North Australian Diamonds Limited

Other Projects

Uranium Exploration

Top End Uranium Ltd. (ASX: TEU) is a uranium focused exploration company that controls, through farm-​in arrangements with NADL, one of the largest portfolios of highly prospective exploration tenements in the Northern Territory, Australia. Its tenement holding covers an area aggregating approximately 33,166sq km across three project areas, Arnhem Land Project Area, Yambarra Project Area and the McArthur South Project Area.

NAD has retained 31% of the issued capital in Top End in accordance with the terms of the Mineral Rights Agreement, whereby NADL assigned to Top End the non-​diamond mineral rights to its tenements.

The Company's tenements that are considered to have potential to host uranium mineralisation:

a) The McArthur South Project area lies midway between Darwin and Mt Isa. The Exploration Licences (ELs) over which TEU hold uranium rights potentially cover lithologies which host uranium mineralisation at Westmoreland which is located 120km east of the project area.

b) In Arnhem Land, TEU holds uranium exploration rights over a number of ELs that occur on the Arnhem Shelf along the western margin of the McArthur Basin within 100 km of the East Alligator River uranium field. Uranium rights are also held over additional potentially prospective ELs which are located along the eastern margin of the McArthur Basin. Collectively, these areas comprise TEU's Arnhem Land Project.

c) In the Daly River Region of the Northern Territory, TEU's Yambarra Project comprises uranium rights over a group of ELs which lie along a major tectonic zone that links the Pine Creek Orogen, one of Australia's richest mineral fields to the Halls Creek Mobile Belt.

McArthur South Project

The McArthur South Tenements area comprises of 5 granted tenements situated in the southern McArthur Basin.

The uranium mineralisation at the Pandanus Creek/Westmoreland uranium field is primarily hosted in the basal Westmoreland conglomerate and to a lesser degree within the overlying Siegal Volcanics. The uranium exploration potential of the McArthur South ELs is based largely on whether Westmoreland Conglomerate and/or Seigal Volcanics occur within the Company's ELs. Significant uranium mineralisation has been discovered in these formations which are located some 120 km east south east of the project area.

Based on a correlation of magnetic responses, it is interpreted that Seigal Volcanics may extend to the west and into the southern tenements of the project area which may indicate the potential for Westmoreland type mineralisation within the project area.

Puzzle Creek

In late 2008 a reconnaissance RadonX survey was undertaken targeting interpreted structures intersecting the unconformity between the Seigal Volcanics and the underlying Westmorland Conglomerate in the Puzzle Creek area. This is a well established geological setting for uranium mineralization in the Westmorland area, located 100km to the east. RadonX is an uranium exploration tool which is a refinement of the Radon-on-activatedcharcoal technique developed by the South African Atomic Energy Corporation in the 1970's. This initial survey highlighted a number of anomalous Radon gas responses which were followed up by a more detailed RadonX survey in 2009.

A number of anomalous Radon gas responses were highlighted in the initial RadonX survey with the most promising responses being followed up by soil geochemical sampling. Detailed follow-up soil geochemical sampling revealed one of the radon gas anomalies to be coincident with anomalous soil geochemical responses in the elements uranium, thorium, copper and constrained to an area approximately 200m by 200m. Additional follow-up and validation soil sampling has been completed and results indicate that the anomaly may be related to uranium-scavenging organic material associated with a surface drainage feature. Further interpretation is required prior to making a decision for drill testing the anomaly.

Arnhem Land Project

The Arnhem Land project area comprises 46 tenements, 11 of which are granted. The project area lies to the east and south east of the East Alligator River uranium deposits and can be separated into a western and eastern limb. Within the western limb, key areas of interest for the Company include Nungbalgarri Creek, Liverpool River and Jimbu. The eastern limb key areas of interest include Mitchell-Flinders and Parsons Range. Pevious exploration for uranium in Arnhem Land occurred in the early 1970's using geochemical sampling techniques and in some instances basic airborne geophysical systems. For approximately 20 years little or no uranium exploration took place. In the mid 1990's exploration recommenced in some areas using more modern exploration techniques.

The Arnhem Land project areas that are closest to the East Alligator River uranium deposits (Ranger, Jabiluka, Koongarra, and Nabarlek) have the highest prospectivity for unconformity-type uranium deposits where the mineralisation is associated with the unconformity at the base of the Kombolgie Sandstone.

a) Western Limb - Areas of Interest within the Arnhem Land Project

The Nungbalgarri Creek area, situated 90 km north east of Ranger Uranium Mine, and the Liverpool River area situated approximately 70 km east south-east of the Nabarlek Uranium Mine are considered priority target areas for unconformity-type uranium mineralisation. Based on conceptual models there is also potential over a much wider area within the western limb for Westmoreland-type uranium mineralisation associated with mafic and other volcanic rocks occurring at shallower depths within the sediments which overlie the unconformity at the base of the Kombolgie Sandstone.

The Jimbu area, located further to the south and approximately 100 km south east of the East Alligator River Uranium Field, is similarly considered prospective for unconformity-type uranium mineralisation. The conceptual targets in this instance are higher in the sedimentary sequence where uranium could potentially be associated with intrusive mafic rocks based on the similarities in geological setting for uranium mineralisation
observed in the Westmoreland area.

b) Eastern Limb - Areas of Interest within the Arnhem Land Project

Within the eastern limb area older basement rocks, equivalent in age to the Pine Creek Orogen basement rocks, have been thrust upwards along the Mitchell-Flinders Thrust Belt exposing an unconformity within the overlying sediments which are equivalent in age to the Kombolgie Subgroup sediments. This geological setting is considered analogous to that seen in the East Alligator River area, and hence has potential for unconformitytype uranium mineralisation.

On the western side of the Thrust Belt, the regional NTGS airborne radiometric data reveals an isolated, narrow but well defined uranium only anomaly, associated with the faulted contact between the Parsons Range Group sediments and the Roper Group sediments. This distinct Parsons Range anomaly provides evidence that uranium mineralisation may be present in the sediments well above the basal unconformity.

Access Meetings

An Initial Meeting was held on 4th August 2011, in Arnhem Land for 3 tenements (EL22262, EL3341, EL6531) with Traditional Owners agreeing to consent to negotiate to grant for these titles.

Sampling

In August 2011 TEUL undertook reconnaissance and infill stream geochemical sampling over 6 tenements (EL26206, EL330, EL27237, EL27238, EL10233 and EL25976). A rock chip sampling and geological mapping program was conducted on EL25976 to follow up an airborne radiometric anomaly. Samples from both these activities are pending analysis. It is anticipated that an additional field program will be possible before the onset of the northern wet season. A further 3 tenements (EL331, EL337, EL3338) will be sampled following a Work Program Meeting scheduled for October 2011.

Stream Sediment Sampling - Anomalous Lead-Zinc Results
Reconnaissance stream sediment samples previously collected by the Company reported results of up to 229ppm Zn and 128ppm Pb within EL26206. Follow-up of these anomalous results was completed during August 2011 with the collection of 18 infill stream geochemical samples. These samples are pending analysis.

Yambarra Project Area

The Tenements within the Yambarra project area lie along a major tectonic zone that links the Pine Creek Orogen to the Halls Creek Mobile Belt, which hosts major mineral occurrences. Similar geological settings within the tenements where Proterozoic aged sediments unconformably overly basement rocks, provide the potential for unconformity type uranium mineralisation.

No exploration specifically aimed at locating uranium has been undertaken on these tenements since the early 1970s. At that time a significant radiometric anomaly known as ‘Door Creek' was investigated. A subsequent NTGS airborne radiometric survey revealed that the source of this anomaly, which is some 5 km in length, may be associated with the faulted unconformity between the Fitzmaurice Group Sediments and the basement Hermit Creek Metamorphics.

Access Meetings

TEUL held Final Consultation Meeting in Daly River region for ELA22348, ELA10381, ELA10435 on 12th to 15th July 2011. At this meeting not all relevant Traditional Owners were present and additional meetings are scheduled for late 2011.

TEUL also held Work Programme Meeting in Daly River region for SEL26956, SEL26958 on 12th to 15th July. At this meeting not all relevant Traditional Owners were present and additional meetings are to be scheduled.

Door Creek Uranium Anomaly

The Door Creek Uranium anomaly extends for a distance of almost 5km and is associated with a drainage emanating from the nearby Tom Turner fault, which, in this area, coincides with the unconformity between the Fitzmaurice Group sediments and the underlying older basement rocks.

Ground follow up of the anomaly comprised of spectrometer traverses and limited auger drilling and sampling was able to confirm the anomaly on the ground. Associated sampling failed to produce anomalous uranium responses indicating that field procedures may not have been optimal for sampling anomalously radioactive geochemistry in this environment. However, a water sample from a spring at the headwaters of Door Creek reported 29 micrograms per litre ("ug/l") of uranium in a background of 0.04ug/l.

A number of conductive targets were identified from a VTEM airborne geophysical survey undertaken in 2008. The most significant of these conductors lies some 2.5 km to the north west of the fault and may represent a discrete conductive unit estimated to be at a depth of less than 100 metres.

The close proximity of this anomaly to Tom Turners Fault is very significant as this is a geological setting that is consistent with the setting of unconformity type uranium mineralisation elsewhere in the Northern Territory.

A soil sampling program comprising 93 samples has been completed over the source point of the airborne anomaly, which is some 600m from the Tom Turner fault and at a distance from the drainage. Although recording some slightly elevated Uranium and base metal responses no specific target was identified.

The agenda of the upcoming Work Program Meeting is to allow field work aimed at resolving the Door Creek anomaly. Specifically to determine how the anomalous surface material is associated with a primary source.

WEBB Project

During the quarter the Company signed a heads of agreement with Meteoric Resources to explore a 500 square kilometre package of four Meteoric tenements in the West Arunta region of Western Australia for diamonds. Meteoric acquired the tenements over a cluster of more than 50 discrete, circular magnetic anomalies evident from regional aeromagnetic data in the Webb area.

The magnetic targets may represent a kimberlite or lamproite pipe field in an area of extensive windblown sand cover. There are no records of any previous diamond exploration having been carried out in this area and the targets are considered to be completely untested.

Under the terms of the agreement, and subject to completion of an exploration access agreement with the traditional owners, NAD may earn 70% of Meteoric's rights in the tenements by expenditure of $2.5M within five years of signing an access agreement. A minimum programme of sampling and 1,000m of drilling is required during the first two years prior to NAD's right of withdrawal.

Meteoric have applied (on behalf of the Company) for West Australian state government co-funding for drilling of the aeromagnetic targets.

The Work Program has been approved by the Tjamu Tjamu Traditional Owners and Central Desert Native Title Services. Subject to administrative ratification of the Native Title Agreement between Meteoric and the Ngaanyatjarra Land Council, the Company will be designing and implementing and exploration strategy to test these anomalies for their commercial diamond potential.

• 7 February 2012 Appendix 3B - Issue of Shares > Read more

• 31 January 2012 Quarterly Activities Report for the period ended 31 December 2011 > Read more

• 25 January 2012 Appendix 3B - Issue of Shares > Read more

• 16 December 2011 Appendix 3X - Dr D S Tyrwhitt > Read more

• 16 December 2011 Appointment of Dr David Tyrwhitt as a Director > Read more

• 25 November 2011 Annual General Meeting November 2011 > Read more

• 25 November 2011 Results of Annual General Meeting 2011 > Read more

• 31 October 2011 Quarterly Activities Report for the period ended 30 September 2011 > Read more

• 25 October 2011 NADL Annual Report 2011 > Read more

• 24 October 2011 Notice of 2011 Annual General Meeting > Read more