PHOSPHATE AUSTRALIA LIMITED - ASX: POZ

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Description

Australia's largest phosphate deposits are in the shallow marine sediments of the Cambrian Georgina Basin in north-west Queensland and the Northern Territory. It is in the Georgina Basin of the Northern Territory that the Company has acquired most of its large portfolio of tenements. All of the tenements are 100% owned by the Company. The Company has phosphate exploration projects at three different stages of maturity - advanced, intermediate and exploration stage.

Advanced Stage: Highland Plains Phosphate Project

At the most advanced stage is the Company’s 100% owned Highland Plains Project Highland Plains Phosphate Project in the Northern Territory of Australia . There is a JORC code compliant phosphate resource at Highland Plains All quoted resource numbers were calculated by Independent Resource Consultants, Cube Consulting Pty Ltd.

Inferred Resource of 14 million tonnes at 20% P2O5 with a lower cut off of 15% P2O5. The aim of the Companies Phase 1 work has been to clearly identify the area at Highland Plains where a commercial phosphate mining operation could be initiated. This area has shallower mineralisation, with a lower strip ratio anticipated to enable the building of a low capex ‘starter mine’. Mineralisation begins at the western edge of the western area almost at surface, and gently dips to the east. Drilling has shown some very high grades (including 5m at 30.5% P2O5 from 2m in hole HAC001) in this western area. This is the obvious place to begin mining and enables POZ to target an operation that requires a low capex start up cost.

Inferred Resource of 56 million tonnes at 16% P2O5 with a lower cut off of 10% P2O5. This resource confirms that Highland Plains is indeed a large and persistent mineralised phosphate body. These numbers are based upon the limited amounts of drilling to date over a large area. The Board of POZ believe these resources have the potential to be significantly improved (particularly the higher grade shallow areas) with further drilling programs.

Intermediate Stage: Alexandria, Alroy and Buchanan Dam Phosphate Prospects

Further areas of known historical phosphate mineralisation in drill holes also occur on the Company's tenements at Alexandria, Alroy and Buchanan Dam. Previous drill intersections include 6.1m @ 25.0% P2O5 from 12.2m (Buchanan Dam), 6.1m @ 15.6% P2O5 from 48.8m (Alexandria) and 4.6m @ 15.5% P2O5 from 17.4m (Alroy).

These documented historical occurrences were reported with substantial bulk mineralisation estimates which would require far more drilling to meet today's reporting standards. The Company intends to conduct follow up drilling to define the known phosphate mineralisation described above and explore for extensions to that mineralisation.

Exploration Stage: Georgina Basin Regional Phosphate Exploration

Phosphate Australia Limited is in a very strong position to make new greenfields phosphate discoveries. Some of the most prospective ground in the Northern Territory is held by the Company. There are three main areas of interest:

1. Along strike from Highland Plains following the Proterozoic unconformity.
2. North of Highland Plains targeting Cambrian phosphate inliers within the Proterozoic.
3. Radiometric anomalies within the Georgina Basin itself.

Iron Project

The Company's tenements include areas that have known iron occurrences and are prospective for Clinton style oolitic iron mineralisation. Recent geological mapping by the Northern Territory Geological Survey ("NTGS") has identified outcrop and sub-crop of iron-bearing formations on the Company's tenements that lie within the South Nicholson Group. NTGS confirmed that one of these formations is equivalent to the host unit for the Constance Range iron ore deposits that lie just over the border in Queensland. The style of mineralisation has been described as Clinton type oolitic ironstones. Iron ore exploration was conducted in the Constance Range area in Queensland in the early 1960s. Results for this exploration are based upon historical data that was prepared before the introduction of the JORC Code and as such is not able to be included in this Prospectus. Since the discontinuation of the Constance Range iron ore project in the early 1960s, iron ore industry economics have changed considerably. The massive stratiform oolitic ironstones for which the Company's South Nicholson Basin tenements are prospective and has known occurrences, make it an excellent iron ore exploration target. The Company's tenements in the South Nicholson Basin are under explored for iron ore and have considerable potential to convert known iron occurrences into commercial tonnages and grades. From recent mapping and site visits the Company has defined target areas for follow up. It is the intention of the Company to follow up these targets with field mapping and sampling.

Uranium Project

The Company's tenements in the South Nicholson Basin region are prospective for uranium. The rocks here are from Lower to Upper-Proterozoic in age and are being targeted for unconformity type uranium deposits. The "hot" (uranium rich) Murphy Inlier granite adjoins the northern part of the tenement area which could potentially act as a source for uranium rich fluids. There are numerous airborne uranium radiometric anomalies on the Company's tenements that are prospective for uranium mineralisation; these anomalies warrant ground follow up. The Company intends to field map and sample the uranium radiometric anomalies and associated structures. A hand held scintillometer will be used whilst mapping to assist with identifying any areas of outcropping uranium mineralisation or account for the radiometric anomalies. The results from mapping and sampling programs would provide orientation data for follow up geophysics surveys and drilling as required.

Mine For

phosphate, uranium, iron

Location of operation(s)

Northern Territory

Australian Basins

Georgina

Address

Ground Floor, 41-47 Colin St
WEST PERTH, WA, AUSTRALIA

Phone

(61 8) 9422 9555

Email

Website

http://www.phosphateaustralia.com.au/

Last Updated

28/2/2011