Summary

• Sinosteel Corporation and PepinNini Minerals Limited have completed a strategic alliance for the joint participation and co-operation in the development and operation of the Crocker Well and Mt Victoria Uranium Deposits and other commodities in the Curnamona Province of South Australia.
• Sinosteel Corporation will contribute $11 million in exploration expenditure for uranium and other commodities within the Curnamona tenements over a 2 year period from June, 2007.
• 2,385 sq.kms. of uranium prospective ground held under granted exploration leases. An additional 1,393 sq.kms. under application
• Crocker Well Uranium Field incorporating six deposits over 4 sq.kms containing 14.85 million lbs of U3O8. (Inferred JORC compliant resource of 12.5MT @ 0.5kg/tonne (0.05%) U3O8 based on a cutoff grade of 300ppm)
• Estimated mining costs of US$2.47/tonne and processing costs of US$12.79/lb U3O8 for Crocker Well. Approximately US$120million capital cost required to establish a mining and processing operation.
• Mt Victoria Uranium Deposit contains an Inferred JORC compliant resource of 250,000 tonnes @ 1.6kg/tonne (0.16%) U3O8.
• Very high grade surface samples (up to 26kgs/tonne U3O8) from newly discovered Becaroo Prospect
• 26 additional known primary uranium prospects within granted tenements yet to be explored
• Potential for Palaeochannel Uranium Deposits
• Potential for unconformity related Uranium Deposits

With the granting of EL 3278 in November, 2004 PepinNini Minerals inherited an extensive amount of data relating to uranium exploration conducted by the South Australian Mines Department and private companies within the Olary Domain between 1951 and 1978. Approximately 1,000 boreholes were drilled to assess the Crocker Well Uranium Field and Mt Victoria Deposit located in the west of the tenement. At least seven shafts were sunk to obtain bulk samples for metallurgical tests. The Crocker Well area remains the most prospective `hard-rock' uranium prospect in the Olary district of the Curnamona Province with areas of extensive shallow cover over prospective zones yet to be investigated. Numerous outcropping prospects easily identified from radiometric data also require investigation by drilling to determine the extent of mineralisation already recognised.
Considerable potential for secondary palaeochannel style deposits as well as unconformity related uranium mineralisation has also been identified within the Curnamona Province tenements.

In the Crocker Well area uranium occurs primarily as thorian brannerite mineralisation as a disseminated accessory mineral or in fractures, breccias or quartz veins in sodic plagioclase rich granitoids and gneisses. Uranium in the form of davidite occurs in the east of the deposit and at the Mt Victoria Deposit.

In September, 2005 independent resource consultants, Hellman & Schofield Pty Limited, completed a JORC compliant resource estimate of the Crocker Well Uranium Field and Mt Victoria Deposit and determined an Inferred Resource of 12.65 million tonnes at an average grade of 0.053% containing 6,740 tonnes (14.85 million lbs) of U3O8 using a cut off grade of 300ppm.

A scoping study for the development of the defined resource at Crocker Well was completed by GRDMinproc Limited in March, 2006 and identified a mining and process concept to produce U3O8. The process design was based on a 5.7Mt/annum mining operation producing 1.725Mt/annum ore from which 585t/annum of U3O8 would be produced. Capital cost to establish a processing plant, mining contractor, waste disposal, water supply and rehabilitation was estimated to be A$160 million.

During October and November, 2006 ten prospects in the vicinity of Crocker Well were investigated by scintillometer and surface sampling. Four prospects with extensive radiometric anomalies associated with surface uranium mineralisation have been prioritised for drilling. Very high grade uranium assays were obtained from surface samples collected from three of the prospect areas including:
•          Three samples from the Becaroo Prospect:      
            26.2 kg/t U3O8 (2.62%),     1.30 kg/t U3O8 (0.13%),     1.26 kg/t U3O8 (0.13%)
•          Two samples from Anomaly A:
            24.1 kg/t U3O8 (2.41%),     14.8 kg/t U3O8 (1.48%)
•          Two samples from Anomaly H:
            8.9 kg/t U3O8 (0.89%)     5.6 kg/t U3O8 (0.56%).
The high grade uranium samples from the Becaroo Prospect and Anomaly A contain accompanying high levels of cerium (max. 23,440ppm or 2.3%) and lanthanum (max. 26,684ppm or 2.7%) mineralisation confirming likely davidite mineralisation at these sites.  The elevated samples from Anomaly H do not contain high levels of cerium and lanthanum and suggest probable thorian-brannerite or other higher grade uranium mineralisation. The results are very encouraging and endorse the potential for significant new resources of uranium to be discovered in the area.

Mullock heaps located beside excavation shafts at Crocker East Uranium Deposit have been systematically sampled and found to contain at least 100 tonnes of ore grade material potentially suitable for the collection of bulk samples of sufficient size for metallurgical and pilot scale process testing.  A total of 55 samples of between 5 kgs and 7 kgs were collected with U3O8 assay results ranging up to 11.17kgs per tonne (1.1%).
The mullock heaps have been constructed according to grade with higher grade material being separated from lower grade material. The discovery of the representative ore grade material potentially represents a significant saving in terms of time and expenditure required for collecting bulk samples of sufficient size for metallurgical and pilot scale process testing.

Two diamond drill holes were completed at Crocker Well Project during June, 2007 as an initial part of a verification program to upgrade the uranium resource contained within the Crocker Well Deposit from Inferred to an Indicated or Measured category.
One of the boreholes was successfully gamma logged to total depth. The downhole gamma logging results indicate the borehole contains significant continuous uranium mineralisation from 10 metres to 99.2 metres with an average grade of 0.05%(eU3O8). Using a 250ppm cutoff the grade averages 0.06%(e U3O8) for a total thickness of 67.55 metres. There is a total of 15.75 metres grading in excess of 0.1%(e U3O8).

A Joint Venture Alliance has been established between Sinosteel Corporation and PepinNini Minerals Limited to manage and operate the development of the Crocker Well and Mt Victoria Uranium Deposits and other commodities in the Curnamona Province of South Australia. Office premises have been established in Adelaide for the Joint Venture Management Company.

In accordance with its strategy to be in production in 2010 Sinosteel PepinNini Curnamona Management Pty Limited as manager of the Joint Venture Alliance has commenced drilling operations to verify and upgrade sufficient of the currently defined JORC compliant uranium resource from an Inferred category to an Indicated and Measured category to allow for a Definitive Feasibility Study to be completed for the development of the Crocker Well Uranium Deposit. A drilling rig has arrived onsite and a program of approximately 130 reverse circulation holes and 16 diamond holes has commenced. The resource verification drilling program is scheduled to be completed by the end of July, 2008. A field camp has been delivered and set up at the site about 1km south of the uranium deposits to facilitate the accommodation of the various consultants and contractors employed on the project. Environmental baseline studies including flora, fauna and radiation monitoring have commenced and hydrogeological and geotechnical investigations are being undertaken in conjunction with the drilling program.

Initial results of metallurgical tests of bulk samples of Crocker Well ore being undertaken by Amdel Laboratories and ANSTO have been received. The Heavy Liquid Separation (HLS) results are particularly encouraging and show a clear ability to beneficiate the Crocker Well uranium ore based on specific gravity (SG). Preliminary tests indicate that 65% of the ore has an SG of less than 2.7. However, this fraction of the ore only holds 1.5% of the uranium. This suggests a HLS technique could be used to reject 65% of the ore prior to processing with only a 1.5% loss in uranium. In addition an increase in the uranium grade from 828ppm for the ore to 2,356ppm for the HLS concentrate was achieved. This has significant advantages to processing and plant costs in regard to plant size, amount of reagents used, recoveries and tailings dam size. Additional testing to determine optimum conditions and technique for beneficiation is currently underway.
Size distribution tests indicate that beneficiation could also be achieved via a simple crushing and sieving exercise. After a -2mm crush over 95% of the uranium will be retained in fractions that are less than 0.5mm. In fact, over 50% of the uranium will be retained in fractions that are sized between 0.25mm and 0.5mm.

Preliminary results also indicate that heating the leaching circuit could substantially improve process recoveries. Initial leach tests indicate leach recoveries of up to 93% can be achieved by heating the leachant. The current test work program will identify the optimal leach conditions. Higher leach recoveries will significantly improve the cost of processing as well as increase the amount of uranium recovered.

                                         

 

Crocker Well Uranium Field	Crocker Original - Mineralised Breccia
Shaft at Mt Victoria Uranium Deposit	Davidite Mineralisation at Mt Victoria Deposit