6659 uog prospectus for pdf - morningstar, inc
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Uranium Oil and Gas LimitedACN 115 593 005
ProspectusFor the issue of: 40,000,000 ordinary Shares of 20 cents each with one free attaching Option for every 2 Shares issued to raise up to $8,000,000
Sponsoring Broker to the Issue Cameron Stockbrokers Limited
THIS IS AN IMPORTANT DOCUMENT WHICH SHOULD BE READ IN ITS ENTIRETY. YOU MAY WISH TO CONSULT YOUR PROFESSIONAL ADVISER ABOUT THE CONTENTS OF THIS PROSPECTUS. AN INVESTMENT IN SHARES OFFERED BY THIS PROSPECTUS SHOULD BE CONSIDERED AS SPECULATIVE.
Global Reports LLC
DIRECTORS
Dr Zhukov (Zeke) Pervan MB, BS(WA), F.R.A.C.G.P., F.A.I.C.D. (Chairman)
William Edwin Bannister MSc. AWASM (Managing Director)
John Karajas BSc (Hons) MAIG
David Zohar BSc DipEd
COMPANY SECRETARY
David Zohar BSc DipEd
REGISTERED OFFICE
8/256 St Georges Terrace PERTH WA 6000
Telephone: (08) 9371 2770 Facsimile: (08) 9371 2770
Website: UOG.com.au
INVESTIGATING ACCOUNTANTS
BDO Consultants (WA) Pty LtdLevel 8256 St Georges TerracePERTH WA 6000
COMPANY AUDITORS
BDO Chartered Accountants and Advisers Level 8 256 St Georges Terrace PERTH WA 6000
INDEPENDENT GEOLOGIST (Mining Tenements)
Geological Investigations Pty Ltd 4 Minim Close MOSMAN PARK WA 6012
INDEPENDENT GEOLOGIST (Petroleum Permits)
RPS Energy Level 3 41-43 Ord Street WEST PERTH WA 6005
SOLICITORS TO THE COMPANY
Lawton Gillon Level 11 16 St Georges Terrace PERTH WA 6000
SHARE REGISTRY
Computershare Investor Services Pty Limited 2/45 St Georges Terrace PERTH WA 6000 Telephone: 1300 557 010 Facsimile: (08) 9323 2033
Corporate Directory
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Contents
CORPORATE DIRECTORY
INVESTMENT HIGHLIGHTS
IMPORTANT INFORMATION
CHAIRMAN’S LETTER
1 INVESTMENT SUMMARY
1.1 Uranium Oil and Gas Limited1.2 Purpose of the Offer1.3 Use of funds1.4 Working capital adequacy 1.5 Capital structure and financial information1.6 Risk factors
2 PROJECT SUMMARY
2.1 Introduction2.2 Uranium Projects2.3 Bungalow Well Project (ELA36/549)2.4 Four Corners Bore Project (ELA57/607)2.5 Galah Rock and Walling Rock Project (E30/312
and E29/589)2.6 Rubberoid Well Project (E09/1245)2.7 Mt Vernon and Collier Projects
(E52/1863 and E52/1864)2.8 Wannamal and Wooroloo Projects
(E70/2444, E70/2692, E70/2693 & E70/2727)2.9 Burdo Project (EPA 113, Northern Territory) 2.10 Kilgour Project (EPA 114, Northern Territory) 2.11 Canning Basin Petroleum Projpect (EP 448) 2.12 Proposed Budget Summary
3. DETAILS OF THE OFFER
3.1 Shares Offered for Subscription 3.2 Minimum Subscription 3.3 Offer period 3.4 Underwriting 3.5 Allotment and Allocation of Securities 3.6 Brokerage and Fees 3.7 Applicants outside Australia 3.8 ASX Listing 3.9 CHESS 3.10 How To Apply 3.11 Escrow Provisions 3.12 Electronic Prospectus 3.13 Enquiries in Relation to the Offer 3.14 Privacy Disclosure 3.15 No Forecasts
4 PROFILE OF DIRECTORS AND MANAGEMENT
5 INDEPENDENT GEOLOGIST’S REPORT(MINING TENEMENTS)
6 INDEPENDENT GEOLOGIST’S REPORT(PETROLEUM PERMITS)
7 INVESTIGATING ACCOUNTANT’S REPORT
8 SOLICITOR’S REPORT
9 RISK FACTORS
9.1 Exploration Risk 9.2 Operating Risks 9.3 Resource Estimates 9.4 Commodity Price Volatility and
Exchange Rate Risks9.5 Environmental Risks 9.6 Title Risks and Native Title 9.7 Share Market Conditions 9.8 General Investment Risks 9.9 Regulatory 9.10 Additional Funding Requirements 9.11 Uninsured Risks 9.12 Specific Risks associated with the Company
10 ADDITIONAL INFORMATION
10.1 Incorporation 10.2 Company Tax Status and Financial Year 10.3 Legal Proceedings 10.4 Summary of Material Contracts 10.5 Rights Attaching to Shares 10.6 Rights Attaching to Options 10.7 Directors’ Interests 10.8 Dividend Policy 10.9 Taxation 10.10 Corporate Governance 10.11 Interests of Experts and Professional Advisers 10.12 Consents to be Named 10.13 Costs of the Issue 10.14 Electronic Prospectus 10.15 Governing Law
11. DIRECTORS’ STATEMENT AND CONSENT
12. DEFINED TERMS
13. APPLICATION FORM AND INSTRUCTIONS
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Uranium ProjectsBungalow Well, Four Corners Bore, Walling Rock and Galah Rock projects all cover interpreted paleochannels with high level uranium sample values and/or radiometric anomalies.
The Bungalow Well project covers approximately 100 km2 of highly prospective ground with uranium mineralisation indicated by surface sampling and several drill holes. The best results gave 0.47% uranium at surface and 0.2% uranium in a sample from auger drilling. The project is situated about 130 km south of BHP Billiton’s Yeelirrie uranium deposit.
The Rubberoid Well project contains uranium prospectivity in a geological setting similar to that hosting the East Alligator River uranium deposits in the Northern Territory.
Oil ProjectsThe two project areas in the Northern Territory contain excellent potential for the discovery of large oil and gas fields.
The Burdo project area (EPA113) is considered to contain a major zone of anticlinal folding with the potential to hold 700 billion cubic feet of gas in-place adjacent to a pipeline. Burdo No. 1, drilled in 1993, showed clear signs of gas despite probably not being drilled within a structural closure.
The Kilgour project area (EPA114) holds 4 separate prospects (Kilgour, Abner, Kilgour South and Glyde River Trend) with the potential for a significant oil and/or gas discovery. The Glyde River Trend has produced a strong gas blowout from a mineral exploration core hole (GR9).
Several prospects within the Canning Basin project (EP 448) in which the Company holds a 10% interest also have the potential for a significant oil and gas discovery.
Other Mineral ProjectsThe company has several other projects with strong geochemical and/or aeromagnetic anomalies for copper, gold and molybdenum. These projects are significant and should not be discounted. In particular the Directors are very optimistic about the potential of the copper and gold mineralisation associated with the Mt Vernon and Collier projects.See the Independent Geology (Mining Tenements) Report in Section 5 of this Prospectus.
The Company has an extensive tenement package in Western Australia which is prospective for Uranium, Copper, Gold and Molybdenum. The Company also has interests in 2 petroleum permit applications and one granted petroleum permit covering a total of approximately 27,000 km2 in Western Australia and the Northern Territory.
Investment Highlights
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Important Information
This Prospectus is dated 19 July 2006. A copy of this Prospectus was lodged with ASIC on 19 July 2006. Neither the ASIC nor the ASX takes any responsibility for the contents of this Prospectus.
No securities will be allotted or issued on the basis of the Prospectus later than 13 months after the date of this Prospectus. Securities allotted or issued pursuant to this Prospectus will be allotted or issued on the terms and conditions set out in this Prospectus.
This Prospectus will be issued in paper form and as an electronic Prospectus which may be viewed online at UOG.com.au. This Offer is available to persons receiving an electronic version of this Prospectus in Australia. The Corporations Act prohibits any person from passing on to another person the Application Form unless it is attached to or accompanied by a complete and unaltered version of this Prospectus. During the Offer Period, any person may obtain a hardcopy of this Prospectus by contacting the Company directly by telephone on (08) 6263 4488 or by email at UOG.com.au.
This Prospectus is subject to an exposure period of 7 days from the date of lodgement with the ASIC. This period may be extended by the ASIC for a further period of up to 7 days.
The purpose of the exposure period is to enable examination of the Prospectus by investors prior to the raising of funds. That examination may result in the identification of deficiencies in the Prospectus and in those circumstances an Application that has been received may need to be dealt with in accordance with Section 724 of the Corporations Act. Applications received prior to the expiration of the exposure period will not be processed until after the expiry of the exposure period. No preference will be conferred on Applications received during the exposure period and all Applications received during the exposure period will be treated as if they were simultaneously received on the Opening Date.
The Company will make an application with the ASX within 7 days of the date of this Prospectus for Official Quotation of the Securities.
The Prospectus contains the Application Form which Applicants must complete in making an application for Shares. An Application Form is only available with a Prospectus.
Applicants should read this Prospectus in its entirety before deciding to apply for shares. If, after reading this Prospectus applicants have any questions as to how to deal with this Prospectus, they should contact a professional adviser.
The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make an offer.
The photographs contained in this Prospectus are for illustration purposes only and are not necessarily assets of the Company.
The Securities the subject of this Prospectus should be considered speculative. Please refer to section 9 of this Prospectus for details relating to risk factors.
No person is authorised to give any information or to make any representation in connection with the Offer described in this Prospectus which is not contained in this Prospectus. Any information or representation not so contained may not be relied upon as having been authorised by the Company in connection with the Offer.
Certain abbreviations and other defined terms are used throughout this Prospectus. Details of the definitions and abbreviations used are set out in section 12 of this Prospectus.
This is an important document and requires your immediate attention.
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Key DatesDate of Prospectus19 July 2006
Offer Opening Date28 July 2006
Offer Closing Date6 September 2006
Issue of Securities to Applicants14 September 2006
Expected despatch of shareholder holding statements15 September 2006
Trading of Securities on ASX expected to commence22 September 2006
The above dates are indicative only and may vary. The Company reserves the right to change the key dates of the Offer without prior notice, which may have a consequential impact on other dates.
How to investApplications to subscribe for or purchase Shares can only be made by completing and lodging an Application Form contained in this Prospectus.
Instructions on how to apply are set out in section 3 of this Prospectus and on the back of the Application Form. Applications must be for at least 10,000 Shares ($2000). Applications for more than 10,000 Shares must be in multiples of 1000 Shares.
Important Information
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Dear Investor On behalf of the board of directors, it is my pleasure to invite you to become a shareholder in Uranium Oil and Gas Limited through this Prospectus which seeks to raise $8,000,000 by the issue of 40,000,000 fully paid Shares (with one free attaching Option for every 2 Shares issued) at an issue price of 20 cents each.
We are an exploration company focused on unlocking the potential of its quality portfolio of assets in Australia. We have the benefit of an experienced board of directors with sound, proven track records in the mining industry as well as in the broader business sphere.
The company was established to acquire and explore for energy resources. Anybody who has followed the financial press over the last 12 months will be well aware that the export markets for uranium and petroleum resources are exceptionally strong.
WA hosts a wide variety of geological environments which are highly prospective for Uranium discoveries. As a result of the implementation of the Three Mines Policy by the Federal Government in the early 1980s, minimal greenfields uranium exploration has taken place in WA over the past two decades. Recently this policy has shown dramatic evidence of change as has been widely reported in the media.
In this time, there have been considerable advances in technologies which can be applied to uranium exploration. These changes primarily relate to the availability, quality and use of radiometrics, the availability of regional scale geochemical datasets as well as the availability of lake based drilling technologies.
The Company’s exploration strategy so far in the case of its uranium prospects has been to target projects with uranium radiometric responses associated with the development of calcrete within palaeochannel drainage systems. In the case of its oil and gas prospects its strategy has been to target substantial structures with the potential to hold large amounts of recoverable oil and/or gas.
Chairman’s Letter
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The most advanced uranium project is the Bungalow Well project covering about 100 km2 of highly prospective ground. On this lease high grade uranium drill results were obtained approximately 35 years ago by Le Nickel Prospecting Pty Ltd. However the majority of the prospective paleochannels are still to be drilled.
The uranium market outlook has improved considerably in the last two years. A growing focus on greenhouse gas reduction appears likely to favour nuclear power generation. The strategic importance of uranium as a power source is rising as China’s rapid industrialisation stresses the supply of more traditional energy sources. Current global uranium production meets only around 55 % of demand. With stockpiles falling, uranium prices have in recent times increased significantly.
It should be noted that in WA the State Government has a restrictive policy on uranium mining and processing. Changes in policy may take time to develop but favourable changes to the regulatory environment in WA are expected to have a positive effect on the Company.
The Company has what I consider to be exciting prospects within its Burdo (EPA 113) and Kilgour (EPA 114) prospects in the Northern Territory. The region in which the prospect areas are situated contains the hallmarks of a significant hydrocarbon province including good to excellent oil-prone source rocks, demonstrated reservoir rocks, good seals, and oil and gas generation and migration after the formation of trap structures such as anticlines. The region contains numerous hydrocarbon exploration wells and mineral exploration drill holes which have encountered live oil and/or wet gas indicating that there has been relatively recent (in geological terms) hydrocarbon generation and migration in the region. The most spectacular hydrocarbon occurrence was in mineral exploration core hole GR9, which was the site of a wet gas blowout in 1979. The Company’s prospects include the Kilgour, Abner and Kilgour South anticlines, as well as the Glyde Trend in EPA 114. Within EPA 113, there may be substantial anticlinal traps along trend from gas shows encountered in exploration well Burdo No. 1.
The Company believes that its tenements are highly prospective for the discovery of large scale resources of several mineral commodities, focusing on uranium, oil and gas, at a time when demand from export markets such as China, India and Japan are growing strongly.
I commend this Offer to you and look forward to welcoming you to the Company as a Shareholder.
Yours sincerely
DR ZHUKOV (ZEKE) PERVANChairman6
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1 Investment SummaryThe information set out in this section is summarised and should be
read in conjunction with the information contained in the remainder
of this Prospectus.
1.1 Uranium Oil and Gas Limited Uranium Oil and Gas Limited is an unlisted public company which was incorporated on 3 August 2005 to acquire a prospective portfolio of mineral and petroleum exploration properties in Western Australia and the Northern Territory which it intends to continue exploring with a view to finding significant mineral and/or petroleum discoveries.
1.2 Purpose of the OfferThe primary purpose of the Offer is to raise sufficient funds to enable the Company to meet its objectives, including:
to implement its planned exploration programme as described in this Prospectus;
to acquire additional strategic interests in mining projects where considered appropriate;
to repay exploration expenses and tenement payments;
to pay the costs of this Issue and fund the admission of the Company to the Official List of the ASX; and
to provide additional working capital.
1.3 Use of fundsThe funds raised from the Offer will be applied as follows:
OfferMinimum
subscription
Exploration expenditure for 2 years
Bungalow Well ProjectS Free carried Free carried
4 Corners Bore ProjectS 436,000 53,000
Galah Rock and Walling Rock ProjectsS 504,000 225,000
Rubberoid Well ProjectS Free carried Free carried
Mt Vernon and Collier ProjectsS 1,110,000 360,000
Wannamal and Wooroloo ProjectsS 820,000 500,000
Burdo and Kilgour ProjectsS 650,000 250,000
Canning Basin ProjectS 150,000 150,000
Administration for 2 years 500,000 450,000
Issue costs 202,000 190,000
Brokerage and fees in respect of the Offer 500,000 170,000
Working capital 3,128,000 152,000
Total issue $8,000,000 $2,500,000
For more details of the exploration budget refer to section 2.12 of this Prospectus.
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1.4 Working capital adequacyIf the Company raises less than the full subscription amount offered under this Prospectus, the Company will reduce the scope of its anticipated exploration programmes focusing on projects which in the Company’s opinion have the greatest value in the short term.
The Directors are of the opinion that on completion of the Offer, the Company will have sufficient working capital to carry out its stated objectives.
When required, further funds are expected to be obtained from a combination of sources, which may include farm-outs, the proceeds of further Share issues and the exercise of Options.
1.5 Capital structure and financial informationAs at the date of this Prospectus, there are 29,000,003 Shares and 19,500,000 Options on issue. For details of the pro forma statement of financial position, please refer to the Investigating Accountant’s Report in section 7 of this Prospectus.
The pro forma capital structure of the Company based on the completion of this Offer (depending on the amount raised) is set out below.
Amount Raised by the Offer
$2,500,000Number of
Shares
$8,000,000Number of
Shares
Capital Structure prior to the Offer
Shares 29,000,003 29,000,003
Options 19,500,000 19,500,000
Number of Shares and Options to be issued pursuant to this Prospectus
Shares 12,500,000 40,000,000
Options 6,250,000 20,000,000
Number of options to be issued to Sponsoring Broker 250,000 250,000
Capital structure following completion of the Offer
Shares 41,500,003 69,000,003
Options 26,000,000 39,750,000
NOTE: (a) The rights attaching to the Shares and Options are summarised in sections 10.5 and 10.6 of this Prospectus. (b) It is anticipated that most or all of the 29,000,003 Shares and 19,500,000 Options currently on issue will be
classified as restricted securities by the ASX (refer to section 3.11 of this Prospectus for further details).
1.6 Risk factorsAn investment in Securities pursuant to this Prospectus should be regarded as speculative. In addition to the general risks applicable to all investments in listed securities, there are specific risks associated with an investment in the Company. A summary of the key risks is set out in section 9 of this Prospectus.
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Figure 1 Project Locations Map
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2.1 IntroductionThe Company has an extensive portfolio of uranium, oil, gas and other mineral projects.
The Company will concentrate its initial exploration work on its uranium projects once the relevant tenements for the uranium projects are granted.
For oil and gas, both of the Company’s prospect areas in the Northern Territory are known to contain gas and/or oil showings and both are close to infrastructure. The Canning Basin area in Western Australia is also a proven area for oil and gas exploration.
Other precious and base metals are sought. Mt Vernon, Collier and Wannamal projects offer good opportunities for the discovery of economic base and precious metal deposits. For example, recent drilling (2006) by another company on its tenements directly to the east of the Wannamal project area has intersected sulphide mineralisation containing both nickel and copper. Thus the eastern portion of the Wannamal project area is of high priority.
This section contains a summary of the Company’s projects. Applicants should refer to the Independent Geologists’ Reports in Sections 5 and 6 of this Prospectus for further details of the Company’s projects.
2.2 Uranium ProjectsMost of the Company’s uranium project areas contain calcrete within palaeo drainage systems. The deposits sought are exemplified by the Yeelirrie deposit of BHP-Billiton which has a published resource of 52,500 tonnes of U3O8.
The calcrete host has developed along old river systems that drained the Murchison and surrounding districts of Western Australia during a much wetter period. As the rivers dried, dissolved salts in the water precipitated at or near the surface of the old river bed. The main precipitate was calcium carbonate calcrete - a form of limestone. Also precipitated in favourable chemical sites was potassium uranium vanadate-carnotite.
The palaeo channels can be wide, up to several kilometres, and very long but the host calcrete has developed only near the surface. The uranium deposits sought are therefore shallow.
Uranium mineralisation is generally located by radioactivity caused by its radioactive decay. The radioactivity can be measured both by a ground survey and an airborne survey but a small soil cover can mask this radioactivity and shallow deposits of uranium may not be identified by such surveys. It is the Company’s intention to test the uraniferous calcrete channels by drilling a number of shallow holes.
2.3 Bungalow Well Project (ELA36/549)The Bungalow Well project lies along part of a major but subsidiary palaeo drainage channel that commences in the Youanmi district. Trending eastwards it describes an arcuate shape until it has its confluence with the Lake Raeside drainage system 40 km to the west of Leonora, a distance of some 225 km. This system is known as the Lakes Noondie – Raeside channel.
The project area contains about 25 km of this drainage system and attains a width up to 3 km. Uranium mineralisation has previously been identified on the project. Le Nickel Prospecting Pty Ltd explored the area in 1972 but concentrated its search in the vicinity of peak surface radiometric responses and drilled only a limited number of holes. The Company considers that there is scope for further exploration to discover more significant mineralisation.
Exploration ProgrammeA geomorphologic study is required to determine the centre and therefore the more prospective area of the channel. Reconnaissance drilling will be done on a line spacing of 2 km and a hole spacing of 200 metres across the channel. This will give a detailed understanding of the distribution of the calcrete and the surrounding carbonated clays plus the related uranium mineralisation.
Follow up drilling will be infill drilling of the reconnaissance grid. Holes where necessary will be drilled on a 1 km line spacing and across the channel to 100 metres. Additional drilling, if required, will be pattern drilling of any mineralisation located.
2 Project Summary
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2.4 Four Corners Bore Project (ELA57/607)The Four Corners Bore project covers the headwaters of the Noondie-Raeside Channel. From Lake Noondie there is a channel trending in a north westerly direction into the project area. The Bureau of Mineral Resources’ (BMR) 1972 airborne radiometric survey encountered low level responses from this area but past exploration has concentrated upon gold and base metals with no regard for uranium. The channel is 15 km long and varies from 1 to 2 km wide.
Exploration ProgrammeThe Company’s proposed exploration programme will be similar to the Bungalow Well project. However because uranium mineralisation has not yet been identified the Company intends to conduct a ground radiometric survey in conjunction with the geomorphologic study. This will be followed up with reconnaissance drilling on a 2 km by 200m grid. If successful infill drilling will be required in the second year.
2.5 Galah Rock and Walling Rock Project(E30/312 and E29/589)The major palaeo channel into Lake Ballard commences to the south west and trends north until a major change of direction occurs. The channel then trends directly east into the Lake. The Walling Rock project area covers the east-west portion whilst the Galah Rock project area covers the north south trend. In total the length is 40 km with widths up to 4 km.
The Company has not been able to locate any records in the Department of Industry and Resources of uranium exploration on the project area but spot radiometric anomalies do occur on the BMR 1972 radiometric survey.
Exploration ProgrammeThe Company’s exploration program will be similar to that for the Four Corners Bore project. Effort will initially be concentrated on determining the source of the radiometric anomaly by conducting both a ground radiometric survey and a geomorphologic study. A reconnaissance drilling programme will be used if the program is successful.
2.6 Rubberoid Well Project (E09/1245)The type of uranium deposit sought at Rubberoid Well is different to that of the calcrete hosted type. An example of the type sought would be that of the East Alligator River deposits in the Northern Territory where Middle Proterozoic clastic sediments overlie unconformably Lower Proterozoic metamorphic units. In the Rubberoid Well project area there are Lower Proterozoic granites, gneisses and schists overlain by Middle Proterozoic sediments.
In 1986 the BMR covered the Mt Phillips area with an airborne survey. A series of radiometric highs were defined extending through the centre of this project area.
Since 1986 no further exploration has been done for uranium. Gold and base metal exploration activity has continued with some minor success that should not be discounted.
Exploration ProgrammeIt is planned to commence exploration over this project area with a complete data review and the construction of a new data base for both uranium, precious and base metals which will include ground reconnaissance. A dual soil and ground radiometric survey will cover favourable stratigraphy.
Ground geophysics will be required to cover base metal anomalies whilst shallow drilling will be used to test positive responses for gold and/or uranium. This work will define targets for additional drilling.
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2.7 Mt Vernon and Collier Projects (E52/1863 and E52/1864)Both project areas are situated in the western portion of the Bangemal Basin. Both have structural features of importance and both contain some igneous activity within the sedimentary basin.
Recent geological thought places the igneous activity found within the Bangemal Basin as being part of the Warakurna Large Igneous Province (LIP). The Bangemal Basin has been redefined as the Bangemal Supergroup to include both igneous and sedimentary units. The importance of the identification of a large igneous province is the potential to locate mineral deposits associated with such activity. The emplacement of the igneous units is thought to be by mantle plume activity which can give rise to copper, nickel and platinum group elements sulphide deposits and giant hydrothermal systems containing mainly copper mineralisation. The exploration program will aim for these types of deposits.
The Mt Vernon project area covers members of the Bangemal Supergroup that have been strongly faulted by two parallel east-west trending structures called the Mt Vernon Fault.
North of the fault is the Kurabuka Formation that consists of micaceous shale, glauconitic sandstone and carbonate lenses with dolerite sills. The ground between the faults is occupied by the Mt Vernon Sandstone and the Ford Creek Shale whilst south of the fault is the Kiangi Formation, a massive laminated quartz arenite. The presence of the dolerite sills and the Mt Vernon Fault are geologic features that fit the Warakurna LIP model.
Past exploration in and around the prospect has located stratabound low grade zinc mineralisation in both the Kurabuka and Kiangi Formations. Both Formations are present on either side of the fault zone and are prime targets in the vicinity of the fault.
The Collier project area is located some 100km to the east of the Mt Vernon project. Structurally the project area covers a fold closure which may be the eastern extension of the Glen Ross Anticline. The axial plane of the anticline is west-east thus the dominant strike within the prospect area is north-south, therefore the stratigraphy is younger to the east. The eastern most stratigraphic formation is the Calyie Sandstone and to the west is the Backdoor Formation. These directly correlate to the Mt Vernon Sandstone and the Ford Creek Shale of the Mt Vernon Prospect. Mafic intrusions occupy parts of the sequence.
Exploration ProgrammeBoth projects have similar exploration potential and the search programmes will be very similar. Initially geological mapping will be needed to guide future work. This will include some lithogeochemical sampling. Prospective areas will be covered by soil geochemistry and airborne magnetic data will be collected. Areas which continue to be of interest will be covered by ground geophysics and the resulting anomalies will be drilled.
2.8 Wannamal and Wooroloo Projects (E70/2444, E70/2692, E70/2693 and E70/2727)The Wannamal and Wooroloo project areas are located within the Western Gneiss Terrain(WGT). This is a complex metamorphic zone occupying the western side of the Yilgarn Craton and bounded on its west by the Darling Fault. Within the WGT are remnant greenstone belts such as the Wongan Hills and the Saddleback greenstone belts. The latter hosts the major Boddington Gold Mine. Another recognisable but separate complex that lies to the west of Perth is the Jimperding Gneiss Complex. The WGT has been intruded by 2 sets of Archaean granitioids.
The metalliferous deposits sought are those associated with hardrock geology such as tin and molybdenum in the granitic units and those associated with the greenstone belts and/or their metamorphic equivalents such as gold, copper and nickel.
Exploration ProgrammeThe projects cover similar geological terrain however there will be some divergence of exploration activity due to the fact that the Wannamal project area has been previously explored for bauxite and that has been drill intensive. There is an abundant amount of data for the Wannamal project area which needs to be assessed first. The Wooroloo Project has seen little exploration other than for vanadium. Both project areas require reconnaissance geological mapping and airborne magnetic surveys.
Immediate positions of interest are the eastern side of the Wannamal project area, where to the east of the boundary nickel and copper sulphide mineralisation has been reported recently, and the north east corner of the Wooroloo project area, where part of the Morangup Greenstone Belt occurs.
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2.9 Burdo Project (EPA 113, Northern Territory)The Burdo project area contains the Burdo lineament, a pronounced structural trend, with associated anticlinal closures. Exploration in this area will target the Moroak and Jamison Sandstones. The application area contains the Burdo No 1 well which encountered a 5 metre gas column in tight sands of the Moroak Sandstone but with better reservoir immediately underlying. Gas was regularly flared during the drilling. It is very unlikely that the well was drilled on the crest of an anticlinal structure as Burdo No 1 was drilled on a single seismic line 89-203.
The proposed seismic programme will delineate the Burdo structure and potentially locate a valid updip location to drill the Burdo anticline in closure. An updip location may encounter the existing gas column in better quality reservoir. The structure may extend over 100 km2 and may contain significant volumes of gas in place in the Moroak and Jamison Sandstone.
Exploration ProgrammeThe proposed exploration for the first 2 years once the permit is granted is as follows:Year 1: Data review, reprocessing of seismic lines 89-203 and MC 92-104.Year 2: Acquisition of 100 linear km of seismic to identify prospects.
2.10 Kilgour Project (EPA 114, Northern Territory)The Kilgour project area contains four prospects defined on surface structure. They are the Kilgour, Abner, Kilgour South, and Glyde River Trend prospects.
The Kilgour prospect has 24 km2 of closure with potential for a significant oil discovery. Shows of bitumen and live oil, which bled from cores, have already been encountered in shallow wells on the structure. The Kilgour No 1 well will target the Reward and Coxco Dolomites at 750m and 1,050m respectively.
The Abner prospect has an aerial closure of 12 km2 but has at least 5 recognised objectives with potential for discovery of oil and gas in place.
The Kilgour South structure has potential for discovery of oil in place in the Coxco and Reward Dolomites.
The permit also contains the Glyde River Trend, a large surface anticline covering some 22 km2 which contains the GR9 mineral exploration hole which yielded a gas blow-out. This prospect has potential for discovery of significant oil and gas in place.
Exploration ProgrammeThe proposed exploration programme for the first 2 years is as follows:Year 1: Data review, oil generation timing study.Year 2: One well.
2.11 Canning Basin Petroleum Project (EP 448)The Company holds a 10% interest in this project. The prospect area contains the Nita Formation and Grant Formation plays updip from a source rock kitchen in the Willara Sub-Basin.
Exploration ProgrammeThe proposed exploration programme for the first 2 years is as follows:Year 1: Data review and aeromagnetic interpretation.Year 2: Seismic reprocessing and land access negotiations.
2.12 Proposed Budget SummaryThe Company proposes to adopt the following budget in relation to carrying out its exploration programme and in the development of its tenements. The proposed expenditure will be refined to suit the result of the programmes as they proceed. Given the inherent uncertainties associated with exploration, programmes and budgets are subject to change and are dependent on the results of exploration activities.
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Fully Subscribed – $8,000,000 raisingProject summary Year 1 Year 2 Total
Bungalow Well Project Free carried Free carried Free carried
4 Corners Bore Project 108,000 328,000 436,000
Galah Rock and Walling Rock Projects 180,000 324,000 504,000
Rubberoid Well Project Free carried Free carried Free carried
Mt Vernon and Collier Projects 473,000 637,000 1,110,000
Wannamal and Wooroloo Projects 432,000 388,000 820,000
Burdo and Kilgour Projects 150,000 500,000 650,000
Canning Basin Project 150,000 Free carried 150,000
TOTAL 1,493,000 2,177,000 3,670,000
Exploration Expenditure Summary Year 1 Year 2 Total
Salaries, wages consultants 689,000 510,000 1,199,000
Field costs 130,000 147,000 277,000
Assay/Analysis 154,000 220,000 374,000
Drilling 317,000 995,000 1,312,000
Geophysics/Remote Sensing 110,000 200,000 310,000
Tenement and other costs 93,000 105,000 198,000
TOTAL 1,493,000 2,177,000 3,670,000
Minimum Subscription - $2,500,000 raisingProject summary Year 1 Year 2 Total
Bungalow Well Project Free carried Free carried Free carried
4 Corners Bore Project 29,000 24,000 53,000
Galah Rock and Walling Rock Projects 125,000 100,000 225,000
Rubberoid Well Project Free carried Free carried Free carried
Mt Vernon and Collier Projects 160,000 200,000 360,000
Wannamal and Wooroloo Projects 133,000 367,000 500,000
Burdo and Kilgour Projects 150,000 100,000 250,000
Canning Basin Project 150,000 Free carried 150,000
TOTAL 747,000 791,000 1,538,000
Exploration Expenditure Summary Year 1 Year 2 Total
Salaries, wages consultants 457,000 259,000 716,000
Field costs 23,000 33,000 56,000
Assay/Analysis 67,000 33,000 100,000
Drilling 72,000 201,000 273,000
Geophysics/Remote Sensing 64,000 223,000 287,000
Tenement and other costs 64,000 42,000 106,000
TOTAL 747,000 791,000 1,538,000
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3.1 Shares Offered for SubscriptionThis Prospectus invites investors to apply for a total of up to 40,000,000 Shares (with one free attaching Option for every 2 Shares issued) at an issue price of 20 cents per Share to raise up to $8,000,000. All Shares issued pursuant to this Prospectus will be issued as fully paid and will rank equally in all respects with the Shares already on issue.
Applications must be for a minimum of 10,000 Shares (and free attaching Options) and thereafter in multiples of 1,000 Shares (with one free attaching Option for every 2 Shares issued). Applications can only be made by completing the Application Form attached to this Prospectus.
The Company reserves the right to reject any Application or to allocate to any investor fewer Securities than the number applied for.
3.2 Minimum SubscriptionThe minimum subscription for the Offer is 12,500,000 Shares raising $2,500,000. No securities will be issued pursuant to this Prospectus until the minimum subscription is reached.
If the minimum subscription has not been raised within 3 months after the date of this Prospectus, the Company will either repay the Application moneys to the Applicants or issue a supplementary or replacement prospectus and allow Applicants to withdraw their Application and be repaid their Application moneys. Interest will not be paid on Application moneys refunded.
3.3 Offer periodThe Offer will open 7 days after the date of this Prospectus, or such later date as may be prescribed by the ASIC.
The Offer will close at 5 pm WST on 6 Spetember 2006 subject to the right of the Company to either close the Offer at an earlier time and date or to extend the closing date and time without prior notice.
No Securities will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.
3.4 UnderwritingThe Offer is not underwritten.
3.5 Allotment and Allocation of SecuritiesSubject to the ASX granting approval for the Company to be admitted to the Official List, the allotment of Securities to Applicants will occur as soon as possible after the Offer is closed, following which statements of holdings of Securities will be dispatched. It is the responsibility of Applicants to determine their allocation prior to trading in Securities. Applicants who sell Securities before they receive their holding statements will do so at their own risk.
Pending the issue of the Securities, or return of the Application monies, the Application Monies will be held in trust for the Applicants.
The Company in consultation with the Sponsoring Broker to the Issue, has the right to allocate Securities under the Offer. The Company may reject any Application or allocate to any investor fewer Securities than applied for under the Offer. If an Application is not accepted, or is accepted in part only, the relevant part of the Application monies will be refunded. Interest will not be paid on Application monies that are refunded.
3.6 Brokerage and FeesNo brokerage, stamp duty or commission is payable by Applicants on the Securities issued pursuant to this Prospectus.
The Company will pay the Sponsoring Broker to the Offer, a fee of 1 % of the amount raised by the Company from subscriptions to the Offer and a management fee of $20,000.
The Sponsoring Broker will also receive 250,000 Options on the same terms as the existing Options. In addition, the Company will pay a commission of 5 % of the amounts committed to be subscribed (and accepted by the Company) to any licensed security dealer in respect of valid Applications bearing their stamp.
3 Details of the Offer
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3.7 Applicants outside AustraliaThis Prospectus does not constitute an offer of Securities in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any Applicant who is resident outside Australia to ensure compliance with all laws of any country relevant to their Application, and any such Applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed to enable them to apply for and be allotted Securities. No action has been taken to register or qualify the Securities or the Offer or otherwise to permit a public offering of the Securities in any jurisdiction outside Australia.
3.8 ASX ListingThe Company will apply to the ASX within 7 days after the date of this Prospectus for admission to the Official List and for Official Quotation of the Securities offered to investors under this Prospectus.
If the ASX does not grant approval for Official Quotation of the Securities within 3 months after the date of this Prospectus, the Company will not allot or issue any Securities and will repay all Application monies without interest within the period prescribed by the Corporations Act.
The ASX takes no responsibility for the contents of this Prospectus. The fact that the ASX may admit the Company to its Official List and quotation of the Securities on the ASX is not to be taken in any way as an indication of the merits of the Company or the Securities offered pursuant to this Prospectus.
3.9 CHESSThe Company proposes participating in the Clearing House Electronic Subregister System (“CHESS”), operated by ASTC (a wholly owned subsidiary of the ASX), in accordance with the Listing Rules and ASTC Settlement Rules. Under this system there will be an electronic issuer sponsored sub-register and an electronic CHESS sub-register. These two sub-registers together will make up the Company’s principal register of securities.
Under CHESS, the Company will not issue certificates to investors. Instead, the Company will provide investors with a holding statement (which is similar to a bank account statement) that sets out the number of Securities allotted to that investor under this Prospectus. This statement will also advise investors of either their Holder Identification Number (HIN) in the case of a holding on the CHESS sub-register or Security Holder Reference Number (SRN) in the case of a holding on the issuer–sponsored sub-register.
A statement will be routinely sent to holders of Securities at the end of any calendar month during which their holding changes. A holder of Securities may request a statement at any other time, however a charge may be incurred for additional statements.
3.10 How To ApplyApplications for Securities under the Offer can only be made on the Application Form issued with and attached to this Prospectus. The Application Form must be completed in accordance with the instructions set out on the back of each Application Form. Completed Application Forms and accompanying cheques should be lodged at any time after the Opening Date with:
Computershare Investor Services Pty Limited2/45 St Georges TerracePERTH WA 6000
OR
Computershare Investor Services Pty LimitedGPO Box D182PERTH WA 6840
Cheques must be made payable to “Uranium Oil and Gas Limited – Subscription Account” and crossed “Not Negotiable”.
Applications must be for a minimum of 10,000 Shares (with one free attaching Option for every 2 shares issued) at the issue price of 20 cents per Share. Applications for more than 10,000 Shares must be in multiples of 1,000.
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3.11 Escrow ProvisionsSecurities on issue as at the date of this Prospectus to promoters and seed capital investors, may be subject to the restricted securities provisions of the Listing Rules. Accordingly, a proportion of such securities may be required to be held in escrow for up to 24 months as determined by the ASX and may not be transferred, assigned or otherwise disposed of during that period.
3.12 Electronic ProspectusThis Prospectus is available on-line at UOG.com.au.
3.13 Enquiries in Relation to the OfferThis Prospectus provides information for potential investors in the Company, and should be read in its entirety. If, after reading this Prospectus, you have any questions about any aspect of an investment in the Company, please contact your stockbroker, accountant or independent financial adviser.
3.14 Privacy DisclosureThe Company collects information in relation to each Applicant as provided on an Application Form (Information) for the purposes of processing the Application Form and, should the Application be successful, to administer the Applicant’s Security holding in the Company (Purposes).
The Company may use the Information for the Purposes and the Company may disclose the Information for the Purposes to the Sponsoring Broker/Manager to the Issue, Share Registry, the Company’s related bodies corporate, agents, contractors and third party service providers, and to the ASX, ASIC and other regulatory authorities.
The Information may also be used and disclosed to persons inspecting the register, including bidders for your Securities in the context of take-overs, licensed securities dealers, mail houses, and regulatory bodies including the Australian Taxation Office.
3.15 No ForecastsThe Directors have considered the matters set out in ASIC Policy Statement 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the Company is an exploration company. Given the speculative nature of exploration, mineral development and production, there are significant uncertainties associated with forecasting future revenues. Accordingly, any forecast or projected financial information would contain such a broad range of potential outcomes and possibilities that is not possible to prepare a reliable best estimate, forecast or prediction in this Prospectus.
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Dr Zhukov (Zeke) Pervan MB, BS(WA), FRACGP, FAICD ChairmanDr Pervan is a Doctor of Medicine with over 35 years experience in various capacities in Western Australia. He has consulted to several university and government bodies in many areas. He has conducted original research in collaboration with the University of Western Australia Departments of Microbiology and Human Movement. This research has been published in international journals. In the past Dr Pervan has served as a Director of several public companies involved in exploration and in the general commercial world including, Agforce Limited, Gold Lake Mining Pty Ltd, Innovative Coatings Limited and Visionglow Global Limited.
William Edwin Bannister MSc AWASMManaging DirectorMr Bannister has over 40 years experience in exploration and mining geology. He has extensive experience with uranium exploration in Western Australia as well as experience in precious metals, base metals, diamonds and heavy mineral deposits, copper and nickel exploration and mining.
Mr Bannister worked for Western Mining Corporation Ltd (“WMC”) in a number of locations and positions, including senior geologist, and then joined the Tenneco group of companies to rise to the position of Australian Exploration Manager – Minerals.
For the past 20 years he has been an independent geologist and consultant. Companies consulted to include WMC, Outokompu Mining (Aust) Pty Ltd and numerous other participants in the mining industry.
John Karajas BSc (Hons) MAIGNon-Executive DirectorJohn Karajas is an exploration geologist with over 30 years of experience in both the mining and oil industries. After graduating from the University of Western Australia with a BSc (Hons) in 1970, he gained his grounding in the mining industry by working for mining companies, Falconbridge, Anaconda and Hanna Mining. This period extended through to 1982 and was predominantly spent in Western Australia but included three years in Mt Isa. Commodities explored for include nickel, copper/lead/zinc, gold, phosphate, taconitic iron ore, tin/tantalite and lignite/oil shale.
Between 1982 and 1985 he gained his initial experience in oil exploration by working for Eagle Corporation and IEDC (Australia). This period was spent in working on sedimentary basins in Western Australia and included basin studies, wellsite geology, and other duties related to oil and gas exploration.
From 1986 onwards, he has worked predominantly as a consultant/contract geologist for a wide range of mining and oil industry clients, both within Australia and abroad. Periods of a more managerial nature have included:
1989 – 1991 Technical Director of King Mining Ltd
1992 – 1995 Technical Director of Omega Oil NL
1996 – 1997 Exploration Vice President of Icelandic Gold Corporation.
He is currently a Member of the Australian Institute of Geoscientists. He is the managing director of ASX listed Red River Resources Limited.
David Alan Zohar BSc DipEd Executive Director, Company Secretary and Commercial ManagerDavid Zohar has undertaken undergraduate studies in Geology and post graduate studies in Accountancy and Commercial Law. He has been active in the exploration industry for over 20 years. He has been a director and/or CEO of a number of exploration companies and has also negotiated numerous agreements with various companies and other participants within the mining industry. He has been involved in the formation and/or listing on the ASX of several public mining companies and is currently a director of ASX listed Red River Resources Limited.
4 Profile of Directors and Management
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5 June 2006The DirectorsUranium Oil and Gas Limited Level 8, 256 St Georges TerracePERTH WA 6000
Dear Sirs
INDEPENDENT CONSULTING GEOLOGISTS REPORT (MINING TENEMENTS)
This report has been prepared at the request of the Directors of Uranium Oil and Gas Limited (“UOG” or “the Company”) in respect of numerous mining tenement exploration projects located in Western Australia in which the Company has an interest.
This report is to be included in a Prospectus to be lodged with the Australian Securities and Investments Commission (“ASIC”) on or about 7 July 2006 offering for subscription 40 million ordinary fully paid shares at an issue price of 20 cents per share to raise $8 million. The funds raised will be used mainly for exploration and evaluation of the mineral properties.
It has been prepared in accordance with the relevant requirements of the listing rules of the Australian Stock Exchange Limited (“ASX”), ASIC Practice Notes 42 and 43 and the Guidelines for Assessment and Valuation of Mineral Assets and Mineral Securities for Independent Expert Reports (the Valmin Code). Adherence to the Valmin Code is mandatory for all members of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists.
Geological Investigations Pty Ltd (“GI”) has neither been requested to provide an Independent Valuation, nor has it been asked to comment on the fairness or reasonableness of any vendor or promoter considerations. We have not offered any opinion on these matters.
GI’s assessment of the mining tenements included in this Prospectus is based upon technical information provided by UOG together with technical reports prepared by Government agencies and reports by previous holders of tenements within the current project areas. Reference has been made also to other relevant published and unpublished data. A listing of the principal sources of information is included in the Independent Geologist’s Report.
None of the prospects have identified resources and all are in the early stages of exploration, however they are located in favourable geological and structural settings and are believed to have the potential to host both base and precious metal mineralisation.
Site visits have been undertaken to all of the prospects with the exception of those areas acquired for their uranium potential that are located on paleodrainages devoid of outcrop. In these cases examination was confined to a study of coloured stereo-pair aerial photographs located at the Western Australian Department of Land Information.
Concerning the Bungalow Well Prospect (E36/549), GSI was recently asked by Red River Resources Limited (“Red River”) to provide an opinion on the fairness and reasonableness of an agreement between UOG and Red River, whereby Red River may earn a 40 per cent interest in E36/549, by way of exploration expenditure over a three year period which will commence if and when the Exploration Licence is granted. It was GSI’s opinion that the agreement was both fair and reasonable.
GI has endeavoured, by making reasonable enquiries, to confirm the authenticity and completeness of all technical data used in the preparation of this report and to ensure GI’s unrestricted access to all relevant technical and other information.
It is the opinion of GI that the mining tenement projects described in this Prospectus are worthy of continued exploration and are located in areas where there is a reasonable expectation that economic mineralisation may be located. It is not possible to accurately determine the outcome of exploration and considerable variation of the proposed exploration programmes and budgets may become necessary as new data becomes available.
Geological Investigations Pty Ltd is an independent geological consultancy that has been in operation since 1967, providing services in the field of geology. Mr John D Wyatt, author of this. report, is a Fellow of The Aus.lMM, having the necessary qualifications, competence and experience to qualify as an Independent Expert within the guidelines of the Valmin Code. Mr Wyatt has in excess of 50 years experience in mineral exploration and more than 30 years experience in mineral asset evaluation, both In Australia and overseas.
The statements contained in this report are given in good faith. They are based on information believed to be reliable and accurate supplemented by our own investigations and observations. We have relied upon this information and have no reason to believe that any material facts have been withheld from us.
Neither Geological Investigations Pty Ltd nor the author of this report have or have previously had any material interest in UOG or the mineral properties in which UOG has an interest. Our relationship with UOG is solely one of professional association between client and independent consultant. This report has been prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this report.
Yours faithfully
John D. WyattPrincipalGeological Investigations Pty Ltd
5 Independent Geologist’s Report (Mining Tenements)
Geological Investigations Pty LtdABN 69 008 727 820
4 Minim Close, Mosman Park WA 6012Ph/Fax: (08) 9384 2432
Mob: 0419 049 675
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CONTENTS1. SUMMARY2. URANIUM PROPERTIES
2.1 Bungalow Well Prospect — E36/5492.1.1 Introduction2.1.2 Geological Setting2.1.3 Previous Exploration2.1.4 Exploration Potential2.1.5 Proposed Exploration and
Expenditure
2.2 Four Corners Bore Prospect — E57/6072.2.1 Introduction2.2.2 Geological Setting2.2.3 Past Exploration2.2.4 Exploration Potential2.2.5 Proposed Exploration and
Expenditure
2.3 Galah Rock — E30/312 and Walling Rock — E29/5892.3.1 Introduction2.3.2 Geological Setting2.3.3 Past Exploration2.3.4 Exploration Potential2.3.5 Proposed Exploration and
Expenditure
3. URANIUM, PRECIOUS AND BASE METAL PROSPECT
3.1 Rubberoid Well — E09/12453.1.1 Introduction3.1.2 Geological Setting and
Mineralisation3.1.3 Past Exploration3.1.4 Exploration Potential3.1.5 Proposed Exploration and
Expenditure
4. GOLD, PGE AND BASE METALS
4.1 Mt Vernon Prospect — E52/18634.1.1 Introduction4.1.2 Geological Setting4.1.3 Past Exploration4.1.4 Exploration Potential4.1.5 Proposed Exploration and
Expenditure
4.2 Collier Prospect — E52/18644.2.1 Introduction4.2.2 Geological Setting4.2.3 Past Exploration4.2.4 Exploration Potential4.2.5 Proposed Exploration and
Expenditure
5. GOLD AND BASE METAL PROSPECTS
5.1 Wannamal Prospect - E70/2444 and E70/2692-26935.1.1 Introduction5.1.2 Geological Setting5.1.3 Past Exploration5.1.4 Exploration Potential 5.1.4.1 Pegmatitic
Mineralisation 5.1.4.2 Orthomagmatic
Mafic and Ultramafic Mineralisation
5.1.4.3 Vein and Hydrothermal Mineralisation
5.1.5 Proposed Exploration and Expenditure
5.2 Wooroloo Prospect — E70/27275.2.1 Introduction5.2.2 Geological Setting5.2.3 Past Exploration5.2.4 Exploration Potential5.2.5 Proposed Exploration and
Expenditure
6. BIBLIOGRAPHY7. GLOSSARY
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1. SummaryUranium Oil and Gas Limited (UOG) has acquired three groups of tenements in geologically and structurally favourable settings which are believed have the potential to host economic mineralisation. The projects exhibit anomalous mineralisation as a result of previous exploration by others.
Four uranium prospects namely Bungalow Well, Four Corners, Galah Rock and Walling Rock are located on near-featureless paleodrainage systems. These were selected on the basis of radiometric anomalies identified from airborne geophysical surveys carried out by the Bureau of Mineral Resources (BMR) in the 1970s.
In 1972, follow-up reconnaissance exploration over a part of the Bungalow Well prospect located northwest of Leonora, and in a similar setting to the Yeelirrie uranium deposit (WMC in 1972, 35 Mt grading 0.15% U3O8), identified three anomalous zones, with a maximum result of 4000 ppm U (0.47% U3O8). Mineralisation was detected in surface sampling and in drill cores with the discovery of up to 0.47% U3O8. The similarity to Yeelirrie; presence of identified uranium mineralisation and the fact that only about 30% of UOG’s prospect area was subjected to exploration indicates that follow-up exploration is warranted.
At Four Corners Bore, BMR geophysical surveys have identified a low-grade (50 to 100 counts) radiometric anomaly trending down the centre of the prospect area together with significant uranium anomalies to the south and north of UOG’s prospect area. It is believed that Four Corners warrants a programme of exploration to investigate the possibility of higher grade U mineralisation being concealed beneath recent soil cover.
The Galah Rock and Walling Rock Prospects are almost wholly located within an extensive paleodrainage which is devoid of outcrop. Geochemical surveys (GSWA 1994) identified uranium, lead and PGE (Pt, Pd) anomalies within the tenement area which are possibly associated with Archaean granitoids exposed along the western boundary. This evidence supports the results of airborne radiometric surveys (BMR 1972) and more recently the GSWA that identified five anomalies in E30/112 and an anomalous zone on the western edge of E29/589. These anomalies warrant further investigation.
In the vicinity of UOG’s Rubberoid Well Prospect, past exploration by others has identified 45 uranium occurrences, three of which occur within UOG’s tenement. Just northeast of the prospect area, at Bustler Well a small high grade gold resource (15 000 t @ 7 g/t Au) has been defined. Previous exploration activity confirms the potential of the area for precious, base metals and uranium.
Both the Mt Vernon and the Collier Prospects lie within the Warakurna Large Igneous Province (LIP) which is some 15 million square kilometres in area and extending from Western Australia, east into South Australia and the Northern Territory. The mineral potential of the Warakurna LIP includes magmatic nickel-platinum group deposits, magmatic hydrothermal deposits and hydrothermal vein deposits. Both the Mt Vernon and Collier Prospects cover areas of the sedimentary Bangemall Basin plus sill complexes belonging to the Warakurna LIP. Anomalous zinc and copper has been reported from past exploration
The Wannamal and Wooroloo Prospects located east of Perth cover similar bedrock geology. The Wannamal prospect is underlain by granitoids and gneisses of the Jimperding and Chittering complexes whilst the Wooroloo Prospect partly straddles the contact between the Morangup Greenstone Belt and granitoids of the Jimperding Metamorphic Complex.
Past exploration of the Wannamal Prospect show anomalous molybdenum, tin, lead, niobium and tungsten values within a roughly circular area about three kilometres in diameter. The airborne geophysical survey of 2005 indicates the presence of a major magnetic feature coincident with the geochemical anomaly.
Exploration has identified residual and supergene gold mineralisation on the eastern boundary of the Wooroloo Prospect area, whilst nearby molybdenite has been found in granitic rocks (Mokine and Swan View areas).
A vanadium resource (40 Mt grading 0.6% V2O5) has also been identified at Coates Siding and at Boddington in the Saddleback Greenstone Belt to the south a major, near-surface and deeper primary gold resource is being mined (302 Mt @ 0.92 g/t Au). The Saddleback Greenstone Belt is of the same age and geological setting as the Morangup Greenstone Belt.
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2. Uranium PropertiesUranium Oil and Gas Limited has acquired five exploration licences covering Tertiary-aged paleodrainage systems, which are believed to have the potential to host near-surface, calcrete-hosted uranium (carnotite, autunite) mineralisation of the Yeelirrie type.
2.1 Bungalow Well Prospect E36/5492.1.1 IntroductionThe Bungalow Well Prospect, E36/549 comprising 34 graticular blocks is located about 85 kilometres northwest of Leonora and some 130 kilometres south of BHP Billiton Ltd’s (recently acquired from WMC) Yeelirrie uranium resource, in the Murchison Mineral Field of Western Australia.
The Bungalow Well tenements cover an extensively soil-covered area of some 10 000 hectares (102 km2) comprising Tertiary-aged sediments within a southeasterly trending drainage system. The underlying basement geology comprises Archaean granitoids intruded by mafic dykes.
In 1972, the Commonwealth Bureau of Mineral Resources airborne survey recorded a radiometric anomaly of X2 contrast (300 cps). By comparison, the Yeelirrie anomaly from the same BMR survey reported a X2 contrast (>300 cps) with follow-up ground radiometrics recording X2 to X8 contrast (maximum >1000 cpm) over the orebody (Butt et al. CSIRO, 1972).
The most recently published airborne radiometric survey maps (2001) for both Bungalow Well and Yeelirrie are shown in Figures 4A and 4B. In the most recent maps the Bungalow Well anomalies are much more clearly defined as a series of radiometric highs trending east-southeasterly through the centre of the tenement area over a distance of some 14 kilometres.
In 1995, geochemical mapping of the Leonora Sheet (GSWA) identified a line of major uranium anomalies along the line of the paleodrainage (Figure 2).
2.1.2 Geological SettingThe regional geology of the Bungalow Well Prospect comprises a basement of Archaean-aged, fine to medium-grained biotite granites and granodiorites that have been intruded by younger mafic dykes. Overlying the basement granitoids is an extensive cover of Quaternary alluvial and colluvial sediments and Tertiary calcretes and laterite.
The general relief is subdued with occasional basic and granitic ridges rising up to 20 metres above plain level. The area is dominated by a salt lake system that is distributed in an arc some 100 kilometres long.
The Bungalow Well tenements cover (for some 25 kilometres) salt lakes trending east-southeasterly which mark out a paleodrainage up to three kilometres wide, and comprising calcrete, and sandy clayey colluvium and alluvium (Figure 2).
2.1.3 Previous ExplorationIn 1972, Le Nickel (Australia) Exploration Pty Ltd (Le Nickel) undertook an exploration programme that included ground scintillometer surveys and auger drilling of an area selected from BMR (1972) airborne radiometric data. Le Nickel’s reconnaissance exploration reportedly covered an area of 60 square kilometres of which 37.5 km2 (14.5 square miles) was originally pegged in 31 mineral claims. These claims cover approximately one third of UOG’s, 102 km2, Bungalow Well Prospect (Figure 3).
Le Nickel reported the presence of seven locations with radioactivity recording x10 background. In four of these locations visible yellow minerals (possibly carnotite) were recorded.
Le Nickel identified 35 anomalies and 9 indications, from which three surface sites were identified having readings up to 4000 ppm U (0.47% U3O8), with showings of autunite in cracks and concretions.
Figure 2 Bungalow Well Project Geology & Tenement Location
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Sub-surface mineralisation was detected in three zones designated Alpha (0.25 km2), Beta (0.31 km2) and Buga 20. Values up to 0.2% U3O8 in auger drills were recorded.
However, not all of the Bungalow Well tenement area was explored and whereas at least two of the BMR anomalies were tested, other anomalies to the northwest and south-southeast were left unchecked for they did not appear on the 1972 BMR survey map (Figures 3 and 4A).
2.1.4 Exploration PotentialIt is well-recorded that a thin cover of soil overburden can mask the presence of subsurface radioactivity. Technical Report 186 (1979), titled “Gamma Ray Surveys in Uranium Exploration” states that “gamma rays from radio-elements cannot penetrate more than 50 cm of overburden”. This fact is important when considering the reconnaissance exploration carried out by Le Nickel in 1972.
Based on the exploration techniques used, the airborne radiometric technology available at that time and that only approximately one third of the Bungalow Well Prospect area was investigated, there still exists good potential for the Bungalow Well Prospect to host an economic uranium resource.
In 1977, the CSIRO, in a report titled “Uranium Occurrences in Calcrete and Associated Sediments in WA” (Butt et al. 1977), identified both Bungalow Well (also known as Mornong Well) and Yeelirrie, with another 59 other radioactive anomalies. Both Yeelirrie and Bungalow Well having similar geological and structural settings, were described as containing traces of carnotite at the surface and had recognisable physical and chemical signatures. Both areas had similar radiometric signatures namely X2 contrast (300 cps and >300 cps).
At Yeelirrie it was reported that resource grade was not directly related to anomaly strength, which is believed to be significant. Until the whole of the Bungalow Well tenement area is subjected to both airborne and close-spaced surveys and follow-up drill testing of identified anomalies, its potential remains.
2.1.5 Proposed Exploration and ExpenditureThis project is subject to a Joint Venture agreement with Red River Resources. Uranium Oil and Gas Limited has a free carried interest for the first two years.
An exploration programme designed to test the extent of the uranium mineralisation located in 1972 is planned. A detailed airborne radiometric survey followed by a close spaced ground survey should locate all the surface uranium radiometric responses. Drilling of these anomalies plus reconnaissance drilling across the channel will show the areal extent of the uranium mineralisation.
Figure 3 Bungalow Well Project Geology
Figure 4A Bungalow Well Project Uranium Contours and Anomolies over Airborne Radiometric image
Figure 4B Comparison Yeelirrie Uranium Contours
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2.2 Four Corners Bore Prospect — E57/6072.2.1 IntroductionThe Four Corners Bore Prospect, E57/607, totalling some 52 km2 in area is located about 500 kilometres northeast of Perth on the Youanmi 1:250 000 geological sheet in the East Murchison Mineral Field, Western Australia.
The regional geological setting comprises northerly trending greenstone belts and extensive areas of granitoids. The structure of the area is dominated by the Youanmi and Yuinmery Fault zones which are located to the west and southwest of the Prospect (Figure 10).
The Four Corners Prospect covers part of a northwest-southeast trending drainage channel that flows into Lake Noondie to the south.
Bureau of Mineral Resources (BMR) airborne radiometric surveys have identified a low grade (50 to 100 cps radiometric contour) radiometric anomaly trending down the centre of the Prospect (Figure 11).
Past exploration has largely been directed to the search for gold and base metals in the greenstone belts, however, the presence of radiometric anomalous zone within the prospect area provides a target for more detailed exploration.
2.2.2 Geological SettingThe regional geology of the area comprises greenstones and granite gneisses of the Southern Cross Province of the Yilgarn Craton.
The four main Archaean-aged rock groups are gneisses of sedimentary and igneous composition; greenstones comprising layered mafic rocks with subordinate felsic volcanics, ultramafics and BIFs, layered mafic intrusives into gneiss and greenstone terrains; and foliated to
massive granitoids which intrude all of the above.
Dolerite dykes of both Archaean and Proterozoic age intersect the above four Archaean Groups. An extensive cover of Tertiary and Quaternary silcrete, calcrete and alluvial/lacustrine sand, clay, silt and gravel surround the greenstone and granitic outcrops.
The Four Corners Prospect is located on colluvial, alluvial sand, clay and calcrete both within and adjacent to a southerly trending drainage which flows into Lake Noondie (Figure 10).
2.2.3 Past ExplorationPast exploration has been restricted to the search for gold and base metals along faulted greenstones and granitoids of the Youanmi, Yuinmery and Black Range districts, with varied success. The Four Corners Prospect covers a portion of E57/228 which comprised part of an area explored by Australian Gold Resources, Battle Mountain Australia Inc, Gindalbie Gold NL, Herald Resources Ltd, and Troy Resources NL between 1994 and 2002.
There are no open file records of companies searching for uranium within the nearby paleodrainage systems, although radiometric anomalies have been identified from airborne geophysical (magnetic and radiometric) surveys and data compilation in the 1970s (BMR) and 2001 (GSWA).
2.2.4 Exploration PotentialExploration for radioactive (U) deposits will be concentrated along the line of radiometric anomalies identified from airborne surveys and other collated data.
BMR airborne radiometric surveys have identified a line of low-level 50-100 cps anomalies trending southeasterly down the centre of the prospect. More recent (2001) GSWA survey data confirm the BMR findings.
Figure 10 Four Corners Tenement & Geology/Structure
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The potential of the Four Corners Prospect will be tested by a planned programme of exploration which initially will comprise both airborne and ground surveys, geochemical sampling and reconnaissance drilling.
2.2.5 Proposed Exploration and ExpenditureThe Four Corners Bore application was to cover spot radiometric anomalies as recorded in the BMR 1972 airborne radiometric survey. To confirm these uranium anomalies airborne and ground reconnaissance radiometric surveys will be conducted in conjunction with a geomorphologic study to determine the distribution of surface calcrete. The responses produced need to be assessed by drilling. This will initially be done by drilling lines across the channel with a hole spacing of 200m. Successful infill drilling should be completed during the second year.
The Exploration Licence is an application and as such the exploration programme will commence when the Licence has been granted.
EXPLORATION BUDGET – FOUR CORNERS BORE PROSPECT
ACTIVITYYEAR 1
$YEAR 2
$TOTAL
$
Ground reconnaissance & geomorphic survey 10,000 10,000
Drilling 28,000 200,000 228,000
Analysis 18,000 40,000 58,000
Geol supervision, Salaries 1 24,000 60,000 84,000
Field Costs 18,000 18,000 36,000
Tenement Office & Management 10,000 10,000 20,000
TOTAL 108,000 328,000 436,000
As the Four Corners Bore prospect is covered by an Exploration Licence Application, there is currently no minimum expenditure requirement.
Figure 11 Four Corners Radiometric Anomolies
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2.3 Galah Rock E30/312 and Walling Rock E29/5892.3.1 IntroductionThe Galah Rock and Walling Rock Prospects (E30/312, E29/589) totalling 112 graticular blocks are located in the North Coolgardie Mineral Field, Western Australia (Figure 1).
The tenements are in the southwestern part of the Menzies 1:250 000 geological map about 185 kilometres north-northwest of Kalgoorlie and 500 kilometres east-northeast of Perth and are virtually devoid of rock outcrop.
The prospects are within an extensive paleodrainage at the western end of Lake Ballard. Scattered Archaean granitoid outcrops along the margins of the drainage channel, whilst the tenements cover Cainozoic lacustrine saline playa, mixed dune, evaporite and alluvial deposits.
There are no past exploration records, apart from the results of GSWA geochemical programme carried out in 1994. This work revealed the presence of anomalous uranium (U) in the lake deposits and anomalous lead (Pb) and PGE (Pt, Pd) associated with Archaean granitoids exposed on the western side of the tenement.
This sampling supports the results of airborne radiometric surveys carried out in 1972 (BMR) and more recent work by the GSWA, which indicated the presence of five anomalies within E30/112 and an anomalous zone (>300 cps) on the western boundary of E29/589. It is believed that these results confirm the potential of UOG’s Galah Rock and Walling Rock Prospects (Figure 9).
2.3.2 Geological SettingThe regional geological setting of UOG’s Galah/Walling Rock Prospects consists of a major north-trending paleodrainage chain of lakes and claypans which have developed over Archaean granitoids that are bounded to the west and east by the Illara and Mount Ida greenstone belts.
The tenement geology comprises lacustrine saline playa deposits with flanking mixed dunes, evaporites and alluvials. These in turn are flanked by rare Archaean, fine to coarse grained monzogranites, and sandy soils (Figure 8).
2.3.3 Past ExplorationThere are no open-file records of past exploration, apart from records of gold mining in the adjacent Illara and Mt Ida Greenstone Belts.
Geochemical mapping by the GSWA (Kojan and Faulkner 1994) has identified anomalous platinum and palladium values in granitoids along the western boundary of E30/312 and anomalous uranium in E30/312 and E29/589 at three locations (Figure 9).
2.3.4 Exploration PotentialThe presence of extensive areas of granitoids rocks surrounding the prospects, which may be a source of uranium by way of leaching and re-concentration, together with identified geochemical and radiometric anomalies, supports the potential of the prospect areas to host uranium mineralisation. Whereas the true potential of the Galah and Walling Rocks Prospects remains uncertain the geological setting and presence of identified radiometric anomalies warrant further investigation.
In addition to the potential for near-surface uranium mineralisation – potential for gold and PGE mineralisation exists in granitoids which outcrop along the western edge of the tenements.
2.3.5 Proposed Exploration and ExpenditureThe Exploration Licence applications cover spot radiometric anomalies recorded by the BMR in the 1972 survey. The spot anomalies will be relocated by a reconnaissance airborne radiometric survey and the areal extent will be mapped and positioned with a ground radiometric survey. Drill testing will be both localised on the anomalous areas and reconnaissance style with lines drilled across the channel at 200 metres spacing. Infill drilling will be needed for those areas showing promise.
The Exploration Licence is an application and as such the exploration programme will commence when the Licence has been granted.
Figure 8 Galah Rocks & Walling Rock Projects Geology & Tenement Plan
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EXPLORATION BUDGET – GALAH ROCK and WALLING ROCK PROSPECTS
ACTIVITYYEAR 1
$YEAR 2
$TOTAL
$
Ground reconnaissance & geomorphic survey 10,000 10,000
Drilling 52,000 200,000 252,000
Analysis 36,000 40,000 76,000
Geol supervision, Salaries 1 50,000 60,000 110,000
Field Costs 1 24,000 19,000 43,000
Tenement Office & Management 8,000 5,000 13,000
TOTAL 180,000 324,000 504,000
The budgeted expenditures of $180,000 and $324,000 for Years 1 and 2 respectively are considered both reasonable and adequate to cover costs of the major planned exploration programme. It is considerably more than the estimated Department of Industry and Resources statutory expenditure requirements for each of the first two years. If the minimum amount only is raised, the Company will reduce the expenditure on the Projects as outlined in section 2.12 of this Prospectus.
3. Uranium, Precious and Base Metal Prospect3.1 Rubberoid Well — E09/12453.1.1 Introduction Rubberoid Well Prospect, E09/1245, is located about 800 kilometres north of Perth, and 250 kilometres northwest of Meekatharra, in the Gascoyne Mineral Field, Western Australia (Figure 1).
Road access is by way of the Great Northern Highway to Meekatharra, thence northwesterly via Errabiddy on the Mt Augustus Road, which passes through the eastern part of the Prospect area. Access within the tenements is by way of well-maintenance station tracks.
The geological setting comprises Proterozoic-aged metamorphic schists of the Morrissey Metamorphic Suite and late-stage granitoids which has caused further widespread secondary deformation to the Morrissey Metamorphics.
The area has been the subject of past exploration by others for gold, base metals and uranium.
A small deposit of relatively high-grade gold mineralisation has been identified to the north and south of the prospect area (15 000 t @ 7.4 g/t Au) and some 45 uranium occurrences have been reported in the area and at least three occur within E09/1245. The results of past exploration confirm the potential for the discovery of precious, base metal and radioactive mineralisation.
Figure 9 Galah Rocks & Walling Rock Projects Radiometric Anomalies
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3.1.2 Geological Setting and MineralisationThe geological setting of E09/1245 consists of Lower Proterozoic granites, gneisses and schists of the Morrissey Metamorphic Suite with overlying Middle Proterozoic sediments of the Mt James Formation together with Bangemall Group arenites and conglomerates of the Mt Augustus Sandstone, to the north and south respectively (Figure 12).
The lithologies of interest in the tenement area are a sporadically developed mafic schist and amphibolites which host gold mineralisation immediately south of E09/1245. At the northern extremity of E09/1245, near-surface uranium mineralisation, occurring as secondary yellow or olive green carnotite has been identified in calcrete and weathered Morrissey Metamorphic suite schists.
Some 45 occurrences of uranium have been found within the Mt Phillips 1:250 000 Sheet, with at least eight locations being found at the western end of E09/1245 in the vicinity of Injinu Hills.
Southeast of Injinu Hills, carnotite has been found at shallow depths in joint and schistosity planes in deeply-weathered granitoids. Uranium mineralisation has also been found in clays and calcareous soils overlying saprolite. At the eastern margin of E09/1245 uranium occurs in dissected valley calcrete of Aurillia Creek. Zoned pegmatites may also contain primary uranium and rare earth minerals.
3.1.3 Past ExplorationBetween 1979-1983, Urangesellschaft Australia Pty Ltd completed a programme of exploration in the general area designed to test for economic uranium mineralisation in rocks of the Gascoyne Complex. A programme of airborne radiometric, magnetic and EM surveys, geological mapping, rock chip and stream sediment sampling failed to locate any significant anomalies.
Between 1981-1982, Stockdale Prospecting Limited, completed a regional programme of diamond exploration in JV with Urangesellschaft. Some kimberlitic indicators and micro-diamonds were reported, but no follow-up work was undertaken.
In 1986, the Mount Phillips area was the subject of airborne radiometric survey by the Commonwealth of Australia, Bureau of Mineral Resources. A series of radiometric
highs were defined extending down the centre of UGG’s Rubberoid Well Prospect (E09/1245). Three of these highs were at locations where anomalous uranium mineralisation had been identified by the GSWA during 1:250 000 scale geological mapping of the Mount Phillips Sheet (Williams et al. 1983) (Figure 13).
Regional reconnaissance stream sediment sampling for gold by Battle Mountain Australia Inc. was completed between 1987 and 1989 without detection of significant anomalies.
Between 1991-1999, investigations were carried out for gold by Aberfoyle Resources and Bremer Resources NL and for base metals by Acacia Resources Ltd and International Resources Services Pty Ltd. The area under investigation, namely the Big Bend Syncline and the Bustler Well, are located south and north of UOG’s E09/1245 prospect in a similar geological and structural setting.
Gold mineralisation of potentially economic significance was identified following exploration which included geophysical and geochemical surveys, geological mapping and follow-up RAB and RC drilling.
Figure 12 Rubberoid Well Tenement & Geology/Structure
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Gold occurrences were tested at three locations, namely:West Point, where gold mineralisation (originally discovered by Battle Mountain Gold) occurs in sheared pyritic, chlorite-biotite carbonate amphibolite with minor ferruginous chert horizons. Significant intersections were 14 m @ 1.57 g/t Au, 10 m @ 1.71 g/t Au, 30 m @ 0.41 g/t Au, 6 m @ 1.58 g/t Au, 13 m @ 0.66 g/t Au and 35 m @ 0.65 g/t Au was recorded in a rock chip traverse. These results suggested potential for a bulk tonnage low-grade gold deposit, having the potential for higher grade shoots within the low grade zone.
Clever Mary, where low grade RAB intersections included 6 m @ 1.93 g/t Au, 5 m @ 2.33 g/t Au and 9 m @ 1.57 g/t Au.
Bustler Well, where a resource of 15 000 t grading 7.4 g/t Au was identified.
In 1994, the Chance gossan located west of Mt James (24º50’S, 116º35’E) and outside E09/1245, was investigated for base metals and Th/U mineralisation. The results of this study are not known.
In 1995, Bremer Resources completed a programme of data reassessment and geochemical sampling. It was concluded that deep drilling was warranted to test for the existence of other zones of mineralisation (Figure 13).
Between 1996-1997, Acacia Resources Ltd carried out exploration for base metal mineralisation in the Big Pond prospect area which comprised mapping, soil, rock chip and stream sediment sampling, followed by an electromagnetic survey. Follow-up RC and diamond drilling encountered 0.5 m @ 1.3% Zn and 0.5 m @ 1.5% Zn + Pb. The mineralisation is hosted by narrow quartz-carbonate veins within a highly foliated metaquartzite of the Morrissey Metamorphic Suite.
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In 1997, Acacia Resources Ltd, in JV with Pasminco Australia Ltd carried out exploration for base metal mineralisation within metasedimentary rocks of the Mt James Formation. Exploration comprised geological mapping, soil sampling, rock chip and stream sediment sampling. The anomalous areas were covered by an EM survey and the resulting responses were tested by a 7 hole RC drill program. A single, angled DDH was drilled to 200 m depth at the Chance Gossan Prospect. This hole encountered weak vein-style mineralisation, with the best intersection being 0.5 m @1.3% Zn and 5 m @ 1.5% Zn and Pb. The tenements were then relinquished with no further exploration being carried out.
In 2000, Eastern Goldfields Exploration Pty Ltd, carried out a data review of open-file reports with respect of tenement E52/1270, which is located adjacent to, and east of, E09/1245. Their work identified a strong magnetic anomaly of an unknown source and a series of regional structural trends which intersect E09/1245. Eastern Goldfields (Hartree Consulting 2000) recommended further field work to test the source of the magnetic anomaly and the potential for associated mineralisation. Further detailed magnetic surveys were also recommended but it is not known if this recommendation was carried out.
3.1.4 Exploration PotentialUOG’s Rubberoid Well Prospect is favourably located in an area where exploration by others has identified both gold and base metal mineralisation. The most recent work identified a major magnetic anomaly and intersecting regional structural trends that warrant more detailed follow-up exploration.
A number of uranium anomalies occur within the prospect area and past airborne radiometric surveys have identified an anomalous zone that trends down the centre of the tenement.
Figure 13 Rubberoid Well Radiometrics and mineralisation
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Geochemical sampling completed by the GSWA (Sanders et al. 1997) confirm the presence of precious and base metal anomalies, as well as fissionable Th/U metals in the vicinity of the prospect.
Evidence of mineralisation identified by others warrants ongoing exploration.
3.1.5 Proposed Exploration and ExpenditureThis project is subject to a joint venture agreement where by the company has a free carried interest in the project for the first two years.
Although uranium is the prime target this is a multi element project with gold and base metals also being sought. The exploration programme is designed to take into account all such possibilities.
4. Gold, Platinum Group Elements and Base Metals4.1 Mt Vernon Prospect —
E52/18634.1.1 IntroductionThe Mt Vernon Prospect, E52/1863 comprising 70 graticular blocks (194 km2) is located about 470 km east of Carnarvon and about 1200 km north of Perth, in the Peak Hill Mineral Field, Western Australia (see Figure 1).
Road access from Perth is by way of the Great Northern Highway to Meekatharra, thence along the Ashburton Downs Road via Mulgul and Mt Vernon. Within the tenements well maintenance tracks from Mt Vernon Station traverse the prospect area. The Mt Vernon Prospect is located in the Bangemall Supergroup sill complex within the Warakurna Large Igneous Province (LIP). A Province that covers some 1.5 million km2 in area and extends from Western Australia into South Australia and the Northern Territory.
The mineral potential of the Warakurna LIP includes magmatic nickel-platinum group (PGE) deposits, magmatic hydrothermal deposits related to magmatism and hydrothermal vein deposits. The Bangemall Supergroup sill complexes are prospective for all these ore deposit types (Morris and Pirajno, 2005).
UOG’s Mt Vernon Prospect area is favourably located along the Mt Vernon Fault Zone, a major structural feature which has recorded anomalous copper, gold and platinum mineralisation (Morris, et al. 1998).
4.1.2 Geological SettingThe regional geology of the Mt Egerton area comprises Archaean-Proterozoic age metamorphic rocks of the Gascoyne Complex occupying the southwestern part of the map sheet and the overlying Bangemall Group which covers about 90% of the map sheet.
The geology of UOG’s Mt Vernon Prospect comprises folded sedimentary silts, shales and cherts in faulted contact with younger sandstone and shale. Both these sedimentary sequences contain basalt sills and dolerite dykes.
A major fault zone, the Mt Vernon Fault/Thrust, separates these two sequences in an east-west direction down the centre of the tenement. The northern fault separates gently dipping sediments from a ridge of locally overturned, steeply dipping Mt Vernon Sandstone. The southern fault is inferred from the stratigraphy. Minor thrust faults are exposed in Glen Ross Creek.
4.1.3 Past ExplorationIn 1968, Westfield Minerals Ltd, carried out stream sediment sampling over the northern limb of the Mt Vernon Syncline, part of which is covered by UOG’s E52/1863. This work identified a strong, three kilometres long, zinc (3000 ppm) and copper (340 ppm) anomaly within the Glen Ross Shale Member of the Kiangi Creek Formation.
Three diamond drill holes were completed. DDH3 encountered 11 metres of 1.2% Zn and 0.1% Cu. Another hole intersected 12 metres @ 0.55% Zn. The locations of Westfield’s drilling have not been identified. No further work was carried out by Westfield.
In the 1990s, Western Mining Corporation (WMC) explored an area mostly east of Mt Vernon. Only one multi-element response was considered significant and no follow-up work was attempted.
Between 1994–1998, exploration for gold and base metals was carried out north of E52/1863 by CRA/Rio Tinto investigating sediments of the Jillewarra Formation, on the northern margin of the Bangemall Basin. Extensive anomalous zinc mineralisation over a strike length of 16 kilometres and up to 500 metres wide was encountered in Kurabuka Formation carbonaceous shales.
Follow-up drilling intersected 28 metres grading 0.5% Zn before the ground was surrendered. Kurabuka Formation Shales exposed in the northwestern part of E52/1863 will be targeted for exploration by UOG.
Between August 1994 to August 1995, Aberfoyle Resources Limited (Aberfoyle) carried out exploration over parts of E52/1863 now held by UOG. Aberfoyle’s work included geological reconnaissance, open file data review and public-domain geophysical interpretation. Enough work was done to interest a Joint venture Partner.
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Figure 5 Mt Vernon & Collier Tenement & Geology/Structure
Figure 6A Mt Vernon Geochemistry
Figure 6B Collier Geochemistry
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In 1996, BHP Minerals Pty Ltd (BHP) in JV with Aberfoyle completed an aeromagnetic survey over the tenements. As a result of this work a GEOTEM aerial survey was flown. One ground EM target was identified indicating the presence of a thick (60 m–200 m) conductive black shale unit of the Kiangi Creek Formation. Reportedly this response was not considered to be sufficiently significant to warrant further investigation and the JV agreement was terminated.
In 1995, Vageta Pty Limited (Vageta) carried out exploration on two tenements with an area of 265 km2, surrounding Mt Vernon Homestead in the search for prehnite, chalcedony and diamonds. Their work identified gem quality prehnite and chalcedony but the potential of the area for diamonds was reportedly downgraded.
In 1997, in Joint Venture with Diamond Rose NL, Vageta continued exploration for prehnite, chalcedony, diamonds, gold and base metals, but no further sites were identified.
No further sites of interest were identified.
4.1.4 Exploration PotentialDespite a long history of exploration there are no mines currently operating on the Mt Egerton 1:250 000 Sheet, with the last gold mine being closed in 1953.
Five styles of mineralisation are found on Mt Egerton (Muhling and Brakel 1985), namely:
stratabound zinc with minor copper goldvein copper and lead in carbonate rockssurface manganese enrichmentstratabound phosphate
In the vicinity of UOG’s Mt Vernon Prospect, stratabound zinc-copper occurrences were found in laminated black shales of the Jillewarra Formation at Mt Vernon, with the best drill intersection being 11 m @ 1.2% Zn and 0.1% Cu (Muhling & Brakel, 1985).
Stream-sediment sampling has been shown to be an effective exploration tool with the source of the identified anomalies being attributed to possible exposure of mineralised basement rocks by way of structural movement (Davy 1980).
Gold is largely restricted to the Egerton mining centre, 75 km south of E52/1863, although low-grade anomalous gold values of 3 ppb have been recorded within the prospect area at Mt Sandman (Morris et al. GSWA 1998) (See Figure 6A).
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Anomalous copper (170 ppm) has also been recorded in the vicinity of Mt Sandford (GSWA 1998) (See Figure 6A).
Mineralisation styles identified in the Bangemall Basin and relevant UOG’s E52/1863 are as follows (Chuck 1984):
Carbonate-hosted lead, often with minor zinc and copper
Shale-hosted zinc and copper, with other metals including gold
Dolerite and fracture-associated, copper and lead.
Of the above, shale-hosted base metal mineralisation has been identified with E53/1863.
The GSWA’s regolith and geochemical mapping programme highlights two potential mineralisation types on the Mt Egerton 1:250 000 Sheet.
Dolerite-hosted precious metals in the vicinity of Mt Vernon Homestead (north of E52/1863, but in a similar geological and structural setting)
Stratabound sulphide mineralisation.
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Figure 7A Warakurna LIP & Distribution of Associated Dykes
Figure 7B Glenayle Sill Complex & Giles intrusions
Figure 7C Schematic Longitudinal Section Model
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More recently, Morris and Pirajno (2005) have examined the mineralisation potential of the Warakurna Large Igneous Province (LIP), the western portion of which extends into Mt Egerton and is occupied by Bangemall Supergroup rocks. The authors postulate that the formation of the Warakurna LIP is the result of rapid emplacement of large amounts of mafic magma and associated mineralization (See Figures 7A, 7B and 7C).
The recognition of the Warakurna LIP in west-central Australia and its assumed relationship to mantle plume activity has very important implications for the mineral potential of the area (Morris and Pirajno, 2005).
Pirajno (2000, 2004b) lists the following main groups of ore deposits that can be linked, either directly or indirectly to mantle plume activity.
1. Primary magmatic
mafic-ultramafic related Cu-Ni-PGE sulphides
mafic related Fe-Ti-V oxides
Anomalous Cu-Ni-PGE, Au and V were identified within UOG’s (E52/1863) prospect area during the GSWA geochemical survey by Morris and Pirajno (1998). Exploration by others has also identified significant Zn and Cu mineralisation.
2. Magmatic/Hydrothermal ore deposits
Giant hydrothermal systems linked to mantle plumes and LIPs
Here hydrothermal ore deposits can be formed as a result of heat transfer during the emplacement of very large mafic melts into the earth’s crust.
Geochemical evidence of anomalous amounts of some recognised key elements, either in, or in the vicinity of UOG’s (E52/1863) Mt Vernon Prospect does indicate the potential of the area to host mineralisation as described by Morris and Pirajno. However this is by no means conclusive.
In addition, the Mt Vernon and Jeeaila River Fault Systems, which comprise major lineaments as much as 40 km long, and which possibly link with a major eastward trending fault on the adjacent Collier Sheet to the east, provide a favourable structural setting for mineralisation.
Thrusting and faulting along northern contact of the Mt Vernon Syncline with sedimentary/dolerite sill sequences of the upper Bangemall Group rocks provide fracturing and conduits for mineralising fluids, an environment for base and precious metal mineralisation.
4.1.5 Proposed Exploration and ExpenditureThe Mt Vernon and Collier projects cover similar geology and they will be covered with similar exploration programmes. The targets are mafic to ultramafic related copper – nickel sulphides, and hydrothermal copper, copper gold mineralisation.
Detailed geology of the projects is little understood. Geological mapping is needed along with lithogeochemical sampling. From the results, areas will be chosen to be covered with soil geochemistry and airborne magnetics. Targets generated will be further assessed with ground geophysical techniques and responses will be drill tested.
In the second year more detailed drilling may be required to follow up the mineralisation located in the previous drilling.
Exploration Budget – Mt Vernon and Collier Prospects
ACTIVITYYEAR 1
$YEAR 2
$TOTAL
$
Data base const.- ground recon.-geol mapping 30,000 30,000
Geochemistry 30,000 30,000
Ground Geophysics 40,000 40,000
Airborne Mags 15,000 15,000
Drilling 141,000 377,000 518,000
Analysis 52,000 70,000 122,000
Geol supervision, Salaries 1 90,000 100,000 190,000
Field Costs 1 45,000 60,000 105,000
Tenement Office & Management 30,000 30,000 60,000
TOTAL 473,000 637,000 1,110,000
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The budgeted expenditures of $473,000 and $637,000 for Years 1 and 2 respectively are considered both reasonable and adequate to cover costs of the major planned exploration programme. It is considerably more than the estimated Department of Industry and Resources statutory expenditure requirements for each of the first two years. If the minimum amount only is raised, the Company will reduce the expenditure on the Mt Vernon and Collier Prospects as outlined in section 2.12 of this Prospectus.
4.2 Collier Prospect E52/18644.2.1 IntroductionThe Collier Prospect, E52/1864, some 145 km2 in area, is located about 550 kilometres east-northeast of Carnarvon and about 900 kilometres north of Perth in the Peak Hill Mineral Field of Western Australia. Access from Perth is by way of the Great Northern Highway to Meekatharra, thence by way of the Meekatharra–Ashburton Downs Road, to a turnoff some 50 kilometres southeast of Mt Vernon Homestead (See Figure 1).
From that point access is difficult and only by way of station well maintenance tracks for a further 60 kilometres.
Long term access will best be afforded either by helicopter or the establishment of a light aircraft landing strip.
The Collier Prospect, located within the Warakurna LIP about 100 kilometres east of UOG’s Mt Vernon Prospect, is extensively soil-covered, has a similar geological and structural setting as UOG Mt Vernon Prospect, and possibly similar mineral potential.
Geochemical sampling by the GSWA has identified anomalous Ni, Cu, Au, Pd, and Pt values associated within a mafic intrusive located in part of the tenement (Figure 6B).
The prospect lies due east of Glen Ross Anticline and probably straddles an extension of the Glen Ross anticlinal axis.
Further northeast, copper mineralisation occurs along Neds Gap Fault in a similar geological and structural setting, namely basaltic sills in silty sandstone sequences (similar to those which hosted base metal (Cu, Zn) mineralisation at Mt Vernon). The potential for mantle plume mineralisation within this part of the Warakurna LIP, whilst not so far evident from exploration, is believed to be the same as for Mt Vernon.
4.2.2 Geological SettingThe geological setting of the Collier Prospect comprises Mesoproterozoic shales and siltstone of the Backdoor Formation together with basic dolerite-gabbro sills which are intrusive in the eastern parts of the tenement. Over 60% of the prospect area is covered with unconsolidated silty, sandy colluvium and calcrete associated with the Brumby Creek drainage channel which traverses southeasterly through the centre of the tenement (Figure 6B).
Structurally, the tenement straddles an easterly extension of the Glen Ross Anticline.
4.2.3 Past ExplorationThere are no open file records of past exploration within E52/1864, although 25 kilometres to the northeast at the Mountain Maid mining area a small amount of copper was mined, having an average grade of 40.39% Cu.
In 1997, BHP Minerals Pty Ltd carried out exploration of tenement E52/1025-1026 about 40 kilometres to the south of E52/1864 at their Kumarina Project.
In summary, exploration comprised stream sediment sampling and an aeromagnetic (GEOTEM) survey. No significant geochemical anomalies were identified, however, interpretation of the GEOTEM data resulted in a recommendation for follow-up work.
BHP also carried out preliminary exploration at Neds Gap (E52/1023-1024) some 80 km northeast of E52/1864 with a similar programme, namely stream sediment sampling and GEOTEM airborne surveys. Minor malachite (Cu) mineralisation was found in black shales. Follow-up sampling failed to repeat a lead anomaly.
No further records of exploration have been sighted. More recent, geochemical mapping of the Collier Sheet (Coker and Faulkner 1999) has identified both base and precious metal anomalies on the Glen Ross Anticlinal Structure and associated mafic sills.
Anomalous gold (20 ppb), nickel (160 ppm), copper (>132 ppm), palladium (9 ppb) and platinum (>13 ppb) have been detected which are believed to warrant more detailed exploration.
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4.2.4 Exploration PotentialThe exploration potential of the Collier Prospect is similar to the Mt Vernon Prospect, namely base metal (Cu, Ni) and PGE associated with the Warakurna LIP and mantle plume activity. In the absence of a larger past or current mining operation in the area the potential of the area is very much dependent on geochemical evidence provided by the GSWA geochemical mapping programme.
Favourable fold structures (Glen Ross Anticline) and associated major faults and their inferred intersection provide favourable structural settings for ore deposition.
In the absence of any identified resources the Collier Prospect is regarded a relatively under-explored prospect well-suited for detailed exploration.
4.2.5 Proposed Exploration and ExpenditureRefer to section 4.1.5 of this report.
5. Gold and Base Metal Prospects5.1 Wannamal Prospect — E70/2444 and E70/2692-26935.1.1 IntroductionThe Wannamal base and precious metal prospect consists of three contiguous tenements that have an area of approximately 70 km2. It is centred about 100 kilometres north of Perth in the South West Mineral Field, Western Australia.
Access from Perth is by way of the Great Northern Highway which passes through the tenements from south to north along their eastern margin. Traversing the western side of the area is the Midland narrow gauge railway line. The prospect covers both privately-owned land and crown land. Access is by way of both shire and private roads that service the various farming properties.
The geological setting comprises Archaean granitoids and greenstones of the Yilgarn Craton, Jimperding, Chittering and Balingup Complexes, younger intrusive granitoids and Phanerozoic sediments.
Southwest Western Australia is the world’s largest producer of bauxite, tantalite and spodumene and is also a significant producer of gold, coal, heavy minerals, tin and silica sand. South Western Australia also has potential for PGE, nickel, chromium, molybdenum, vanadium, base metals, iron ore, diamonds, and industrial minerals (Hassan, L.Y. 1998).
On the western boundary of E70/2444 (Wannamal/Mogumber) ilmenite mineralisation has been reported, whilst on the eastern boundary of E70/2444, PGE mineralisation occurs in mafic/ultramafic igneous complexes (GSWA Rept 65, 1998).
5.1.2 Geological SettingThe prospect is situated on the Yilgarn Craton, which in this area is composed mainly of late-Archaean granitoids rock with belts of greenstone of the Jimperding and Chittering Metamorphic Complexes.
The dominant rock type of these metamorphic complexes is a banded quartz-feldspar-biotite gneiss, locally containing garnet, cordierite or hypersthene. Much of the gneiss is believed to have a sedimentary origin although some may be orthogneiss or metamorphosed banded migmatite.
The prospect geology largely comprises granitic gneiss overlain by an extensive cover of laterite and sand, flanked by quartz-mica schist and minor mafic/ultramafic igneous complexes.
Along the western margin of the prospect area are northerly trending belts of gneisses and mylonites which are derived from Archaean and Proterozoic deformation of Archaean rocks adjacent to the Darling Fault (Figure 15).
The structural setting is dominated by the main, north-trending Darling Fault, and a series of sub-parallel south easterly trending splay faults and major faults and/or terrain boundaries.
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5.1.3 Past ExplorationBetween 1983-1986, the CSIRO carried out geochemical sampling of laterite within E70/2444 which identified anomalous tin in laterite with values ranging from 10 ppm-50 ppm. The roughly circular anomaly had a diameter of about three kilometres. Anomalous niobium, up to 170 ppm, and arsenic, up to 270 ppm are coincident with the tin anomaly. Pegmatites occur within the anomalous zone which could be the primary source of the anomalous mineralization.
In 1986, Greenbushes Ltd carried out a programme of exploration for mineralisation of an area located about 15 kilometres southwest of New Norcia, within UOG’s E70/2444.
Their programme comprised detailed geological and structural geological mapping, rock chip sampling and petrology.
Greenbushes concluded that whereas the mapping and petrological studies indicated the presence of what could be categorised as a “tin granite”, the paucity of outcrop did not allow identification of a suitable target area for more detailed study, and in April 1986 the area was surrendered.
Exploration by others, including a study in 1998, (GSWA) of the exploration potential of Southwest Western Australia, identified a number of precious and base-metal anomalies both within and close to UOG’s prospect areas.
Between 1987-2004, Mitchell Plateau Bauxite Co Pty Ltd, Rio Tinto and others carried out exploration for bauxite over a portion of UOG’s Wannamal tenement (E70/2444).
The results of this work relating to bauxite mineralisation have not been addressed because, under the terms of UOG’s agreement with Swancove, bauxite mining is excluded. However, within the area covering E70/2444 anomalous Mo, Pb and Wo values were identified (Figure 17).
In 2005, Swancove carried out airborne geophysical surveys of the Wannamal prospects and adjacent areas. This work provided significant magnetic and gravity data, which in conjunction with CSIRO geochemistry, identified both base and precious metal anomalies within and to the south of UOG’s Wannamal Prospect (Figure 16).
A major magnetic anomaly centred about E70/2444, warrants more detailed investigation as a potential source of mineralisation possibly introduced along favourable splay faults associated with the main Darling Fault which bounds the Wannamal project along its western boundary.
5.1.4 Exploration PotentialThe most recent assessment of the mineral potential of UOG’s Wannamal Prospect is addressed in the GSWA Report 65 on Mineral Occurrences and Exploration Potential of Southwest Western Australia (Hassan 1998). A number of mineral occurrences, either within or close to UOG’s Prospect, have been identified and mineralisation styles discussed.
5.1.4.1 Pegmatitic MineralisationThe Greenbushes rare-metal pegmatite, reportedly the world’s largest producer of tantalum and spodumene, is a classic example of pegmatite host mineralisation.
Within UOG’s Wannamal Prospect, reconnaissance exploration by Greenbushes identified anomalous tin mineralisation, possibly pegmatite hosted. This anomalous zone warrants more detailed exploration.
5.1.4.2 Orthomagmatic Mafic and Ultramafic MineralisationSignificant PGE and copper mineralisation has been identified at Yarawindah near New Norcia adjacent to and just east of UOG’s Wannamal Prospect in small mafic/ultramafic igneous complexes. Values of up to 2.68 g/t Pt and 0.36 g/t Pd have been recorded as well as grades of 2.4% Cu and 1.5% Ni.
No such igneous complexes have yet been identified in UOG’s tenement E70/2444 but their presence either adjacent to or just inside the eastern boundary, is believed worthy of more detailed investigation.
5.1.4.3 Vein and Hydrothermal MineralisationVein and hydrothermal gold occurrences in the Southwest are essentially of two types, mesothermal Archaean/Proterozoic age and epithermal gold deposits of Permian/Cretaceous.
Two Archaean/Proterozoic-aged gold occurrences have been identified adjacent to and just south of E70/2692 and identified as Chittering and Bindoon locations in GSWA Report 65.
In addition to tin and gold mineralisation, the presence of a number of base metal occurrences (molybdenum and vanadium) to the south, in Jimperding Metamorphic Suite granitoids, suggests that the potential may exist for similar mineralisation in granitic rock suites having a favourable structural setting with UOG’s Wannamal Project area.
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Mineralisation controls and potential for both gold and base metal mineralisation are discussed in GSWA Report 65.
It is suggested that the potential also exists for both lateritic and primary gold mineralisation in, as yet unidentified, slices of greenstone similar to the Morangup greenstone belt, which is south of UOG’s Wannamal Project but adjacent to, and just inside the northeastern corner of UOG’s Wundowie Prospect.
The Morangup greenstone belt is reportedly poorly explored and is interpreted by Wilde and Pidgeon (1990) to consist predominantly of basalt with minor andesite and sedimentary rocks.
Only detailed geological mapping will confirm the presence or otherwise of similar greenstone with UOG’s project areas.
5.1.5 Proposed Exploration and ExpenditureRefer to section 5.2.5 of this report.
5.2 Wooroloo Prospect — E70/27275.2.1 IntroductionThe Wooroloo Prospect, E70/2727 covers an area of about 100 km2 and is located about 50 kilometres east of Perth in the Southwest Mineral Field, Western Australia (Figure 14).
Access from Perth is by way of the Great Eastern Highway to Wooroloo thence within the tenement is by way of several shire and private roads. In the southeastern portion of E70/2727, an area of about 16 km2 is designated as an Institutional Reserve and is a prohibited area.
The regional geological setting is that of granitoids in the northeast in contact with the interpreted mafic Morangup Greenstone Belt (Wilde & Pidgeon, 1990). The Morangup Greenstone Belt is believed to be of similar age to the Saddleback Greenstone Belt to the south which hosts the Boddington Gold Mine (302 Mt @ 0.92 g/t Au).
Residual and supergene gold from a lateritic host has already been identified at Wundowie on the eastern side of E70/2727, whilst to the east at Coates Siding, a vanadium resource has been identified, totalling some 40 Mt grading between 0.5-0.6% V2O5 (Hassan 1998). The host rock is a small mafic/ultramafic igneous complex (Figure 15).
5.2.2 Geological SettingThe geological setting of the prospect area comprises Precambrian rocks of the Yilgarn Complex, Jimperding Metamorphic Suite and the Morangup Greenstone Belt, which underlies the northeastern corner of E70/2727 (Figure 15).
In the southern part of the prospect, granite and granodiorites occur whilst granite, porphyritic granite and migmatite cover much of the remaining area. Mafic metabasalt and metasedimentary sequences of the Morangup igneous complex have been interpreted as underlying the northeastern corner of E70/2727.
5.2.3 Past ExplorationApart from geochemical sampling carried out by the GSWA (Hassan 1998) that identified residual and supergene gold mineralisation on the eastern boundary of E70/2727, there are no open file records of past exploration in the area.
However, nearby to the west at Swan View and east at Mokine, molybdenite has been found in granitic rocks similar to those found within E70/2727. The molybdenite is described as occurring in joints in granite and in parallel veins up to 10 cm wide. The Swan View molybdenite is described as possibly vein and hydrothermal, but has been assigned to the disseminated and stockwork plutonic intrusion category. This is similar to the genetic model described for molybdenite deposits found elsewhere in the world.
5.2.4 Exploration PotentialThe geological and structural setting, together with the known presence of anomalous precious and base metals suggests hydrothermal vein style mineralisation that has been identified in the prospect area.
The Morangup Greenstone Belt that is located along the eastern boundary of E70/2727, has been directly compared with the Saddleback Greenstone Belt, to the south, which hosts the large Boddington primary gold deposit.
In addition to gold, PGE molybdenite and vanadium have been found in the Jimperding and Chittering Metamorphic Complexes, which are the predominant rocks in the area.
Investigation by others of the mineralisation controls, and potential of the area in general, suggests that there may be potential for further lateritic and primary gold mineralisation, both at the Saddleback and Morangup Greenstone Belts.
It is suggested that there is also potential for gold mineralisation in yet undiscovered greenstone remnants, which may be preserved along northwest trending faults that cut the Yilgarn Craton in the southwest Mineral Field (Hassan, 1998). Epithermal gold mineralisation is known to occur in fault splays off the Darling Fault.
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Based on the above it is believed that UOG’s Prospects, which are favourably located both adjacent to the Darling Fault (Wannamal Prospect) and the Morangup Greenstone Complex (Wooroloo Prospect), warrant more detailed exploration.
5.2.5 Proposed Exploration and ExpenditureThe Wannamal and Wooroloo projects are situated within the Western Gneiss Terrain north and east of Perth WA. Detailed geological mapping is needed to guide the exploration programme for gold, copper nickel, tin, molybdenum and vanadium. Remote sensing techniques are required due to the fact that some of the area is privately owned land and permission must be sought prior to egress. This will include structural analysis and airborne magnetic data and radiometric data collection.
In the Wannamal Project abundant holes have been drilled in the past search for bauxite. The data collected from these holes that includes location, geological logging and down hole analytical information will initially be collated. This information coupled with structures, magnetic and radiometric and geological mapping will drive the next phase of the exploration programme.
Detailed soil sampling followed with ground geophysics and drilling is the aim.
Two areas required special attention. To the east of the Wannamal Project in the area of Yarawindah Brook there is a known nickel-copper + PGE occurrence. This position needs to be explored early to determine if there are any ultramafic rock units.
Secondly the Morangup Greenstone Belt requires mapping and sampling to see if gold is present and if there are similarities to the Saddleback Greenstone Belt that hosts the Boddington Gold Mine.
Exploration Budget – Wannamal and Wooroloo Prospects
ACTIVITY YEAR 1
$YEAR 2
$TOTAL
$
Data base const.- ground recon.-geol mapping 75,000 75,000
Geochemistry 20,000 20,000
Ground Geophysics
Airborne Mags 55,000 55,000
Drilling 96,000 118,000 214,000
Analysis 48,000 70,000 118,000
Geol supervision, Salaries 1 50,000 100,000 150,000
Field Costs 1 43,000 50,000 93,000
Agreements with land holders 20,000 20,000 40,000
Tenement Office & Management 25,000 30,000 55,000
TOTAL 432,000 388,000 820,000
The budgeted expenditures of $432,000 and $388,000 for Years 1 and 2 respectively are considered both reasonable and adequate to cover costs of the major planned exploration programme. It is considerably more than the estimated Department of Industry and Resources statutory expenditure requirements for each of the first two years. If the minimum amount only is raised, the Company will reduce the expenditure on the Wannamal and Wooroloo Prospects as outlined in section 2.12 of this Prospectus.
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6 bibliographyANON 1998 Annual Report for E52/877 and 998 Mt Vernon Proj. Oct 1996-Oct 1997. Vageta
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ANON 1994-2002 Open File Reports ITEM 11325. WAMEX, DME.
ANON 1993-1999 Open File Reports ITEM 10376. WAMEX, DME.
ANON 1986 Final Report. Exploration Licence E70/112. Greenbushes Ltd.
BATES AND JACKSON 1980 Glossary of Geology 2nd Ed. American Geological Institute.
BRAKEL, A. et al. 1982 Collier, Western Australia. Western Australian Geological Survey 1:250 000 Geological Series Explanatory Notes.
BUTT et al. 1977 Uranium occurrence in calcrete and associated sediments in WA, CSIRO.
CAMERON, E. 1990 Yeelirrie Uranium Deposit Geology of the Mineral Deposits of Australia and PNG, p.1625-1629, the AusIMM.
CARRIE, R. 1972 Ground scintillometry and auger drilling Bungalow Well. Le Nickel (Aust) Exploration Pty Ltd. Uranium Project 0620.
CARTER, J.D. and LIPPLE, S.
1982 Moora, Western Australia SH/50-10. Western Australian Geological Survey 1:250 000 Geological Series Explanatory Notes.
CLIFFORD, M. 1997 Big Bend Joint Venture. Final Report E09/589, E09/689, E09/690. Acacia Resources Limited.
DENDLE, P. 1997 Kumarina Project E52/1025-1026. Annual Report for period Feb 1996 to Feb 1997. BHP Minerals Pty Ltd.
DEPT OF MINES 1954 List of Cancelled Gold Mining Leases, WA Dept of Mines.
ELLIOT, S.J. 1994 Big Bend Project E09/589. First Annual Report. International Resource Services Pty Ltd.
HARTREE CONSULTING 2000 Annual Report for E52/1270. Eastern Goldfields Exploration Pty Ltd.
HASSAN, L.Y. 1998 Mineral Occurrences and Exploration Potential of Southwest Western Australia. Geological Survey of Western Australia, Dept of Minerals and Energy.
HICKS, D.J. 1995 Combined Annual Report. E52/859-872 5 Aug 1994-5 Aug 1995 Bangemall Basin Prospect. Aberfoyle Resources Ltd.
HORE-LACY, I. 2005 Uranium Back in Vogue. The AusIMM Bulletin No.5 Sept-Oct 2005.
JOYCE, R.M. 1993 Mt James Project E52/582, 52/691, 52/693 Annual Report on Exploration. Aberfoyle Resources Ltd.
McLATCHEE, G. 1996 Mt Vernon Group-Jillewarra Project. 2nd Annual Report, E52/869-872. BHP Minerals Pty Ltd.
McLATCHEE, G. 1997 Mt Vernon Group E52/869-872 3rd Annual Report. BHP Minerals Pty Ltd.
MITCHELL PLATEAU BAUXITE CO PTY LTD
1987-1990 Laterite Sampling – Chittering E70/237 – Muchea Jt Relinquishment Report. Freeport McMoran Australia.
MORRIS, P.A. and PIRAJNO, F.
2005 Mesoproterozoic Sill Complexes in the Bangemall Supergroup Western Australia. GSWA Dept of Industry and Resources.
MORRIS, P.A. et al. 1998 Geochemical Mapping of the Mt Egerton 1:250 000 Sheet. GSWA, Dept of Minerals and Energy.
MUHLING, P.C. et al. 1978 Mount Egerton, Western Australia. Western Australia Geological Survey 1:250 000 Geological Series Explanatory Notes.
PEREGOODOFF, T. 1998 Mt Vernon Group 4th Annual Report. Aberfoyle Resources Ltd.
PETERS, W.S. 1994 Aeromagnetic Survey Interpretation Report. Youanmi Area. Southern Geoscience Consultants. Gindalbie Gold NL.
PLAYFORD, P.E. 1990 Geology and Mineral Resources of Western Australia, Memoir 3, Geological Survey of Western Australia.
RED RIVER RESOURCES LIMITED
2005 Prospectus.
ROBINSON, S. 1996 Mt James Project E52/582, 52/691, 52/693 Annual Report. Bremer Resources NL.
ROBSON, S.D. 1998 Voluntary Relinquishment Report Youanmi Project E57/233, 228, 229 and 260. Geochemex Australia. Gindalbie Gold NL.
RUI 2005- 2006
Register of Australian Mining.
SANDERS, A.J. et al. 1997 Geochemical Mapping of the Mount Phillips 1:250 000 Sheet. GSWA, Department of Minerals and Energy.
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STEWART, J. et al. 1983 Youanmi, Western Australia. Western Australian Geological Survey 1:250 000 Geological Series Explanatory Notes.
TEMBY, P. and Ass. 1996 Annual Report Oct 1994-Oct 1995 Mt Vernon Project. Vageta Pty Ltd.
TEMBY, P. and Ass. 1996 Annual Report Oct 1995-Oct 1996, EL52/877-52/998 Mt Vernon Project. Vageta Pty Ltd.
THOM, R. and BARNES, R.G.
1997 Leonora WA Western Australian Geological Survey 1:250 000 Geological Series Explanatory Notes.
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1978 Perth, Western Australia SH-14. Western Australian Geological Survey 1:250 000 Geological Series Explanatory Notes.
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7 glossaryaeromagnetic Data collected from an aeromagnetic survey
airborne geophysical surveys
Geophysical surveys are designed to test, at surface to shallow depths, rock units with specific properties, eg sulphides by EM and radioactive minerals by radiometric surveys. Several geophysical instruments can be used in the air.
alluvial That which is transported by running water
alluvial sediments Material laid down by a river
alluvium All detrital deposits resulting from the operations of modern rivers, thus including the sediments laid down in river-beds, flood-plains, lakes, fans at the foot of mountain slopes, and estuaries
amphibolite A granulose or glomero-blastic metamorphic rock, consisting essentially of amphibole and plagioclase, and often containing quartz, epidote, or garnet
andesite A volcanic rock, generally porphyritic, composed essentially of plagioclase (andesine or oligoclase, or having an average composition corresponding to those types), together with one or more of the mafic minerals, biotite, hornblende, and pyroxene
anomalous Anomalous is a statistical term being much greater than the norm or background.
anticlinal/anticline A convex fold in rock strata
anticlinal axis The line that joins points of maximum curvature of an anticline
Archaean Oldest rock units
Archaean granitoids Felsic plutonic rock units emplaced during the Archaean.
Archaean-Proterozoic Proterozoic: The era that elapsed between the close of the formation of the igneous complex and the beginning of the lowest system, which is now known to contain abundant well-preserved fossils.
arenites Medium grained clastic sedimentary rock, sand sized particles
As Chemical symbol for arsenic
Au chemical symbol for gold
auger A type of drill
autunite A hydrous phosphate of uranium and calcium
axis In relation to folded strata, a line where the folded bed shows the maximum curvature
background Background is a statistical term relating to the vast majority of samples in a population that are normal or background.
basalt A fine grained dark coloured, extrusive igneous rock with low quartz content
basaltic Pertaining to, formed of, or containing basalt
base metal Any metal as iron, lead, etc. which is altered by exposure to the air, etc, in contrast with the noble or precious metals
basic A term applied to igneous rocks having a relatively low percentage of silica, the limit below which they are regarded as basic being about 52%
bauxite An amorphous mineral having the composition represented by Al2O3,2H2O. The name is also applied commercially to aluminous lateritic rocks in which aluminium hydroxides, amorphous or crystalline, predominate over other lateritic constituents
biotite Essentially H2K(Mg,Fe)3Al(SiO4)3
calcrete A term suggested for conglomerates formed by the cementation of superficial gravels by calcium carbonate
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carbonaceous Containing carbon, usually of organic origin, such as shales with plant remains
carbonate Limestones
carnotite A canary-yellow mineral, somewhat variable in composition, containing uranium and vanadium with either or both lime and potash
chalcedony A transparent or more generally translucent cryptocrystalline quartz
cherts A dense crypto-crystalline rock composed mineralogically of chalcedony (micro-fibrous amorphous silica or opal) and crypto-crystalline quartz
chlorite A silicate of aluminium with ferrous iron and magnesium and chemically combined water, characterized by the green colour common with silicates in which ferrous iron is prominent
chromium A brilliant tin-white, comparatively rare metal, hard, brittle, and refractory.
colluvium Denoting the heterogeneous aggregates of rock detritus, such as talus and avalanches resulting from the transporting action of gravity
conglomerates Is a sedimentary rock that consists mainly of rounded pebbles between the sizes of 4 and 64 mm.
contact Surface where two different kinds of rock come together
copper An element, the chemical symbol is Cu
cordierite Is a silicate of aluminium, magnesium and iron usually found in metamorphosed sedimentary rocks.
DDH Diamond Drill Hole
diamond drilling A method of drilling with a diamond impregnated bit to obtain a cylindrical core
diamonds Hardest naturally occurring substance, made of carbon
disseminated Particles finely spread throughout a rock
dolerite Fine grained intrusive basic dark coloured rock
dolerite dykes A hypabyssal volcanic rock unit that cuts across the stratigraphy – composed of dolerite
dolerite sill A hypabyssal volcanic rock that is conformable with the stratigraphy – composed of dolerite
drilling A method of testing subsurface rock units including mineralisation
dyke An intrusive wall like body of igneous rock which cuts across the structure of adjacent rocks.
EM Electro Magnetic. An electric current is put into the ground by a loop of wire. Any induced magnetic response is measured.
evaporites Dissolved salts that remain after the water has evaporated. Eg common salt – sodium chloride
Exploration Licence A mining tenement which allows exploration for minerals but does not allow mining. Granted for 2 years and renewable to a maximum of 5 years.
faulting/fault A break in strata along which movement has occurred
Fe Chemical symbol for iron
felsic Light coloured igneous rock
felsic volcanics Extrusive light coloured igneous rock
ferruginous Rich in iron
fissionable The nucleus of an atom that can be split
folding/fold A bend in strata
g Grams
gabbro Coarse grained igneous intrusive rock formed by the relatively slow cooling of a mafic magma
gamma rays Electromagnetic radiation - X-rays of a very short wavelength
garnet A calcium, iron, magnesium and aluminium silicate found commonly in metamorphic rocks.
geochemical Combining geology and chemistry to study the normal and abnormal distribution of chemicals in the earth crust
geophysical The physical properties of bedrock measured using electrical, magnetic, gravity or seismic method
gneiss A metamorphic rock where the coarse grained minerals have been aligned in one direction giving a banded appearance.
gold An element – chemical symbol Au
granites Felsic plutonic igneous rock unit
granitic Pertaining to granites
granodiorites An intermediate to felsic plutonic igneous rock unit
gravity anomaly Difference between observed value and theoretical calculated value
greenstone A metamorphosed basic igneous rock
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greywacke Typically poorly sorted sandstone, grey or greenish in colour
g/t Grams per tonne
hard-rock Primary mineral deposit formed by igneous or metamorphic activity
high grade (gold mineralisation)
Rich mineralisation usually in excess of 5-10 g/t
hypersthene An orthorhombic pyroxene - a silicate of iron and magnesium
intersection A zone of mineralisation in a drill hole
kimberlitic Ultramafic magma usually explosively emplaced in pipes, occasionally as dykes and sills, can carry diamonds.
lacustrine Pertaining to lake sediments
laterite A horizontally layered sequence of strongly leached clays rich in iron and aluminium formed at or near the surface as a result of tropical weathering
lateritic Pertaining to laterite
leaching The movement of water / acid soluble chemicals from rock forming minerals at or near the surface
lead An element – chemical symbol Pb
level A horizon at which an ore body is opened up and from which mining proceeds. It includes all horizontal workings on that horizon ie No 1 Level, No 2 Level etc
limb One of the sides of an anticline of syncline on either side of the axis
lode Fissure vein deposit of metalliferous minerals
m Metre/s
mafic Dark coloured igneous rock or dark coloured rock forming mineral
mafic intrusive Plutonic or hypabyssal igneous body that has intruded into the earths crust, of mafic composition
magmatic Pertaining to magma – shallow to deep seated molten rock
mantle plume Partial melting of the stable crystalline mantle with the resultant magma rising in a plume to the surface or near surface.
melts The melting of an in situ rock unit
Mesoproterozoic New terminology for Middle Proterozoic
metamorphic The change of pre existing minerals in a rock to equate to changes in new temperature and pressure – due to heat and or pressure
metamorphosed That which has been subject to metamorphism
migmatite Occurs close to granitic contacts and consist of two rock types – (1) country rock variously altered by metamorphism and metasomatism and (2) granite
mineralisation Process by which minerals are introduced into rock
mineralised Containing a concentration of minerals which may be of economic interest
molybdenum An element – chemical symbol Mo
nickel-platinum Two elements Ni – Pt normally associated
niobium An element – chemical symbol Nb
ore Mineral bearing rock that can be (or has been) mined and treated at a profit
ore body The total amount of ore to the limit of cut-off grade
orthogneiss The precursor of the gneiss is mainly of igneous origin
outcrop Part of a geological formation on the surface of the earth
paleodrainage Basically a fossilised drainage system
pegmatites Normally silicic dike rock having a conspicuously coarse texture
petrological/petrology Branch of geology dealing with origin or age of rocks
ppm Parts Per Million
prehnite Is a hydrous silicate of calcium and aluminium
prospect An area of geological or mining interest that has not yet been fully evaluated
Proterozoic The Era between the Palaeozoic Era and the Archaean on the geological scale
pulps Fine grained rock dust from percussion drilling
quartz Common mineral composed of silica SiO2
Quartzo-feldspathic Consists mainly of quartz and felspar
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Quaternary Is a geological System belonging to the Cainozoic Era – the most recent geological time.
RC Reverse Circulation – a form of drilling
radiometric Radioactivity
reef A gold-bearing quartz vein
regolith The layer of loose rock material that nearly everywhere forms the surface of the land and rests on the hard or bedrock
reverse circulation (RC)
Method or percussion drilling whereby rock chips drilling are recovered by pressurised air returning inside the drill rods
sandstone Compacted or cemented detrital sediment composed essentially of quartz grains
saprolite Soft, decomposed rock, formed in place by weathering
schistosity Foliation due to parallel orientation of flaky, lamellar or occasionally rod shaped minerals
schists Rock units exhibiting schistosity
scintillometer An instrument constructed to detect radioactivity - gamma radiation
sedimentary Rock units formed from the erosion of pre existing rock units and the deposition of the resulting detritus either by water or wind.
shales A laminated sedimentary rock composed of fine rock particles
silcrete A rock unit formed from the deposition of silica either from hot springs or from chemically active waters in an arid environment
silts Silts are sedimentary particles of a size that fall between clays and sands. When indurated they form siltstones
spodumene Is a lithium aluminium silicate and the main ore of Lithium
strata Layers of sedimentary rocks or beds
stratabound A rock mass bounded by confining strata but not necessarily part of the strata as with stratiform
stratigraphy The science of rock strata
stream sediment sampling
Sampling of stream bed detritus
strike A trend or bearing of a geological body at its intersection with a horizontal plane
structure Pertaining to rock deformation or to features that result from it
supergene The alteration of the near surface part of a mineral deposit; generally enrichment
syncline A fold, generally convex downwards, the core of which contains younger rocks
t Tonnes
tantalite Is the main ore of Tantalum
tension Is the pulling apart of rock units as opposed to compression
Tertiary Geological period dating from about 1.8 to 65 million years ago
Th/U Thorium and Uranium are two naturally occurring radioactive elements
thrust faults Faults of very low dip and large displacement resulting from intense compression
thrust An overriding movement of one crustal unit over another
tin An element – chemical symbol Sn
tungsten An element – chemical symbol W
ultramafic A very dark coloured igneous rock unit of either intrusive or extrusive origin
uranium An element – chemical symbol U
vanadium An element – chemical symbol V
vein A dyke-like intrusion of mineral traversing a rock mass of different material
volcanic A class of igneous rock that has flowed out or has been ejected at or near the earth’s surface
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Independent Evaluation of the Petroleum Prospectivity of Application Areas EPA 113 and EPA 114, McArthur Basin and EP 448, Canning Basin
Prepared for Uranium Oil and Gas Limited.
Rick de Boer, July 2006
RPS EnergyLevel 3, 41-43 Ord St.,
West Perth, WA 6005, AustraliaT +61 (8) 9226 0400F +61 (8) 9226 0511
E [email protected] www.rpsplc.com.au
6 Independent Geologist’s Report (Petroleum Permits)
Group PlcT H E E N V I R O N M E N TA L CO N S U LTA N C Y
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Our Ref: RPSE 085 E-mail: [email protected]
Direct Dial: +61 8 9226 0444
Date: 06 July 2006Uranium Oil and Gas Limited Level 8 256 St. George’s Terrace Perth WA 6000 Australia
Dear Sirs
Independent Evaluation of the Petroleum Prospectivity of Application Areas EPA 113 and EPA 114, McArthur Basin and EP 448, Canning Basin.
This report has been prepared for inclusion in a Prospectus for Uranium Oil and Gas Limited (hereafter UOG) for issue to the public of shares, and to apply for admission to the Official List of the Australian Stock Exchange Limited.
RPS Energy has been commissioned as an Independent Geological Expert to review and provide a technical assessment of the petroleum permit interests held by UOG in Application Areas EPA 113 and EPA 114, McArthur Basin and EP 448, Canning Basin in Australia. We enclose our report that addresses this brief. In preparing our report, professional staff of RPS Energy provided expert opinion on matters related to their specific expertise.
RPS Energy is the energy services division within RPS Group Plc, a leading consultancy group established in 1975 and quoted on the London Stock Exchange. The group offers a wide variety of services from its network of offices throughout Europe, Australia, Asia and North America. As a multi-disciplinary organisation, RPS Energy provides technical and commercial consultancy services to the energy sector on a worldwide basis. The majority of the services are applied in the upstream oil and gas industry but also encompass the renewable resources and nuclear areas.
Yours faithfully
For RPS
Alex Parks
Technical Director Australia and South-East Asia
Level 3, 41-43 Ord St., West Perth, WA 6005, Australia
T +61 (8) 9226 0400 F +61 (8) 9226 0511 E [email protected] W www.rpsplc.com.au
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TABLE OF CONTENTS
1. INTRODUCTION2. SUMMARY3. EXPLORATION PERMITS EP(A)113 AND EP(A)114
3.1 Regional Overview3.2 Petroleum System Analysis 3.2.1 Source Rocks 3.2.2 Reservoirs 3.2.3 Seals 3.2.4 Play Types3.3 Petroleum Prospectivity 3.3.1 Application Area EP(A)113 (Burdo) 3.3.2 Application Area EP(A)114
4. EP 448 CANNING BASIN4.1 Regional Overview 4.1.1 Ordovocian – Silurian Megasequence 4.1.2 Devonian – Early Carboniferous 4.1.3 Late Carboniferous – Permian 4.1.4 Jurassic – Early Cretaceous4.2 Petroleum System Analysis,
Southern Canning Basin 4.2.1 Source Rocks 4.2.2 Reservoirs 4.2.3 Seals 4.2.4 Play Types4.3 Petroleum Prospectivity 4.3.1 EP 448
5. DECLARATIONS5.1 Independence and Qualifications5.2 Basis of Opinion5.3 Sources of information
6. REFERENCES 7. APPENDIX A: GLOSSARY OF TERMS AND ABBREVIATIONS
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List of FiguresFigure 1 Location map and major tectonic units, McArthur Basin
Figure 2 McArthur Basin stratigraphy
Figure 3 Schematic cross-section through the McArthur Basin
Figure 4 Oil-stained cores from wells in the McArthur Basin
Figure 5 EP(A)113 and EP(A)114 location, infrastructure and database
Figure 6 Application Area EP(A)113
Figure 7 Application Area EP(A)114
Figure 8 Satellite image EP(A)114, showing the Kilgour, Kilgour South and Abner prospects
Figure 9 Surface geology, Kilgour, Abner and Kilgour South prospects
Figure 10 Schematic cross-section through Abner and Kilgour Prospects
Figure 11 Glyde River Trend prospective area (GR-9 area)
Figure 12 Location and major tectonic units, Canning Basin.
Figure 13 Canning Basin Stratigraphy
Figure 14 Stratal relationship of Gogo Formation
Figure 15 Isostatic gravity anomaly, Canning Basin
Figure 16 Cross-section southern Willara Sub-basin and the Anketell Shelf
Figure 17 EP 448 Location and Database
Figure 18 Lower Grant Group sandstone leads (TWT structure map)
List of TablesTable 1 Proposed Work Program EP(A)113 and EP(A)114
Table 2 EP 448 Work Program
Table 3 Summary of prospects
Table 4 Oil and gas shows in the McArthur Basin
Table 5 Organic richness of the major source intervals in the McArthur Basin
Table 6 Abner prospect volumetric summary
Table 7 Glyde River Trend volumetric summary
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1. INTRODUCTIONUranium Oil and Gas Limited (UOG) is in the process of acquiring two exploration tenements in the Northern Territory and has a 10% interest in a third permit in the Canning Basin of Western Australia. Two of the three permits are still in the application stage and await execution of access agreements with traditional owners before permits can be granted, although the applicant holds priority rights over the acreage, pending issue of title.
EP(A)113 (Burdo) covers 33 graticular blocks (2,711 km2) and is currently under a joint application by Kjirt Exploration Services Pty Ltd (ACN 061 662 039) and Swancore Enterprises Pty Ltd (ACN 076 507 849) each of which will hold 50% of the title. The Proposed Work Program is outlined below in Table 1.
EP(A)114 (Kilgour) covers 100 graticular blocks (8,050 km2) and is currently under a joint application by Kjirt Exploration Services Pty Ltd (ACN 061 662 039) and Swancore Enterprises Pty Ltd (ACN 076 507 849) each of which will hold 50% of the title. The Proposed Work Program is outlined below in Table 1.
EP(A)113Year 1 Data review, reprocessing of seismic lines 89-203 and MC 92-104
Year 2 Acquisition of 100 linear km of seismic to identify prospects
Year 3 Target definition survey, 100 km of seismic
Year 4 One well
Year 5 One well
EP(A)114Year 1 Data review, oil generation timing study
Year 2 One well
Year 3 One well
Year 4 One well
Year 5 One well
Table 1 – Proposed work Program EP(A)113 & EP(A)114
EP 448 which covers 210 graticular blocks (17,022 km2) is held by Gulliver Productions Pty Ltd (ACN 008 729 584) who will hold 25% of the title, Maneroo Oil Company Limited (ARBN 065 728 154) who will hold 45% of the title, Indigo Oil Pty Ltd (ACN 008 054 233) who will hold 20% of the title, and Kjirt Exploration Services Pty Ltd (ACN 061 662 039) who will hold 10% of the title.
The work commitments submitted with the application comprise a two year primary program, which forms the basis for the minimum work commitment, followed by a secondary work program, from which the applicant can withdraw prior to commencement of the next permit year.
The work program as submitted to the Western Australian Government is outlined in Table 2.
EP 448 Primary term (Compulsory)
Year 1 Data review, and aeromagnetic interpretation
Year 2 Seismic reprocessing and land access negotiations
EP 448 Secondary Term
Year 3 Acquisition of 500 km of seismic survey
Year 4 One exploration well
Year 5 Acquisition of 500 km of seismic survey
Year 6 One exploration well
Table 2 – EP 448 Work Program
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2 SUMMARYUranium Oil and Gas Limited (UOG) holds interests in two application areas for onshore petroleum exploration permits in the McArthur River Basin of the Northern Territory, these are EP(A)113 and EP(A)114, and a 10% interest in EP 448 in the Canning Basin of Western Australia.
On grant of the Northern Territory applications UOG envisage commencement of further studies to delineate final drilling locations. The studies include charge modelling, data review, seismic reprocessing, and planning for acquiring an additional 100 line km of seismic in EP(A)113. A very strong synergy exists between mineral and petroleum exploration in the Nathan Group, which is also host to Mississippi Valley Type sulphide deposits.
EP(A)113 (Burdo) contains the Burdo lineament, a pronounced structural trend, with associated anticlinal closures. Exploration in this area will target the Moroak and Jamison Sandstones. The application area contains the Burdo-1 well which encountered a five metres gas column in tight sands of the Moroak Sandstone. Gas was regularly flared during the drilling. It is very unlikely the well is drilled crestally as Burdo-1 was drilled on a rollover located on a single seismic line 89-203. The proposed seismic program will delineate the Burdo structure and potentially locate a valid updip location to drill the Burdo anticline in closure. An updip location may possibly encounter the existing gas column in better quality reservoir. The structure extends over 100 km2 and may contain 700 Bscf of GIIP in the Moroak and Jamison Sandstones.
EP(A)114 (Kilgour) contains four prospects defined on surface structure. They are Kilgour, Abner, Kilgour South, and Glyde River.
The Kilgour prospect has a 24 km2 closure with a Prospective OIIP of 84.5 MMbbls. Shows of bitumen and live oil, which bled from cores, have already been encountered in shallow wells on the structure. The Kilgour-1 well will target the Reward and Coxco Dolomites at 750 m and 1,050 m respectively.
The Abner prospect has an aerial closure of 12 km2 but has at least five recognised objectives with a Prospective OIIP of 105.6 MMbbls and a Prospective GIIP of 215 Bcf.
The Kilgour South structure has a Prospective OIIP of 32 MMbbls in the Coxco and Reward Dolomites.
The permit also contains the Glyde River Trend, a large surface anticline covering some 22 km2 which contains the GR-9 minerals well which experienced a gas blow-out. Glyde River may contain a Prospective OIIP of 77.5 MMbbls and a prospective GIIP of 23.7 Bcf GIIP.
Access to market.The Northern Territory application areas are well positioned for development. The gas pipeline supplying the McArthur River Lead-zinc mine passes through EP(A)113 and EP(A)114 and connects to the regional Alice Springs – Darwin Gas pipeline. The latter has capacity of 87 MMcfd. In case of an oil discovery, the oil could be trucked to Darwin via either the Carpentaria or Tableland Highways, which cross the area and connect to the Stuart Highway. There are numerous smaller tracks which provide access to the prospective areas. The McArthur River Lead zinc mine is located within EP(A)114 and is a user of gas; it is approximately 60 km north from the Glyde River Prospect.
Permit Prospects
Prospective OIIPMMbbls
Prospective Oil ResourceMMbbls
Prospective GIIPBcf
Prospective Gas ResourceBcf
EP(A)113 Burdo - - 700 350
EP(A)114 Kilgour 25.4 - -
EP(A)114 Abner 105 37 215 172
EP(A)114 Kilgour South. 32 11.2 - -
EP(A)114 Glyde River 19 - 77.5 6.6 - 27 23.7 19
EP 448 Exploration activities will target Nita Formation plays and Grant Formation Plays
Table 3 – Summary of prospects
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3. EXPLORATION PERMITS EP(A)113 AND EP(A)1143.1 Regional OverviewThe Middle Proterozoic McArthur Basin of Central Australia outcrops over an area of 200,000 km2, in the Northern Territory, with a relatively unknown, but large, section which sub-crops below younger sequences (Figure 1). The basin contains up to 12 km of relatively undeformed and un-metamorphosed sedimentary rocks comprising clastics, evaporites and carbonates. The stratigraphy is subdivided into four stratigraphic groups separated by regional unconformities. The four stratigraphic groups of the Middle Proterozoic are the Tawallah Group, McArthur Group, Nathan Group, and the Roper Group (Figure 2). An unnamed sequence of Neoproterozoic sediments accumulated over the Roper Group.
The main structural features reflecting the tectonic evolution of the McArthur Basin are; east-west trending basement ridges such as the Murthy and the Urapunga Ridges; northwest-trending strike-slip faults, such as the Calvert, Mallapunyah and Bulman Faults; and morth-trending high angle older normal faults with later inversion, such as the Emu, Tawalla and Four Arches faults.
The present structure of the McArthur Basin is dominated by the Batten Fault Zone, a north trending zone of more intense faulting, approximately 50 km wide. Stratigraphic reconstructions (Plumb et al, 1981) have suggested that the Batten Fault Zone marks the site of the Batten Trough a syndepositional graben containing up to 12 km of sedimentary rocks. On the Bauhinia and Wearyan Shelves which are adjacent to the Batten trough the sedimentary section thins to 4 km, and continues to thin to the north over the Urapunga Ridge. The Batten and Urapunga Fault Zones are the main areas of deformation, which is mainly in response to block faulting. Only minor deformation is apparent away from these structural zones (Figure 3).
Differential subsidence of the Batten Trough probably started during deposition of the Lower McArthur Group and continued, to a lesser extent, during the deposition of the Nathan Group (Jackson, et.al., 1987). Thickening of the Roper Group, to 5 km on the Bauhinia Shelf, west of the Abner Range area reflects a shift of the basin depocenter during the deposition of the Roper Group.
Figure 1 - Location map and major tectonic units, McArthur Basin
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The Tawallah Group is the lowermost of the four major sequences, it is up to 4,500 m thick and represents the economic or effective basement. The Tawallah Group consists mainly of sandstones with subordinate finer grained clastics, volcanics and rare carbonates.
The McArthur and Nathan Groups overlay the Tawallah Group, they have a combined thickness of between 3,000 and 5,500 m. They are mostly stromatolitic and evaporitic dolostones interbeded with lesser siltstones and shales. The McArthur and Nathan Group sediments were deposited in a variety of environments including marginal marine, lagoonal, lacustrine and fluvial. The Nathan Group is potentially a source of the hydrocarbons encountered in wells and may also host Mississippi Valley type sulphide deposits.
The uppermost unit, the Roper Group varies between 1,500 and 4,000 m in thickness. The Roper Group thickens to the southwest. It consists of alternating quartz arenites, siltstones and shales. The Roper Group unconformably overlies the McArthur and the Nathan Groups. The sedimentary sequences within the Roper Group have significant lateral extent, with more uniform facies when compared to the underlying successions, of the Tallawah, McArthur and Nathan Groups. The estimated age of the Roper Group is at least 1,430 Ma.
An un-named succession of sandstones and shales of probable Neo-Proterozoic age, overlays the Roper Group, these have a maximum thickness in excess of 600 m.
3.2 Petroleum System AnalysisNumerous hydrocarbon shows and well documented recoveries of oil and gas have been recorded in exploration wells and mineral drill holes throughout the McArthur Basin. The shows include produced hydrocarbon gasses, live oils, bitumen, both cut and direct oil fluorescence, and oil stains, as summarised in Table 4. Jamison-1 recovered 12 bbls of 34.6o API oil in 1990.
No hydrocarbon fields or significant accumulations have been discovered to date in the Proterozoic McArthur Basin, however exploration is sparse with only twenty three, relatively shallow oil exploration wells in the entire basin. None of the wells appears to be a valid structural test and the area remains under-explored, and its potential for commercial accumulations of hydrocarbons is largely untested. Data from petroleum wells is supplemented by a large number of BMR wells and mineral core-holes.
Figure 2 - McArthur Basin stratigraphy
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Figure 3 - Schematic cross-section through the McArthur Basin
Well Date TD (m) Hydrocarbon shows Notes
Altree-1 1988 1,700 Minor oil/gas shows Stratigraphic test
Walton-1 1989 1,014 Minor oil/gas shows Stratigraphic test
McManus-1 1989 1,617 Minor oil/gas shows Stratigraphic test
Sever-1 1990 1,260 No shows Stratigraphic test
Jamison-1 1990 1,767 2 m3 34.6º API oil Stratigraphic test
Mason-1 1991 1,103 Minor oil/gas shows Structural test
Elliot-1 1991 1,729 15 ml light oil4 Stratigraphic test
Balmain-1 1992 1,050 4.5 litres oil CTEM anomaly
Shortland-1 1992 1,020 Minor oil/gas shows Structural test
Chanin-1 1993 1,411 Minor oil/gas shows Structural test
Ronald -1 1993 1,150 Gas/minor oil shows Structural test
Burdo -1 1993 1,239 Gas/minor oil shows One line rollover
Table 4 - Oil and gas shows in the McArthur Basin
The Burdo-1 well drilled by Pacific Oil and gas in 1993 regularly flared gas during air drilling, of the Moroak Sandstone and encountered live oil and bitumen shows. Post-well evaluation confirmed a 5 m gas column in tight Moroak Sandstone. Better quality reservoir was present below the gas and water zone which influxed into the well, at significant rates. Oil-stained cores from the Jamison Sandstone in Balmain-1 and Barney Creek Formation in the GR-9 mineral well are illustrated in Figure 4.
There is little doubt that an active petroleum system is present in the Proterozoic of the McArthur Basin, the issues are timing and preservation. The presence of live oils and bitumens indicates polyphase generation and migration has occurred.
Figure 4 - Oil-stained cores from wells in the McArthur Basin
Barney Creek Fromation, GR9 corehole at 141.6m
“Jamison Sandstone”, Balmain Nº1 at 887m
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3.2.1 Source RocksOrganically rich source rocks with the potential to generate both oil and gas are present in several intervals within thick shales of the McArthur Group such as the Barney Creek and Yalco Formations and Caranbirini Member of the Lynott Formation; and in the Upper Roper Group, in the Velkerri and Kyalla Formations (Figure 2 and Table 5).
Formation Main Lithology Max Thickness, m TOC, %
Kyalla Shales 250 1 – 3.6
Velkerri Black shales 350 3 – 12.5
Yalco Shale interbeds 200 up to 5.4
Carranbirini Mbr Shales 300 up to 3.4
Upper Barney Creek Shales 200 up to 10.4
Upper Barney Creek Shales 140 0.71 – 4.27
Table 5 - Organic richness of the major source intervals in the McArthur Basin
Overall source quality is high with total organic carbon levels up to 12.5%. In comparison the Elang/Plover source of the giant NW-Shelf gasfields seldom exceeds 4% TOC. The oil and gas encountered in the wells drilled in the Proterozoic confirms generation, migration and entrapment of hydrocarbons have occurred which confirms the validity of the petroleum system.
Source rock maturity varies from over mature in the Batten Trough to marginally mature on the Bauhinia and Wearyan Shelves, with many areas currently in the peak oil generation window. Source rocks are a mixture of Type I (oil prone) and Type II (oil and gas prone) kerogens.
The Barney Creek Formation is late mature to overmature in the central and northern portions of the Batten Trough in the vicinity of the Batten fault zone, and is marginally mature to mature in the Glyde River region and on the flanks of the Batten Through (Crick et al., 1987).
The maturation patterns of the Yalco and Caranbirini Members of the Lynott Formation are similar to those of the Barney Creek Formation. Within the northern parts of the Batten Trough and adjacent to major faults they are late mature to overmature, whereas in Amoco’s 82/6 and 82/7 coreholes in the southern part of the Batten Trough they are marginally mature (Crick et al., 1987).
The Velkerri and Kyalla formations are the major potential source rocks in the Beetaloo Sub-basin. Notably organic rich beds with TOC values up to 12.5%, and predominantly Type II oil and gas prone kerogens and lesser mixed Type I-II kerogens are developed in the mid-Velkerri Formation (Taylor, et al, 1994). Type I, oil prone, kerogen is present in the Kyalla Formation. Further details on the Proterozoic kerogen types and maturity indicators are published in Crick et al (1987) and Taylor et al (1994).
On the northern margin of the Beetaloo Sub-basin the Velkerri Formation ranges from mature for oil generation to overmature. At depths greater than 2,500 m, it is within the dry gas generation zone (Lanigan, et al, 1994). A significant section of the Kyalla Formation is currently in the oil window over large areas of the Beetaloo Sub-basin, elsewhere it ranges from marginally mature to locally overmature.
Timing of maturation and oil generation for the Proterozoic sequences is poorly constrained due to vast amount of time involved, inadequate chronology control, uncertainties with the geothermal gradient variations and insufficient well control. The analysis of the petroleum products from the Upper Roper Group in the Beetaloo Sub-basin indicates that two phases of oil are present: a highly degraded early phase and a fresher younger phase, suggesting at least two hydrocarbon generation pulses (Lanigan et al, 1994). Timing of these pulses is assumed to be between late Mesoproterozoic and the late Cambrian.
Apatite fission track analysis (AFTA) carried out by Geotrack, University of Melbourne, suggests an even younger major generation phase during the mid-Carboniferous to Permian for the live oil shows in the Batten Trough. This postdates the major structural deformations in the region and may significantly increase the prospectivity of the entire area.
Not-withstanding the poor control on timing, the shows in wells confirm generation, and migration and trapping of oil and gas has occurred the main issue is that of preservation for the Cambrian and Mesoproterozoic oils.
3.2.2 ReservoirsBoth clastic and carbonate reservoirs in the McArthur Basin have been confirmed to have fair to good reservoir characteristics. The main objectives are sandstones in the Roper Group, with secondary targets in the Kyalla, Velkerri, Bukalara, Yalcoo, and Looking Glass Formations, as well as the carbonate reservoirs of the Coxco Dolomite, Reward Dolomite and Hayfield Mudstone.
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Within the Roper Group the main reservoir objectives are attributed to three major sandstone levels, these are; the Bessie Creek Sandstone, Moroak Sandstone and Jamison Sandstone.
The most complete known section of the Bessie Creek Sandstone is in Altree-2, where it is 442 m thick. The Bessie Creek Sandstone is a fine to coarse grained quartz arenite with measured porosities up to 14% and permeability up to 50 mD. It is mineralogically and texturally mature. Pore filling authigenic minerals, including quartz overgrowths have occluded most of the primary porosity. Much of the Bessie Creek Sandstone is at depths greater than 3,000 m, which significantly reduces the expected porosity.
The Moroak Sandstone is approximately 200 m thick in Elliot-1. It is a fine to very coarse grained sandstone. Porosity encountered in the Moroak Sandstone generally ranges between 5 and 15% but locally reaches 17%. Permeability is commonly less than a few millidarcies, but locally may range from tens to hundreds of millidarcies, over intervals several metres thick. Drill Stem Tests in Elliot-1 which straddled a more permeable interval of the Moroak Sandstone flowed water at about 1,000 bbls/day. Similarly Ronald -1 flowed water at a rate of 3,000 bbls/day from the Moroak Sandstone, and it is considered one of the more viable reservoir objectives.
The Jamison Sandstone is one of the more prospective objectives although it is commonly argillaceous. The Jamison Sandstone locally varies from very fine- to coarse quartz sandstone, to basal conglomeratic sandstones. Within the Jamison Sandstone porosity generally varies between 6% and 18% and locally reaches 21%. Overall permeability is low, with localised intervals reaching tens and hundreds of millidarcies. DST in Jamison-1 produced 34.5 API gravity oil, from the uppermost levels of the Jamison Sandstone. The Jamison Sandstone is sealed by the Hayfield Mudstone.
Within the Kyalla and Velkerri Formations and Hayfield Mudstone, thin sandstone intervals have some reservoir potential, particularly in areas of significant cumulative thickness, where they can form stacked reservoirs. Commonly theses zones have porosity less then 10% and low permeability, but locally porosity may reach 16% and 300 mD permeability as a result of fracture development.
The Cambrian Bukalara Sandstone Formation, informally known as Cambrian Sandstone, has very good reservoir characteristics, with porosity ranging from 19% to 24% and permeability of 50 - 100 mD. However, Bukalara Sandstones are unlikely to form an attractive target due to their lateral discontinuity and lack of reliable top seal.
Carbonate reservoirs in the McArthur Group are the major objectives in the Batten Trough area covered by EP(A)114. Good vuggy porosities have been observed in the Coxco Dolomite, Reward Dolomite, and the Barney Creek Formation. The Barney Creek Formation has measured porosity of 8% to14% in the Glyde River-9 corehole, and although at core plug sample scale the matrix permeability is poor, being generally a few millidarcies, on a macroscopic scale, development of fractures is very likely and would considerably enhance reservoir porosity and permeability.
The gas blow-out reported in the Glyde River-9 mineral corehole was from the lowermost Barney Creek Formation.
The uppermost levels of the Looking Glass Formations and Reward Dolomite may have enhanced reservoir characteristics associated with karst development, as suggested from outcrops. However the extent of the karstification is largely unknown.
The Yalcoo Formation is also a potential reservoir with porosity up to 18%, averaging 7.1% and permeability of up to 137.1 mD, associated with fracture development.
3.2.3 SealsThe potential for effective seals is considered good with development of regional, semi-regional and local seals throughout the Proterozoic succession in the McArthur Basin. Thick shale prone sequences occur in the Hayfield Mudstone, Kyalla, Velkerri, and Mainoru Formations of the Roper Group. The Roper Group also contains thinner intraformational seals.
In the McArthur Group there is a 200 m thick evaporitic unit in the lowermost Balbirini Dolomite and thick shales in the Lynott and Barney Creek Formations (Figure 2). Evaporitic seals are regarded as high integrity seals and are likely to be effective over long periods, whereas highly indurated shales may be prone to fracturing and their long term capacity to seal remains to be confirmed, often in older basins fractured shales may be effective reservoirs.
3.2.4 Play TypesExploration of the McArthur Basin has generally targeted simple structural plays, based on surface geology or in some cases limited seismic. Structural traps are still considered the main objective, however improved seismic coverage and quality has potential to delineate stratigraphic targets and alternative play types.
There is little doubt that oil and gas have been generated, migrated and trapped in the Middle Proterozoic, the risks in finding an economic accumulation are associated with long term preservation, and hence the plays need to target robust high integrity objectives, or possibly more subtle secondary traps.
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The proposed exploration in EP(A)113 targets four-way dip closed features and fault bounded anticlines. The primary reservoir objective is the Moroak Sandstone sourced from the thick Velkerri Formation shales and sealed by Kyalla Formation shale. There are two risks associated with the play: Firstly the timing of generation in relation to trap formation is unclear, and secondly is preservation. A risk with these highly indurated sediments is that intense fracturing associated with late structuring may reduce the sealing capacity of the shales in the Kyalla Formation. Fracturing would enhance the permeability of the reservoir sandstone.
Structural plays, mostly anticlinal features, are the major targets for oil and gas exploration in the folded Batten Trough. Recognised reservoirs are developed at various levels within carbonates of the McArthur Group, these are potentially sealed by shales in Barney Creek and Lynott Formations or by thick evaporites at the base of the Balbirini Dolomite. The Barney Creek Formation is considered the major source rock, but the Lynott and Yalgoo formations have also good generating potential and are currently in the oil window.
A viable play with a high integrity seal and possible enhanced karstic porosity exists at the top of the Looking Glass Formation. Potentially karstified Looking Glass Fm dolomites are sealed by evaporites at the base of the Balbirini Dolomite and sourced from the Yalcoo or Barney Creek Formations. The Looking Glass Formation is truncated by a regional unconformity and was sub-aerially exposed, developing karstic porosity in its upper parts. The play is validated by the shows of bitumen and other hydrocarbons in vuggy porosity in the shallow BMR-4 (Bauhinia Downs) and Amoco 82-7 drillholes. This play needs to be pursued at depths more viable for exploration.
The risks associated with this play are timing of hydrocarbon generation and migration with regard to trap formation and porosity retention, and long term preservation. Where reservoir quality has not been diminished by later diagenetic modifications, as indicated by petrographic studies (Womer, 1986) there is a possibility of encountering better preserved secondary karstic porosity, in hydrocarbon charged features.
Non-conventional plays such as self-sourcing oil-bearing shaly sequences are also possible in the Beetaloo Sub-basin; however their presence in EP(A)113 remains speculative, until more data is available, and the play can be matured.
3.3 Petroleum Prospectivity3.3.1 Application Area EP(A)113 (Burdo)Application Area EP(A)113 occupies 33 graticular blocks, covering an area of approximately 2,711 km2. It is located on the boundary between the Beetaloo Sub-basin and the outcropping portion of the McArthur Basin. The northwest-southeast trending Burdo lineament is the major structural feature within the permit (Figure 5). By analogy to the Mallapunyah Fault which occurs 35 km to the northwest, the “Burdo” lineament is inferred to be major strike-slip fault associated with anticlinal development.
EP(A)113 contains one exploration well – Burdo-1; and 49 km of 2D seismic. However there are numerous publications on the area.
Burdo-1 was drilled by Pacific Oil and Gas in 1993 and is located on a rollover observed on a single seismic line. The rollover is associated with a major strike slip fault. The Burdo-1 well targeted objectives in the Jamison Sandstone and the Moroak Sandstone. Fractured shales within the Kyalla Formation were a secondary target. The well flared dry gas and had minor oil shows from the Moroak Sandstone. Sustained gas flows were inhibited by a strong aquifer influx from below the gas zone.
Wireline logs indicate a tight gas-bearing zone between 1,143 and 1,151 m at the top of the Moroak Sandstone. Significant improvement of permeability developed was indicated by the influx of formation water into the well bore while drilling. Minor oil shows were observed in the Moroak Sandstone from 1,146 to 1,149 and bitumen throughout the Moroak Sandstone down to 1,200 m. Cuttings gas remained relatively constant but connection gas continued to increase as the drilling proceeded.
Regionally, the Moroak Sandstone Member represents an excellent target reservoir with good permeability in Burdo-1 and Ronald-1 40 km to the West. Ronald-1 encountered 25 m of net pay with 12.5% average porosity at the top of the Moroak Sandstone. Excellent permeability of the reservoir was indicated by a drill stem test which flowed formation water at 3,000 bbls/d of, until the produced hypersaline waters overcame the hydrostatic head and killed the well.
The Kyalla Formation source rock in samples from Burdo-1 contained TOC values reaching 1.39% and analysis indicated that most of the section is in the oil generation window and only the lowermost part is in the dry gas zone. The Kyalla Formation is relatively lean and it is likely that, in the area of the Burdo lineament, hydrocarbon charge for the Moroak Sandstone originates from the underlying Velkerri Formation.
Hydrocarbon indications from the Burdo-1 and Ronald-1 area suggest that the charge is more likely to be gas and condensate rather than oil and, exploration in the Burdo trend targets gas/condensate.
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Figure 5 – EP(A)113 and EP(A)114 location, infrastructure and database
As Burdo-1 was drilled on a single seismic line rollover it is very unlikely it is located on the crest of the anticline, and is most likely on its flank, or not in closure. Further seismic is required to properly delineate fully closed anticlines associated with the “Burdo” lineament. It is likely that an updip well on the Burdo structure could encounter the gas column in more favourable reservoir. The produced gas is very encouraging and the structure may have significant up-dip potential.
The Burdo trend has an outcrop area of over 1,000 km2. An updip prospect with an estimated 100 km2 closure containing 25 m of net pay with 12.5% porosity could potentially contain 700 MMcf GIIP. Without a validated structural map the structural risk is currently the largest risk factor associated with this lead, as charge and preservation appear to be confirmed by Burdo-1. Risks are also associated with the timing of generation with regard to major structuring and trap formation, preservation of early accumulations, and reservoir quality, particularly for hydrocarbons expelled at later stages.
Figure 6 - Application Area EP(A)113
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3.3.2 Application Area EP(A)114EP(A)114 consists of 100 graticular blocks covering an area of approximately 8,200 km2 encompassing the Batten Trough. The Batten Trough is a Middle Proterozoic depocenter, filled with carbonates and shaly deposits of the McArthur and Nathan Groups.
EP(A)114 is approximately 750 km southeast of Darwin. The McArthur River Lead-zinc-silver mine is located at its northern boundary and the southern boundary is about 90 km from the mine. The Carpentaria Highway passes to the south.
There are no petroleum exploration wells drilled in the application area and no seismic has been acquired. Geological control is provided by surface geology, mineral exploration wells, and gravity and magnetic data. Mineral exploration drilling provides stratigraphic control and several mineral bores have encountered a number of live oil and gas shows within the McArthur Group. The most prominent hydrocarbon show was a gas blow-out in drillhole Glyde River-9 (GR-9) drilled in 1979. The drillhole yielded a strong gas blow upon sudden pressure release caused by the drill string being pulled out of the hole by a helicopter.
The Upper McArthur Group contains two excellent oil-prone black shale horizons, the Barney Creek Formation which has TOC up to 10.4% and the Caranbirini Member of the Lynott Formation. Both formations are favourable for oil generation; they are marginally mature to mature or currently in the peak oil generation window over extensive parts of the Batten Trough. The Yalco Formation also contains some source rock potential.
The live oil and gas shows encountered in mineral drillholes in the Batten Trough, are commonly associated with extensive bitumen occurrences. Gas chromatograms show that the live oil shows have received little or nil bacterial biodegradation whereas the bitumen occurrences are evidence of an earlier phase of oil generation which has been almost completely biodegraded. This suggests multiple phases of oil generation in the Batten Trough. Apatite fission track analysis indicates that there might have been a major phase of oil generation during the mid-Carboniferous to Permian period, which is very favourable with regard to trap formation.
Carbonates within the Upper McArthur Group are the major reservoirs in the Batten Trough. Cores from the mineral drillholes in the area display vuggy and/or fracture porosity in potential carbonate reservoirs.
A 10 m thick vuggy dolomite bed with porosity ranging between 8% and 14 % was interested near the base of the Barney Creek Formation in corehole GR-9. In Amoco 83-6 and 82-7 drillholes the Yalco Formation has vuggy porosity between 8% and 18 % with permeability up to 1,792 mD.
Locally, sandstones in the upper part of the McArthur Group may also contain fair to good porosity. Cores from the Stretton Sandstone in Amoco’s drillholes 82-6 and 82-7 showed porosity from 5.2 % to 16.4 % and permeability ranging from 0.00047 mD to 122.7 mD.
Using satellite imagery and surface geological maps, four targets have been identified. Three of these are 4-way dip closured surface anticlines (Figure 8, Figure 9). The fourth objective is a re-entry of a the GR-9 drillhole to test if the gas previously encountered is potentially commercial.
Each of the three anticlines as well as the GR-9 well is considered a viable exploration target. Good to excellent quality source rocks are developed within the Barney Creek and Yalco Formations. Good quality carbonate reservoirs occur within the Coxco Dolomite, the lower Barney Creek Formation, the Reward Dolomite and in the Yalco Formation, particularly in areas of karst development and/or intense fracturing.
Figure 7- Application Area EP(A)114
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Kilgour prospectClosure: Fourway dip closed Anticline 24km2 Prospective OIIP: 84.5 MMbbls COS: 1:6
Kilgour has an areal closure of 24 km2 with a well defined expression in a surface anticline covering 13 km2 (Figure 9, Figure 10). Two shallow mineral drill-holes 82-7 drilled by Amoco and BMR-4 (Bauhimia Downs) were drilled on the structure and both yielded bitumen and bled oil from the Looking Glass Formation. The Kilgour-1 well will target carbonate reservoirs in the Reward Dolomite and the Coxco Dolomite at approximately 750 m and 1,050 m respectively.
It is estimated that an areal closure of 24 km2 with a net pay thickness of 10 m and average porosity of 10% could contain 84.5 MMbbls of Prospective OIIP. The presence of oil in previous shallow wells on the structure confirms generation and migration into the structure from likely source in the Barney Creek Formation. The risks associated with this prospect are seal integrity and to a lesser extent reservoir quality. The regional top seal the Balbirini Dolomite outcrops in the anticlinal axis and intra-formational seal within the McArthur Group may be required.
Abner ProspectClosure: Fourway dip closed Anticline 12km2 Prospective OIIP: Up to 100 MMbbls or over 200 Bscf COS: 1:5
Abner is a 4-way dip closed anticline with area of 12 km2 of which 6 km2 is expressed on the surface. Abner is the favoured prospect as it has at least five stacked reservoirs within the carbonate section of the McArthur Group. Table 6 shows Prospective hydrocarbons in place, for a subsurface closure of approximately 12 km2, net pay of 5 or 10 m and average porosity of 10%.
Objectives in the Abner feature are the Balbirini Formation, Looking Glass Formation, Yalco Formation, Reward Dolomite and Coxco Dolomite. The lower two objectives the Reward and Coxco Dolomites are gas objectives.
The risks associated with this prospect are timing of generation, reservoir quality, and trap integrity. There is a strong co-dependency between these factors such that in the event of early generation trap integrity becomes a significant risk, and reservoir is a lesser risk. In late generation, reservoir quality is the largest risk and trap integrity is a lesser concern. The presence of stacked objectives reduces the overall risk of the prospect.
Figure 8 - Satellite image EP(A)114, showing the Kilgour, Kilgour South and Abner prospects
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ReservoirBalbirini
FmLooking
Glass Fm* Yalco FmReward
DolomiteCoxco
Dolomite
Depth to Objective 600 m 1,400 m 1,600 m 2,200 m 2,600 m
Areal Closure 12 km2 12 km2 ~12 km2 ~12 km2 ~12 km2
Vert. Closure 1,000 m 700 m 700 m 700 m 700 m
Assumed Net Pay 5 m 10 m 10 m 10 m 10 m
Average Porosity 10% 10% 10% 10% 10%
OIL
Oil saturation 0.7 0.7 0.7
Prospective Oil in Place, MMbbls 21.13 42.26 42.26
Recovery Factor 0.20 0.35 0.35
Prospective Oil Resource, MMbbls 4.2 14.8 14.8
GAS
Gas Saturation 0.7 0.7 0.7 0.7
Prospective Gas in Place, Bcf 38.8 44.6 61.4 70.8
Recovery Factor 0.8 0.8 0.8 0.8
Prospective Gas Resource, Bcf 31 35.7 49.1 56.6
Table 6 - Abner prospect volumetric summary
Figure 10 - Schematic cross-section through Abner and Kilgour Prospects
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Kilgour South ProspectClosure: Fourway dip closed Anticline 4 km2 Prospective OIIP: 32 MMbbls COS: 1:5
The Kilgour South prospect is the smallest identified with a surface closure of 4 km2 and a Prospective OIIP of 32 MMbbls in the Reward and Coxco dolomite. Major risks are attributed to reservoir quality, top seal efficiency and timing of generation.
Figure 9 - Surface geology, Kilgour, Abner and Kilgour South prospects
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Glyde River Trend Closure: Fourway dip closed Anticlines 12 - 22km2 Prospective OIIP: 19 - 77.5 MMbbls COS: 1:5
The portion of the Glyde River Trend that is considered ready to drill has a total area of 110 km2 (Figure 11), and is prospective for oil and/or gas. A 22 km2 closure at the Coxco Dolomite level with assumed karstic porosity of 10% has a Prospective OIIP of 77.5 MMbbls or 23.7 Bcf of Prospective GIIP. Fault Block II where the Glyde River-9 well was drilled is estimated to contain 19.4 MMbbls of Prospective OIIP and/or 6.1 of Prospective Bcf GIIP. A 12 km2 fault Block IV, immediately to the northeast of Fault Block II (Figure 11) is estimated to contain the similar amounts of hydrocarbons and may form a follow-on target. The Barney Creek Formation is the major source in the area and is marginally mature to mature for oil generation. Major risk associates with retaining trap integrity over long time.
Area Fault Block II Fault Block IV Coxco Dolomite
Depth to Objective 480 m 480 m 500 m
Areal Closure 11 km2 12 km2 ~22 km2
Assumed Net Pay 5 m 5 m 10 m
Average Porosity 10% 10% 10%
OIL
Oil saturation 0.7 0.7 0.7
Prospective Oil in Place, MMbbls 19.4 21.1 77.5
Recovery Factor 0.20 0.20 0.35
Prospective Oil Resource, MMbbls 3.9 4.2 27.1
GAS
Gas Saturation 0.7 0.7 0.7
Prospective Gas in Place, Bcf 6.1 6.7 25.6
Recovery Factor 0.3 0.3 0.3
Prospective Gas Resource, Bcf 1.8 2.0 7.6
Table 7 - Glyde River Trend volumetric summary
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4. EP 448 CANNING BASIN4.1 Regional OverviewThe Canning Basin is the largest sedimentary basin in Western Australia, covering an area of about 595,000 km2, of which 430,000 km2 is onshore. It is bounded by Proterozoic and Archaean terrains and has been internally subdivided into a series of sub-basins, platforms, shelves, and terraces bounded by northwesterly–southeasterly trending fault zones (Figure 12).
Figure 12 - Location and major tectonic units, Canning Basin. (After Tyler & Hocking, 2001)
Historically oil and gas exploration in the Canning Basin has lacked significant success, this is due in part due to the relatively low level of exploration with approximately 200 wells, (1 per 25,000 km2), many of which are either shallow stratigraphic tests, or are not valid tests, usually due to low levels of seismic control. Discoveries to date have been small and the Canning Basin remains somewhat anomalous when compared to similar basins, such as the Devonian Alberta Basin, or Ordovician Michigan Basin, which are productive.
The application area targets one of the least explored margins of the Canning Basin, spanning the Ankatell Shelf and the flanks of the Kidson Sub-basin. There are no wells in the application area.
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The Canning Basin contains two major, northwesterly trending depocentres with flanking shelves and a mid-basin arch. The northern depocentre is centred on the Fitzroy Trough and Gregory Sub-basin, and the southern depocentre on the Willara and Kidson Sub-basins (Figure 12). The basin underwent a long and complex tectono-sedimentary history extending from the Early Ordovician to the Cainozoic.
Deposition in the Canning Basin began in the Early Ordovician in response to extensional deformations. Successive episodes of subsidence, largely related to extension, resulted in the deposition of four major tectono-stratigraphic megasequences (Ordovician–Silurian, Devonian – Early Carboniferous, Late Carboniferous – Permian, and Jurassic – Early Cretaceous) controlled by major, north-westerly trending fault systems (Kennard et al., 1994).
4.1.1 Ordovocian – Silurian MegasequenceThe Ordovician - Lower Silurian succession is a relatively conformable package of clastics and carbonates deposited in terrestrial, marginal marine and marine environments. It is subdivided into Nambeet, Willara, Goldwyer, and Nita Formations, and Carribuddy Group (Figure 13)
The Nambeet Formation contains a basal transgressive sandstone and conglomerate, succeeded by mudstone, limestone, dolostone, and sandstone of marine origin. It is overlain, by Willara Formation, which consists mainly of limestone, with subordinate dolostone, mudstone, and sandstone, of shallow marine origin. Local emergence at the end of the deposition of the Willara Formation resulted in karstic weathering and localized dolomitization at its uppermost levels. The Goldwyer Formation was deposited in intertidal to open marine environments. Goldwyer Formation mudstone-dominated sediments were deposited in basinal areas, whereas mainly limestones formed on platform and terrace areas. Goldwyer Formation limestones have locally undergone significant secondary dolomitization.
The Nita Formation is a shallowing-upward unit of interbedded limestone, dolostone, and mudstone deposited in tidal to supra-tidal environment. These were overlain by redbed evaporitic mudstone and minor carbonate and sandstone of the Bongabinni Formation, the basal unit of the Carribuddy Group. Upwards the section comprises halite and claystone of the Minjoo Salt, claystone, dolomite, and siltstone, with rare sandstone bed, followed by a massive halite package of the Mallowa Salt, and a sequence of dolomite, siltstone, and rare sandstone interbeds of the Sahara Formation.
The Carribuddy Group is characterised with thickness variations due largely to salt withdrawal but regionally it thins towards the north and east. A complete section of the Carribuddy Group is intersected in Frankenstein-1 immediately to the south-east of the application area.
4.1.2 Devonian – Early CarboniferousRegional regression, associated with the Prices Creek compression and climate change in the Early Devonian resulted in a change from evaporitic environments to the deposition of continental and shallow marine sandstones and minor fine-grained clastic sediments of the Tandalgoo Sandstone in the southern part of the Canning Basin. Worral and Poulton Formations are lateral equivalents of the Tandalgoo Sandstone in the central and northeastern areas of the basin. This basal clastic unit is overlain by shallow marine limestone, dolomite, and shale of the Mellinjerie Formation in the sourthern areas and by the Givetian-Famennian reef complexes in the central and northern part of the Canning Basin These are the well documented Pillara and Nollara reef cycles.
The Fairfield Group is a shallow-marine carbonate and shale-dominated succession, containing good potential source rocks, seals, and reservoirs, which conformably overlies the Devonian reefal carbonate and is overlain by fluvial–deltaic sandstone and siltstone of the Anderson Formation.
4.1.3 Late Carboniferous – PermianThe Reeves Formation was deposited following regional uplift in the mid-Carboniferous which resulted in a basin-wide unconformity. The Reeves Formation comprises sandstone interbedded with shale and siltstones, these were deposited in a fluvial to marginal marine environments.
In the Late Carboniferous large-scale glaciation influenced deposition in the entire Canning Basin. The Grant Group was deposited during that time, comprising a thick succession of fluvial, deltaic and marine coarse and finer grained clastics. These are overlain by the shallow-marine to coastal sandstones of the Poole Sandstone and siltstone with shaly interbeds of the Nura Nura Member.
The Liveringa Group forms the uppermost Permian sediments, they consists primarily of sandstones deposited in shallow-marine to fluvial environments. Sediments of the Liveringa Group are typically at shallow depths, or outcrop, and are unlikely to form a valid reservoir objective.
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4.1.4 Jurassic – Early CretaceousThe Reeves Formation was deposited following regional uplift in the mid-Carboniferous which resulted in a basin-wide unconformity. The Reeves Formation comprises sandstone interbedded with shale and siltstones, these were deposited in a fluvial to marginal marine environments.
In the Late Carboniferous large-scale glaciation influenced deposition in the entire Canning Basin. The Grant Group was deposited during that time, comprising a thick succession of fluvial, deltaic and marine coarse and finer grained clastics. These are overlain by the shallow-marine to coastal sandstones of the Poole Sandstone and siltstone with shaly interbeds of the Nura Nura Member.
The Liveringa Group forms the uppermost Permian sediments, they consists primarily of sandstones deposited in shallow-marine to fluvial environments. Sediments of the Liveringa Group are typically at shallow depths, or outcrop, and are unlikely to form a valid reservoir objective.
Figure 13 - Canning Basin Stratigraphy
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4.2 Petroleum System Analysis, Southern Canning BasinThe southern portion of the Canning Basin is the least explored section of the Canning Basin and may have some potential for commercial hydrocarbon accumulations. The six small commercial oil fields that have been found in the Canning Basin are all located on the Lennard Shelf, which is the Northern flank. The fields are: Blina, Boundary, Lloyd, Sundown, West Kora, and West Terrace. Exploration activities have been largely focused on the northern and central parts of the basin, with relatively little work elsewhere. Exploration in the application area will target potential Nita Formation plays and Grant Formation Plays.
4.2.1 Source RocksThere are several high quality source rocks in the Canning Basin they are: The Goldwyer Formation unit -4, Gogo Formation, Bongabinni Formation, Reeves Formation and the Grant Group.
The Ordovician Goldwyer Unit -4 contains the rich Gloeocapsomorpha prisca (G. prisca) source interval. Ordovician sediments containing either G. prisca or oils derived from that source occur in the Baltic Basin (Estonian, kukersite)of the F.S.U. the Illinois, Michigan, and Williston basins of the USA and the Canning and Amadeus basins, Australia, and the Hudson Bay Basin, Canada (Reed et al 1986).
All known G. prisca source is believed to have formed in a zone within 5o of latitude from the Ordovician equator (Foster 1986). The nature of G. prisca is uncertain some consider it a cyanobacteria, whereas the more popular view is that G. prisca was a non-photosynthetic, prokaryotic, benthic algal mat; others believe it was a photosynthetic, eukaryotic, planktonic, possibly prokaryotic organism, which bloomed episodically throughout the Ordovician. All this is somewhat academic as regardless of its precise origins it is one of the more significant global source intervals.
Goldwyer Formation unit -4 is identified as the major source interval in the central and southern Canning Basin. G. prisca source in the Canning Basin are characterised with TOC up to 6.4%, high hydrocarbon yields (S2 up to 36.5 mg/g) and hydrogen indices up to 1,178, making them somewhat oil prone (D’ercole et al 2003). There is general agreement that the Goldwyer Formation has high generative potential with conservative estimates in excess of 80 billion barrels expelled. Maturity of Goldwyer Formation source varies through out the Canning Basin. It is immature on basement highs such as the Crosslands Platform and over mature in the Fitzroy Trough. Oils sourced from the Goldwyer Formation are present in Dodenea-1, Mirbelia-2, Pictor-1, Looma-1, and Acacia-1.
The Bongabini Formation has thin, very organically rich beds with TOCs up to 54.3%, reported in mineral bores along the Admiral Bay Fault Zone (McCracken, 1997). The generative potential of these beds is not sufficiently evaluated, but it could be quite significant.
The Reeves Formation contains some of the richest source rocks in the basin, the Cycus-1 well recovered coaly sediments with 16.9% TOC and 59.4 mg/g S1+S2 yields.
The source intervals in the Bongabinni Formation, as well as the Goldwyer Formation, are presently in the oil window along the Admiral Bay Fault Zone, and mature to late mature in the Wallara Sub-basin depocenter (McCracken 1994, 1997).
The shale beds within the Permian Grant Group are organically lean, TOC usually between 0.3 – 0.9%, but up to 1.45% locally. In the Southern Canning Basin, these are immature to marginally mature mostly due to insufficient burial.
Regionally the Gogo Formation is also recognised as a source but is not likely to be developed in the application area.
Timing of maturation and peak oil generation for the source rocks in the Southern Canning basin is largely uncertain. Maturity modelling (Kennard et al, 1994; Russell, 1998) indicated two major hydrocarbons generation phases, the first during the Late Devonian to Carboniferous and the second in Permian to Triassic, prior the Fitzroy Transpression. The Fitzroy event is a major tectonic event and this implies a high risk for preservation of accumulations formed during prior to the Fitzroy event.
Preservation would rely on targeting high integrity traps, areas bypassed by the tectonism or secondary migration into younger structural and structural/stratigraphic traps. Expulsion of oil after the Fitzroy Transpression is unlikely except for areas associated with locally elevated heat flows, as a result of tectonic and igneous activity such as the Admiral Bay Fault Zone. The areal extent of zones of increased heat flows with higher source rocks maturity and associated hydrocarbon expulsion could be limited.
4.2.2 ReservoirsClastic and carbonate rocks with fair to excellent reservoir characteristics have been identified in the Southern Canning Basin.
Reservoir rocks within the Ordovician section include sandstones in the Nambeet Formation, and porous carbonates within the Willara and Nita Formations. The Nambeet Formation is of fair to good reservoir potential, due to extensive secondary diagenetic modifications. However, the basal sandstones have a log derived porosity of 14 % in Calamia-1, immediately to the north of the application area.
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Dolomite intervals in the Willara Formation have variable porosity (0.5% – 15%) but very low permeability. The Acacia Sandstone Member of the Willara Formation has better reservoir characteristics with porosities up to19.3%, and permeability up to 385 mD and has flowed water at high rates from wells on the Crosslands Platform. Live oil was recorded in the Acacia Sandstone in Looma-1, and Acacia-1 recorded strong shows in the Acacia Sandstone.
Reservoir quality of the Acacia Sandstone improves near the Barbwire Terrace area and it was a low net poor quality sequence in Looma-1. It is likely that a secondary sand source was derived from the west and the Acacia Sandstone may improve in the block.
Numerous oil and gas shows have been reported in Nita Formation carbonates. It is ranked as most promising potential reservoir unit within the Ordovician section in the Southern Canning Basin. In cores, visibly vuggy porosity is commonly present within intervals of late-diagenetic replacement dolostone, but it is generally not clear to what degree the vugs are interconnected (Haines, 2004) and predicting the location of good reservoir rocks is difficult. Karajas and Kernick (1984) reported core-derived porosities of 10% to 18.5% and permeabilities ranging between 35 mD and 3,310 mD in Aquila-1 (located to the northeast of the Application area), which penetrated approximately 30 m of water saturated Nita Formation exhibiting both vuggy and intercrystalline porosity.
Sandstone in the Tangalgoo Formation has excellent reservoir characteristics. In Frankenstein-1, located immediately to the south-east of the application area, the Tandalgoo Formation has core porosity ranging between 15% and 28% and permeability up to 1,478 mD.
Sandstones within the Permian Grant Group have excellent reservoir characteristics in most wells throughout the entire Canning Basin. Their porosity may reach over 30%, averaging 20%. Permeability varies from 0.03 up over 5,520 mD. These sandstones are oil producing in Boundary-1, Sundown and West Terrace oilfields on the Lennard Shelf, and numerous hydrocarbon shows have been recorded throughout the Basin.
4.2.3 SealsRegional, semi-regional and intra-formational seals are present throughout the sedimentary section in the Southern Canning Basin.
Intraformational shale, mudstone, and tight, impermeable limestone within the Ordovician Nambeet, Willara, and Goldwyer Formations could form seals. Evaporites within the Carribuddy Group form an excellent regional seal for the Ordovician reservoirs, in the areas where mid-Carboniferous erosion has not completely removed the Carribuddy Group.
Shale and claystones in the Grant Group form excellent and proven intraformational seals for accumulations in the associated sandstones. Validity of intraformational seals in the Grant Formation is confirmed in the Boundary-1 well, where the oil is trapped by a small intra formational shale rather than at the thicker regional seal.
Intraformational seals are effective in the Boundary, Sundown, and West Terrace oilfields in the northern Canning Basin. The difficulty associated with the intraformational seals in the Grant Group is establishing their architecture and distribution as some tend to be thin and laterally discontinuous, and may even be absent in some areas in the southern part of the basin.
4.2.4 Play TypesA variety of structural, structural-stratigraphic and stratigraphic plays are developed in the sub-salt Ordovician and Lower Silurian. Potentially traps include low-amplitude anticlines, fault-controlled structures, and stratigraphic traps. Structures in the sub-salt section could have formed as early as the Late Carboniferous.
The Ordovician reservoir objectives are clastics and carbonates within Nambeet, Willara, and Nita Formations. Where sealing intervals within the Carribuddy Group are preserved, the Nita Formation is the primary target, provided that secondary porosity has developed. If the Carribuddy Group is eroded Ordovician plays would rely on intraformational seals, and targets are the, Goldwyer Formation, Acacia Sandstone and Nambeet Formations. If the Ordovician reservoirs are overlain by the Grant Group, top seals may be at risk, and hydrocarbons would leak into traps in the Grant Formation.
The Goldwyer and Bongabini Formations are the major source intervals for the Ordovician and Silurian plays. The Goldwyer Formation is also a potential self-sourcing reservoir, particularly in fracture zones. The primary risks in sub-salt plays are the timing of generation with regard to trap formation, retention of trap integrity and top seal, particularly as some areas have complete erosion of the Carribuddy Group.
Reservoirs above the Mallowa Salt section include sandstones within the Tandalgoo Formation and the Grant Group; and the Devonian carbonates of the Pillara and Nullara Formations. In the Southern Canning Basin these plays rely on charge mainly from the Goldwyer Formation, which implies a risk of charge accessibility as, over large areas, the hydrocarbons need to migrate through a thick section of Mallowa salt.
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Along the southern margin of the Willara Sub-basin and the Anketel Shelf the Grant Group reservoir beds lie directly on the Goldwyer Formation, which provides direct access to source. Shale and claystone in the Grant Group provide an intraformational seal for the sandstone reservoirs, but a risk is associated with their lateral continuity and frequent facies changes.
Structural, structural-stratigraphic and stratigraphic traps were identified in the supra-salt section in the Southern Canning Basin. Sunshine-1 and Whistler-1 tested stratigraphic traps within the Grant Group section. Based on seismic these are “moundforms” associated with the glaciogene deposits during Early Permian. There is a certain risk associated with the presence of an effective top seal. The identification of stratigraphic traps within the Grant Group is a task that can only be achieved with a significant amount of high-resolution seismic data and increased well control.
4.3 Petroleum Prospectivity4.3.1 EP 448EP 448 in the South-western Canning Basin, covers an area of 17,022 km2. Tectonically, on the southern flank of the Willara Sub-basin the Anketell Shelf and Samphire Graben (Figure 12).
The Willara Sub-basin is bounded to the North by the Admiral Bay Fault Zone and the Broome Platform. The Sub-basin was a major depocenter during the Palaeozoic evolution of the Canning Basin, comprising thick (up to 5,000 m) Ordovician to Permian sedimentary succession. These sediments thin to the South and onlap the Anketell Shelf. The latter is a basement high, with considerably reduced thickness of the sedimentary cover (Figure 15, Figure 16).
There are no wells drilled within the application area. The closest wells are Calamia-1, Dariwell-1 and Wood Hills-1 which are located immediately to the north of the area. To the southeast of the application area Frankenstein-1, Auld-1 and Auld South-1 provide information on stratigraphy and hydrocarbon prospectivity. None of these wells recorded significant hydrocarbon shows. The seismic coverage is poor, consisting of less then 1,000 km of old vintage data acquired between 1970 and 1990. The seismic is concentrated along the northern part of the permit (Figure 17).
Figure 14 – Stratal relationship of Gogo Formation (modified from Playford, 1984)
EP 448
Figure 15 - Isostatic gravity anomaly, Canning Basin (after Lockwood, 2004)
Figure 16 - Cross-section southern Willara Sub-basin and the Anketell Shelf
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EP448
The principle playtype being pursued in the area is the Middle to Late Ordovician Nita Formation over horsts and rotated fault blocks. Vuggy porosity within the Nita is well documented in wells such as Dodonea-1. The Nita Formation is underlain by Goldwyer Formation G. prisa source and potentially sealed by high integrity evaporitic seals of the Carribuddy Group. The exploration area may contain a favourable zone where Nita Formation has developed vuggy porosity, the Carribuddy Group has not been eroded, and mature Goldwyer occurs down dip on the structure.
Aeromagnetic data over the permit area shows evidence of northwest striking basement highs, on a similar trend to those targeted in the Mirbelia-2 well to the east of the permit area. Pre-existing basement topographic highs are favourable locations for locating intertidal facies of the Nita Formation with better initial reservoir quality.
The proposed work program of initial studies on existing seismic and reprocessing, followed by additional seismic, presumably along the defined trends delineated in the initial work may locate a potential drilling objective to test the play concept.
The Nita Formation carbonates are considered a major reservoir in the Southern Canning Basin but in most of the wells, adjacent to the permit area the Nita Formation is generally tight. Significant secondary dolomitization might have developed in the areas where the Formation subcrops beneath the pre-Grant Group unconformity, or it has been sub-aerially exposed prior to Carribuddy Formation deposition, or in shallow intertidal facies.
Within the permit area and the surrounds the best reservoirs have been identified within the Grant Group. Sandstone beds were intersected by the wells in the area, both with lower and upper part of the Permian section. The Grant Group sandstone have porosities up to 30%, averaging between 24% to 26% in Darriwell-1, Wood Hills-1, Calamia-1, and Auld-1. The Grant Group sandstones may locally form stacked potential reservoir objectives in the permit area.
The Willara and Nambeet Formations are also potential reservoirs, though their reservoir characteristics are poorer.In Calamia-1 sandstones within the Nambeet Formation have log derived average porosity of 14.2% over a 21 m thick net reservoir horizon. In the same well a sandstone within the Willara Formation, probably the Acacia Member or its equivalent, exhibits log porosity of 12% average, with a maximum of 16% over a 30 m interval (Geary, 1988).
The Tandalgoo Formation is a potential reservoir in the southeastern portion of the permit area. Excellent reservoir characteristics have been recorded in the Tandalgoo Formation in Frankenstein-1. Cores recovered from the Tandalgoo Formation have porosity up to 28% and permeability up to 1,478 mD. Frankenstein-1 is immediately to the southeast of the permit area.
Figure 17 - EP 448 Location and Database
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Shales within the Grant Group provide both intraformational seals and a semi-regional seal over the Tandalgoo Formation sandstones and sub-cropping Ordovician sediments. However, some risk is associated with the lateral continuity of these shales. Shaly beds within the Willara and Nambeet Formation are likely to form intraformational seals.
The Ordovician sequence in the Willara Sub-basin have likely generated significant amounts of hydrocarbons, as indicated by the numerous oil and gas shows reported in wells. The Goldwyer Formation Unit -4 (G. prisca) is believed to be the major source rock in the application area. In Calamia-1 the thin oil-prone G. prisca rich zones within Goldwyer Formation are early mature to mature for oil generation with vitrinite reflectance values up to 0.90% Ro (Pickering, 1988). G. prisca source is expected to be mature in the Willara Sub-basin depocenter, but this would require long distance migration, particularly to the areas where the excellent Grant Group reservoirs lie directly on the Goldwyer Formation. Potential Nita Formation plays are more proximal to source.
Interpretation of the limited available 2D seismic data has delineated a number of potential structures and play-types. However, the region is not explored sufficiently to mature prospects to ”ready-to-drill” status. The structures observed on seismic are within the Grant Group and although these are not the primary objective of the exploration in the block they may form an alternate secondary play fairway.
Several leads have been mapped in the lower Grant Group in the north-most part of the permit area, adjacent to the Calamia-1 (Figure 18). In addition a pinch-out play against the Anketell shelf is highlighted.
Leads A, B, C were formed as a result of drape-over and compaction of the Grant Group deposits over tilted Ordovician fault blocks. A northwest–southeast trending structural component dominates these features. Sandstone with excellent porosity-permeability parameters in the Lower Grant Group provides the reservoir. These directly overlie the potential Goldwyer Formation or Willara Formation source rocks. The seal is provided by intraformational shale intervals. Major risks are associated with maturation levels of the underlaying source rock intervals, migration, and reactivation of the bounding faults during the Fitzroy movement.
Leads D and E were mapped to the northeast. Though these are four-way closed drape structures over possible salt related features in the Carribuddy Group, leads D and E, are considered less attractive due to the risk associated with charge accessibility. In this area the Grant Group reservoirs overlay the Carribuddy Group and any potential hydrocarbons, generated by the Goldwyer Formation would need to migrate through a thick salt sequence.
Figure 18 - Lower Grant Group sandstone leads (TWT structure map)
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5. DECLARATIONS5.1 Independence and Qualifications RPS Energy is an independent consultancy providing a comprehensive range of technical services and economical analysis to the petroleum industry. Except for the provision of professional services on a fee basis, RPS Energy does not have a commercial arrangement with any other person or company involved in the interests that are the subject of this report. Mr. R. de Boer, Geological Manager of RPS Energy Australia/SE Asia, has supervised the evaluation.
Rick de Boer is an experienced petroleum geologist with 18 years experience in the industry, during which time he has worked for Mobil, Alberta Energy Company, Energy Equity Corporation. Rick holds a BSC (Geology) Curtin and Grad Dip. (Natural Resources) Curtin.
Other RPS Energy employees involved in this work hold at least a Masters degree in geology, geophysics, petroleum engineering or a related subject and have at least five years of relevant experience in the practice of geology, geophysics or petroleum engineering.
5.2 Basis of OpinionThe evaluation presented in this report reflects our informed judgement based on accepted standards of professional investigation, but is subject to generally recognised uncertainties associated with the interpretation of geological, geophysical and engineering data. The evaluation has been conducted within our understanding of petroleum legislation, taxation and other regulations that currently apply to these interests. However, RPS Energy is not in a position to attest to the property title, financial interest relationships or encumbrances related to the property.
In estimating oil and gas in place (OIIP and GIIP), Reserves and Resources we have used the standard petroleum engineering techniques. We have estimated the degree of uncertainty inherent in the measurement and interpretation of the basic data and have calculated a range of petroleum initially in place and recoverable. For the Prospects, the RPS’s estimates of chance of success (risk factors) are quoted for information.
It should be understood that any evaluation, particularly one involving exploration and future petroleum developments may be subject to significant variations over short periods of time as new information becomes available.
5.3 Sources of informationThis report is based upon information which was provided by Uranium Oil and Gas Limited and also draws upon public domain information as well as propriety data from RPSE data bases.
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6. REFERENCESCrick, I, H; Boreham, C. J., Powell, T. G. 1987 Assessment of hydrocarbon source potential McArthur Basin: In () Petroleum geology and geochemistry, Middle Proterozoic McArthur Basin. BMR Record, Geology and Geophysics, 1987/48, 99-138.
D’Ercole, C., Gibbons, L., and Ghori, K. A. R., (Editers), 2003, Prospects and leads, central Canning Basin, Western Australia, 2003: Western Australia Geological Survey, Record 2003/14, 89p.
Foster, C. B., O’Brien, G. W., Watson, S. T.1986.Hydrocarbon source potential of the Goldwyer Formation, Barbwire Terrace, Canning Basin, Western Australia. Aust. Pet. Explor. Assoc. J. 26:142-55
Geary, G. C. 1988. Calamia -1 Well Completion Report. Oil Company of Australia (unpublished).
Haines, P. W., 2004, Depositional facies and regional correlations of the Ordovician Goldwyer and Nita Formations, Canning Basin, Western Australia, with implications for petroleum exploration: Western Australia Geological Survey, Record 2004/7, 45p.
Lanigan, K, Hibbird, S., Menpes, S. and Torkington, J., 1994. Petroleum exploration in the Proterozoic Beetaloo Sub-basin, Northern Territory. APPEA Journal, 34 (1), 674-691.
Karajas, J., and Kernick, C. N., 1984, A prospective Nita Formation reservoir trend on the Broome Platform. In W.A., In: P.G. Purcell, (Ed) The Canning Basin, W.A. Geological Society of Australia and Petroleum Exploration Society of Australia, Canning Basin Symposium, Perth, W.A., 1984, Proceedings, p. 169–177.
Kennard, J.M., Jackson, M.J., Romine, K.K., Shaw, R.D., and Southgate, P.N., 1994b, Depositional sequences and associated petroleum systems of the Canning Basin, W.A., In: P.G. & R.R. Purcell, (Eds) The Sedimentary Basins of Western Australia, Proceedings of the Western Australian Basins Symposium, Perth, W.A., PESA, 657-676.
Lockwood, A. M., 2004, Western Australia: isostatic residual gravity anomaly and depth to basement model: Western Australia Geological Survey, Record 2004/14, 31p.
McCracken, S., 1994, Timing of hydrocarbon migration into the Admiral Bay Fault Zone, Canning Basin, in The Sedimentary Basins of Western Australia edited by P. G. PURCELL and R. R. PURCELL: Petroleum Exploration Society of Australia, Western Australian Basins Symposium, Perth, W.A., 1994, Proceedings, p. 739–751.
Pickering, S., 1988. A review of Goldwyer source rock in Darriwell-1 and Calamia-1. Company report for Oil Company of Australia N.L. (unpublished).
Playford, P., 1984. Platform margin and Marginal-slope relationships in Devonian reef complexes of the Canning Basin. In W.A., In: P.G. Purcell, (Ed) The Canning Basin, W.A. Geological Society of Australia and Petroleum Exploration Society of Australia, Canning Basin Symposium, Perth, W.A., 1984, Proceedings, p. 189-214.
Plumb, K. A., Derrick, G. M., Needham, R. S., Shaw, R. D., 1981. The Proterozoic of Northern Australia. In Hunter, D. R. (ed), Pre-Cambrian of the Southern Hemishere. Developments of Precambrian Geology, 2, Elsevier, Amstredam, 205-307.
Powel T.G., Jackson, M. J., Sweet, I. P., Crick, I. H., Boreham, C. J., and Summons, R. R., 1987. Petroleum geology and geochemistry, Middle Proterozoic McArthur Basin. BMR Record, Geology and Geophysics, 1987/48, 99-138
Russell, J., 1998, Chapter 11: EP 353 Canning Basin charge modelling, in Canning Basin project, 1998 edited by SRK Consulting: Western Australia Geological Survey, Statutory petroleum exploration report, S6353 R1 A5 (unpublished).
Taylor, D., 1992, A review of Ordovician source rocks, Canning Basin, Western Australia: Australia Bureau of Mineral Resources, Record 1992/43, 87p.
Taylor, D., Kontorovich, A. E., Larichev, A. I. and Glikson, M. 1994. Petroleum Source rocks in the Roper Group of the McArthur Basin: Source characterisation and maturity determinations using physical and chemical methods. APPEA Journal, 34 (1), 279-296.
Womer, M.B., 1986. Hydrocarbon occurrences and diagenetic history within Proterozoic sediments, McArthur River Area, Northern Territory, Australia. APEA Journal, 363-374.
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7. APPENDIX A: GLOSSARY OF TERMS AND ABBREVIATIONS API American Petroleum Institute
bbl(s) barrels
bbls/d barrels per day
Bcf billion cubic feet
Bcm billion cubic metres
COS Chance of success
GIP Gas in Place
GIIP Gas Initially in Place
km kilometres
km2 square kilometres
m metre
m3 cubic metres
M thousand
ml millilitres
MM million
mD permeability in millidarcies
MMbbls million barrels
MMscf/d millions of standard cubic feet per day
OIIP Oil Initially in Place
petroleum deposits of oil and/or gas
scf standard cubic feet measured at 14.7 pounds per square inch and 60° F
scf/d standard cubic feet per day
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Level 8, 256 St George’s Terrace Perth WA 6000 PO Box 7426 Cloisters Square Perth WA 6850 Tel: (61-8) 9360 4200 Fax: (61-8) 9481 2524 AFS Licence Number 246328 Email: [email protected] www.bdo.com.au
Our ref: SA/PG
8 June 2006
The DirectorsUranium Oil and Gas LimitedLevel 8, 256 St George’s Terrace Perth WA 6000
Dear Sirs
INVESTIGATING ACCOUNTANT’S REPORT
1. IntroductionWe have prepared this Investigating Accountant’s Report (“Report”) on historical financial information of Uranium Oil and Gas Limited (“UOG” or “the Company”) for inclusion in a Prospectus, relating to the minimum issue of 12.5 million and the maximum issue of 40 million ordinary shares in the Company at a price of 20 cents each plus one free attaching option for every two shares issued (“the Public Offer”).
2. Basis of PreparationThis Report has been prepared to provide investors with information on the historical results (Income Statement as noted in Appendix 1), the Balance Sheet and Statement of Changes in Equity and the pro-forma Balance Sheet as noted in Appendices 2 and 3.
This Report does not address the rights attaching to the shares to be issued in accordance with the Prospectus, nor the risks associated with the investment and has been prepared based on the Minimum Subscription only being achieved.
BDO Consultants (WA) Pty Ltd (“BDO”) has not been requested to consider the prospects for the Company, the shares on offer and related pricing issues, nor the merits and risks associated with becoming a shareholder and accordingly has not done so, and does not purport to do so. BDO accordingly takes no responsibility for these matters or for any matter or omission in the Prospectus, other than responsibility for this Report. Risk factors are set out in Section 9 of the Prospectus.
Expressions defined in the Prospectus have the same meaning in this Report.
3. BackgroundThe Company was incorporated on 3 August 2005 as Uranium Oil And Gas Limited.
The Company is a registered Australian Unlisted Public Company limited by shares. As at 31 January 2006 the company had 28,750,003 ordinary shares on issue.
UOG has agreed to purchase a number of tenements conditional on listing on the ASX. The activities of UOG have so far revolved around negotiations to purchase these tenements.
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4. Scope You have requested BDO to prepare an Investigating Accountant's Report covering the following financial information:
the historical Income Statement of the Company for the period from incorporation to 31 January 2006;
the Balance Sheet and Statement of Changes in Equity of the Company as at 31 January 2006; and
the pro-forma Balance Sheet as at 31 January 2006 which assumes completion of the contemplated transactions disclosed in Section 6 of this Report (“the pro-forma transactions”) referred to collectively as the historical financial information;
The historical financial information set out in the appendices to this Report has been extracted from the financial statements of the Company for the period ended 31 January 2006 which was reviewed by BDO Chartered Accountants & Advisers.
The Directors are responsible for the preparation of the historical financial information including determination of the adjustments.
We have conducted our review of the historical financial information in accordance with the Australian Auditing and Assurance Standard AUS 902 “Review of Financial Reports”. We made such inquiries and performed such procedures as we, in our professional judgment, considered reasonable in the circumstances including:
a review of work papers, accounting records and other documents pertaining to balances in existence at 31 January 2006;
a review of the assumptions used to compile the pro-forma Balance Sheet;
a review of the adjustments made to the pro-forma historical financial information;
a comparison of consistency in application of the recognition and measurement principles in Accounting Standards and other mandatory professional reporting requirements in Australia, and the accounting policies adopted by the Company disclosed in the appendices to this Report; and
enquiry of Directors and others.
These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
Our review was limited primarily to an examination of the historical financial information, the pro-forma financial information, analytical review procedures and discussions with both management and directors. A review of this nature provides less assurance than an audit and, accordingly, this Report does not express an audit opinion on the historical information or pro-forma financial information included in this Report or elsewhere in the Prospectus.
In relation to the information presented in this Report:
support by another person, corporation or an unrelated entity has not been assumed;
the amounts shown in respect of assets do not purport to be the amounts that would have been realised if the assets were sold at the date of this Report; and
the going concern basis of accounting has been adopted.
5. ConclusionStatement on Historical Financial Information
Based on our review, which was not an audit, nothing has come to our attention which would cause us to believe the historical financial information as set out in Appendices 1 and 2 of this report does not present fairly the financial performance for the period to 31 January 2006 and the financial position of the Company as at 31 January 2006, in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia.
Statement of Pro-forma Financial Information
Based on our review, which was not an audit, nothing has come to our attention which would cause us to believe the pro-forma financial information as set out in Appendices 2 and 3 of this report does not present fairly the financial position of the Company as at 31 January 2006, in accordance with the measurement and recognition requirements (but not all of the disclosure requirements) of applicable Accounting Standards and other mandatory professional reporting requirements in Australia as if the pro-forma transactions had occurred on that date.
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No opinion is expressed on the historical results, as shown in the Income Statement in Appendix 1 and the historical net asset position, as shown in the Balance Sheet and Statement of Changes in Equity in Appendix 2 except to state that nothing has come to our attention which would require further modification to the financial information in order for it to present fairly the results and net assets of the period identified.
6. Subsequent EventsDuring the period 31 January 2006 to 22 May 2006 UOG issued an additional 250,000 shares at 10 cents per share.
Apart from the matters dealt with in this Report, and having regard to the scope of our Report, to the best of our knowledge and belief no material transactions or events outside of the ordinary business of the Company have come to our attention that would require comment on, or adjustment to, the information referred to in our Report or that would cause such information to be misleading or deceptive.
7. Assumptions Adopted in Compiling the Pro-forma Statement of Financial Position The pro-forma Balance Sheet after the Public Offer is shown in Appendix 2. This has been prepared based on the reviewed financial statements as at 31 January 2006 after taking into account the following transactions:
The issue of 12,500,000 ordinary fully paid shares to raise $2.5 million, pursuant to the Public Offer;
The issue of 6,250,000 free attaching options with an exercise price of 20 cents each;
The payment of expenses associated with the preparation and issue of the Prospectus and the listing of the Company amounting to $360,000. These have been netted off against the share capital raised;
The payment of $45,000 to Ms H Ansell for the acquisition of the Four Corners Bore and Rubberoid Well tenements; and
The issue of 250,000 ordinary shares at 10 cents per share in the period between 31 January 2006 and the date of this Report.
The issue of 250,000 options to the Sponsoring Brokers on the same terms as the existing options. These have been netted off against the share capital raised.
8. DisclosuresBDO Consultants (WA) Pty Ltd is the licensed corporate advisory arm of BDO in Perth, and is wholly owned by partners of that firm.
Neither BDO Consultants (WA) Pty Ltd nor BDO (Perth), nor any partner or executive or employee thereof, has any financial interest in the outcome of the proposed transaction except for the normal professional fee due for the preparation of this Report.
Consent to the inclusion of the Independent accountant’s Report in the Prospectus in the form and context in which it appears, has been given. At the date of this Report, this consent has not been withdrawn.
Yours faithfully
BDO Consultants (WA) Pty Ltd
Sherif Andrawes
Director
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APPENDIX 1URANIUM OIL AND GAS LIMITED INCOME STATEMENTFOR THE PERIOD FROM 3 AUGUST 2005 TO 31 JANUARY 2006
$
Sale of tenements 28,333
Interest revenue 492
Total Revenue 28,825
Expenses
Bank charges 124
Tenement costs 2,795,486
Consulting fees 15,000
Management fees 292,500
Technical reports 95,904
Travel costs 20,000
Administrative costs 7,896
3,226,910
Loss from ordinary activities before income tax expense (3,198,085)
Income tax expense relating to ordinary activities -
Loss from ordinary activities after income tax expense attributable to members (3,198,085)
The Income Statement is to be read in conjunction with the notes to and forming part of the historical financial information set out in Appendix 3.
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APPENDIX 2URANIUM OIL AND GAS LIMITED BALANCE SHEET
Notes31 January
2006Pro-forma
AdjustmentsPro-forma
after the Offer
$ $
CURRENT ASSETS
Cash and cash equivalents 2 25,141 2,120,000 2,145,141
Receivables 44,927 44,927
Prepayments 8,333 - 8,333
Other current assets 238 - 238
TOTAL CURRENT ASSETS 78,639 2,120,000 2,198,639
NON-CURRENT ASSETS
Investments 3 23,333 - 23,333
TOTAL NON-CURRENT ASSETS 23,333 - 23,333
TOTAL ASSETS 101,972 2,120,000 2,221,972
CURRENT LIABILITIES
Creditors 223,822 - 223,822
TOTAL CURRENT LIABILITIES 223,822 - 223,822
TOTAL LIABILITIES 223,822 - 223,822
NET ASSETS (121,850) 2,120,000 1,998,150
EQUITY
Issued Capital 4 512,353 2,134,041 2,646,394
Accumulated Losses 4 (3,198,085) (45,000) (3,243,085)
Option Reserve 5 2,563,882 30,959 2,594,841
TOTAL EQUITY (121,850) 2,120,000 1,998,150
The pro-forma Balance Sheet after the Offer is as per the Balance Sheet at 31 January 2006 adjusted for the transactions discussed in section 6 of the Investigating Accountant’s Report. The Balance Sheet is to be read in conjunction with the notes to and forming part of the financial information set out in Appendix 3.
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APPENDIX 2URANIUM OIL AND GAS LIMITED STATEMENT OF CHANGES IN EQUITY
Period to31 January 2006
$
Pro-FormaAdjustments
$
Pro-forma31 January 2006
$
Total equity at the beginning of the year - - -
Loss for the year (3,198,085) (45,000) (3,243,085)
Total recognised for the year (3,198,085) (45,000) (3,243,085)
Transactions with equity holders in their capacity as equity holders:
Contributions of equity, net of transaction costs 450,000 2,134,041 2,584,041
Share based payments 50,000 - 50,000
Loans outstanding 2,353 - 2,353
502,353 2,275,000 2,777,353
Issue of Options 2,563,882 30,959 2,594,841
Total equity at the end of the year (131,850) 2,120,000 1,998,150
Total recognised income and expense for the year is attributable to:
Members of Uranium Oil and Gas Limited (3,198,085) (45,000) (3,243,085)
The above consolidated changes in equity should be read in conjunction with the accompanying notes.
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APPENDIX 3
Uranium Oil And Gas Limited
Notes to and Forming Part of the Historical Financial Information for the Period Ended 31 January 2006NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of the historical financial information included in this Report have been set out below.
a) Basis of PreparationThe historical financial information has been prepared in accordance with applicable Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 and we have made such disclosures, as we consider necessary for the purposes of this Report.
The historical financial information has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or current valuations of non current assets except where stated. Cost is based on the fair values of the consideration given in exchange for assets. The accounting policies have been consistently applied, unless otherwise stated.
b) Income TaxIncome TaxesThe income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or liability. No deferred tax asset or liability is recognised in relation to these temporary differences if the arose in a transaction. Other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Goods and Services TaxRevenues, expenses and assets are recognised net of the amount of GST except:
where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
Exploration expenditure has been expensed. All costs involved in conducting feasibility studies in the future, exploration expenditure will be capitalised and amortised over the relevant life of assets where an area of interest is held in the name of the company.
c) Cash and Cash EquivalentsCash includes cash on hand and at call and deposits with banks or financial institutions and investments in the money market instruments which are readily convertible to cash and used in the cash management function on a day to day basis, net of bank overdrafts.
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d) Exploration and Evaluation ExpenditureExploration expenditure has been expensed. All costs involved in conducting feasibility studies in the future, exploration expenditure will be capitalised and amortised over the relevant life of assets where an area of interest is held in the name of the company.
e) Recoverable AmountNon-current assets are not carried at an amount above their recoverable amount, and where carrying values exceed this recoverable amount assets are written down. In determining recoverable amount, the expected net cash flows have not been discounted.
f) Trade and Other PayablesLiabilities for trade and other creditors are carried at cost which is the fair value of the consideration to be paid in future for goods and services received, whether billed or not billed to the Company.
g) Contributed EquityContributed equity is recognised at the fair value of the consideration received by the Company, less any capital raising costs in relation to the issue.
h) RevenueInterest revenue is recognized on a proportional basis taking into account the interest rates applicable to financial assets. All revenue is stated net of the amount of goods and services tax.
i) Share Based PaymentAASB 2 “Share Based Payments” requires an entity to recognise share-based payment transactions in its financial statements, including transactions with employees or other parties to be settled in cash, other assets, or equity instruments of the entity. In accordance with AASB 2, all share based payments have been measured at the fair value of goods or services received, unless that fair value cannot be estimated reliably, in which case share based payments have been valued by reference to the fair value of the equity instruments granted.
NOTE 2. CASH31 January
2006Pro-forma after issue
$ $
Cash at bank 25,141 2,145,141
Adjustments arising in the preparation of the pro-forma cash balance are summarised as follows:
Reviewed balance at 31 January 2006 25,141
Proceeds from shares issued pursuant to the Public Offer 2,500,000
Proceeds from 250,000 ordinary shares issued at 10 cents per share 25,000
Payment to Helen Ansell for the Four Corners Bore and Rubberoid Well (ELA 57/607 and ELA 09/1245)
(45,000)
Share issue costs (cash portion) (360,000)
2,145,141
NOTE 3. INVESTMENTS31 January
2006
$
Shares in listed corporations
- Strike Resources Limited 23,333
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NOTE 4. CONTRIBUTED CAPITAL
NotesNumber of
OptionsNumber of
Shares $ Value
As at 31 January 2006 a 19,500,000 28,750,003 512,353
Shares issued post 31 January 2006 - 250,000 25,000
Shares issued pursuant to public offer - 12,500,000 2,500,000
Options issued exercisable at 20 cents expiring on 4 August 2010 6,250,000 - -
Total share issue costs 250,000 - (390,959)
26,000,000 41,500,003 2,646,394
(a) Shares issued during the period are set out below:
Date of IssueNumber of
Shares IssuedIssue Price
$Total Value
$
3 August 2005 3 1.0000 3
5 August 2005 23,500,000 0.0001 2,350
10 August 2005 200,000 0.0250 5,000
17 August 2005 500,000 0.1000 50,000
19 August 2005 350,000 0.1000 35,000
31 August 2005 1,850,000 0.1000 185,000
1 September 2005 500,000 0.1000 50,000
5 September 2005 400,000 0.1000 40,000
7 September 2005 200,000 0.1000 20,000
14 September 2005 450,000 0.1000 45,000
24 September 2005 200,000 0.1000 20,000
30 September 2005 300,000 0.1000 30,000
3 October 2005 100,000 0.1000 10,000
10 October 2005 200,000 0.1000 20,000
(b) The following share based payments were made during the period through the issue of shares:
Description of ServiceNumber of
Shares IssuedIssue Price
$Total Value
$
Management services 350,000 0.1000 35,000
Consulting Services 100,000 0.1000 10,000
Printing 200,000 0.0250 5,000
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(c) 19.5 million options were issued on 4 August 2005 with an exercise price of 20 cents and a term of 5 years. Using the Black Scholes Model we have calculated the fair value of an option to be 13 cents based on the following criteria:
Input Value
Weighted average share price 20 cents
Exercise price 20 cents
Expected volatility* 23%
Option Life 5 years
Expected dividends Nil
Risk free interest rate 5.25%
* Standard deviation taken from the Australian Graduate School of Management.
Otions have been issued for the following goods and services:
Description of ServiceNumber of options
IssuedIssue Price
$Total value
$
Payment for Tenements 19,000,000 0.13 2,563,882
Uranium Oil and Gaswill issue 250,000 options to its Sponsoring Broker. We have valued these options at $30,949.
NOTE 5. ACCUMULATED LOSSES31 January
2006$
Pro-formaAfter Issue
$
Accumulated losses (3,198,085) (3,243,085)
Opening Balance (3,198,085)
Payment to Helen Ansell for the Four Corners Bore and Rubberoid Well (ELA 57/607 and E 09/1245)
(45,000)
Pro-forma Balance (3,243,085)
NOTE 6: COMMITMENTS AND CONTINGENCIESUOG has committed to pay $45,000 plus GST to Helen Ansell for the exchange of tenements upon UOG listing on the ASX. As at the date of this report no other material commitments or contingent liabilities exist.
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Lawton GillonBarristers & Solicitors
Ian Ross Gillon
Simon Christopher England Our Ref: SE 15533 Lett.doc.13 fc
Your Ref:
5 July 2006
The DirectorsUranium Oil and Gas Limited8/256 St Georges TerracePERTH WA 6000
Dear Sirs
Re: Solicitor’s Report on Mining Tenements and Petroleum Permits
1. IntroductionThis Solicitor’s Report is prepared for inclusion in a prospectus to be issued by Uranium Oil and Gas Limited (the Company) on or about 19 July 2006 to raise up to $8,000,000 (the Prospectus). The offer in the Prospectus comprises the issue by the Company of 40,000,000 fully paid ordinary shares at an issue price of 20 cents per Share with one free attaching Option for every 2 Shares issued.
We are instructed that as at the date of this report, the Company has entered into the following agreements in relation to the mining tenements and petroleum permits the subject of this report (Contracts):
(a) Option Agreement with Helen Ansell in relation to E36/549, Option Agreement with Helen Ansell in relation to E57/607, Option Agreement with Swancove Enterprises Pty Ltd in relation to E52/1863 and E52/1864, Option Agreement with Swancove Enterprises Pty Ltd in relation to E70/2444, E70/2692, E70/2693 and E70/2727;
(b) Agreement with Helen Ansell and Fastscout Limited in relation to E09/1245;
(c) Agreement with Kjirt Exploration Services Pty Ltd and Swancove Enterprises Pty Ltd in relation to EPA113, EPA114 and EP 448;
(d) Heads of Agreement with Red River Resources Limited in relation to E36/539; and
(e) Agreement with Paul Askins and Callum Baxter in relation to E30/312 and E29/589.
The terms and conditions of the Contracts are summarised by the Company in Section 10.4 of the Prospectus.
Under the Contracts, the Company is entitled, subject to exercise of the options and completion of the Contracts, to acquire an interest in various applications for the grant of mining tenements and petroleum permits and granted mining tenements. In addition, the Company holds 2 granted mining tenements in its own right (all granted mining tenements and all applications for mining tenements and petroleum permits, collectively referred to as the Tenements).
Schedules of the mining tenements and the petroleum permits comprising the Tenements are attached to and form part of this report (Schedules). In addition to a list of the Tenements, the Schedules contain notes in relation to the status of the Tenements, native title claims affecting the Tenements and endorsements and conditions affecting the Tenements.
Except for EPA113 and EPA114 which are located in the Northern Territory, all of the Tenements are located in Western Australia.
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Fax (08) 9221 4224Email [email protected]
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2. OpinionAs a result of our searches (referred to below) and enquiries, but subject to the assumptions and qualifications set out below, we are satisfied that, as at the date of the relevant searches:
the details of the Tenements included in this report are accurate as to the status of the Tenements and the Company’s interest in the Tenements;
where title to a Tenement has not been granted or an application for extension of a term of a Tenement is pending, that fact is disclosed in the Schedules or the notes to the Schedules;
all applicable rents payable in respect of the Tenements have been paid, unless otherwise noted in the Schedules;
under the terms and conditions of the Contracts, the Company has the right to acquire an interest in the Tenements on the terms set out in the Contracts, subject to the matters referred to in this report or the Schedules; and
Tenements granted since 23 December 1996 are valid assuming the applicable processes prescribed by the Native Title Act 1993 as amended by the Native Title Amendment Act 1998 (Cth) (which as amended is referred to as the NTA) were complied with by the State Government (which we have not checked).
The valid grant of any of the current applications for Tenements which may affect native title will require compliance with the applicable processes of the NTA.
3. QualificationsWhile the status of the Tenements is dealt with in the Schedules, we point out, by way of summary, that:
(a) we have assumed the accuracy and completeness of all Tenement searches and other information or responses which were obtained from the relevant Department or authority. We cannot comment on any obligations of the Company that may arise from agreements that are not registered as a dealing, encumbrance or otherwise noted on the searches of the Tenements obtained from the Western Australian Department of Industry and Resources (DIR) and the Northern Territory Department of Primary Industry, Fisheries and Mines (DPIFM);
(b) the holding of the Tenements is subject to compliance with the terms and conditions and the provisions of the Mining Act in the case of the mining tenements, the WA Petroleum Act in the case of the Western Australian petroleum permit and the NT Petroleum Act in the case of the Northern Territory petroleum permits;
(c) we have assumed the accuracy and completeness of any instructions or information which we have received from the Company or any of its officers, agents and representatives;
(d) we have further assumed that the Company’s seals and signatures on all the Contracts are authentic and that the Contracts are and were within the capacity and powers of those who executed them. We assume that all of the Contracts were validly authorised, executed and delivered by and are binding on the parties to them and comprise the entire agreements of the parties to each of them with respect to their respective subject matters. We have relied on the Company’s instructions that the Contracts are the only contracts or arrangements relating to the Tenements to which it is a party or of which it is aware;
(e) with respect to any application for the grant of a Tenement, we express no opinion as to whether such application will ultimately be granted and that reasonable conditions will be imposed upon grant, although we have no reason to believe that any application will be refused or that unreasonable conditions will be imposed;
(f) where compliance with the requirements necessary to maintain a Tenement in good standing is not disclosed on the face of the searches referred to in this report, we express no opinion on such compliance;
(g) references in the Schedules to any area are taken from details shown on searches obtained from the DIR or DPIFM. It is not possible to verify the accuracy of those areas without conducting a survey;
(h) where Ministerial consent to any agreement or dealing referred to in this report is being or will be sought, we express no opinion as to whether such consent will be granted, or the consequences of consent being refused, although we have no reason to believe that any application for consent will be refused;
(i) the Schedules of Tenements are accurate as at 5 July 2006 as they are based on searches from the DIR or DPIFM at that date. We cannot comment on whether any changes have occurred in respect of the Tenements between 5 July 2006 and the date of the Prospectus; and
(j) with relation to each native title claim outlined in this report we do not express an opinion on the merits of such native title claim.
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4. Mining Tenements(a) Prospecting Licence
A prospecting licence remains in force for a period of 4 years and does not carry a right of renewal.
Pursuant to sections 49(1) and 75(7) of the Mining Act 1978 (as amended) (Mining Act), the holder of a prospecting licence may apply for and, subject to the Mining Act and the conditions of the licence, has the right to have granted a mining lease over any of the land within the licence. Prior to the terms of the prospecting licences expiring, applications may be made to convert them to mining leases.
Where an application has been made to convert a prospecting licence to a mining lease, section 49 of the Mining Act provides that the prospecting licence remains in force until the application for the mining lease is determined. There is no restriction on assignment of a prospecting licence.
(b) Exploration Licence
An exploration licence remains in force for a period of 5 years. The Minister may extend the term by a further period or periods of 1 or 2 years. An exploration licence cannot be assigned during the first year of its term without the prior written consent of the Minister.
Thereafter, there is no restriction on assignment. Pursuant to sections 67(1) and 75(7) of the Mining Act, the holder of an exploration licence may apply for and, subject to the Mining Act and the conditions of the licence, has the right to have granted one or more mining leases over any of the land within the area of the licence. Prior to the expiration of the term of any of the exploration licences set out in the Mining Tenement Schedule, an application may be made to convert it to one or more mining leases.
(c) Mining Lease
A mining lease remains in force for a period of 21 years and may be renewed for successive periods of 21 years. It is a breach of a condition of a mining lease to assign it without the prior written consent of the Minister. In the case of a mining lease application which is a conversion from either a prospecting licence or an exploration licence, if the licence is assigned, the mining lease application continues in the name of the assignee.
(d) General Conditions
Mining tenements are granted subject to various conditions prescribed by the Mining Act including payment of rent, compliance with minimum expenditure and reporting requirements.
Certain conditions that apply to one or more of the mining tenements include standard environmental conditions. Mining tenements are also subject to statutory requirements of certain other Acts including Aboriginal heritage legislation, environmental protection legislation and rights in water legislation.
(e) Specific Conditions
Specific conditions applicable to the individual mining tenements are detailed in the notes to the Mining Tenement Schedule.
(f) Encumbrances
Encumbrances and caveats applicable to the individual mining tenements are mentioned in the Mining Tenement Schedule.
(g) Compliance
The Company’s interest in or right in relation to the granted mining tenements is subject to the holder continuing to comply with the respective terms and conditions of the respective granted mining tenements under the provisions of the Mining Act, and any regulations made pursuant to that Act, together with the conditions specifically applicable to any granted mining tenement. We have sought and received confirmation from the Company that the various conditions in respect of each granted mining tenement have been met in all material respects.
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5. Petroleum PermitsWestern Australia
Onshore exploration and production of petroleum in Western Australia is regulated by the Petroleum Act 1967 (WA Petroleum Act).
An exploration permit granted pursuant to the WA Petroleum Act authorises the holder to explore exclusively for petroleum and to carry out such operations and execute such works as are necessary for that purpose in the title area, subject to the WA Petroleum Act and conditions imposed on the permits at the discretion of the Minister. In applying for a permit the holder must submit a proposed work program including expected expenditure and will usually be required to comply with that work program as a condition of a permit.
Other conditions imposed on exploration permits are determined at the discretion of the relevant Minister. It is a condition of all exploration permits granted pursuant to the WA Petroleum Act that the holder will comply with the royalty provisions of the WA Petroleum Act.
The initial term of an exploration permit is six years. In addition, the holder of an exploration permit may apply for renewal for a further period of five years of no more than half of the existing blocks of the exploration permit. If the holder has complied with the conditions of the permit and of the legislation, the renewal is to be granted as of right. If the holder has not complied with the conditions of the permit and the Minister is satisfied that special circumstances exist, the Minister may grant the renewal application.
Where a holder of an exploration permit has not complied with a condition of the title, the Minister can cancel all or some of the blocks of the exploration permit.
A transfer of or dealing in an exploration permit is of no force until it has been approved by the Minister.
The holder of an exploration permit may make an application over a block or blocks in which a petroleum pool has been identified for that area to be declared a location (Location). A permittee may, within a defined application period, make application for a retention lease or production licence over the area of the Location.
Northern Territory
Onshore exploration and production of petroleum in the Northern Territory is regulated by the Petroleum Act 1984 (NT Petroleum Act).
An exploration permit granted pursuant to the NT Petroleum Act authorises the holder and his agents and employees to enter the exploration permit area with such vehicles and machinery as are necessary for exploration for petroleum and for carrying out the permittees technical works program. In applying for an exploration permit the applicant must submit a proposed technical works program for each year of the term of the permit and is required to adhere to that program. In addition the applicant must submit evidence of its financial and technical ability to comply with that works program.
Other conditions imposed on exploration permits are determined at the discretion of the Minister for Mines and Energy. It is a condition of all exploration permits granted pursuant to the NT Petroleum Act that the holder will comply with the royalty provisions of the NT Petroleum Act.
The initial term of an exploration permit is five years. In addition, the holder of an exploration permit may apply for renewal for a further period of five years of no more than half of the existing blocks of the exploration permit. If the holder has complied with the conditions of the permit and of the legislation, the renewal may be granted by the Minister. If the holder has not complied with the conditions of the permit and the Minister is satisfied that special circumstances exist, the Minister may grant the renewal application. The Minister can not renew an exploration permit more than twice.
Where a holder of an exploration permit does not comply with a condition or conditions of an exploration permit the Minister may cancel some or all of the blocks comprising the exploration permit area. Where a holder of an exploration permit does not comply with a direction given to him by the Minister the Minister can do all things required by that direction to be done and charge the cost of so doing to the holder of the permit.
A transfer of or dealing in an exploration permit is of no force until it has been approved by the Minister.
The holder of an exploration permit must notify the Minister as soon as petroleum is discovered in the permit area. Within 3 days of such discovery the holder must submit to the Minister particulars of such discovery in writing. Once the written particulars are submitted to the Minister the holder of the exploration permit may apply to the Minister for the grant of a Retention Licence or a Production Licence.
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6. SearchesFor the purposes of this report, we have conducted and reviewed searches of the Tenements in the registers maintained by the DIR and DPIFM.
These searches were conducted on 21 and 22 March 2006 at DIR and on 12 April 2006 at DPIFM. Updated searches of the Tenements were obtained on 5 July 2006 to identify any changes that had occurred in respect of the Tenements since the initial searches were conducted.
We have obtained "Quick Appraisal" reports from the DIR, summarising information available in the "TENGRAPH" system maintained by the DIR to determine if any native title claims are registered over the area of the Tenements. These searches were conducted on 23 March 2006. Updated searches were also conducted on 4 July 2006 to confirm that no relevant changes had occurred in respect of the claims since the initial searches were conducted. We have obtained extracts from the Register of Native Title Claims maintained by the National Native Title Tribunal (NNTT) in respect of registered native title claims identified in the Quick Appraisals. This material was obtained on 24 March 2006. Updated searches were also conducted on 4 and 5 July 2006 to confirm that no relevant changes had occurred in respect of the claims since the initial searches were conducted.
7. Aboriginal SitesTenements in Western Australia are granted subject to an endorsement reminding the tenement holder of its obligation to comply with the requirements of the Aboriginal Heritage Act 1972 (WA) (Heritage Act).
The Heritage Act protects sites and areas of significance to Aboriginal persons. The Minister’s consent is required where any use of land is likely to result in the excavation or other alteration of or damage to an Aboriginal site or any objects on or under that site.
There is no requirement for a site to be registered in any public manner or, indeed, be in any way acknowledged as an Aboriginal site for it to qualify as an Aboriginal site for the purposes of the Heritage Act. A register of sites is maintained by the Aboriginal Affairs Department of Western Australia. The Heritage Act applies to all Aboriginal sites and objects whether or not they are registered under the Heritage Act. For that reason, we have not conducted a search of that register for the purposes of this report.
A practical method of minimising the danger of unintentional disturbance of a site, is to undertake Aboriginal heritage surveys with local Aboriginal communities before the commencement of land disturbing activities. This is an informal process because the Heritage Act does not actually prescribe a mechanism for identifying Aboriginal sites. We are not aware of any heritage surveys of the land the subject of the Tenements having been conducted to date.
Grants of petroleum permits in the Northern Territory do not have any endorsements relating to Aboriginal sites.
However, under the Northern Territory Aboriginal Sacred Sites Act (Sacred Sites Act) any person wishing to carry out work on land which is on or in the vicinity of a sacred site must first have obtained a certificate from the Aboriginal Areas Protection Authority (AAPA). Such a certificate is granted after consultation with the custodians of the sacred site either through agreement with the custodians or with approval of AAPA after satisfying AAPA that the proposed work will not disturb the sacred site.
AAPA maintains a register of sacred sites and a register of certificates granted by AAPA. The practical method of ensuring that sacred sites are not disturbed by exploration activities is to conduct a search of AAPA register before commencing work. Should a sacred site be identified an application would need to be made for a certificate from AAPA. The Company will then need to ensure that it complies with any conditions imposed on it under the terms of the certificate.
It is an offence to enter onto a registered sacred site without a valid certificate issued by AAPA.
The Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) (Heritage Protection Act) also affords some protection to Aboriginal sites in Western Australia and the Northern Territory. It allows declarations to be made which protect or preserve objects or areas which are of significance to Aboriginals, whether situated on private or Crown land.
Two types of declarations may be made in relation to significant Aboriginal objects or Aboriginal areas (being objects or areas of significance to Aboriginals in accordance with Aboriginal tradition) under the Heritage Protection Act:
(a) emergency declarations of preservation which remain in force for a maximum of 60 days; and
(b) declarations of preservation (which remain in force for the terms specified in the declarations).
Before making a permanent declaration in relation to an area, the Minister for Aboriginal Affairs must commission a report on the area, which addresses specific matters such as the significance of the area, the extent of the area to be protected and the effects of the declaration on any non-Aboriginal interests in the land.
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Compensation is payable by the Minister for Aboriginal Affairs to a person who is, or is likely to be, affected by a permanent declaration of preservation.
It is an offence to contravene a declaration made under the Heritage Protection Act.
In respect of these sites and any other sites identified on any of the Tenements, the Company needs to ensure that any interference with such sites is in strict conformity with the provisions of the Heritage Act, the Heritage Protection Act and the Sacred Sites Act as applicable.
8. Native Title LegislationOn 3 June 1992, the High Court of Australia held in Mabo v. Queensland (No.2) (1992) 175 CLR 1 that the common law of Australia recognises a form of native title. In order to succeed in a native title claim the persons making such claim must show that they enjoy certain customary rights and privileges in respect of a particular area of land and that by these rights and privileges they have a connection with that land. Such a claim will not be recognised if the native title has been extinguished, either by voluntary surrender to the Crown, death of the last survivor of a community entitled to native title, abandonment of the land in question by that community or the granting of a wholly "inconsistent interest" in the land by the Crown.
An example of an inconsistent interest would be the granting of a freehold or some type of exclusive possession leasehold interest in the land. The granting of a lesser form of interest not conferring exclusive possession will not extinguish native title as it would not be wholly inconsistent with native title rights and interests.
The Racial Discrimination Act 1975 (Cth) (RDA) enacted by the Federal Parliament is binding on the State of Western Australia, and generally makes racial discrimination unlawful.
The Commonwealth Parliament responded to the Mabo decision by passing the Native Title Act 1993 (Cth). This Act enabled a State Parliament to validate any mining tenements granted prior to its commencement which might otherwise have been invalid by reason of the RDA. The Native Title Act 1993 (Cth) was extensively amended by the Native Title Amendment Act 1998 (Cth). These amendments include the ability of a State Parliament to validate any titles which may have been invalidly granted over pastoral leases and certain other leasehold interests during the period 1 January 1994 to 23 December 1996. The State of Western Australia has enacted the validating legislation contemplated by the NTA: the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 as amended by the Titles (Validation) and Native Title (Effect of Past Acts) Amendment Act 1999.
9. Native Title ClaimsPersons claiming to hold native title may lodge an application for determination of native title with the Federal Court. The Court will then refer the application to the Native Title Registrar for the registration test.
If the Native Title Registrar is satisfied that the lodged claim meets the registration requirements set out in the NTA (Registration Test), it will be entered on the Register of Native Title Claims maintained by the National Native Title Tribunal (Register). Claimants of registered claims are afforded certain procedural rights under the NTA including the "right to negotiate".
Claims which fail to meet the Registration Test are recorded on the Schedule of Applications Received. Such claims may be entered on the Register at a later date if additional information is provided by the claimant that satisfies the Registration Test.
Some of the Tenements relate to land which is currently the subject of one or more registered native title claims. These claims are identified in the Schedules. If native title is found to exist, the nature of the native title may be such that consent to the grant of a mining tenement may be required by the native title holders but is withheld or only granted on conditions unacceptable to the Company.
We have not undertaken the considerable historical, anthropological and ethnographic work that would be required to determine the likelihood that existing claims may be successful, or the possibility of any further native title claims being made in the future.
In any event, the existence of native title is not the relevant issue for the Company. The relevant issue is the existence of a registered native title claim. That effectively requires the Company to observe the provisions of the NTA in proceeding with its applications for Tenements. The reason for this is that an act which affects native title rights such as the grant of a mining tenement may be invalid unless there has been compliance with the provisions of the NTA. Until the native title claim has been determined by the Federal Court the existence of native title will be uncertain. Prudence dictates that native title should be assumed to exist over all claimed land other than freehold, "exclusive possession" leasehold or vested reserve until the claim has been determined.
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10. Effect of Native Title on Validity of TenementsThe existence of native title to an area as at the date of grant of a Tenement may render the tenement invalid. For example, if the provisions of the RDA or the NTA are ignored. The following is relevant to the validity of each of the mining tenements:
(a) Tenements granted prior to 1 January 1994
Tenements granted prior to 1 January 1994 are either valid as at the date or were subsequently validated by the combined operation of the NTA and Western Australian or Northern Territory native title legislation, depending on their location.
None of the Tenements in which the Company has an interest were granted prior to 1 January 1994.
(b) Tenements granted between 1 January 1994 and 23 December 1996
Tenements granted between 1 January 1994 and 23 December 1996 (being the date on which the High Court handed down the Wik decision) will either be:
Valid as at the date of grant; or
Invalid because they fail to comply with certain provisions of the NTA or for any other reason because of native title.
The combined operation of the Commonwealth and Western Australian and or Northern Territory native title legislation will have validated such invalid acts, if certain statutory criteria are met (such as, where applicable, the payment of compensation and notification requirements).
None of the Tenements in which the Company has an interest were granted between 1 January 1994 and 23 December 1996.
(c) Tenements granted since 23 December 1996
Mining tenements granted since 23 December 1996 which affect native title rights and interests will be valid provided that the future act procedures set out in (d) below were followed by the relevant parties. We have not been instructed to analyse whether or not the relevant NTA procedures were followed in relation to each tenement, but are of the opinion that they were validly granted.
E 30/312, E 29/589, E 09/1245, E 52/1863, E 52/1864, E 70/2444, E 70/2692, E 70/2693 and E 70/2727 are all mining tenements and EP 448 is a Petroleum Permit in which the Company has an interest that have been granted and are classified as valid future acts under the NTA.
(d) Future Tenement Grants
The valid grant of any mining tenement that may affect native title requires full compliance with the provisions of the NTA. The primary procedure prescribed under the NTA is the “right to negotiate” process.
The right to negotiate process involves the publishing or advertising of a notice of the proposed grant of a tenement followed by a 6 month period of negotiation between the State Government, the tenement applicant and the relevant registered native title claimant. If agreement is not reached to enable the grant to occur, the matter may be referred to arbitration before the National Native Title Tribunal (“NNTT”), which has a further 6 months to reach a decision. The decision of the NNTT may be reviewed by the relevant Federal Minister.
The right to negotiate process is not required to be followed in respect of a proposed future act in instances where the expedited procedure applies. Under the NTA, a future act is an act attracting the expedited procedure if:
(a) the act is not to interfere directly with the carrying on of the community or social activities of the persons who are the holders of native title in relation to the land; and
(b) the act is not likely to interfere with areas or sites of particular significance, in accordance with their traditions, to the persons who are holders of the native title in relation to the land; and
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(c) the act is not likely to involve major disturbance to any land or waters concerned or create rights whose exercise is likely to involve major disturbance to any land.
When the proposed future act is considered to be one that attracts the expedited procedure, persons have until 3 months after the notification date to take steps to become a native title party in relation to the relevant act (for example the proposed granting of an exploration licence). The future act may be done unless, within 4 months after the notification day, a native title party lodges an objection with the NNTT against the inclusion of a statement that the proposed future act is an act attracting the expedited procedure.
If there are no native title parties or no objections lodged within the 4 month period, the act may be done. If one or more native title parties object to the statement, the NNTT must determine whether the act is an act attracting the expedited procedure. If the NNTT determines that it is, the State may do the future act (ie grant an exploration licence).
The right to negotiate process does not have to be pursued in cases where an indigenous land use agreement (“ILUA”) is negotiated with the relevant Aboriginal people and registered with the NNTT. In such cases, the procedures prescribed by the ILUA must be followed to obtain the valid grant of the tenement. These procedures will vary depending on the terms of the ILUA.
We have not been provided with any information on any negotiations relating to any ILUA for any of the Tenements.
11. ConsentThis report is given solely for the benefit of the Company and the directors of the Company in connection with the issue of the Prospectus and is not to be relied on or disclosed to any other person or used for any other purpose or quoted or referred to in any public document or filed with any government body or other person without our prior written consent.
Yours faithfully
LAWTON GILLON
Barristers & Solicitors
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MINING TENEMENT SCHEDULE
TenementName
Holders(Shares)
AreaBlocks
GrantDate
ExpiryDate
Rent($)
MinimumExpenditure
($) Notes
Bungalow Well Project
E 36/549 Helen Mary Ansell 34 Pending $3,366.00 1, 2, 3, A, B
Four Corners Bore Project
E 57/607 Helen Mary Ansell 20 Pending $2,028.40 1, 4, A
Galah Rock/Walling Rock Project
E 30/312 Uranium Oil and Gas Ltd 60 30/06/2006 29/06/2011 $6,085.20 $60,0005, 6, 7, A,
B, C
E 29/589 Uranium Oil and Gas Ltd 52 30/06/2006 29/06/2011 $5,273.84 $52,0008, 9, 10,
A, B
Rubberoid Well Project
E 09/1245 Helen Mary Ansell 35 23/03/2006 22/03/2011 $3,549.70 $35,00011, 12, 13,
D, E
Mt Vernon/Collier Project
E 52/1863Swancove Enterprises Pty Ltd
70 21/10/2005 20/10/2010 $6,930.00 $63,000.00 14, 15, E
E 52/1864Swancove Enterprises Pty Ltd
37 21/10/2005 20/10/2010 $3,663.00 $33,300.00 16, 17, E
Wannamal/Wooroloo Project
E 70/2444Swancove Enterprises Pty Ltd
64 04/07/2003 03/07/2008 $6,490.88 $57,600.00 18, 19, 20, F
E 70/2692Swancove Enterprises Pty Ltd
70 27/10/2005 26/10/2010 $6,729.80 $63,000.00 21, 22, 23, F
E 70/2693Swancove Enterprises Pty Ltd
70 24/01/2006 23/01/2011 $6,729.80 $63,000.00 24, 25, 26, F
E 70/2727Swancove Enterprises Pty Ltd
28 27/07/2005 26/07/2010 $2,772.00 $25,200.00 27, 28, 29
Notes to Mining Tenement ScheduleNote 1Application only. Please note that in respect of an exploration licence application, the application may be granted in respect of fewer blocks than applied for and this will have the effect of reducing the area, the rent payable and the annual expenditure commitment.
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Note 2EL 36/549The following land would not be included in the grant of the Licence:
Exploration Licence 36/450.
Note 3EL 36/549The rental is in respect of the year ending 21 February 2006.
Note 4EL 57/607The rental is in respect of the year ending 24 July 2006.
Note 5EL 30/312The rental is in respect of the year ending 29 June 2006.
Note 6EL 30/312The following land is not included in the grant of the Licence:
Exploration Licence 36/450.
Note 7EL 30/312Endorsements1. The Licensee’s attention is drawn to the provisions of the Aboriginal Heritage Act 1972 and any Regulations
thereunder.2. The Licensee’s attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection
(Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately
after completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR).Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
5. The Licensee notifying the holder of any underlying pastoral or grazing lease by telephone or in person, or by registered post if contact cannot be made, prior to undertaking airborne geophysical surveys or any ground disturbing activities utilising equipment such as scrapers, graders, bulldozers, backhoes, drilling rigs; water carting equipment or other mechanised equipment.
6. The Licensee or transferee, as the case may be, shall within thirty (30) days of receiving written notification of:the grant of the Licence; orregistration of a transfer introducing a new Licensee;
advise, by registered post, the holder of any underlying pastoral or grazing lease details of the grant or transfer.
Note 8EL 29/589The following land is not included in the grant of the Licence:
Exploration Licence 29/133.
Note 9 EL 29/589The rental is in respect of the year ending 29 June 2006.
Note 10EL 29/589
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Endorsements1. The Licensee’s attention is drawn to the provisions of the Aboriginal Heritage Act 1972 and any Regulations
thereunder.2. The Licensee’s attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection
(Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
3. Pursuant to the Savings and Transitional Provisions of the Mining Amendment Acts 1990 and 1994 all land surrendered, forfeited (other than by plaint action) or expiring from a non-graticular exploration licence will either:
Automatically be included into a graticular exploration licence, provided the surrender, forfeiture or expiry occurred after the grant of the graticular exploration licence; or Automatically be included into an application for a graticular exploration licence provided the surrender, forfeiture or expiry occurred after 14 October 1995.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately
after completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR).Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
5. The Licensee notifying the holder of any underlying pastoral or grazing lease by telephone or in person, or by registered post if contact cannot be made, prior to undertaking airborne geophysical surveys or any ground disturbing activities utilising equipment such as scrapers, graders, bulldozers, backhoes, drilling rigs; water carting equipment or other mechanised equipment.
6. The Licensee or transferee, as the case may be, shall within thirty (30) days of receiving written notification of:the grant of the Licence; orregistration of a transfer introducing a new Licensee;
advise, by registered post, the holder of any underlying pastoral or grazing lease details of the grant or transfer.
Note 11 EL 09/1245The following land is not included in the grant of the Licence:
Exploration Licence 09/974.
Note 12 EL 09/1245The rental is in respect of the year ending 22 March 2007.
Note 13EL 09/1245Endorsements1. The licensee’s attention is drawn to the provisions of the Aboriginal Heritage Act 1972 and any Regulations
thereunder.2. The licensee’s attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection
(Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
3. The grant of this licence does not include the land the subject of prior Exploration Licence 09/974. If the prior licence expires, is surrendered or forfeited that land may be included in this licence, subject to the provisions of the Third Schedule of the Mining Regulations 1981 titled “Transitional provisions relating to Geocentric Datum of Australia”.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately
after completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR).
Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
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3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
In respect to those portions of land designated “CPL 27” and “CPL 28” in Tengraph, being portions of former Pastoral Leases 3114/1156 and 3114/1276, the following shall apply:
5. Prior to any ground-disturbing activity, as defined by the Director, Environment, DoIR the licensee preparing a detailed program for each phase of proposed exploration for approval of the Director, Environment, DoIR. The program to include:
maps and/or aerial photographs showing all proposed routes, construction and upgrading of tracks, camps, drill sites and any other disturbances;the purpose, specifications and life of all proposed disturbances; andtechniques, prescriptions and timetable for the rehabilitation of all proposed disturbances.
6. The licensee, at his expense, rehabilitating all areas cleared, explored or otherwise disturbed during the term of the licence to the satisfaction of the Director, Environment, DoIR. Such rehabilitation as is appropriate and may include:
stockpiling and return of topsoil;backfilling all holes, trenches and costeans;ripping;contouring to the original landform;revegetation with seed; andcapping and backfilling of all drill holes.
7. Prior to the cessation of exploration/prospecting activity the licensee notifying the Environmental Officer, DoIR and arranging an inspection as required.
Note 14 EL 52/1863Endorsements1. The Licensees attention is drawn to the provisions of the Aboriginal Heritage Act 1972.2. The Licensees attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection
(Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
3. The grant of the Exploration Licence has been made in accordance with the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement between the State of Western Australia and the Native Title Holders registered under Section 24CL of the Native Title Act 1993 on 5 July 2001.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately
after completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR). Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
5. The Licensee notifying the holder of any underlying pastoral or grazing lease by telephone or in person, or by registered post if contact cannot be made, prior to undertaking airborne geophysical surveys or any ground disturbing activities utilising equipment such as scrapers, graders, bulldozers, backhoes, drilling rigs; water carting equipment or other mechanised equipment.
6. The Licensee or transferee, as the case may be, shall within thirty (30) days of receiving written notification of:-the grant of the Licence; or
registration of a transfer introducing a new Licensee;
advise, by registered post, the holder of any underlying pastoral or grazing lease details of the grant or transfer.
7. The rights conferred by this Exploration Licence may not be exercised until a Heritage Agreement (as defined in the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement) has been entered into in respect of the Licence provided that this restriction only applies for so long as the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement is in force.
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8. The holder from time to time of this Exploration Licence shall not so long as the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement is in force carry out an exploration activity (as defined in the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement) other than in accordance with the Heritage Agreement.
9. Prior to accessing the licence area, the licensee shall consult with the Environmental Officer, DoIR, and ensure that where required all vehicles and equipment entering the designated area are washed down to remove soil and plant propagules and adhering to such conditions specified for the prevention of the spread of soil borne diseases.
10. Prior to any activity involving disturbance to vegetation and soils including:-exploration access; and/orexploration sampling;
the licensee preparing a detailed program for each phase of proposed exploration for written approval of the Director, Environment, DoIR. The Director, Environment, DoIR to consult with the Regional/District Manager, Department of Conservation and Land Management or the Department of Environmental Protection or other government agency (as relevant) prior to approval. This program to describe the environmental impacts and programs for their management and is to include:-
maps and/or aerial photographs showing the proposed locations of all ground activities and disturbances;the purpose, specifications and extent of each activity and disturbance; descriptions of all vegetation types (in general terms), land forms, and unusual features likely to be disturbed by such proposed disturbances; details on proposals that may disturb sensitive terrestrial habitats including any declared rare flora and fauna if applicable; procedures to protect the integrity of special ecosystems such as wetland systems, mangal communities and rainforests areas (and/or associated rainforest monitoring sites) if applicable;techniques, prescriptions and timetable for rehabilitation of all proposed disturbances;undertaking for corrective measures for failed rehabilitation;details of water requirements from within designated area;details of refuse disposal; andproposals for instruction and supervision of personnel and contractors in respect to environmental conditions.
11. Access to and from and the movement of vehicles within the licence area being restricted to ground or seasonal conditions and routes approved under the program or otherwise agreed by the Environmental Officer, DoIR.
12. At agreed intervals, not greater than 12 monthly, the licensee providing a brief report to the Director, Environment, DoIR outlining the progress of the operation and rehabilitation program and the proposed operations and rehabilitation programs for the next 12 months.
13. Prior to the cessation of the exploration/prospecting activity in the designated area, the licensee notifying the Environmental Officer, DoIR and arranging an inspection as required.
Note 15EL 52/1863The rental is in respect of the year ending 20 October 2006.
Note 16EL 52/1864Endorsements1. The Licensees attention is drawn to the provisions of the Aboriginal Heritage Act 1972.2. The Licensees attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection
(Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
3. The grant of the Exploration Licence has been made in accordance with the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement between the State of Western Australia and the Native Title Holders registered under Section 24CL of the Native Title Act 1993 on 5 July 2001.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately
after completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR). Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
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5. The Licensee notifying the holder of any underlying pastoral or grazing lease by telephone or in person, or by registered post if contact cannot be made, prior to undertaking airborne geophysical surveys or any ground disturbing activities utilising equipment such as scrapers, graders, bulldozers, backhoes, drilling rigs; water carting equipment or other mechanised equipment.
6. The Licensee or transferee, as the case may be, shall within thirty (30) days of receiving written notification of:-the grant of the Licence; orregistration of a transfer introducing a new Licensee;advise, by registered post, the holder of any underlying pastoral or grazing lease details of the grant or transfer.
7. The rights conferred by this Exploration Licence may not be exercised until a Heritage Agreement (as defined in the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement) has been entered into in respect of the Licence provided that this restriction only applies for so long as the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement is in force.
8. The holder from time to time of this Exploration Licence shall not so long as the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement is in force carry out an exploration activity (as defined in the Nharnuwanagga Wajarri and Ngarlawangga Indigenous Land Use Agreement) other than in accordance with the Heritage Agreement.
Note 17EL 52/1864The rental is in respect of the year ending 20 October 2006.
Note 18EL 70/2444The following land is not included in the grant of the Licence:
Any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land.
Conservation of Flora and Fauna Reserve 7615.
Avon River Management Area.
Vacant Crown Land.
FNA 2932.
Application for exploration Licence 70/2371.
Perth Plan 2691; 0,t.
2764; g,h,m,n.
Note 19EL 70/2444Endorsements1. Pursuant to the Savings and Transitional Provisions of the Mining Amendment Acts 1990 and 1994 all land
surrendered, forfeited (other than by plaint action) or expiring from a non-graticular exploration licence will either:Automatically be included into a graticular exploration licence, provided the surrender, forfeiture or expiry occurred after the grant of the graticular exploration licence; orAutomatically be included into an application for a graticular exploration licence provided the surrender, forfeiture or expiry occurred after 14 October 1995.
2. The Licensees attention is drawn to the provisions of the Aboriginal Heritage Act 1972.3. The land the subject of this Licence affects an Important Wetland Geomorphic Wetland GW/4.4. The land the subject of this Licence affects a Rare Flora site/s (including Rare Flora Site/s 4049, 4539, 14701,
14717, 14718, 15049, 15045, 15843, 1507 and 15023) declared under the Wildlife Conservation Act 1950. The Licensee is advised to contact the Department of Conservation and Land Management for detailed information on the management of Declared Rare Flora present within the tenement area.
5. By approval of the Minister for State Development the grant of this Licence was amended to include land the subject of Swan Locations 2938, 3241, 3260 being lot 3 on Plan 6398 & 3241 being lot 4 on Plan 6398.
6. By approval of the Minister for State Development the grant of this Licence was amended to include land the subject of Swan Locations 3259, 3268, 2328, 3250, 2412, 2327, & 6996.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe after
completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR). Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
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4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
5. The prior written consent of the Minister for State Development being obtained before commencing mining on Buffer Strip 29100 and FNA2932.
6. In areas of native vegetation within the tenement, no exploration activities commencing until the licensee provides a plan of management to prevent the spread of dieback disease (Phytophtherasp) to the State Mining Engineer for assessment and until his written approval has been received. All exploration activities shall then comply with the commitments made in the management plan.
7. No interference with Geodetic Survey Station 154, 222, 223, 335, 337, 338, & 339 and mining within 15 metres thereof being confined to below a depth of 15 metres from the natural surface.
8. No excavation, excepting shafts, approaching closer to the Great Northern Highway, Highway verge or the road reserve than a distance equal to twice the depth of the excavation and mining on the Great Northern Highway or Highway verge being confined to below a depth of 30 metres from the natural surface.
Note 20EL 70/2444The rental is in respect of the year ending 3 July 2006.
Note 21EL 70/2692The following land is not included in the grant of the Licence:
Any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land.Conservation of Flora and Fauna Reserve 965.Vacant Crown Land.
Note 22EL 70/2692Endorsements1. The Licensees attention is drawn to the provisions of the:
Aboriginal Heritage Act 1972 and any Regulations thereunder;Water and Rivers Commission Act 1995 and any Regulations thereunder;Identification of environmental sensitive wetlands listed within the RAMSAR Convention 1971, ANCA’s Directory
of important wetlands, the National Estates Register and the Environmental Protection Policies 1999.2. The Licensees attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection
(Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
3. The land the subject of this Licence affects a Rare Flora site/s (including Rare Flora Site/s 15050, 15841, 4946, 4947) declared under the Wildlife Conservation Act 1950. The Licensee is advised to contact the Department of Conservation and Land Management for detailed information on the management of Declared Rare Flora present within the tenement area.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately
after completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR). Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
5. In areas of native vegetation within the tenement, no exploration activities commencing until the licensee provides a plan of management to prevent the spread of dieback disease (Phytophthera) to the Director, Environment, DoIR for assessment and until his written approval has been received. All exploration activities shall then comply with the commitments made in the management plan.
6. No interference with Geodetic Survey Station PERTH 334T 1 and 2, MM 48, PERTH 69 – 72, 155, 330 – 334, PTH 71A, NT 35 and 35T and mining within 15 metres thereof being confined to below a depth of 15 metres from the natural surface.
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7. No excavation, excepting shafts, approaching closer to the Great Northern Highway, Highway verge or the road reserve than a distance equal to twice the depth of the excavation and mining on the Great Northern Highway or Highway verge being confined to below a depth of 30 metres from the natural surface.
8. Mining within a radius of 150 metres of any Australian Telecommunications Commission microwave repeater station being confined to below a depth of 60 metres from the natural surface.
9. No interference with the Australian Telecommunications Commission microwave repeater station ray-line.10 Written notification, where practicable, of the time frame, type and extent of proposed ground disturbing activities
being forwarded to the Department of Environment Ellam Street seven days prior to commencement of those activities.
11. Any significant waterway (flowing or not), wetland or its fringing vegetation that may exist on site not being disturbed or removed without prior written approval from the Department of Environment.
12. The rights of ingress to and egress from the Licence being at all reasonable times preserved to officers of the Department of Environment for inspection and investigation purposes.
13. The storage and disposal of hydrocarbons, chemicals and potentially hazardous substances being in accordance with the Department of Environment’s Guidelines and Water Quality Protection Notes.
14. All mining Act tenement activities prohibited within 200 metres of RAMSAR or ANCA listed wetlands unless written permission of Department of Conservation and Land Management, in consultation with the Department of Environment, is first obtained.
15. All mining Act tenement activities prohibited within 200 metres of “Conservation” and “Resource Enhancement” Category wetlands unless written permission of the Department of Environment is first obtained.
Note 23EL 70/2692The rental is in respect of the year ending 26 October 2006.
Note 24EL 70/2693The following land is not included in the grant of the Licence:
Any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land.
Unnumbered Land Act Reserve 551, Conservation of Flora and Fauna Reserve 2332, Recreation Reserve 40297, Communications Mast Site Reserve 47392, Vacant Crown Land, General Lease H711946.
Note 25EL 70/2693Endorsements1. The Licensees attention is drawn to the provisions of the:
Aboriginal Heritage Act 1972 and any Regulations thereunder;Water and Rivers Commission Act 1995 and any Regulations thereunder; Identification of environmental sensitive wetlands listed within the RAMSAR Convention 1971, ANCA’s Directory of important wetlands, the National Estates Register and the Environmental Protection Policies 1999.
2. The Licensees attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection (Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
3. The land the subject of this Licence affects a Rare Flora site/s (including Rare Flora Site/s 3085, 3380, 386, 15881, 15882, 3086, 3088, 20907) declared under the Wildlife Conservation Act 1950. The Licensee is advised to contact the Department of Conservation and Land Management for detailed information on the management of Declared Rare Flora present within the tenement area.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately
after completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR). Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
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5. In areas of native vegetation within the tenement, no exploration activities commencing until the licensee provides a plan of management to prevent the spread of dieback disease (Phytophthera) to the Director, Environment, DoIR for assessment and until his written approval has been received. All exploration activities shall then comply with the commitments made in the management plan.
6. The prior written consent of the Minister for State Development being obtained before commencing mining on Trigonometrical Station Reserve 12036.
7. No interference with Geodetic Survey Station LC, MOORA 46 and 47 and mining within 15 metres thereof being confined to below a depth of 15 metres from the natural surface.
8. No interference with the use of the Aerial Landing Ground and mining thereon being confined to below a depth of 15 metres from the natural surface.
9. Written notification, where practicable, of the time frame, type and extent of proposed ground disturbing activities being forwarded to the Department of Environment Ellam Street seven days prior to commencement of those activities.
10. Any significant waterway (flowing or not), wetland or its fringing vegetation that may exist on site not being disturbed or removed without prior written approval from the Department of Environment.
11. The rights of ingress to and egress from the Licence being at all reasonable times preserved to officers of the Department of Environment for inspection and investigation purposes.
12. The storage and disposal of hydrocarbons, chemicals and potentially hazardous substances being in accordance with the Department of Environment’s Guidelines and Water Quality Protection Notes.
13. All mining Act tenement activities prohibited within 200 metres of RAMSAR or ANCA listed wetlands unless written permission of Department of Conservation and Land Management, in consultation with the Department of Environment, is first obtained.
14. All mining Act tenement activities prohibited within 200 metres of “Conservation” and “Resource Enhancement” Category wetlands unless written permission of the Department of Environment is first obtained.
Note 26EL 70/2693The rental is in respect of the year ending 23 January 2007.
Note 27EL 70/2727The following land is not included in the grant of the Licence:
Any private land referred to in Section 29(2) of the Mining Act 1978 except that below 30 metres from the natural surface of the land.PERTH 3197; r w. Conservation of Flora and Fauna Reserve 14275, Water Supply Reserve 39700, Pipe Track Reserve 7889, Public Utility Reserve 4198, Gravel & Recreation Reserve 37156, Recreation Reserves 11625, 2146, 777, Rubbish Depot Reserve 23782, Public Recreation Reserves 39853, 45536, 38320, Recreation Golf Links Reserve 25225 and Water Pipeline Reserve 28682.Application for Exploration Licence 70/2230.
Note 28EL 70/2727Endorsements1. The Licensee’s attention is drawn to the provisions of the Aboriginal Heritage Act 1972 and any Regulations
thereunder.2. The Licensee’s attention is drawn to the Environmental Protection Act 1986 and the Environmental Protection
(Clearing of Native Vegetation) Regulations 2004, which provides for the protection of all native vegetation from damage unless prior permission is obtained.
3. Pursuant to Clause 9(20)(c) of the Alumina Refinery Agreement Act the grant of this licence does not include the right to mine bauxite.
Conditions1. All surface holes drilled for the purpose of exploration are to be capped, filled or otherwise made safe immediately
after completion.2. All costeans and other disturbances to the surface of the land made as a result of exploration, including drill pads,
grid lines and access tracks, being backfilled and rehabilitated to the satisfaction of the Environmental Officer, Department of Industry and Resources (DoIR). Backfilling and rehabilitation being required no later than 6 months after excavation unless otherwise approved in writing by the Environmental Officer, DoIR.
3. All waste materials, rubbish, plastic sample bags, abandoned equipment and temporary buildings being removed from the mining tenement prior to or at the termination of exploration program.
4. Unless the written approval of the Environmental Officer, DoIR is first obtained, the use of drilling rigs, scrapers, graders, bulldozers, backhoes or other mechanised equipment for surface disturbance or the excavation of costeans is prohibited. Following approval, all topsoil being removed ahead of mining operations and separately stockpiled for replacement after backfilling and/or completion of operations.
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5. In areas of native vegetation within the tenement, no exploration activities commencing until the licensee provides a plan of management to prevent the spread of dieback disease (Phytophthera) to the Director, Environment, DoIR for assessment and until his written approval has been received. All exploration activities shall then comply with the commitments made in the management plan.
6. The prior written consent of the Minister for State Development being obtained before commencing mining on Wooroloo Townsite Boundary Reserve.
7. No interference with Geodetic Survey Station BAILUP 4, 7, 1, 2, 2T, 1T, 3T, 6T, WOOROLOO 10, BOORONGING 9, WUNDOWIE 10, 9, We refer to previous correspondence 4, BLP 3, 6, WOR 9, 8, 2 and 7 and mining within 15 metres thereof being confined to below a depth of 15 metres from the natural surface.
8. Mining on a strip of land 20 metres wide with any pipeline as the centreline being confined to below a depth of 31 metres from the natural surface and no mining material being deposited upon such strip and the rights of ingress to and egress from the facility being at all times preserved to the owners thereof.
9. Prior to accessing the licence area, the licensee shall consult with the Environmental Officer, DoIR, and ensure that where required all vehicles and equipment entering the designated area are washed down to remove soil and plant propagules and adhering to such conditions specified for the prevention of the spread of soil borne diseases.
10. Prior to any activity involving disturbance to vegetation and soils including:-Exploration access; and/orExploration sampling;
the licensee preparing a detailed program for each phase of proposed exploration for written approval of the Director, Environment, DoIR. The Director, Environment, DoIR to consult with the Regional/District Manager, Department of Conservation and Land Management or the Department of Environmental Protection or other government agency (as relevant) prior to approval. This program to describe the environmental impacts and programs for their management and is to include:-
maps and/or aerial photographs showing the proposed locations of all ground activities and disturbances;the purpose, specifications and extent of each activity and disturbance; descriptions of all vegetation types (in general terms), land forms and unusual features likely to be disturbed by such proposed disturbances. details on proposals that may disturb sensitive terrestrial habitats including any declared rare flora and fauna if applicable; procedures to protect the integrity of special ecosystems such as wetland systems, mangal communities and rainforests areas (and/or associated rainforest monitoring sites) if applicable;techniques, prescriptions, and timetable for rehabilitation of all proposed disturbances;undertaking for corrective measures for failed rehabilitation;details of water requirements from within the designated area;details of refuse disposal; andproposals for instruction and supervision of personnel and contractors in respect to environmental conditions.
11. Access to and from and the movement of vehicles within the licence area being restricted to ground or seasonal conditions and routes approved under the program or otherwise agreed by the Environmental Officer, DoIR.
12. At agreed intervals, not greater than 12 monthly, the licensee providing a brief report to the Director, Environment, DoIR outlining the progress of the operation and rehabilitation program and the proposed operations and rehabilitation programs for the next 12 months.
13. Prior to the cessation of the exploration/prospecting activity in the designated area, the licensee notifying the Environmental Officer, DoIR and arranging an inspection as required.
Note 29EL 70/2727The rental is in respect of the year ending 26 July 2006.
Native Title Claims (Mining Tenements)A Native Title Claim WC 99/010 - WuthaB Native Title Claim WC 99/001 - WongathaC Native Title Claim WC 99/029 – Central West Goldfields PeopleD Native Title Claim WC 04/010 – Wajarri Yamatji E Indigenous Land Use Agreement WAD0072_98 – Nharnuwangga Wajarri and NgarlawanggaF Native Title Claim WC 97/071 - Yued
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PETROLEUM PERMIT SCHEDULE
TenementName
Holders(Shares)
AreaBlocks
GrantDate
ExpiryDate
Rent($)
MinimumExpenditure
($) Notes
Bardo/Kilgour Prospect
EPA 113Kjirt Exploration Services Pty Ltd (50%)
Swancove Enterprises Pty Ltd (50%)33 Pending $276.00 $2,800,000.00 1, 2, 3, A, B, C
EPA 114Kjirt Exploration Services Pty Ltd (50%)
Swancove Enterprises Pty Ltd (50%)100 Pending $2,200.00 $3,300,000.00
1, 2, 3, D, E, F, G, H, I, J, K, L
Canning Basin Prospect
EP 448
Maneroo Oil Company Ltd (45%)Gulliver Productions Pty Ltd (25%)
Indigo Oil Pty Ltd (20%)Kjirt Exploration Services Pty Ltd (10%)
21016 June
200615 June
2012$20,880.00 $8,950,000.00 4, 5, 6, M
Note 1Application only. Please note that in respect of an exploration licence application, the application may be granted in respect of fewer blocks than applied for and this will have the effect of reducing the area and the rent payable.
Note 2The minimum expenditure is the total expenditure proposed by the applicants in their application for the exploration licence for the full five year term of the exploration licence.
Note 3The rent is in respect of the first year of the term of the exploration licence.
Note 4The minimum expenditure is the total expenditure proposed by the applicants in their application for the exploration licence for the full six year term of the exploration licence.
Note 5The rent is calculated at $72.00 per graticular block pursuant to section 137(b) of the WA Petroleum Act.
Note 6The minimum work requirements for each year are as follows:Year 1 Geotechnical Studies;Year 2 1500km Seismic Reprocessing;Year 3 500km 2D Seismic Survey;Year 4 One (1) Exploration Well;Year 5 500km 2D Seismic Survey; andYear 6 One (1) Exploration Well.
Native Title Claims (Petroleum Permits)A Native Title Claim DC 01/52 – Nathan RiverB Native Title Claim DC 01/71 – Daly WatersC Native Title Claim DC 02/35 – TanumbiriniD Native Title Claim DC 00/19 – Spring Creek No. 2E Native Title Claim DC 00/21 – Kiana No. 1F Native Title Claim DC 00/27 – McArthur RiverG Native Title Claim DC 00/29 – BillengarrahH Native Title Claim DC 01/3 – Mallapunyah NorthI Native Title Claim DC 01/50 – Spring Creek No. 4J Native Title Claim DC 01/51 – Spring Creek No. 3K Native Title Claim DC 01/68 – Kiana WestL Native Title Claim DC 02/14 – McArthur River No. 2M Native Title Claim WC 00/2 - Karajarri
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Investors should be aware that an investment in the Company involves many risks, which may be higher than the risks associated with an investment in other companies. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls but some are outside the control of the Company and cannot be mitigated.
This section identifies the areas the Directors regard as the principal risks associated with an investment in the Company. The list is not exhaustive and potential investors should read this Prospectus in full and seek professional advice if they require further information on material risks before deciding whether to apply for Securities.
9.1 Exploration RiskThe mining tenements and petroleum permits of the Company as described in this Prospectus are at various stages of exploration, and potential investors should understand that mineral and petroleum exploration and development are high-risk undertakings. There can be no assurance that exploration of the project areas described in this Prospectus, or any other tenements that may be acquired in the future, will result in the discovery of an economic deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically exploited.
9.2 Operating RisksThe operations of the Company may be affected by various factors, including:
failure to locate or identify mineral deposits;
failure to achieve predicted grades in exploration and mining;
operational and technical difficulties encountered in mining;
difficulties in commissioning and operating plant and equipment;
mechanical failure or plant breakdown;
unanticipated metallurgical problems which may affect extraction costs;
adverse weather conditions and acts of God;
industrial and environmental accidents;
industrial disputes; and
unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.
The Company was incorporated on 3 August 2005 and has undertaken limited initial exploration on some tenements listed in this Prospectus. Although the Company only has a short operating history, the Directors have between them extensive professional operational experience. No assurances can be given that the Company will achieve commercial viability through the successful exploration and/or mining of its tenement interests. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses.
9.3 Resource EstimatesResource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company’s operations.
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9.4 Commodity Price Volatility and Exchange Rate Risks
If the Company achieves success leading to mineral and or petroleum production, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for precious, base and other metals and petroleum, technological advancements, forward selling activities and other economic factors.
Furthermore, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of the Company are and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets.
9.5 Environmental RisksThe operations and proposed activities of the Company are subject to State and Federal laws and regulation concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.
Although the Company intends to comply in all respects with all applicable environmental laws and regulations, there are certain risks inherent in its activities such as accidental spills, leakages or other unforseen circumstances, that could subject the Company to extensive liability. Further, the Company may require approval from the relevant authorities before it can undertake activities which are likely to impact on the environment, particularly in relation to the disposal of water. Failure to obtain such approvals will prevent the Company from undertaking the desired activities. The Company is unable to predict the effect of additional environmental laws and regulations which may be adopted in the future, including whether any such laws or regulations would materially increase the Company’s cost of doing business or affect its operations in any area. However, there can be no assurances that new environmental laws, regulations or stricter enforcement policies, once implemented, will not oblige the Company to incur significant expenses and undertake significant investments in this respect which could have a material adverse effect on the Company’s business, financial condition and results of operation.
9.6 Title Risks and Native TitleInterests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.
It is also possible that, in relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected. The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.
Reference should be made to the relevant section of the Solicitor’s Report set out in section 8 of this Prospectus for information on the issue of title and a description of the native title regime in Western Australia.
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9.7 Share Market ConditionsThe market price of the Securities and the value of the Company will be subject to fluctuations in line with the volatility of the share market in general. The prices for the Securities on the ASX may rise or fall due to numerous factors such as general economic conditions, variations in the global and local markets for listed securities generally, movements in, or outlook on, interest rates and inflation rates, currency fluctuations, commodity prices, changes in investor sentiment towards particular market sectors and the demand for, and supply of, capital stock, securities or commodities.
The prices for shares for many companies have in recent times been subject to wild fluctuations which in many cases may reflect a diverse range of non-company specific influences such as global hostilities and tensions, acts of terrorism and the general state of the economy. Such market fluctuations may materially adversely affect the market price of the Securities.
There can be no guarantee that an active market in the Securities will develop or that the price of the Securities will increase. The number of buyers and sellers of the Securities on the ASX at any time may increase the volatility of the market price of the Securities and may also affect the prevailing market price at which Applicants are able to sell their Securities.
9.8 General Investment RisksThe Company’s future possible revenue and operations may be affected by a number of factors which are beyond the control of the Company. Those factors include:
local and world economic conditions;
interest rates;
levels of tax, taxation law and accounting practice;
government legislation or intervention;
inflation or inflationary expectations; and
natural disasters, social upheaval or war in Australia or overseas.
9.9 Regulatory The introduction of new policies, legislation or amendments to existing policies or legislation by governments or the interpretation of those laws in any of the legal jurisdictions which govern the Company’s operations or contractual obligations could impact adversely on the assets, operations and ultimately the financial performance of the Company and its Securities.
9.10 Additional Funding Requirements The Directors expect that the proceeds of the Offer will provide sufficient working capital to enable the Company to achieve its initial business objectives. The Directors can, however, give no assurances that such objectives will in fact be met without future borrowings or further capital raisings and, if such borrowings or capital raisings are required, that they can be obtained on terms favourable to the Company.
In addition, expenditure may need to be incurred which has not been taken into account in the preparation of this Prospectus. Although the Company is not aware of any additional expenditure requirements, if such expenditure is subsequently incurred, this may adversely affect the expenditure proposals of the Company.
9.11 Uninsured Risks Exploration for and development of minerals and petroleum involves risks which could result in the Company incurring losses and liabilities to third parties. There is a risk that the Company may not be insured against all losses or liabilities which could arise from its operations. If the Company incurs losses or liabilities which are not covered by its insurance policies, the funds available for exploration and development will be reduced and the value and/or tenure of the Company’s assets may be materially affected.
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9.12 Specific Risks associated with the CompanyThere are also a number of specific risks associated with the Company which may adversely affect the Company’s financial position, prospects and price of its Securities. In particular, the Company is subject to risks relating to the exploration and development of mineral and petroleum properties which are not generally associated with other businesses.
Set out below are specific risks that may adversely affect the Company:the Company cannot guarantee that those tenements that are applications for tenements will ultimately be granted in whole or in part pursuant to the Mining Act and or the Petroleum Act;
the Western Australian Department of Industry and Resources and the Northern Territory Department of Primary Industry, Fisheries and Mines from time to time review the environmental bonds that are placed on tenements and petroleum permits. The Directors are not in a position to state whether a review is imminent or whether the outcome of such a review would be detrimental to the funding needs of the Company; and
the exploration costs of the Company described in section 2 of this Prospectus are based on certain assumptions with respect to the method and timing of exploration. By their nature, these estimates and assumptions are subject to significant uncertainties and, accordingly, the actual costs may materially differ from these estimates and assumptions. Accordingly, no assurance can be given that the cost estimates and the underlying assumptions will be realised in practice and this may materially and adversely affect the Company’s viability.
The approval processes for uranium mining are more rigorous than for the mining of other metals, as both Commonwealth and State Government legislation needs to be satisfied. There is a risk that, should economic deposits of uranium be discovered, the necessary government approvals may not be granted, or may be significantly delayed.
The Federal Government currently permits the mining and export of uranium under strict international agreements designed to prevent nuclear proliferation. The export of uranium is tightly controlled by the Federal Government through its licensing process and Australian uranium can only be exported to those countries who undertake to use it for peaceful purposes.
Although Western Australia currently has no legislation that prohibits uranium mining, there is a State Government policy opposing uranium mining. All mining leases granted since 22 June 2002, have been issued subject to a condition prohibiting the mining of uranium. While there is no restriction on the Company exploring and evaluating their uranium prospects, the development of any discovered uranium deposits will be contingent upon a change of Western Australian State Government policy.
There can be no assurance that the policy in Western Australia will change in the future and this may adversely affect the long term prospects for the Company’s uranium prospective tenements.
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10.1 IncorporationThe Company was incorporated on 3 August 2005.
10.2 Company Tax Status and Financial YearThe Directors expect the Company will be taxed in Australia as a public company. The financial year of the Company ends on 30 June, annually.
10.3 Legal ProceedingsThe Company is not involved in any material litigation or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company.
10.4 Summary of Material ContractsSet out below is a brief summary of certain contracts which have been entered into by the Company and which have been identified as material and relevant to potential investors. To fully understand all the rights and obligations of a material contract it would be necessary to review each contract in full and these summaries should be read on that basis.
Bungalow Well Project – Option to PurchaseThe Company has entered into an agreement with Helen Ansell (“Ansell”) whereby the Company has the option to purchase Ansell’s interest in Exploration Licence number E36/549 once Ansell’s application for that tenement is granted. The Company has paid Ansell $100,000 for the grant of the option. Ansell is required to use her best endeavours to obtain the grant of the application for the tenement and the Company is required to provide all reasonable assistance that Ansell may request in obtaining that grant.
The term of the option granted to the Company is for 18 months from the date of grant of the application for the tenement. The Company can exercise that option at any time during the period commencing on the first anniversary of the date of grant of the application and expiring on the last day of the option term. The Company is required to pay Ansell $1 on exercising its option. The Company has the exclusive right to prospect and explore for minerals over the tenement during the option term. The Company is responsible for maintaining the tenement in good standing, including paying all rents, rates, taxes and fees levied or assessed on the tenement and meeting all expenditure requirements.
Bungalow Well Project – Red River Joint VentureThe Company has entered into a heads of agreement with Red River Resources Limited (”Red River”) to form a joint venture to explore Exploration Licence E36/549 once the application for that tenement is granted.
The terms of the heads of agreement are that Red River may earn a 40 % interest in the tenement by expending $500,000 on mining expenditure on the tenement over a 3 year period commencing on the date the tenement is granted. Red River will earn a 10 % interest in the tenement upon expenditure of $100,000, a further 10 % interest in the tenement upon expenditure of a further $100,000 and a further 20 % interest in the tenement upon the expenditure of a further $300,000.
Red River is required to reimburse the Company up to a maximum of $20,000 for costs incurred by the Company in acquiring and conducting exploration on the tenement.
4 Corners Bore Project – Option to PurchaseThe Company has entered into an agreement with Ansell whereby the Company has the option to purchase Ansell’s interest in Exploration Licence number E57/607 once Ansell’s application for that tenement is granted. The Company has paid Ansell $3009.06 by way of reimbursement of tenement application costs and issued Ansell 1,000,000 ordinary fully paid shares in the Company at 0.01 cents per share. The Company is required to pay Ansell $45,000 upon the admission of the Company to the Official List. If the Company has not issued a prospectus for an initial public offering by 31 December 2006 or such later date as may be mutually agreed, either party may terminate the agreement. Ansell is required to use her best endeavours to obtain the grant of the application for the tenement and the Company is required to provide all reasonable assistance that Ansell may request in obtaining that grant.
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The term of the option granted to the Company is for 18 months from the date of grant of the application for the tenement. The Company can, subject to having issued a prospectus for an initial public offering by 31 December 2006 or such later date as may be mutually agreed, exercise that option at any time during the period commencing on the first anniversary of the date of grant of the application and expiring on the last day of the option term. The Company is required to pay Ansell $1 on exercising its option.
The Company has the exclusive right to prospect and explore for minerals over the tenement during the option term. The Company is responsible for maintaining the tenement in good standing, including paying all rents, rates, taxes and fees levied or assessed on the tenement and meeting all expenditure requirements.
Rubberoid Well – Fastscout AgreementThe Company has entered into an agreement with Ansell and Fastscout Limited (“Fastscout”) whereby Fastscout is entitled to a 70 % interest in that tenement and the Company is entitled to the remaining 30 % interest in that tenement. In consideration for those entitlements, Fastscout has issued 350,000 fully paid ordinary shares in Fastscout to the Company, paid $5000 to the Company, of which the Company has paid $4177 to Ansell and Fastscout has paid $25,000 to Ansell.
Under the agreement Fastscout is responsible for maintaining the tenement in good standing, including paying all rents, rates, taxes and fees levied or assessed on the tenement and meeting expenditure requirements.
Ansell is required, upon the expiration of 12 months following the grant of the tenement or such earlier period subject to Ministerial consent or otherwise permissible at law, to transfer a 70 % interest in the tenement to Fastscout and a 30 % interest in the tenement to the Company.
Fastscout is to undertake at its expense and absolute discretion exploration, feasibility or other expenditure on the tenement with a view to delineating relevant resources to support the completion of a bankable feasibility study and a decision to mine. If Fastscout discovers a commercial mineral deposit, Fastscout may make a declaration to the Company that it has made a decision to mine, which must be supported by the completion of an appropriate bankable feasibility study. After a decision to mine has been made all expenditure incurred in respect of the tenement, it is to be shared in proportion to the Company’s and Fastscout’s interests in the tenement.
Fastscout may in its absolute discretion withdraw from the agreement at any time prior to a decision to mine being made provided that it has maintained the tenement in good standing up to the date of withdrawal or pays to the Company an amount equal to the balance of the minimum expenditure commitments required to be expended by Fastscout prior to the date of withdrawal. Fastscout will on withdrawal have no further commitments under the agreement or interest in the tenement. If Fastscout determines that it does not wish to retain its interest in the tenement, it must at the request of the Company transfer that interest to the Company.
Until title to the tenement is wholly transferred from Ansell, if Fastscout withdraws from the agreement and pays any amount to the Company for minimum expenditure commitments, the Company is required to maintain the tenement in good standing.
By a letter agreement between Ansell and the Company, if the Company has not issued a prospectus for an initial public offering by 31 December 2006, the Company is required to transfer back to Ansell its interest at that date in the tenement.
Galah Rock and Walling Rock ProjectIn consideration for consulting services provided by Paul Askins and Callum Baxter in relation to Exploration Licence numbers E30/312 and E29/589, the Company has paid Paul Askins $10,000 and Callum Baxter $10,000 for consultancy fees and issued a total of 1,000,000 ordinary shares in the Company at 0.01 cents per share to Paul Askins and Callum Baxter.
In addition, the Company is required to pay Paul Askins a further $25,000.00 and Callum Baxter a further $25,000 upon the admission of the Company to the Official List. If the Company has not been admitted to the Official List by 31 December 2006 then the further $25,000 is payable to each of Paul Askins and Callum Baxter on 1 January 2007.
Mt Vernon/Collier Project – Option to Purchase The Company has entered into an agreement with Swancove Enterprises Pty Ltd (“Swancove”) whereby the Company has the option to purchase Swancove’s interest in Exploration Licence numbers E52/1863 and E52/1864. The Company has reimbursed Swancove for all payments and expenditure made by Swancove prior to 1 May 2006 in respect of the tenements.
The term of the option is for the period commencing on 1 May 2006 and expiring on the date being 2 years from the date UOG is admitted to the Official List. The Company is during the option term required to expend $250,000 on mining expenditure on the tenements. The Company can only exercise its option after it has been admitted to the Official List and after it has expended $250,000 on mining expenditure on the tenements.
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If the option is exercised by the Company, the Company is required within 10 business days of the date of exercise to pay to Swancove $1 and to pay Swancove a royalty of 2 % of the net smelter return from product containing minerals produced from the tenements.
The Company has the exclusive right to prospect and explore for minerals over the tenements during the option term. The Company is responsible for maintaining the tenements in good standing, including paying all rents, rates, taxes and fees levied or assessed on the tenements and meeting expenditure requirements.
Wannamal/Wooroloo Project – Option to PurchaseThe Company has entered into an agreement with Swancove whereby the Company has the option to purchase all of Swancove’s interest in Exploration Licence numbers E70/2444 (“Wannamal Central Tenement”), E70/2692, E70/2693 and E70/2727 except for the right to explore for, and mine, bauxite.
The term of the option is for the period commencing on 1 May 2006 and expiring on the date being 2 years from the date the Company is admitted to the Official List. The Company is during the option term required to expend $200,000 on mining expenditure on the tenements. The Company can only exercise the option after it has been admitted to the Official List and after it has expended $200,000 on mining expenditure on the tenements.
If the option is exercised by the Company, the Company is required within 10 business days of the date of exercise to pay Swancove $1 and to pay to Swancove a royalty of 2 % of the net smelter return from product containing minerals other than bauxite produced from the tenements.
The grant of the option is subject to an option held by Red River to purchase and acquire the rights to tin and tantalum on the Wannamal Central Tenement. If Red River exercises its option then the option granted to the Company in respect of the Wannamal Central Tenement also excludes the right to explore for, and mine, tin and tantalum and the Wannamal Central Tenement will be held in Red River’s name. If Red River does not exercise its option then the option granted to the Company in respect of the Wannamal Central Tenement includes the right to explore for, and mine, tin and tantalum.
The Company has the exclusive right during the option term to prospect and explore for all minerals on the tenements except bauxite and except tin and tantalum on the Wannamal Central Tenement. The Company is responsible for maintaining the tenements in good standing, including paying all rents, rates, taxes and fees levied or assessed on the tenements and meeting expenditure requirements.
The agreement contains an acknowledgement that Swancove was prior to 3 July 2006 required to surrender 50 % of the area of the Wannamal Central Tenement pursuant to section 65(1)(a) of the Mining Act 1978 which Swancove has done.
Burdo, Kilgour and Canning Basin Projects – Agreement to PurchaseThe Company has entered into an agreement with Kjirt Exploration Services Pty Ltd (“Kjirt”) and Swancove whereby Kjirt and Swancove have agreed to transfer all of their interests in EPA113 and EPA114 once the applications for those exploration permits are granted and Kjirt has agreed to transfer its 10% interest in EP 448 to the Company. The Company has reimbursed Kjirt and Swancove for all payments and expenditure made by each of them in respect of the exploration permits.
Kjirt and Swancove are required to transfer their respective interests in the exploration permits upon the grant of the exploration permits.
The transfer of the interests in the exploration permits is subject to the relevant Minister’s approval.
Employment Agreement – D A ZoharThe Company has entered into an agreement with David Alan Zohar whereby it has agreed to employ Mr Zohar to seek and source investment opportunities for the Company, manage the operation of the Company’s Perth office, perform those duties and functions usually performed by an executive director of a public listed mining company and perform such other duties and functions as the directors of the Company may from time to time require him to perform or as are incidental to or reasonably necessary for him to fully perform his obligations under the Employment Agreement. Mr Zohar is required to devote a minimum on average 20 hours per week for at least 40 weeks per year to the affairs of the Company.
Mr Zohar’s remuneration under the Employment Agreement is by way of payment of a salary of $90,000.00 per annum plus superannuation as required by law and payment of all authorised reasonable out of pocket costs and expenses.
The term of Mr Zohar’s employment is for 2 years from the date of admission of the Company to the Official List.
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Employment Agreement – W E BannisterThe Company has entered into an agreement with William Edwin Bannister whereby it has agreed to employ Mr Bannister to be responsible for managing, supervising, organising and co-ordinating the exploration activities and programmes to be conducted and carried out by the Company on its mining tenements. Mr Bannister is required to devote a minimum on average of 8 hours per day for at least 45 weeks per year to the affairs of the Company.
Mr Bannister’s remuneration under the Employment Agreement is by way of payment of a salary of $150,000.00 per annum plus superannuation as required by law and payment of all authorised reasonable out of pocket costs and expenses.
The term of Mr Bannister’s employment is for 2 years from the date of admission of the Company to the Official List.
10.5 Rights Attaching to SharesThere is only one class of shares in the Company, fully paid ordinary shares. The rights attaching to the Shares are:(a) set out in the constitution of the Company; and
(b) in certain circumstances regulated by the Corporations Act, the Listing Rules, the ASTC Settlement Rules and the general law.
A copy of the constitution of the Company may be inspected during normal business hours at the registered office of the Company.
The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. All Shares issued pursuant to this Prospectus will, from the date they are issued, rank pari passu with all of the Company’s existing Shares.
VotingSubject to any restriction on voting imposed due to a breach of the Listing Rules relating to restricted shares or any escrow agreement entered into by the Company and a Shareholder, every holder of Shares present in person or by proxy, attorney or representative at a meeting of Shareholders has one vote on a vote taken by a show of hands, and, on a poll every holder of Shares who is present in person or by proxy, attorney or representative has one vote for every fully paid Share held by him or her, and a proportionate vote for every partly paid share.
A poll may be demanded before a vote is taken, or before or immediately after the declaration of the result of the show of hands by the chairperson of the meeting, on a resolution by the chairperson of the meeting, by not less than 5 Shareholders having the right to vote at the meeting, or by any one or more Shareholders who are together entitled to not less than 5 % of the total voting rights of the Shares of all those Shareholders having the right to vote on the resolution at that meeting.
DividendsDividends are payable out of the Company’s profits and are declared by the Directors. Dividends are divisible amongst the Shareholders in accordance with the Corporations Act.
Transfer of SharesA Shareholder may transfer Shares by a market transfer in accordance with any computerised or electronic system established or recognised by the Listing Rules or the Corporations Act for the purpose of facilitating transfers in Shares or by an instrument in writing approved by the ASX or in any other usual form or in any form approved by the Directors.
The Directors may refuse to register any transfer of Shares, other than a market transfer, where permitted by the Listing Rules or the ASTC Settlement Rules. The Company must not prevent, delay or in any way interfere with the registration of a transfer of Shares where to do so would be contrary to the provisions of any of the Listing Rules or the ASTC Settlement Rules.
Meetings and NoticeEach Shareholder is entitled to receive notice of and to attend general meetings of the Company and to receive all notices, accounts and other documents required to be sent to Shareholders under the constitution of the Company, the Corporations Act or the Listing Rules.
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Winding UpThe Company has only issued one class of shares, which all rank equally in the event of liquidation. A liquidator may, with the sanction of a special resolution of Shareholders, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair on any property to be so divided, and may determine how the division is to be carried out as between the Shareholders. The liquidator can with the sanction of a special resolution of the Shareholders vest the whole or any part of the assets in trust for the benefit of Shareholders as the liquidator thinks fit, but no Shareholder can be compelled to accept any shares or other securities in respect of which there is any liability.
Shareholder LiabilityAs the Shares under this Prospectus are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.
Alteration of ConstitutionThe Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders entitled to vote on the resolution. At least 28 days’ written notice specifying the intention to propose the resolution as a special resolution must be given.
ASX Listing RulesIf the Company is admitted to the Official List, notwithstanding anything in the constitution of the Company, if the Listing Rules prohibit an act being done, the act must not be done. Nothing in the constitution prevents an act being done that the Listing Rules require to be done. If the Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done, as the case may be. If the Listing Rules require the constitution to contain a provision or not to contain a provision, the constitution is deemed to contain that provision or not to contain that provision, as the case may be. If a provision of the constitution is or becomes inconsistent with the Listing Rules, the constitution is deemed not to contain that provision to the extent of the inconsistency.
10.6 Rights Attaching to OptionsThe terms and conditions of the Options are:(a) each Option entitles the holder to subscribe for ONE (1) ordinary Share in the Company upon payment of
TWENTY (20) cents per Option;
(b) The Options will lapse at 5.00 pm WST on 4 August 2010;
(c) the Options may be exercised at any time before the expiry date by delivery to the registered office of the Company of notice in writing stating the intention of the Option holder to exercise all or a specified number of Options held by them accompanied by the Option certificate and a cheque made payable to the Company for the payment of the sum of TWENTY (20) cents per Option exercised;
(d) the Options are transferable;
(e) application will be made to the ASX for Official Quotation of the Options and application will be made for Official Quotation of the Shares issued upon exercise of the Options;
(f) there are no participating rights or entitlements inherent in the Options and holders of the Options will not be entitled to participate in new issues of capital which may be offered to Shareholders during the currency of the Options but Option holders will have the right to exercise their Options prior to the date of determining entitlements to any capital issues to the then existing Shareholders of the Company made during the currency of the Options, and will be granted a period of at least SEVEN (7) business days before the books closing date to exercise the Options;
(g) the Shares issued on the exercise of the Options will, from the date of allotment, rank equally with the existing ordinary Shares of the Company in all respects;
(h) in the event of any reorganisation (including reconstructions, consolidations, subdivision or reduction of capital) of the issued capital of the Company, the Options will be reorganised as required by the Listing Rules but in all other respects the terms of exercise will remain unchanged; and
(i) the Options will not give any right to participate in dividends until Shares are allotted pursuant to the exercise of the relevant Options.
The 19,500,000 Options issued to date by the Company together with the options to be issued to the Sponsoring Broker have the same terms and conditions as the above and will be subject to escrow restrictions as required by the ASX.
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10.7 Directors’ InterestsExcept as disclosed in this Prospectus:
(a) no Director has any interest, nor has had any interest within two years before the lodging of this Prospectus with the ASIC in the formation or promotion of the Company or the Offer or in any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; and
(b) no Director has received or is entitled to receive any sum for services rendered by himself either to induce him to become or qualify him as a Director, or otherwise in connection with the promotion or formation of the Company or the Offer.
Shareholding QualificationsThe Directors are not required to hold any Shares under the constitution of the Company.
Directors Share and Option HoldingsAs at the date of this Prospectus the relevant interest of each of the Directors in the Securities of the Company are as follows:
DirectorNº of Shares held directly
Nº of Shares held indirectly
Nº of Options held directly
Nº of Options held indirectly
Dr Zhukov Pervan 200,000 2,200,000
Mr William Bannister 2,000,000
Mr John Karajas 5,500,000 2,000,000
Mr David Zohar 5,000,001 10,000,002 12,000,000
The Directors may subscribe for shares under this Prospectus.
Remuneration of DirectorsThe constitution of the Company provides that the Directors may collectively be paid as remuneration for their services a fixed sum, not exceeding the aggregate maximum sum per annum from time to time determined by the Company in general meeting.
At a General Meeting held on 4 July 2006 the aggregate remuneration was set at $100,000.
A Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also paid for all travelling and other expenses incurred by them attending meetings or otherwise in connection with the Company’s business.
As at the date of this Prospectus the Company has the following commitment or contractual obligations with respect to executive and non-executive directors:
Refer to section 10.4 for details on Employment Contracts involving Mr William Bannister and Mr David Zohar.
10.8 Dividend PolicyThe Company’s operations are in exploration mode with no present significant revenue sources available prior to the proving up of mineable resources and the commencement of mining operations and sales. Accordingly there is no present intention to pay dividends on the Shares.
The Directors will develop a suitable dividend policy at the appropriate stage. The Directors can give no assurance as to the extent, timing or actual payment of future dividends or the availability or level of franking credits. The level of dividends payable depend upon a number of factors including future earnings, capital requirements and the overall financial condition of the Company. The Company has not declared or paid any dividends before the issue of this Prospectus.
10.9 TaxationThe acquisition and disposal of Shares in the Company will have tax consequences, which will differ depending on the individual financial affairs of each Shareholder. All potential investors in the Company are urged to take independent
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financial advice about the consequences of acquiring Securities from a taxation viewpoint and generally.
To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability or responsibility with respect to the taxation consequences of subscribing for Securities under this Prospectus.
10.10 Corporate GovernanceIntroductionThe Company has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity and pursuing the true spirit of corporate governance commensurate with the Company's needs. To the extent they are applicable, the Company has adopted the Ten Essential Corporate Governance Principles and Best Practice Recommendations ("Recommendations") as published by ASX Corporate Governance Council.
As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance structures will be given further consideration.
The Board sets out below its "if not, why not" report in relation to those matters of corporate governance where the Company's practices depart from the Recommendations.
Explanations for Departures from Best Practice RecommendationsPrinciple 1 recommendation 1.1Notification of Departure:The Company has not formally disclosed the functions reserved to the Board and those delegated to management. The appointment of the Non-Executive Chairman to the Board is formalised in writing by way of a letter of engagement.
Explanation for Departure:The Board recognises the importance of distinguishing between the respective roles and responsibilities of the Board and management. The Board has established a framework for the management of the Company and the roles and responsibilities of the Board and management.
Previously, due to the small size of the Board and of the Company, the Board did not think that it was necessary to formally document the roles of the Board and management as these roles were clearly understood by all members of the Board and management. The Board is responsible for the strategic direction of the Company, establishing goals for management and monitoring the achievement of these goals, monitoring the overall corporate governance of the Company and ensuring that shareholder value is increased.
Principle 2 Recommendation 2.1Notification of Departure:The Board does not have a majority of independent Directors.
Explanation for Departure:The Board has been structured such that its composition and size will enable it to effectively discharge its responsibilities and duties. Each Director has the relevant industry experience and specific expertise relevant to the Company's business and level of operations.
The Board considers that its structure is, and will continue to be, appropriate in the context of the Company's recent history. The Company considers that the non-independent Directors possess the skills and experience suitable for building the Company. Furthermore, the Board considers that in the current phase of the Company's growth, the Company's shareholders are better served by directors who have a vested interest in the Company. The Board intends to reconsider its composition as the Company's operations evolve, and may appoint independent directors as it deems appropriate.
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Principle 2 Recommendation 2.4Notification of Departure:The full Board carries out the role of a nomination committee in accordance with the Nomination Committee Charter formalised on 15 May 2006. The Board has not adopted a charter relevant to the specific functions of a nomination committee.
Explanation for Departure:The Board considers that no efficiencies or other benefits would be gained by establishing a separate nomination committee, in particular at this early stage of the Company's operations (ie. a company seeking to be listed on the ASX), where the Company's focus is on the retention of directors and senior executives.
Principle 3 Recommendation 3.1 and Principle 10 Recommendation 10.1Notification of Departure:The Company established a formal code of conduct on 15 May 2006.
Explanation for Departure:The Board considers that, before the Code of Conduct was formalised and adopted, its business practices, as led by the Board and key executives, were the equivalent of a code of conduct.
Principle 3 Recommendation 3.2Notification of Departure:The Company established a formal policy regarding trading in the Company's securities on 15 May 2006.
Explanation for Departure:Although prior to 15 May 2006 there was no written policy, all directors, officers and employees of the Company understood when it is appropriate for trading in securities to occur (in line with the law relating to the prohibitions on insider trading, set out in the Corporations Act.). This has now been formalised
Principle 4 Recommendation 4.2, 4.3, 4.4Notification of Departure:There is no separate Audit Committee.
Explanation for Departure:The Company's financial statements are prepared by the company secretary and reviewed in detail by the full Board. The Board also relies on the functions and capabilities of its external auditors to ensure proper audit of financial statements. While the Board considers this process sufficient to ensure integrity in financial reporting in the current circumstances, it will continue to monitor whether any further safeguards are required and make changes as appropriate.
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Principle 5 Recommendation 5.1Notification of Departure:The Company established written policies and procedures designed to ensure compliance with Listing Rule disclosure requirements and accountability for compliance on 15 May 2006.
Explanation for Departure:Before adopting the written policy, the Company had in place informal procedures which it believes were sufficient for ensuring compliance with Listing Rule disclosure requirements and accountability for compliance. The Board nominated the managing director and the company secretary as being responsible for all matters relating to disclosure.
Principle 6 Recommendation 6.1Notification of Departure:The Company established a formal shareholder communication strategy on 15 May 2006.
Explanation for Departure:The Company established a formal Shareholder communication strategy to support active communication with its Shareholders once it is listed and it aims to actively promote shareholder involvement in the Company. It will achieve this by posting on its website, copies of all information which is lodged with the ASX. Shareholders with internet access will also be encouraged to provide their email addresses to receive electronic copies of information distributed by the Company. Alternatively, hard copies of information distributed by the Company will be available on request.
Principle 7 Recommendation 7.1Notification of Departure:Until 15 May 2006, the Company had only an informal risk oversight and management policy and internal compliance and control system.
Explanation for Departure:The Board is aware of the various risks that affect the Company and its particular business and established a written policy on 15 May 2006. As the Company develops, the Board will further develop appropriate procedures to deal with risk oversight and management and internal compliance, taking into account the size of the Company and the stage of development of its projects.
Principle 8 Recommendation 8.1Notification of Departure:The Company does not have in place a formal process for evaluation of the Board, its committees, individual directors and key executives.
Explanation for Departure:Due to the recent history of the Company (it was registered on 3 August 2005), an evaluation of the Board has been carried out on a continuing and informal basis as part of the Company's preparations for the initial public offering and proposed listing on ASX. The Company will put in place a process for evaluating the Board, individual Directors and key executives once it has been listed and has had an opportunity to put into effect its business plan as disclosed in this Prospectus.
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Principle 9 Recommendations 9.1, 9.2, 9.3, 9.4Explanation for departure:The Company does not have a formal remuneration policy and has not established a separate remuneration committee.
Explanation for Departure:The current remuneration of the Directors is disclosed in Section 10.7 of this Prospectus. Remuneration is currently in accordance with the general principals recommended by the ASX. Non-executive Directors receive a fixed fee for their services and do not receive performance based remuneration. Due to the early stage of development and small size of the Company, a separate remuneration committee was not considered to add any efficiency to the process of determining the levels of remuneration for the Directors and key executives. The Board considers that it is more appropriate to set aside time at 2 Board meetings each year to specifically address matters that would ordinarily fall to a remuneration committee. In addition, all matters of remuneration will continue to be in accordance with Corporations Act requirements, especially in respect of related party transactions. That is, none of the Directors participate in any deliberations regarding their own remuneration or related issues.
10.11 Interests of Experts and Professional AdvisersExcept as disclosed in this Prospectus, no promoter or person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus has, or had within 2 years before lodgement of this Prospectus with ASIC, any interest in:
(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the Offer;
(c) the Offer;
and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons for services rendered by them in connection with the formation or promotion of the Company or the Offer.
Geological Investigations Pty Ltd has received professional fees of approximately $30,000 for consultancy services in connection with this Prospectus, including the provision of the Independent Geologist’s Report for Mining Tenements.
RPS Energy has received professional fees of approximately $60,000 for consultancy services in connection with this Prospectus, including the provision of the Independent Geologist’s Report for Petroleum Permits.
BDO Consultants (WA) Pty Ltd will receive professional fees of approximately $12,000 for accounting services in connection with this Prospectus, including the provision of the Investigating Accountant’s Report.
Lawton Gillon will receive professional fees of approximately $70,000 for acting as Solicitors to the Company and providing general advice in relation to this Prospectus.
Cameron Stockbrokers Limited has acted as Sponsoring Broker in relation to the Offer. For those services the Company will pay the Sponsoring Broker to the Offer a fee of 1 % of the amount raised by the Company from subscriptions to the Offer and a management fee of $20,000. The Sponsoring Broker will also receive 250,000 Options on the same terms as the existing Options. In addition, the Company will pay a commission of 5 % of the amounts committed to be subscribed (and accepted by the Company) to any licensed security dealer in respect of valid Applications bearing their stamp.
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10.12 Consents to be NamedEach of the parties referred to in this section:
(a) does not make, or purport to make, any statement in this Prospectus other than those referred to in this section; and
(b) to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this section.
Geological Investigations Pty Ltd has given and has not, before lodgement of this Prospectus with the ASIC, withdrawn its consent to the inclusion in this Prospectus of its Independent Geologist’s Report for Mining Tenements and to all statements referring to that report in the form and context in which they appear in this Prospectus.
RPS Energy has given and has not, before lodgement of this Prospectus with the ASIC, withdrawn its consent to the inclusion in this Prospectus of its Independent Geologist’s Report for Petroleum Permits and to all statements referring to that report in the form and context in which they appear in this Prospectus.
BDO Consultants (WA) Pty Ltd has given and has not, before lodgement of this Prospectus with the ASIC, withdrawn its consent to the inclusion of its Investigating Accountant’s Report and to all statements referring to that report in the form and context in which they appear in this Prospectus.
Lawton Gillon has given and has not, before lodgement of this Prospectus with the ASIC, withdrawn its consent to the inclusion in this Prospectus of its Solicitor’s Report and to all statements referring to that report in the form and context in which they appear in this Prospectus.
Each of the following has consented to being named in this Prospectus in the capacity noted below and have not withdrawn such consent prior to the lodgement of this Prospectus with the ASIC:
(a) Geological Investigations Pty Ltd, as independent geologist for Mining Tenements;
(b) RPS Energy, as independent geologists for Petroleum Permits;
(c) BDO Consultants (WA) Pty Ltd, as investigating accountants;
(d) BDO Chartered Accountants and Advisors, as the auditor of the Company;
(e) Lawton Gillon, as solicitors to the Company;
(f) Computershare Investor Services Pty Limited, as the Share Registry to the Company; and
(g) Cameron Stockbrokers Limited, as Sponsoring Broker.
Cameron Stockbrokers Limited does not make, purport to make, any statement in this Prospectus or any statement on which a statement in this prospectus is based; and to the maximum extent permitted by the law, expressly disclaims and takes no responsibility for any part of this Prospectus, other than a reference to its name.
Cameron Stockbrokers Limited was not involved in the due diligence process undertaken in relation to this Prospectus.
10.13 Costs of the IssueThe total estimated costs of the Offer will be approximately $792,000 (exclusive of GST) of which $90,000 has been paid to date, made up as follows:
Brokerage and management fee 500,000
Independent Geologists’ fees 90,000
Accounting Fees 17,000
Legal Fees 70,000
ASX Listing Fee and ASIC Fees 30,000
Printing and Mailing Fees 60,000
Miscellaneous 25,000
$792,000
It is estimated that the capital raising costs for a $2,500,000 capital raising would be $450,000 of which $90,000 has been paid.
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10.14 Electronic ProspectusPursuant to Class Order 00/044 the ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic Application Form on the basis of a paper prospectus lodged with the ASIC, and the issue of Shares in response to an electronic Application Form, subject to compliance with certain conditions. If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please email the Company at UOG.com.au and the Company will send to you free either a hard copy or a further electronic copy of the Prospectus or both. Alternatively, you may obtain a copy of the Prospectus from the Company’s website at: UOG.com.au .
The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered. In such a case, the Application monies received will be dealt with in accordance with section 722 of the Corporations Act.
10.15 Governing Law This Prospectus and the contracts which arise from the acceptance of the Applications are governed by the laws applicable in Western Australia and each Applicant submits to the exclusive jurisdiction of the courts of Western Australia.
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For the purposes of the Corporations Act, the Directors state that they have made all reasonable inquiries and have reasonable grounds to believe that any statements made by the Directors in this Prospectus are true and not misleading. This Prospectus is prepared on the bases that:
(a) certain matters may be reasonably expected to be known to professional advisers of any kind with whom Applicants may reasonably be expected to consult; and
(b) information is known to Applicants or their professional advisers by virtue of any acts or laws of Western Australia or the Commonwealth of Australia.
The Board has authorised the issue of this Prospectus, each Director has consented to lodgement of the Prospectus with the ASIC and has not withdrawn that consent
Dated 19 July 2006
Mr William Bannister
11 Directors’ Statement and Consent
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Where the following terms are used in this Prospectus, they have the following meanings:
Applicant(s) means a person(s) who submits a valid Application Form pursuant to this Prospectus.
Application means a valid application for Shares pursuant to this Prospectus.
Application Form means the application form attached to and forming part of this Prospectus.
ASIC means Australian Securities and Investments Commission.
ASTC means ASX Settlement and Transfer Corporation Pty Ltd (ACN 008 504 532).
ASX means Australian Stock Exchange Limited (ACN 008 624 691).
Board means the board of Directors of the Company.
Business Day means a day other than a Saturday or Sunday on which banks are open for business in Perth, Western Australia.
CHESS means ASX Clearing House Electronic Subregistry System.
Closing Date means 5.00 pm WST on 6 September 2006 or such other date as determined by the Directors.
Company means Uranium Oil and Gas Limited (ACN 115 593 005).
Corporations Act means the Corporations Act 2001 of Australia.
Directors means the directors of the Company from time to time.
Exposure Period means the period of 7 days after the date of lodgement of this Prospectus with the ASIC, which period may be extended by the ASIC by not more than 7 days pursuant to Section 727(3) of the Corporations Act 2001.
Listing Rules means Listing Rules of the ASX.
Offer means the offer of Shares pursuant to this Prospectus.
Offer Period means the period during which the Offer remains open under this Prospectus.
Official List means the Official List of the ASX.
Official Quotation means official quotation by the ASX in accordance with the Listing Rules.
Opening Date means 9.00 am WST on 28 July 2006 or such other date as determined by the Directors.
Option means an option to subscribe for a Share.
Prospectus means this prospectus.
Securities means the Shares and Options offered pursuant to this Prospectus.
Share means 1 fully paid ordinary share in the Company.
Shareholder means a holder of Shares.
WST means western standard time, Perth, Western Australia.
12 Defined Terms
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Share Registrars use only
Broker reference – stamp only
A I/We apply for B Total amount payablecheque(s) to equal this amount
at $0.20 per Share, plus free attaching options A$
Broker code Adviser Code
Number of Shares Applied for
C Individual/Joint applications - refer to naming standards overleaf for correct forms of registrable titles(s)
Title or Company Name Given Name(s) Surname
Joint Applicant 2 or Account Designation
Joint Applicant 3 or Account Designation
D Enter your postal address - Include State and Postcode
Number/street name or PO Box information/other information
Suburb/town State/postcode
E Enter your contact details (optional to fill this out)
( ) Contact Name Telephone Number - Business Hours/After Hours
F CHESS HIN
(Optional) Please Note that if you supply a CHESS HIN but the name and address details on your form do not correspond exactly with the registration details held at CHESS, your application will be deemed to be made without the CHESS HIN, and any securities issued as a result of the IPO will be held on the Issuer Sponsored subregister.
G Cheque details (optional to fill this out) - Make your cheque or bank draft payable to "Uranium Oil and Gas Limited Share Application"
Drawer Cheque number BSB number Account number Total amount of cheque
A$
A$
By submitting this Application Form, I/we declare that this application is completed and lodged according to the Prospectus and the declarayions/statements on the reverse of this Application form and I/we declare that all details and statements made be me/us (including the declaration on the reverse of this Application Form) are completed and accurate. I/we agree to be bound by the Constitution of the Company.
See Back of form for Completion Guidelines.
13 Application Form and InstructionsONLY COMPLETE THIS APPLICATION FORM IF YOU WISH TO BUY NEW SHARES AND FREE ATTACHING OPTIONS UNDER THIS OFFER.
PUBLIC APPLICATION FORMThis Application form is important. If you are in doubt as to how to deal with it please contact your stockbroker or professional adviser without delay. You should read the entire Prospectus carefully before completing this form. To meet the requirements of the Corporations Act, this Application Form must not be distributed unless included in, or accompanied by, the Prospectus.
PLEASE NOTEFor this application to be a valid application, you must at least complete details of your name and address and provide a valid cheque or bank draft.
NOTE 2$2000 for 10,000 shares and 5,000 free attached options is the minimum investment allowable, but you can apply for more if you wish.
URANIUM OIL AND GAS LIMITEDACN 115 593 005
REGISTERED OFFICE: SHARE REGISTRY:
8/256 St Georges Terrace Computershare Investor Services Pty LimitedPerth WA 6000 Level 2, Reserve Bank Building,Tel/Fax: (08) 9371 2770 45 St Georges Terrace, Perth WA 6000 Tel: 1300 557 010 Fax: (08) 9323 2033
Global Reports LLC
HOW TO COMPLETE THIS FORM
Before completing the Application Form the Applicant(s) should read the Prospectus to which the Application relates. By lodging the Application Form, the Applicant(s) agrees that this Application is for Shares and Options in the Company upon and subject to the terms of this Prospectus, agrees to take any number of Shares equal to or less than the number of Shares indicated in Section A that may be allotted to the Applicant(s) pursuant to the Prospectus and declares that all details and statements made are complete and accurate. It is not necessary to sign the Application Form.
Lodgment of Applications Application Forms must be received at the Perth office of Computershare Investor Services Pty Limited by no later than 5.00pm WST on 6 September 2006.
Return your completed Application Form with cheque(s) attached to:
By Post to: Or delivered to: Computershare Investor Services Pty Ltd Computershare Investor Services Pty Ltd GPO Box D182 Level 2, Reserve Bank Building PERTH WA 6840 45 St Georges Terrace PERTH WA 6000
Privacy Statement
Personal Information is collected on this form by Computershare Investor Services Pty Limited (“CIS”), as registrar for securities issuers (“the issuer”), for the purposes of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. your personal information may be disclosed to our related bodies corporate, to external srvice companies such as print and mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by CIS, or you would like to correct information that is innaccurate, inncorrect or out of date, please contact CIS. in accordance with the Corporations Act 2001, you may be sent material (including markleting material) approved by the issuer in addition to general corporate communications. You may elect not to receive marketing material by conrtacting CIS. You can contact CIS using the details provided on the front of this form or E-mail [email protected]
If you have any enquiries concerning your application, please contact Computershare Investor Services Pty Limited on 1300 557 010
Correct form of Registrable Title
Note that ONLY legal entities are allowed to hold Shares. Applications must be in the name(s) of a natural person(s), companies or other legal entities in accordance with the Corporations Act. At least one full given name and the surname is required for each natural person. The name of the beneficial owner or any other registrable name may be included by way of an account designation if completed exactly as described in the example of correct forms of registrable title(s) below:
Type of investor Correct form of Registrable Title Incorrect form of Registrable Title
Individual Use names in full, no initials
Mr John Alfred Smith JA Smith
Minor (a person under the age of 18) Use the name of a responsible adult, do not use the name of a minor.
John Alfred Smith<Peter Smith>
Peter Smith
Company Use company title, not abbreviations
ABC Pty LtdABC P/LABC Co
Trusts Use trustee(s) personal name(s), do not use the name of the trust
Mrs Sue Smith<Sue Smith Family A/C>
Sue Smith Family Trust
Deceased Estates Use executor(s) personal name(s), do not use the name of the deceased
Ms Jane Smith<Est John Smith A/C>
Estate of late John Smith
Partnerships Use partners personal names, do not use the name of the partnership
Mr John Smith and Mr Michael Smith <John Smith and Son A/C>
John Smith and Son
A SHARES APPLIED FOR Insert the number of Shares you wish to apply for. The minimum is 10,000 shares for $2,000 at 20 cents per share.
EG: $10,000 buys 50,000 shares plus 25,000 free attaching options. $5,000 buys 25,000 shares plus 12,500 free attaching options. $2,000 buys 10,000 shares plus 5,000 free attaching options.
B APPLICATION MONEY Insert the relevant amount of Application money.
C APPLICANTS NAME(S) Write the full name you wish to appear on the statement of shareholdings. Either your own name or the name of the company. Up to three joint Applicants may register.
D POSTAL ADDRESS Please enter your postal address for all correspondence. All communications to you from the share registry will be mailed to the person(s) and address as shown. For Joint Applicants, only one address can be entered.
E CONTACT DETAILS Please enter your telephone number(s), area code, email address and contact name in case we need to contact you in relation to your Application. This is optional.
F CHESS The Company intends to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of Australian Stock Exchange Limited. In CHESS, the Company will operate an electronic CHESS subregister of securities holdings and an electronic issuer sponsored subregister of securities holdings. Together the two subregisters will make up the Company's principal register of securities. The Company will not be issuing certificates to Application in respect of securities allotted. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold securities allotted to you under this Application in uncertified form on the CHESS subregister, complete Section G or forward your Application Form to your sponsoring participant for completion of this section prior to lodgement. Otherwise, leave Section G blank and on allotment, you will be sponsored by the Company and an SRN will be allocated to you. For further information refer to the relevant section of the Prospectus. (Optional to fill this out)
G PAYMENT Make your cheque or Bank Draft payable to "Uranium Oil and Gas Limited
Share Application Money Account”.
Complete the cheque details in the boxes provided. (Optional to fill this out)
Cheques will be processed on the day of receipt and as such, cheques returned unpaid may not be re-presented and may result in your application being rejected. Pin (do not staple) your cheque(s) to the Application Form where indicated.
Receipt for payment will not be forwarded.
Global Reports LLC
Share Registrars use only
Broker reference – stamp only
A I/We apply for B Total amount payablecheque(s) to equal this amount
at $0.20 per Share, plus free attaching options A$
Broker code Adviser Code
Number of Shares Applied for
C Individual/Joint applications - refer to naming standards overleaf for correct forms of registrable titles(s)
Title or Company Name Given Name(s) Surname
Joint Applicant 2 or Account Designation
Joint Applicant 3 or Account Designation
D Enter your postal address - Include State and Postcode
Number/street name or PO Box information/other information
Suburb/town State/postcode
E Enter your contact details (optional to fill this out)
( ) Contact Name Telephone Number - Business Hours/After Hours
F CHESS HIN
(Optional) Please Note that if you supply a CHESS HIN but the name and address details on your form do not correspond exactly with the registration details held at CHESS, your application will be deemed to be made without the CHESS HIN, and any securities issued as a result of the IPO will be held on the Issuer Sponsored subregister.
G Cheque details (optional to fill this out) - Make your cheque or bank draft payable to "Uranium Oil and Gas Limited Share Application"
Drawer Cheque number BSB number Account number Total amount of cheque
A$
A$
By submitting this Application Form, I/we declare that this application is completed and lodged according to the Prospectus and the declarayions/statements on the reverse of this Application form and I/we declare that all details and statements made be me/us (including the declaration on the reverse of this Application Form) are completed and accurate. I/we agree to be bound by the Constitution of the Company.
See Back of form for Completion Guidelines.
13 Application Form and InstructionsONLY COMPLETE THIS APPLICATION FORM IF YOU WISH TO BUY NEW SHARES AND FREE ATTACHING OPTIONS UNDER THIS OFFER.
PUBLIC APPLICATION FORMThis Application form is important. If you are in doubt as to how to deal with it please contact your stockbroker or professional adviser without delay. You should read the entire Prospectus carefully before completing this form. To meet the requirements of the Corporations Act, this Application Form must not be distributed unless included in, or accompanied by, the Prospectus.
PLEASE NOTEFor this application to be a valid application, you must at least complete details of your name and address and provide a valid cheque or bank draft.
NOTE 2$2000 for 10,000 shares and 5,000 free attached options is the minimum investment allowable, but you can apply for more if you wish.
URANIUM OIL AND GAS LIMITEDACN 115 593 005
REGISTERED OFFICE: SHARE REGISTRY:
8/256 St Georges Terrace Computershare Investor Services Pty LimitedPerth WA 6000 Level 2, Reserve Bank Building,Tel/Fax: (08) 9371 2770 45 St Georges Terrace, Perth WA 6000 Tel: 1300 557 010 Fax: (08) 9323 2033
Global Reports LLC
HOW TO COMPLETE THIS FORM
Before completing the Application Form the Applicant(s) should read the Prospectus to which the Application relates. By lodging the Application Form, the Applicant(s) agrees that this Application is for Shares and Options in the Company upon and subject to the terms of this Prospectus, agrees to take any number of Shares equal to or less than the number of Shares indicated in Section A that may be allotted to the Applicant(s) pursuant to the Prospectus and declares that all details and statements made are complete and accurate. It is not necessary to sign the Application Form.
Lodgment of Applications Application Forms must be received at the Perth office of Computershare Investor Services Pty Limited by no later than 5.00pm WST on 6 September 2006.
Return your completed Application Form with cheque(s) attached to:
By Post to: Or delivered to: Computershare Investor Services Pty Ltd Computershare Investor Services Pty Ltd GPO Box D182 Level 2, Reserve Bank Building PERTH WA 6840 45 St Georges Terrace PERTH WA 6000
Privacy Statement
Personal Information is collected on this form by Computershare Investor Services Pty Limited (“CIS”), as registrar for securities issuers (“the issuer”), for the purposes of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. your personal information may be disclosed to our related bodies corporate, to external srvice companies such as print and mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by CIS, or you would like to correct information that is innaccurate, inncorrect or out of date, please contact CIS. in accordance with the Corporations Act 2001, you may be sent material (including markleting material) approved by the issuer in addition to general corporate communications. You may elect not to receive marketing material by conrtacting CIS. You can contact CIS using the details provided on the front of this form or E-mail [email protected]
If you have any enquiries concerning your application, please contact Computershare Investor Services Pty Limited on 1300 557 010
Correct form of Registrable Title
Note that ONLY legal entities are allowed to hold Shares. Applications must be in the name(s) of a natural person(s), companies or other legal entities in accordance with the Corporations Act. At least one full given name and the surname is required for each natural person. The name of the beneficial owner or any other registrable name may be included by way of an account designation if completed exactly as described in the example of correct forms of registrable title(s) below:
Type of investor Correct form of Registrable Title Incorrect form of Registrable Title
Individual Use names in full, no initials
Mr John Alfred Smith JA Smith
Minor (a person under the age of 18) Use the name of a responsible adult, do not use the name of a minor.
John Alfred Smith<Peter Smith>
Peter Smith
Company Use company title, not abbreviations
ABC Pty LtdABC P/LABC Co
Trusts Use trustee(s) personal name(s), do not use the name of the trust
Mrs Sue Smith<Sue Smith Family A/C>
Sue Smith Family Trust
Deceased Estates Use executor(s) personal name(s), do not use the name of the deceased
Ms Jane Smith<Est John Smith A/C>
Estate of late John Smith
Partnerships Use partners personal names, do not use the name of the partnership
Mr John Smith and Mr Michael Smith <John Smith and Son A/C>
John Smith and Son
A SHARES APPLIED FOR Insert the number of Shares you wish to apply for. The minimum is 10,000 shares for $2,000 at 20 cents per share.
EG: $10,000 buys 50,000 shares plus 25,000 free attaching options. $5,000 buys 25,000 shares plus 12,500 free attaching options. $2,000 buys 10,000 shares plus 5,000 free attaching options.
B APPLICATION MONEY Insert the relevant amount of Application money.
C APPLICANTS NAME(S) Write the full name you wish to appear on the statement of shareholdings. Either your own name or the name of the company. Up to three joint Applicants may register.
D POSTAL ADDRESS Please enter your postal address for all correspondence. All communications to you from the share registry will be mailed to the person(s) and address as shown. For Joint Applicants, only one address can be entered.
E CONTACT DETAILS Please enter your telephone number(s), area code, email address and contact name in case we need to contact you in relation to your Application. This is optional.
F CHESS The Company intends to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of Australian Stock Exchange Limited. In CHESS, the Company will operate an electronic CHESS subregister of securities holdings and an electronic issuer sponsored subregister of securities holdings. Together the two subregisters will make up the Company's principal register of securities. The Company will not be issuing certificates to Application in respect of securities allotted. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold securities allotted to you under this Application in uncertified form on the CHESS subregister, complete Section G or forward your Application Form to your sponsoring participant for completion of this section prior to lodgement. Otherwise, leave Section G blank and on allotment, you will be sponsored by the Company and an SRN will be allocated to you. For further information refer to the relevant section of the Prospectus. (Optional to fill this out)
G PAYMENT Make your cheque or Bank Draft payable to "Uranium Oil and Gas Limited
Share Application Money Account”.
Complete the cheque details in the boxes provided. (Optional to fill this out)
Cheques will be processed on the day of receipt and as such, cheques returned unpaid may not be re-presented and may result in your application being rejected. Pin (do not staple) your cheque(s) to the Application Form where indicated.
Receipt for payment will not be forwarded.
Global Reports LLC
Global Reports LLC
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RG 06/15533G1.DOC FC
SSSUUUPPPPPPLLLEEEMMMEEENNNTTTAAARRRYYY PPPRRROOOSSSPPPEEECCCTTTUUUSSS IN RELATION TO AN OFFER OF APPROXIMATELY 40 MILLION
SHARES AT 20 CENTS PER SHARE WITH ONE FREE ATTACHING OPTION FOR EVERY TWO SHARES ISSUED IN URANIUM OIL AND GAS LIMITED
(ACN 115 593 005) IN A PROSPECTUS DATED 19 JULY 2006
THIS SUPPLEMENTARY PROSPECTUS WAS LODGED WITH ASIC ON
8 SEPTEMBER 2006. NEITHER ASIC NOR ASX TAKE ANY RESPONSIBILITY FOR THE CONTENTS OF THIS SUPPLEMENTARY PROSPECTUS
Uranium Oil and Gas Limited ACN 115 593 005
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RG 06/15533G1.DOC FC
Supplementary Prospectus
This Supplementary Prospectus is dated 8 September 2006 and supplements the Prospectus of Uranium Oil and Gas Limited (“the Company”) dated 19 July 2006 (“the Original Prospectus”). Except as set out in this Supplementary Prospectus, terms defined in the Original Prospectus have the same meanings in this Supplementary Prospectus.
As yet no Shares have been issued pursuant to the Original Prospectus.
This Supplementary Prospectus has been lodged by the Company following ASIC making an interim stop order pursuant to section 739(3) of the Corporations Act 2001 (Cth) (“Act”).
ASIC determined that some of the information disclosed in the Original Prospectus was either misleading or deceptive, that the Original Prospectus did not contain all the information investors and their professional advisers would reasonably require to make an informed assessment of the financial position and prospects of the Company, or that the information in the Original Prospectus is not worded and presented in a clear, concise and effective manner.
This means that the Company must give applicants under the Prospectus who have lodged applications prior to the date of the Supplementary Prospectus:
(i) a copy of the Supplementary Prospectus; and
(ii) the right for a period of 1 month from the date of the Supplementary Prospectus to withdraw their application.
All applicants who lodged their applications prior to receipt of the Supplementary Prospectus have a right to withdraw their applications and be repaid their application money.
If having read and considered this Supplementary Prospectus you wish to retain your shares that you have applied for do nothing. If you wish to withdraw your application and be repaid, you must:
• Complete and properly sign the return form that accompanies this Supplementary Prospectus;
• Send the completed and properly signed return form to reach:
Uranium Oil and Gas Limited c/- Computershare Investor Services Pty Ltd Level 2 Reserve Bank Building 45 St Georges Terrace PERTH WA 6000
Before 5.00 pm (Perth Time) on 8 October 2006.
This Supplementary Prospectus is issued in order to bring to the attention of persons who have made application for shares or propose making application for shares under
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the Original Prospectus certain matters which the Directors of the Company believe address the concerns of ASIC and generally to comply with the provisions of the Act.
This Supplementary Prospectus amends and supplements the Original Prospectus in the following ways:
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2 At the end of “Uranium projects” insert the following:
“In Western Australia the current policy of the State Government is to oppose uranium mining. All mining leases granted since 22 June 2002 have been issued subject to a condition prohibiting the mining of uranium. For further details regarding the risks associated with this prospectus, refer to section 9 commencing on page 107 and in particular section 9.12 which refers to specific risks associated with the Company.”
5 At the end of paragraph 4 insert:
“The Company can of course give no assurance that any government policy relating to uranium mining or otherwise will or may change in the future.”
6 In the second paragraph delete:
“Current global uranium production meets only around 55 per cent of demand. With stockpiles falling, uranium prices have in recent times increased significantly.”
This statement has been deleted as it is a generalisation and subjective in nature.
Insert at the end of paragraph 3:
“The Company can of course give no assurance that any government policy relating to uranium mining or otherwise will change in the future.”
10 – 15 In Section 2 delete sections 2.1 to 2.11 inclusive and insert the following: “2. PROJECT SUMMARY 2.1 Introduction
The Company has either applied for or otherwise is in the process of acquiring a portfolio of uranium, oil, gas and other mineral projects. A number of the projects are being acquired from one or both of Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd. David Zohar is the sole director of Swancove Enterprises Pty Ltd and John Karajas is a director of Kjrit Exploration Services Pty Ltd. For full details of material contracts refer to section 10.4. The Company will concentrate its initial exploration work on its uranium
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projects once the relevant tenements for the uranium projects are granted. The Company is aware that the current policy of the Western Australian Government is that uranium mining is prohibited in Western Australia. Should the Company discover uranium on its projects in Western Australia, it will not be able to proceed to mine the uranium unless the policy of the Government has changed and it is at that time permissible to mine uranium. If the Company does not discover uranium, it will concentrate on its other projects. In any event, the Company will proceed with exploration on its non-uranium projects. For oil and gas, both of the Company’s prospect areas in the Northern Territory are known to contain gas and/or oil showings and both are close to infrastructure. The Canning Basin area in Western Australia is also a proven area for oil and gas exploration. Other precious and base metals are sought. Mt Vernon, Collier and Wannamal projects offer good opportunities for the discovery of economic base and precious metal deposits. Thus the eastern portion of the Wannamal project area is of high priority. This section contains a summary of the Company’s projects. Applicants should refer to the Independent Geologists’ Reports in Sections 5 and 6 of this Prospectus for further details of the Company’s projects.
2.2 Uranium Projects
Currently uranium mining is prohibited in Western Australia. Unless uranium mining is at some time in the future permitted in Western Australia generally and on the Company’s projects in particular, the Company will not be in a position to conduct any uranium mining on its projects and, as a result, will not be in a position to derive any commercial benefit from any uranium which may be discovered on the Company’s projects. The Company’s uranium project areas have been selected for their favourable geology. They are summarised in 2.3 – 2.6 below and more fully described in section 5, Independent Geologists Report (Mining Tenements), commencing at page 19. However, it should be noted these projects are all in Western Australia where uranium mining is currently prohibited. The Company can give no assurance that uranium mining will be permitted in Western Australia generally or on the Company’s projects in particular. Uranium mineralisation is generally located by radioactivity caused by its radioactive decay. The radioactivity can be measured both by a ground survey and an airborne survey but a small soil cover can mask this radioactivity and shallow deposits of uranium may not be identified by such surveys. It is the Company’s intention to test for uranium mineralisation by drilling a number of shallow holes.
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2.3 Bungalow Well Project (ELA36/549)
Exploration Licence 36/549 is currently in the application stage and has yet to be granted. The application has been made in the name of Helen Ansell. The Company has paid an option fee of $100,000 to Helen Ansell and may exercise the option and acquire the tenement by paying $1 to Helen Ansell at any time within 18 months of the grant of the tenement. The Bungalow Well Prospect, E36/549, comprising 34 graticular blocks is located about 85 kilometres northwest of Leonora and some 130 kilometres south of BHP Billiton Ltd’s (recently acquired from WMC) Yeelirrie uranium resource, in the Murchison Mineral Field of Western Australia. Uranium mineralisation has previously been identified on the project. Le Nickel Prospecting Pty Ltd explored the area in 1972 but concentrated its search in the vicinity of peak surface radiometric responses and drilled only a limited number of holes. The Company considers that there is scope for further exploration to discover more significant mineralisation. Exploration Programme
An exploration programme designed to test the extent of the uranium mineralisation located in 1972 is planned. A detailed airborne radiometric survey followed by a close spaced ground survey should locate all the surface uranium radiometric responses. Drilling of these anomalies plus reconnaissance drilling across the channel will show the areal extent of the uranium mineralisation.
2.4 Four Corners Bore Project (ELA57/607)
Exploration Licence 57/607 is currently in the application stage and has yet to be granted. The application has been made in the name of Helen Ansell. The Company has paid an option fee of $3009.06 and issued 1,000,000 shares in the Company to Ansell. The Company is required to pay $45,000 to Ansell upon admission of the Company to the Official List of the ASX and may exercise the option and acquire the tenement by paying $1 to Ansell within 18 months of the grant of the tenement. The Four Corners Bore Prospect. E57/607, totalling some 52 km2 in area, is located about 500 kilometres northeast of Perth in the East Murchison Mineral Field, Western Australia. The regional geological setting comprises northerly trending greenstone belts and extensive areas of granitoids. The structure of the area is dominated by the Youanmi and Yuinmery Fault zones
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which are located to the west and southwest of the Prospect. Bureau of Mineral Resources (BMR) airborne radiometric surveys have identified a low grade radiometric anomaly trending down the centre of the Prospect. Exploration Programme
Exploration will endeavour to confirm previously identified uranium anomalies through airborne and ground reconnaissance radiometric surveys in conjunction with a geomorphologic study to determine the distribution of surface calcrete. The responses produced will need to be assessed by follow up drilling.
2.5 Galah Rock and Walling Rock Project (ELA30/312 and
ELA29/589)
Exploration Licences 30/312 and 29/589 are granted tenements in the name of the Company. The Galah Rock and Walling Rock Prospects (E30/312, E29/589) totalling 112 graticular blocks are located in the North Coolgardie Mineral Field, Western Australia. There are no past exploration records, apart from the results of GSWA geochemical programmes carried in 1994. This work revealed the presence of anomalous uranium in the lake deposits. Exploration Programme The Exploration Licence applications cover spot radiometric anomalies recorded by the Bureau of Mineral Resources (BMR) 1972 survey. The spot anomalies will be relocated by a reconnaissance airborne radiometric survey and the areal extent will be mapped and positioned with a ground radiometric survey. Drill testing will be both localised on the anomalous areas and reconnaissance style with lines drilled across the channel at 200 metres spacing. Infill drilling will be needed for those areas showing promise.
2.6 Rubberoid Well Project (EL09/1245) Exploration Licence 09/1245 is a granted tenement currently in the
name of Helen Ansell. Ansell is required to transfer the tenement to Fastscout (70 %) and the Company (30 %) 12 months after the grant of the tenement. Fastscout is to conduct exploration of the tenement and to maintain the tenement. Refer to section 10.4 for full details of the contract between Ansell, Fastscout and the Company.
The Rubberoid Well Prospect, E09/1245, is located about 800
kilometres north of Perth and 250 kilometres northwest of Meekatharra, in the Gascoyne Mineral Field, Western Australia.
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The area has been the subject of past exploration by others for gold, base metals and uranium. A small deposit of relatively high-grade gold mineralisation has been identified to the north and south of the prospect area (15,000 t @ 7.4 g/t Au) and some 45 uranium occurrences have been reported in the area and at least three occur within E09/1245. The results of past exploration confirm the potential for the discovery of precious, base metal and radioactive mineralisation. Exploration Programme It is planned to commence exploration over this project area with a complete data review and the construction of a new data base for both uranium, precious and base metals which will include ground reconnaissance. A dual soil and ground radiometric survey will cover favourable stratigraphy. Ground geophysics will be required to cover base metal anomalies whilst shallow drilling will be used to test positive responses for gold and/or uranium. This work will define targets for additional drilling.
2.7 Mt Vernon and Collier Projects (E52/1863 and E52/1864) (Base
Metals Projects)
Exploration Licences 52/1863 and 52/1864 are granted tenements in the name of Swancove Enterprises Pty Ltd. The Company has an option to acquire these tenements. Refer to section 10.4 for full details of the option. The projects are located about 470 km east of Carnarvon and about 1200 km north of Perth. UOG’s Mt Vernon Prospect area is favourably located along the Mt Vernon Fault Zone, a major structural feature which has recorded anomalous copper, gold and platinum mineralisation. The Collier Prospect located about 100 kilometres east of the Mt Vernon Prospect is extensively soil-covered, has a similar geological and structural setting as the Mt Vernon Prospect and possible similar mineral potential. Geochemical sampling by the GSWA has identified anomalous nickel, copper, gold, palladium and platinum values. The projects are considered to be prospective for these metals. Exploration Programme Both projects have similar exploration potential and the search programmes will be very similar. Initially geological mapping will be needed to guide future work. This will include some lithogeochemical sampling. Prospective areas will be covered by soil geochemistry and airborne magnetic data will be collected. Areas which continue to be of
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interest will be covered by ground geophysics and the resulting anomalies will be drilled.
2.8 Wannamal and Wooroloo Projects (E70/2444, E70/2692, E70/2693
and E70/2727) (Base Metals Projects)
Exploration Licences 70/2444, 70/2692, 70/2693 and 70/2727 are all granted tenements. The tenements are in the name of Swancove Enterprises Pty Ltd. The Company has an option to acquire these tenements from Swancove Enterprises Pty Ltd. Refer to section 10.4 for full details of the option. The Wannamal and Wooroloo Projects are located approximately 100 kilometres north of Perth and have been the subject of limited exploration activity. The metalliferous deposits sought are tin, molybdenum, gold, copper and nickel. The tenements are considered to be prospective for these metals. Exploration Programme The projects cover similar geological terrain however there will be some divergence of exploration activity due to the fact that the Wannamal project area has been previously explored for bauxite and that has been drill intensive. There is an abundant amount of data for the Wannamal project area which needs to be assessed first. Both project areas require reconnaissance geological mapping and airborne magnetic surveys. Immediate positions of interest are the eastern side of the Wannamal project area, where to the east of the boundary nickel and copper sulphide mineralisation has been reported recently, and the north east corner of the Wooroloo project area, where part of the Morangup Greenstone Belt occurs.
2.9 Burdo Petroleum Project (EPA 113, Northern Territory)
EPA 113 is currently in the application stage and has yet to be granted. The application has been made in the name of Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd. The Company has entered into an agreement with Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd whereby Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd will transfer the permit to the Company in consideration of the Company having reimbursed Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd the costs of applying for the permit. The Burdo project area contains the Burdo lineament, a pronounced structural trend. Exploration in this area will target the Moroak and Jamison Sandstones. The application area contains the Burdo No 1 well which encountered a 5 metre gas column in tight sands of the
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Moroak Sandstone. Gas was regularly flared during the drilling. Exploration Programme The proposed exploration for the first 2 years once the permit is granted is as follows: Year 1: Data review, reprocessing of seismic lines 89-203 and MC 92-104. Year 2: Acquisition of 100 linear km of seismic to identify prospects.
2.10 Kilgour Petroleum Project (EPA 114, Northern Territory)
EPA 114 is currently in the application stage and has yet to be granted. The application has been made in the name of Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd. The Company has entered into an agreement with Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd whereby Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd will transfer the permit to the Company in consideration of the Company having reimbursed Swancove Enterprises Pty Ltd and Kjrit Exploration Services Pty Ltd the costs of applying for the permit. EPA 114 is currently the subject of 9 Native Title claims. For full details of the Native Title claims refer to section 8 of this prospectus. The Kilgour project area contains four prospects defined on surface structure. They are the Kilgour, Abner, Kilgour South, and Glyde River Trend prospects. The Kilgour project has potential for a new oil discovery. Bitumen and oil have already been encountered in shallow wells on the structure. The Abner prospect has potential for discovery of oil and gas in place. The Kilgour South structure has potential for discovery of oil. The permit also contains the Glyde River Trend, which contains the GR9 mineral exploration hole which yielded a gas blow-out. This prospect has potential for a new discovery of significant oil and gas. Exploration Programme The proposed exploration programme for the first 2 years once the permit is granted is as follows: Year 1: Data review, oil generation timing study.
Year 2: One well.
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2.11 Canning Basin Petroleum Prospect (EP448) (10 %)
EP 448 is granted and is currently in the names of Maneroo Oil Company Ltd (45 %), Gulliver Productions Pty Ltd (25 %), Indigo Oil Pty Ltd (20 %) and Kjrit Exploration Services Pty Ltd (10 %). The Company has entered into an agreement to acquire Kjrit Exploration Services Pty Ltd’s 10 % interest in the permit. The Company will hold a 10 % interest in this prospect. The prospect area contains sedimentary rock formations which are considered prospective for oil and gas. Exploration Programme The proposed exploration programme for the first 2 years once the permit is granted is as follows: Year 1: Data review and aeromagnetic interpretation. Year 2: Seismic reprocessing and land access negotiations.”
18 Under “John Karajas” insert at the end the following:
“John Karajas is a director of Kjrit Exploration Services Pty Ltd and owns one of two shares in that company. Kjrit Exploration Services Pty Ltd is a vendor to the Company.”
Under “David Alan Zohar” insert at the end the following:
“In September 2005 orders were made by consent in proceedings commenced by ASIC against Swancove Enterprises Pty Ltd and David Zohar. ASIC commenced proceedings following concerns that Swancove Enterprises Pty Ltd and David Zohar carried on a financial services business without being the holder of a required financial services licence under the Corporations Act. The full text of those orders is set out on page 111 under ’Legal proceedings’. David Zohar is the sole director of Swancove Enterprises Pty Ltd, which company is a vendor to the Company.”
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111 Section 10.3, Legal Proceedings
Insert the following:
“On 1 September 2005 in the Federal Court of Australia, in proceedings commenced by ASIC against Swancove Enterprises Pty Ltd and David Zohar, Swancove Enterprises Pty Ltd and David Zohar consented to various orders being made including:
(a) That under section 1101B and 1324(1) of the Corporations Act 2001 Swancove Enterprises Pty Ltd be hereby permanently restrained whether by themselves, their servants, agents and employees from conducting a financial services business in contravention of section 911A of the Corporations Act 2001 by making recommendations or statements of opinion that are intended to influence persons to acquire shares or would reasonably be regarded as being intended to have such an influence, without holding an Australian Financial Services Licence covering the provision of the financial services.
(b) That under section 1324(1) of the Corporations Act that Swancove Enterprises Pty Ltd and David Zohar by themselves, their servants, agents and employees be hereby permanently restrained from being in any way, directly or indirectly, knowingly concerned in, or party to, the conduct by another person of a financial services business in contravention of section 911A of the Corporations Act by that other person making recommendations intended to influence persons to acquire shares, or could reasonably be regarded as being intended to have such an influence, without holding an Australian Financial Services Licence covering the provision of these financial services.”
Section 10.4, Summary of Material Contracts
After paragraph 1 insert the following:
“John Karajas is a director of Kjrit Exploration Services Pty Ltd (“Kjrit”) and owns one of two shares in Kjrit. John Karajas is a director and a shareholder of Red River Resources Limited. David Zohar is the sole director and owns one of two shares in Swancove Enterprises Pty Ltd.”
Section 10.4, Summary of Material Contracts
In Bungalow Well project – option to purchase
After the second paragraph insert the following:
“Subject only to the successful grant of Exploration Licence 36/549, the Company will, upon exercise of the option, acquire a 100 per cent interest in Exploration Licence E36/549. The interest of the Company in the Exploration Licence may be diluted in terms of the joint venture entered into with Red River Resources Limited and as
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set out below.”
112 After paragraph 2 insert:
“Subject only to the grant of Exploration Licence E57/607 the Company will, upon exercise of the option, acquire a 100 per cent interest in Exploration Licence 57/607.”
Rubberoid Well – Fastscout Agreement
After paragraph 7 insert:
“After the first anniversary of the grant of Exploration Licence 09/1245 the Company will be entitled to become registered as the holder of a 30 % interest in the tenement. The remaining 70 % interest will be held by Fastscout. In the event that Fastscout determines that it does not wish to retain its interest in the Exploration Licence, it shall, at the request of the Company, transfer its interest to the Company.”
Mt Vernon/Collier Project – option to purchase
After paragraph 4 insert the following:
“Upon exercise of the option the Company will acquire 100 per cent interest in the Exploration Licences.”
113 Wannamal/Wooroloo Project – Option to purchase
After paragraph 6 insert the following:
“Upon exercise of the option the Company will have the right to explore for minerals excluding bauxite (which is retained by Swancove Enterprises Pty Ltd) and the right to explore for tin and tantalum on Exploration Licence 70/244 (which is retained by Red River Resources). Title to Exploration Licence 70/244 will remain with Red River Resources and title to Exploration Licences 70/2692, 2693 and 2727 will remain with Swancove Enterprises Pty Ltd.”
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In the case of any ambiguity between this Supplementary Prospectus and any matter in the Original Prospectus, this Supplementary Prospectus prevails. Reference in the Original Prospectus to the “Prospectus” includes a reference to this Supplementary Prospectus.
Directors’ Authorisation
Every director of the Company has consented to the lodgement of this Supplementary Prospectus. The Directors have authorised the issue of this Supplementary Prospectus on behalf of Uranium Oil and Gas Limited.
This Supplementary Prospectus has been signed by a Director for and on behalf of Uranium Oil and Gas Limited in accordance with section 351 of the Corporations Act. DAVID ZOHAR Director
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