ASX : UXA
"On the Road to Discovery"

2007 highlights

July 2006:
Analyses of core samples from first two drill holes of UXA's first campaign of drilling (April-June 2006) indicate low levels of anomalous silver at Sloane Hill Prospect on EL 3429 in South Australia as well as low levels of iron sulphides plus traces of copper sulphides in SH-2. Analytical results being correlated and modelled to determine significance.

August 2006:
Analyses of additional core samples from Sloane Hill drill program indicate traces of iron and copper sulphides associated with silver and tungsten and some garnet. UXA Board approves second drilling campaign to include additional Sloane Hill Prospect investigation, and reconnaissance drill holes on other South Australian ELs. EL 52/1835 Angelo River North granted in Western Australia.

September 2006:
Four additional ELAs filed by UXA in South Australia totalling 3,002 square kilometres (km2). Modelling and interpreting core analyses from first drilling campaign.

October 2006:
UXA commences second drilling campaign of up to 4,000 metres drilling on EL 3429, EL 3432, and EL 3494 in South Australia. EL 36/546 Yeelirrie South East granted in Western Australia.

November 2006:
International uranium executive Mr Patrick Mutz joins UXA as CEO. Second drilling campaign continues. Consulting geologist and geophysicist engaged for independent reassessment of UXA EL.

December 2006:
Independent reassessment of UXA's EL package and exploration strategy being conducted by CEO and consulting geologist and geophysicist to develop more aggressive exploration plan and budget. EL 3679 Playford South East granted in South Australia. Second campaign of drilling completed with 3,345 metres drilled on three South Australian ELs. UXA awarded $50,000 PACE Grant for Sloane Hill Prospect on EL 3429 in SA.

January 2007:
Board approves aggressive 18-month exploration plan and budget including 20,000 metres drilling. UXA Board appoints Mr Patrick Mutz as Managing Director. New exploration program detailed geological and geophysical studies begin.

February 2007:
Relocating UXA registered and corporate office from Sydney to Adelaide. Office Manager added to permanent staff. Board approves UXA marketing and funding plan. Detailed plans finalised for commencement of field activities in SA.

March 2007:
Geophysical surveys are scheduled for key ELs in South Australia. Native Title clearances and Woomera Prohibited Area access approvals scheduled. Phase one fund raising of $2.99 million with placement of shares equivalent to 15% of capital.
2007 highlights (continued)

April 2007:
Native Title clearances and detailed ground-based gravity surveys are conducted on EL 3431 in South Australia. UXA signs Strategic Alliance agreement with Geoscience Associates Australia for priority access to prompt fission neutron (PFN) technology. EL 3751 Sloane Hill East is granted in South Australia. Field Geologist, Field Supervisor, and Receptionist added to permanent staff.

May 2007:
UXA signs joint venture agreement with Newcrest for Newcrest to earn 75% in EL 3494 in South Australia. Detailed gravity surveys are conducted on EL 3430 and EL 3679 in South Australia. Phase two fund raising launched through share purchase plan (SPP). UXA signs drilling contract with United Drilling Services for minimum 3,000 metres drilling. Field Geophysicist and Field Assistant are added to permanent staff.

June 2007:
UXA signs joint venture agreement with Rosscraft for option for UXA to earn 75% in Marcollat EL in South Australia. UXA launches third drilling campaign. Reconnaissance hole being drilled at Marcollat EL. Native Title clearances for drilling conducted on EL 3430 and EL 3679. First hole being drilled on EL 3430 in South Australia. SPP closes with take-up of $2.8 million and balance to $6 million to be underwritten. General meeting of Shareholders held in Sydney.


Subsequent to 30 June 2007:

July 2007:
$1.5 million of SPP shortfall underwriting placed. Experienced geologist Simon Powell joins UXA as Exploration Manager. UXA's third drilling campaign continues with 4 additional drill holes on EL 3431 in SA. Detailed gravity surveys conducted on EL 3432 in SA. Detailed airborne magnetics and radiometrics conducted on EL 52/1835 in Western Australia. UXA conducts road show in Sydney and Melbourne. UXA granted four additional ELs in South Australia: EL 3863, EL 3864, EL 3865, and EL 3866. This granting makes UXA the largest single EL holder on the Stuart Shelf in SA. UXA signs second drilling contract with Tom Browne Drilling for minimum 2,700 metres drilling.

August 2007:
Detailed airborne magnetic and radiometric surveys are conducted on EL 36/546 in Western Australia. Detailed gravity surveys conducted on EL3470 in South Australia. PACE Grant drilling conducted on EL 3429 in SA.



Letter from the Chairman

I am pleased to report that Uranium Exploration Australia Limited (UXA) made significant progress in 2006-07 towards its goal of becoming a successful uranium, precious and base metals explorer with a further goal of becoming a uranium producer.

Bringing our prospective EL portfolio and some exciting new exploration tools together is a first-class management team headed by Mr Patrick Mutz who joined UXA in November 2006 as CEO and was appointed UXA's Managing Director in January 2007. Mr Mutz has 30 years uranium exploration, mining and processing experience in the United States, Australia and Germany.

Most recently, he served as Managing Director of Operations for Heathgate Resources in South Australia, which owns and operates the Beverley uranium mine - Australia's only, and the world's largest, in situ leach uranium operation. Mr Mutz was also head of Heathgate's exploration affiliate, Quasar Resources, which in 2006 announced the discovery of a new world-class uranium deposit in South Australia known as Four Mile.

I am delighted that Mr Mutz accepted the appointment to UXA and believe this heralds an exciting future for your Company.

With much of UXA's EL portfolio based in a highly prospective, and producing, mineral region in South Australia, your Directors decided to move the UXA head and registered office to Adelaide. While there was a certain degree of disruption associated with the relocation - which was completed on 1 March 2007 - UXA now has greater access to scarce exploration resources.

Furthermore, even before the recent positive change in Australian Labor Party policy towards uranium mining, the SA Government was already a strong supporter of uranium exploration and mining, and backs its commitment to the resources sector generally with practical assistance through the Plan for Accelerated Exploration (PACE). In 2006, UXA was the beneficiary of a $50,000 PACE Grant for exploration drilling at Sloane Hill on UXA's Prominent Hill EL in the Gawler Craton.

In January 2007, the Board of Directors approved an exciting new exploration plan and budget that committed $10.8 million to a comprehensive program of surveying, sampling and drilling activity across UXA's EL over the period to 30 June 2008.

Highlights of UXA's activities to date include:

Commencing a third drilling program in June 2007 on the highly prospective Stuart Shelf area of the Gawler Craton where UXA has a total of 13 ELs and ELAs located in a mineralised corridor hosting the Olympic Dam Mine, the Prominent Hill mine development and the 2005 copper/gold discovery at Carrapateena.

Signing a joint venture agreement with Newcrest in May 2007 under which this major Australian mining company can earn a 75% interest in UXA's Oak Dam Northeast EL in the Gawler Craton by spending a minimum of $3 million in the search for base metals. UXA retains the right to develop, mine and market uranium from any uranium-only discovery on this EL. Newcrest has already completed a first-stage gravity survey across the entire EL in July 2007.

Signing an option and joint venture agreement with Rosscraft under which UXA can earn an interest of up to 75% of the Marcollat base metals and gold prospect located in the south-east of SA with an outlay of up to $1.6 million over five years.

Another significant development that augurs well for our future exploration prospects was UXA's completion in early 2007 of a Strategic Alliance agreement with Geoscience Associates Australia to secure priority access to the leading edge Prompt Fission Neutron (PFN) technology.

UXA intends to be the first grassroots exploration company in Australia to utilise this state-of-the-art exploration technology that facilitates down-hole detection and measurement of uranium. Unlike conventional gamma tools that detect uranium indirectly by measuring the gamma energy from the daughter products of uranium, PFN measures uranium concentration directly by neutron bombardment and fissioning of uranium-235.

Under certain conditions, conducting uranium exploration with conventional gamma tools alone may result in the explorer ‘stepping over' a uranium deposit, or interpreting uranium where none exists.

PFN technology is much more effective in detecting uranium and can:

  • Eliminate the possibility of missing uranium in the borehole,
  • Provide foolproof and immediate analysis of uranium within the borehole,
  • Analyse a larger mass of host rock than core samples or drill cuttings,
  • Reduce the cost of time-consuming chemical analyses, and
  • Eliminate the need for core sample collection in initial exploration stages.
Another key addition to UXA's senior management team was the appointment of Mr Simon Powell as Exploration Manager. Simon has twenty years of geology and geophysical experience in the mining industry throughout Australia. He joined UXA from BHP Billiton where he was involved in the supervision and coordination of up to 15 drilling rigs, operating 24 hours per day, on the Olympic Dam expansion project.

UXA looks forward to successfully undertaking a substantial exploration program in the months ahead that includes plans for up to 20,000 metres of exploration drilling to be completed by 30 June 2008.

As UXA embarks on this major exploration program, the outlook for uranium prices remains strong. Current uranium supply shortfalls are expected to be exacerbated by dwindling secondary supplies and forecast strengthening of uranium demand as governments in China, India, Russia, Europe, North America and elsewhere respond to the need for lower CO2 emitting sources of base load electricity, in response to climate change concerns, and push to build more nuclear power stations.

I would like to extend the appreciation of the Board of Directors for the hard work and commitment of the UXA exploration team in a year that has placed UXA in a strong position for future success.



Neill Arthur
Chairman

28 September 2007



Corporate strategy

UXA was established to explore for, locate and develop commercial grade uranium mineralisation in its project areas where there may also be associated copper, gold and silver. UXA's initial focus is on exploration in geological provinces containing some of the world's largest uranium mines and deposits in Australia, where up to 50% of world's known low-cost recoverable uranium resources are located. UXA will implement this strategy by:
  • Utilising available geological, geophysical, geochemical, geomorphological and exploration data from a wide variety of sources to provide input for UXA's exploration models,
  • Developing and refining specific exploration models for individual or groups of ELs based on geographical location, geological setting, and source and type of potential mineralisation,
  • Conducting detailed geophysical surveys in areas of sparse, outdated or non-existent coverage,
  • Selecting prospective drilling targets based on appropriate interpretation of modelled data,
  • Utilising the best available exploration technology and information gathering, modelling and interpretation techniques,
  • Systematically evaluating its ELs by drilling prioritised targets and feeding results back into the model and refining the exploration strategy as necessary,
  • Acquiring access to additional prospective exploration ELs through ELAs and/or joint ventures, and
  • Evaluating opportunities to secure interest in existing uranium resources through joint ventures, acquisitions and/or mergers.
UXA's focus is on the systematic exploration of its ELs in Australia that have the potential to yield commercial deposits of uranium, copper, gold and silver.

UXA has 17 ELs and 5 ELAs) in areas prospective for uranium and/or associated precious and base metals in South Australia, Western Australia, the Northern Territory and New South Wales. Of these:
  • All thirteen South Australian ELs are located on the highly-prospective Stuart Shelf which hosts BHP Billiton's world-class Olympic Dam copper, gold, uranium mine (the world's largest single uranium resource), Oxiana's Prominent Hill copper/gold mine development, and the 2005 discovery of the Carrapateena copper/gold deposit.
  • Previous drilling by other parties has revealed uranium mineralisation near UXA's two Western Australian ELs,
  • One EL in the Northern Territory is located in the Ngalia Basin hosting known uranium mineralisation at Bigrlyi and Ngalia-Walbiri,
  • In the Northern Territory two ELAs are located proximate to the former Nabarlek high-grade uranium mine, one ELA is located near the former Rum Jungle uranium mine, and one ELA is located in the vicinity of the known uranium deposits of Pandanus Creek and Westmorland, and
  • The single EL in New South Wales hosts granites with a prominent radioactive signature and is potentially prospective for rare earths, gold and copper.
Concepts behind UXA's Uranium Exploration Strategy

By far the greatest proportion of the world's known uranium resources are associated with ferruginous or hematitic (iron-rich) breccias - known as IOCGU deposits. Globally 50%, and within Australia 65%, of uranium resources are located in the Olympic Dam deposit on the Stuart Shelf, the northeast part of the Gawler Craton province of central South Australia.

UXA controls 7,369 km2 across 13 ELs prospective for this style of uranium mineralisation, stretching across a corridor of the Stuart Shelf in South Australia hosting the Olympic Dam Mine and elsewhere within this corridor, Oxiana's Prominent Hill mine development to the northwest, and the Teck Cominco/RMG Carrapateena deposit to the southeast.

The second most important style of uranium mineralisation is the Unconformity Vein style, best seen in the Alligator River region of the Northern Territory, the Athabasca area of Saskatchewan in NW Canada, and in Kazakhstan, which, when combined, make up 33% of global uranium resources, and 20% of Australian resources (UIC 2006).

UXA has four ELAs prospective for this style of uranium mineralisation along the east, west and south margins outside of the Kakadu National Park in the Alligator River region of the Northern Territory. UXA is negotiating with the Northern Land Council and traditional owners for the grant of each of these ELAs.

The third most important uranium mineralisation style is within sandstones and calcrete host rocks. Globally this style accounts for 15% of uranium resources, however in Australia to date only 5% of uranium resources are found in these rocks.

UXA has one EL and one ELA prospective for this style of uranium mineralisation:
  • Yeelirrie South East (EL 36/546) in Western Australia, on the southeastern margin of BHP Billiton's undeveloped Yeelirrie calcrete hosted uranium deposit in Western Australia, part of the largest calcrete hosted uranium occurrence in Australia and the world.
  • Pandanus West (ELA 24565) in the Northern Territory, immediately to the west of the old Pandanus Creek uranium mine, currently held by Rio Tinto in the Westmoreland area. UXA's Pandanus West ELA is part of the largest known sandstone-uranium occurrence in Australia, which extends for over a 50 kilometres (km) strike across the Northern Territory/Queensland border.
In April 2007, the Australian Labor Party changed its policy regarding uranium mining and eliminated the long-standing "three mines policy". At the end of June 2007, uranium mining and exploration are restricted by State legislation in New South Wales and Victoria; uranium exploration is allowed, but uranium mining prohibited in Queensland and Western Australia; and uranium exploration and mining are allowed in South Australia and the Northern Territory. Of these latter two, South Australia has the most progressive and supportive policies and regulatory regime for uranium exploration and uranium mining.

UXA's portfolio is strategically positioned to take advantage of these differences in State policies.
  • Seventy five percent of the total area of UXA's ELs is located in South Australia
  • Ninety three percent of its ELs and ELAs are located in South Australia and the Northern Territory
  • Similarly, UXA's primary exploration focus has been and continues to be on its South Australian ELs, where the granting of a uranium mine operating permit following discovery is more certain and likely to have the shortest overall timeline to market.




Review of operations

Background

Uranium Exploration Australia Limited (UXA) was conceived in late 2004 when it became clear that global energy demand, driven by rapid industrial growth in China, India, and other countries, was outpacing the supply of energy minerals. Uranium had already increased from less than US$8 per pound in 2001 to more than US$20 per pound in the latter part of 2004. Demand for uranium was forecast to continue to increase with the construction of new nuclear power stations to address higher energy demand and to complement efforts aimed at reducing greenhouse gas emissions over concerns regarding global warming.

In this climate of increasing energy demand and a rising uranium market, UXA began the process of selecting exploration tenements for uranium prospectivity, in areas of known uranium deposits throughout Australia. UXA listed on the Australian Stock Exchange (ASX) in November 2005 with a portfolio of 16 ELAs in South Australia, Western Australia, Northern Territory and New South Wales.

UXA's EL package at the time of listing included:
  • seven ELAs in South Australia near the world-class Olympic Dam Mine and the 1999 discovery of Prominent Hill
  • six ELAs in the Northern Territory near Nabarlek, Rum Jungle, Katherine, Pandanus Creek and within the Ngalia Basin
  • two ELAs in Western Australia near Yeelirrie and Angelo River; and
  • one ELA in New South Wales where airborne geophysics indicate granites with a prominent radioactive signature that may be prospective for uranium, rare earths, precious and base metals.
Immediately following listing, UXA began evaluating its exploration tenements and lodging additional licence applications to increase its exploration portfolio. Following the successful grant of several licence applications to EL status, UXA launched an initial reconnaissance drilling program in April 2006.

As of the end of June 2007, UXA controls 100% interest of a portfolio of 13 granted ELs and 9 ELAs covering a total area of 9,793 km2. Over 75% of this area is in the Gawler Craton in South Australia, in a mineralised corridor hosting the known iron oxide-copper-gold-uranium (IOCGU) deposits of BHP Billiton's Olympic Dam Mine, Oxiana's Prominent Hill mine development, and the 2005 discovery of the Teck Cominco/RMG Carrapateena project.

Corporate

On 29 January 2007, the Board of Uranium Exploration Australia Limited (ASX:UXA) appointed Mr Patrick Mutz as Managing Director. Mr Mutz has 30 years of uranium exploration, mining and processing experience in the USA, Australia and Germany. Prior to joining UXA, Patrick served as Managing Director of Operations for Heathgate Resources Pty Ltd and Quasar Resources Pty Ltd. Heathgate owns and operates the Beverley Uranium Mine in South Australia which is Australia's only, and one of the world's largest, in situ leach uranium mines. Quasar is the exploration affiliate of Heathgate that discovered a new world-class uranium deposit announced in 2006 called the Four Mile uranium deposit in South Australia.

The UXA Board also approved an expanded exploration plan and budget for an eighteen month program ending 30 June 2008. The program will be funded in part by a placement completed in March 2007, which raised $2.99 million and a Shareholder Participation Plan (SPP) underwritten by Martin Place Securities Pty Ltd to $6 million.

UXA relocated its principal place of business and registered office from New South Wales to South Australia 1 March 2007. With South Australia rapidly becoming one of the most active centres for exploration and mining development in Australia and the South Australian State Government being openly supportive of uranium exploration and mining, UXA made the decision to relocate its head and registered office to Adelaide. A South Australian location will facilitate UXA's access to scarce exploration resources in the State where UXA has focused its initial exploration and holds the majority of its ELs.

Joint Ventures

UXA has taken steps to expand its exploration efforts by entering into two strategic joint venture agreements.

In May 2007, UXA entered into a Joint Venture (JV) with Melbourne-based Newcrest Operations Limited (Newcrest). This JV is specific to EL 3494 - Oak Dam Northeast, one of UXA's numerous exploration ELs on the highly-prospective Stuart Shelf in the Gawler Craton in South Australia.

Under the terms of this JV, Newcrest has the right to earn 75% interest in EL 3494 by spending a minimum of $3 million in four years. UXA retains its full interests and rights to explore for uranium only, as well as to develop a mine and market uranium from any discovery containing uranium-only mineralisation, regardless of whether discovered by Newcrest or UXA.

The Oak Dam NE JV is an excellent example of UXA's ability to add value for Shareholders by attracting investment from a "major" to advance exploration while also sharing exploration risk.

In June 2007, UXA entered into an option and joint venture agreement with Rosscraft Minerals. The agreement is specific to EL 3013 - Marcollat, located approximately 50 km west of Bordertown in South Australia.

Under the terms of this agreement, UXA has the option to earn 25% interest in the Marcollat EL by spending a minimum of $60K on drilling, and may, at its sole discretion, increase its interest in stages to 50% and 75%, by spending up to a total of $1.6 million over five years.

Drill targets at Marcollat consist of coincident magnetic and gravity anomalies with the potential for base metals and gold within the basement rocks. In addition, prior drilling in the area by other explorers indicated a strong gamma signature in the cover sequence, suggesting a potentially unrecognised opportunity for uranium exploration in this area.

Advanced Technology

On 18 April 2007, UXA announced a strategic alliance with Geoscience Associates Australia (GAA) that provides priority access to Prompt Fission Neutron (PFN) technology for use in UXA's uranium exploration program.

PFN technology is utilised in a geophysical wire-line logging tool for the detection and measurement of uranium in boreholes. Unlike conventional gamma tools which measure uranium indirectly by measuring the gamma energy from the daughter products of uranium 238 (mainly bismuth 214), PFN tools measure uranium directly. Consequently, PFN is not affected by disequilibrium between uranium and its daughters and is therefore more reliable as a means of measuring uranium concentration in a drillhole. Under certain conditions, conducting uranium exploration with gamma tools alone can result in the explorer ‘stepping over' a zone of uranium mineralisation, or interpreting uranium where none exists.

UXA intends to utilise PFN technology to test for uranium in drillholes as UXA explores for uranium in targeted sediments and/or palaeochannels, as well as in the cover sequences overlying targeted IOCGU basement mineralisation.

Exploration

New Plan and Budget

Under the direction of its new Managing Director, UXA completed a reassessment of its exploration program and ELs in December 2006, in order to develop a more focused and aggressive exploration program and budget for 2007-08. The new 18-month program includes a systematic evaluation of UXA's ELs and involves considerable emphasis on additional geophysical surveys. It also includes updating the geological and geophysical models used to interpret available information and select new drill sites.

The new exploration plan and budget was approved by the Board of Directors in January 2007 and includes plans for up to 20,000 metres of exploration drilling focused primarily on UXA's ELs in South Australia, and will also include its ELs in Western Australia and Northern Territory.

South Australia

UXA's 2006 drilling program was restricted to its South Australian ELs. The reasons for this focus include:
  • the fact that UXA has 13 ELs and ELAs covering 7,369 square kilometres in South Australia
  • the prospectivity of the Stuart Shelf where UXA's South Australian ELs are located
  • the proximity of UXA's ELs to known deposits at Olympic Dam, Prominent Hill, and Carrapateena
  • the assistance provided with native title and heritage clearance by local indigenous groups
  • the State Government's open promotion and support for uranium exploration and mining
UXA completed its second campaign of drilling in 2006. This campaign started in August 2006 and was finalized in December 2006, for a total of 3,359 metres of drilling across three ELs.

The new exploration program for 2007 has been expanded to include plans for drilling on UXA's ELs outside South Australia. However, the majority of UXA's 2007 exploration activities are scheduled to remain in South Australia.

Prominent Hill South (EL 3429)

This EL covers an area of about 876 km2 and is located 15 km south of Oxiana's Prominent Hill mine development where the mineralisation is predominantly copper and gold with lower levels of uranium.

UXA's initial focus on this EL was related to a surface radiometric anomaly that is thought to be caused by uranium deposited by fluids reaching the surface along an interpreted fault on the southern margin of the anomaly in the Sloane Hill area.

The first program of drilling in April/May 2006 resulted in UXA reporting a significant silver anomaly in the Sloane Hill area based on assays from drill hole SH-1 and traces of silver in a number of other holes in the area. During the second campaign of drilling in August-December 2006, a "twin" hole was drilled immediately adjacent to the original SH-1 hole from the first drilling campaign, to verify the original assays. Silver assay results from drill hole SH-1 ‘twin' were substantially lower than the assays of the original hole SH-1. Further investigation of this situation has shown that the anomalous silver values reported previously were not confirmed, and the emphasis on silver in this area was therefore downgraded. Similarly, the interpretation of a volcanic horizon intersected in the Sloane Hill drilling has been revised to ferruginous sandstone, probably derived from erosion of Gawler Range Volcanics.

By the end of UXA's second drilling campaign in 2006, a total of fourteen holes had been drilled on EL 3429 in the Sloane Hill and Laurie Hill areas. While assay results were not generally encouraging, drillhole SH-7 at Sloane Hill returned a 3.1 metre section from 505 metres depth which assayed 68 ppm uranium. This intersection, in ferruginous Pandurra Formation sandstone, is considered significant as it is not associated with a reducing environment. Other anomalous intercepts in this same hole include 2 metres of 900 ppm zinc from a depth of 106 metres, and 2 metres at 6.3% manganese, 580 ppm lead and 70 ppm zinc from a depth of 802 metres (downhole lengths quoted, true width not known).

Assay results from drilling at Laurie Hill (LH-1) included a 6.4 metre interval containing 3.2 ppm silver, 970 ppm copper and 180 ppm zinc from a depth of 187 metres (split core assays, downhole lengths quoted, true width not known).

In December 2006, UXA was awarded a PACE Grant of $50,000 for drilling in the Sloane Hill project area. Additional drilling in this area is planned for July/August 2007 to further test the original interpretation of the fault in the Sloane Hill area.

Griffen Well (EL 3431)

This EL covers approximately 622 km2 and is located directly south of and contiguous with UXA's EL 3429 - Prominent Hill South, and is approximately 55 km south of the Prominent Hill mine development.

During the reassessment of UXA's EL package in December 2006, two areas of interest were identified on this EL. Primary interest is in a northeasterly-oriented fault interpreted from gravity, magnetic and drilling data. The second area of interest is a northwesterly-trending magnetic anomaly. Available regional gravity surveys were found to be broadly spaced at up to 6 km between stations.

Based on an exploration model for the Stuart Shelf incorporating coincident magnetic and gravity anomalies, UXA initiated the collection of ground-based gravity data across the identified areas of interest to provide detailed geophysical information for modelling and interpretation as well as for the selection of drill targets.

Detailed gravity surveys were conducted in April/May 2007 by Haines Surveys. Modelling this information, along with available magnetic data resulted in the selection of five potential IOCGU drill targets at depths less than about 500 metres.

Diamond drilling of the selected targets began in June 2007. The first three holes reached depths of 310, 198 and 568 metres. Drilling of the final two targets is scheduled for July 2007.

Inspection of core from the first three drill holes revealed only minimal indications of alteration that may be associated with mineralising processes. GW-01 intersected a 17-metre section of altered rock containing pyrite at a depth of 230 metres. Core sample preparation and analysis for all three holes was pending at the end of this reporting period.

Playford (EL 3430) and Playford Southeast (EL 3679)

EL 3430 and EL 3679 are contiguous ELs and cover approximately 285 and 477 km2 respectively. EL 3679 was granted to UXA in December 2006. These ELs are located approximately 40 km west-northwest of the Olympic Dam Mine and approximately 75 km southeast of the Prominent Hill mine development. They have large areas covered by salt lakes and sand dunes with occasional low ridges.

During the December 2006 EL reassessment, two large areas of interest were identified on these adjoining ELs based on available gravity and magnetic information. Regional gravity data is very sparse in this area, with station spacing of up to 6 km. Consequently, detailed gravity surveys were conducted across both areas of interest in May 2007. Modelling the detailed gravity and available magnetics resulted in the selection of four basement related drilling targets with potential for hosting IOCGU mineralisation. Native Title clearance surveys were conducted in June 2007 and drilling is scheduled to begin in August/September 2007.

Glenside (EL 3470)

This EL covers approximately 354 km2. It is located approximately 38 km south-southeast of the Olympic Dam Mine and is approximately 4 km north of BHP Billiton's Oak Dam prospect. (Oak Dam is an IOCGU prospect where anomalous uranium and copper are present within a large mass of iron oxides at the unconformity beneath the Mesoproterozoic Pandurra Formation. The prospect was investigated by Western Mining Corporation during the late 1980s.)

In a previous drill hole within EL 3470, Western Mining Corporation (WMC) intersected anomalous copper in granitic basement beneath thick Pandurra Formation cover. UXA is focusing on this magnetic anomaly but has additionally identified adjacent gravity and magnetic anomalies in the northwest of the EL as potential IOCGU targets. Detailed gravity surveys have been scheduled for August/September 2007 for a large area of interest on this EL. Detailed gravity data and existing magnetic data will be utilised in geophysical modelling and interpretation of potential IOGCU mineralisation and in selection of drilling targets.

During UXA's second drilling campaign in 2006, one diamond drillhole (HD-1) was drilled at the Hardy's Dam site to a total depth of 301 metres. This hole ended in Pandurra Formation above the crystalline basement, and assay results from drillcore provided no indications of significant mineralisation.

Winjabbie (EL 3432)

This EL covers approximately 539 km2. It is located approximately 57 km south of the Olympic Dam Mine and 47 km west of the Carrapateena project.

UXA drilled a single hole on this EL in 2006. Diamond hole BG-1 was completed to a total depth of 371 metres. Assay results indicated 21 metres averaging 127 ppm copper, 0.4% manganese, 236 ppm lead, and 710 ppm zinc from a depth of 350 metres to the bottom of the hole (downhole lengths quoted, probably close to true width). This intersection is hosted by the Tapley Hill Formation, which commonly displays elevated background levels of base metals.

During the exploration program reassessment in December 2006, three areas of interest for potential IOCGU mineralisation were identified on this EL. Two of the areas are large magnetic anomalies and the third area was identified by Geoscience Australia as a possible hematite-rich gravity anomaly and potential IOCGU host.

Detailed gravity surveys are planned for August 2007. Detailed gravity data and available magnetics will be modelled to identify potential IOCGU basement related mineralisation and to select specific drilling targets.

Roxby Downs West (EL 3428)

This EL covers approximately 348 km2 and is located approximately 30 km south-southwest of the Olympic Dam Mine and 5 km southwest of BHP Billiton's Acropolis prospect, a satellite of Olympic Dam.

Two areas of interest were identified on this EL during the independent EL reassessment in December 2007. The first is a large area with potential adjacent gravity and magnetic anomalies. The second area was identified by Geoscience Australia as a potential hematite-rich gravity anomaly.

Detailed gravity surveys are planned for both areas of interest for September/October 2007. Detailed gravity data and available magnetics will be modelled and interpreted to identify potential IOCGU basement related drilling targets.

Oak Dam North East (EL 3494)

This EL covers approximately 792 km2 and is located 6 km east of BHP Billiton's Oak Dam IOCGU prospect, approximately 52 km southeast of the Olympic Dam Mine. The southern boundary of the EL is 15 km north of the Carrapateena discovery.

In May 2007, UXA entered into a joint venture agreement (JV) with Melbourne-based Newcrest Operations Limited (Newcrest). The JV is specific to EL 3494 - Oak Dam Northeast and is called the Oak Dam NE JV.

Under the terms of this agreement, Newcrest has the right to earn 75% interest in EL 3494 by spending a minimum of $3 million in four years. UXA retains its full interests and rights to develop, mine and market uranium from any uranium-only discovery.

Newcrest's initial exploration efforts focused on a detailed gravity survey across the entire EL on a one-km grid pattern. This survey was completed in July 2007. A second stage of closer spaced gravity surveys will be conducted in specific areas of interest to identify potential IOCGU drilling targets.

Sloane Hill East (EL 3751)

This EL was granted to UXA by Primary Industries and Resources South Australia (PIRSA) effective 19 April 2007. The EL is an eastern extension of UXA's existing EL 3429 in the Sloane Hill Project area.

Marcollat (EL 3013)

In June 2007, UXA entered into an option and joint venture agreement with Rosscraft Minerals Pty Ltd (Rosscraft) regarding this EL. It is located approximately 50 km west of Bordertown in South Australia.

Geological investigations conducted by Rosscraft indicate the basement rocks on this EL may be of similar age and geological setting to lithological units of the Dundas Trough in western Tasmania, which hosts significant economic precious and base metal mineralisation.

Drill targets at Marcollat consist of coincident magnetic and gravity anomalies with the potential for base metals and gold within the basement rocks. In addition, prior drilling in the area by other explorers indicates a strong gamma signature in the cover sequence, suggesting possible opportunity for discovery of sediment-hosted uranium mineralisation.

UXA drilled a single reconnaissance hole on Marcollat in June 2007 to a total depth of 336 metres. Analysis of drill cuttings through the 54 metres of cover above basement resulted in only background levels of uranium, with a peak value of 2.5 ppm. Analysis of core samples resulted in relatively consistent and low levels of approximately 100 ppm zinc, 60 ppm copper and 0.17% manganese across the entire 282 metre core length.

Analytical results from this hole, including petrology, are being integrated with available geology and geophysics before deciding on an appropriate follow-on exploration program.

Northern Territory

UXA has one EL and five ELAs in the Northern Territory.

UXA has obtained Ministerial consent and having satisfied other legal requirements is now in the process of negotiating terms of an access agreement with the Traditional Owners and the Northern Land Council in respect of each of five ELAs, pursuant to the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth)(ALRA).

Complying with native title and heritage legislation and negotiation of access agreements in the Northern Territory is a lengthy process. The grant of these ELAs is expected to occur in 2008.

Ngalia Thrust (EL 24566)

This EL covers approximately 242 km2 and is located approximately 270 km northwest of Alice Springs. It is flanked by known uranium occurrences including the Bigrilyi and Walbiri prospects to the west and the Rankin's Reward and Rinkabeena prospects to the east.

This licence application was not subject to the requirements of the ALRA and was granted EL status in October 2005.

UXA conducted a reconnaissance sampling and mapping field survey on this EL in 2006. Four of the eight samples collected contained uranium greater than 10 ppm, with the highest sample at 25 ppm U. Airborne magnetic and radiometric geophysical surveys are planned for October 2007.

Nabarlek North (ELA 24868)

This ELA covers an area of approximately 224 km2 and is approximately 5 km north of the previously operated, high-grade Nabarlek uranium mine, 45 km northeast of the Jabiluka uranium deposit and 60 km northeast of the Ranger uranium mine. This ELA is adjacent to UXA's Nabarlek West ELA and is considered to be in an area that is under-explored. Past drilling by other companies in this area tested an area along the one main access track.

UXA has compiled available information on geology, geophysics and past exploration. Exploration cannot commence until the EL is granted EL status.

UXA is seeking the consent of the Traditional Owners to the grant of an EL pursuant to ELA 24868 in accordance with the ALRA.

Nabarlek West (ELA 24564)

This ELA covers approximately 84 km2 and is approximately 7 km west of the previously operated, high-grade Nabarlek uranium mine and 55 km northeast of the Ranger uranium mine. As with Nabarlek North, this EL is considered under-explored. Available information has been compiled. Exploration cannot commence until the tenement is granted EL status.

UXA is seeking the consent of the Traditional Owners to the grant of an EL pursuant to ELA 24564 in accordance with the ALRA. An initial country meeting has been scheduled by the Northern Land Council (NLC) for October 2007 to meet with the NLC and Traditional Owners and to present UXA's exploration and potential mine development conceptual plans.

Rum Jungle North East (ELA 24586)

This ELA covers approximately 35 km2 and is located 2 km northeast of the previously mined Rum Jungle Creek South mine and 2 km from Compass Resources' Brown's nickel-cobalt mine development. More than 1.5 million tonnes of uranium and uranium/copper ore was mined from the nearby Rum Jungle area mines, mainly White's, Dyson's and Rum Jungle Creek South, and a total of 3,530 tonnes of U3O8 was produced before the plant was closed in 1971.

UXA has compiled available information on geology, geophysics and past exploration. Exploration cannot commence until the tenement is granted EL status.

UXA is seeking the consent of the Traditional Owners to the grant of an EL pursuant to ELA 24586 in accordance with the ALRA. An initial country meeting is being scheduled by the Northern Land Council (NLC) to meet with the NLC and Traditional Owners and to present UXA's exploration and potential mine development conceptual plans.

Katherine North (ELA 24577)

This ELA covers approximately 223 km2 and is located approximately 15 km north of Katherine in the Northern Territory. This EL is adjacent to the "ABC" uranium prospect with high-grade (0.4% U3O8) surface mineralisation across a small area discovered in the 1950s.

UXA intends to determine whether the surface uranium at "ABC" is sourced by a larger mass of subsurface uranium along the nearby unconformity zone between the volcanic/granite basement and overlying sandstones.

As with the other Northern Territory ELAs, UXA has compiled available information on geology, geophysics and past exploration. Exploration cannot commence until the tenement is granted EL status.

UXA is seeking the consent of the Traditional Owners to the grant of an EL pursuant to ELA 24577 in accordance with the ALRA. UXA attended an initial country meeting in Katherine in April 2007 with the Northern Land Council and Traditional Owners and presented its exploration and potential mine development conceptual plans.

Pandanus West (ELA 24565)

This ELA covers approximately 988 km2 and is located approximately 50 km west of the Queensland/Northern Territory border and 35 km west of the Pandanus Creek uranium mine and 45 km southwest of numerous other former uranium mines and prospects.

This EL has a very large airborne radiometric anomaly covering over 200 km2 and several high amplitude magnetic anomalies. Field mapping and sampling are planned. Exploration cannot be conducted until the tenement is granted EL status.

UXA is seeking the consent of the Traditional Owners to the grant of an EL pursuant to ELA 24565 in accordance with the ALRA. UXA attended an initial country meeting at Boorooloola in July 2006 with the Northern Land Council and Traditional Owners and presented its exploration and potential mine development conceptual plans.

Western Australia

At the end of June 2007, the Western Australian Government allows uranium exploration, but does not allow uranium mining. As a result of UXA's primary focus on its South Australian ELs, no field work was conducted on its Western Australian ELs in 2006.

Yeelirrie South East (E36/546)

UXA's exploration licence application for this tenement was granted EL status in October 2006. This EL covers an area of approximately 171 km2 and is located approximately 50 km southeast of the Yeelirrie uranium deposit, which has an Indicated Resource of 52,500 tonnes U3O8 and is considered to be the world's largest calcrete hosted uranium deposit. It was discovered by Western Mining Corporation (WMC) in 1972.

Available geophysical information and past drilling data related to this EL has been compiled and analyzed. Detailed airborne magnetic and radiometric surveys are planned for July 2007. A field survey will be scheduled following evaluation of the geophysical survey data, for the purpose of selecting potential drilling sites.

Angelo River North (E52/1835)

UXA's exploration licence application for this tenement was granted EL status in August 2006. This EL covers an area of approximately 189 km2 and is located approximately 10 km north of the Angelo River Uranium Prospect. It is prospective for unconformity vein style uranium mineralisation.

As with the Yeelirrie South East EL, available geophysical information and past drilling data related to this EL has been compiled and analysed. Detailed airborne magnetic and radiometric surveys are planned for August 2007. A field survey will be scheduled following evaluation of the geophysical survey data, for the purpose of selecting potential drilling sites.

New South Wales

At the end of June 2007, New South Wales maintains a prohibition on uranium exploration and mining in accordance with State legislation.

Gulgong-Ulan South (EL 6498)

This EL covers approximately 270 km2 and is located approximately 20 km north of Mudgee.

A field trip was conducted on this EL in March 2007. Radiometric anomalies identified from regional airborne radiometric surveys are coincident with granite outcrops. Young sedimentary deposits at the base of these granite outcrops could potentially host Rare Earth Elements (REE) or other metals that may have been leached from the granites and re-deposited.

A shallow auger sampling program is being planned to evaluate the potential of these sediments to host mineralisation.


JORC Compliance Statement
Technical Information in this report is based on information compiled by Mr Hamish Paterson who is employed by Hamish Paterson and Associates Pty Ltd and who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Paterson has sufficient exploration experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' ("JORC 2004"). Mr Paterson consents to the inclusion in this release of the matters based on his information in the form and context in which it appears.




Details of all Tenements currently held at 27 September 2007

EL
Date
 Area
Number
 State
 Name
 Status
 Application
 Granted
 Expiry
 km2
EL 3428
 South Australia
 Roxby Downs West
 Granted
 21/02/2005
 20/10/2005
 19/10/2007
 348
EL 3429
 South Australia
 Prominent Hill South
 Granted
 14/04/2005
 20/10/2005
 19/10/2008
 876
EL 3430
 South Australia
 Playford
 Granted
 14/04/2005
 20/10/2005
 19/10/2008
 285
EL 3431
 South Australia
 Griffen Well
 Granted
 19/04/2005
 20/10/2005
 19/10/2007
 622
EL 3432
 South Australia
 Winjabbie
 Granted
 19/04/2005
 20/10/2005
 19/10/2008
 539
EL 3470
 South Australia
 Glenside
 Granted
 23/06/2005
 5/12/2005
 4/12/2008
 354
EL 3494
 South Australia
 Oak Dam North East
 Granted
 2/03/2005
 18/01/2006
 17/01/2008
 792
EL 3679
 South Australia
 Playford South East
 Granted
 15/03/2006
 18/12/2006
 17/12/2007
 477
EL 3751
 South Australia
 Sloane Hill East
 Granted
 28/06/2006
 19/04/2007
 18/04/2008
 72
EL 3863
 South Australia
 Mount Morgan East
 Granted
 11/09/2006
 30/07/2007
 29/07/2008
 652
EL 3864
 South Australia
 Twin Hill
 Granted
 11/09/2006
 30/07/2007
 29/07/2008
 924
EL 3865
 South Australia
 Porter Hill
 Granted
 11/09/2006
 30/07/2007
 29/07/2008
 590
EL 3866
 South Australia
 Chinaman Hat Hill
 Granted
 11/09/2006
 30/07/2007
 29/07/2008
 836
 
  Sub-Total
  
  
  
  
  
  7,367
EL 24564
 Northern Territory
 Nabarlek West
 Application
 2/02/2005
 -
 -
 83
EL 24565
 Northern Territory
 Pandanus West
 Application
 2/02/2005
 -
 -
 988
EL 24566
 Northern Territory
 Ngalia Thrust
 Granted
 2/02/2005
 21/10/2005
 20/10/2011
 241
EL 24577
 Northern Territory
 Katherine North
 Application
 2/02/2005
 -
 -
 222
EL 24586
 Northern Territory
 Rum Jungle North East
 Application
 14/02/2005
 -
 -
 35
EL 24868
 Northern Territory
 Nabarlek North
 Application
 19/08/2005
 -
 -
 224
 
  Sub-Total
  
  
  
  
  
 1,793
E36/546
 Western Australia
 Yeelirrie South East
 Granted
 4/02/2005
 8/10/2006
 7/10/2011
 170
E52/1835
 Western Australia
 Angelo River North
 Granted
 16/02/2005
 2/08/2006
 1/08/2011
 188
 
  Sub-Total
  
  
  
  
  
  358
EL 6498
 New South Wales
 Gulgong / Ulan South
 Granted
 21/03/2005
 4/01/2006
 3/01/2008
 269

Sub-Total




269









Grand Total




9,787




Directors' report

The Directors present their report together with the financial report of Uranium Exploration Australia Limited ("UXA") for the year ended 30 June 2007 and the auditor's report thereon.

1. Directors

The Directors at any time during or since the end of the financial year are:

Name and qualifications
 Experience, special responsibilities and other director relationships
Neill Fleming Arthur
Age 64
Chairman
Eur Ing BE Chem.(Hons), FAusIMM, C Eng, FIChE, FAICD
 Neill is a Director of The Australasian Institute of Mining and Metallurgy (The AusIMM); Chairman of Granite Power Limited; Chairman of Metallum Resources PLC (UK); until March 2006, Director of Superior Coal Limited; formerly CEO of ASX 200 listed and unlisted organisations in Australia and overseas; currently or formerly advisor on energy and infrastructure issues to a number of government bodies in Australia and overseas; and a professional mentor.
Other listed company Directorships held during past 3 years: Nil
Patrick Mutz
Age 49
Managing Director
Bs/BM (Hons), MBA/GM, REM, FAusIMM, MSME
 Patrick has 30 years of industry experience within the international uranium mining industry across executive, managerial and technical roles in the United States, Germany and Australia. He was until November 2006 the Managing Director of Operations at Heathgate Resources Pty Ltd in South Australia. Heathgate is an affiliate of General Atomics, USA, and is the owner and operator of the Beverley Uranium Mine in South Australia. Beverley is Australia's only and one of the world's largest and most advanced in-situ uranium mining operation. Patrick was responsible for all aspects of Heathgate's operations in Australia including affiliate Quasar Resources' exploration activities and new business development including the discovery of the Four Mile world-class uranium deposit in South Australia.
Mr Mutz is a registered Environmental Manager (REM) and holds a Masters of Business Administration in Global Business Management from the University of Phoenix (USA), as well as a Bachelor of Science in Business Management.

Other listed company Directorships held during past 3 years: Nil
Name and qualifications
 Experience, special responsibilities and other director relationships
David Leslie Hawley
Age 62
Non Executive Director
BA (Hons), GradDip EnvSt, FAIE, MAIG, MAusIMM, MEPLA of NSW, MAWA, MGSA
 David has had over 40 years experience in the energy and minerals exploration industry, with 15 years as a listed resource company director and 15 years as a uranium geologist. He is also a director of Granite Power Limited.
Other listed company directorships held during past 3 years: Nil
Stephen Geoffrey Gemell
Age 53
Non-Executive Director
BE Mining (Hons), FAusIMM(CP), MAIME, MMICA
 Stephen is consulting mining engineer who has had more than 30 years experience in the mining industry, both in Australia and overseas. He has previously held senior operating roles including CEO positions, and executive and non-executive Directorships in ASX-listed mining companies and unlisted mine operators or joint venturers.

Other listed company Directorships held during past 3 years:

Allstate Explorations NL (Current)
Central West Gold NL (Chairman, until 2006)
Cluff Resources Pacific NL (Chairman, Current)
Barry John Dawes
Age 57
Non-Executive Director

BSc, FAusIMM(CP), MSDIA
 Barry is the founder and Managing Director of Martin Place Securities Pty Limited, established in 2000 as a boutique investment firm specialising in the resource industry and corporate finance. He is also a director of Superior Coal Limited, NSX listed BBX Property Investment Fund and Granite Power Limited.
Other listed company Directorships held during past 3 years:
BBX Property Investment Fund
Ian McLeay Mutton
Age 59
Non-Executive Director
 Ian presently advises a number of major listed companies on the development of strategies for and the implementation of compliance programs. He is Chairman of He_Nuclear Limited; and was until mid 2006 the Chairman of Sensitron Australasia Pty Limited the Australian arm of Sensitron Inc, a United States based pioneer of wireless health care technology.
Other listed company Directorships held during past 3 years: Nil

2. Company secretary

Kevin Lynn CA, FAICD, FFin is Company Secretary to several listed companies.

3. Company particulars

UXA is incorporated in Australia. The address of the registered office and principal place of business is:

313 Payneham Road
Royston Park
SA 5070
Australia
Phone: +61 8 8363 7970
Fax: +61 8 8363 7963
Email: info@uxa.com.au
Web: www.uxa.com.au

4. Principal activities

UXA was established to explore for, locate and develop commercial grade uranium mineralisation and associated copper and gold. The focus remains on exploration in key target areas in Australia. More particularly, UXA aims to:
  • Locate new commercial uranium deposits in its project areas where there may also be gold, silver and copper in any new discovery;
  • Collect all available past geological, geophysical, geochemical, geomorphological and exploration data, whether this be from commercial, government, university research or private contractor source;
  • Generate multi-layered digital databases applying state of the art and in-house software on both specific (drill) and continuous (geophysical) data sets for each EL and ELA.
  • Locate future drill targets using geochemical and other sampling techniques; and
  • Drill the high priority zones and feed results back into the model to refine further exploration strategy.
The principal activity of UXA during the financial year was commencing exploration on its mineral ELs.

5. Review and result of operations and state of affairs

The loss after income tax amounted to $1,728,018 (2006: $444,387).
UXA's board and management team has broad corporate and commercial knowledge in the resources and energy industries and management has considerable experience in locating new uranium mineralisation. UXA's focus is on exploration in Australian geological provinces containing some of the world's largest uranium mines and exploration areas, where over 50% of the world's lowest cost recoverable uranium resources are located.
Uranium Exploration Australia Limited

During the year:

Mr Patrick Mutz joined UXA in November 2006 as CEO and was appointed UXA's Managing Director in January 2007. Mr Mutz has 30 years uranium exploration, mining and processing experience in the United States, Australia and Germany. Most recently, he served as Managing Director of Operations for Heathgate Resources in South Australia, which owns and operates the Beverley uranium mine - Australia's only, and the world's largest, in-situ leach uranium operation. Patrick was also head of Heathgate's Resource's exploration affiliate, Quasar Resources, which in 2006 announced the discovery of a new world-class uranium deposit in South Australia known as Four Mile.

With much of UXA's EL portfolio based in a highly prospective, and producing, mineral region in South Australia, UXA moved UXA's head and registered office to Adelaide.

In January 2007, the Board of Directors approved an exploration budget that committed $10.8 million to a program of surveying, sampling and drilling activity across UXA's ELs over the period to 30 June 2008.

Highlights of UXA's activities to date include:
  • Commencement of a third drilling program in June 2007 on the highly prospective Stuart Shelf area of the Gawler Craton where UXA has a total of 13 EL and ELAs located in a mineralised corridor hosting the Olympic Dam Mine, the Prominent Hill mine development and the 2005 copper/gold discovery at Carrapateena.
  • Signing a joint venture agreement with Newcrest in May 2007 under which Newcrest can earn a 75% interest in UXA's Oak Dam Northeast EL in the Gawler Craton by spending a minimum of $3 million in the search for gold and base metals. UXA retained the right to develop, mine and market uranium from any uranium-only discovery on this EL. Newcrest has already completed a first-stage gravity survey across the entire EL in July 2007.
  • Signing an option and joint venture agreement with Rosscraft under which UXA can earn an interest of up to 75% of the Marcollat base metals and gold prospect located in the south-east of SA with an outlay of up to $1.6 million over five years.
  • Forming a Strategic Alliance with GAA to secure priority access to the leading edge (PFN) technology. UXA intends to be the first grassroots exploration company in Australia to utilise this state-of-the-art exploration technology that facilitates down-hole detection and measurement of uranium. Unlike conventional gamma tools that detect uranium indirectly by measuring the gamma energy from the daughter products of uranium, PFN measures uranium concentration directly by neutron bombardment and fissioning of uranium-235.

6. Dividends

No dividends were paid or declared by UXA since the end of the previous financial year and no dividend is recommended for the current year (2006: nil).

7. Events subsequent to reporting date

In July 2007, UXA:
  • Launched its third drilling campaign on the highly prospective Stuart Shelf on the Gawler Craton in South Australia, which will include up to 20,000 metres of drilling across UXA's granted exploration ELs in Australia.
  • Completed a placement of $1,500,000 through the issue of 4,285,714 ordinary fully paid shares at 35 cents to ETR Nominees Pty Ltd.
  • Newcrest Operations Limited completed the stage 1 ground-based gravity survey on UXA's EL 3494 - Oak Dam Northeast EL in South Australia.
Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of material and unusual nature likely, in the opinion of the Directors of UXA, to affect significantly the operations of UXA, the results of those operations, or the state of affairs of UXA, in future financial years.

8. Likely developments

Information on likely developments is included in the Review of Operations Report accompanying this financial report.

9. Environmental regulation

The UXA project areas are located on ELs issued by the Department of Mineral Resources (NSW), Department of Primary Industries South Australia (SA), Department of Industry and Resources (WA) and Department of Primary Industries, Fisheries and Mines (NT) and operates under environmental licences issued by the Environmental Protection Authority. These licences require the preparation of an annual Environmental Management report as well as periodic rehabilitation reports as exploration proceeds.

UXA has a statutory obligation to protect the environment in areas in which it was and is exploring. During the reporting period, UXA did not fail to meet its obligations pursuant to any environmental legislation.

10. Corporate governance statement

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors support and have adhered to the principles of good corporate governance. UXA's corporate governance statement follows the financial report.

10.1 The Board and Executive Directors

The Board is responsible for the appointment and contract with the Managing Director. The Managing Director leads the organisation.

The Managing Director is responsible for the internal work culture of UXA, for the employment of staff and consultants and for overall financial and operational management and control. The Managing Director is the primary spokesperson for UXA and the lead person in its key relationships with Government, ASX and other organizations whilst focusing on the management of exploration programs, technical reporting and any future joint ventures.

Under the Constitution of UXA, the Directors may confer upon the Managing Director any of the powers exercisable by the Directors upon such terms and conditions and with any restrictions as they see fit. Likewise, the Directors may at any time revoke, withdraw, alter or vary all or any of those powers. The Board will determine the performance goals and remuneration of Managing Director.

10.2 Meetings of Directors

The following table sets out the number of meetings of UXA's Directors during the year ended 30 June 2007 and the number of meetings attended by each Director.


 Audit Committee
 Board

Eligible
 Attended
 Eligible
 Attended
Neill Arthur
 -
 -
 13
 13
David Hawley
 2
 2
 13
 12
Barry Dawes
 -
 -
 13
 13
Stephen Gemell
 2
 2
 13
 12
Ian Mutton
 2
 2
 13
 13
Patrick Mutz
 -
 -
 7
 7

No Nomination or Remuneration Committee meetings were held during the year, with all relevant matters being considered by the full Board of Directors.

10.3 Share options

Options issued in the current financial year

During the financial year UXA, issued a total of 1,180,000 listed options to the new Chief Executive Officer Patrick Mutz. During the year, 1,502,032 options were converted to shares in UXA.

Total outstanding options at the date of this report

Unlisted options
 Exercisable at 20 cents on or before 31 March 2008
 24,900,000
Listed options
 Exercisable at 20 cents on or before 31 March 2008
 18,747,067

Total options on issue
 43,647,067

10.4 Non-audit services

The auditor, KPMG, has not undertaken any non-audit services. Any future non-audit services are to be referred to the Chairman of the Audit Committee for approval.

Details of the amounts paid or payable to the auditor for audit and non-audit services provided during the year are set out below.

Audit services
 2007
 2006
$
 $
Remuneration for audit and review of financial reports under the Corporations Act 2001
24,000
12,500

10.5 Remuneration report

10.5.1 Principles of compensation

Non-executive Directors are each to be paid a fee, monthly, totalling $30,000 per annum (exclusive of GST or superannuation) as and from the date of listing on ASX. Executive Directors are not paid Directors' fees.

The total of all Directors' fees, exclusive of consulting fees, GST or superannuation, in any one financial year will not exceed $150,000 without approval by the Members. The level of individual Director's fees within the approved total is determined by the Board. In due course, one or more of the Directors may become salaried employees, depending on the way in which the activities of UXA develop. In the event that such Director(s) become salaried employees, their remuneration will be inclusive of any Directors' fees.

No Director of UXA has received or has become entitled to receive a benefit from UXA during or since the end of the financial year 30 June 2007, because of a contract with:

  • that Director; or
  • a firm of which the Director is a member; or
  • an entity in which the Director has a substantial financial interest; or
  • an entity controlled by UXA; or
  • a company related to UXA at the time any contract was made or when the Director received or became entitled to receive a benefit,
except for Mr Hawley, in respect of payments to Geoplan Services Pty Limited, a company controlled by him, Mr Mutton, in respect of payments to Crafers Connect Pty Limited, a company controlled by him and Mr Dawes, who is also a Director of Martin Place Securities Pty Limited, Mr Gemell, in respect of payments to Gemell Mining Engineers, and Mr Arthur.

10.5.2 Directors' and executive officers' remuneration


Short-term
 Post - employment
 Share - based payments


Total
 Value of options
as proportion of
remuner-ation
%
Salary
 Fees and commissions
Total
 Super-
annuation
benefits
Options
2007
 $
 $
$
 $
 $
N Arthur
 15,000
 152,253(3)
 167,253
 1,350
 -
 168,603
 -
P Mutz
 211,458
 -
 211,458
 19,031
 300,000(1)
 530,489
 56%
B Dawes
 30,000
 144,047(2)
 174,047
 2,700
 -
 176,747
 -
S Gemell
 30,000
 466
 30,466
 2,700
 -
 33,166
 -
D Hawley
 10,000
 138,100(4)
 148,100
 900
 -
 149,000
 -
I Mutton
 30,000
 11,556(5)
 41,556
 2,700
 -
 44,256
 -
Total
 326,458
 446,422
 772,880
 29,381
 300,000
 1,102,261
 -

Notes

  • The Board granted Mr Mutz 1,180,000 options which were trading 25.4 cents at the time of granting.
  • Underwriting fee paid to Martin Place Securities Pty Ltd.
  • In addition, Mr Arthur was reimbursed $111,230 for expenses paid on UXA's behalf to third parties.
  • In addition, Mr Hawley was reimbursed $585 for expenses paid on UXA's behalf to third parties.
  • In addition, Mr Mutton was reimbursed $68,081 for expenses paid on UXA's behalf to third parties.




 Short-term
 Post - employment
 Share - based payments


Total
 Value of options
as proportion of
remuner-ation
%
Salary
 Fees and commissions
Total
 Super-
annuation
benefits
Options
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