Lake Frome Joint Venture (uranium) - Giralia 25% free carried interest

The Company’s key Lake Frome Joint Venture is located adjacent to the operating Beverley in-situ leach uranium mine in South Australia. The mine owner, Heathgate Resources Pty Ltd (“Heathgate”), an affiliate of the US utility General Atomic, is the holder of one of the few export licences for uranium in Australia and manages a joint venture over Giralia’s tenements under which Heathgate can confirm a 75% interest by meeting all expenditure up to a decision to mine, with Giralia free carried at 25%.

Heathgate affiliate Quasar Resources Pty Ltd has reported a high-grade uranium discovery at Beverley Four Mile (a JV with Alliance Resources Limited) close to the foot of the range, west of the Beverley mine. Giralia’s tenements cover around 45 kilometres of strike of the range front marking the edge of Proterozoic basement outcrop both north and south of the Beverley Four Mile discovery, along with the direct extensions of the Beverley East and Deep South deposits. Heathgate has recently extended its mineral production leases at Beverley to the east and south, to now directly adjoin Giralia’s tenements.

In late June 2007, widely spaced regional drilling along the range front in the north west corner of tenement EL 3002 North Mulga, around 12 kilometres north of the Beverley Mine, in an area considered prospective for both ‘Beverley’ and ‘Four Mile’ style mineralisation reported significant intersections including 2.76 metres @ 0.109 % eU3O8, (from 159.84 to 162.6 metres), and 3.76 metres @ 0.038 % eU3O8 (from 168.22 to 171.98 metres) in hole NM051. The mineralisation in hole NM051 is hosted within reduced sands, which reportedly appear more akin to Beverley mine style rather than Four Mile style setting.

Two drilling programs were completed during the December 2007 quarter. On the North Mulga tenement (EL 3002), 14 holes for 445 metres of shallow aircore drilling was completed in a program co-funded by the South Australian government under the PACE initiative to test potential for uranium in calcretes developed along the range front in the area. The new aircore drill holes did not test for extensions to deeper target zones.

Heathgate also reports that a 16 hole rotary mud drilling program for 3,162 metres was completed on the southern Wooltana tenement, in a series of widely spaced drill hole traverses in the south and west of the tenement. The purpose of the drilling has not yet been reported. Heathgate report that the new holes returned no gamma responses in excess of 0.03%eU3O8 over 0.5 metres.

During the June 2008 quarter, Heathgate reported the completion of a major, detailed, high resolution, airborne magnetic and radiometric survey over the JV tenements (over 2,500 line kilometres), with line spacing of 40 metres and flying height of 30 metres.

“eU3O8”-refers to the equivalent U3O8 grade as estimated from downhole gamma logging and provides a more representative sample than chemical assays due to a much larger volume of rock being measured. This method is commonly used to estimate uranium grade in drillholes where the radiation contribution from thorium and potassium is believed to be negligible. Compared to chemical assays, gamma logging also offers a vastly superior resolution, increased precision and does not suffer from contamination.