zambia

Chirundu JV Project
(African Energy can earn up to 70% equity from Albidon Limited)

The first of the two joint venture projects with Albidon arising from the Albidon Exploration Agreement, the Chirundu Project, comprises an area of 1,301 square kilometres. This is covered by the Albidon Exploration Agreement and covers part of Albidon’s prospecting licence PLLS.250 Mugoto. Albidon acquired this tenement on the basis of older ‘basement’ geology (favourable for base metals exploration around its Munali Nickel deposit) and the presence of Karoo sediments in the Kariba Valley. The Albidon Exploration Agreement includes those portions of Albidon’s licences which cover the Karoo Supergroup and which are believed to be highly prospective for uranium, coal and coal-bed methane. This prospectivity is demonstrated by the presence of a number of known uranium deposits and the producing Gwembe coal field in the Lower Karoo sediments of the Kariba Valley.

Considerable previous exploration was undertaken throughout the Kariba Valley in the 1970s and early 1980s. African Energy has obtained a significant proportion of the exploration database compiled by previous exploration companies during this period. This database includes several regional and detailed baseline maps which show the results of extensive ground radiometric surveys within the Chirundu and Kariba Valley areas, and a significant number of drill cross-sections illustrating the geology and grade of uranium mineralisation at several prospects.

The most advanced of these prospects are Njame in the Chirundu Project, and Chisebuka, Munyumbwe and Namakande in the Kariba Valley Project. This database allowed African Energy to quickly identify areas for follow-up drill testing, ultimately resulting in the estimation of a uranium resource at Njame.

Through its subsidiary African Energy (Australia), African Energy can earn a 30% interest in this project through the expenditure of a total of A$1 million on exploration. As at 31 December 2006 A$481,843 of this expenditure commitment has already been met. Under the terms of the Albidon Exploration Agreement, African Energy (Australia) may subsequently proceed to earn a 70% interest in the project area by completing a prefeasibility study on a JORC Indicated Resource.

Figure 3 Location map showing key geological elements of the Chirundu JV and Kariba Valley JV projects in Zambia. Click on map to enlarge

Njame Uranium Prospects

Njame consists of two prospects, Njame North and South, which were initially outlined as two separate ground radiometric anomalies. Both were drilled in the 1970’s, with significant uranium intersections made at both prospects. Most of these intersections were calculated from calibrated down-hole gamma logging rather than chemical assays. African Energy determined that the quality of the drilling database for Njame was not of sufficient quality to allow the estimation of a JORC-compliant resource, and so embarked upon a drilling program to collect sufficient data to do so.

The first stage of aircore drilling at the Njame North prospect comprised 21 vertical aircore holes for 897m on a nominal 400m x 100m grid pattern. Assay results for this initial program were received on 29th June 2006 and confirmed the presence of significant uranium mineralisation, and an infill program of a further 26 vertical aircore holes for 1,103 m was completed, to a nominal 200m x 50m grid pattern (see Figure 4 and Figure 5). Results from this drilling were used to estimate an inferred resource of 5.5 Mt @ 400 ppm U3O8 for a contained total of 2,200t U3O8 (4.8 Mlb U3O8). This resource is still open along strike and down dip and will be subjected to further drilling in 2007. The Company is confident that the resource will be increased, but it is unlikely to more than double in size.

The drilling program has established the following:

• Mineralisation at Njame North occurs in two layers, with the lower being thicker and generally higher grade.
• Mineralisation is of the style referred to as sandstone-type uranium mineralisation, hosted by Karoo sediments.
• Mineralisation is open along strike in both directions, and is open down dip.
• The mineralisation is near-surface, with cover thickness varying from 5m to 34m

		Figure 4 Geological map of the Njame North prospect showing location of African Energy's drill holes. Click on map to enlarge
		Figure 5 Geological cross-section for Njame North mineralisation Click on map to enlarge

New Prospects at Chirundu

African Energy has recently completed a program of airborne radiometric surveying over the northern part of the Chirundu JV where no previous uranium exploration is known to have occurred. This survey included a detailed orientation survey over Njame. The results from the survey have highlighted two new uranium anomalies, Gwabe North and Chirundu North, both of which require ground evaluation to determine if they represent targets for reconnaissance drill testing (see Figure 6), The uranium anomaly at Gwabe North is particularly encouraging as it covers an area some 6km long and up to 800m wide, with a main peak some 2500m long and over 500m wide. By comparison, the anomaly associated with the inferred resource at Njame North is only 1000m long and 300m wide.

Figure 6 Airborne radiometric survey results for the Chirundu JV Project showing uranium anomalism at Njame, Gwabe North and Chirundu North. For survey location, refer to Figure 3 Click on map to enlarge

The Kariba Valley JV Project
(African Energy can earn up to 70% equity from Albidon Limited)

The second of the two joint venture projects with Albidon arising from the Albidon Exploration Agreement is the Kariba Valley Project (see Figure 3). It comprises an area of 1,968 sq km and includes parts of three Albidon prospecting licences (PLLS.250 Mugoto, PLLS.245 Sinazeze and PLLS.193 Masuku).

Previous exploration on this project area has identified three prospects. The Chisebuka, Munyumbwe and Namakande prospects have a similar geological setting to Njame. Chisebuka is characterised by a well defined, intense radiometric anomaly over an area of 1,500m x 400m, and appears to have undergone little previous drill testing. A drilling program to test this anomaly has been planned and will commence in the near future.

At Munyumbwe, two prospects have been identified. Munyumbwe ‘A’ consists of a broad ground radiometric anomaly which has been tested by African Energy through reconnaissance drilling. Evaluation of the drill cuttings suggests that significant mineralisation has not been identified. Munyumbwe ‘B’, further to the north, has not been tested to date. Namakande consists of a series of poorly constrained ground radiometric anomalies over an area in excess of 7km x 2km. Field work is required at this prospect to evaluate the potential of these and to prioritise targets for drill testing.

No work was undertaken by the previous holders of the relevant prospecting licenses on the Sinazongwe blocks due to security concerns related to possible minefields near the shore of Lake Kariba. The potential of this area has thus not been tested to date. African Energy has recently completed an airborne radiometric survey over the Sinazongwe blocks to assess the uranium potential, and has identified three areas of uranium anomalism for further evaluation (Figure 7).

In addition to the uranium potential, there are several coal occurrences in Lower Karoo sediments within the Kariba project area. The Company intends to undertake a program to evaluate the coal potential, and particularly the scope for accumulations of coal-bed methane, and will utilise the services of an expert consultant to help design this program.

Figure 7 Airborne radiometric survey results for the Kariba Valley JV at Sinazongwe, showing uranium anomalism. For survey location, refer to Figure 3 Click on map to enlarge

Luano Valley Uranium-Coal Project

The Luano Valley Project comprises two licence areas, Lunsemfwa and Bulonga, and is part of the Exploration Agreement with Albidon Limited. The two areas cover part of two Albidon Prospecting Licences (Bulonga covers part of PLLS.246 Kamoto, and Lunsemfwa covers part of PLLS.247 Lunsemfwa), and have a combined area of 6,970 sq km covering Karoo sediments (Figure 8).

Based on previous exploration one significant radiometric anomaly has been identified at the Myvuwe River prospect. This has been evaluated for its uranium potential through a detailed airborne radiometric survey. Results from this have confirmed this anomaly and identified an additional area of uranium anomalism (Figure 9). These will be evaluated by field mapping and, if warranted, reconnaissance drill testing in 2007.

In addition to the uranium potential, coal bearing horizons up to 60-120m thick have been noted in the Luano Valley, suggesting good CBM potential in the region. A program to evaluate this potential will be implemented in 2007.

Figure 8 Location of the Luano Valley Project, Zambia Click on map to enlarge

 

Figure 9 Airborne radiometric survey results for the Myvuwe River target on the Luano Valley Project showing two areas of uranium anomalism Click on map to enlarge

Central Luangwa Valley Uranium-Coal Project

The Central Luangwa Valley Project comprises two areas, Munyamadzi and Kakumbi, and is part of the Exploration Agreement with Albidon Limited. The two blocks cover portions of two of Albidon’s Prospecting Licences (Munyamadzi covers part of PLLS.260 Chilonga, Kakumbi covers part of PLLS.246 Kamoto), and have a combined area of 10,085 sq km (Figure 10).

The tenements were pegged by Albidon on the basis that they contain Karoo sediments, and also because they contain basement rocks which may be prospective for base metals. The areas covered by the Exploration Agreement, Munyamadzi and Kakumbi are those parts of the tenements that contain the Karoo sediments which are prospective for uranium, coal and coal-bed methane.

Little previous exploration for uranium has been documented for this area So the Company therefore plans to generate targets on the basis of geological interpretation where this demonstrates the presence of target Karoo sediments above uranium-rich basement rocks and faults which link the two. Any such areas defined will be evaluated with field reconnaissance and spectrometer traverses.

Figure 10. Location of the Central and Northern Luangwa Valley Projects, Zambia Click on map to enlarge

Northern Luangwa Valley Uranium-Coal Project

The Northern Luangwa Valley Project comprises two Prospecting Licences (PLLS.270 Matonda, PLLS.271 Mulipo) granted to African Energy and covering a total area of 17,915 sq km. The project is situated at the northern end of the Luangwa Valley in northeast Zambia, extending as far as the international border with Malawi (Figure 10). Access to the eastern side of this project is generally good, with a major road running the length of the project, whereas access to the western side is generally very poor. The tenements were pegged to cover the northern extension of the Karoo sediments in the Luangwa Valley, 30km along strike from the Kayelekera deposit in northern Malawi, where Paladin Resources have outlined a resource containing over 15,000t of U3O8.

Previous exploration has defined a significant multi-point regional radiometric anomaly, over an area of 400 sq km; along with a number of smaller, lower level anomalies. The Company has evaluated this area through an airborne radiometric survey. This has identified six anomalies which require more detailed ground follow-up mapping in mid-2007and, if warranted, reconnaissance drilling (Figure 11).

Figure 11 Airborne radiometric survey results for the southern part of the North Luangwa Valley Project showing six clusters of uranium anomalies Click on map to enlarge

 

 

 

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