Hillview Project

(E51/1127) - Encounter 80%, Avoca 20%

The Hillview project is located 50km south east of Meekatharra. Broad spaced reconnaissance drilling at Hillview by Western Mining Corporation in the 1970s, identified a 15km long zone of near surface uranium mineralisation.

Multiple phases of aircore drilling were completed by Encounter during the year to test this large scale anomaly. The drilling successfully outlined a laterally continuous and coherent envelope of near surface mineralisation. Drilling was completed to a nominal 400m by 100m spacing comprising of a total of 133 vertical aircore holes. This drill spacing facilitated a resource calculation at Hillview.

Coffey Mining, independent consultants engaged by Encounter, have estimated an initial Inferred Resource above a 100ppm U ₃O ₈ lower cut off at Hillview of 27.6 million tonnes, averaging 174ppm U ₃O ₈ for a contained 10.6 million pounds of U ₃O ₈ (or approximately 4,800 tonnes contained U ₃O ₈) (see Table 1). The Inferred Resource is reported in accordance with the JORC code (2004) and guidelines.

The main mineralised zone at Hillview is 7km long by 1.4km wide with an average thickness of 3.15m (Figure 1). The Hillview resource is a flat lying, consistent body of near surface uranium mineralisation with minimal internal dilution. The resource area has been aircore drilled on a nominal 400m by 100m spacing. In total 133 vertical aircore holes have been used in the resource calculation.

The mineralisation is divided into three zones using the logged calcrete/silcrete horizon together with a nominal 100ppm U ₃O ₈ grade shell to domain the deposit. Two main intervals were defined (Zones 1 and 2) along with a distinct lower grade sub-division excised from Zone 1 (Zone 11).

Table 1. Hillview Uranium Deposit - Inferred Resource Estimate

Hillview Uranium Project, Western Australia Inferred Resource Estimate
Reported Above a 100ppm and 150ppm U 3O 8 Lower Cut Off
Reported Using a Bulk Density of 2.0 t/m 3
2D Ordinary Kriged Estimate Using Length x Grade and Length as Service Variables
Parent Cell Dimensions of 100m NS by 200m EW by 32m RL
Zone	Tonnage (Mt)	Grade (U 3O 8 ppm)	Contained Metal U 3O 8 (M lb)
100ppm U3O8 Lower Cut Off
1	21.6	182	8.7
2	1.6	147	0.5
11	4.4	146	1.4
Total	27.6	174	10.6
150ppm U3O8 Lower Cut Off
1	20.6	184	8.3
2	0.6	168	0.2
11	1.5	153	0.5
Total	22.7	181	9.0
Note: Figures have been rounded

Table 1 shows the Inferred Mineral Resource estimates at 100ppm and 150ppm U ₃O ₈ cut off grades. Contained Metal U ₃O ₈ reports in-situ metal in the ground and does not consider any mining, metallurgical or economic parameters at this stage.

The resource has been calculated using both chemical ICP-MS (ICP) assays and downhole gamma logging. A statistical analysis of the 42 holes that had both ICP and gamma assays indicated that the gamma assays were under-calling the grade of the mineralised intervals by an average of 20% with respect to the ICP analysis. A possible explanation for this is that this 'young' uranium mineralisation is affected by radioactive disequilibrium. Based on the statistical study of the ICP and gamma data, the gamma assays were adjusted up by 20% for use in this resource estimation.

Statistical analyses on the accumulated composites (grade times width) were completed and outliers reduced where appropriate. Two of the drillhole composites in Zone 1 were cut. Variography and search neighbourhood analysis were also conducted as input into the grade estimation.

The grade estimation method used was Block Ordinary Kriging. Both the accumulated metal and accumulated width were interpolated and back calculated to define the U ₃O ₈ grade. Ordinary Kriging was executed in 2D in estimation panels of 100m by 200m, using a maximum of 6 data points, and a maximum search distance of 400m for the first pass and 600m for the second pass calculations.

A dry, in-situ bulk density of 2t/m ³ was used for the tonnage calculation, based upon the density measurements of surface samples taken onsite at Hillview and a comparison of data density data from similar calcrete hosted deposits.

Initial metallurgical testwork has commenced to provide an indication of the potential leach amenability of the uranium mineralisation.

Figure 1. Hillview Uranium Deposit - Drilling Location and Mineralised Zones

* Historical uranium mineralisation grades are annotated with a sub-prefix 'e' because they have been reported as uranium equivalent grades derived fromdown-hole gamma ray logging results and should be regarded as approximations only. Gamma logging or "total count gamma logging" (the method usedby Western Mining Corporation Limited at Hillview) is a common method used to estimate uranium grade where the radiation contribution from thorium andpotassium is very small. Sandstone and calcrete hosted deposits are usually of this type. Gamma logging does not account for energy derived from thoriumand potassium (as does spectral gamma logging) and thus the result is expressed as an equivalent value or eU308.The gamma radiation from potassium, uranium and thorium is dominated by gamma rays at specific energy levels. These energy levels are sufficiently wellseparated such that they can be measured independently of each other. They are typically measured as narrow energy bands that contain the specific energylevels. Bands are used because the measuring systems do not have the resolution to target a specific energy wavelength. There is some scattering of higherenergy gamma radiation, e.g.thorium, into lower energy radiation, e.g. uranium and potassium. This scattered radiation can be calculated from suitablecalibration procedures and removed from the lower energy level measurements. This method is commonly termed spectral gamma logging.The downhole gamma logging system used by Western Mining Corporation Limited on this project was the ELMAC 2000.