Watch It ! Xemplar Energy

As a result of the above work by the Sarusas Group, General Mining and Finance Corp. entered into a joint venture with the Sarusas Group to develop the Engo Valley uranium project. Under this agreement, General Mining carried out exploration work in the area between 1974 and 1980. Approximately 5,784 metres of drilling was carried out on the project. As a result of their work they were able to report a calculated ore reserve for the Engo Valley uranium deposit, of approximately 5.68 million tonnes at 0.34 kilogram per tonne U3O8.

This historical resource estimate was prepared in accordance with generally accepted practices used at the time and do not reflect current mineral categories as outlined in National Instrument 43-101. While the resource calculation is believed to be reliable, the data supporting the estimate are not currently available. Since the data are not available to Xemplar, it is not treating it as a National Instrument 43-101 defined resource verified by a qualified person. The reader is cautioned that one should not rely on this resource estimate.

In a report written on the Engo Valley project by B.A. Fletcher (general mining, project geologist), 1979, the following comment was made:

"Detail I area has an estimated potential for approximately 15 million tons of ore at a grade of approx 0.4 kilogram per tonne U3O8. However a large amount of drilling is required to prove the reserves."

As part of the Namibia\'s northwest development, it has been proposed by the Namibian government that a harbour be constructed at Cape Fria. This will be Namibia\'s third deep water harbour. A prefeasibility study is currently under way. If this work goes ahead, it will mean that a full deep-water harbour will be located some 40 kilometress south of the Engo Valley uranium deposit.

The succession of rock types in the area consists of rocks of the Damara sequence, which are unconformably overlain by Karoo sequence rocks. The Damara is made up of schists, gneisses and calc-silicates rocks equivalent to the Kuiseb formation. The rocks are highly metamorphosed and structurally complex. The Kuiseb formation is intruded by tectonic granites that are quite radioactive. It is thought that these granites are the source of the uranium mineralization in the area. In places the Damaran basement is overlain by sedimentary strata of the Karoo sequence. The basal Dwyka formation consists mainly of tillite, shale, pebbly shale and lenses of conglomerate, grit, marl, mudstone and sandstone. Detailed field studies carried out by General Mining have suggested a possible fluvio-glacial to lacustrine depositional environment. A number of prominent radiometric anomalies have been recorded in the Engo Valley over a distance of about 20 kilometres. Follow-up ground radiometric surveys by General Mining delineated four anomalous areas. In the largest of the four areas, visible uranium mineralization (carnotite) is disseminated in the coarse clastic strata of the Dwyka formation. The black shale of the Dwyka formation contains large amounts of sulphides, mainly pyrite. In the shale band of the middle Engo formation the uranium occurs as fine-grained uraninite. The uranium mineralization appears to be confined to the Dwyka and Engo formation of the Karoo sequence.

The exploration target is a mineralized Dwyka and Engo formation. The mineralization model would be similar to a sandstone-conglomerate and siltstone-hosted epigenetic/diagenetic deposit of which the rollfront and paene-concordant type in the United States are best known. Exploration work during the tenure of the ERL will consist of an extensive and thorough data compilation of all existing borehole data, uranium assays and detailed airborne radiometrics. A ground radiometric survey together with an extensive Alphatrack radon survey is also planned.

The Engo Valley uranium deposit lies within a Permo-Triassic-age Karoo sediments. These sediments are quite extensive in this part of Namibia and little work has been done to explore for this type of occurrence. It is Xemplar\'s intention to explore all of these occurrences within the licence area.

The Engo Valley uranium deposit is a significant resource for Xemplar and the company intends to proceed with its development as quickly as possible. The company appreciates that this part of Namibia is an environmentally sensitive area and as a result the company has provided for in its exploration program, an integrated environmental management program.

We seek Safe Harbor.