ferrets stock to watch: eromanga uranium

Ferret's Stock to Watch: EROMANGA URANIUM LTD
08:33, Tuesday, 1 May 2007

Sydney - Tuesday - May 1: (RWE Aust Business News)
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OVERVIEW
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The weekend decision by the Australian Labor Party to scrap its
"no new uranium mines" policy has provided a fillip for the melange of
companies scouring the country for the radioactive material.

Eromanga Uranium Ltd (ASX:ERO), one of the many recently listed
on the Australian Stock Exchange, has a solid portfolio in the hotbeds
of uranium exploration activity within the Eromanga and Gawler cratons
in South Australia and Northern Territory.

The company has recently completed over 4,000 line/kilometre of
airborne EM surveys at the Marree JV project in which it has a 70 per
cent interest with partner Maximus Resources (ASX:MXR) in northern South
Australia.

Last month it delineated a previously unknown and unexplored
palaeodrainage system.

This buried river system, located entirely within Eromanga's
tenements, has over 100km of deeper channels capable of hosting
sandstone hosted (rollfront) uranium deposits.

The data identified an area 20km by 10km containing a cluster of
six discrete anomalies.

Eromanga has applied for two additional exploration licences
covering approximately 1,870sqkm immediately to the west of current
tenements at Marree.

At Billa Kalina, SA, Eromanga is earning 50pc in a joint venture
with Maximus and drilling of two deep diamond drill holes to test the
gravity anomaly will take place shortly. This gravity anomaly is similar
to those at Carrapateena and Prominent Hill and is considered
prospective for iron oxide copper/gold/uranium-style mineralisation.

At the Illogwa Creek project, NT, where the company is earning
70pc in a JV with Maximus, the first meeting with the traditional owners
is expected to take place in the second week of May.

Provided that the response from this meeting is positive there
will be a requirement for a second meeting and subsequent Heritage
Clearances before on-ground exploration can commence.

Eromanga plans a very active June quarter with airborne EM
surveys at Billa Kalina and Abminga and the commencement of drilling at
Billa Kalina and Marree.

SHARE PRICE MOVEMENTS
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Shares of Eromanga have posted a rolling high of 38c and low of
17c since its listing. The shares closed yesterday at 36.5c, up 3.5c

The company has 61,339,203 shares on issue with a market cap of
$21.78 million.

Maximus Resources holds approximately 44.36m (35.4pc) shares in
Eromanga.

BACKGROUND
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Eromanga listed on the ASX on October 31, 2006.

Its projects include:

Marree (70pc): 40km east of Marree in SA. The Marree
Palaeodrainage is constrained to the west by a major basement fault.
Interpretation of the survey data suggests that this fault structure was
a major barrier to water flow and caused the development of an ancient
swamp or lake system.

The company believes this type of palaeo
environment would result in an excellent site for later development of
rollfront style uranium mineralisation. Data was originally acquired, in
1993, as part of the government-sponsored South Australian Exploration
Initiative (SAEI) and covers the entire tenement position at the Marree.
The multi-channel radiometric data has been re-processed, using various
ratios, to identify areas of anomalous or elevated gamma responses which
may be due to the presence of uranium at surface.

Analytical results
returned a best value of 85ppm uranium (two samples) with six of the 32
samples assaying in excess of 50ppm uranium. These anomalous uranium
results, whilst not economic, are important for confirming the presence
of elevated uranium concentrations in bedrock over a substantial area.

Illogwa Creek (70pc): 200km east of Alice Springs in NT with two
exploration licence applications covering 1,333sqkm. Tenements
positioned at the contact between the Eromanga Basin and the eastern
margin of the late Proterozoic Arunta province. The company is targeting
sandstone-hosted uranium mineralisation along shallow basin margin.The
Illogwa project is the most northern tenement holding forming part of
the Eromanga Basin initiative.

Billa Kalina (50pc): 70km from Olympic Dam mine in SA. The JV
covers all non-diamond minerals in five granted exploration licences
covering 4,084sqkm. The company is targeting sandstone-hosted uranium
deposits in Permian palaeodrainages along the margins of the Arkaringa
Basin.

Targeting gravity highs for Olympic Dam-style iron oxide
uranium/copper/gold with geophysics and drilling. The northwesterly
trending G2 structural corridor, a continental scale geological feature
thought to represent a long lasting zone of crustal weakness along which
the Olympic Dam mineralisation is located, passes through the Eromanga
tenements.

Billa Kalina consists of five largely contiguous tenements in
which, by agreement with Flinders Diamonds (ASX:FDL) can be explored for
non-diamond minerals by the JV.Interpretation of regional gravity data
has highlighted a broad gravity high beneath the overlying younger
sediments.

Kingoonya (70pc): The company is targeting shallow sandstone
hosted deposits as well unconformity-related uranium mineralisation.
Located mid-way between the townships of Glendambo and Coober Pedy, SA,
the project contains four exploration licences and one exploration
licence application covering 4,060sqkm.

The project is targeting two
distinct styles of uranium mineralisation - shallow sandstone hosted
deposits in Mesozoic and Tertiary palaeodrainages and deeper
unconformity related deposits similar to the high grade systems at
Alligator River, NT.

Abminga (70pc): In northern South Australia with seven
exploration licence applications covering 6,966sqkm.A contiguous block
positioned over the contact between the Eromanga Basin and the uranium
enriched Musgrave Block. Over 230 kilometres of basin margin to explore.

The company is targeting sandstone hosted uranium deposits in Mesozoic
palaeodrainages along the basin margin. The Abminga project is the
largest of the four projects which make up the Eromanga Basin
initiative. The project will explore over 230 kilometres of the Eromanga
Basin margin where it is in contact with the metamorphosed sediments and
volcanics of the middle Proterozoic Musgrave Block.

The target is
sandstone hosted uranium mineralisation in the Mesozoic palaeodrainages.
Limited previous exploration in 1975 by BHP identified northeast
trending palaeovalleys along the southern basin margin.

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.