DREADNOUGHT RESOURCES LTD — Interim / Quarterly Report 2007

Jul 30, 2007

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QUARTERLY REPORT

period ending 30 June 2007

Highlights

• Deep drill testing of the Billa Kalina gravity anomaly has commenced with the first of two planned holes currently at a depth of 496m. This target is considered to be highly prospective for Olympic Dam style iron oxide-copper-gold-uranium (IOCG) mineralisation.

• After successful completion of an Aboriginal Heritage Site Clearance survey, the first phase of rotary-mud drilling at the Marree Project is underway with 16 holes, for a total of 2202m completed to-date.

• A very large airborne electromagnetic survey (AEM) covering over 9,000 line/km has been completed at the Abminga Project and is currently undergoing detailed computer processing.

• Following ongoing geological analysis of the Abminga Project, three additional exploration licence applications have been lodged by the company over ground considered prospective for both sandstone-hosted uranium and iron oxide-copper-gold (IOCG) style deposits.

• Eromanga has entered into an agreement with Caldera Resources Pty Ltd designed to consolidate the company’s strategic land position in the Abminga region.

• As at 30th June 2007 the company held cash of $12.04 million.

• After a very active June Quarter the company is well positioned to continue this momentum with drilling programs to continue at the Billa Kalina and Marree Projects and major AEM surveys to be undertaken at Billa Kalina in August and the Kingoonya Project in September 2007.

REVIEW OF OPERATIONS

Corporate Activities

The June Quarter of 2007 has seen three of the company’s major projects gaining significant momentum with drilling programs initiated at the Billa Kalina and Marree Projects and the completion of a very large airborne EM survey over the entire Abminga Project tenement holdings. The company has also been able to build on the improved geological understanding at Abminga and has added important new ground positions by way of an agreement with Caldera Resources Pty Ltd and through applications for three new exploration licences (100% Eromanga) adjacent to the company’s granted tenements. (Figure 3)

Caldera Resources Pty Ltd will assign its interest in the uranium rights of EL3186 to Eromanga Uranium Ltd for a small upfront cash consideration, ongoing direct

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Location of Projects
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exploration costs and a 1.5% net smelter royalty on any future uranium production. Caldera Resources also holds a 10% beneficial interest in EL3186 on behalf of Ellendale Resources NL. EL3186 covers an area of approximately 74km[2] and is

located between Eromanga’s EL 3601 and ELA 220/07. Initial interpretation of open file data suggests that a palaeodrainage occurs partly within EL3186, upstream of the known uranium occurrence within ELA220/07.

Eromanga Uranium Limited ACN 119 031 864 | 62 Beulah Road Norwood South Australia 5067 | PO Box 3126 Norwood South Australia 5067

Phone 61 8 8132 7970 | Fax 61 8 8362 5966 | Email info@eromangauranium.com | web www.eromangauranium.com

Eromanga has continued to strengthen it’s technical team with the appointment of Mr Dan Woolford as Exploration Geologist. Dan will commence duties with the company in early August 2007.

Finance

As at 30 June 2007, Eromanga had available funds of $12.04 million of which the majority is held in term deposits with an Australian bank. During the June quarter total net exploration expenditure by the company was $660,000.

EXPLORATION ACTIVITIES

Billa Kalina Project

(Eromanga earning 50% under the Billa Kalina JV Agreement with Maximus Resources Ltd.)

The Billa Kalina Project is located 70 km north-northwest of the Olympic Dam copper-gold-uranium mine, and 45km east of the more recent discovery and mine development at Prominent Hill, South Australia. The company’s primary target at Billa Kalina is the deep drill testing of the Billa Kalina Gravity anomaly which is wholly contained within the granted exploration licence EL3170. This drilling is being undertaken with partial funding from the South Australian Government via the PACE initiative. The gravity anomaly covers an area of 7km x 2km and is considered to be highly prospective for iron oxide-coppergold-uranium styles of mineralisation.

The first hole, BKDDH02 (of a two hole program) is positioned on the flank of the main gravity feature (Figure 2) and has reached a depth of 496 metres (as at 29/07/07). This hole has passed through the base of the Permian sedimentary cover sequence at a depth of 317m and has intersected a thick sequence of basaltic volcanics which continues to the current base of the hole. The volcanic sequence is variably veined and altered with an overall tendency for vein density and thickness to increase down-hole.

The company is encouraged by the results to-date in BKDDH02 and drilling is continuing. In order to expedite drilling rates at Billa Kalina a second drill rig has been sourced and is currently drilling the

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Figure 1 Location of Eromanga Exploration Licences and Licence Applications

pre-collar to hole BKDDH01, located above the peak gravity response. This pre-collar is currently at a depth of 108 metres.

sequence with the potential to host roll-front style uranium deposits.

Marree Project

Future Exploration

(Eromanga earning 70% under Eromanga Basin JV Agreement with Maximus Resources Ltd)

Drilling of holes BKDDH01 and 02 will be completed and the results incorporated in the planning of future drill programs. An airborne EM survey of the entire tenement package at the Billa Kalina Project will commence during the first week of August 2007. This survey will involve the flying of approximately 4000 line/km and is designed to delineate palaeodrainage targets in the shallow sedimentary cover

The Marree Project is located 40 km east of the township of Marree in northern South Australia and consists of four granted exploration licences and two exploration licence applications covering in excess of 5,779 km[2] . The company’s primary exploration target at the Marree Project

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?
0 1 2
kilometres
-29º56'
BKDDH02BKDDH02BKDDH02BKDDH02 ������� �
?
BKDDH01BKDDH01BKDDH01BKDDH01 ������� �
-29º58'
GravityGravityGravity Gravity
TargetTargetTarget Target
Fault
135º58' 136º 136º02' 136º04'
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directly target the basal portions of prospective palaeodrainages. Prior to the commencement of the second phase of drilling it will be necessary to complete further Heritage Site Clearance surveys where planned drill holes are not covered by our current consents.

Abminga Project

(Eromanga earning 70% under the Eromanga Basin JV Agreement with Maximus Resources Ltd)

The Abminga Project is located in a linear belt from Marla, South Australia to 50km north of the South Australian-Northern Territory border. It consists of seven granted exploration licences and three new exploration licence applications covering at total of approximately 10,000 km[2] . The primary exploration focus of the company is sandstone-hosted uranium deposits, however the recent applications have exciting potential for deeper IOCG styles of mineralisation (Figure 3).

Figure 2 Billa Kalina gravity target drillholes.

An airborne EM survey over Eromanga’s tenement position at Abminga has been successfully completed. This survey involved the acquisition of over 9,000 line/ km of data utilising the REPTEM system supplied by Geosolutions Pty Ltd. Coverage of the survey has included all granted tenements and incorporated the area of the recent applications ELA 220/07, ELA 297/07 and the Caldera Resources EL3186 (Figure 3). Detailed interpretation of this extensive data set is

drill program. Preliminary results have been encouraging with the identification of target sandstone horizons in stratigraphic positions both above and below the Mesozoic Bulldog Shale.

is sandstone-hosted uranium deposits similar to those at the Beverley Mine and Beverley 4 Mile discovery. The Marree Project has been a primary focus of the company during the quarter following the successful delineation of a previously unknown palaeodrainage system earlier in 2007.

Future Exploration

The results of the initial drill program, including down-hole geophysical logging, will be assessed and aid in the design of further drill testing that will more

Prior to on-ground exploration commencing it was necessary for the company to reach an agreement with the appropriate Aboriginal Traditional Owners and to carry out Heritage Clearance surveys. During the quarter Eromanga Uranium Limited signed a Work Area Clearance Agreement with the Traditional Owners and has successfully completed the first phase of clearance surveys, allowing drilling to commence.

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Rotary-mud drilling commenced in early July and to-date 16 holes have been completed for a total of 2202 metres.

The initial drilling program at Marree consists of approximately fifty (50) holes and has been designed to provide an improved understanding of the geological setting, as interpreted from the airborne EM survey, and to allow better targeting of prospective palaeodrainages in the ongoing

Downhole logging vehicle at Marree Project.

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-25º30'-25º30'-25º30'-25º30'-25º30'-25º30'-25º30'-25º30'-25º30'
EL 25163
EL 25166
Northern Territory
-2-2-2------ 26º26º26º26º26º26º6º6º6º
South Australia
EL 3602
ELA 297/07
EL 3601
EL 3186EL 3186EL 3186EL 3186EL 3186EL 3186EL 3186EL 3186EL 3186
-26º30'-26º30'-26º30'-26º30'-26º30'-26º30'-26º30'-26º30'-26º30'
ELA 220/07
EL 3599
See Figure 4
-27º-27º-27º-27º-27º-27º-27º-27º-27º
EL 3600 Nicholson
ELA 387/07
Marla
� Welbourn Hill
EL 3575
20km
-27º30'-27º30'-27º30'-27º30'-27º30'-27º30'-27º30'-27º30'-27º30'
Granted Exploration Licence Exploration Licence Application Caldera Resources Agreement
Hwy
Stuart
133º30'133º30'133º30'133º30'133º30'133º30'133º30'133º30'133º30' 134º134º134º134º134º134º134º134º134º 134º30'134º30'134º30'134º30'134º30'134º30'134º30'134º30'134º30'
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Figure 3 Abminga Project exploration licences.

Analysis of the area covered by ELA 387/07 has also identified aeromagnetic and gravity features, at Welbourn Hill and Nicholson, where the geological setting is considered favourable for Olympic Dam style iron oxide copper-gold-uranium (IOCG) mineralisation (Figure 4).

currently in progress. Eromanga recently applied for three additional exploration licences (ELA 220/07, ELA 297/07 and ELA 387/07) adjacent to the northern portion of our Abminga Project land holding. All three applications cover favourable stratigraphy at relatively shallow depths and are considered prospective for sandstone-hosted uranium deposits. These will be held 100% by Eromanga Uranium Ltd and will not form part of the Eromanga Basin Joint Venture with Maximus Resources Ltd.

The combination of the three new exploration licence applications and the Caldera Resources agreement consolidates Eromanga’s strategic landholding in this region and additionally brings exciting new potential for the discovery of large IOCG deposits in an area not previously tested.

Future Exploration

The massive data sets generated by the AEM survey will undergo detailed computer processing and imaging to identify the extent of buried palaeodrainages in the region. The company is confident that this major task will be completed in shorter timeframes than were experienced at the Marree Project following substantial investment in in-house computing systems and staff training. In conjunction with this work the company is initiating discussions with the relevant Aboriginal groups at Abminga in order to facilitate the earliest possible commencement of drill testing.

Illogwa Creek Project

(Eromanga earning 70% under the Eromanga Basin JV Agreement with Maximus Resources Ltd)

The Illogwa Creek Project is located approximately 200km to the east of Alice Springs in the Northern Territory and consists of two tenement blocks covering 1333 km[2] . The tenements are considered to be prospective for sandstone-hosted uranium mineralisation and form part of the Eromanga Basin JV with Maximus Resources Limited. Exploration licence application EL25161 is on aboriginal freehold land and on the 15 May 2007 a meeting was held between the company and the Traditional Owners of the land to discuss Eromanga’s proposed work programs and seek authorisation from the Traditional Owners for grant of the exploration licence. The company is yet to receive a response on the outcomes of the meeting.

Should the Traditional Owners indicate that they will allow exploration on the tenement then it will be necessary to complete a second meeting with them and to undertake heritage clearance surveys before on-ground exploration can commence.

Kingoonya Project

(Eromanga earning 70% under the Eromanga Basin JV Agreement with Maximus Resources Ltd)

The Kingoonya Project is located approximately mid-way between the townships of Glendambo and Coober Pedy, South Australia and consists of five (5)

granted exploration licences covering approximately 4060 km[2] . The company’s main exploration targets at Kingoonya are sandstone-hosted (roll-front) uranium and unconformity related uranium deposits.

On-ground exploration at the Kingoonya Project will be initiated in early September 2007 with the flying of over 4,000 line/km of airborne EM survey (AEM). This will be the last of the four AEM surveys planned for 2007.

General

During the quarter the company has virtually finalised the acquisition of all the plant and equipment necessary to safely and efficiently manage three concurrent major field programs. This has included not only fully equipped field vehicles and Adelaide based support systems but also the commissioning of Eromanga’s geophysical logging truck. Some requirement remains to supplement our field staff with an additional technician and possibly a further exploration geologist should drilling rates be increased from their current levels. Overall the company is delighted with the professionalism and dedication of our people and is very pleased to have been able to recruit quality staff in a very competitive employment environment.

The company has continued to promote the quality of it’s asset portfolio and exploration strategy to both the Broking community and the wider market by way of targeted presentations and at more broadly focussed but relevant industry conferences.

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Mr Kevin Lines Managing Director

31 July 2007

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ELA 387/07
-27º
Nicholson
Welbourn Hill
-27º20'
ELA 387/07 5km
134º 134º20'
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Figure 4 Abminga targets showing gravity contours and magnetics.

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Kevin Lines who is a Member of the Australasian Institute of Mining and Metallurgy, and who has sufficient experience relevant to the style of mineralisation, the type of deposit under consideration, and the activity 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 (the JORC Code). This report is issued in the form and context in which it appears with the written consent of the Competent Person, who is Managing Director of the Company.

For further information please contact Eromanga Uranium on 08 8132 7970 or Investor Relations - Mr Duncan Gordon on 0404 006 444

Further information relating to Eromanga Uranium Limited and its various exploration projects can be found on the Eromanga website:

www.eromangauranium.com

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

	Name of entity
	Eromanga Uranium Limited
	ABN 40 119 031 864 Consolidated statement of cash flows
			30 June 2007
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows		Current quarter $A’000		Year to date (12 months) $A’000
		(660) (82) 94		(1,184) (860) 269
		(648)		(1,775)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c)other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		(94) (20)		(377) (118)
		(114)		(495)
		(762)		(2,270)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(762)	(2,270)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows		13,800
	-	13,800
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(762) 12,803	11,530 511
	12,041	12,041

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
			97
1.25 Explanation necessaryfor an understandingof the transactions Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest		Explanation necessaryfor an understandingof the transactions
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1	Loan facilities
3.2	Credit standby arrangements

Amount available	Amount used
$A’000	$A’000

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development	$A’000
	1,500
Total	1,500

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	28	17
	12,013	12,786
Total: cash at end of quarter(item 1.22)	12,041	12,803

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	EL 3186	Right to explore for and proceed to mine uranium	Nil	100%

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	125,442,346	63,255,203
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	26,785,714 283,000		Exercise price $0.30 $0.22	Expiry date 30/6/2011 20/3/2012
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here:

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Date: 30 July 2007

(Director/Company secretary)

Print name: Richard W C Willson

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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• See chapter 19 for defined terms.

Appendix 5B Page 5

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