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Gardner Range Project

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Uranium-REE-Gold-Base Metals

Gardner Range contains sediments of the Birrindudu Group (Mesoproterozoic) which unconformably overlie Palaeoproterozoic sediments of the Killi Killi Formation. This geological setting, including the unconformity and historical local discoveries of uranium and gold mineralisation, has long caused geologists to believe that this area has many similarities to unconformity-associated deposits of the Pine Creek Inlier (Nabarlek & Jabiluka Uranium Mines), northern Australia and the Athabasca Basin (McArthur River Uranium Mine), Canada.

Canadian Energy Resources Pty Ltd (CER) discovered uranium mineralisation in the 1980’s at the Mt. Mansbridge prospect (see Figure 1) which was 350 meters south of the identified unconformity. A significant leaf uranium geochemistry anomaly was discovered, after testing airborne geophysical targets, with a strike length of over 300 meters. The leaf geochemistry technique was proven at Jabiluka Uranium Mine to be able to detect buried uranium mineralisation. CER discovered a highly altered zone in this area and dug 7 small pits to take rock samples. All pits showed highly anomalous uranium values with pit 5 showing up to 980ppm uranium.

Further research by Quantum uncovered that up to 7% REE was also discovered in the pits sampled by CER which was reported by the 1986 joint venture between CER and BHP Minerals Ltd. The alteration zone was described as xenotime rich alteration. Xenotime is a rare earth mineral containing the rare earth element yttrium but can also contain other REE’s including the highly valuable HREE’s. The only REE that was assayed by CER was yttrium and a full analysis of all REE’s was not conducted.

Although the BHP/CER joint venture reported yttrium levels up to 7% in rock chips from Mt. Mansbridge, there is limited information on sampling methodology and assaying techniques. These historical results cannot be used to confirm the quality or quantity of potential REE mineralization at Mt. Mansbridge, however the reference to REE’s in the 1986 field program report is very encouraging and exciting. Follow up drilling by the BHP/CER Joint Venture did not assay for REE’s which shows the exploration focus at the time was principally targeting uranium. The Joint Venture was dissolved due to logistical issues before the proposed extensive diamond drilling program was initiated. This area is now priority 1 for drill testing after the current exploration program is complete.

Uraniferous xenotime and xenotime rich in heavy rare earth elements (HREE) have been discovered in a number of localities in the local region by previous and current explorers. The discoveries are often associated with the unconformity between the Paleoproterozoic Killi Killi Formation and the Mesoproterozoic Gardner Sandstone highlighting this contact as a high priority exploration target at the Gardner Range.

A multidisciplinary study completed in the September quarter of 2011 of all available Gardner Range exploration results has led to a reprioritisation of the Company's targets in these tenements. Based on this study the company considers that rare earth elements offer the most potential for being present in economic quantities.

Elevated rare earth element assays from the contact between the Killi Killi Beds and overlying basal conglomerates of the Gardner Sandstone provide evidence for hydrothermal rare earth element mineralisation. The magnitude of total rare earth element contours in the soil samples of the Company's Gardner Range prospect are of the same order as the main anomaly reported by Northern Minerals at the Browns Range project.

The Company is encouraged by the rare earth element results to date and an exploration program will be designed to define the nature and extent of potential mineralisation.

In 2012, over a three month period, three periods of exploration activity were undertaken at the Gardner Range Project and was comprised of RadonX surveys, MMI sample lines, rock chip sampling, stream gravel sampling and mapping. The sampling program was a first pass reconnaissance style program undertaken by Quantum to identify areas for more focussed exploration in 2011.

Sample results, plus a review of geophysical data and aerial photo-geological mapping work, highlighted a number of areas warranting follow-up for uranium, rare earth mineralisation, with some potential for gold.

Exploration in 2011 built on the 2010 results and included a second phase of mobile metal ion and conventional soil geochemical sampling, rock chip sampling, hand held spectrometer surveying and a greater emphasis on geological mapping in order to define hosting stratigraphy and identify potential drilling targets.

Drill testing of targets defined from the 2010-2011 results may commence in 2012 subject to further review of sample results, relevant approvals, ground access and drill rig availability.

Area 1
Work during 2010 in this area comprised rock chip sampling and MMI sampling to follow-up work undertaken by BHP/CER in the 1980's. Historical sampling in this area had outlined a zone of interest that returned high uranium and REE values from shallow pits. The 2010 program located these pits and sampling returned elevated uranium (>50ppm) and REE. Two rock chip samples also returned gold values >50ppb. The 2010 program confirmed and validated the presence of mineralisation providing encouragement to undertake further exploration to determine the hosting stratigraphy and style of mineralisation present and potential economics of any identified deposit. Proposed drill testing of mineralisation has been postponed until targets have been more accurately defined in particular the REE mineralisation.

MMI samples collected during the 2010 program over a coincident magnetic and radiometric anomaly reported base metal response ratios (including Fe, Ni, Cu) up to 9 times background over the anomaly and elevated uranium and REE's near the margins of the anomaly. Further work here will involve detailed spectrometer surveying and field geological mapping, and the collection of rock chip and conventional soil geochemical samples.

Area 2
The 2010 MMI sampling program returned gold response ratios up to 400 times background. This sampling was reconnaissance only and no detailed geological information was obtained to assist with the interpretation of the results. Further infill MMI sampling and detailed geological mapping is planned to follow-up this potentially exciting result. In addition several stream gravel samples will be collected to test for the presence of alluvial gold particles.

Area 3
Reconnaissance MMI sampling in 2010 targeted a WNW trending structure that hosts a uranium occurrence off-tenement to the east. A photo-feature reported coincident elevated response ratios for Ce, La, Y, Ni, Pb and Mg. Several additional sampling lines reported anomalous response ratios and infill MMI sampling is planned along with more detailed spectrometer surveying, geological mapping and rock chip sampling to identify mineralised zones.

The 2011 field program was designed to follow up on the anomalies identified in the previous year prior to selecting drill targets. During the third quarter of 2011, the company collected over 1,000 samples, as summarised in the table below.

Sample Table

All samples have been submitted for assay. Early results for soil geochemistry at the Mt Mansbridge prospect indicate anomalous regions of the rare earth element Yttrium. The main anomaly pictured in Figure 4 extends over approximately 500m. A detailed interpretation of the results will be conducted once the remainder of the sample assays are returned from the laboratory.

Work Program Meeting

Work program meetings with the Kimberley Land Council and heritage clearance applications were completed and field work commenced in August 2011.