Honeymoon not over for Southern Cross (June 01, 2004)

Southern Cross Resources (SXR-T) has identified more uranium within 500 metres of the Honeymoon Resource on Mining lease 6109 in the Curnamona area, 75 km northwest of Broken Hill in the state of Southern Australia.

The latest drilling, 19 holes totalling 2,322 metres, delineated the Brooks Dam prospect, a belt of uranium mineralization northwest (and downstream) of the Honeymoon deposit.

The prospect has a strike length of at least 1 km and grade thickness values ranging from 0.23 metre per cent to 0.83 metre per cent. It has been delineated by grades greater than 0.03% U₃O₈, based on an internal dilution of less than 20 cm, and across a mining width of at least 20 cm. Two thirds of this resource lies within the mining lease; the remainder is north, on exploration licence 3017.

A new logging method was used during the latest drilling. The prompt fission neutron (PFN) tool measures uranium grades directly, and at the Brooks Dam prospect, this method has resulted in grade thickness values about three times as great as gamma logging.

The disequilibrium factor (DEF) is the ratio between true uranium grade as measured by the PFN tool to equivalent uranium grade as calculated from uranium’s gamma-emitting decay products. In a test of the PFN tool, the DEF values at Honeymoon averaged 1.18.

DEF values of 2-10 resulted from logging the Brooks Dam holes. This indicates that previous gamma-logging may have underestimated the uranium content of deposits similar to this, which are at some distance from a uranium source. Southern Cross intends to drill at Goulds Dam to see if it can improve the low-grade resource there using this technology.

Drilling will begin in mid-July to define the Brooks Dam prospect further.

The Honeymoon resource is a Tertiary uranium deposit with an indicated resource of 2.8 million tonnes grading 0.12% U<->3

O<->8

for a total of 7.3 million lbs. U₃O₈ at an average grade thickness of 0.84 metre per cent U₃O₈. This resource is based on upper and basal sands, and used a 0.01% cutoff and a 0.2-metre-per-cent grade-thickness secondary cutoff.

Forty-three holes totalling 5,874 metres were drilled east of Honeymoon in an attempt to expand the resource in that direction. Thick packages of coarse sand and gravel were intersected, confirming the presence of basal units in the paleo-channel, but no significant mineralization was intersected.

Thirteen holes totalling 1,374 metres tested the Yarramba prospect, about 12 km north of the Honeymoon deposit. One hole intersected 0.97 metre per cent U₃O₈, and three other holes recorded values ranging from 0.11 to 0.16 metre per cent, but the remainder recorded no significant values.

Southern Cross has $7 million and no debt. At April 30, the company had 59.8 million shares outstanding, or 71.7 million shares on a diluted basis.