Yeelirrie Channel Project

(E53/1158, E36/541) - Encounter 80%, Avoca 20% ( ELA53/1251) - Encounter 100%

Encounter concentrated its early exploration activities within the Yeelirrie drainage, located approximately 60kms south west of Wiluna. This channel is host to the world's largest calcrete associated uranium deposit, BHPB's Yeelirrie uranium deposit, with a published resource of 52,500 tonnes of U 3O 8.

The potential for additional satellite uranium deposits in the Yeelirrie channel was founded in the discovery of Bellah Bore East in 2007. Bellah Bore East is located up stream of the Yeelirrie uranium deposit and has an Inferred Resource of 350,000tonnes averaging 210ppm U 3O 8 for 160,000pounds of U 3O 8, estimated in accordance with the JORC (2004) Code.

Reassessment of Encounter's ground holding has resulted in a rationalisation of tenements in the area. Encounter still has the belief that there is potential for calcrete associated and basal palaeochannel uranium mineralisation within the Yeelirrie catchment. An application for ELA53/1427 is a target based on the palaeochannel uranium model similar to the Beverley uranium deposit in South Australia. Exploration will commence once the tenement is granted.

Bellah Bore East (E53/1158)

Bellah Bore East was targeted to evaluate a discrete, high amplitude airborne radiometric anomaly. A field examination in the area of the airborne anomaly identified visible uranium mineralisation within an outcrop of silicified calcrete.

In early June 2006, five reconnaissance aircore holes (EYN001-5) were drilled at Bellah Bore East to determine the nature and depth extent of the outcropping uranium mineralisation. Drill holes EYN001 and EYN005 intersected a highly anomalous, near surface zone of uraniferous silicified calcrete that remained open along strike and to the west.

  • EYN001 - 7m @ 100ppm U 3O 8 from 1m, including 2m @165ppm U 3O 8 from 5m
  • EYN005 - 8m @ 123ppm U 3O 8 from 0m, including 3m @ 204ppm U 3O 8 from 0m

In July 2006 an 18 hole aircore drilling program was completed to test the immediate area to the north, south and west of the uranium mineralisation intersected in EYN001 and EYN005. Drill hole EYN064, located roughly in the centre of this calcareous zone, has intersected 3m @ 781ppm U 3O 8 from 4m including 1m @ 2,111ppm U 3O 8.

The 32 hole follow up program in December 2006 at Bellah Bore East was designed to test for strike repetitions and the continuity of near surface uranium mineralisation. The drilling confirmed the continuity of near surface uranium mineralisation at Bellah Bore East. Results include:

  • 8m @ 215ppm U 3O 8 from 0m incl. 2m @ 410ppm U 3O 8 from 1m
  • 10m @ 166ppm U 3O 8 from 0m incl. 2m @ 410ppm U 3O 8 from 1m

An Inferred Mineral Resource of 350,000t averaging 210 parts per million U 3O 8 for a contained U 3O 8 content of 160,000lb of U 3O 8 has been estimated in accordance with the JORC Code (2004).

The results at Bellah Bore East have confirmed the initial hypothesis that satellite uranium occurrences are still to be found within the Yeelirrie channel catchment and Bellah Bore East is interpreted to be remnant calcrete drainage.

Table 1. Bellah Bore East Resource Summary

Tonnes

U 3O 8 ppm

Contained U 3O 8 tonnes

Contained U 3O 8 pounds

350,000

210

73.5

160,000
The numbers in this table are rounded to reflect the accuracy of the estimation process and as a consequence exhibit rounding errors. Both Contained U 3O 8 tonnes and Contained U 3O 8 pounds are based on contained metal content and at this stage do not consider any mining, metallurgical or economic parameters.The estimate is based on a cut off of 100ppm U 3O 8 over a minimum downhole distance of 1m. Shallow aircore drilling has been completed on a nominal 150m by 150m grid. All grade values used in the calculation are based on chemical analysis of representative drill samples. A specific gravity of 2.1 was used in the calculation which is an assumed figure based on a literature search of similar deposits found in Western Australia and Namibia.The mineralised zone varies in vertical thickness from 1m to 6m. The main uranium mineral identified in drilling is carnotite which is a common mineral found in Surfical style deposit in Western Australia. All mineralised intervals in the modelled area are within 10m of surface and, therefore, are potentially easily mined. Additional drilling is required determine the extent of the higher grade core of the mineralisation centred on EYN064 (3m@781ppm U 3O 8 including 1m@2111ppm U 3O 8). The assay interval of 1m@2111ppm U 3O 8 in EYN064 was treated as an outlier in the resource model and cut to 500ppm U 3O 8. If further drilling can extend the high grade area it is anticipated that the resource grade will increase.

Altona Gap (E36/541)

The Altona Gap prospect is the 4km gap between the Yeelirrie deposit and Yeelirrie South mineralisation (both resources are owned by BHP Billiton). The maximum depth drilled was 15 meters by both Encounter Resources (2007) and historic WMC drilling in the 1970s. In 2008, eight reverse circulation holes tested a deeper portion of the channel to 30m below surface.

Alluvial sediments of mixed clays, loams and sands are common near the surface, averaging 3 to 7ppm uranium. Deeper in the regolith profile, between approximately 25m to 30m, lateritic gravels, silcrete and laterite are developed above oxidised residual basement granitic rocks. The gravels and silcrete are weakly anomalous averaging 10 to 15ppm uranium. Results up to 27ppm U are located within the silcrete and gravels near the residual-transported contact.

There is still potential for uranium mineralisation along the main channel and this will be evaluated in the next year.