A PACE Initiative Year 3 subsidised drilling programme has been undertaken by the EL 3482 licensees over part of the Yarramba Palaeochannel north of the Honeymoon U deposit, seeking similar, Tertiary sediment-hosted roll-front uranium deposits in an area of the palaeochannel where newly available geophysical data indicate that there may be an as yet untested, geologically possibly conducive depositional setting for such mineralisation. In brief, the combined image interpretation of data from aeromagnetic, gravity and recently acquired aerial EM surveys has now facilitated recognition of a section of the Yarramba Palaeovalley where the ancient river's indirect crossing of a palaeotopographic ridge could have partially dammed its course and allowed the relatively greater accumulation of alluvial organic debris as a precursor to effective uranium chemical entrapment. The licence operator Curnamona Energy completed 56 rotary mud drillholes totalling 5279.75 m, to depths averaging 110 m, across the new prospect between November 2005 and March 2006. Six of the holes did not reach bedrock due to unforseen drilling difficulties, but 37 of the other holes successfully intersected the palaeochannel sediments, and 14 of these holes returned downhole radiometric log anomalies of greater than 0.01% U3O8 equivalent. Hole CEM021 contains a mineralised layer 1.45 m thick @ 0.032% eU3O8, and hole CEM056 has a radiometric log spike approaching 0.1% eU3O8. Although the indicated grade of the uranium mineralisation is below economic levels, it is believed to be an encouraging sign that active U-rich geochemical redox cells are present nearby in groundwater of the palaeochannel aquifer. Accordingly, the licensees propose to continue test drilling of the prospect during the rest of 2006.