AUD$5 million over 6 years.

Jervois Project

At Jervois, approximately 290 km north-east of Alice Springs, the discovery of vanadium-bearing magnetite represents further potential to diversify Arafura's commodity base. The project is secured by EL 10215, EL 26231, EL 26318 and EL 26812.

The Bonya Schist is the dominant outcropping Palaeoproterozoic unit within Arafura's licence areas. It is predominantly composed of pelitic, psammopelitic and calcareous metasedimentary rocks, all metamorphosed at upper greenschist to lower amphibolite facies conditions. The Attutra Metagabbro occurs as a series of low hills on the licences. It is described as altered gabbro, dolerite, norite and magnetite rock. Titanium-vanadium-rich magnetite occurrences, some with anomalous copper-PGE-gold, are known within the Attutra Metagabbro in the north-eastern parts of EL 10215. Past exploration efforts have not fully evaluated the extents of these occurrences.

Encouraging results from systematic programs of surface geological mapping, rock chip geochemical sampling, and airborne geophysics by Arafura in 2005-2006 culminated in a 15-hole RC drilling program in October 2006. Drilling confirmed the sub-surface continuation of several near-massive magnetite horizons up to 44 metres in thickness over an area of approximately 20 km2. The average grade of in-situ (head) material from all mineralised drill intercepts is 29.2% Fe, 0.47% V2O5 and 6.48% TiO2, confirming the tenor of earlier surface rock chip assays.

Recovery of magnetite concentrate using an industry-standard process shown below (Davis Tube Recovery - DTR) delivers an average physical yield of 27.9% grading 64.5% Fe, 1.34% V2O5 and 5.22% TiO2. Metal recovery in concentrate averages 61.5% for Fe, 76.4% for V2O5 and 22.2% for TiO2.

Kurinelli Davenport West

The Kurinelli gold project is located in the Davenport Ranges 150 km south-east of Tennant Creek. Arafura Resources holds several tenements in the area: AC 74 and MCC 950-953. This region has not been explored before using modern exploration techniques and represents an outstanding opportunity to discover a new gold district.

Prospective basement rocks in the Kurinelli project area belong to the Palaeoproterozoic Ooradidgee Group, and more specifically arenites and siltstones of the Rooneys Formation interlayered with sills of dolerite and gabbro. Primary gold mineralisation seems to be predominantly in quartz veins and reefs injected into and adjacent to contacts between the dolerites and sediments of the Rooneys Formation.

Since commencing exploration at Kurinelli, drill targets have been identified by Arafura through soil sampling programs (2005 and 2007). An RC drilling program in 2006 delivered several narrow intercepts of mineralisation in basement rocks grading 0.5 to 6.8 g/t gold. Extensive gold-in-soil anomalies generated during 2007 await drill testing.

Frances Creek Mt Porter

Arafura Resources has interests in a number of gold tenements in the Pine Creek region (AN 389, EL 10137, EL 22270, ERL 116, EL 23237, ML 23839), approximately 170 km south-east of Darwin. These include the Frances Creek and Mt Porter projects.

Tenements defining the Frances Creek project (AN 389, EL 10137, EL 22270, EL 23237) are held by Territory Resources Limited, with Arafura holding gold exploration and development rights. The project area covers metasediments of the Palaeoproterozoic Namoona, Mount Partridge and South Alligator Groups, and the adjacent Allamber Springs Granite. Work programs undertaken by Arafura in the Frances Creek area include stream sediment sampling and RC drilling. These programs built upon earlier work completed by Homestake Gold of Australia in 1996-1999 which discovered several gold prospects in the region.

Arafura's Mt Porter project, defined by ERL 116 and ML 23839, is located 15 km north of GBS Gold International's Union Reefs mill, near Pine Creek. Metasedimentary rocks present in the Mt Porter project area belong to the Koolpin Formation of the South Alligator Group. Sediment-hosted stratiform gold mineralisation and quartz-sulphide-vein-hosted stratabound gold mineralisation at Mt Porter is associated with cherty iron formation and carbonaceous mudstone mainly in the Koolpin Formation.

The Mt Porter project contains a JORC compliant resource of 34,200 oz of gold (355,000 t @ 3.0g/t gold, using a 1.7g/t cutoff grade) conducive to open pit mining. In recent years, Arafura has completed two drilling campaigns at Mt Porter. The 2006 program encountered a 13 metre intersection grading 2.28 g/t gold to the west of, and beneath, the identified resource. This represents a new and unexpected zone of mineralisation.

Arufura Resources Asia Mining Conference presentation

Mine For

Rare Earths, Gold, Iron Ore, Nickel, Vanadium, Uranium, Phosphate

Location of operation(s)

Northern Territory

Address

Level 5, 16 St Georges Tce
PERTH, WA, AUSTRALIA

Phone

(61 8) 6210 7666

Email

Website

http://www.arafuraresources.com.au

Last Updated

07/05/2010